Document:

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                                                                     EXHIBIT 4.5
================================================================================

                     PETROBRAS INTERNATIONAL FINANCE COMPANY

                                                                         Company

                                       TO

                               JPMORGAN CHASE BANK

                                                                         Trustee

                                   ___________

                                    INDENTURE

                            Dated as of July 19, 2002

                                   ___________

                                 Debt Securities

================================================================================

<PAGE>

                     Petrobras International Finance Company
                 Certain Sections of this Indenture relating to
                  Sections 3.10 through 3.18, inclusive, of the
                          Trust Indenture Act of 1939:

<TABLE>
<CAPTION>
Trust Indenture                                              Indenture
  Act Section                                                 Section
<S>                                                     <C>
      (S)3.10(a)(1) .................................   6.09
        (a)(2)      .................................   6.09
        (a)(3)      .................................   Not Applicable
        (a)(4)      .................................   Not Applicable
        (b)         .................................   6.08
                    .................................   6.10
      (S)3.11(a)    .................................   6.13
        (b)         .................................   6.13
      (S)3.12(a)    .................................   7.01
                    .................................   7.02
        (b)         .................................   7.02
        (c)         .................................   7.02
      (S)3.13(a)    .................................   7.03
        (b)         .................................   7.03
        (c)         .................................   7.03
        (d)         .................................   7.03
      (S)3.14(a)    .................................   7.04
        (a)(4)      .................................   1.01
                    .................................   10.13
        (b)         .................................   Not Applicable
        (c)(l)      .................................   1.02
        (c)(2)      .................................   1.02
        (c)(3)      .................................   Not Applicable
        (d)         .................................   Not Applicable
        (e)         .................................   1.02
      (S)3.15(a)    .................................   6.01
        (b)         .................................   6.02
        (c)         .................................   6.01
        (d)         .................................   6.01
        (e)         .................................   5.14
      (S)3.16(a)    .................................   1.01
        (a)(1)(A)   .................................   5.02
                    .................................   5.12
        (a)(1)(B)   .................................   5.13
        (a)(2)      .................................   Not Applicable
                    .................................   5.08
        (c)         .................................   1.04
      (S)3.17(a)(l) .................................   5.03
        (a)(2)      .................................   5.04
      (S)3.18(a)    .................................   1.07
</TABLE>

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

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                    RECITALS

                                   ARTICLE ONE
             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
     <S>                                                                     <C>
     Section 1.01   Definitions ............................................   1

     Section 1.02   Compliance Certificates and Opinions ...................  12

     Section 1.03   Form of Documents Delivered to Trustee .................  13

     Section 1.04   Acts of Holders of Securities; Record Dates ............  13

     Section 1.05   Notices, Etc., to Trustee and the Company ..............  15

     Section 1.06   Notice to Holders of Securities; Waiver ................  15

     Section 1.07   Language of Notices, Etc. ..............................  16

     Section 1.08   Conflict with Trust Indenture Act ......................  16

     Section 1.09   Effect of Headings and Table of Contents ...............  16

     Section 1.10   Successors and Assigns .................................  16

     Section 1.11   Separability Clause ....................................  16

     Section 1.12   Benefits of Indenture ..................................  16

     Section 1.13   Governing Law ..........................................  16

     Section 1.14   Saturday, Sundays and Legal Holidays ...................  16

     Section 1.15   Appointment of Agent for Service; Submission to
                    Jurisdiction; Waiver of Immunity .......................  17

                                   ARTICLE TWO
                                 SECURITY FORMS

     Section 2.01   Forms Generally ........................................  17

     Section 2.02   Form of Global Security ................................  18

     Section 2.03   Form of Legend for Global Securities ...................  29

     Section 2.04   Form of Trustee's Certificate of Authentication ........  30

     Section 2.05   Guarantee by Guarantor; Form of Guarantee ..............  30

                                  ARTICLE THREE
                                 THE SECURITIES

     Section 3.01   Amount Unlimited: Issuable in Series ...................  33

     Section 3.02   Denominations ..........................................  36
</TABLE>

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

                                        i

<PAGE>

                                TABLE OF CONTENTS

                                   (continued)

<TABLE>
<CAPTION>
                                                                            Page
     <S>                                                                    <C>
     Section 3.03   Execution, Authentication, Delivery and Dating .......... 36

     Section 3.04   Temporary Securities .................................... 37

     Section 3.05   Registration, Registration of Transfer and Exchange ..... 39

     Section 3.06   Mutilated, Destroyed, Lost and Stolen Securities ........ 43

     Section 3.07   Payment of Interest; Interest Rights Preserved .......... 44

     Section 3.08   Persons Deemed Owners ................................... 45

     Section 3.09   Cancellation ............................................ 45

     Section 3.10   Computation of Interest ................................. 45

     Section 3.11   CUSIP Numbers ........................................... 45

     Section 3.12   Add On Notes ............................................ 45

     Section 3.13   Forms of Certification .................................. 46

     Section 3.14   Standby Purchase Agreements ............................. 49

                                  ARTICLE FOUR
                           SATISFACTION AND DISCHARGE

     Section 4.01   Satisfaction and Discharge of Indenture ................. 50

     Section 4.02   Application of Trust Money .............................. 51

                                  ARTICLE FIVE
                                    REMEDIES

     Section 5.01   Events of Default ....................................... 51

     Section 5.02   Acceleration of Maturity; Rescission and Annulment ...... 53

     Section 5.03   Collection of Indebtedness and Suits for Enforcement
                    by Trustee .............................................. 54

     Section 5.04   Trustee May File Proofs of Claim ........................ 54

     Section 5.05   Trustee May Enforce Claims Without Possession of
                    Securities .............................................. 55

     Section 5.06   Application of Money Collected .......................... 55

     Section 5.07   Limitation on Suits ..................................... 55

     Section 5.08   Unconditional Right of Holders to Receive Principal,
                    Premium and Interest and to Convert ..................... 56

     Section 5.09   Restoration of Rights and Remedies ...................... 56

     Section 5.10   Rights and Remedies Cumulative .......................... 56

     Section 5.11   Delay or Omission Not Waiver ............................ 57
</TABLE>

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

                                       ii

<PAGE>

                                TABLE OF CONTENTS

                                   (continued)

<TABLE>
<CAPTION>
                                                                            Page
     <S>                                                                    <C>
     Section 5.12   Control by Holders of Securities ........................ 57

     Section 5.13   Waiver of Past Defaults ................................. 57

     Section 5.14   Undertaking for Costs ................................... 58

     Section 5.15   Waiver of Stay, Extension or Usury Laws ................. 58

                                   ARTICLE SIX
                                   THE TRUSTEE

     Section 6.01   Certain Duties and Responsibilities ..................... 58

     Section 6.02   Notice of Defaults ...................................... 58

     Section 6.03   Certain Rights of Trustee ............................... 59

     Section 6.04   Not Responsible for Recitals or Issuance of
                    Securities .............................................. 60

     Section 6.05   May Hold Securities ..................................... 60

     Section 6.06   Money Held in Trust ..................................... 60

     Section 6.07   Compensation and Reimbursement .......................... 60

     Section 6.08   Conflicting Interests ................................... 61

     Section 6.09   Corporate Trustee Required; Eligibility ................. 61

     Section 6.10   Resignation and Removal; Appointment of Successor ....... 61

     Section 6.11   Acceptance of Appointment by Successor .................. 63

     Section 6.12   Merger, Conversion, Consolidation or Succession
                    to Business ............................................. 64

     Section 6.13   Preferential Collection of Claims Against Company ....... 64

     Section 6.14   Appointment of Authenticating Agent ..................... 64

                                  ARTICLE SEVEN
                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

     Section 7.01   Company to Furnish Trustee Names and Addresses
                    of Holders .............................................. 66

     Section 7.02   Preservation of Information; Communications to
                    Holders ................................................. 66

     Section 7.03   Reports by Trustee ...................................... 67

     Section 7.04   Reports by Company ...................................... 67

     Section 7.05   Calculation of Original Issue Discount .................. 67

                                  ARTICLE EIGHT
              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

     Section 8.01   Company May Consolidate, Etc., Only on Certain
                    Terms ................................................... 68
</TABLE>

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

                                       iii

<PAGE>

                               TABLE OF CONTENTS

                                  (continued)

<TABLE>
<CAPTION>
                                                                            Page
     <S>                                                                    <C>
     Section 8.02   Successor Substituted ................................... 69

                                  ARTICLE NINE
                             SUPPLEMENTAL INDENTURES

     Section 9.01   Supplemental Indentures Without Consent of Holders ...... 69

     Section 9.02   Supplemental Indentures with Consent of Holders ......... 70

     Section 9.03   Execution of Supplemental Indentures .................... 71

     Section 9.04   Effect of Supplemental Indentures ....................... 71

     Section 9.05   Conformity with Trust Indenture Act ..................... 72

     Section 9.06   Reference in Securities to Supplemental Indentures ...... 72

                                   ARTICLE TEN
                                    COVENANTS

     Section 10.01  Payment of Principal and Interest ....................... 72

     Section 10.02  Performance Under This Indenture ........................ 72

     Section 10.03  Maintenance of Corporate Existence ...................... 72

     Section 10.04  Maintenance of Properties ............................... 72

     Section 10.05  Compliance with Laws .................................... 73

     Section 10.06  Maintenance of Government Approvals ..................... 73

     Section 10.07  Payments of Taxes and Other Claims ...................... 73

     Section 10.08  Maintenance of Insurance ................................ 73

     Section 10.09  Maintenance of Books and Records ........................ 73

     Section 10.10  Maintenance of Office or Agency ......................... 74

     Section 10.11  Ranking ................................................. 74

     Section 10.12  Use of Proceeds ......................................... 74

     Section 10.13  Statement by Officers as to Default and Notices of
                    Events of Default ....................................... 74

     Section 10.14  Provision of Financial Statements and Reports ........... 74

     Section 10.15  Further Actions ......................................... 75

     Section 10.16  Appointment to Fill a Vacancy in Office of Trustee ...... 75

     Section 10.17  Payments and Paying Agents .............................. 75

     Section 10.18  Waiver of Certain Covenants ............................. 76

     Section 10.19  Additional Amounts ...................................... 77
</TABLE>

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

                                       iv

<PAGE>

                               TABLE OF CONTENTS

                                  (continued)

<TABLE>
<CAPTION>
                                                                            Page
                                 ARTICLE ELEVEN
                            REDEMPTION OF SECURITIES

     <S>                                                                    <C>
     Section 11.01  Applicability of Article ................................ 79

     Section 11.02  Election to Redeem; Notice to Trustee ................... 79

     Section 11.03  Selection by Trustee of Securities to Be Redeemed ....... 79

     Section 11.04  Notice of Redemption .................................... 80

     Section 11.05  Deposit of Redemption Price ............................. 80

     Section 11.06  Securities Payable on Redemption Date ................... 81

     Section 11.07  Securities Redeemed in Part ............................. 81

     Section 11.08  Optional Redemption Due to Changes in Tax Treatment ..... 81

                                 ARTICLE TWELVE
                                  SINKING FUNDS

     Section 12.01  Applicability of Article ................................ 82

     Section 12.02  Satisfaction of Sinking Fund Payments with
                    Securities .............................................. 82

     Section 12.03  Redemption of Securities for Sinking Fund ............... 82

                                ARTICLE THIRTEEN
                        MEETINGS OF HOLDERS OF SECURITIES

     Section 13.01  Purposes for Which Meetings May Be Called ............... 83

     Section 13.02  Call, Notice and Place of Meetings ...................... 83

     Section 13.03  Persons Entitled to Vote at Meetings .................... 83

     Section 13.04  Quorum; Action .......................................... 83

     Section 13.05  Determination of Voting Rights; Conduct and
                    Adjournment of Meetings ................................. 84

     Section 13.06  Counting Votes and Recording Action of Meetings ......... 85

                                ARTICLE FOURTEEN
                       DEFEASANCE AND COVENANT DEFEASANCE

     Section 14.01  Company's Option to Effect Defeasance or Covenant
                    Defeasance .............................................. 85

     Section 14.02  Defeasance and Discharge ................................ 85

     Section 14.03  Covenant Defeasance ..................................... 86

     Section 14.04  Conditions to Defeasance or Covenant Defeasance ......... 86
</TABLE>

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

                                        v

<PAGE>

                               TABLE OF CONTENTS

                                  (continued)

<TABLE>
<CAPTION>
                                                                            Page
<S>                                                                         <C>
     Section 14.05  Deposited Money and U.S. Government Obligations
                    to Be Held in Trust; Miscellaneous Provisions ........... 88

     Section 14.06  Reinstatement ........................................... 88

TESTIMONIUM

     SIGNATURES AND SEALS....................................................
     ACKNOWLEDGEMENTS........................................................
</TABLE>

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

                                       vi

<PAGE>

               INDENTURE, dated as of July 19, 2002, between PETROBRAS
INTERNATIONAL FINANCE COMPANY, an exempted company incorporated with limited
liability under the laws of the Cayman Islands (the "Company"), having its
principal office at Anderson Square Building, P.O. Box 714, George Town, Grand
Cayman, Cayman Islands, B.W.I., and JPMorgan Chase Bank, a New York banking
corporation, as Trustee hereunder (herein called the "Trustee").

                                    RECITALS

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

               The Company is a wholly-owned subsidiary of Petroleo Brasileiro
S.A.- Petrobras ("Petrobras"), a sociedade de economia mista organized and
existing under the laws of the Federative Republic of Brazil ("Brazil").

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

               NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

                                   ARTICLE ONE

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.01   Definitions.

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

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

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

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

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

                                       1

<PAGE>

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

               "Act," when used with respect to any Holder, has the meaning set
forth in Section 1.04.

               "Additional Amounts" has the meaning set forth in Section 10.19.

               "Add-On Notes" has the meaning set forth in Section 3.12.

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

               "Agent Members" has the meaning set forth in Section 3.05(1).

               "Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of any depository for such Security, DTC, the Euroclear
System and Clearstream, Luxembourg, in each case to the extent applicable to
such transaction and as in effect from time to time.

               "Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.

               "Authorization," with respect to any creation or issuance of a
series of Securities by the Company and any actions taken by the Company in
connection with such issuance, means the authorization of such issuance and
actions by the Board of Directors or any other corporate body of the Company
required pursuant to the Company's organizational documents and Cayman Islands
law to authorize such issuance and actions.

               "Authorized Representative" means, with respect to the Company,
each Officer of the Company and any other person duly appointed by such Officer
pursuant to a power of attorney with specific powers to perform such act on
behalf of such Officer; provided, however, that such power of attorney is
granted in a legal and valid manner pursuant to the Company's by-laws, and
provided further that any Officer may only appoint attorneys-in-fact who, in the
judgment of such Officer, have positions and responsibilities compatible with
the powers granted.

               "Board of Directors," when used with reference to the Company,
means the board of directors of the Company or any committee of that board duly
authorized to act for such board hereunder.

               "Board Resolution" means, when used with reference to the
Company, a copy of a resolution certified by the secretary or the assistant
secretary of the Company, to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification, and in
each case delivered to the Trustee.

               "Brazil" has the meaning set forth in the first recital of this
Indenture.

                                       2

<PAGE>

               "Business Day" means, with respect to any series of Securities,
unless otherwise specified with respect to such series of Securities as
contemplated by Section 3.01, a day, other than a Saturday or Sunday, that (a)
in the Place of Payment (or in any of the Places of Payment, if more than one)
in which amounts are payable, as specified in the form of such series of
Securities and (b) in the city in which the Corporate Trust Office is located,
is not a day on which banking institutions are authorized or required by law or
regulation to close (and for purposes of the sending of notices only, is not a
day on which banking institutions in the Cayman Islands are authorized or
required by law or regulation to close).

               "Certificated Securities" has the meaning set forth in Section
3.05(1).

               "Certification Date" means, with respect to Securities of any
series, (i) if Securities of such series are not to be initially represented by
a Temporary Regulation S Security, the date of delivery of the definitive
Regulation S Security and (ii) if Securities of such series are initially
represented by a Temporary Regulation S Security, the earlier of (A) the
Exchange Date with respect to Securities of such series and (B) if the first
Interest Payment Date with respect to Securities of such series is prior to such
Exchange Date, such Interest Payment Date.

               "Clearstream, Luxembourg" means Clearstream Banking, societe
anonyme, Luxembourg.

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

               "Common Depositary" means the common depositary, if any, for
Clearstream, Luxembourg and Euroclear.

               "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture and thereafter "Company"
shall mean such successor Person, as described further in Section 9.01(1).
Company shall also mean any new issuer of future issuances of Securities under
this Indenture as contemplated by Section 9.01(1).

               "Corporate Trust Office" means the principal office of the
Trustee at which at any time its corporate trust business shall be administered,
which office at the date hereof is located at 450 West 33rd Street, New York,
New York 10001, or such other address as the Trustee may designate from time to
time by written notice to the Holders and the Company, or the principal
corporate trust office of any successor Trustee (or such other address as a
successor Trustee may designate from time to time by notice to the Holders and
the Company).

               "Covenant Defeasance" has the meaning set forth in Section 14.03.

               "Default" means an event or condition with respect to a series of
Securities that, with the giving of notice, lapse of time or failure to satisfy
certain specified conditions, or any combination thereof, would become an Event
of Default with respect to the Securities of such series if not cured or
remedied.

               "Defaulted Interest" has the meaning set forth in Section 3.07.

                                       3

<PAGE>

               "Defeasance" has the meaning set forth in Section 14.02.

               "Depositary" means, with respect to Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, a clearing agency registered under the Exchange Act that is
designated to act as Depositary for such Securities as contemplated by Section
3.01.

               "DTC" means The Depository Trust Company or its nominee.

               "Environmental Laws" means all applicable federal, state and
local statutes, rules, regulations, ordinances, orders, decrees and common law,
including any of the forgoing in any foreign jurisdiction, relating in any
manner to contamination, pollution or protection of human health or the
environment.

               "Euroclear Operator" means Euroclear S.A./N.V., a bank organized
under the laws of the Kingdom of Belgium, as operator of the Euroclear system
(or any successor securities clearing system).

               "Event of Default" has the meaning set forth in Section 5.01.

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

               "Exchange Date" has the meaning set forth in Section 3.04.

               "Expiration Date" has the meaning set forth in Section 1.04.

               "Exchange Offer" has the meaning set forth in the form of the
face of the Global Security set forth in Section 2.02.

               "Exchange Security" means any Security issued by the Company (i)
pursuant to the Exchange Offer, (ii) upon the registration of transfer of a
Security registered for resale on a Resale Registration Statement or (iii) upon
the transfer of, or in exchange for, Securities which are Exchange Securities.

               "Global Security" means any Security or series of Security issued
in the form set forth in Section 2.02 or established pursuant to Section 2.01
which is registered in the Security Register in the name of a Depositary and
bears the legend set forth in Section 2.03 (or such legend as may be specified
as contemplated by Section 3.01 for such Securities).

               "Governmental Authority" means any regulatory, administrative or
other legal body, any court, tribunal or authority or any public legal entity or
public agency of the Cayman Islands, Brazil or the United States or any other
jurisdiction whether created by federal, provincial or local government, or any
other legal entity now existing or hereafter created, or now or hereafter
controlled, directly or indirectly, by any public legal entity or public agency
of any of the foregoing.

               "Guarantee" means an obligation of a person to pay the
Indebtedness of another person including, without limitation:

               (1)  an obligation to pay or purchase such Indebtedness;

                                       4

<PAGE>

               (2)  an obligation to lend money or to purchase or subscribe for
          shares or other securities or to purchase assets or services in order
          to provide funds for the payment of such Indebtedness;

               (3)  an indemnity against the consequences of a default in the
          payment of such Indebtedness; or

               (4)  any other agreement to be responsible for such Indebtedness.

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

               "Indebtedness" means any obligation (whether present or future,
actual or contingent and including, without limitation, any guarantee) for
payment on or the repayment of money which has been borrowed or raised
(including money raised by acceptances and all leases which, under U.S. GAAP,
would constitute a capital lease obligation).

               "Indenture" means this instrument as originally executed and as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 3.01.

               "Initial Regulation S Securities" means any Securities sold by
the purchasers thereof in an initial offering contemplated by a purchase
agreement in reliance on Regulation S and which are Temporary Regulation S
Securities.

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

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

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

               "Law" means any constitutional provision, law, statute, rule,
regulation, ordinance, treaty, order, decree, judgment, decision, certificate,
holding, injunction, enforceable at law or in equity, along with the
interpretation and administration thereof by any Governmental Authority charged
with the interpretation or administration thereof.

               "Majority Holders" means the holders of more than 50% in
aggregate principal amount of the Securities then Outstanding at any time.

               "Material Adverse Effect" means a material adverse effect on (i)
the business, operations, assets, property, condition (financial or otherwise)
of the Company or its Subsidiaries, taken as a whole,

                                       5

<PAGE>

(ii) the validity or enforceability of this Indenture, or (iii) the ability of
the Company to perform its obligations under this Indenture, or the material
rights of or benefits available to the Holders or the Trustee, as representative
of the Holders under this Indenture.

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

               "Moody's" means Moody's Investors Service, Inc. and any successor
or successors thereto.

               "Notice of Default" means a written notice of the kind set forth
in Section 5.01(3).

               "Officer" means, with respect to the Company, any officer of the
Company.

               "Officer's Certificate" means a certificate of the chief
financial officer and any other Officer of the Company given pursuant to Section
10.05.

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

               "Order" means a written request or order signed in the name of
the Company by one or more of its Officers, in each case delivered to the
Trustee.

               "Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 5.02.

               "Original Securities" means Securities of any series that are not
Exchange Securities.

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

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

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

               (3) Securities as to which Defeasance has been effected pursuant
          to Section 14.02; and

               (4) Securities which have been paid pursuant to Section 3.06 or
          in exchange for or in lieu of which other Securities have been
          authenticated and delivered pursuant to this Indenture, other than any
          such Securities in respect of which there shall have been

                                       6

<PAGE>

          presented to the Trustee proof satisfactory to it that such Securities
          are held by a protected purchaser in whose hands such Securities are
          valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent or waiver hereunder,
(i) the principal amount of an Original Issue Discount Security that shall be
deemed to be Outstanding shall be the amount of the principal thereof that would
be due and payable as of the date of such determination upon acceleration of the
Maturity thereof pursuant to Section 5.02, (ii) the principal amount of a
Security denominated in one or more foreign currencies or currency units shall
be the U.S. dollar equivalent, determined in the manner provided as contemplated
by Section 3.01 on the date of original issuance of such Security, of the
principal amount (or, in the case of an Original Issue Discount Security, the
U.S. dollar equivalent on the date of original issuance of such Security of the
amount determined as provided in (i) above) of such Security, (iii) if the
principal amount payable at Stated Maturity of any Security is not determinable
upon original issuance, the principal amount of such Security that shall be
deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 3.01, and (iv) Securities owned by the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Securities which a Responsible Officer of the Trustee actually knows to be so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.

               "Paying Agent" means any Person authorized by the Company to pay
the principal of or any premium or interest on any Securities on its behalf,
which at the date of this Indenture includes the Trustee and J.P. Morgan Trust
Bond Ltd., a bank established under the laws of Japan with its corporate trust
office at Akasaka Park Building, 13th Floor, 2-20 Akasaka, 5-chome, Minato-ku,
Tokyo 107-6151, Japan.

               "Permanent Regulation S Security" has the meaning set forth in
Section 3.04.

                                       7

<PAGE>

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

               "Petrobras" has the meaning set forth in the second recital of
this Indenture.

               "Place of Payment," when used with respect to the Securities of
any series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 3.01.

               "Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.06 in exchange for

                                       8

<PAGE>

or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.

               "Purchase Agreement" means any Purchase Agreement entered into to
issue Securities under this Indenture.

               "Rating Agency" means Moody's and/or S&P.

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

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

               "Registered Security," means any Security issued in registered
form which is registered in the Security Register. Registered Securities shall
include Global Securities and Certificated Securities.

               "Registration Default" has the meaning set forth in the form of
face of Global Security in Section 2.02.

               "Registration Default Period" has the meaning set forth in the
form of face of the Global Security in Section 2.02.

               "Registration Rights Agreement" means an agreement entered into
by the Company contemplating the registration under the Securities Act of a
series of Securities issued under this Indenture subsequent to the initial date
of issuance of such series of Securities.

               "Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 3.01.

               "Regulation S" means Regulation S under the Securities Act (or
any successor provision), as it may be amended from time to time.

               "Regulation S Certificate" means a certificate substantially in
the form set forth in Annex A.

               "Regulation S Global Security" has the meaning set forth in
Section 2.01.

               "Regulation S Legend" means a legend substantially in the form of
the legend required in the forms of face of Security set forth in Section 2.02
to be placed upon a Regulation S Global Security.

               "Regulation S Securities" means all Securities required pursuant
to Section 3.05(3) to bear a Regulation S Legend. Such term includes a
Regulation S Global Security.

               "Reorganization" means the conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety to any Person
that guarantees the Company's obligations under this Indenture and the
Securities in accordance with Section 8.01.

               "Resale Registration Statement" shall mean a registration
statement under the Securities Act registering the Securities for resale
pursuant to the terms of the Registration Rights Agreement.

                                       9

<PAGE>

               "Responsible Officer" shall mean, when used with respect to the
Trustee, any officer within the corporate trust department (or similar group) of
the Trustee, with responsibility for the administration of the Indenture, and
any officer of the Trustee to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject.

               "Restricted Global Security" means any Global Security required
pursuant to Section 3.05(3) to bear a Restricted Securities Legend.

               "Restricted Period" means, with respect to any series of
Regulation S Securities, the period of 41 consecutive days beginning on and
including the later of (i) the day on which Securities of such series are first
offered to persons other than distributors (as defined in Regulation S) in
reliance on Regulation S and (ii) the day on which the closing of the offering
of Securities of such series pursuant to a Purchase Agreement occurs.

               "Restricted Security" means all Securities required pursuant to
Section 3.05(3) to bear a Restricted Securities Legend. Such term includes a
Restricted Global Security.

               "Restricted Securities Certificate" means a certificate
substantially in the form set forth in Annex B.

               "Restricted Securities Legend" means a legend substantially in
the form of the legend required in the form of face of Securities set forth in
Section 2.02 to be placed upon a Restricted Security.

               "Rule l44A" means Rule l44A under the Securities Act (or any
successor provision), as it may be amended from time to time.

               "Rule 144A Securities" means all Securities initially distributed
in connection with the offering of the Securities by the Purchasers in reliance
upon Rule 144A.

               "SEC Registered Securities" means the Exchange Securities and all
other Securities sold or otherwise disposed of pursuant to an effective
registration statement under the Securities Act, together with their respective
Successor Securities.

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

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

               "Security Register" and "Security Registrar" have the respective
meanings set forth in Section 3.05.

               "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., and any successor or successors thereto.

               "Special Interest" has the meaning set forth in the form of face
of the Global Security in Section 2.02. Unless the context otherwise requires,
references herein to "interest" on the Securities shall include Special
Interest.

                                       10

<PAGE>

               "Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 3.07.

               "Standby Purchase Agreement" has the meaning set forth in Section
3.14.

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

               "Step-Down Date" has the meaning set forth in the form of face of
the Global Security in Section 2.02.

               "Step-Up" has the meaning set forth in the form of face of the
Global Security in Section 2.02.

               "Subsidiary" means, as to any Person, a corporation, company,
partnership or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors (or similar governing body) of such
corporation, partnership or other entity 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. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Indenture shall refer
to a Subsidiary or Subsidiaries of Petrobras.

               "Successor Company" has the meaning set forth in Section 8.01.

               "Successor Security" of any particular Security means every
Security issued after, and evidencing all or a portion of the same debt (subject
to provisions, if any, in the Predecessor Security regarding payment of Special
Interest) as that evidenced by, such particular Security; and, for the purposes
of this definition, any Security authenticated and delivered under Section 3.06
in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.

               "Temporary Regulation S Security" means a temporary Security
issued in global registered form.

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

               "Trust Indenture Act" means the United States Trust Indenture Act
of 1939 as in force at the date as of which this instrument was executed (except
as provided in Section 9.05); provided, however, that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means,
to the extent required by any such amendment, the Trust Indenture Act of 1939 as
so amended.

                                       11

<PAGE>

               "United States" means the United States of America (including the
States and the District of Columbia) and its possessions (including Puerto Rico,
the U.S. Virgin Islands, Guam, American Samoa, Wake island and the Northern
Mariana Islands).

               "Unrestricted Securities Certificate" means a certificate
substantially in the form set forth in Annex C.

               "U.S. Person" shall have the meaning ascribed to such term in
Rule 902 of Regulation S.

               "U.S. GAAP" means generally accepted accounting principles in
effect in the United States applied on a basis consistent with the principles,
methods, procedures and practices in effect from time to time.

               "U.S. Government Obligations" has the meaning set forth in
Section 14.04.

               "Wholly-Owned Subsidiary" means, with respect to any corporate
entity, any person of which 100% of the outstanding capital stock (other than
qualifying shares, if any) having by the terms thereof ordinary voting power
(not dependent on the happening of a contingency) to elect the Board of
Directors (or equivalent controlling governing body) of such person is at the
time owned or controlled directly or indirectly by such corporate entity, by one
or more wholly-owned subsidiaries of such corporate entity or by such corporate
entity and one or more wholly-owned subsidiaries thereof.

Section 1.02   Compliance Certificates and Opinions.

               Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee such certificates and opinions as may be required under the Trust
Indenture Act with respect to compliance with conditions precedent provided for
in the Indenture. Each such certificate or opinion shall be given in the form of
an Officer's Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture, except that in the event of any such application or request as
to which the furnishing of such documents is specifically required by any
provisions of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.

               Every certificate or opinion, whether required to be provided
pursuant to this Section 1.02 or elsewhere, with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

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

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

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

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

                                       12

<PAGE>

Section 1.03   Form of Documents Delivered to Trustee.

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

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

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

Section 1.04   Acts of Holders of Securities; Record Dates.

               (1)  Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by an agent duly appointed in writing. Except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee and, where it is
hereby expressly required, to the Company. Such instrument or instruments and
any such record (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders of Securities signing
such instrument or instruments or so voting at such meeting. Proof of execution
of any such instrument or of a writing appointing any such agent or proxy, or of
the holding by any Person of a Security shall be sufficient for any purpose of
this Indenture and (subject to Section 6.01) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section. The record of
any meeting of Holders of Securities shall be proved in the manner provided in
Section 13.06.

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

               (3)  The Company may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand,

                                       13

<PAGE>

authorization, direction, notice, consent, waiver or other action provided or
permitted by this Indenture to be given, made or taken by Holders of Securities
of such series, provided that the Company may not set a record date for, and the
provisions of this paragraph shall not apply with respect to, the giving or
making of any notice, declaration, request or direction referred to in the next
paragraph. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities of the relevant series on such record date, or their duly
designated proxies, and no other Holders, shall be entitled to take the relevant
action, whether or not such Holders remain Holders after such record date;
provided that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders, or duly designated proxies,
of the requisite principal amount of Outstanding Securities of such series on
such record date. Nothing in this paragraph shall be construed to prevent the
Company from setting a new record date for any action for which a record date
has previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be canceled
and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders, or their duly designated proxies, of
the requisite principal amount of Outstanding Securities of the relevant series
on the date such action is taken. Promptly after any record date is set pursuant
to this paragraph, the Company, at its own expense, shall cause notice of such
record date, the proposed action by Holders and the applicable Expiration Date
to be given to the Trustee in writing and to each Holder of Securities of the
relevant series in the manner set forth in Section 1.06.

               The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.02, (iii) any request to institute
proceedings referred to in Section 5.07(2) or (iv) any direction referred to in
Section 5.12, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, or their duly designated proxies,
and no other Holders, shall be entitled to join in such notice, declaration,
request or direction, whether or not such Holders remain Holders after such
record date; provided that no such action shall be effective hereunder unless
taken on or prior to the applicable Expiration Date by Holders, or their duly
designated proxies, of the requisite principal amount of Outstanding Securities
of such series on such record date. Nothing in this paragraph shall be construed
to prevent the Trustee from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be canceled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders, or their duly designated
proxies, of the requisite principal amount of Outstanding Securities of the
relevant series on the date such action is taken. Promptly after any record date
is set pursuant to this paragraph, the Trustee, at the expense of the Company,
shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Company in writing and to each
Holder of Securities of the relevant series in the manner set forth in Section
1.06.

               With respect to any record date set pursuant to this Section, the
party hereto which sets such record date may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party or
parties hereto in writing, and to each Holder of Securities of the relevant
series in the manner set forth in Section 1.06, on or prior to the existing
Expiration Date. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date and, if an Expiration
Date is not designated with respect to any record date set pursuant to this
Section, the party or parties hereto which set such record date shall be deemed
to have designated the 180th day after such record date as the Expiration Date
with respect thereto.

                                       14

<PAGE>

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

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

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

               (6)  The provisions of this Section 1.04 are subject to the
provisions of Section 13.05.

Section 1.05   Notices, Etc., to Trustee and the Company.

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

               (1)  the Trustee by any Holder of Securities or by the Company
          shall be sufficient for every purpose hereunder if made, given,
          furnished or filed in writing (or sent by facsimile and confirmed in
          writing) to or with the Trustee at its Corporate Trust Office,
          Attention: Institutional Trust Services, or

               (2)  the Company by the Trustee or by any Holder of Securities
          shall be sufficient for every purpose hereunder (unless otherwise
          herein expressly provided) if in writing and mailed (or sent by
          facsimile and confirmed in writing) international air mail postage
          prepaid and addressed to its principal office specified in the first
          paragraph of this instrument to the attention of its Secretary, or at
          any other address previously furnished in writing to the Trustee by
          the Company.

Section 1.06   Notice to Holders of Securities; Waiver.

               Unless otherwise herein expressly provided, where this Indenture
provides for notice to Holders of any event, such notice shall be sufficiently
given to Holders of Securities if in writing and mailed, first-class postage
prepaid, or delivered by hand or overnight courier to each Holder of a Security
affected by such event, at its address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice.

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

               Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall

                                       15

<PAGE>

be the equivalent of such notice. Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.

Section 1.07   Language of Notices, Etc.

               Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language.

Section 1.08   Conflict with Trust Indenture Act.

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

Section 1.09   Effect of Headings and Table of Contents.

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

Section 1.10   Successors and Assigns.

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

Section 1.11   Separability Clause.

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

Section 1.12   Benefits of Indenture.

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

Section 1.13   Governing Law.

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

Section 1.14   Saturday, Sundays and Legal Holidays.

               In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security or the last day on which Holders have the right
to convert or exchange their Securities shall not be a Business Day at any Place
of Payment or place of conversion or exchange, then (notwithstanding any

                                       16

<PAGE>

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

Section 1.15   Appointment of Agent for Service; Submission to Jurisdiction;
Waiver of Immunity.

               By the execution and delivery of this Indenture, the Company
hereby appoints the New York office of the Company as its agent upon which
process may be served in any legal action or proceeding which may be instituted
in any Federal court in the Borough of Manhattan, the City of New York, State of
New York, arising out of or relating to the Securities or this Indenture, but
for that purpose only. Service of process upon such agent at the office of the
Company at 1336 Avenue of the Americas, 16th Floor, New York, New York
10019-5422, and written notice of said service to the Company by the Person
servicing the same addressed as provided by Section 1.05, shall be deemed in
every respect effective service of process upon the Company in any such legal
action or proceeding. The Company will take any and all action necessary to
continue such designation in full force and effect and to advise the Trustee of
any change of address of such agent; should such agent become unavailable for
this purpose for any reason, the Company will promptly and irrevocably designate
a new agent in the Borough of Manhattan, City of New York, State of New York,
which will agree to act as such for powers and for the purposes set forth in
this Section 1.15. The Company hereby (i) irrevocably submits to the
nonexclusive jurisdiction of any Federal court in the Borough of Manhattan, the
City of New York, State of New York in which any such legal action or proceeding
is so instituted, and any appellate court from any thereof, (ii) to the extent
it may effectively do so, irrevocably and unconditionally waives any objection
which it may have now or hereafter to the laying of the venue of any such legal
action or proceeding and (iii) to the extent the Company has or hereafter may
acquire any immunity from jurisdiction of any such court or from any legal
process (whether through service of notice, attachment prior to judgment,
attachment in aid of execution or otherwise) with respect to itself or its
property, the Company hereby irrevocably waives such immunity in respect of its
obligations under the Indenture and the Securities to the fullest extent
permitted by law. Such appointment shall be irrevocable so long as the Holders
of Securities shall have any rights pursuant to the terms thereof or of this
Indenture until the appointment of a successor by the Company with the consent
of the Trustee and such successor's acceptance of such appointment. The Company
further agrees to take any and all action, including the execution and filing of
any and all such documents and instruments, as may be necessary to continue such
designation and appointment of such agent or successor.

                                   ARTICLE TWO

                                 SECURITY FORMS

Section 2.01   Forms Generally.

               The Securities of each series shall be in substantially the form
set forth in this Article, or in such other form (including temporary or
permanent global form) as shall be established by or pursuant to an
Authorization of the Company or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or

                                       17

<PAGE>

endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary or as may, consistently herewith, be
determined by an Authorized Representative executing such Securities pursuant to
this Indenture, as evidenced by its execution thereof. If the forms of
Securities of any series are established by action taken pursuant to an
Authorization, a copy of an appropriate record of such action shall be certified
by any Authorized Representative of the Company or the secretary or assistant
secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Order contemplated by Section 3.03 for the authentication and
delivery of such Securities. Any such Board Resolution or other document
evidencing an Authorization shall have addressed thereto a true and correct copy
of the form of Security referred to therein approved by or pursuant to such
Authorization.

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

               Upon their original issuance, any Rule 144A Securities and any
Initial Regulation S Securities of any series shall be issued in the form of
separate Global Securities. The Global Securities representing Rule 144A
Securities, together with their Successor Securities which are Global Securities
other than Regulation S Global Securities and SEC Registered Securities, are
collectively herein called the "Restricted Global Securities". The Global
Securities representing Initial Regulation S Securities, together with their
Successor Securities which are Global Securities other than Restricted Global
Securities and SEC Registered Securities, are collectively herein called the
"Regulation S Global Securities".

Section 2.02   Form of Global Security.

                        [Form of Face of Global Security]

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

                     PETROBRAS INTERNATIONAL FINANCE COMPANY

                               [Title of Security]

Date: ___________
No.________                                               CUSIP NO._____________
                                                          ISIN NO.______________
[Legend if the Security is a Restricted Security:

               "THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT') AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING
OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) AND (4) TO AN

                                       18

<PAGE>

INSTITUTIONAL ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT) IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE, IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES."]

[Legend if the Security is a Regulation S Security:

          THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT, UNDER THE SECURITIES
ACT, BE OFFERED, SOLD, OR DELIVERED IN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, ANY U.S. PERSON, UNLESS THIS SECURITY IS REGISTERED UNDER
THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREOF IS
AVAILABLE.]

          [Legend if the Security is a Temporary Regulation S Security:

          THIS GLOBAL NOTE IS A TEMPORARY GLOBAL NOTE FOR PURPOSES OF REGULATION
S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT").
NEITHER THIS TEMPORARY GLOBAL NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD
OR DELIVERED, EXCEPT AS PERMITTED ABOVE.

          NO BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE PAYMENT OF PRINCIPAL HEREOF OR INTEREST HEREON UNLESS THE REQUIRED
CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE TERMS OF THE INDENTURE.]

          [Legend if the Security benefits from a Registration Rights Agreement:

               THE HOLDER OF THIS SECURITY IS SUBJECT TO, AND ENTITLED TO THE
BENEFITS OF, THE EXCHANGE AND REGISTRATION RIGHTS AGREEMENT, DATED AS OF [date
of agreement], AMONG THE COMPANY AND THE OTHER PARTIES REFERRED TO THEREIN.]

               PETROBRAS INTERNATIONAL FINANCE COMPANY, a Cayman Islands limited
company (herein called the "Company," which term includes any successor Person
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to ______________, or registered assigns, the principal sum of
________________ on ______________[if the Security is to bear interest prior to
Maturity, insert --, and to pay interest thereon from ___________, ___ or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually in arrears on ________and ________ in each year]
[annually in arrears on __________ in each year], commencing ___________, __, at
the rate of ____% per annum, until the principal hereof is paid or made
available for payment [if applicable insert -- provided that any principal and
premium, and any such installment of interest, which is overdue shall bear
interest at the rate of ___% per annum (to the extent that the payment of such
interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment, and such interest shall be
payable on demand.] The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the _______[or _______] (whether or not a
Business Day) [, as the case may be,] next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date

                                       19

<PAGE>

and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than ten days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture].

               [If applicable insert: Any such interest on overdue principal or
premium which is not paid on demand shall bear interest at the rate of ____% per
annum (to the extent that payment of such interest shall be legally enforceable)
from the date of such demand until the amount so demanded is paid or made
available for payment. Interest on any overdue interest shall be payable on
demand.]

               [If applicable insert: provided, however, that if (i) a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), registering a security substantially identical to this
Security (except that such Security will not contain terms with respect to the
Special Interest payments described below or legends reflecting transfer
restrictions) pursuant to an exchange offer (the "Exchange Offer") (the
"Exchange Registration Statement") (or, if applicable, a registration statement
registering this Security for resale (a "Shelf Registration Statement")) has not
become or been declared effective on or before the date on which such
registration statement is required to become or be declared effective pursuant
to the Exchange and Registration Rights Agreement, dated as of [date of
agreement] (the "Registration Rights Agreement"), among the Company and the
other parties referred to therein, or (ii) the Exchange Offer has not been
completed within the number of days specified by the Registration Rights
Agreement after the initial effective date of the Exchange Registration
Statement (if the Exchange Offer is then required to be made) or a Shelf
Registration Statement has not become or been declared effective on or before
the date on which it is required to become or be declared effective pursuant to
the Exchange and Registration Rights Agreement, or (iii) any Exchange
Registration Statement or, if applicable, the Shelf Registration Statement is
filed and declared effective but shall thereafter cease to be effective (except
as specifically permitted pursuant to the Registration Rights Agreement) without
being succeeded immediately (except as specifically permitted pursuant to the
Registration Rights Agreement) by an additional registration statement filed and
declared effective, in each case in Clauses (i) through (iii) upon the terms and
conditions set forth in the Registration Rights Agreement (each such event
referred to in Clauses (i) through (iii), a "Registration Default" and each
period during which a Registration Default has occurred and is continuing, a
"Registration Default Period"), then interest will accrue (in addition to any
stated interest on the Securities) (the "Step-Up") at a per annum rate of _____%
for such Registration Default Period from and including the date on which a
Registration Default first occurs to but excluding the first date (the
"Step-Down Date") that no Registration Default is in effect. Interest accruing
as a result of the Step-Up is referred to herein as "Special Interest." Accrued
Special Interest, if any, shall be paid semi-annually on ______ and ______ in
each year; and the amount of accrued Special Interest shall be determined on the
basis of the number of days during which such Registration Default is in effect.
The Company shall provide the Trustee with written notice of the date of any
Registration Default and the Step-Down Date. Any accrued and unpaid interest
(including Special Interest) on this Security upon the issuance of an Exchange
Security (as defined in the Indenture) in exchange for this Security shall cease
to be payable to the Holder hereof but such accrued and unpaid interest
(including Special interest) shall be payable on the next Interest Payment Date
for such Exchange Security.]

               [If the Security is not to bear interest prior to Maturity,
insert -- The principal of this Security shall not bear interest except in the
case of a default in payment of principal upon acceleration, upon redemption or
at Stated Maturity, and in such case the overdue principal and any overdue
premium

                                       20

<PAGE>

shall bear interest at the rate of ___% per annum (to the extent that the
payment of such interest shall be legally enforceable), from the date such
amounts are due until they are paid or made available for payment. Interest on
any overdue principal shall be payable on demand. Any such interest on any
overdue principal or premium which is not so paid on demand shall bear interest
at the rate of ___% per annum (to the extent that the payment of such interest
on interest shall be legally enforceable), from the date of such demand until
the amount so demanded is paid or made available for payment. Interest on
overdue interest shall be payable on demand.)

               Payment of the principal of [(and premium, if any)) and [if
applicable, insert -- any such] interest on this Security will be made at the
office or agency of the Company maintained for that purpose in in [such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts] [If Security is denominated and
payable in United States dollars insert currency and method of payment] [if
applicable, insert --; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register].

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

               [All terms used in this Security which are not defined herein but
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.]

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

               IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed manually or in facsimile.

Dated:
                                        PETROBRAS INTERNATIONAL FINANCE COMPANY

                                        By: ______________________________
                                            Name:
                                            Title:

                                       21

<PAGE>

                      [Form of Reverse of Global Security]

          This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of ., 2002 (herein called the "Indenture"
which term shall have the meaning assigned to it in such instrument), between
the Company and JPMorgan Chase Bank, as Trustee (herein called the "Trustee,"
which term includes any other successor trustee under the Indenture), and
reference is hereby made to the Indenture for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is one
of the series designated on the face hereof [, limited in aggregate principal
amount to U.S.$__________].

          [If applicable, insert-- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
(1) on __________ in any year commencing with the year ____ and ending with the
year _________ through operation of the sinking fund for this series at a
Redemption Price equal to [insert formula for determining amount] (with the
amount in excess of 100% of the principal amount being additional interest), and
(2)] at any time [if applicable, insert -- on or after ________, _____], as a
whole or in part, at the election of the Company, at the following Redemption
Prices (expressed as percentages of the principal amount): If redeemed [if
applicable, insert -- on or before ____________, ____%, and if redeemed] during
the 12-month period beginning _________ of the years indicated,

           Redemption                                        Redemption

Year                       Price                  Year                    Price

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

               [If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, (1) on
___________ in any year commencing with the year _____ and ending with the year
_____, through operation of the sinking fund for this series at the Redemption
Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below, and (2) at
any time [if applicable, insert -- on or after_______, ___________, as a whole
or in part, at the election of the Company, at the Redemption Prices for
redemption otherwise than through operation of the sinking fund (expressed as
percentages of the principal amount, with the amount in excess of 100% of the
principal amount being additional interest) set forth in the table below: If
redeemed during the 12-month period beginning_____________ of the years
indicated,

                                       22

<PAGE>

                                Redemption Price
                                 For Redemption           Redemption Price For
                               Through Operation       Redemption Otherwise Than
                                     of the             Through Operation of the
Year                              Sinking Fund                Sinking Fund
----                              ------------                ------------

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

               [If applicable, insert -- Notwithstanding the foregoing, the
Company may not, prior to __________, redeem any Securities of this series as
contemplated by [If applicable, insert -- Clause (2) of] the preceding paragraph
as a part of, or in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an interest cost to the
Company (calculated in accordance with generally accepted financial practice) of
less than ____% per annum.]

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

               [if applicable, insert -- The Securities of this series may be
redeemed at the option of the Company, in whole but not in part, upon not less
than 30 nor more than 60 days' notice given as provided in the Indenture, at any
time at a Redemption Price equal to the principal amount thereof plus accrued
interest to the date fixed for redemption if as a result of any change in or
amendment to the laws or any regulations or rulings promulgated thereunder of
the jurisdiction (or of any political subdivision or taxing authority thereof or
therein) in which the Company is incorporated (or in the case of a successor
Person to the Company, of the jurisdiction in which such successor Person is
organized or any political subdivision or taxing authority thereof or therein)
or any change in the official application or interpretation of such laws,
regulations or rulings, or any change in the official application or
interpretation of, or any execution of or amendment to, any treaty or treaties
affecting taxation to which such jurisdiction or such political subdivision or
taxing authority (or such other jurisdiction or political subdivision or taxing
authority) is a party, which change, execution or amendment becomes effective on
or after ____________ (or, in the case of a successor Person to the Company, the
date on which such successor Person became such pursuant to the applicable
provision of the Indenture).]

               [If applicable, insert -- The Securities may also be redeemed in
whole but not in part upon not less than 30 nor more than 60 days' notice given
as provided in the Indenture at any time at a Redemption Price equal to the
principal amount thereof plus accrued interest to the date fixed for

                                       23

<PAGE>

redemption if the Person formed by a consolidation of the Company or into which
the Company is merged or to which the Company conveys, transfers or leases its
properties and assets substantially as an entirety is required to pay a Holder
Additional Amounts in respect of any tax, assessment or governmental charge
imposed on any such Holder or required to be withheld or deducted from any
payment to such Holder as a consequence of such consolidation, merger,
conveyance, transfer or lease.]

               [If applicable, insert -- the Redemption Price of the Securities
of this series shall be equal to the applicable percentage of the principal
amount at Stated Maturity set forth below:

           If Redemption During the                   Redemption
          12-Month Period Commencing                    Price
          --------------------------                    -----

together with, in each case (except if the Redemption Date shall be a
__________), an amount equal to the applicable Redemption Price multiplied by a
fraction the numerator of which is the number of days from but not including the
preceding _______________ to and including the Redemption Date multiplied by the
difference between the Redemption Price applicable during the 12 months
beginning on the _________________ following the Redemption Date (or, in the
case of a Redemption Date after ___________, 100%) and the Redemption Price
applicable on the Redemption Date and the denominator of which is the total
number of days from but not including the _________________ preceding the
Redemption Date to and including the next succeeding ____________. The Company
will also pay to each eligible Holder, or make available for payment to each
such Holder, on the Redemption Date any additional interest (as set forth on the
face hereof) resulting from the payment of such Redemption Price.]

               [If applicable insert -- The Redemption Price of the Securities
of this series either in the event of certain changes in the tax treatment or in
an event of default would include, in addition to the face amount of the
Security, an amount equal to the Original Issue Discount accrued since the issue
date. Original Issue Discount (the difference between the Issue Price and the
Principal Amount at Maturity of the Security), in the period during which a
Security of this series remains outstanding, shall accrue at __% per annum, on a
semi-annual bond equivalent basis using a 360-day year composed of twelve 30-day
months, commencing on the Issue Date of this Security.]

               [If applicable, insert -- Notice of redemption will be given by
mail to Holders of Securities of this series, not less than 30 nor more than 60
days prior to the date fixed for redemption, all as provided in the Indenture.]

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

               [If applicable insert: The Securities are the Company's unsecured
obligations [and will be subordinated in right of payment to all of the
Company's existing and future senior indebtedness (as such term is defined in
the [supplemental indenture] [Board Resolution or other document evidencing an
Authorization] authorizing this series of Securities)] and effectively
subordinated to all existing and future Indebtedness and other liabilities of
its subsidiaries.]

               [If applicable, insert -- The Indenture contains provisions for
defeasance at any time of [the entire indebtedness on this Security] [or]
[certain restrictive covenants and Events of Default with

                                       24

<PAGE>

respect to this Security] [, in each case,] upon compliance with certain
conditions set forth in the Indenture.)

               [If applicable, insert -- Subject to and upon compliance with the
provisions of the Indenture, the Holder of this Security is entitled, at his
option, at any time after ________________, to [convert] [exchange] this
Security into [Describe Securities and conversion mechanics].]

               [If applicable, insert -- In the event of conversion of this
Security in part only, a new Security or Securities of this series and of like
tenor for the unconverted portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.]

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

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

               [If not applicable, delete -- If any deduction or withholding for
any present or future taxes, assessments or other governmental charges of Brazil
(or any political subdivision or taxing authority thereof or therein) shall at
any time be required by Brazil (or any such political subdivision or taxing
authority) in respect of any amounts to be paid by the Company under the
Securities, the Company will pay to the Holder of this Security such additional
amounts as may be necessary in order that the net amounts paid to such Holder of
such Security who, with respect to any such tax, assessment or other
governmental charge, is not resident in Brazil, after such deduction or
withholding, shall be not less than the amounts specified in such Security to
which such Holder is entitled ("Additional Amounts"); provided, however, that
the Company shall not be required to make any payment of Additional Amounts for
or on account of:

                    (a)  any tax, assessment or other governmental charge which
               would not have been imposed but for (i) the existence of any
               present or former connection between such Holder or the
               beneficial owner of the Security of such series (or between a
               fiduciary, settler, beneficiary, member or shareholder of, or
               possessor of a power over, such Holder or beneficial owner, if
               such Holder or beneficial owner is an estate, trust, partnership
               or corporation) and Brazil or any political subdivision or
               territory or possession thereof or area subject to its
               jurisdiction other than the mere holding of a Security or receipt
               of payment in respect thereto, including, without limitation,
               such Holder or beneficial owner (or such fiduciary, settler,
               beneficiary, member, shareholder or possessor) being or having
               been a citizen or resident thereof or being or having been
               present or engaged in trade or business therein or having or
               having had a permanent establishment therein or (ii) the
               presentation of a Security of such series (where presentation is
               required) for payment on a date more than 30 days after the date
               on which such payment became due

                                       25

<PAGE>

               and payable or the date on which payment thereof is duly provided
               for, whichever occurs later;

                    (b) any estate, inheritance, gift, sale, transfer, personal
               property or similar tax, assessment or other governmental charge;

                    (c) any amount required to be deducted or withheld by any
               Paying Agent from a payment on or in respect of the Security, if
               such payment can be made without such deduction or withholding by
               any other Paying Agent and we duly provide for such other Paying
               Agent to make such payment;

                    (d) withholding for any taxes, duties, assessments or other
               governmental charges that are payable otherwise than by deduction
               or withholding from payments on the Security;

                    (e) any tax, assessment or other governmental charge that is
               imposed or withheld by reason of the failure to comply by the
               Holder or the beneficial owner of the Security of such series
               with a request of the Company addressed to the Holder (i) to
               provide information concerning the nationality, residence or
               identity of the Holder or such beneficial owner or (ii) to make
               any declaration or other similar claim or satisfy any information
               or reporting requirements, which, in the case of (i) or (ii), is
               required or imposed by a statute, treaty, regulation or
               administrative practice of Brazil as a precondition to exemption
               from all or part of such tax, assessment or other governmental
               charge;

                    (f) where any Additional Amounts are imposed on a payment on
               the Securities to an individual and is required to be made
               pursuant to any European Union Directive on the taxation of
               savings income relating to the proposal for a Directive on the
               taxation of savings income published by the European Commission
               on July 18, 2001 or otherwise implementing the conclusions of the
               Economic and Financial Council of Ministers of the member states
               of the European Union (ECOFIN) Council meeting of 26 and 27
               November 2000 or any law implementing or complying with, or
               introduced in order to conform to, any such Directive; or

               any combination of items (a), (b), (c), (d), (e) and (f) above;

nor shall Additional Amounts be paid with respect to any payment in respect of
any Security to any Holder or beneficial owner who is a fiduciary or partnership
or other than the sole beneficial owner of such payment to the extent such
payment would be required by the laws of Brazil (or any political subdivision or
taxing authority thereof or therein) to be included in the income for tax
purposes of a beneficiary or settlor with respect to such fiduciary or a member
of such partnership or a beneficial owner who would not have been entitled to
such Additional Amounts had it been the Holder or beneficial owner, as the case
may be, of such Security.

               Unless the context otherwise requires, the Original Securities
(as defined in the Indenture) of this series and the Exchange Securities (as
defined in the Indenture) of this series shall constitute one series for all
purposes under the Indenture, including without limitation, amendments, waivers
and redemptions.

                                       26

<PAGE>

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

               As set forth in, and subject to, the provisions of the Indenture,
no Holder of any Security of this series will have any right to institute any
proceeding with respect to the Indenture, this Security or for any remedy
thereunder, unless such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to the Securities
of this series, the Holders of not less than 25% in principal amount of the
Outstanding Securities of this series shall have made written request, and
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the Holders of a majority
in principal of the Outstanding Securities of this series a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days; provided, however, that such limitations do not apply
to a suit instituted by the Holder hereof for the enforcement of payment of the
principal [(and premium, if any)], interest or any Additional Amount on this
Security on or after the respective due dates expressed herein [If applicable
insert -- or to a suit instituted by the Holder hereof for the enforcement of
the right to convert this Security or receive Securities upon conversion or
exchange in accordance with the Indenture].

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

               The Securities of this series are issuable only in registered
form without coupons in denominations of _________ and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same. As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Security is registrable in the Security Register, upon
surrender of this Security for registration of transfer at the office or agency
of the Company in any place where the principal of and any premium and interest
on this Security are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Securities of this series and of like
tenor, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees.

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

                                       27

<PAGE>

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

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

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

                                       28

<PAGE>

                                   SCHEDULE A

                          SCHEDULE OF PRINCIPAL AMOUNT

               The initial principal amount of this Security shall be U.S.$ .
The following decreases/increases in the principal amount of this Security have
been made:

                                               Total Principal     Notation Made
  Date of     Decrease in      Increase in         Amount            by or on
 Decrease/     Principal        Principal      Following such        Behalf of
 Increase       Amount           Amount       Decrease/Increase       Trustee
----------    -----------      -----------    -----------------    -------------

__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________
__________    ___________      __________        ___________         _________

Section 2.03   Form of Legend for Global Securities.

               Unless otherwise specified as contemplated by Section 3.01 for
the Securities evidenced thereby, every Global Security authenticated and
delivered hereunder shall bear a legend in substantially the following form:

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

                                       29

<PAGE>

DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.

Section 2.04   Form of Trustee's Certificate of Authentication.

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

                          CERTIFICATE OF AUTHENTICATION

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

     Dated:

                                                     JPMorgan Chase Bank
                                                        As Trustee

                                                     By:______________________
                                                        Authorized Officer

Section 2.05   Guarantee by Guarantor; Form of Guarantee.

               In the event that any series of Securities of the Company is to
be guaranteed by Petrobras, the Company, Petrobras and the Trustee shall enter
into a supplemental indenture pursuant to which Petrobras will agree with each
Holder of a Security of such series, and with the Trustee on behalf of each such
Holder, to be unconditionally bound by the terms and provisions of the Guarantee
endorsed on such guaranteed Securities and will authorize the Trustee to confirm
such Guarantee to the Holder of each such Security by its execution and delivery
of each such Security, with such Guarantee endorsed thereon, authenticated and
delivered by the Trustee. The Guarantee to be endorsed on any such guaranteed
Securities shall, subject to Section 2.01 and to the provisions of the relevant
supplemental indenture, be in substantially the form set forth below:

                                    GUARANTEE

                                       OF

                       PETROLEO BRASILEIRO S.A.- PETROBRAS

     For value received, Petroleo Brasileiro S.A.- Petrobras, a mixed capital
company (sociedade do economia mista) organized under the laws of Brazil, having
its principal office at Avenida Republica do Chile, 65, 20035-900 Rio de Janeiro
- RJ, Brazil (herein called the "Guarantor," which term includes any Person as a
successor Guarantor under the Indenture referred to in the Security upon which
this Guarantee is endorsed), hereby fully and unconditionally guarantees to the
Holder of the Security upon which this Guarantee is endorsed and to the Trustee
on behalf of each such Holder the due and punctual payment of the principal of,
premium, if any, and interest (including additional amounts, if any) on such
Security and the due and punctual payment of the sinking fund or analogous
payments referred to therein, if any, when and as the same shall become due and
payable, whether on the Stated Maturity, by declaration of

                                       30

<PAGE>

acceleration, call for redemption or otherwise, according to the terms thereof
and of the Indenture referred to therein. In case of the failure of Petrobras
International Finance Company, a Cayman Islands limited company (herein called
the "Borrower," which term includes any successor Person under such Indenture),
to punctually make any such payment of principal of, premium, if any, and
interest (including additional amounts, if any) on or any such sinking fund or
analogous payment, the Guarantor hereby agrees to cause such payment to be made
punctually when and as the same shall become due and payable, whether on the
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise, and as if such payment were made by the Borrower.

         The Guarantor hereby agrees that its obligations hereunder shall be as
if it were the principal debtor and not merely surety, and shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of such Security or such Indenture, and failure
to enforce the provisions of such Security or such Indenture, or any waiver,
modification or indulgence granted to the Borrower with respect thereto, by the
Holder of such Security or the Trustee or any other circumstance which may
otherwise constitute a legal or equitable discharge of a surety or guarantor;
provided, however, that, notwithstanding the foregoing, no such waiver,
modification or indulgence shall, without the consent of the Guarantor, increase
the principal amount of such Security, or increase the interest rate thereon, or
increase any premium or additional amounts payable thereon, or alter the Stated
Maturity thereof, or increase the principal amount of any Original Issue
Discount Security that would be due and payable upon a declaration of
acceleration of the maturity thereof pursuant to Article V of such Indenture.
The Guarantor hereby waives diligence, presentment, demand for payment, filing
of claims with a court in the event of merger or bankruptcy of the Borrower, any
right to require a proceeding first against the Borrower, protest or notice with
respect to such Security or the indebtedness evidenced thereby or with respect
to any sinking fund or analogous payment required under such Security and all
demands whatsoever, and covenants that this Guarantee will not be discharged
except by payment in full of the principal of, premium, if any, and interest
(including additional amounts, if any) on such Security.

         The Guarantor shall be subrogated to all rights of the Holder of such
Security and the Trustee against the Borrower in respect of any amounts paid to
such Holder by the Guarantor pursuant to the provisions of this Guarantee;
provided, however, that the Guarantor shall not be entitled to enforce, or to
receive any payments arising out of or based upon such right of subrogation
until the principal of, premium, if any, and interest (including additional
amounts, if any) on all Securities of the same series issued under such
Indenture shall have been paid in full.

         No reference herein to such Indenture and no provision of the Guarantee
or of such Indenture shall alter or impair the guarantees of the Guarantor,
which are absolute and unconditional, of the due and punctual payment of the
principal of, premium, if any, and interest (including additional amounts, if
any) on, and any sinking fund or analogous payments with respect to, the
Security upon which this Guarantee is endorsed.

         This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication of such Security shall have been manually
executed by or on behalf of the Trustee under such Indenture.

         All terms used but not defined in this Guarantee which are defined in
such Indenture shall have the meanings assigned to them in such Indenture.

                                       31

<PAGE>

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

                                       32

<PAGE>

                                 ARTICLE THREE

                                 THE SECURITIES

Section 3.01   Amount Unlimited: Issuable in Series.

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

               The Securities may be issued in one or more series. There shall
be established in or pursuant to a Board Resolution or other document evidencing
an Authorization of the Company and, subject to Section 3.03, set forth, or
determined in the manner provided, in an Officer's Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series, the terms of the Securities of such series, including
(as applicable) and without limitation:

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

               (2) any limit upon the aggregate principal amount of the
          Securities of the series which may be authenticated and delivered
          under this Indenture (except for Securities authenticated and
          delivered upon registration of transfer of, or in exchange for, or in
          lieu of, other Securities of the series pursuant to Sections 3.04,
          3.05, 3.06, 9.06 or 11.07 and except for any Securities which,
          pursuant to Section 3.03, are deemed never to have been authenticated
          and delivered hereunder) (including any provision for the offering of
          additional Securities of the series beyond any such limit upon the
          aggregate principal amount of Securities of such series);

               (3) whether the Securities of series will be issued at par, at a
          premium or at discount or as an Original Issue Discount Security;

               (4) whether the Securities will constitute subordinated
          obligations of the Company;

               (5) whether the Securities will be secured obligations of the
          Company;

               (6) whether Securities of the series in a form other than as
          Global Securities, whether any Securities of the series are to be
          issuable initially as Temporary Regulation S Securities and whether
          any Securities of the series are to be issuable as Permanent
          Regulation S Securities and, if so, whether beneficial owners of
          interests in any such Permanent Regulation S Security may exchange
          such interests for Securities of such series and of like tenor of any
          authorized form and denomination and the circumstances under which any
          such exchanges may occur, if other than in the manner provided in
          Section 3.05;

               (7) the Person to whom any interest on a Security of the series
          shall be payable, if other than the Person in whose name that Security
          (or one or more Predecessor Securities) is registered at the close of
          business on the Regular Record Date for such interest the manner in
          which, any interest on any Security of the series shall be payable, if
          other than by wire transfer in same-day funds to the Holder;

               (8) the date or dates on which the principal of the Securities of
          the series is payable;

                                       33

<PAGE>

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

          (10) the place or places where, subject to the provisions of Section
     10.10, the principal of and any premium and interest on Securities of the
     series shall be payable, any Global Securities of the series may be
     surrendered for registration of transfer, Securities of the series may be
     surrendered for exchange or conversion and notices and demands to or upon
     the Company in respect of the Securities of the series and this Indenture
     may be served;

          (11) other than with respect to any redemption of Securities pursuant
     to Section 11.08, the period or periods within which, the price or prices
     at which and the terms and conditions upon which Securities of the series
     may be redeemed, in whole or in part, at the option of the Company
     (including the period following the date referred to in Section 11.08) and,
     if other than by a Board Resolution, the manner in which any election by
     the Company to redeem the Securities shall be evidenced;

          (12) other than with respect to any redemption of Securities pursuant
     to Section 11.08, the obligation, if any, of the Company to redeem or
     purchase any Securities of the series pursuant to any sinking fund or
     analogous provisions or at the option of a Holder thereof and the period or
     periods within which, the price or prices at which and the terms and
     conditions upon which Securities of the series shall be redeemed or
     purchased, in whole or in part, pursuant to such obligation;

          (13) the terms and conditions for conversion or exchange of Securities
     into equity securities of the Company (including, if applicable, the
     rights, preferences and privileges of such equity securities), and the
     terms of any additional redemption rights of the Company relating to such
     terms and conditions for conversion or exchange, whether any such equity
     securities may be evidenced by American Depositary Receipts and whether
     such security is convertible or exchangeable into another security;

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

          (15) the applicable rate on Defaulted Interest;

          (16) the currency, currencies or currency units in which payment of
     the principal of and any premium and interest on any Securities of the
     series shall be payable if other than the currency of the United States of
     America and the manner of determining the equivalent thereof in the
     currency of the United States of America for purposes of the definition of
     "Outstanding" in Section 1.01;

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

          (18) if the principal of or any premium or interest on any Securities
     of the series is to be payable, at the election of the Company or a Holder
     thereof, in one or more currencies or

                                       34

<PAGE>

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

          (19) if other than the principal amount thereof, the portion of the
     principal amount of Securities of the series which shall be payable upon
     declaration of acceleration of the Maturity thereof pursuant to Section
     5.02;

          (20) the application, if any, of Sections 14.01, 14.02 or 14.03 or
     both such Sections to the Securities of the series and, if other than by a
     Board Resolution, the manner in which any election by the Company to
     defease such Securities shall be evidenced;

          (21) if Additional Amounts pursuant to Section 10.04 will not be
     payable by the Company;

          (22) if the principal amount payable at the Stated Maturity of any
     Securities of the series is not determinable as of one or more dates prior
     to the Stated Maturity, the amount which shall be deemed to be the
     principal amount of such Securities as of any such date for any other
     purpose hereunder, including the principal amount thereof which shall be
     due and payable upon any Maturity other than the Stated Maturity or which
     shall be deemed to be Outstanding as of any date (or, in any such case, the
     manner in which such principal amount shall be determined);

          (23) if applicable, that any Securities of the series shall be
     issuable in whole or in part in the form of one or more Global Securities
     and, in such case, the respective Depositaries for such Global Securities,
     the form of any legend or legends which shall be borne by any such Global
     Security in addition to or in lieu of that set forth in Section 2.03 and,
     if different from those set forth in Clause (2) of the last paragraph of
     Section 3.05, any circumstances in which Securities issued upon any
     exchange may be registered in the name or names of Persons other than the
     Depositary for such Global Security or a nominee thereof;

          (24) any addition to or change in the Events of Default which applies
     to any Securities of the series and any change in the right of the Trustee
     or the requisite Holders of such Securities to declare the principal amount
     thereof due and payable pursuant to Section 5.02;

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

          (26) whether the Securities of the series may be exchanged for
     Exchange Securities pursuant to an Exchange Offer or otherwise in
     authorized denominations in exchange for a like principal amount of
     Original Securities of the same series, all in accordance with the terms of
     this Indenture and the terms of such security; and

          (27) whether the Securities are Restricted Securities and Regulation S
     Securities, or SEC Registered Securities;

          (28) whether Add On Notes will be permitted;

                                       35

<PAGE>

               (29) any other terms of the Securities of such series (which
     terms shall not be inconsistent with the provisions of this Indenture,
     except as permitted by Section 9.01(5)).

               Unless the context otherwise requires, any Original Securities of
a series and any Exchange Securities of such series shall constitute one series
for all purposes under this Indenture, including without limitation, amendments,
waivers or redemptions.

               If any of the terms of the Securities of a series are established
by action taken pursuant to an Authorization of the Company, a copy of an
appropriate record of such action shall be certified by any Authorized
Representative of the Company, as the case may be, each delivered to the Trustee
at or prior to the delivery of the Officer's Certificate setting forth the terms
of the series.

Section 3.02   Denominations.

               Unless otherwise provided as contemplated by Section 3.01 with
respect to any series of Securities, any Securities of a series shall be
issuable in denominations of $1,000 and any integral multiple thereof.

Section 3.03   Execution, Authentication, Delivery and Dating.

               The Securities shall be executed on behalf of the Company by any
Authorized Representative of the Company. The signature of any such Authorized
Representative of the Company may be manual or facsimile.

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

               At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series,
executed by the Company to the Trustee for authentication, together with an
Order for the authentication and delivery of such Securities, and the Trustee in
accordance with the Order shall authenticate and deliver such Securities.

               If the forms or terms of the Securities of the series have been
established in or pursuant to one or more Authorizations as permitted by
Sections 2.01 and 3.01, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be
fully protected in relying upon, an Opinion of Counsel and Officers' Certificate
stating,

               (1) that such forms or terms have been established in conformity
     with the provisions of this Indenture; and

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

                                       36

<PAGE>

                  The Trustee shall have the right to decline to authenticate
and deliver any Securities under this Section if the Trustee, being advised in
writing by counsel, determines that such action may not lawfully be taken or if
the Trustee in good faith shall determine that such action would expose the
Trustee to personal liability based upon the written advice of counsel.

                  The Trustee shall not be required to authenticate the
Securities of any series if the issue of such Securities pursuant to this
Indenture will affect the Trustee's own rights, duties or immunities under the
Securities and this Indenture or otherwise in a manner which is not reasonably
acceptable to the Trustee.

                  Notwithstanding the provisions of Section 3.01 and of the
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officer's
Certificate otherwise required pursuant to Section 3.01 or the Order and Opinion
of Counsel otherwise required pursuant to such preceding paragraph at or prior
to the time of authentication of each Security of such series if such documents
are delivered at or prior to the authentication upon original issuance of the
first Security of such series to be issued.

                  Each Security shall be dated the date of its authentication.

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

Section 3.04      Temporary Securities.

                  Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Order the Trustee shall authenticate
and deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities. A Temporary
Regulation S Security shall be delivered only in compliance with the conditions
set forth in Section 3.03 and this Section 3.04.

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

                                       37

<PAGE>

                  If Temporary Regulation S Securities of any series are issued,
any such Temporary Regulation S Security shall, unless otherwise provided
therein, be delivered to DTC or its nominee or the Common Depositary, in each
case, for the benefit of the Euroclear Operator and Clearstream, Luxembourg, for
credit to the respective accounts of the beneficial owners of such Securities
(or to such other accounts as they may direct).

                  Without unnecessary delay but in any event not later than the
date specified in, or determined pursuant to the terms of, any such Temporary
Regulation S Security of a series (the "Exchange Date"), the Company shall
deliver to the Trustee definitive Securities of that series in aggregate
principal amount equal to the principal amount of such Temporary Regulation S
Security executed by the Company. On or after the Exchange Date, such Temporary
Regulation S Security shall be surrendered by DTC or its nominee or the Common
Depositary, as the case may be, to the Trustee, as the Company's agent for such
purpose, to be exchanged, in whole or from time to time in part, for definitive
Securities of that series without charge, and the Trustee shall authenticate and
deliver, in exchange for each portion of such Temporary Regulation S Security a
like aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such Temporary
Regulation S Security to be exchanged; provided however, that upon such
presentation by DTC or its nominee or the Common Depositary, such Temporary
Regulation S Security must be accompanied by a certificate dated the Exchange
Date or a subsequent date and signed by the Euroclear Operator as to the portion
of such Temporary Regulation S Security held for its account then to be
exchanged and a certificate dated the Exchange Date or a subsequent date and
signed by Clearstream, Luxembourg as to the portion of such Temporary Regulation
S Security held for its account then to be exchanged, each in the form set forth
in Section 3.12(2). The definitive Securities to be delivered in exchange for
any such Temporary Regulation S Security shall, unless otherwise specified in
the Temporary Regulation S Security, be in or in the form of Permanent
Regulation S Securities.

                  Unless otherwise specified in the Temporary Regulation S
Security, the interest of a beneficial owner of Securities of a series in a
Temporary Regulation S Security shall be exchanged on the Exchange Date for
interest in a permanent global registered Security (a "Permanent Regulation S
Security") of the same series and of like tenor unless, on or prior to the
Exchange Date, such beneficial owner has not delivered to the Euroclear Operator
or Clearstream, Luxembourg, as the case may be, a certificate in the form set
forth in Section 3.12(1) dated no earlier than the Certification Date, copies of
which certificate shall be available from the office of the Euroclear Operator
and Clearstream, Luxembourg, the Trustee, and any Authenticating Agent appointed
for such series of Securities and each Paying Agent and after the Exchange Date,
the interest of a beneficial owner of Securities of a series in a Temporary
Regulation S Security shall be exchanged for an interest in a Permanent
Regulation S Security of the same series and of like tenor following such
beneficial owner's delivery to the Euroclear Operator or Clearstream,
Luxembourg, as the case may be, of a certificate in the form set forth in
Section 3.12(1) dated no earlier than the Certification Date. Unless otherwise
specified in such Temporary Regulation S Security, any such exchange shall be
made free of charge to the beneficial owners of such Temporary Regulation S
Security.

                  Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, interest payable on a
Temporary Regulation S Security on an Interest Payment Date for Securities of
such series shall be payable to the Euroclear Operator and Clearstream,
Luxembourg on such Interest Payment Date only upon delivery by the Euroclear
Operator or Clearstream, Luxembourg to the Trustee of a certificate or
certificates in the form set forth in Section 3.12(2), for credit without
further interest on or after such

                                       38

<PAGE>

Interest Payment Date to the respective accounts of the Persons who are the
beneficial owners of such Temporary Regulation S Security on such Interest
Payment Date and who have each delivered to the Euroclear Operator or
Clearstream, Luxembourg, as the case may be, a certificate in the form set forth
in Section 3.12(1). Any interest so received by the Euroclear Operator and
Clearstream, Luxembourg and not paid as herein provided shall be returned to the
Trustee immediately prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Company in accordance with Section
10.17.

Section 3.05      Registration, Registration of Transfer and Exchange.

                  (1) The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and in
any other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Registered Securities and of transfers of Registered
Securities. The Trustee is hereby appointed "Security Registrar" for the purpose
of registering Registered Securities and transfers of Registered Securities as
herein provided. Such Security Register shall distinguish between Original
Securities and Exchange Securities.

                  Except as otherwise provided in this Section 3.05(1), upon
surrender for registration of transfer of a Registered Security of any series at
the office or agency in a Place of Payment for that series, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Registered Securities of
the same series, of any authorized denominations and of like tenor and aggregate
principal amount.

                  Subject to Section 3.05(2), at the option of the Holder,
Registered Securities of any series may be exchanged for other Registered
Securities of the same series, of any authorized denominations and of a like
tenor and aggregate principal amount upon surrender of the Registered Securities
to be exchanged at such office or agency. Whenever any Registered Securities are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Registered Securities which the Holder making the
exchange is entitled to receive.

                  All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company evidencing
the same debt (subject to the provisions, if any, in the Original Securities
regarding payment of Special Interest) and entitled to the same benefits under
this Indenture, as the Securities surrendered upon such registration of transfer
or exchange.

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

                  In the event that the Company delivers to the Trustee a copy
of an Officer's Certificate certifying that a registration statement under the
Securities Act with respect to an Exchange Offer relating to a particular series
of Securities, if any such Exchange Offer is contemplated for such series, has
been declared effective by the Commission and that the Company has offered
Exchange Securities of such series to the Holders in accordance with the
Exchange Offer, the Trustee shall exchange, upon request of any Holder, such
Holder's Securities for Exchange Securities upon the terms set forth in the
Exchange Offer.

                                       39

<PAGE>

                  No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Sections 3.04, 9.06 or 11.07 not involving any
transfer.

                  The Company shall not be required (i) to issue, register the
transfer of or exchange Registered Securities of any series during a period
beginning at the opening of business 15 days before any selection of Securities
of that series to be redeemed and ending at the close of business on the day of
the mailing of the relevant notice of redemption or (ii) to register the
transfer of or exchange any Registered Security so selected for redemption, in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.

                  The provisions of Clauses (a), (b), (c) and (d) below shall
apply only to Global Registered Securities:

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

                  (b) Subject to Clause (4) below, any exchange of a Global
         Security for other Securities may be made in whole or in part, and all
         Securities issued in exchange for a Global Security or any portion
         thereof shall be registered in such names as the Depositary for such
         Global Security shall direct.

                  (c) Every Security authenticated and delivered upon
         registration of transfer of, or in exchange for or in lieu of, a Global
         Security or any portion thereof, whether pursuant to this Section,
         Sections 3.04, 3.06, 9.06 or 11.07 or otherwise, shall be authenticated
         and delivered in the form of, and shall be, a Global Security, unless
         such Security is registered in the name of a Person other than the
         Depositary for such Global Security or a nominee thereof.

                  (d) Except as provided below, owners of beneficial interests
         in Global Securities will not be entitled to receive Registered
         Securities in their names ("Certificated Securities"). Certificated
         Securities shall be issued to all owners of beneficial interests in a
         Global Note in exchange for such interests if:

                      (i)   The Depositary notifies the Company that it is
                  unwilling or unable to continue as depositary for such Global
                  Note or the Depositary ceases to be a clearing agency
                  registered under the Exchange Act, at a time when such
                  Depositary is required to be so registered in order to act as
                  depositary, and in each case, and a successor depositary is
                  not appointed by the Company within 90 days of such notice,

                      (ii)  The Depositary executes and delivers to the Trustee
                  and the Security Registrar an Officers' Certificate stating
                  that such Global Note shall be so exchangeable, or

                      (iii) an Event of Default has occurred and is continuing
                  and the Security Registrar has received a request from the
                  Depositary or the Security Registrar and the Company have
                  received a request from the Trustee.

                                       40

<PAGE>

     In connection with the exchange of an entire Global Security for
     Certificated Securities pursuant to this Clause (d), such Global Note shall
     be deemed to be surrendered to the Trustee for cancellation, and the
     Company shall execute, and upon receipt of an Order the Trustee shall
     authenticate and deliver, to each beneficial owner identified by the
     Depositary in exchange for its beneficial interest in such Global Security,
     an equal aggregate principal amount of Certificated Securities of
     authorized denominations.

          (e)  Members of, or participants in, DTC or Euroclear and Clearstream,
     Luxembourg, as the case may be ("Agent Members"), shall have no rights
     under this Indenture with respect to any Global Security held on their
     behalf by DTC or by the Common Depositary under such Global Security, and
     DTC or the Common Depositary, as the case may be, may be treated by the
     Company, the Trustee, the Paying Agent and the Security Registrar and any
     of their agents as the absolute owner of such Global Security for all
     purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
     prevent the Company, the Trustee, the Paying Agent or the Security
     Registrar or any of their agents from giving effect to any written
     certification, proxy or other authorization furnished by DTC or the Common
     Depositary or impair, as between DTC or Euroclear and Clearstream,
     Luxembourg and their respective Agent Members, the operation of customary
     practices governing the exercise of the rights of an owner of a beneficial
     interest in any Global Security. The registered Holder of a Global Security
     may grant proxies and otherwise authorize any Person, including Agent
     Members and Persons that may hold interests through Agent Members, to take
     any action that a Holder is entitled to take under this Indenture or the
     Securities.

          (2)  Certain Transfers and Exchanges.

          (a)  The following provisions shall apply with respect to any proposed
     transfer of an interest in a Restricted Global Security: If (i) the owner
     of a beneficial interest in a Restricted Global Security wishes to transfer
     such interest (or portion thereof) to a Non-U.S. Person pursuant to
     Regulation S and (ii) such Non-U.S. Person wishes to hold its interest in
     the Security through a beneficial interest in the Regulation S Global
     Security, (x) upon receipt by the Depositary and Security Registrar of:

               (i)  instructions from the Holder of the Restricted Global Note
          directing the Depositary and Security Registrar to credit or cause to
          be credited a beneficial interest in the Regulation S Global Security
          equal to the principal amount of the beneficial interest in the
          Restricted Global Security to be transferred, and

               (ii) a Restricted Securities Certificate in the form of Annex B
          from the transferor,

          and (y) subject to the rules and procedures of the Depositary, the
     Depositary and Security Registrar shall increase the Regulation S Global
     Security and decrease the Restricted Global Security by such amount in
     accordance with the foregoing.

          (b)  If the owner of an interest in a Regulation S Global Security
     wishes to transfer such interest (or any portion thereof) to a "qualified
     institutional buyer" as defined by and pursuant to Rule 144A prior to the
     expiration of the Restricted Period therefor, (x) upon receipt by the
     Depositary and Security Registrar of:

                                       41

<PAGE>

               (i)  instructions from the Holder of the Regulation S Global
          Security directing the Depositary and Security Registrar to credit or
          cause to be credited a beneficial interest in the Restricted Global
          Note equal to the principal amount of the beneficial interest in the
          Regulation S Global Security to be transferred, and

               (ii) a Restricted Securities Certificate in the form of Annex B
          duly executed by the transferor,

          and (y) in accordance with the rules and procedures of the Depositary,
     the Depositary and Security Registrar shall increase the Restricted Global
     Security and decrease the Regulation S Global Security by such amount in
     accordance with the foregoing.

          (c)  Other Transfers. Any transfer of Restricted Securities or
     Regulation S Securities not described above (other than a transfer of a
     beneficial interest in a Global Security that does not involve an exchange
     of such interest for a Certificated Note or a beneficial interest in
     another Global Security, which must be effected in accordance with
     applicable law and the rules and procedures of the Depositary, but is not
     subject to any procedure required by this Indenture) shall be made only
     upon receipt by the Security Registrar of such opinions of counsel,
     certificates and/or other information reasonably required by and
     satisfactory to it in order to ensure compliance with the Securities Act or
     in accordance with paragraph (3) of this Section 3.05.

          (3)  Securities Act Legends. Rule 144A Securities and their
Successor Securities shall bear a Restricted Securities Legend, and Initial
Regulation S Securities and their Successor Securities shall bear a Regulation S
Legend, subject to the following:

          (a)  subject to the following Clauses of this Section 3.05(3), a
     Security or any portion thereof which is exchanged, upon registration of
     transfer or otherwise, for a Registered Global Security or any portion
     thereof shall bear the Securities Act legend borne by such Registered
     Global Security while represented thereby;

          (b)  subject to the following Clauses of this Section 3.05(3), a new
     Registered Security which is issued in exchange for another Security or any
     portion thereof, upon registration of transfer or otherwise, shall bear the
     Securities Act legend borne by such other Security, provided that, if such
     new Registered Security is required to be issued in the form of a
     Restricted Security, it shall bear a Restricted Securities Legend and, if
     such new Registered Security is so required to be issued in the form of a
     Regulation S Security, it shall bear a Regulation S Legend;

          (c)  any SEC Registered Securities shall not bear a Securities Act
     legend,

          (d)  after the applicable restricted period prescribed by Rule 144(k)
     under the Securities Act, a new Registered Security which does not bear a
     Securities Act legend may be issued in exchange for or in lieu of a
     Registered Security or any portion thereof which bears such a legend if the
     Trustee has received an Unrestricted Securities Certificate, satisfactory
     to the Trustee and duly executed by the Holder of such legended Security or
     his attorney duly authorized in writing, and after such date and receipt of
     such certificate, the Trustee shall authenticate and deliver such a new
     Registered Security in exchange for or in lieu of such other Registered
     Security as provided in this Article Three,

                                       42

<PAGE>

               (e) a new Registered Security which does not bear a Securities
     Act legend may be issued in exchange for or in lieu of a Registered
     Security or any portion thereof which bears such a legend if, in the
     Company's judgment, placing such a legend upon such new Security is not
     necessary to ensure compliance with the registration requirements of the
     Securities Act, and the Trustee, at the direction of the Company, shall
     authenticate and deliver such a new Security as provided in this Article
     Three, and

               (f) notwithstanding the foregoing provisions of this Section
     3.05(3), a Successor Security of a Security that does not bear a particular
     form of Securities Act legend shall not bear such form of legend unless the
     Company has reasonable cause to believe that such Successor Security is a
     "restricted security" within the meaning of Rule 144 under the Securities
     Act, in which case the Trustee, at the direction of the Company, shall
     authenticate and deliver a new Security bearing a Restricted Securities
     Legend in exchange for such Successor Security as provided in this Article
     Three.

Section 3.06   Mutilated, Destroyed, Lost and Stolen Securities.

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

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

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

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

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

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

                                       43

<PAGE>

Section 3.07   Payment of Interest; Interest Rights Preserved.

               Except as otherwise provided as contemplated by Section 3.01 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid, in the case of definitive Registered Securities, to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest and, at the
option of the Company, may be paid by check mailed to the address of the Person
as it appears in the Security Register or, in the case of Global Securities, by
wire transfer of same-day funds to the Holder.

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

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

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

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

                                       44

<PAGE>

Section 3.08   Persons Deemed Owners.

               Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and any
premium and (subject to Sections 3.04, 3.05 and 3.07) any interest on such
Security, and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.

Section 3.09   Cancellation.

               All Securities surrendered for payment, redemption, registration
of transfer or exchange or conversion or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee and shall be promptly canceled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly canceled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be disposed of by the Trustee in accordance
with its customary procedures unless otherwise directed by an Order.

Section 3.10   Computation of Interest.

               Except as otherwise specified as contemplated by Section 3.01 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.

Section 3.11   CUSIP Numbers.

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

Section 3.12   Add On Notes.

               Unless otherwise provided pursuant to Section 3.01, the Company
may, from time to time, subject to compliance with any other applicable
provisions of this Indenture, without the consent of the Holders, create and
issue pursuant to this Indenture additional notes ("Add On Notes") having terms
and conditions identical to those of any other series of Outstanding Securities
issued under this Indenture, except that Add On Notes:

               (1)  may have a different issue date from such other series of
     Outstanding Securities;

                                       45

<PAGE>

               (2) may have a different amount of interest payable on the first
     Interest Payment Date after issuance than is payable on such other series
     of Outstanding Securities;

               (3) may have terms specified pursuant to the Board Resolution or
     other document evidencing an Authorization or in a supplemental indenture
     for such Add On Notes making appropriate adjustments to the terms of this
     Indenture applicable to such Add On Notes in order to conform to and ensure
     compliance with the Securities Act (or other applicable securities laws)
     and any Registration Rights Agreement applicable to such Add On Notes,
     which are not adverse in any material respect to the Holder of any such
     series of Outstanding Securities (other than such Add On Notes); and

               (4) may be entitled to Step-Up interest not applicable to such
     other series of Outstanding Securities and may not be entitled to such
     Step-Up interest applicable to such other series of Outstanding Securities.

Section 3.13   Forms of Certification.

               (1) Whenever any provision of this Indenture contemplates that
certification be given by a beneficial owner of a portion of the Temporary
Regulation S Security, such certification shall be provided substantially in the
form of the following certificate, with only such changes as shall be approved
by the Company:

                                   CERTIFICATE

                     PETROBRAS INTERNATIONAL FINANCE COMPANY

                                     Company

                              [Title of Securities]

               This is to certify that as of the date hereof, and except as set
forth below, the above-captioned Securities held by you for our account (i) are
owned by person(s) that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States Federal income taxation regardless of its
source ("United States person(s)"), (ii) are owned by United States person(s)
that (a) are foreign branches of United States financial institutions (as
defined in U.S. Treasury Regulations Section 1.165-l2(c)(l)(v)) ("financial
institutions") purchasing for their own account or for resale, or (b) acquired
the Securities through foreign branches of United States financial institutions
and who hold the Securities through such United States financial institutions on
the date hereof (and in either case (a) or (b), each such United States
financial institution hereby agrees, on its own behalf or through its agent,
that you may advise the Company or its agent that it will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of
1986, as amended, and the regulations thereunder), or (iii) are owned by United
States or foreign financial institutions for purposes of resale during the
restricted period (as defined in U.S. Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)) and, in addition, if the owner of the Securities is a
United States or foreign financial institution described in Clause (iii) above
(whether or not also described in Clause (i) or (ii)) this is to further certify
that such financial institution has not acquired the Securities for purposes of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.

                                       46

<PAGE>

               As used herein, "United States" means the United States of
America (including the States and the District of Columbia); and its
"possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American
Samoa, Wake Island and the Northern Mariana Islands.

               We undertake to advise you by tested telex if the above statement
is not correct on the date on which you intend to submit your certificate
relating to such Securities to the Trustee, and in the absence of any such
notification it may be assumed that this certificate applies as of such date.

               This certificate excepts and does not relate to U.S.$ ___of which
interest in the above Securities in respect of which we are not able to certify
and as to which we understand exchange and delivery of definitive Securities
cannot be made until we do so certify.

               We understand that this certificate is required in connection
with certain tax laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceedings.
Dated:

By: ________________
    As, or as agent for,
    the beneficial owner(s) of
    the Securities to which this
    certificate relates";

               (2) Whenever any provision of this Indenture contemplates that
certification be given by DTC (or its nominee), the Euroclear Operator or
Clearstream, Luxembourg in connection with the exchange of a Temporary
Regulation S Security for a Permanent Regulation S Security, such certification
shall be provided substantially in the form of the following certificate, with
only such changes as shall be approved by the Company:

                                  CERTIFICATION

                     PETROBRAS INTERNATIONAL FINANCE COMPANY
                                     Company

                              [Title of Securities]

                               (the "Securities")

               This is to certify that, based solely on certifications we have
received in writing, by tested telex or by electronic transmission from member
organizations appearing in our records as persons being entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
to the effect set forth in the Indenture dated as of ., 2002, ______ principal
amount of the above-captioned Securities (i) is owned by Persons that are not
citizens or residents of the United States, domestic partnerships, domestic
corporations or any estate or trust the income of which is subject to United
States Federal income taxation regardless of its source ("United States
persons"), (ii) is owned by United States persons that (a) are foreign branches
of United States financial institutions (as defined in U.S. Treasury Regulations
Section l.165-12(c)(1)(v) ("financial institutions")) purchasing for their own
account or for resale, or (b) acquired the Securities through foreign branches
of United States financial

                                       47

<PAGE>

institutions and who hold the Securities through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such United
States financial institution has agreed, on its own behalf or through its agent,
that we may advise the Company or its agent that it will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of
1986, as amended, and the regulations thereunder), or (iii) is owned by United
States or foreign financial institutions for purposes of resale during the
restricted period (as defined in U.S. Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7))), and to the further effect that United States or
foreign financial institutions described in Clause (iii) above (whether or not
also described in Clause (i) or (ii)) have certified that they have not acquired
the Securities for purposes of resale directly or indirectly to a United States
person or to a Person within the United States or its possessions.

               As used herein, "United States" means the United Stales of
America (including the States and the District of Columbia); and its
"possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American
Samoa, Wake Island and the Northern Mariana Islands.

               We further certify (i) that we are not making available herewith
for exchange (or, if relevant, exercise of any rights or collection of any
interest) any portion of the Temporary Regulation S Security excepted in such
certifications and (ii) that as of the date hereof we have not received any
notification from any of our Member Organizations to the effect that the
statements made by such Member Organizations with respect to any portion of the
part submitted herewith for exchange (or, if relevant, exercise of any rights or
collection of any Interest) are no longer true and cannot be relied upon as of
the date hereof.

               We understand that this certification is required in connection
with certain tax laws and, if applicable, certain securities laws in the United
States. In connection therewith, if administrative or

                                       48

<PAGE>

legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certification to any interested party in such proceedings.

Dated:__________

                                             Yours faithfully,

                                                THE DEPOSITARY TRUST COMPANY

                                                or

                                                EUROCLEAR S.A./N.V.,
                                                as operator of the Euroclear
                                                System

                                                or

                                                Clearstream Banking,
                                                societe anonyme, Luxembourg

                                             By: ___________________
                                                 Name:
                                                 Title:

Section 3.14   Standby Purchase Agreements.

               The parties hereto agree that the Trustee may, in connection with
the issuance of a series of Securities under this Indenture, enter into standby
purchase agreements (each, as may be amended or supplemented from time to time,
a "Standby Purchase Agreement") with Petrobras. The Company and the Trustee
hereby acknowledge that the purpose and intent of Petrobras in providing any
Standby Purchase Agreement is to give effect to the agreement of Petrobras, from
time to time upon the receipt of a specified notice from the Trustee that the
Company has failed to make the required payments under the Securities of such
series, this Indenture and any supplemental indenture or other applicable
document evidencing an Authorization, to purchase the Holders' claims against
the Company. The Holders of any series of Securities supported by a Standby
Purchase Agreement (by acceptance of the Securities of such series upon
issuance) shall be deemed to have consented to the sale by the Trustee, on
behalf of the Holders, of all rights such Holders may have to receive amounts
due on or in respect of the Securities of such series that are not paid by the
Company in accordance with the requirements of this Indenture and receipt by
such Holder of funds paid by Petrobras under the Standby Purchase Agreement in
respect of such unpaid amounts shall extinguish such Holder's claims against the
Company in respect of any such unpaid amounts. The Trustee agrees to treat any
Standby Purchase Agreement in substantially the same

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fashion as it would a guarantee or similar obligation and shall promptly deposit
in accordance with the terms of Article V hereof any funds it receives from
Petrobras under or pursuant to any Standby Purchase Agreement.

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

Section 4.01   Satisfaction and Discharge of Indenture.

               This Indenture shall upon Order of the Company cease to be of
further effect (except as to any surviving rights of registration of transfer or
exchange or conversion of Securities herein expressly provided for, and any
right to receive Additional Amounts as provided in Section 10.19), and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when

               (1)  either

               (a) all Securities theretofore authenticated and delivered (other
          than (i) Securities which have been destroyed, lost or stolen and
          which have been replaced or paid as provided in Section 3.06 and (ii)
          Securities for whose payment money has theretofore been deposited in
          trust or segregated and held in trust by the Company and thereafter
          repaid to the Company or discharged from such trust, as provided in
          Section 10.17) have been delivered to the Trustee for cancellation; or

               (b)  all such Securities

                    (i)   have become due and payable, or

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

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

                    and the Company in the case of (i), (ii) or (iii) above, has
               deposited or caused to be deposited with the Trustee as trust
               funds in trust for the purpose money in an amount sufficient to
               pay and discharge the entire indebtedness on such Securities for
               principal and any premium and interest to the date of such
               deposit (in the case of Securities which have become due and
               payable) or to the Stated Maturity or Redemption Date, as the
               case may be;

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

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

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<PAGE>

             Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 6.07, the
obligations of the Company and the Trustee to any Authenticating Agent under
Section 6.14 and, if money shall have been deposited with the Trustee pursuant
to Subclause (B) of Clause (l) of this Section, the obligations of the Trustee
under Section 4.02 and the last paragraph of Section 10.17 shall survive.

Section 4.02 Application of Trust Money.

             Subject to the provisions of the last paragraph of Section 10.17,
all money deposited with the Trustee pursuant to Section 4.01 shall be held in
trust (without liability to the Holders for interest or investment) and applied
by it, in accordance with the provisions of the Securities and this Indenture,
to the payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine, to the
Persons entitled thereto, of the principal and any premium and interest for
whose payment such money has been deposited with or received by the Trustee.

                                  ARTICLE FIVE

                                    REMEDIES

Section 5.01 Events of Default.

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

             (1) The Company shall fail to make any payment in respect of
      principal on any of the Securities whether on the Stated Maturity (as the
      same may be extended as permitted hereunder), upon redemption or prior to
      the Maturity or otherwise in accordance with the terms of the Securities
      and this Indenture, non-payment of which shall continue for a period of 14
      calendar days and the Trustee shall not have otherwise received such
      amounts from amounts on deposit or otherwise by the end of such 14
      calendar day period;

             (2) The Company shall fail to make any payment in respect of any
      interest or other amounts due on or with respect to the Securities of any
      series (including Additional Amounts, if any) in accordance with the terms
      of the Securities of such series and this Indenture, non-payment of which
      shall continue for a period of 30 calendar days and the Trustee shall not
      have otherwise received such amounts from amounts on deposit or otherwise
      by the end of such 30 calendar day period;

             (3) The Company shall fail to perform, or breach, any term,
      covenant, agreement or obligation contained in this Indenture and such
      failure is either incapable of remedy or continues for a period of 60
      calendar days after there has been received by the Company from the
      Trustee or the Holders of at least 25% in principal amount of the
      Outstanding Securities of that series a written notice specifying such
      default or breach and requiring it to be remedied and stating that such a
      notice is a "Notice of Default" hereunder;

             (4) (i) The acceleration of any Indebtedness of the Company in
      accordance with the terms of such Indebtedness, it being understood that
      prepayment or redemption by the Company of any Indebtedness is not
      acceleration for this purpose; (ii) the Company shall fail to pay any

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<PAGE>

      Indebtedness when due or, as the case may be, beyond any applicable grace
      period specified in the underlying transaction document; or (iii) the
      Company shall fail to pay when due any amount payable by it under any
      Guarantee for, or indemnity in respect of, the Indebtedness of any other
      Person; provided, however, that the aggregate amount of any such
      Indebtedness falling within (i), (ii) or (iii) above (as to which the time
      for payment has not been extended by the relevant obligees) equals or
      exceeds U.S.$100,000,000 (or its equivalent in another currency);

             (5) One or more final and non-appealable judgments or final decrees
      is entered against the Company involving in the aggregate a liability (not
      theretofore paid or reimbursed by insurance) of U.S.$100,000,000 (or its
      equivalent in another currency) or more, and all such judgments or final
      decrees shall not have been vacated, discharged or stayed within 120
      calendar days after the rendering thereof;

             (6) The Company stops payment of, or is generally unable to pay,
      its debts as and when they become due except(i) as is otherwise expressly
      provided under this Indenture or (ii) in the case of a winding-up,
      dissolution or liquidation for the purpose of and followed by a
      consolidation, merger, conveyance or transfer, the terms of which shall
      have been approved by a resolution of a meeting of the Holders;

             (7) Proceedings are initiated against the Company under any
      applicable bankruptcy, reorganization, insolvency, moratorium or
      intervention law or law with similar effect, or under any other law for
      the relief of, or relating to, debtors, and any such proceeding is not
      dismissed or stayed within 90 days after the entering of such proceeding,
      or an administrator, receiver, trustee, manager, fiduciary, statutory
      manager, intervener or assignee for the benefit of creditors (or other
      similar official) is appointed to take possession or control of all or any
      material part of the undertaking, property, assets or revenues of the
      Company;

             (8) The Company initiates or consents to judicial, administrative
      or other proceedings relating to it under any applicable bankruptcy,
      reorganization, insolvency, moratorium or intervention law or law with
      similar effect, or under any other law for the relief of, or relating to,
      debtors, or makes or enters into a conveyance, assignment, arrangement or
      composition with or for the benefit of its creditors, or appoints or
      applies for the appointment of an administrator, receiver, trustee,
      manager, fiduciary, statutory manager, intervener or assignee for the
      benefit of creditors (or other similar official) to take possession or
      control of the whole or any material part of its undertaking, property,
      assets or revenues, or takes any judicial, administrative or other similar
      proceeding under any law for a readjustment or deferment of its
      Indebtedness or any part of it;

             (9) An effective resolution is passed for, or any authorized action
      is taken by any court of competent jurisdiction, directing the winding-up,
      dissolution or liquidation of the Company (other than in any of the
      circumstances referred to as exceptions in paragraph (6) above);

             (10) Any event occurs that under the laws of any relevant
      jurisdiction has substantially the same effect as any of the events
      referred to in any of paragraphs (6), (7), (8) or (9) of this Section
      5.01.

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<PAGE>

             (11) Any action, condition or thing (including the obtaining or
      effecting of any necessary consent, approval, authorization, exemption,
      filing, license, order, recording or registration) at any time required to
      be taken, fulfilled or done in order to (i) enable the Company lawfully to
      enter into, exercise its rights and perform and comply with its
      obligations under this Indenture, (ii) ensure that those obligations under
      this Indenture are legally binding and enforceable or (iii) make this
      Indenture admissible in evidence in the courts of Brazil and the Cayman
      Islands that is not taken, fulfilled or done within ten calendar days
      after notice thereof has been given to the Company by the Trustee or once
      any such authorization or consent has been given, is removed, withdrawn,
      modified, withheld or otherwise fails to remain valid and subsisting in
      full force and effect within ten calendar days after notice of such
      removal, withdrawal, modification, withholding or failure has been given
      to the Company by the Trustee;

             (12) This Indenture or any part thereof shall cease to be in full
      force and effect or binding and enforceable against the Company, it
      becomes unlawful for the Company to perform any material obligation under
      this Indenture, or the Company shall contest the enforceability of this
      Indenture or deny that it has liability under this Indenture; and

             (13) Petrobras fails to retain at least 51% direct or indirect
      ownership of the outstanding voting and economic interests (equity or
      otherwise) of and in the Company.

Section 5.02      Acceleration of Maturity; Rescission and Annulment.

                  If an Event of Default (other than an Event of Default
specified in Section 5.01(6), 5.01(7), 5.01(8) or 5.01(9)) with respect to
Securities of any series at the time Outstanding occurs and is continuing, then
in every such case the Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Securities of such series may declare the principal
amount (or, if any of the Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified in the terms thereof) of all of the Securities of such series to be
due and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable. If an
Event of Default specified in Section 5.01(6), 5.01(7), 5.01(8) or 5.01(9) with
respect to Securities of any series at the time Outstanding occurs, the
principal amount of all the Securities of that series (or, if any Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified by the terms thereof)
shall automatically and without any declaration or other action on the part of
the Trustee or any Holder, become immediately due and payable.

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

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

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

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

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<PAGE>

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

                  (d) all sums paid or advanced by the Trustee hereunder and the
      reasonable compensation, expenses, disbursements and advances of the
      Trustee, its agents and counsel, and all other amounts due to the Trustee
      under Section 6.07; and

             (2) all Events of Default with respect to Securities of that
      series, other than the non-payment of the principal of Securities of that
      series which has become due solely by such declaration of acceleration,
      have been cured or waived as provided in Section 5.13.

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

Section 5.03 Collection of Indebtedness and Suits for znforcement by Trustee.

             The Company covenants that if:

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

             (2) default is made in the payment of the principal of (or premium,
      if any, on) any Security at the Maturity thereof and such default
      continues for a period of 14 days,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable, including
Additional Amounts, on such Securities for principal and any premium and
interest and, to the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal and premium and on any overdue
interest, at the rate or rates prescribed therefor in such Securities, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and all
amounts due the Trustee under Section 6.07.

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

Section 5.04 Trustee May File Proofs of Claim.

             In case of any judicial proceeding relative to the Company or any
other obligor upon the Securities of a series or the property of the Company or
of such other obligor or their creditors, the Trustee shall be entitled and
empowered, by intervention in such proceeding or otherwise, to take any and all
actions authorized under the Trust Indenture Act in order to have claims of the
Holders of that series of Securities and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized

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<PAGE>

to collect and receive any moneys or other property payable or deliverable on
any such claims and to distribute the same; and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Holder of that series of
Securities to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders of
that series of Securities, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due to the Trustee under Section
6.07.

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

Section 5.05 Trustee May Enforce Claims Without Possession of Securities.

             All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due to the Trustee under Section 6.07, be for the ratable benefit of the
Holders of the Securities in respect of which such judgment has been recovered.

Section 5.06 Application of Money Collected.

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

             FIRST: To the payment of all amounts due the Trustee under Section
      6.07;

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

             THIRD: To the payment of the balance, if any, to the Company.

Section 5.07 Limitation on Suits.

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

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

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<PAGE>

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

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

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

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

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

Section 5.08  Unconditional Right of Holders to Receive Principal, Premium and
Interest and to Convert.

              Notwithstanding any other provision in this Indenture, the Holder
of any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to Sections
3.04, 3.05 and 3.07) interest and any Additional Amounts on such Security on the
respective Stated Maturity or Maturities expressed in such Security (or, in the
case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and, if such Security is convertible or
exchangeable, to convert or exchange such Security in accordance with this
Indenture and to institute suit for the enforcement of such right to convert or
to receive Securities upon conversion and such rights shall not be impaired
without the consent of such Holder.

Section 5.09  Restoration of Rights and Remedies.

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

Section 5.10  Rights and Remedies Cumulative.

              Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 3.06, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders of Securities is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in

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<PAGE>

equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

Section 5.11      Delay or Omission Not Waiver.

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

Section 5.12      Control by Holders of Securities.

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

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

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

                  (3) the Trustee need not follow any such direction if doing so
         would in its reasonable discretion either involve it in personal
         liability or be unduly prejudicial to Holders of Securities not joining
         in such direction.

Section 5.13      Waiver of Past Defaults.

                  Subject to Section 5.02, the Holders of not less than a
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series waive any past
default hereunder with respect to such series of the Company and its
consequences, except a default

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

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

                  (3) in the conversion or exchange of any Security of such
         series of such Company and the delivery of Securities upon conversion.

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

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<PAGE>

Section 5.14      Undertaking for Costs.

                  In any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, a court may require any party litigant in
such suit to file an undertaking to pay the costs of such suit, and may assess
reasonable costs, including reasonable attorney's fees and expenses, against any
such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company, in any suit instituted
by the Trustee, in any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% in principal amount of the Outstanding
Securities of any series, or in any suit instituted by any Holder of any
Security for the enforcement of the payment of the principal of or any premium
or interest on any Security on or after the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on or after the
Redemption Date) or for the enforcement of any right to convert such Security
pursuant to this Indenture.

Section 5.15      Waiver of Stay, Extension or Usury Laws.

                  The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, 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 Company 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. The Company hereby
expressly waives (to the extent that it may lawfully do so) all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.

                                   ARTICLE SIX

                                   THE TRUSTEE

Section 6.01      Certain Duties and Responsibilities.

                  The duties and responsibilities of the Trustee shall be as
specifically set forth in this Indenture and the Trust Indenture Act and no
implied covenants or obligations shall be read into this Indenture against the
Trustee, except as otherwise required by the Trust Indenture Act.
Notwithstanding the foregoing, no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it. Whether or not therein expressly so
provided, every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section.

Section 6.02      Notice of Defaults.

                  If, to the knowledge of the Trustee, a Default occurs
hereunder with respect to Securities of any series, the Trustee shall give the
Holders of Securities of such series notice of such Default as and to the extent
provided by the Trust Indenture Act; provided, however, that in the case of any
default of the

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<PAGE>

character specified in Section 5.01(3) with respect to Securities of such
series, no such notice to such Holders shall be given until at least 30 days
after the occurrence thereof.

Section 6.03      Certain Rights of Trustee.

                  Subject to the provisions of Section 6.01:

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

                  (2) any request or direction of the Company mentioned herein
         shall be sufficiently evidenced by an Order and any resolution of the
         Board of Directors of the Company may be sufficiently evidenced by a
         Board Resolution;

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

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

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

                  (6) the Trustee shall not be bound to make any investigation
         into the facts or matters stated in any resolution, certificate,
         statement, instrument, opinion, report, notice, request, direction,
         consent, order, bond, debenture, note, coupon, other evidence of
         indebtedness or other paper or document, but the Trustee, in its
         discretion, may make such further inquiry or investigation into such
         facts or matters as it may see fit, and, if the Trustee shall determine
         to make such further inquiry or investigation, it shall be entitled to
         examine the books, records and premises of the Company, personally or
         by agent or attorney (and the Company shall reimburse the Trustee for
         reasonable expenses in connection with such inquiry or investigation);
         provided that the Trustee shall not be entitled to such information
         which the Company is prevented from disclosing as a matter of law or
         contract;

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

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                  (8)  the Trustee shall not be liable for any action taken or
         omitted by it in good faith and believed by it to be within the
         discretion, rights or powers conferred upon it by this Indenture;

                  (9)  the Trustee shall not be deemed to have notice of any
         default (as defined in Section 6.02) or Event of Default unless a
         Responsible Officer of the Trustee has actual knowledge thereof or
         unless written notice of any event which is in fact such a default is
         received by the Trustee at the Corporate Trust Office of the Trustee,
         and such notice references the Securities and this Indenture; and

                  (10) 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 to each agent,
         custodian and other Person employed to act hereunder.

Section 6.04      Not Responsible for Recitals or Issuance of Securities.

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

Section 6.05      May Hold Securities.

                  The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 6.08 and 6.13, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.

Section 6.06      Money Held in Trust.

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

Section 6.07      Compensation and Reimbursement.

                  The Company agrees:

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

                  (2) except as otherwise expressly provided herein, to
         reimburse the Trustee upon its written request for all reasonable
         expenses, disbursements and advances incurred or made by the Trustee in
         accordance with any provision of this Indenture (including the
         reasonable compensation and the expenses and disbursements of its
         agents and counsel), except to the extent

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         that any such expense, disbursement or advance may be attributable to
         its negligence or bad faith; and

                  (3) to fully indemnify the Trustee and any predecessor Trustee
         and their agents for, and to hold it harmless against, any and all
         loss, liability, damages, claims or expense arising out of or in
         connection with the acceptance or administration of the trust or trusts
         hereunder and the performance of its duties hereunder, including the
         costs and expenses of defending itself against any claim or liability
         in connection with the exercise or performance of any of its powers or
         duties hereunder except to the extent that any such loss, liability or
         expense may be attributable to its negligence or bad faith.

                  The Trustee shall have a lien prior to the Holders of
Securities to payment of amounts due it under this Section 6.07 from funds held
by the Trustee hereunder. "Trustee" for purposes hereof includes any predecessor
trustee, but the negligence or bad faith of any trustee shall not affect the
rights of any other trustee hereunder.

                  If the Trustee incurs expenses or renders services after the
occurrence of an Event of Default specified in Sections 5.01(6), 5.01(7),
5.01(8) or 5.01(9), the reasonable expenses and the compensation for the
services will be intended to constitute expenses of administration under Title
11 of the United States Bankruptcy Code or any other applicable law.

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

Section 6.08      Conflicting Interests.

                  If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.
For this purpose, the Trustee shall not be deemed to have a conflicting interest
by reason of being Trustee for the Securities of any series and Trustee for the
Securities of any other series.

Section 6.09      Corporate Trustee Required; Eligibility.

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

Section 6.10      Resignation and Removal; Appointment of Successor.

                  (1) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 6.11.

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

                  (3) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company. The Trustee so removed may, at the expense of the Company, petition
any court of competent jurisdiction for the appointment of a successor Trustee
if no successor Trustee has been appointed within 30 days of such removal.

                  (4) If at any time:

                  (a) the Trustee shall fail to comply with Section 6.08 after
         written request therefor by the Company or by any Holder who has been a
         bona fide Holder of a Security for at least six months, or

                  (b) the Trustee shall cease to be eligible under Section 6.09
         and shall fail to resign after written request therefor by the Company
         or by any such Holder, or

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

then, in any such case, (i) the Company may remove by Board Resolution the
Trustee with respect to all Securities, or (ii) subject to Section 5.14, any
Holder of a Security who has been a bona fide Holder of a Security for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee with respect
to all Securities and the appointment of a successor Trustee or Trustees.

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

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

Section 6.11      Acceptance of Appointment by Successor.

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

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

                  (3) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (1) and (2) of this Section, as the case may be.

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

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Section 6.12      Merger, Conversion, Consolidation or Succession to Business.

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

Section 6.13      Preferential Collection of Claims Against Company.

                  If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of Section 3.11 of the Trust Indenture Act, but only to the
extent therein specified, regarding the collection of claims against the Company
(or any such other obligor). For purposes of Section 3.11(b)(4) and (6) of such
Act, the following terms shall mean:

                  (1) "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after delivery of
the goods or securities in currency or in checks or other orders drawn upon
banks or bankers and payable upon demand; and

                  (2) "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or incurred
by the Company for the purpose of financing the purchase, processing,
manufacturing, shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to, possession of, or a lien
upon, the goods, wares or merchandise or the receivables or proceeds arising
from the sale of the goods, wares or merchandise previously constituting the
security, provided the security is received by the Trustee simultaneously with
the creation of the creditor relationship with the Company arising from the
making, drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation.

Section 6.14      Appointment of Authenticating Agent.

                  The Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
original issue and upon exchange, registration of transfer or partial
conversion, exchange or partial redemption thereof or pursuant to Section 3.06,
and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Any such appointment shall be evidenced by an
instrument in writing signed by a Responsible Officer of the Trustee and a copy
of which shall be promptly furnished to the Company. Wherever reference is made
in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than U.S.$50,000,000
and subject to supervision or examination by Federal or State authority. If

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such Authenticating Agent publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Authenticating Agent shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. If
at any time an Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section.

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

                  An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.06 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.

                  The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 6.07.

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

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

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                                                 JPMorgan Chase Bank
                                                   As Trustee

                                                 By ____________________________
                                                    As Authenticating Agent

                                                 By ____________________________
                                                    As Authorized Signatory

               If all of the Securities of a series may not be originally issued
at one time, and if the Trustee does not have an office capable of
authenticating Securities upon original issuance located in a Place of Payment
where the Company wishes to have Securities of such series authenticated upon
original issuance, the Trustee, if so requested by the Company in writing (which
writing need not comply with Section 1.02 and need not be accompanied by an
Opinion of Counsel), shall appoint in accordance with this Section an
Authenticating Agent having an office in the Place of Payment designated by the
Company with respect of such series of Securities.

                                  ARTICLE SEVEN

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 7.01   Company to Furnish Trustee Names and Addresses of Holders.

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

               (1) semi-annually, if interest is paid semi-annually, or
     quarterly, if interest is paid quarterly, not later than 15 days after each
     Regular Record Date in each year or, if interest is paid annually, not
     later than 15 days after each Regular Record Date and the date six months
     subsequent to such Regular Record Date, a list, in such form as the Trustee
     may reasonably require, as to the names and addresses of the Holders of
     Securities as of such Regular Record Date, and

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

provided, that, for so long as the Trustee shall be Security Registrar, no such
list shall be required to be furnished.

Section 7.02   Preservation of Information; Communications to Holders.

               (1) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of Securities
contained in the most recent list furnished to the Trustee as provided in
Section 7.01 and the names and addresses of Holders of Securities received by
the Trustee in

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its capacity as Security Registrar. The Trustee may destroy any list furnished
to it as provided in Section 7.01 upon receipt of a new list so furnished.

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

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

Section 7.03   Reports by Trustee.

               (1) On or about each July 15 following the date hereof, the
Trustee shall transmit to Holders of Securities such reports, if any, dated as
of the preceding May 15 is concerning the Trustee and its actions under this
Indenture as may be required pursuant to Section 3.13(a) of the Trust Indenture
Act in the manner provided pursuant to Section 3.13(c) thereof. The Trustee
shall also transmit to Holders of Securities such reports, if any, as may be
required pursuant to Section 3.13(b) of the Trust Indenture Act at the times and
in the manner provided pursuant thereto and to Section 3.13(c) thereof.

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

Section 7.04   Reports by Company.

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

               Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice (other than with respect to notice of
an Event of Default pursuant to Sections 5.01(7), 5.01(8) and 5.01(9) hereof) of
any information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officer's
Certificates).

Section 7.05   Calculation of Original Issue Discount.

               The Company shall file with the Trustee promptly at the end of
each calendar year (i) a written notice specifying the amount, if any, of
original issue discount (including daily rates and accrual periods) accrued on
Outstanding Securities of each series as of the end of such year and (ii) such
other specific information, if any, relating to such original issue discount as
may then be relevant under the Internal Revenue Code of 1986, as amended from
time to time. The Trustee shall not be obligated to recalculate, recompute or
reconfirm such calculation.

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                                 ARTICLE EIGHT

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 8.01   Company May Consolidate, Etc., Only on Certain Terms.

               The Company will not, in one or a series of transactions,
consolidate or amalgamate with or merge into any corporation or convey, lease or
transfer substantially all of its properties, assets or revenues to any Person
(other than a direct or indirect Subsidiary of Petrobras) or permit any Person
(other than a direct or indirect Subsidiary of the Company) to merge with or
into it, unless:

               (1) either the Company is the continuing entity or the Person
     (the "Successor Company") formed by such consolidation or into which the
     Company is merged or that acquired or leased such property or assets of the
     Company will be a corporation organized and validly existing under the laws
     of the Cayman Islands and shall assume (jointly and severally with the
     Company unless the Company shall have ceased to exist as a result of such
     merger, consolidation or amalgamation), by a supplemental indenture (the
     form and substance of which shall be previously approved by the Trustee),
     all of the Company's obligations under this Indenture;

               (2) the Successor Company (jointly and severally with the Company
     unless the Company shall have ceased to exist as part of such merger,
     consolidation or amalgamation) agrees to indemnify each Holder against any
     tax, assessment or governmental charge thereafter imposed on such Holder
     solely as a consequence of such consolidation, merger, conveyance, transfer
     or lease with respect to the payment of principal of, or interest on, the
     Securities;

               (3) immediately after giving effect to such transaction, no Event
     of Default and no Default has occurred and is continuing;

               (4) the Company has delivered to the Trustee an Officer's
     Certificate and an Opinion of Counsel each stating that such merger
     consolidation, sale, transfer or other conveyance or disposition and the
     amendment to this Indenture complies with the terms of this Indenture and
     that all conditions precedent provided for herein and relating to such
     transaction have been complied with; and

               (5) the Company has delivered notice of any such transaction to
     Moody's to the extent that any series of Securities is then rated by
     Moody's (which notice shall contain a description of such merger,
     consolidation or conveyance).

               Notwithstanding anything to the contrary in the foregoing, so
long as no Default or Event of Default shall have occurred and be continuing at
the time of such proposed transaction or would result therefrom:

               (6) the Company may merge, amalgamate or consolidate with or
     into, or convey, transfer, lease or otherwise dispose of all or
     substantially all of its properties, assets or revenues to a direct or
     indirect Subsidiary of the Company or Petrobras in cases when the Company
     is the surviving entity in such transaction and such transaction would not
     have a material adverse effect on the Company and its Subsidiaries taken as
     a whole, it being understood that if the Company is not the surviving
     entity, the Company shall be required to comply with the requirements set
     forth in the previous paragraph; or

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               (7) any direct or indirect Subsidiary of the Company may merge or
     consolidate with or into, or convey, transfer, lease or otherwise dispose
     of assets to, any person (other than the Company or any of its Subsidiaries
     or Affiliates) in cases when such transaction would not have a material
     adverse effect on the Company and its Subsidiaries taken as a whole; or

               (8) any direct or indirect Subsidiary of the Company may merge or
     consolidate with or into, or convey, transfer, lease or otherwise dispose
     of assets to, any direct or indirect Subsidiary of the Company or
     Petrobras; or

               (9) any direct or indirect Subsidiary of the Company may
     liquidate or dissolve if the Company determines in good faith that such
     liquidation or dissolution is in the best interests of Petrobras, and would
     not result in a material adverse effect on the Company and its Subsidiaries
     taken as a whole and if such liquidation or dissolution is part of a
     corporate reorganization of the Company or Petrobras.

Section 8.02   Successor Substituted.

               Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 8.01, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to and be substituted for and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, as the case may be, and
thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the
Securities.

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

Section 9.01   Supplemental Indentures Without Consent of Holders.

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

               (1) to evidence the succession of another Person to the Company
     and the assumption by any such successor of the covenants of the Company
     herein and in the Securities, to evidence the full and unconditional
     guarantee by another Person, as provided in Section 8.01 hereof, or to add
     another Company to this Indenture for future issuances; or

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

               (3) to add any additional Events of Default for the benefit of
     the Holders of all or any series of Securities (and if such additional
     Events of Default are to be for the benefit of less than

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     all series of Securities, stating that such additional Events of Default
     are expressly being included solely for the benefit of such series); or

               (4) to add to or change any of the provisions of this Indenture
     to permit or facilitate the issuance of Securities in uncertificated form,
     in bearer form or in global bearer form, provided that any such action
     shall not adversely affect the Interest of the Holders of Securities of any
     series in any material respect; or

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

               (6) to establish the form or terms of Securities of any series,
     each as permitted by Sections 2.01 and 3.01; or

               (7) to evidence and provide for the acceptance of appointment
     hereunder by a successor Trustee with respect to the Securities of one or
     more series and to add to or change any of the provisions of this Indenture
     as shall be necessary to provide for or facilitate the administration of
     the trusts hereunder by more than one Trustee, pursuant to the requirements
     of Section 6.11(2); or

               (8) to reduce the conversion price of the Securities of any
     series other than pursuant to this Indenture; or

               (9) (i) to cure any ambiguity, to correct or supplement any
     provision herein which may be inconsistent with any other provision herein,
     or (ii) to amend, supplement or make any other provisions with respect to
     matters or questions arising under this Indenture, provided that such
     action pursuant to this Clause (9) shall not adversely affect the interests
     of the Holders of Securities of any series in any material respect.

Section 9.02   Supplemental Indentures with Consent of Holders.

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

               (1) change the Stated Maturity of the principal of or any
     installment of principal of or interest or premium on any Security or
     reduce the principal amount thereof or the rate of interest thereon or any
     premium payable upon the redemption thereof, or change any obligation of
     the Company to pay Additional Amounts pursuant to Section 10.19 (except as
     contemplated by Section 8.01(1) and permitted by Section 9.01(1)), or
     reduce the amount of the principal of an Original Issue Discount Security
     that would be due and payable upon a declaration of

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         acceleration of the Maturity thereof pursuant to Section 5.02, or the
         coin or currency in which, any Security or any premium or interest
         thereon is payable, or modify or affect in any manner adverse to the
         interests of the Holders of Securities of any series the conversion or
         exchange rights of such Securities, or impair the right to institute
         suit for the enforcement of any such payment on or after the Stated
         Maturity thereof (or, in the case of redemption, on or after the
         Redemption Date) or of any such right of conversion or exchange, or

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

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

               (4)  modify any of the provisions of this Section, Section 5.13
          or Section 10.07, except to increase any such percentage or to provide
          that certain other provisions of this Indenture cannot be modified or
          waived without the consent of the Holder of each Outstanding Security
          affected thereby; provided, however, that this Clause shall not be
          deemed to require the consent of any Holder of a Security with respect
          to changes in the references to "the Trustee" and concomitant changes
          in this Section and Section 10.18, or the deletion of this proviso, in
          accordance with the requirements of Sections 6.11(2) and 9.01(7), or

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

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

Section 9.03   Execution of Supplemental Indentures.

               In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.01) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture and that all conditions precedent
herein and in the Securities to such execution have been satisfied. The Trustee
may, but shall not be obligated to, enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.

Section 9.04   Effect of Supplemental Indentures.

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

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Section 9.05   Conformity with Trust Indenture Act.

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

Section 9.06   Reference in Securities to Supplemental Indentures.

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

                                   ARTICLE TEN

                                    COVENANTS

Section 10.01  Payment of Principal and Interest

               The Company covenants and agrees for the benefit of Holders of
each series of Securities that it will duly and punctually pay the principal of
and any premium and interest and other amounts (including any Additional
Amounts) on the Securities of that series in accordance with the terms of the
Securities of that series and this Indenture.

Section 10.02  Performance Under This Indenture.

               The Company will agree to duly and punctually perform, comply
with and observe all obligations and agreements to be performed by it under the
terms of this Indenture.

Section 10.03  Maintenance of Corporate Existence.

               The Company will, and will cause each of its Subsidiaries to, (i)
maintain in effect their corporate existence and all registrations necessary
therefor except as otherwise permitted by Article VIII and (ii) take all
reasonable actions to maintain all rights, privileges, titles to property,
franchises, concessions and the like necessary or desirable in the normal
conduct of its business, activities or operations; provided, however, that this
Section 10.03 shall not require the Company to maintain or cause any Subsidiary
thereof to maintain any such right, privilege, title to property or franchise or
to preserve the corporate existence of any Subsidiary, if the Company's Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company, and that the loss thereof is not
disadvantageous in any material respect to the Holders.

Section 10.04  Maintenance of Properties.

               The Company will, and will cause each of its Subsidiaries to,
maintain and keep in good condition, repair and working order (normal wear and
tear excepted) all their properties used or useful in the conduct of its or its
Subsidiaries businesses and will cause, and will cause each of its Subsidiaries
to cause, to be made all necessary repairs, renewals, replacements and
improvements thereof, all as in the judgment of the Company shall be necessary
properly to conduct at all times the business carried on in connection
therewith; provided that this Section 10.04 shall not require the Company to
maintain or cause

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any Subsidiary thereof to maintain any of such properties if the failure to
maintain such properties does not, and will not, have a Material Adverse Effect.

Section 10.05  Compliance with Laws.

               The Company will comply, and will cause its Subsidiaries to
comply, at all times in all material respects with all applicable Laws
(including, without limitation, Environmental Laws) of any Governmental
Authority having jurisdiction over the Company, the Company's business or any of
the transactions contemplated herein, except where the failure so to comply
would not have a Material Adverse Effect.

Section 10.06  Maintenance of Government Approvals.

               The Company will, and will cause its Subsidiaries to, duly obtain
and maintain in full force and effect all approvals, consents or licenses of any
Governmental Authority which are necessary under the laws of Brazil, the Cayman
Islands or any other jurisdiction having jurisdiction over the Company or the
Company's business, or the transactions contemplated herein in order for the
Company to conduct its business or for the Company to perform its obligations
under this Indenture or the Securities or the validity or enforceability thereof
except, in the case of such approval, consent or license relating to the conduct
of the Company's business, where the failure so to comply would not have a
Material Adverse Effect.

Section 10.07  Payments of Taxes and Other Claims.

               The Company will, and will cause each of its Subsidiaries to, pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, any present or future taxes, penalties, fines, duties, assessments
or other governmental charges (or interest on any of the foregoing) of
whatsoever nature levied or imposed upon the Company or such Subsidiary, as the
case may be, and all lawful claims for labor, materials and supplies which, if
unpaid, might by law become a lien upon the property of the Company or such
Subsidiary, as the case may be; provided, however, that this Section 10.07 shall
not require the Company to, or cause any Subsidiary thereof to, pay or discharge
or cause to be paid or discharged any such tax, penalty, fine, duty, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith and, if appropriate, by appropriate legal proceedings or where the
failure to do so would not have a Material Adverse Effect.

Section 10.08  Maintenance of Insurance.

               The Company will, and will cause each of its Subsidiaries to,
maintain insurance with insurance companies that the Company reasonably believes
to be financially sound in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning or operating
properties or facilities similar to those owned or operated by the Company or
its Subsidiaries, as the case may be, in the same general locations in which the
Company and its Subsidiaries own or operate their properties or facilities,
except when the failure to do so would not have a Material Adverse Effect.

Section 10.09  Maintenance of Books and Records.

               The Company shall, and shall cause each of its Subsidiaries to,
maintain books, accounts and records in accordance with U.S. GAAP.

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Section 10.10  Maintenance of Office or Agency.

               So long as the Securities of any series are Outstanding, the
Company will maintain in the Borough of Manhattan, the City of New York, an
office or agency where notices to and demands upon the Company in respect of
this Indenture and the Securities of such series may be served, and the Company
will not change the designation of such office without prior notice to the
Trustee and designation of a replacement office in the same general location. If
at any time the Company shall fail to maintain any required office or agency or
shall fail to furnish the Trustee with the address thereof, all presentations,
surrenders, notices and demands may be served at the Corporate Trust Office and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.

Section 10.11  Ranking.

               The Company shall ensure that the Securities of each series will
at all times constitute general senior, unsecured and unsubordinated obligations
of the Company and will rank pari passu, without any preferences among
themselves, with all other present and future unsecured and unsubordinated
obligations of the Company (other than obligations preferred by statute or by
operation of law).

Section 10.12  Use of Proceeds.

               Unless otherwise indicated in any Board Resolution, supplemental
indenture or other document evidencing an Authorization pursuant to Section 3.01
hereof, the Company will use the proceeds from the offer and sale of the
Securities of any series after the deduction of any commissions principally for
general corporate purposes, including the financing of the purchase of oil
product imports and the repayment of existing trade-related debt.

Section 10.13  Statement by Officers as to Default and Notices of Events of
Default.

               The Company (and each other obligor on the Securities of any
series) will deliver to the Trustee, within 90 days after the end of each fiscal
year of the Company ending after the date hereof (which, unless the Trustee is
notified otherwise, shall be December 31), an Officer's Certificate, stating
whether or not to the best knowledge of the signers thereof the Company is in
default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company (or any such
obligor) shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge. Within 15 days (or promptly
with respect to Events of Default pursuant to Sections 5.01(4), 5.01(5) and
5.01(6) hereunder) after the Company becomes aware or should reasonably become
aware of the occurrence of an Event of Default pursuant to Section 5.01
hereunder, the Company shall provide notice to the Trustee of such occurrence,
accompanied by an Officer's Certificate of the Company setting forth the details
thereof.

Section 10.14  Provision of Financial Statements and Reports.

               In the event that the Company shall file any financial statements
or reports with the SEC or shall publish or otherwise make such statements or
reports publicly available in Brazil, the United States or elsewhere, the
Company shall furnish a copy of such statements or reports to the Trustee within
15 calendar days of the date of filing or the date the information is otherwise
made publicly available, as the case may be.

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               The Company will provide, together with each of the financial
statements delivered pursuant to Clause (i) above, an Officer's Certificate
stating (A) that a review of the Company's activities has been made during the
period covered by such financial statements with a view to determining whether
the Company has kept, observed, performed and fulfilled its covenants and
agreements under this Indenture; and (B) that no Default or Event of Default has
occurred during such period or, if one or more have actually occurred,
specifying all such events and what actions have been taken and will be taken
with respect to such Event of Default.

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

Section 10.15  Further Actions.

               The Company will, at its own cost and expense, and will cause its
Subsidiaries to, at their own cost and expense, take any action, satisfy any
condition or take any action (including the obtaining or effecting of any
necessary consent, approval, authorization, exemption, filing, license, order,
recording or registration) at any time required, in the reasonable opinion of
the Trustee, in accordance with applicable Laws (as applicable) to be taken,
fulfilled or done in order to (i) to enable the Company to lawfully enter into,
exercise its rights and perform and comply with its obligations under each
series of the Securities and this Indenture, (ii) to ensure that the Company's
obligations under each series of the Securities and this Indenture are legally
binding and enforceable, (iii) to make each series of the Securities and this
Indenture admissible in evidence in the courts of the State of New York, Brazil
or the Cayman Islands, (iv) to enable the Trustee to exercise and enforce its
rights under and carry out the terms, provisions and purposes of this Indenture,
(v) to take any and all action necessary to preserve the enforceability of, and
maintain the Trustee's rights hereunder, including, without limitation,
refraining from taking any action that reasonably can be expected to have an
adverse effect on the enforceability of, or any of the Trustee's rights under,
this Indenture, and (vi) to assist the Trustee in the Trustee's performance of
its obligations under this Indenture; provided, however, that the Company shall
not be required to take any action contemplated herein if it promptly (and in no
event later than two Business Days after any such request) provides to the
Trustee a written Opinion of Counsel reasonably acceptable to the Trustee
specifying that the failure to take such action or satisfy such condition would
not have an adverse effect on the rights of the Holders under this Indenture.

Section 10.16  Appointment to Fill a Vacancy in Office of Trustee.

               The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, will appoint in the manner provided in Section 6.10, a
successor Trustee, so that there shall at all times be a Trustee with respect to
the Securities.

Section 10.17  Payments and Paying Agents.

               The Company will, prior to 3:00 p.m. New York City time, on the
Business Day preceding any payment date of the principal of or interest on any
series of Securities or other amounts (including Additional Amounts), deposit
with the

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Trustee a sum sufficient to pay such principal, interest or other amounts
(including Additional Amounts) so becoming due.

                  Whenever the Company shall appoint a Paying Agent other than
the Trustee with respect to any series of Securities, it will cause such Paying
Agent to execute and deliver to the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section:

                  (1) that it will hold all sums received by it as such agent
         for the payment of the principal of or interest on any Securities
         (whether such sums have been paid to it by or on behalf of the Company
         or by any other obligor on the Securities) in trust for the benefit of
         the Holders or of the Trustee;

                  (2) that it will give the Trustee notice of any failure by the
         Company (or by any other obligor on the Securities) to make any payment
         of the principal of or interest on any series of Securities (including
         Additional Amounts) and any other payments to be made by or on behalf
         of the Company under this Indenture or the Securities when the same
         shall be due and payable; and

                  (3) that it will pay any such sums so held in trust by it to
         the Trustee upon the Trustee's written request at any time during the
         continuance of the failure referred to in Clause (ii) above.

                  The Trustee shall arrange with all such Paying Agents for the
payment, from funds furnished by the Company to the Trustee pursuant to this
Indenture, of the principal of and interest and other amounts due on the
Securities (including Additional Amounts) and of the compensation of such Paying
Agents for their services as such.

                  If the Company shall act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of or interest on such series of Securities, set aside, segregate and
hold in trust for the benefit of the Holders of such series of Securities a sum
sufficient to pay such principal or interest (including Additional Amounts) so
becoming due. The Company will promptly notify the Trustee of any failure to
take action.

                  Anything in this Section 10.17 to the contrary
notwithstanding, the Company may at any time, for the purpose of obtaining a
satisfaction and discharge with respect to any series of Securities hereunder,
or for any other reason, pay or cause to be paid to the Trustee all sums held in
trust for such series of Securities by the Company or any Paying Agent
hereunder, as required by this Section, such sums to be held by the Trustee upon
the trusts herein contained.

                  Anything in this Section 10.17, to the contrary
notwithstanding, the agreements to hold sums in trust as provided in this
Section are subject to the provisions of Section 4.02.

                  The Company agrees to indemnify the Holders against any
failure on the part of any Paying Agent to pay, in accordance with the terms
hereof, any sum due in respect of any series of Securities on the applicable
Payment Date.

Section 10.18     Waiver of Certain Covenants.

                  Except as otherwise specified as contemplated by Section 3.01
for Securities of such series, the Company may, with respect to the Securities
of any series, omit in any particular instance to comply with any term,
provision or condition set forth in any covenant provided pursuant to Section

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3.01(23), 9.01(2) or 9.01(6) for the benefit of the Holders of Securities of
such series or any term, provision or condition set forth in an indenture
supplemental hereto, if before the time for such compliance the Holders of at
least a majority in principal amount of the Outstanding Securities of such
series shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.

Section 10.19     Additional Amounts.

                  Unless otherwise specified in any Board Resolution of the
Company or indenture supplemental hereto establishing the terms of Securities of
a series in accordance with Section 3.01, if any deduction or withholding for
any present or future taxes, assessments or other governmental charges of Brazil
(or any political subdivision or taxing authority thereof or therein) shall at
any time be required by Brazil (or any such political subdivision or taxing
authority) in respect of any amounts to be paid by the Company of principal of
or interest on a Security of any series, the Company will pay to the Holder of a
Security of such series such additional amounts as may be necessary in order
that the net amounts paid to such Holder of such Security who, with respect to
any such tax, assessment or other governmental charge, is not resident in
Brazil, after such deduction or withholding, shall be not less than the amounts
specified in such Security to which such Holder is entitled ("Additional
Amounts"); provided, however, that the Company shall not be required to make any
payment of Additional Amounts for or on account of:

                  (1) any tax, assessment or other governmental charge which
         would not have been imposed but for (i) the existence of any present or
         former connection between such Holder or the beneficial owner of the
         Security of such series (or between a fiduciary, settler, beneficiary,
         member or shareholder of, or possessor of a power over, such Holder or
         beneficial owner, if such Holder or beneficial owner is an estate,
         trust, partnership or corporation) and Brazil or any political
         subdivision or territory or possession thereof or area subject to its
         jurisdiction other than the mere holding of a Security or receipt of
         payment in respect thereto, including, without limitation, such Holder
         or beneficial owner (or such fiduciary, settler, beneficiary, member,
         shareholder or possessor) being or having been a citizen or resident
         thereof or being or having been present or engaged in trade or business
         therein or having or having had a permanent establishment therein or
         (ii) the presentation of a Security of such series (where presentation
         is required) for payment on a date more than 30 days after the date on
         which such payment became due and payable or the date on which payment
         thereof is duly provided for, whichever occurs later;

                  (2) any estate, inheritance, gift, sale, transfer, personal
         property or similar tax, assessment or other governmental charge;

                  (3) any amount required to be deducted or withheld by any
         Paying Agent from a payment on or in respect of the Security, if such
         payment can be made without such deduction or withholding by any other
         Paying Agent and we duly provide for such other Paying Agent to make
         such payment;

                  (4) withholding for any taxes, duties, assessments or other
         governmental charges that are payable otherwise than by deduction or
         withholding from payments on the Security;

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                  (5) any tax, assessment or other governmental charge that is
         imposed or withheld by reason of the failure to comply by the Holder or
         the beneficial owner of the Security of such series with a request of
         the Company addressed to the Holder (i) to provide information
         concerning the nationality, residence or identity of the Holder or such
         beneficial owner or (ii) to make any declaration or other similar claim
         or satisfy any information or reporting requirements, which, in the
         case of (i) or (ii), is required or imposed by a statute, treaty,
         regulation or administrative practice of Brazil as a precondition to
         exemption from all or part of such tax, assessment or other
         governmental charge;

                  (6) where any Additional Amounts are imposed on a payment on
         the Notes to an individual and is required to be made pursuant to any
         European Union directive on the taxation of savings income relating to
         the directive approved by the European Parliament on March 14, 2002 or
         otherwise implementing the conclusions of the Economic and Financial
         Council of Ministers of the member states of the European Union
         (ECOFIN) Council meeting of 26 and 27 November 2000 or any law
         implementing or complying with, or introduced in order to conform to,
         any such Directive; or

                  (7) any combination of items (1), (2), (3), (4), (5) and (6)
         above.

nor shall Additional Amounts be paid with respect to any payment in respect of
any Security to any Holder or beneficial owner who is a fiduciary or partnership
or other than the sole beneficial owner of such payment to the extent such
payment would be required by the laws of Brazil (or any political subdivision or
taxing authority thereof or therein) to be included in the income for tax
purposes of a beneficiary or settlor with respect to such fiduciary or a member
of such partnership or a beneficial owner who would not have been entitled to
such Additional Amounts had it been the Holder or beneficial owner, as the case
may be, of such Security. Subject to the foregoing provisions, whenever in this
Indenture there is mentioned, in any context, the payment of the principal of or
any premium or interest on, or in respect of, any Security of any series or the
net proceeds received on the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided for in this Section to the extent that, in such context,
Additional Amounts are, were or would be payable in respect thereof pursuant to
the provisions of this Section and express mention of the payment of Additional
Amounts (if applicable) in any provisions hereof shall not be construed as
excluding Additional Amounts in those provisions hereof where such express
mention is not made.

                  If the terms of the Securities of a series established as
contemplated by Section 3.01 do not specify that Additional Amounts pursuant to
the Section will not be payable by the Company, at least ten days prior to the
first Interest Payment Date with respect to that series of Securities (or if the
Securities of that series will not bear interest on or prior to Maturity, the
first day on which a payment of principal and any premium is made), and at least
ten days prior to each date of payment of principal and any premium or interest
if there has been any change with respect to the matters set forth in the
below-mentioned Officer's Certificate, the Company will furnish the Trustee and
the Company's principal Paying Agent or Paying Agents, if other than the
Trustee, with an Officer's Certificate instructing the Trustee and such Paying
Agent or Paying Agents whether such payment of principal of and any premium or
interest on the Securities of that series shall be made to Holders of Securities
of that series without withholding for or on account of any tax, assessment or
other governmental charge described in the Securities of that series. If any
such withholding shall be required, then such Officer's Certificate shall
specify the amount, if any, required to be withheld on such payments to such
Holders of Securities and the Company will pay to the Trustee or such Paying
Agent or Paying Agents the Additional Amounts required by this Section. The
Company covenants to indemnify each of the Trustee and any Paying

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Agent for, and to hold each of them harmless against, any reasonable loss,
liability or expense arising out of or in connection with actions taken or
omitted by any of them in reliance on any Officer's Certificate furnished
pursuant to this Section, except to the extent that any such loss, liability or
expense is due to its own negligence or bad faith.

                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES

Section 11.01     Applicability of Article.

                  Securities of any series which are redeemable before their
Stated Maturity shall be redeemable in accordance with their terms and (except
as otherwise specified as contemplated by Section 3.01 for Securities of any
series) in accordance with this Article.

Section 11.02     Election to Redeem; Notice to Trustee.

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

Section 11.03     Selection by Trustee of Securities to Be Redeemed.

                  If less than all the Securities of any series are to be
redeemed (unless all of the Securities of such series and of a specified tenor
are to be redeemed or unless such redemption affects only a single Security),
the particular Securities to be redeemed shall be selected less than 61 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by lot or, in the Trustee's
discretion, on a pro rata basis, provided that the unredeemed portion of the
principal amount of any Security shall be in an authorized denomination which
shall not be less than the minimum authorized denomination for such Security. If
less than all of the Securities of such series and of a specified tenor are to
be redeemed (unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected less than 30 days prior
to the Redemption Date by the Trustee, from the Outstanding Securities of such
series and specified tenor not previously called for redemption in accordance
with the preceding sentence, and the Trustee shall promptly notify the Company
in writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amounts thereof to be
redeemed.

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

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

Section 11.04     Notice of Redemption.

                  Notice of redemption shall be given in the manner provided in
Section 1.06 to each Holder of Securities to be redeemed not less than 30 nor
more than 60 days prior to the Redemption Date.

            All notices of redemption shall state:

                  (1) the Redemption Date,

                  (2) the Redemption Price, plus accrued interest and Additional
         Amounts, if any,

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

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

                  (5) the place or places where each such Security is to be
         surrendered for payment of the Redemption Price, plus accrued interest
         and Additional Amounts, if any,

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

                  (7) the current conversion price and the date on which the
         right to convert such Securities or portions thereof will expire, and

                  (8) the CUSIP number or numbers, if any, with respect to such
         Securities.

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

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

Section 11.05     Deposit of Redemption Price.

                  Prior to 3:00 p.m., New York City time, on the Business Day
preceding any Redemption Date, the Company shall deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 10.17) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest

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Payment Date) accrued interest on, all the Securities which are to be redeemed
(other than those theretofore surrendered for conversion) on that date.

Section 11.06     Securities Payable on Redemption Date.

                  Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided however, that unless otherwise
specified as contemplated by Section 3.01, installments of interest on
Registered Securities whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
3.07.

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

Section 11.07     Securities Redeemed in Part.

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

Section 11.08     Optional Redemption Due to Changes in Tax Treatment.

                  Unless otherwise specified in a Board Resolution or indenture
supplemental hereto, each series of Securities contained in one or more
particular issues may be redeemed at the option of the Company, in whole but not
in part, at any time (except in the case of Securities that have a variable rate
of interest, which may be redeemed on any Interest Payment Date) at a Redemption
Price equal to the principal amount thereof plus accrued interest to the date
fixed for redemption (except in the case of Outstanding Original Issue Discount
Securities which may be redeemed at the Redemption Price specified by the terms
of such series of Securities) if as a result of any change in or amendment to
the laws or any regulations or rulings promulgated thereunder of the
jurisdiction (or of any political subdivision or taxing authority thereof or
therein) in which the Company is incorporated (or, in the case of a successor
Person to the Company, of the jurisdiction in which such successor Person is
organized or any political subdivision or taxing authority thereof or therein)
or any change in the official application or interpretation of such laws,
regulations or rulings, or any change in the official application or
interpretation of, or any execution of or amendment to, any treaty or treaties
affecting taxation to which such jurisdiction or such political subdivision or
taxing authority (or such other jurisdiction or political subdivision or taxing
authority) is a party, which change, execution or amendment becomes effective on
or after the date specified for such series pursuant to the terms of the
Security or Section 3.01(10) (or in

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the case of a successor Person to the Company, the date on which such successor
Person became such pursuant to Sections 8.01 and 8.02.

                                 ARTICLE TWELVE

                                  SINKING FUNDS

Section 12.01     Applicability of Article.

                  The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of a series except as otherwise
specified as contemplated by Section 3.01 for Securities of such series.

                  The minimum amount of any sinking fund payment provided for by
the terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment," and any payment in excess of such minimum amount provided
for by the terms of Securities of any series is herein referred to as an
"optional sinking fund payment". If provided for by the terms of Securities, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 12.02. Each sinking fund payment shall be applied to the redemption
of Securities of any series as provided for by the terms of such Securities.

Section 12.02     Satisfaction of Sinking Fund Payments with Securities.

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

Section 12.03     Redemption of Securities for Sinking Fund.

                  Not less than 60 days prior to each sinking fund payment date
for any Securities, the Company will deliver to the Trustee an Officer's
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities of that
series pursuant to Section 12.02 and will also deliver to the Trustee any
Securities to be so delivered. Not less than 50 days prior to each such sinking
fund payment date the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 11.03 and
cause notice of the redemption thereof to be given in the name of and at the
expenses of the Company in the manner provided in Section 11.04. Such notice
having been duly given, the redemption of such Securities shall be made upon the
terms and in the manner specified in Sections 11.06 and 11.07.

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                                ARTICLE THIRTEEN

                        MEETINGS OF HOLDERS OF SECURITIES

Section 13.01     Purposes for Which Meetings May Be Called.

                  A meeting of Holders of Securities of a series may be called
at any time and from time to time pursuant to this Article to make, give or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.

Section 13.02     Call, Notice and Place of Meetings.

                  (1) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 13.01, to be held
at such time and at such place in the Borough of Manhattan, The City of New York
as the Trustee shall determine. Notice of every meeting of Holders of Securities
of any series, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be given,
in the manner provided in Section 1.06, not less than 21 nor more than 180 days
prior to the date fixed for the meeting.

                  (2) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose specified in
Section 13.01, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have made the
first publication of the notice of such meeting within 21 days after receipt of
such request or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company or the Holders of Securities of such series in
the amount specified above, as the case may be, may determine the time and the
place in the Borough of Manhattan, The City of New York for such meeting and may
call such meeting for such purposes by giving notice thereof as provided in
subsection (1) of this Section.

Section 13.03     Persons Entitled to Vote at Meetings.

                  To be entitled to vote at any meeting of Holders of Securities
of any series, a Person shall be (i) a Holder on a record date established
pursuant to Section 1.04(3) of one or more Outstanding Securities of such
series, or (ii) a Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.

Section 13.04     Quorum; Action.

                  The Persons entitled to vote a majority in principal amount of
the Outstanding Securities of a series shall constitute a quorum for a meeting
of Holders of Securities of such series. In the absence of a quorum within 15
minutes (or such longer period not exceeding 30 minutes as the chairman may
decide) of the time appointed for any such meeting, the meeting shall if
convened upon the requisition of Holders be dissolved. In any other case it
shall stand adjourned to the same day in the next week (or if such day is not a
business day the next succeeding business day) at the same time and place. If
within 15 minutes (or such longer period not exceeding 30 minutes as the
chairman may decide) after the time

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appointed for any adjourned meeting a quorum is not present for the transaction
of any particular business, then, subject and without prejudice to the
transaction of the business (if any) for which a quorum is present, the chairman
may either (with the approval of the Trustee) dissolve such meeting or adjourn
the same for such period, being not less than ten calendar days (but without any
maximum number of calendar days), and to such place as may be appointed by the
chairman either at or subsequent to such adjourned meeting and approved by the
Trustee, and the provisions of this sentence shall apply to all further
adjourned such meetings.

                  Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 13.02(1), except that such notice need be given
only once not less than five days prior to the date on which the meeting is
scheduled to be reconvened. Notice of a reconvening of an adjourned meeting
shall state expressly the percentage, as provided above, of the principal amount
of the Outstanding Securities of such series which shall constitute a quorum.

                  Any resolution passed or decision taken at any meeting of
Holders of Securities of any series duly held in accordance with this Section
shall be binding on all the Holders of Securities of such series, whether or not
presented or represented at the meeting. However, for the avoidance of doubt, no
actions taken at such meeting shall be binding on all Holders of Securities
unless such actions were approved by the minimum percentage in principal amount
of the Outstanding Securities of the series as required elsewhere in this
Indenture or under the Trust Indenture Act with respect to such actions.

Section 13.05     Determination of Voting Rights; Conduct and Adjournment of
Meetings.

                  (a) Notwithstanding any other provisions of this Indenture,
the Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders of Securities of a series in regard to proof of the
holding of Securities of such series and the appointment of proxies and in
regard to the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section
1.04 and the appointment of any proxy shall be proved in the manner specified in
Section 1.04. Such regulations may provide that written instruments appointing
proxies, regular on their face, may be presumed valid and genuine without the
proof specified in Section 1.04 or other proof.

                  (b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 13.02(2), in
which case the Company or the Holders of Securities of the series calling the
meeting, as the case may be, shall in like manner appoint a temporary chairman.
A permanent chairman and a permanent secretary of the meeting shall be elected
by vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.

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

                  (d) Any meeting of Holders of Securities of any series duly
called pursuant to Section 13.02 at which a quorum is present may be adjourned
from time to time by Persons entitled to

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vote a majority in principal amount of the Outstanding Securities of such series
represented at the meeting, and the meeting may be held as so adjourned without
further notice.

Section 13.06     Counting Votes and Recording Action of Meetings.

                  The vote upon any resolution submitted to any meeting of
Holders of Securities of any series shall be by written ballots on which shall
be subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 13.02 and, if
applicable, Section 13.04. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.

                                ARTICLE FOURTEEN

                       DEFEASANCE AND COVENANT DEFEASANCE

Section 14.01     Company's Option to Effect Defeasance or Covenant Defeasance.

                  The Company may elect, at its option at any time, to have
Section 14.02 or Section 14.03 applied to any Securities or any series of
Securities designated pursuant to Section 3.01 as being defeasible pursuant to
such Section 14.02 or 14.03, in accordance with any applicable requirements
provided pursuant to Section 3.01 and upon compliance with the conditions set
forth below in this Article. Any such election shall be evidenced by a Board
Resolution or in another manner specified as contemplated by Section 3.01 for
such Securities.

Section 14.02     Defeasance and Discharge.

                  Upon the Company's exercise of its option to have this Section
applied to any Securities or any series of Securities, as the case may be, the
Company shall be deemed to have been discharged from its obligations with
respect to such Securities or series of Securities as provided in this Section
on and after the date the conditions set forth in Section 14.04 are satisfied
(hereinafter called "Defeasance"). For this purpose, such Defeasance means that
the Company shall be deemed to have paid and discharged the entire indebtedness
represented by such Securities and to have satisfied all its other obligations
under such Securities and this Indenture insofar as such Securities are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), subject to the following which shall
survive until otherwise terminated or discharged hereunder: (i) the rights of
Holders of such Securities to receive, solely from the trust fund described in
Section 14.04 and as more fully set forth in such Section, payments in respect
of the principal of and any premium and interest on such Securities when
payments are due, (ii) the Company's obligations with respect to such Securities
under Sections 3.04, 3.05, 3.06, 10.10 and 10.21, (iii) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and (iv) this Article
Fourteen. Subject to compliance with this Article, the Company

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may exercise its option to have this Section 14.02 applied to any Securities
notwithstanding the prior exercise of its option to have Section 14.03 applied
to such Securities.

Section 14.03     Covenant Defeasance.

                  Upon the Company's exercise of its option to have this Section
applied to any Securities or any series of Securities, as the case maybe, (i)
the Company shall be released from any covenants provided pursuant to Section
3.01(23), 9.01(2) or 9.0l(7) for the benefit of the Holders of such Securities,
and (ii) the occurrence of any event specified in Section 5.01(3) shall be
deemed not to be or result in an Event of Default, in each case with respect to
such Securities as provided in this Section on and after the date the conditions
set forth in Section 14.04 are satisfied (hereinafter called "Covenant
Defeasance"). For this purpose, such Covenant Defeasance means that, with
respect to such Securities, the Company may omit to comply with and shall have
no liability in respect of any term, condition or limitation set forth in any
such specified Section (to the extent so specified in the case of Section
5.01(3)), whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section to
any other provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby.

Section 14.04     Conditions to Defeasance or Covenant Defeasance.

                  The following shall be the conditions to the application of
Section 14.02 or Section 14.03 to any Securities or any series of Securities, as
the case may be:

                  (1) The Company shall irrevocably have deposited or caused to
         be deposited with the Trustee as trust funds in trust for the purpose
         of making the following payments, specifically pledged as security for,
         and dedicated solely to, the benefit of the Holders of such Securities,
         (i) money in an amount, or (ii) U.S. Government Obligations which
         through the scheduled payment of principal and interest in respect
         thereof in accordance with their terms will provide, not later than one
         day before the due date of any payment, money in an amount, or (iii) a
         combination thereof, in each case sufficient, in the opinion of a
         nationally recognized firm of independent public accountants expressed
         in a written certification thereof delivered to the Trustee, to pay and
         discharge, and which shall be applied by the Trustee to pay and
         discharge, the principal of and any premium, interest and Additional
         Amounts on such Securities on the respective Stated Maturities, in
         accordance with the terms of this Indenture and such Securities. As
         used herein, "U.S. Government Obligation" means (x) any security which
         is (A) a direct obligation of the United States of America for the
         payment of which the full faith and credit of the United States of
         America is pledged or (B) an obligation of a Person controlled or
         supervised by and acting as any agency or instrumentality of the United
         States of America the payment of which is unconditionally guaranteed as
         a full faith and credit obligation by the United States of America,
         which, in either case (A) or (B), is not callable or redeemable at the
         option of the issuer thereof, and (y) any depositary receipt issued by
         a bank (as defined in Section 3(a)(2) of the Securities Act) as
         custodian with respect to any U.S. Government Obligation which is
         specified in Clause (x) above and held by such bank for the account of
         the holder of such depositary receipt, or with respect to any specific
         payment of principal of or interest on any U.S. Government Obligation
         which is so specified and held, provided that (except as required by
         law) such custodian is not authorized to make any deduction from the
         amount payable to the holder of such depositary receipt from any amount
         received by the custodian in respect of the U.S. Government Obligation
         or the specific payment of principle or interest evidenced by such
         depositary receipt.

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                  (2) In the event of any election to have Section 14.02 apply
         to any Securities or any series of Securities, as the case may be, the
         Company shall have delivered to the Trustee an Opinion of Counsel
         stating that (i) the Company has received from, or there has been
         published by, the Internal Revenue Service a ruling or (ii) since the
         date of this instrument, there has been a change in the applicable U.S.
         Federal income tax law, in either case (i) or (ii) to the effect that,
         and based thereon such opinion shall confirm that, the Holders of such
         Securities will not recognize gain or loss for U.S. Federal income tax
         purposes as a result of the deposit, Defeasance and discharge to be
         effected with respect to such Securities and will be subject to Federal
         income tax on the same amount, in the same manner and at the same times
         as would be the case if such deposit, Defeasance and discharge were not
         to occur.

                  (3) In the event of an election to have Section 14.03 apply to
         any Securities or any series of Securities, as the case may be, the
         Company shall have delivered to the Trustee an Opinion of Counsel to
         the effect that the Holders of such Securities will not recognize gain
         or loss for Federal income tax purposes as a result of the deposit and
         Covenant Defeasance to the effected with respect to such Security and
         will be subject to Federal income tax on the same amount, in the same
         manner and at the same times as would be the case if such deposit and
         Covenant Defeasance were not to occur.

                  (4) The Company shall have delivered to the Trustee an Opinion
         of Counsel to the effect that neither such Securities nor any other
         Securities of the same series, if then listed on any securities
         exchange, will be delisted as a result of such deposit.

                  (5) No event which is, or after notice or lapse of time both
         would become, an Event of Default with respect to such Securities or
         any other Securities shall have occurred and be continuing at the time
         of such deposit or, with regard to any such event specified in Sections
         5.01(6), 5.01(7), 5.01(8) and 5.01(9), at any time on or prior to the
         day which is 90 days after the date of such deposit (it being
         understood that this condition shall not be deemed satisfied until
         after such day which is 90 days after the date of such deposit).

                  (6) Such Defeasance or Covenant Defeasance shall not cause the
         Trustee to have a conflicting interest within the meaning of the Trust
         Indenture Act (assuming all Securities are in default within the
         meaning of such Act).

                  (7) Such Defeasance or Covenant Defeasance shall not result in
         a breach or violation of, or constitute a default under, any other
         agreement or instrument to which the Company is a party or by which it
         is bound.

                  (8) Such Defeasance or Covenant Defeasance shall not result in
         the trust arising from such deposit constituting an investment company
         within the meaning of the Investment Company Act unless such trust
         shall be registered under such Act or exempt from registration
         thereunder.

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

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Section 14.05     Deposited Money and U.S. Government Obligations to Be Held in
Trust; Miscellaneous Provisions.

                  Subject to the provisions of the last paragraph of Section
10.17, all money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee pursuant to Section 14.04 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or through any such Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such
Securities, of all sums due and to become due thereon in respect of principal
and any premium and interest, but money so held in trust need not be segregated
from other funds except to the extent required by law.

                  The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 14.04, or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of Outstanding Securities.

                  Anything in this Article to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Order any
money or U.S. Government Obligations held by it as provided in Section 14.04
with respect to any Securities which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof which
would then be required to be deposited to effect the Defeasance or Covenant
Defeasance, as the case may be, with respect to such Securities.

Section 14.06     Reinstatement.

                  If the Trustee or the Paying Agent is unable to apply any
money in accordance with this Article with respect to any Securities by reason
of any order of judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the obligations
under this Indenture and such Securities from which the Company has been
discharged or released pursuant to Section 14.02 or 14.03 shall be revived and
reinstated as though no deposit had occurred pursuant to this Article with
respect to such Securities in accordance with this Article; provided, however,
that if the Company makes any payment of principal of or any premium or interest
on any such Security following such reinstatement of its obligations, the
Company shall be subrogated to the rights (if any) of the Holders of such
Securities to receive such payment from the money so held in trust.

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

                           ___________________________

                                       88

<PAGE>

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

                                       PETROBRAS INTERNATIONAL FINANCE COMPANY

                                       By /s/ ALMIR GUILHERME BARBASSA
                                          -----------------------------
                                          Name: Almir Guilherme Barbassa
                                          Title: Chairman of the Board

                                       JPMORGAN CHASE BANK, as Trustee

                                       By /s/ SUSY P. PESTANA
                                          -----------------------------
                                          Name: Susy P. Pestana
                                          Title: Assistant Treasurer

<PAGE>

                                                        ANNEX A -- Form of
                                                        Regulation S Certificate

                            REGULATION S CERTIFICATE

               (For transfers pursuant to (S) 3.05(c)(i) and (iii)
                               of this Indenture)

JPMorgan Chase Bank
[Address of Trustee]

Attn: Global Agency & Trust Services

              Re: [.%] Notes due o of Petrobras International Finance Company
                  (the "Securities")

              Reference is made to the Indenture, dated as of ., 2002 (the
"Indenture"), between Petrobras International Finance Company (the "Company")
and JPMorgan Chase Bank, as Trustee. Terms used herein and defined in the
Indenture or in Regulation S or Rule 144 under the U.S. Securities Act of 1933
(the "Securities Act") are used herein as so defined.

              This certificate relates to [$____________] principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):

              [CUSIP No(s)._________________________________________]

              [COMMON CODE No(s).___________________________________]
              ISIN No(s).___________________________________________

              CERTIFICATE No(s).____________________________________

The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities, (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so or (iii) it
is the Holder of a Global Security and has received a certification to the
effect set forth below. Such beneficial owner or owners are referred to herein
collectively as the "Owner". If the Specified Securities are not represented by
a Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.

              The Owner has requested that the Specified Securities be
transferred to a person (the "Transferee") who will take delivery in the form of
a Regulation S Security. In connection with such transfer, the Owner hereby
certifies or has certified that, unless such transfer is being effected pursuant
to an effective registration statement under the Securities Act, it is being
effected in accordance with Rule 904 of Regulation S or Rule 144 under the
Securities Act and with all applicable securities laws of the states of the
United States and other jurisdictions. Accordingly, the Owner hereby further
certifies or has certified as follows:

         (1)  Rule 904 Transfers.  If the transfer is being effected in
         accordance with Rule 904 of Regulation S:

              (A) the Owner is not a distributor of the Securities, an affiliate
              of the Company or any such distributor or a person acting on
              behalf of any of the foregoing;

                                      A-1

<PAGE>

               (B)  the offer of the Specified Securities was not made to a
               person in the United States or for the account or benefit of a
               U.S. Person;

               (C)  either

                    (i)  at the time the buy order was originated, the
               Transferee was outside the United States or the Owner and any
               person acting on its behalf reasonably believed that the
               Transferee was outside the United States, or

                    (ii) the transaction is being executed in, on or through the
               facilities of the Eurobond market, as regulated by the
               International Securities Market Association or another designated
               offshore securities market and neither the Owner nor any person
               acting on its behalf knows that the transaction has been
               prearranged with a buyer in the United States;

               (D)  no directed selling efforts have been made in the United
               States by or on behalf of the Owner or any affiliate thereof;

               (E)  if the Owner is a dealer in securities or has received a
               selling concession, fee or other remuneration in respect of the
               Specified Securities, and the transfer is to occur during the
               Restricted Period, then the requirements of Rule 904(c)(1) have
               been satisfied; and

               (F)  the transaction is not part of a plan or scheme to evade the
               registration requirements of the Securities Act

          (2)  Rule 144 Transfers.  If the transfer is being effected pursuant
               to Rule 144:

               (A)  the transfer is occurring after [insert date one year from
               date of issuance] and is being effected in accordance with the
               applicable amount, manner of sale and notice requirements of Rule
               144; or

               (B)  the transfer is occurring after [insert two years from date
               of issuance] and the Owner is not, and during the preceding three
               months has not been, an affiliate of the Company.

This certificate and the statements contained herein are made for your benefit
and the benefit of the Company and the Purchasers.

Dated:__________________________________
                    (Print the name of the Undersigned, as such term is defined
                    in the second paragraph of this certificate.)

                    By:
                        Name:
                        Title:

                    (if the Undersigned is a corporation, partnership or
                    fiduciary, the title of the person signing on behalf of the
                    Undersigned must be stated.)

                                       A-2

<PAGE>

                                              ANNEX B -- Form of
                                              Restricted Securities Certificate

                        RESTRICTED SECURITIES CERTIFICATE

                  (For transfers pursuant to (S) 3.05(c)(ii),
                     (iii), (iv) and (v) of this Indenture)

JPMorgan Chase Bank
[address of trustee]

Attn:  Global Agency & Trust Services

         Re: [.%] Notes due . of Petrobras International Finance Company (the
"Securities")

              Reference is made to the Indenture, dated as of ., 2002 (the
"Indenture"), between Petrobras International Finance Company (the "Company")
and JPMorgan Chase Bank, as Trustee. Terms used herein and defined in the
Indenture or in Relation S or Rule 144 under the U.S. Securities Act of 1933
(the "Securities Act") are used herein as so defined.

              This certificate relates to [$_____________] principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):

              [CUSIP No(s)._________________________________________]

              [COMMON CODE No(s).___________________________________]
              ISIN No(s).___________________________________________

              CERTIFICATE No(s).____________________________________

The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities, (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so or (iii) it
is the Holder of a Global Security and has received a certification to the
effect set forth below. Such beneficial owner or owners are referred to herein
collectively as the "Owner". If the Specified Securities are not represented by
a Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.

              The Owner has requested that the Specified Securities be
transferred to a person (the "Transferee") who will take delivery in the form of
a Restricted Security. In connection with such transfer, the Owner hereby
certifies or has certified that, unless such transfer is being effected pursuant
to an effective registration statement under the Securities Act, it is being
effected in accordance with Rule l44A or Rule 144 under the Securities Act and
all applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies or has certified
that:

         (1)  Rule 144A Transfers.  If the transfer is being effected in
              accordance with Rule 144A:

              (A)  the Specified Securities are being transferred to a person
              that the Owner and any person acting on its behalf reasonably
              believe is a "qualified institutional buyer" within

                                       B-1

<PAGE>

               the meaning of Rule 144A, acquiring for its own account or for
               the account of a qualified institutional buyer; and

               (B) the Owner and any person acting on its behalf have taken
               reasonable steps to ensure that the Transferee is aware that the
               Owner may be relying on Rule l44A in connection with the
               transfer.

          (2)  Rule 144 Transfers. If the transfer is being effected pursuant to
               Rule 144:

               (A) the transfer is occurring after [insert date one year after
               initial date of issuance] and is being effected in accordance
               with the applicable amount, manner of sale and notice
               requirements of Rule 144; or

               (B) the transfer is occurring after [insert date two years after
               initial date of issuance] and the Owner is not, and during the
               preceding three months has not been, an affiliate of the Company.

               This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Purchasers.

Dated: _________________________

                    (Print the name of the Undersigned, as such term is defined
                    in the second paragraph of this certificate.)

                    By:
                        Name:
                        Title:

                    (If the Undersigned is a corporation, partnership or
                    fiduciary, the title of the person signing on behalf of the
                    Undersigned must be stated.)

                                      B-2

<PAGE>

                                                 ANNEX C -- Form of Unrestricted
                                                 Securities Certificate

                       UNRESTRICTED SECURITIES CERTIFICATE

        (For removal of Securities Act legends pursuant to (S) 3.05(d))

JPMorgan Chase Bank
[Address of trustee]

Attn:  Global Agency & Trust Services

               Re: [.%] Notes due . of Petrobras International Finance Company
(the "Securities")

               Reference is made to the Indenture, dated as of ., 2002 (the
"Indenture"), between Petrobras International Finance Company (the "Company")
and JPMorgan Chase Bank, as Trustee. Terms used herein and defined in the
Indenture or in Regulation S or Rule 144 under the U.S. Securities Act of 1933
(the "Securities Act") are used herein as so defined.

               This certificate relates to [$____________] principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):

               [CUSIP No(s). __________________________________]

               [COMMON CODE No(s). ____________________________]
               ISIN No(s)._____________________________________

               CERTIFICATE No(s).______________________________

The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities, (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so or (iii) it
is the Holder of a Global Security and has received a certification to the
effect set forth below. Such beneficial owner or owners are referred to herein
collectively as the "Owner". If the Specified Securities are not represented by
a Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.

               The Owner has requested that the Specified Securities be
exchanged for Securities bearing no Securities Act legend pursuant to Section
3.05(d) of the Indenture. In connection with such exchange, the Owner hereby
certifies or has certified that the exchange is occurring after [insert
applicable date] and the Owner is not, and during the preceding three months has
not been, an affiliate of the Company. The Owner also acknowledges or has
acknowledged that any future transfers of the Specified Securities must comply
with all applicable securities laws of the states of the United States and other
jurisdictions.

                                       C-1

<PAGE>

               This certificate and the statements contained herein we made for
your benefit and the benefit of the Company and the Purchasers.

Dated: ___________________________

                    (Print the name of the Undersigned, as such term is defined
                    in the second paragraph of this certificate.)

                    By:
                        Name:
                        Title:

                    (If the Undersigned is a corporation, partnership or
                    fiduciary, the title of the person signing on behalf of the
                    Undersigned must be stated.)

                                      C-2<PAGE>
                                                                     EXHIBIT 4.1

                                    INDENTURE

                                 BY AND BETWEEN

                     UNITED BANCORPORATION OF ALABAMA, INC.

                                       AND

                     WELLS FARGO BANK, NATIONAL ASSOCIATION,

                                   AS TRUSTEE

                  FLOATING RATE JUNIOR SUBORDINATED DEFERRABLE

                      INTEREST DEBENTURES DUE JUNE 30, 2032

                          EFFECTIVE AS OF JUNE 27, 2002

<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                              PAGE
<S>                                                                                                           <C>
ARTICLE I             DEFINITIONS................................................................................2

         Section 1.1           Definitions of Terms..............................................................2

ARTICLE II            ISSUE, DESCRIPTION, TERMS, CONDITIONS, REGISTRATION AND EXCHANGE OF THE DEBENTURES........10

         Section 2.1           Designation and Principal Amount.................................................10

         Section 2.2           Maturity.........................................................................10

         Section 2.3           Form and Payment.................................................................10

         Section 2.4           Intentionally Left Blank.........................................................11

         Section 2.5           Interest.........................................................................11

         Section 2.6           Execution and Authentications....................................................13

         Section 2.7           Registration of Transfer and Exchange............................................14

         Section 2.8           Temporary Debentures.............................................................17

         Section 2.9           Mutilated, Destroyed, Lost or Stolen Debentures..................................18

         Section 2.10          Cancellation.....................................................................18

         Section 2.11          Benefit of Indenture.............................................................19

         Section 2.12          Authentication Agent.............................................................19

ARTICLE III           REDEMPTION OF DEBENTURES..................................................................20

         Section 3.1           Special Event Redemption.........................................................20

         Section 3.2           Optional Redemption by Company...................................................20

         Section 3.3           Notice of Redemption.............................................................21

         Section 3.4           Payment Upon Redemption..........................................................22

         Section 3.5           No Sinking Fund..................................................................23

ARTICLE IV            EXTENSION OF INTEREST PAYMENT PERIOD......................................................23

         Section 4.1           Extension of Interest Payment Period.............................................23

         Section 4.2           Notice of Extension..............................................................23

         Section 4.3           Limitation on Transactions.......................................................24

ARTICLE V             PARTICULAR COVENANTS OF THE COMPANY.......................................................25

         Section 5.1           Payment of Principal and Interest................................................25

         Section 5.2           Maintenance of Agency............................................................25

         Section 5.3           Paying Agents....................................................................25
</Table>

                                       -i-
<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<Table>
<Caption>
                                                                                                              PAGE
<S>                                                                                                           <C>
         Section 5.4           Appointment to Fill Vacancy in Office of Trustee.................................26

         Section 5.5           Compliance with Consolidation Provisions.........................................26

         Section 5.6           Limitation on Transactions.......................................................27

         Section 5.7           Covenants as to the Trust........................................................27

         Section 5.8           Covenants as to Purchases........................................................28

         Section 5.9           Waiver of Usury, Stay or Extension Laws..........................................28

ARTICLE VI            DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE........................28

         Section 6.1           Company to Furnish Trustee Names and Addresses of Debentureholders...............28

         Section 6.2           Preservation of Information Communications with Debentureholders.................29

         Section 6.3           Reports by the Company...........................................................29

         Section 6.4           Reports by the Trustee...........................................................29

ARTICLE VII           REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON EVENT OF DEFAULT..........................30

         Section 7.1           Events of Default................................................................30

         Section 7.2           Collection of Indebtedness and Suits for Enforcement by Trustee..................32

         Section 7.3           Application of Money Collected...................................................33

         Section 7.4           Limitation on Suits..............................................................34

         Section 7.5           Rights and Remedies Cumulative; Delay or Omission not Waiver.....................34

         Section 7.6           Control by Debentureholders......................................................35

         Section 7.7           Undertaking to Pay Costs.........................................................35

         Section 7.8           Direct Action; Right of Set-Off..................................................36

ARTICLE VIII          FORM OF DEBENTURE AND ORIGINAL ISSUE......................................................36

         Section 8.1           Form of Debenture................................................................36

         Section 8.2           Original Issue of Debentures.....................................................36

ARTICLE IX            CONCERNING THE TRUSTEE....................................................................36

         Section 9.1           Certain Duties and Responsibilities of the Trustee...............................36

         Section 9.2           Notice of Defaults...............................................................38
</Table>

                                      -ii-
<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<Table>
<Caption>
                                                                                                              PAGE
<S>                                                                                                           <C>
         Section 9.3           Certain Rights of Trustee........................................................38

         Section 9.4           Trustee Not Responsible for Recitals, etc........................................39

         Section 9.5           May Hold Debentures..............................................................40

         Section 9.6           Moneys Held in Trust.............................................................40

         Section 9.7           Compensation and Reimbursement...................................................40

         Section 9.8           Reliance on Officers' Certificate................................................41

         Section 9.9           Disqualification; Conflicting Interests..........................................41

         Section 9.10          Corporate Trustee Required; Eligibility..........................................41

         Section 9.11          Resignation and Removal; Appointment of Successor................................41

         Section 9.12          Acceptance of Appointment by Successor...........................................43

         Section 9.13          Merger, Conversion, Consolidation or Succession to Business......................43

         Section 9.14          Preferential Collection of Claims Against the Company............................44

ARTICLE X             CONCERNING THE DEBENTUREHOLDERS...........................................................44

         Section 10.1          Evidence of Action by Holders....................................................44

         Section 10.2          Proof of Execution by Debentureholders...........................................44

         Section 10.3          Who May be Deemed Owners.........................................................45

         Section 10.4          Certain Debentures Owned by Company Disregarded..................................45

         Section 10.5          Actions Binding on Future Debentureholders.......................................45

ARTICLE XI            SUPPLEMENTAL INDENTURES...................................................................46

         Section 11.1          Supplemental Indentures Without the Consent of Debentureholders..................46

         Section 11.2          Supplemental Indentures with Consent of Debentureholders.........................47

         Section 11.3          Effect of Supplemental Indentures................................................47

         Section 11.4          Debentures Affected by Supplemental Indentures...................................47

         Section 11.5          Execution of Supplemental Indentures.............................................48

ARTICLE XII           SUCCESSOR CORPORATION.....................................................................48

         Section 12.1          Company May Consolidate, etc.....................................................48

         Section 12.2          Successor Person Substituted.....................................................49

         Section 12.3          Evidence of Consolidation, etc. to Trustee.......................................49
</Table>

                                      -iii-
<PAGE>

                                TABLE OF CONTENTS
                                   (continued)

<Table>
<Caption>
                                                                                                              PAGE
<S>                                                                                                           <C>
ARTICLE XIII          SATISFACTION AND DISCHARGE................................................................49

         Section 13.1          Satisfaction and Discharge of Indenture..........................................49

         Section 13.2          Discharge of Obligations.........................................................50

         Section 13.3          Deposited Money to be Held in Trust..............................................50

         Section 13.4          Payment of Money Held by Paying Agents...........................................50

         Section 13.5          Repayment to Company.............................................................51

ARTICLE XIV           IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS...........................51

         Section 14.1          No Recourse......................................................................51

ARTICLE XV            MISCELLANEOUS PROVISIONS..................................................................52

         Section 15.1          Effect on Successors and Assigns.................................................52

         Section 15.2          Actions by Successor.............................................................52

         Section 15.3          Surrender of Company Powers......................................................52

         Section 15.4          Notices..........................................................................52

         Section 15.5          Governing Law....................................................................52

         Section 15.6          Treatment of Debentures as Debt..................................................52

         Section 15.7          Compliance Certificates and Opinions.............................................53

         Section 15.8          Payments on Business Days........................................................53

         Section 15.9          Application of Trust Indenture Act; Conflict.....................................53

         Section 15.10         Counterparts.....................................................................54

         Section 15.11         Severability.....................................................................54

         Section 15.12         Assignment.......................................................................54

         Section 15.13         Acknowledgment of Rights; Right of Set Off.......................................54

ARTICLE XVI           SUBORDINATION OF DEBENTURES...............................................................55

         Section 16.1          Agreement to Subordinate.........................................................55

         Section 16.2          Default on Senior Debt, Subordinated Debt or Additional Senior Obligations.......55

         Section 16.3          Liquidation; Dissolution; Bankruptcy.............................................55

         Section 16.4          Subrogation......................................................................57

         Section 16.5          Trustee to Effectuate Subordination..............................................58

         Section 16.6          Notice by the Company............................................................58

         Section 16.7          Rights of the Trustee; Holders of Senior Indebtedness............................59

         Section 16.8          Subordination may not be Impaired................................................59
</Table>

                                      -iv-
<PAGE>

                                    INDENTURE

         THIS INDENTURE, effective as of June 27, 2002, between United
Bancorporation of Alabama, Inc., a Delaware corporation (the "Company") and
Wells Fargo Bank, National Association, a national banking association with its
principal place of business in the State of Delaware (the "Trustee");

                                    RECITALS:

         WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of securities to be known as Floating Rate Junior Subordinated
Deferrable Interest Debentures due June 30, 2032 (hereinafter referred to as the
"Debentures"), the form and substance of such Debentures and the terms,
provisions and conditions thereof to be set forth as provided in this Indenture;

         WHEREAS, United Bancorp Capital Trust I, a Delaware statutory business
trust (the "Trust"), has offered in a private placement up to Four Million
Dollars ($4,000,000) aggregate liquidation amount of its Trust Preferred
Securities (as defined herein) and proposes to invest the proceeds from such
offering, together with the proceeds of the issuance and sale by the Trust to
the Company of up to One Hundred Twenty-Five Thousand Dollars ($125,000)
aggregate liquidation amount of its Common Securities (as defined herein), in up
to Four Million One Hundred Twenty-Five Thousand Dollars ($4,125,000) aggregate
principal amount of the Debentures;

         WHEREAS, the Company has requested that the Trustee execute and deliver
this Indenture;

         WHEREAS, all requirements necessary to make this Indenture a valid
instrument in accordance with its terms, and to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed, and the execution and
delivery of this Indenture have been duly authorized in all respects;

         WHEREAS, to provide the terms and conditions upon which the Debentures
are to be authenticated, issued and delivered, the Company has duly authorized
the execution of this Indenture; and

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

         NOW, THEREFORE, in consideration of the premises set forth herein and
the purchase of the Debentures by the holders thereof, it is mutually covenanted
and agreed as follows for the equal and ratable benefit of the holders of the
Debentures as follows:

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

         SECTION 1.1 DEFINITIONS OF TERMS.

         The terms defined in this Section 1.1 (except as otherwise expressly
provided in this Indenture or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section 1.1 and shall include the
plural as well as the singular. All other terms used in this Indenture that are
defined in the Trust Indenture Act, or that are by reference in the Trust
Indenture Act and defined in the Securities Act (except as herein otherwise
expressly provided or unless the context otherwise requires), shall have the
meanings assigned to such terms in the Trust Indenture Act and in the Securities
Act as in force at the date of the execution of this instrument and as may be
amended from time to time. All accounting terms used herein and not expressly
defined shall have the meanings assigned to such terms in accordance with
Generally Accepted Accounting Principles.

         "Accelerated Maturity Date" means if the Company elects to accelerate
the Maturity Date in accordance with Sections 2.2(b) and 2.2(c), the date
selected by the Company which is prior to the Scheduled Maturity Date, but is on
an Interest Payment Date after June 30, 2007.

         "Additional Interest" means interest earned and to be paid on interest
that was not timely paid.

         "Additional Senior Obligations" means all indebtedness of the Company
whether incurred on or prior to the date of this Indenture or thereafter
incurred, for claims in respect of derivative products such as interest and
foreign exchange rate contracts, commodity contracts and similar arrangements;
provided, however, that Additional Senior Obligations does not include claims in
respect of Senior Debt or Subordinated Debt or obligations which, by their
terms, are expressly stated to be not superior in right of payment to the
Debentures or to rank pari passu in right of payment with the Debentures. For
purposes of this definition, "claim" shall have the meaning assigned thereto in
Section 101(4) of the United States Bankruptcy Code of 1978, as amended.

         "Additional Sums" shall have the meaning set forth in Section 2.5(g).

         "Administrative Trustees" shall have the meaning set forth in the Trust
Agreement.

         "Affiliate" means, with respect to a specified Person, (i) any Person
directly or indirectly owning, controlling or holding with power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person; (ii) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person; (iii) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person; (iv) a partnership in which the specified Person is a
general partner; (v) any officer or director of the specified Person; and (vi)
if the specified Person is an individual, any entity of which the specified
Person is an officer, director or general partner.

                                      -2-
<PAGE>

         "Authenticating Agent" means an authenticating agent with respect to
the Debentures appointed by the Trustee pursuant to Section 2.12.

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

         "Board of Directors" means the Board of Directors of the Company or any
duly authorized committee of such Board or any other duly designated officers of
the Company.

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

         "Business Day" means, with respect to the Debentures, any day other
than a Saturday or a Sunday or a day on which federal or state banking
institutions in Delaware or Minnesota are authorized or required by law,
executive order or regulation to close, or a day on which the Corporate Trust
Office of the Trustee or the Property Trustee is closed for business.

         "Calculation Agent" shall have the meaning set forth in Section
2.5(d)(i).

         "Capital Treatment Event" means the receipt by the Company and the
Trust of an Opinion of Counsel, rendered by a law firm having a recognized
national bank regulatory practice, to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision thereof or therein, or (b) any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or which pronouncement or
decision is announced on or after the date of issuance of the Trust Preferred
Securities under the Trust Agreement, there is more than an insubstantial risk
of impairment of the Company's ability to treat the Trust Preferred Securities
(or any substantial portion thereof) as Tier 1 capital (or the then equivalent
thereof), for purposes of the capital adequacy guidelines of the Federal Reserve
(or any successor thereto), as then in effect and applicable to the Company;
provided, however, that the Trust or the Company shall have requested and
received such an Opinion of Counsel with regard to such matters within a
reasonable period of time after the Trust or the Company shall have become aware
of the probable occurrence of any such event.

         "Certificate" means a certificate signed by the principal executive
officer, the principal financial officer, the principal accounting officer, the
treasurer or any vice president of the Company. The Certificate need not comply
with the provisions of Section 15.7.

         "Change in 1940 Act Law" shall have the meaning set forth in the
definition of "Investment Company Event."

         "Commission" means the Securities and Exchange Commission.

         "Common Securities" means undivided common beneficial interests in the
assets of the Trust that rank pari passu with the Trust Preferred Securities;
provided, however, that upon the occurrence of an Event of Default, the rights
of holders of Common Securities to payment in

                                      -3-
<PAGE>

respect of distributions and payments upon liquidation, redemption and otherwise
are subordinated to the rights of holders of Trust Preferred Securities.

         "Company" means United Bancorporation of Alabama, Inc., a corporation
duly organized and validly existing under the laws of the State of Delaware,
and, subject to the provisions of Article XII, shall also include its successors
and assigns.

         "Compounded Interest" shall have the meaning set forth in Section 4.1.

         "Corporate Trust Office" means the office of the Trustee or the
Property Trustee at which, at any particular time, its corporate trust business
shall be principally administered, which office at the date hereof is located at
919 Market Street, Suite 700

         Wilmington, Delaware 19801 , Attention: Corporate Trust Administration.

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

         "Debentures" shall have the meaning set forth in the Recitals hereto.

         "Debentureholder," "holder of Debentures," "registered holder," or
other similar term, means the Person or Persons in whose name or names a
particular Debenture shall be registered on the books of the Company or the
Trustee kept for that purpose in accordance with the terms of this Indenture.

         "Debenture Register" shall have the meaning set forth in Section
2.7(b).

         "Debt" means with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; and (vi) every
obligation of the type referred to in clauses (i) through (v) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.

         "Default" means any event, act or condition that with notice or lapse
of time, or both, would constitute an Event of Default.

         "Deferred Interest" shall have the meaning set forth in Section 4.1.

         "Dissolution Event" means that as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance with
the Trust Agreement and the Debentures

                                      -4-
<PAGE>

held by the Property Trustee are to be distributed to the holders of the Trust
Securities issued by the Trust pro rata in accordance with the Trust Agreement.

         "Event of Default" means, with respect to the Debentures, any event
specified in Section 7.1, which has continued for the period of time, if any,
and after the giving of the notice, if any, therein designated.

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

         "Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.

         "Federal Reserve" means the Board of Governors of the Federal Reserve
System.

         "Floating Interest Rate" shall have the meaning set forth in Section
2.5(a).

         "Generally Accepted Accounting Principles" means such accounting
principles as are generally accepted at the time of any computation required
hereunder.

         "Governmental Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged; or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America that, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such Governmental
Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of the holder of
such depository receipt; provided, however, that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depositary receipt from any amount received by the
custodian in respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such
depositary receipt.

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

         "Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into in accordance with the terms hereof.

         "Interest Payment Date," has the meaning specified in Section 2.5(a).

         "Interest Reset Date" has the meaning specified in Section 2.5(d).

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

                                      -5-
<PAGE>

         "Investment Company Event" means the receipt by the Trust and the
Company of an Opinion of Counsel, rendered by a law firm having a recognized
national securities law practice, to the effect that, as a result of the
occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law"), the Trust is or
shall be considered an "investment company" that is required to be registered
under the Investment Company Act, which Change in 1940 Act Law becomes effective
on or after the date of original issuance of the Trust Preferred Securities
under the Trust Agreement; provided, however, that the Trust or the Company
shall have requested and received such an Opinion of Counsel with regard to such
matters within a reasonable period of time after the Trust or the Company shall
have become aware of a Change in 1940 Act Law.

         "Maturity Date" means the date on which the Debentures mature and on
which the principal shall be due and payable together with all accrued and
unpaid interest thereon including Compounded Interest and Additional Interest,
if any.

         "Ministerial Action" shall have the meaning set forth in Section 3.1.

         "Officers' Certificate" means a certificate signed by the Chief
Executive Officer, President or a Vice President and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary of the Company
that is delivered to the Trustee in accordance with the terms hereof. Each such
certificate shall include the statements provided for in Section 15.7, if and to
the extent required by the provisions thereof.

         "Opinion of Counsel" means an opinion in writing of independent,
outside legal counsel for the Company that is delivered to the Trustee in
accordance with the terms hereof. Each such opinion shall include the statements
provided for in Section 15.7, if and to the extent required by the provisions
thereof.

         "Outstanding," when used with reference to the Debentures, means,
subject to the provisions of Section 10.4, as of any particular time, all
Debentures theretofore authenticated and delivered by the Trustee under this
Indenture, except (i) Debentures theretofore canceled by the Trustee or any
Paying Agent, or delivered to the Trustee or any Paying Agent for cancellation
or that have previously been canceled; (ii) Debentures or portions thereof for
the payment or redemption of which money or Governmental Obligations in the
necessary amount shall have been deposited in trust with the Trustee or with any
Paying Agent (other than the Company) or shall have been set aside and
segregated in trust by the Company (if the Company shall act as its own Paying
Agent); provided, however, that if such Debentures or portions of such
Debentures are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as provided in Article III or provision
satisfactory to the Trustee shall have been made for giving such notice; and
(iii) Debentures in lieu of or in substitution for which other Debentures shall
have been authenticated and delivered pursuant to the terms of Section 2.7;
provided, however, that in determining whether the holders of the requisite
percentage of Debentures have given any such request, notice, consent or waiver
hereunder, Debentures held by the Company or any Affiliate of the Company shall
not be included; provided, further, that the Trustee shall be protected in
acting or relying upon any request, notice, consent or waiver unless a
Responsible

                                      -6-
<PAGE>

Officer of the Trustee shall have actual knowledge that the holder of any such
Debenture is the Company or an Affiliate thereof.

         "Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.3.

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

         "Predecessor Debenture" means every previous Debenture evidencing all
or a portion of the same debt as that evidenced by such particular Debenture;
and, for the purposes of this definition, any Debenture authenticated and
delivered under Section 2.9 in lieu of a lost, destroyed or stolen Debenture
shall be deemed to evidence the same debt as the lost, destroyed or stolen
Debenture.

         "Property Trustee" has the meaning set forth in the Trust Agreement.

         "Resale Restriction Termination Date" means, with respect to the offer,
sale or other transfer of a Debenture, (a) the date which is two years (or such
shorter period of time as permitted by Rule 144(k) under the Securities Act)
after the later of the original issue date of such Debenture and the last date
on which the Company or any Affiliate of the Company was the owner of such
Debenture (or any predecessor of the Debenture) and (b) such later date, if any,
as may be required by applicable laws.

         "Redemption Date" shall have the meaning set forth in Section 3.2(a).

         "Redemption Price" shall have the meaning set forth in Section 3.1.

         "Responsible Officer" when used with respect to the Trustee means any
officer within the Corporate Trust Office of the Trustee with direct
responsibility for the administration of this Indenture, including any vice
president, any assistant vice president, any assistant secretary or any other
officer or assistant officer of the Trustee customarily performing functions
similar to those performed by the Persons who at the time shall be such officers
or to whom such corporate trust matter is referred because of that officer's
knowledge of and familiarity with the particular subject.

         "Scheduled Maturity Date" means June 30, 2032.

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

         "Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on all
Debt, whether incurred on or prior to the date of this Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the

                                      -7-
<PAGE>

Debentures or to other Debt which is pari passu with, or subordinated to, the
Debentures; provided, however, that Senior Debt shall not be deemed to include
(i) any Debt of the Company owed which when incurred and without respect to any
election under Section 1111(b) of the United States Bankruptcy Code of 1978, as
amended, was without recourse to the Company; (ii) Debt which by its terms is
subordinated to trade accounts payable or accrued liabilities arising in the
ordinary course of business; and (iii) Debt which constitutes Subordinated Debt.

         "Senior Indebtedness" shall have the meaning set forth in Section 16.1.

         "Special Event" means a Tax Event, an Investment Company Event or a
Capital Treatment Event.

         "Subordinated Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of this Indenture or thereafter
incurred, which is by its terms expressly provided to be junior and subordinate
to Senior Debt of the Company (other than the Debentures); provided, however,
that Subordinated Debt will not be deemed to include (i) any Debt of the Company
which when incurred and without respect to any election under Section 1111(b) of
the United States Bankruptcy Code of 1978, as amended, was without recourse to
the Company, (ii) any Debt which by its terms is subordinated to trade accounts
payable or accrued liabilities arising in the ordinary course of business; (iii)
Debt which constitutes Senior Debt and (iv) any Debt of the Company under debt
securities (and guarantees in respect of these debt securities) initially issued
to any trust, or a trustee of a trust, partnership or other entity affiliated
with the Company that is, directly or indirectly, a financing vehicle of the
Company in connection with the issuance by that entity of preferred securities
or other securities which are intended to qualify for Tier 1 capital treatment
for purposes of the capital adequacy guidelines of the Federal Reserve, as then
in effect.

         "Subsidiary" means, with respect to any Person, (i) any corporation at
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries; (ii) any general
partnership, limited liability company, joint venture or similar entity, at
least a majority of whose outstanding partnership or similar interests shall at
the time be owned by such Person, or by one or more of its Subsidiaries, or by
such Person and one or more of its Subsidiaries; and (iii) any limited
partnership of which such Person or any of its Subsidiaries is a general
partner.

         "Tax Event" means the receipt by the Company and the Trust of an
Opinion of Counsel, rendered by a law firm having a recognized federal tax law
practice, to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement or
decision is announced on or after the date of issuance of the Trust Preferred
Securities under the Trust Agreement, there is more than an insubstantial risk
that (i) the Trust is, or shall be within 90 days after the date of such Opinion
of Counsel, subject to

                                      -8-
<PAGE>

United States federal income tax with respect to income received or accrued on
the Debentures; (ii) interest payable by the Company on the Debentures is not,
or within 90 days after the date of such Opinion of Counsel, shall not be,
deductible by the Company, in whole or in part, for United States federal income
tax purposes; or (iii) the Trust is, or shall be within 90 days after the date
of such Opinion of Counsel, subject to more than a de minimis amount of other
taxes, duties, assessments or other governmental charges; provided, however,
that the Trust or the Company shall have requested and received such an Opinion
of Counsel with regard to such matters within a reasonable period of time after
the Trust or the Company shall have become aware of the occurrence or the
possible occurrence of any of the events described in clauses (i) through (iii)
above.

         "Three-Month LIBOR" shall have the meaning set forth in Section 2.5(d).

         "Trust" means United Bancorp Capital Trust I, a Delaware statutory
business trust.

         "Trust Agreement" means the Amended and Restated Trust Agreement,
effective as of June 27, 2002, of the Trust, as amended from time to time.

         "Trust Preferred Securities" means undivided preferred beneficial
interests in the assets of the Trust that rank pari passu with Common Securities
issued by the Trust; provided, however, that upon the occurrence of an Event of
Default, the rights of holders of Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Trust Preferred Securities.

         "Trust Preferred Securities Guarantee" means any guarantee that the
Company may enter into with the Trustee or other Persons that operates directly
or indirectly for the benefit of holders of Trust Preferred Securities.

         "Trustee" means Wells Fargo Bank, National Association and, subject to
the provisions of Article IX, shall also include its successors and assigns in
each such Person's capacity as trustee hereunder, and, if at any time there is
more than one Person acting in such capacity hereunder, "Trustee" shall mean
each such Person.

         "Trust Indenture Act," means the Trust Indenture Act of 1939 or any
successor statute thereto, in each case as amended from time to time.

         "Trust Securities" means the Common Securities and Trust Preferred
Securities, collectively.

         "Voting Stock," as applied to stock of any Person, means shares,
interests, participations or other equivalents in the equity interest (however
designated) in such Person having ordinary voting power for the election of a
majority of the directors (or the equivalent) of such Person, other than shares,
interests, participations or other equivalents having such power only by reason
of the occurrence of a contingency.

                                      -9-
<PAGE>

                                   ARTICLE II

                     ISSUE, DESCRIPTION, TERMS, CONDITIONS,
                   REGISTRATION AND EXCHANGE OF THE DEBENTURES

         SECTION 2.1 DESIGNATION AND PRINCIPAL AMOUNT.

         There is hereby authorized Debentures designated the "Floating Rate
Junior Subordinated Deferrable Interest Debentures due June 30, 2032," limited
in aggregate principal amount to Four Million One Hundred Twenty-Five Thousand
Dollars ($4,125,000) which amount shall be as set forth in any written order of
the Company for the authentication and delivery of Debentures pursuant to
Section 2.6.

         SECTION 2.2 MATURITY.

                  (a) The Maturity Date shall be either:

                  (i)      the Scheduled Maturity Date; or

                  (ii)     if the Company elects to accelerate the Maturity Date
                           to be a date prior to the Scheduled Maturity Date in
                           accordance with Sections 2.2(b) and 2.2(c), the
                           Accelerated Maturity Date.

                  (b) The Company may at any time before the day which is 90
         days before the Scheduled Maturity Date and after June 30, 2007, elect
         to shorten the Maturity Date only once to the Accelerated Maturity Date
         provided that the Company has received the prior approval of the
         Federal Reserve if then required under applicable capital guidelines,
         policies or regulations of the Federal Reserve.

                  (c) If the Company elects to accelerate the Maturity Date in
         accordance with Section 2.2(b), the Company shall give notice to the
         Trustee and the Trust (unless the Property Trustee is not the holder of
         the Debentures, in which case the Trustee will give notice to the
         holders of the Debentures) of the acceleration of the Maturity Date and
         the Accelerated Maturity Date at least 30 days and no more than 180
         days before the Accelerated Maturity Date.

         SECTION 2.3 FORM AND PAYMENT.

         The Debentures shall be issued in certificated form, registered in the
name of the holder thereof, without interest coupons. The Debentures, including
the Certificate of Authentication, shall be substantially in the form of Exhibit
A hereto. Prior to the Resale Restriction Termination Date, the Debentures will
be issued and may only be transferred in a minimum aggregate principal amount of
$100,000. Subsequent to the Resale Restriction Termination Date, the Debentures
may only be transferred in a minimum aggregate principal amount of $100,000. Any
attempted transfer not in accordance with the preceding two sentences shall be
void and of no effect whatsoever.

                                      -10-
<PAGE>

         Principal and interest on the Debentures issued in certificated form
shall be payable, the transfer of such Debentures shall be registrable and such
Debentures shall be exchangeable for Debentures bearing identical terms and
provisions at or through the office or agency of the Trustee; provided, however,
that payment of interest may be made at the option of the Company by check
mailed to the holder at such address as shall appear in the Debenture Register
or by wire transfer to an account maintained by the holder as specified in the
Debenture Register, provided that the holder provides proper transfer
instructions by the regular record date. Notwithstanding the foregoing, so long
as the holder of any Debentures is the Property Trustee, the payment of
principal of and interest (including Compounded Interest and Additional
Interest, if any) on such Debentures held by the Property Trustee shall be made
at such place and to such account as may be designated by the Property Trustee.

         SECTION 2.4 INTENTIONALLY LEFT BLANK.

         SECTION 2.5 INTEREST.

                  (a) Each Debenture shall bear interest at the rate of 3.65%
         per annum over the Three-Month LIBOR Rate, calculated on each Interest
         Reset Date (the "Floating Interest Rate"), from the original date of
         issuance until the principal thereof becomes due and payable, and on
         any overdue principal and (to the extent that payment of such interest
         is enforceable under applicable law) on any overdue installment of
         interest at the Floating Interest Rate, compounded quarterly, payable
         (subject to the provisions of Article IV) quarterly in arrears on March
         30, June 30, September 30 and December 30 of each year (each such date,
         an "Interest Payment Date," and each quarterly period, an "Interest
         Payment Period"), commencing on September 30, 2002 to the Person in
         whose name such Debenture or any Predecessor Debenture is registered,
         at the close of business on the regular record date for such interest
         installment, which shall be the 15th of the last month of each Interest
         Payment Period.

                  (b) The Floating Interest Rate for each Interest Payment
         Period will be set on the second London business day preceding each
         Interest Payment Date; provided, that the initial Floating Interest
         Rate will be set on June 30, 2002 and will not be reset until the next
         Interest Reset Date, until the principal on the Debentures is paid or
         made available for payment. If the Interest Reset Date is not a
         Business Day, then such Interest Reset Date shall be the next
         succeeding day which is a Business Day. In no event shall the Floating
         Interest Rate exceed 12% prior to June 30, 2007.

                  (c) The amount payable for any Interest Payment Period shall
         be computed on the basis of a 360-day year and the actual number of
         days in such Distribution Period. In the event that any date on which
         distribution is payable is not a Business Day, then payment shall be
         made on the next succeeding day that is a Business Day except that, if
         such Business Day is in the next succeeding calendar year, payment will
         be made on the immediately preceding Business Day.

                  (d) The "Three-Month LIBOR Rate" shall mean the rate
         determined in accordance with the following provisions:

                                      -11-
<PAGE>

                  (i)      On the second LIBOR Business Day (provided that on
                           such day commercial banks are open for business
                           (including dealings in foreign currency deposits) in
                           London (a "LIBOR Banking Day") preceding each January
                           15, April 15, July 15 and October 15 (except with
                           respect to the first interest payment period, on June
                           27, 2002 (each such date, a "Distribution Reset
                           Date"), Wells Fargo Bank, National Association (the
                           "Calculation Agent"), will determine the Three-Month
                           LIBOR Rate which shall be the rate for deposits in
                           the London interbank market in U.S. dollars having a
                           three-month maturity which appears on the Telerate
                           Page 3750 as of 11:00 a.m., London time, on such
                           Distribution Reset Date. "Telerate Page 3750" means
                           the display on Page 3750 of the Bloomberg Financial
                           Markets Commodities News (or such other page as may
                           replace that page on that service for the purpose of
                           displaying London interbank offered rates of major
                           banks for U.S. dollar deposits). If the Three-Month
                           LIBOR Rate on such Distribution Reset Date does not
                           appear on the Telerate Page 3750, such Three-Month
                           LIBOR Rate will be determined as described in (ii)
                           below. "LIBOR Business Day" means any day that is not
                           a Saturday, Sunday or other day on which commercial
                           banking institutions in New York, New York or
                           Wilmington, Delaware are authorized or obligated by
                           law or executive order to be closed. If such rate is
                           superseded on Telerate Page 3750 by a corrected rate
                           before 12:00 noon (London time) on the same
                           Distribution Reset Date, the corrected rate as so
                           substituted will be the applicable LIBOR for that
                           Distribution Reset Date.

                  (ii)     If, on any Distribution Reset Date, such rate does
                           not appear on Telerate Page 3750 as reported by
                           Bloomberg Financial Markets Commodities News or such
                           other page as may replace such Telerate Page 3750,
                           the Calculation Agent shall determine the arithmetic
                           mean of the offered quotations of the Reference Banks
                           (as defined below) to leading banks in the London
                           interbank market for three-month U.S. Dollar deposits
                           in Europe (in an amount determined by the Calculation
                           Agent) by reference to requests for quotations as of
                           approximately 11:00 a.m. (London time) on the
                           Distribution Reset Date made by the Calculation Agent
                           to the Reference Banks. If, on any Distribution Reset
                           Date, at lease two of the Reference Banks provide
                           such quotations, LIBOR shall equal the arithmetic
                           mean of such quotations. If, on any Distribution
                           Reset Date, only one or none of the Reference Banks
                           provide such a quotation, LIBOR shall be deemed to be
                           the arithmetic mean of the offered quotations that at
                           least two leading banks in the City of New York (as
                           selected by the Calculation Agent) are quoting on the
                           relevant Distribution Reset Date for three-month U.S.
                           Dollar deposits in Europe at approximately 11:00 a.m.
                           (London time) (in an amount determined by the
                           Calculation Agent). As used herein, "Reference Banks"
                           means four major banks in the London interbank market
                           selected by the Calculation Agent.

                                      -12-
<PAGE>

                  (iii)    If the Calculation Agent is required but is unable to
                           determine a rate in accordance with at least one of
                           the procedures provided above, LIBOR shall be LIBOR
                           in effect on the previous Distribution Reset Date
                           (whether or not LIBOR for such period was in fact
                           determined on such Distribution Reset Date).

                  (e) The Floating Interest Rate and amount of interest to be
         paid on the Debentures for each Interest Payment Period will be
         determined by the Calculation Agent. All calculations made by the
         Calculation Agent shall, in the absence of manifest error, be
         conclusive for all purposes and binding on the Company and Holders of
         the Debentures. So long as the Three-Month LIBOR Rate is required to be
         determined with respect to the Debentures, there will at all times be a
         Calculation Agent. In the event that any then acting Calculation Agent
         shall be unable or unwilling to act, or that such Calculation Agent
         shall fail duly to establish the Three-Month LIBOR Rate for any
         Interest Payment Period, or that the Company proposes to remove such
         Calculation Agent, the Company shall appoint another Person which is a
         bank, trust company, investment banking firm or other financial
         institution to act as the Calculation Agent.

                  (f) The Trustee shall provide written notice of the Floating
         Interest Rate as certified by the Calculation Agent to each holder of
         Debentures as set forth in the Debenture Register no later than five
         Business Days following each Interest Reset Date.

                  (g) If, at any time while the Trust or the Property Trustee is
         the holder of any Debentures, the Trust or the Property Trustee is
         subject to or is required to pay any taxes, duties, assessments or
         governmental charges of whatever nature (including withholding taxes)
         imposed by the United States, or any other taxing authority, then, in
         any case, the Company shall pay as additional amounts ("Additional
         Sums") on the Debentures held by the Trust or the Property Trustee,
         such additional amounts as shall be required so that the net amounts
         received and retained by the Trust and the Property Trustee after the
         withholding or paying of such taxes, duties, assessments or other
         governmental charges shall be equal to the amounts the Trust and the
         Property Trustee would have received and retained had no such taxes,
         duties, assessments or other government charges been imposed.

                  (h) The Floating Interest Rate will in no event be higher than
         the maximum rate permitted by the law of the State of Delaware, or, if
         higher, the law of the United States of America.

         SECTION 2.6 EXECUTION AND AUTHENTICATIONS.

                  (a) The Debentures shall be signed on behalf of the Company by
         its Chief Executive Officer, President or one of its Vice Presidents,
         under its corporate seal, if any, attested by its Secretary or one of
         its Assistant Secretaries. Signatures may be in the form of a manual or
         facsimile signature. The Company may use the facsimile signature of any
         Person who shall have been a Chief Executive Officer, President or Vice
         President thereof, or of any Person who shall have been a Secretary or
         Assistant Secretary thereof, notwithstanding the fact that at the time
         the Debentures shall be authenticated and

                                      -13-
<PAGE>

         delivered or disposed of such Person shall have ceased to be the Chief
         Executive Officer, President or a Vice President, or the Secretary or
         an Assistant Secretary, of the Company (and any such signature shall be
         binding on the Company). The corporate seal of the Company, if any, may
         be in the form of a facsimile of such seal and may be impressed,
         affixed, imprinted or otherwise reproduced on the Debentures. The
         Debentures may contain such notations, legends or endorsements required
         by law, stock exchange rule or usage. Each Debenture shall be dated the
         date of its authentication by the Trustee. A Debenture shall not be
         valid until authenticated manually by an authorized signatory of the
         Trustee, or by an Authenticating Agent. Such signature shall be
         conclusive evidence that the Debenture so authenticated has been duly
         authenticated and delivered hereunder and that the holder is entitled
         to the benefits of this Indenture.

                  (b) At any time and from time to time after the execution and
         delivery of this Indenture, the Company may deliver Debentures executed
         by the Company to the Trustee for authentication, together with a
         written order of the Company for the authentication and delivery of
         such Debentures signed by its Chief Executive Officer, President or any
         Vice President and its Treasurer or any Assistant Treasurer, and the
         Trustee in accordance with such written order shall authenticate and
         deliver such Debentures.

                  (c) In authenticating such Debentures and accepting the
         additional responsibilities under this Indenture in relation to such
         Debentures, the Trustee shall be entitled to receive, and (subject to
         Section 9.1(b)) shall be fully protected in relying upon, an Opinion of
         Counsel stating that the form and terms thereof have been established
         in conformity with the provisions of this Indenture.

                  (d) The Trustee shall not be required to authenticate such
         Debentures if the issue of such Debentures pursuant to this Indenture
         shall affect the Trustee's own rights, duties or immunities under the
         Debentures and this Indenture or otherwise in a manner that is not
         reasonably acceptable to the Trustee.

         SECTION 2.7 REGISTRATION OF TRANSFER AND EXCHANGE.

                  (a) Subject to Section 2.3, Debentures may be exchanged upon
         presentation thereof at the office or agency of the Company designated
         for such purpose in Wilmington, Delaware or at the office of the
         Debenture Registrar, for other Debentures and for a like aggregate
         principal amount in denominations of integral multiples of $1,000, upon
         payment of a sum sufficient to cover any tax or other governmental
         charge in relation thereto, all as provided in this Section 2.7. In
         respect of any Debentures so surrendered for exchange, the Company
         shall execute, the Trustee, upon written order of the Company, shall
         authenticate and such office or agency shall deliver in exchange
         therefore the Debenture or Debentures that the Debentureholder making
         the exchange shall be entitled to receive, bearing numbers not
         contemporaneously outstanding.

                  (b) The Company shall keep, or cause to be kept, at its office
         or agency designated for such purpose in Wilmington, Delaware or at the
         office of the Debenture Registrar or such other location designated by
         the Company a register or registers (herein referred to as the
         "Debenture Register") in which, subject to such reasonable regulations

                                      -14-
<PAGE>

         as it may prescribe, the Company shall register the Debentures and the
         transfers of Debentures as provided in this Article II and which at all
         reasonable times shall be open for inspection by the Trustee. The
         registrar for the purpose of registering Debentures and transfer of
         Debentures as herein provided shall initially be the Trustee and
         thereafter as may be appointed by the Company as authorized by Board
         Resolution (the "Debenture Registrar"). Subject to Section 2.3, upon
         surrender for transfer of any Debenture at the office or agency of the
         Company designated for such purpose, the Company shall execute, the
         Trustee, upon written order of the Company, shall authenticate and such
         office or agency shall deliver in the name of the transferee or
         transferees a new Debenture or Debentures for a like aggregate
         principal amount. All Debentures presented or surrendered for exchange
         or registration of transfer, as provided in this Section 2.7, shall be
         accompanied (if so required by the Company or the Debenture Registrar)
         by a written instrument or instruments of transfer, in form
         satisfactory to the Company or the Debenture Registrar, duly executed
         by the registered holder or by such holder's duly authorized attorney
         in writing.

                  (c) Notwithstanding anything herein to the contrary,
         Debentures may not be transferred except in compliance with the
         restricted securities legends set forth below, unless otherwise
         determined by the Company, upon the advice of legal counsel, in
         accordance with applicable law:

         THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933, AS AMENDED (THE "SECURITIES ACT"), ANY STATE SECURITIES LAWS OR
         ANY OTHER APPLICABLE SECURITIES LAWS. NEITHER THIS DEBENTURE NOR ANY
         INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED SOLD, ASSIGNED,
         TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
         ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM,
         OR NOT SUBJECT TO, SUCH REGISTRATION. PRIOR TO (X) THE DATE WHICH IS
         TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k)
         UNDER THE SECURITIES ACT) AFTER THE LATER OF (i) THE ORIGINAL ISSUE
         DATE HEREOF OR (ii) THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE
         OF THE COMPANY WAS THE OWNER OF THIS DEBENTURE (OR ANY PREDECESSOR OF
         THIS DEBENTURE) AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY
         APPLICABLE LAWS (THE "RESALE RESTRICTION TERMINATION DATE"), THE HOLDER
         OF THIS DEBENTURE BY ITS ACCEPTANCE HEREOF AGREES FOR THE BENEFIT OF
         THE COMPANY TO OFFER, SELL OR OTHERWISE TRANSFER THIS DEBENTURE ONLY
         (A) TO THE COMPANY OR AN AFFILIATE OF THE COMPANY, (B) PURSUANT TO A
         REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
         SECURITIES ACT, (C) FOR SO LONG AS THIS DEBENTURE IS ELIGIBLE FOR
         RESALE PURSUANT TO RULE 144A ("RULE 144A") PROMULGATED UNDER THE
         SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
         INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN
         ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN
         COMPLIANCE WITH RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED
         INVESTOR"

                                      -15-
<PAGE>

         WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501
         UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS DEBENTURE FOR ITS OWN
         ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED
         INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER
         OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
         SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
         REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE
         COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE,
         TRANSFER OR OTHER DISPOSITION (i) PURSUANT TO CLAUSES (D) OR (E) TO
         REQUIRE THE DELIVERY BY THE HOLDER OF AN OPINION OF COUNSEL,
         CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY 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 AND (ii) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT
         A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF
         THIS DEBENTURE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
         TRUSTEE AND THE REGISTRAR IN CONNECTION WITH ANY TRANSFER OF THIS
         DEBENTURE PRIOR TO THE RESALE RESTRICTION TERMINATION DATE. THE HOLDER
         MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE CERTIFICATE OF TRANSFER
         RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THE CERTIFICATE OF
         TRANSFER TO THE TRUSTEE AND THE REGISTRAR. THIS LEGEND WILL BE REMOVED
         UPON REQUEST OF THE HOLDER AFTER THE EARLIER OF (i) THE TRANSFER OF THE
         DEBENTURE EVIDENCED HEREBY PURSUANT TO CLAUSE (B) ABOVE OR (ii) THE
         RESALE RESTRICTION TERMINATION DATE. THE HOLDER WILL, AND EACH
         SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
         DEBENTURE OF THE RESALE RESTRICTIONS REFERRED TO HEREIN.

         PRIOR TO THE RESALE RESTRICTION TERMINATION DATE, THIS DEBENTURE MAY BE
         TRANSFERRED OR EXCHANGED ONLY IN A MINIMUM AGGREGATE PRINCIPAL AMOUNT
         OF NOT LESS THAN $100,000. ANY ATTEMPTED TRANSFER OF THIS DEBENTURE IN
         AN AGGREGATE PRINCIPAL AMOUNT OF LESS THAN $100,000 PRIOR TO THE RESALE
         RESTRICTION TERMINATION DATE SHALL BE DEEMED TO BE VOID AND OF NO LEGAL
         EFFECT WHATSOEVER. AFTER SUCH RESALE RESTRICTION TERMINATION DATE, ANY
         ATTEMPTED TRANSFER OF THIS DEBENTURE IN AN AGGREGATE PRINCIPAL AMOUNT
         OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
         WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE
         HOLDER OF THIS DEBENTURE FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED
         TO, THE RIGHT TO RECEIVE INTEREST PAYMENTS ON THIS DEBENTURE, AND SUCH
         PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN
         THIS DEBENTURE.

                                      -16-
<PAGE>

         IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
         REGISTRAR SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED BY
         THE INDENTURE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
         RESTRICTIONS.

                  (d) No service charge shall be made for any exchange or
         registration of transfer of Debentures, or issue of new Debentures in
         case of partial redemption, but the Company may require payment of a
         sum sufficient to cover any tax or other governmental charge in
         relation thereto. Other than exchanges pursuant to Section 2.8, the
         Company shall not be required (i) to issue, exchange or register the
         transfer of any Debentures during a period beginning at the opening of
         15 business days before the day of the mailing of a notice of
         redemption of less than all the Outstanding Debentures and ending at
         the close of business on the day of such mailing; nor (ii) to register
         the transfer of or exchange any Debentures or portions thereof called
         for redemption.

                  (e) Nothing herein withstanding, the Property Trustee shall
         not be authorized, other than in the case of Default, to cause the
         transfer of a Denture issued hereunder except (i) upon prior consent
         and authorization by the Administrative Trustees or (ii) upon order of
         a court of competent jurisdiction.

                  (f) Debentures may only be transferred, in whole or in part,
         in accordance with the terms and conditions set forth in this
         Indenture. Any transfer or purported transfer of any Debenture not made
         in accordance with this Indenture shall be null and void.

         SECTION 2.8 TEMPORARY DEBENTURES.

         Pending the preparation of definitive Debentures, the Company may
execute, and the Trustee shall authenticate and deliver, temporary Debentures
(printed, lithographed, or typewritten). Such temporary Debentures shall be
substantially in the form of the definitive Debentures in lieu of which they are
issued, but with such omissions, insertions and variations as may be appropriate
for temporary Debentures, all as may be determined by the Company. Every
temporary Debenture shall be executed by the Company and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Debentures. Without unnecessary delay the Company
shall execute and shall furnish definitive Debentures and thereupon any or all
temporary Debentures may be surrendered in exchange therefor (without charge to
the holders), at the office or agency of the Company designated for that purpose
in Wilmington, Delaware or such other office or agency as the Company shall
designate for that purpose pursuant to Section 5.2 hereof, and the Trustee shall
authenticate, upon written order of the Company, and such office or agency shall
deliver in exchange for such temporary Debentures an equal aggregate principal
amount of definitive Debentures, unless the Company advises the Trustee to the
effect that definitive Debentures need not be authenticated and furnished until
further notice from the Company. Until so exchanged, the temporary Debentures
shall be entitled to the same benefits under this Indenture as definitive
Debentures authenticated and delivered hereunder.

                                      -17-
<PAGE>

         SECTION 2.9 MUTILATED, DESTROYED, LOST OR STOLEN DEBENTURES.

                  (a) In case any temporary or definitive Debenture shall become
         mutilated or be destroyed, lost or stolen, the Company (subject to the
         next succeeding sentence) shall execute, and upon the Company's written
         order and request the Trustee (subject as aforesaid) shall authenticate
         and deliver, a new Debenture bearing a number not contemporaneously
         outstanding, in exchange and substitution for the mutilated Debenture,
         or in lieu of and in substitution for the Debenture so destroyed, lost,
         stolen or mutilated. In every case the applicant for a substituted
         Debenture shall furnish to the Company and the Trustee such security or
         indemnity as may be required by them to hold each of them harmless,
         and, in every case of destruction, loss or theft, the applicant shall
         also furnish to the Company and the Trustee evidence to their
         satisfaction of the destruction, loss or theft of the applicant's
         Debenture and of the ownership thereof. The Trustee may authenticate
         any such substituted Debenture and deliver the same upon the written
         order and request or authorization of the Chief Executive Officer,
         President or any Vice President and the Treasurer or any Assistant
         Treasurer of the Company. Upon the issuance of any substituted
         Debenture, the Company may require the payment of a sum sufficient to
         cover any tax or other governmental charge that may be imposed in
         relation thereto and any other expenses (including the fees and
         expenses of the Trustee) connected therewith. In case any Debenture
         that has matured or is about to mature shall become mutilated or be
         destroyed, lost or stolen, the Company may, instead of issuing a
         substitute Debenture, pay or authorize the payment of the same (without
         surrender thereof except in the case of a mutilated Debenture) if the
         applicant for such payment shall furnish to the Company and the Trustee
         such security or indemnity as they may require to hold them harmless,
         and, in case of destruction, loss or theft, evidence to the
         satisfaction of the Company and the Trustee of the destruction, loss or
         theft of such Debenture and of the ownership thereof.

                  (b) Every replacement Debenture issued pursuant to the
         provisions of this Section 2.9 shall constitute an additional
         contractual obligation of the Company whether or not the mutilated,
         destroyed, lost or stolen Debenture shall be found at any time, or be
         enforceable by anyone, and shall be entitled to all the benefits of
         this Indenture equally and proportionately with any and all other
         Debentures duly issued hereunder. All Debentures shall be held and
         owned upon the express condition that the foregoing provisions are
         exclusive with respect to the replacement or payment of mutilated,
         destroyed, lost or stolen Debentures, and shall preclude (to the extent
         lawful) any and all other rights or remedies, notwithstanding any law
         or statute existing or hereafter enacted to the contrary with respect
         to the replacement or payment of negotiable instruments or other
         securities without their surrender.

         SECTION 2.10 CANCELLATION.

         All Debentures surrendered for the purpose of payment, redemption,
exchange or registration of transfer shall, if surrendered to the Company or any
Paying Agent, be delivered to the Trustee for cancellation, or, if surrendered
to the Trustee, shall be canceled by it, and no Debentures shall be issued in
lieu thereof except as expressly required or permitted by any of the provisions
of this Indenture. On request of the Company at the time of such surrender, the

                                      -18-
<PAGE>

Trustee shall deliver to the Company canceled Debentures held by the Trustee. In
the absence of such request the Trustee may dispose of canceled Debentures in
accordance with its standard procedures and deliver a certificate of disposition
to the Company. If the Company shall otherwise acquire any of the Debentures,
however, such acquisition shall not operate as a redemption or satisfaction of
the indebtedness represented by such Debentures unless and until the same are
delivered to the Trustee for cancellation.

         SECTION 2.11 BENEFIT OF INDENTURE.

         Nothing in this Indenture or in the Debentures, express or implied,
shall give or be construed to give to any Person, other than the parties hereto
and the holders of the Debentures (and, with respect to the provisions of
Article XVI, the holders of the Senior Indebtedness) any legal or equitable
right, remedy or claim under or in respect of this Indenture, or under any
covenant, condition or provision herein contained; all such covenants,
conditions and provisions being for the sole benefit of the parties hereto and
of the holders of the Debentures (and, with respect to the provisions of Article
XVI, the holders of the Senior Indebtedness).

         SECTION 2.12 AUTHENTICATION AGENT.

                  (a) So long as any of the Debentures remain Outstanding there
         may be an Authenticating Agent for any or all such Debentures, and the
         Trustee shall have the right to appoint such Authenticating Agent. Said
         Authenticating Agent shall be authorized to act on behalf of the
         Trustee to authenticate Debentures issued upon exchange, transfer or
         partial redemption thereof, and Debentures so authenticated shall be
         entitled to the benefits of this Indenture and shall be valid and
         obligatory for all purposes as if authenticated by the Trustee
         hereunder. All references in this Indenture to the authentication of
         Debentures by the Trustee shall be deemed to include authentication by
         an Authenticating Agent. Each Authenticating Agent shall be acceptable
         to the Company and shall be a corporation that has a combined capital
         and surplus, as most recently reported or determined by it, sufficient
         under the laws of any jurisdiction under which it is organized or in
         which it is doing business to conduct a trust business, and that is
         otherwise authorized under such laws to conduct such business and is
         subject to supervision or examination by federal or state authorities.
         If at any time any Authenticating Agent shall cease to be eligible in
         accordance with these provisions, it shall resign immediately.

                  (b) Any Authenticating Agent may at any time resign by giving
         written notice of resignation to the Trustee and to the Company. The
         Trustee may at any time (and upon request by the Company shall)
         terminate the agency of any Authenticating Agent by giving written
         notice of termination to such Authenticating Agent and to the Company.
         Upon resignation, termination or cessation of eligibility of any
         Authenticating Agent, the Trustee may appoint an eligible successor
         Authenticating Agent acceptable to the Company. Any successor
         Authenticating Agent, upon acceptance of its appointment hereunder,
         shall become vested with all the rights, powers and duties of its
         predecessor hereunder as if originally named as an Authenticating Agent
         pursuant hereto.

                                      -19-
<PAGE>

                                   ARTICLE III

                            REDEMPTION OF DEBENTURES

         SECTION 3.1 SPECIAL EVENT REDEMPTION.

         If, prior to June 30, 2007, a Special Event has occurred and is
continuing, then, notwithstanding Section 3.2(a) but subject to Section 3.2(b),
the Company shall have the right upon not less than 30 days' nor more than 60
days' notice to the holders of the Debentures to redeem the Debentures, in whole
but not in part, for cash within 180 days following the occurrence of such
Special Event (the "180-Day Period") at a redemption price equal to One Hundred
Three Percent (103%) of the principal amount to be redeemed plus any accrued and
unpaid interest thereon to the date of such redemption (the "Redemption Price"),
provided that if at the time there is available to the Company the opportunity
to eliminate, within the 180-Day Period, a Tax Event by taking some ministerial
action (a "Ministerial Action"), such as filing a form or making an election, or
pursuing some other similar reasonable measure which has no adverse effect on
the Company, the Trustee, the Trust or the holders of the Trust Securities
issued by the Trust, the Company shall pursue such Ministerial Action in lieu of
redemption. The Redemption Price shall be paid prior to 12:00 noon, New York
time, on the date of such redemption or such earlier time as the Company
determines, provided that the Company shall deposit with the Trustee an amount
sufficient to pay the Redemption Price by 10:00 a.m., New York time, on the date
such Redemption Price is to be paid.

         SECTION 3.2 OPTIONAL REDEMPTION BY COMPANY.

                  (a) Subject to the provisions of Section 3.2(b), except as
         otherwise may be specified in this Indenture, the Company shall have
         the right to redeem the Debentures, in whole or in part, from time to
         time, on any Interest Payment Date after June 30, 2007 (each a
         "Redemption Date"), at a Redemption Price equal to 100% of the
         principal amount to be redeemed plus any accrued and unpaid interest
         thereon to the Redemption Date. Any redemption pursuant to this Section
         3.2(a) shall be made upon not less than 30 days' nor more than 60 days'
         notice to the holder of the Debentures, at the Redemption Price. If the
         Debentures are only partially redeemed pursuant to this Section 3.2,
         the Debentures shall be redeemed pro rata or by lot or in such other
         manner as the Trustee shall in good faith deem appropriate and fair in
         its sole discretion. The Redemption Price shall be paid prior to 12:00
         noon, New York time, on the Redemption Date or at such earlier time as
         the Company determines provided that the Company shall deposit with the
         Trustee an amount sufficient to pay the Redemption Price by 10:00 a.m.,
         New York time, on the Redemption Date.

                  (b) Any redemption of Debentures pursuant to Section 3.1 or
         Section 3.2 shall be subject to the Company obtaining the prior
         approval of the Federal Reserve, if such approval is then required
         under the applicable capital guidelines, policies or regulations of the
         Federal Reserve, and any other required regulatory approvals.

                  (c) If a partial redemption of the Debentures would result in
         the delisting of the Trust Preferred Securities issued by the Trust
         from any national securities exchange

                                      -20-
<PAGE>

         or other organization on which the Trust Preferred Securities are then
         listed, if any, the Company shall not be permitted to effect such
         partial redemption and may only redeem the Debentures in whole.

                  (d) Subject to the provisions of this Section 3.2, the Company
         shall have the right to redeem Debentures in a principal amount equal
         to the Liquidation Amount (as defined in the Trust Agreement) of any
         Trust Preferred Securities purchased and beneficially owned by the
         Company, plus an additional principal amount of Debentures equal to the
         Liquidation Amount (as defined in the Trust Agreement) of that number
         of Common Securities that bears the same proportion to the total number
         of Common Securities then outstanding as the number of Trust Preferred
         Securities to be redeemed bears to the total number of Trust Preferred
         Securities then outstanding. Such Debentures shall be redeemed pursuant
         to this Section 3.2(d) only in exchange for and upon surrender by the
         Company to the Property Trustee of the Trust Preferred Securities and a
         proportionate amount of Common Securities, whereupon the Property
         Trustee shall cancel the Trust Preferred Securities and Common
         Securities so surrendered and a Like Amount (as defined in the Trust
         Agreement) of Debentures shall be extinguished by the Trustee and shall
         no longer be deemed Outstanding.

         SECTION 3.3 NOTICE OF REDEMPTION.

         In case the Company shall desire to exercise such right to redeem all
         or, as the case may be, a portion of the Debentures in accordance with
         the right reserved so to do, the Company shall, or shall cause the
         Trustee to upon receipt of at least 45 days' written notice from the
         Company (which notice shall, in the event of a partial redemption,
         include a representation to the effect that such partial redemption
         will not result in the delisting of the Trust Preferred Securities as
         described in Section 3.2(c) above), give notice of such redemption to
         holders of the Debentures to be redeemed by mailing, first class
         postage prepaid, a notice of such redemption not less than 30 days and
         not more than 180 days before the date fixed for redemption to such
         holders at their last addresses as they shall appear upon the Debenture
         Register unless a shorter period is specified in the Debentures to be
         redeemed. Any notice that is mailed in the manner herein provided shall
         be conclusively presumed to have been duly given, whether or not the
         registered holder receives the notice. In any case, failure duly to
         give such notice to the holder of any Debenture designated for
         redemption in whole or in part, or any defect in the notice, shall not
         affect the validity of the proceedings for the redemption of any other
         Debentures. In the case of any redemption of Debentures prior to the
         expiration of any restriction on such redemption provided in the terms
         of such Debentures or elsewhere in this Indenture, the Company shall
         furnish the Trustee with an Officers' Certificate evidencing compliance
         with any such restriction. Each such notice of redemption shall specify
         the date fixed for redemption and the Redemption Price and shall state
         that payment of the Redemption Price shall be made at the office or
         agency of the Company or at the Corporate Trust Office of the Trustee,
         upon presentation and surrender of such Debentures, that interest
         accrued to the date fixed for redemption shall be paid as specified in
         said notice and that from and after said date interest shall cease to
         accrue. If less than all the Debentures are to be redeemed, the notice
         to the holders of the Debentures shall specify the particular
         Debentures to be redeemed. If the Debentures are

                                      -21-
<PAGE>

         to be redeemed in part only, the notice shall state the portion of the
         principal amount thereof to be redeemed and shall state that on and
         after the redemption date, upon surrender of such Debenture, a new
         Debenture or Debentures in principal amount equal to the unredeemed
         portion thereof will be issued to the holder. If less than all the
         Debentures are to be redeemed, the Company shall give the Trustee at
         least 45 days' notice in advance of the date fixed for redemption as to
         the aggregate principal amount of Debentures to be redeemed, and
         thereupon the Trustee shall select, pro rata or by lot or in such other
         manner as it shall in good faith deem appropriate and fair in its sole
         discretion, the portion or portions (equal to $1,000 or any integral
         multiple thereof) of the Debentures to be redeemed and shall thereafter
         promptly notify the Company in writing of the numbers of the Debentures
         to be redeemed, in whole or in part. The Company may, if and whenever
         it shall so elect pursuant to the terms hereof, by delivery of
         instructions signed on its behalf by its Chief Executive Officer, its
         President or any Vice President, instruct the Trustee or any Paying
         Agent to call all or any part of the Debentures for redemption and to
         give notice of redemption in the manner set forth in this Section 3.3,
         such notice to be in the name of the Company or its own name as the
         Trustee or such Paying Agent may deem advisable. In any case in which
         notice of redemption is to be given by the Trustee or any such Paying
         Agent, the Company shall deliver or cause to be delivered to, or permit
         to remain with, the Trustee or such Paying Agent, as the case may be,
         such Debenture Register, transfer books or other records, or suitable
         copies or extracts therefrom, sufficient to enable the Trustee or such
         Paying Agent to give any notice by mail that may be required under the
         provisions of this Section 3.3.

         SECTION 3.4 PAYMENT UPON REDEMPTION.

                  (a) If the giving of notice of redemption shall have been
         completed as above provided, the Debentures or portions of Debentures
         to be redeemed specified in such notice shall become due and payable on
         the date and at the place stated in such notice at the applicable
         Redemption Price, and interest on such Debentures or portions of
         Debentures shall cease to accrue on and after the date fixed for
         redemption, unless the Company shall default in the payment of such
         Redemption Price with respect to any such Debenture or portion thereof.
         On presentation and surrender of such Debentures on or after the date
         fixed for redemption at the place of payment specified in the notice,
         said Debentures shall be paid and redeemed at the Redemption Price (but
         if the date fixed for redemption is an Interest Payment Date, the
         interest installment payable on such date shall be payable to the
         registered holder at the close of business on the applicable record
         date).

                  (b) Upon presentation of any Debenture that is to be redeemed
         in part only, the Company shall execute and the Trustee or the
         Authenticating Agent, upon written order of the Company, shall
         authenticate and the office or agency where the Debenture is presented
         shall deliver to the holder thereof, at the expense of the Company, a
         new Debenture of authorized denomination in principal amount equal to
         the unredeemed portion of the Debenture so presented.

                                      -22-
<PAGE>

         SECTION 3.5 NO SINKING FUND.

         The Debentures are not entitled to the benefit of any sinking fund.

                                   ARTICLE IV

                      EXTENSION OF INTEREST PAYMENT PERIOD

         SECTION 4.1 EXTENSION OF INTEREST PAYMENT PERIOD.

         The Company shall have the right, at any time and from time to time
during the term of the Debentures so long as no Event of Default has occurred
and is continuing, to defer payments of interest by extending the interest
payment period of such Debentures for a period not exceeding 20 consecutive
quarters (the "Extended Interest Payment Period"), during which Extended
Interest Payment Period no interest shall be due and payable; provided that no
Extended Interest Payment Period may extend beyond the Maturity Date or end on a
date other than an Interest Payment Date. To the extent permitted by applicable
law, interest, the payment of which has been deferred because of the extension
of the interest payment period pursuant to this Section 4.1, shall bear interest
thereon at the Floating Interest Rate in effect for each period compounded
quarterly for each quarter of the Extended Interest Payment Period ("Compounded
Interest"). At the end of the Extended Interest Payment Period, the Company
shall calculate (and deliver such calculation to the Trustee) and pay all
interest accrued and unpaid on the Debentures, including any Additional Interest
and Compounded Interest (together, "Deferred Interest") that shall be payable to
the holders of the Debentures in whose names the Debentures are registered in
the Debenture Register on the first record date after the end of the Extended
Interest Payment Period. Before the termination of any Extended Interest Payment
Period, the Company may further extend such period so long as no Event of
Default has occurred and is continuing, provided that such period together with
all such further extensions thereof shall not exceed 20 consecutive quarters, or
extend beyond the Maturity Date of the Debentures or end on a date other than an
Interest Payment Date. Upon the termination of any Extended Interest Payment
Period and upon the payment of all Deferred Interest then due, the Company may
commence a new Extended Interest Payment Period, subject to the foregoing
requirements. No interest shall be due and payable during an Extended Interest
Payment Period, except at the end thereof, but the Company may prepay at any
time all or any portion of the interest accrued during an Extended Interest
Payment Period.

         SECTION 4.2 NOTICE OF EXTENSION.

                  (a) If the Property Trustee is the only registered holder of
         the Debentures at the time the Company selects an Extended Interest
         Payment Period, the Company shall give written notice to the
         Administrative Trustees, the Property Trustee and the Trustee of its
         selection of such Extended Interest Payment Period two Business Days
         before the earlier of (i) the next succeeding date on which
         Distributions on the Trust Securities issued by the Trust are payable;
         or (ii) the date the Trust is required to give notice of the record
         date, or the date such Distributions are payable, to any applicable
         self-regulatory organization or to holders of the Trust Preferred
         Securities issued by the Trust.

                                      -23-
<PAGE>

                  (b) If the Property Trustee is not the only holder of the
         Debentures at the time the Company selects an Extended Interest Payment
         Period, the Company shall give the holders of the Debentures and the
         Trustee written notice of its selection of such Extended Interest
         Payment Period at least two Business Days before the earlier of (i) the
         next succeeding Interest Payment Date; or (ii) the date the Company is
         required to give notice of the record or payment date of such interest
         payment to any applicable self-regulatory organization, if any, or to
         holders of the Debentures.

                  (c) The quarter in which any notice is given pursuant to
         paragraphs (a) or (b) of this Section 4.2 shall be counted as one of
         the 20 quarters permitted in the maximum Extended Interest Payment
         Period permitted under Section 4.1.

         SECTION 4.3 LIMITATION ON TRANSACTIONS.

         If (i) the Company shall exercise its right to defer payment of
interest as provided in Section 4.1; or (ii) there shall have occurred and be
continuing any Event of Default, then

                  (a) the Company shall not, and will not permit any Subsidiary
         to, declare or pay any dividends on, make any distributions with
         respect to, or redeem, purchase, acquire or make a liquidation payment
         with respect to, any of its capital stock (other than (1) dividends or
         distributions in shares of, or options, warrants or rights to subscribe
         for or purchase shares of, common stock of the Company or such
         Subsidiary, (2) any declaration of a dividend in connection with the
         implementation of a shareholder's rights plan, or the issuance of stock
         under any such plan in the future, or the redemption or repurchase of
         any such rights pursuant thereto, (3) purchases of common stock of the
         Company related to the issuance of such common stock under any of the
         Company's employee benefit plans for its directors, officers or
         employees, (4) as a result of a reclassification of any class or series
         of the Company's capital stock solely into another class or series of
         the Company's capital stock, or (5) declarations or payments of
         dividends or distributions payable by a Subsidiary of the Company to
         the Company or to any of the Company's Subsidiaries);

                  (b) the Company shall not, and will not permit any Subsidiary
         to, make any payment of interest, principal or premium, if any, or
         repay, repurchase or redeem any debt securities issued by the Company
         which rank pari passu with or junior to the Debentures;

                  (c) the Company shall not make any guarantee payments with
         respect to any guarantee by the Company of the debt securities of any
         Subsidiary of the Company if such guarantee ranks pari passu with or
         junior to the Debentures; provided, however, that notwithstanding the
         foregoing the Company may make payments pursuant to its obligations
         under the Trust Preferred Securities Guarantee; and

                  (d) the Company shall not redeem, purchase or acquire less
         than all of the Outstanding Debentures or any of the Trust Preferred
         Securities.

                                      -24-
<PAGE>

                                    ARTICLE V

                       PARTICULAR COVENANTS OF THE COMPANY

         SECTION 5.1 PAYMENT OF PRINCIPAL AND INTEREST.

         The Company shall duly and punctually pay or cause to be paid the
principal of and interest on the Debentures at the time and place and in the
manner provided herein.

         SECTION 5.2 MAINTENANCE OF AGENCY.

         So long as any of the Debentures remain Outstanding, the Company shall
maintain, or shall cause to be maintained, an office or agency in Wilmington,
Delaware, and at such other location or locations as may be designated as
provided in this Section 5.2, where (i) Debentures may be presented for payment;
(ii) Debentures may be presented as hereinabove authorized for registration of
transfer and exchange; and (iii) notices and demands to or upon the Company in
respect of the Debentures and this Indenture may be given or served, such
designation to continue with respect to such office or agency until the Company
shall, by written notice signed by its Chief Executive Officer, President or an
Executive Vice President and delivered to the Trustee, designate some other
office or agency for such purposes or any of them. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, notices and demands. In addition to any such office or agency,
the Company may from time to time designate one or more offices or agencies
outside of Wilmington, Delaware where the Debentures may be presented for
registration or transfer and for exchange in the manner provided herein, and the
Company may from time to time rescind such designation as the Company may deem
desirable or expedient; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
any such office or agency in Wilmington, Delaware for the purposes above
mentioned. The Company shall give the Trustee prompt written notice of any such
designation or rescission thereof.

         SECTION 5.3 PAYING AGENTS.

                  (a) The Trustee shall be the initial Paying Agent. If the
         Company shall appoint one or more Paying Agents for the Debentures,
         other than the Trustee, the Company shall cause each such Paying Agent
         to execute and deliver to the Trustee an instrument in which such agent
         shall agree with the Trustee, subject to the provisions of this Section
         5.3:

                  (i)      that it shall hold all sums held by it as such agent
                           for the payment of the principal of or interest on
                           the Debentures (whether such sums have been paid to
                           it by the Company or by any other obligor of such
                           Debentures) in trust for the benefit of the Persons
                           entitled thereto;

                  (ii)     that it shall give the Trustee notice of any failure
                           by the Company (or by any other obligor of such
                           Debentures) to make any payment of the

                                      -25-
<PAGE>

                           principal of or interest on the Debentures when the
                           same shall be due and payable;

                  (iii)    that it shall, at any time during the continuance of
                           any failure referred to in the preceding paragraph
                           (a)(ii) above, upon the written request of the
                           Trustee, forthwith pay to the Trustee all sums so
                           held in trust by such Paying Agent; and

                  (iv)     that it shall perform all other duties of Paying
                           Agent as set forth in this Indenture.

                  (b) If the Company shall act as its own Paying Agent with
         respect to the Debentures, it shall on or before each due date of the
         principal of or interest on such Debentures, set aside, segregate and
         hold in trust for the benefit of the Persons entitled thereto a sum
         sufficient to pay such principal or interest so becoming due on
         Debentures until such sums shall be paid to such Persons or otherwise
         disposed of as herein provided and shall promptly notify the Trustee of
         such action, or any failure (by it or any other obligor on such
         Debentures) to take such action. Whenever the Company shall have one or
         more Paying Agents for the Debentures, it shall, prior to each due date
         of the principal of or interest on any Debentures, deposit with the
         Paying Agent a sum sufficient to pay the principal or interest so
         becoming due, such sum to be held in trust for the benefit of the
         Persons entitled to such principal or interest, and (unless such Paying
         Agent is the Trustee) the Company shall promptly notify the Trustee of
         this action or failure so to act.

                  (c) Notwithstanding anything in this Section 5.3 to the
         contrary, (i) the agreement to hold sums in trust as provided in this
         Section 5.3 is subject to the provisions of Section 13.3 and 13.4; and
         (ii) the Company may at any time, for the purpose of obtaining the
         satisfaction and discharge of this Indenture or for any other purpose,
         pay, or direct any Paying Agent to pay, to the Trustee all sums held in
         trust by the Company or such Paying Agent, such sums to be held by the
         Trustee upon the same terms and conditions as those upon which such
         sums were held by the Company or such Paying Agent; and, upon such
         payment by any Paying Agent to the Trustee, such Paying Agent shall be
         released from all further liability with respect to such money.

         SECTION 5.4 APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE.

         The Company, whenever necessary to avoid or fill a vacancy in the
office of Trustee, shall appoint, in the manner provided in Section 9.11, a
Trustee, so that there shall at all times be a Trustee hereunder.

         SECTION 5.5 COMPLIANCE WITH CONSOLIDATION PROVISIONS.

         The Company shall not, while any of the Debentures remain Outstanding,
consolidate with, or merge into, or sell or convey all or substantially all of
its property to any other company unless the provisions of Article XII hereof
are complied with.

                                      -26-
<PAGE>

         SECTION 5.6 LIMITATION ON TRANSACTIONS.

         If Debentures are issued to the Trust or a trustee of the Trust in
connection with the issuance of Trust Securities by the Trust and (i) there
shall have occurred any event that would constitute an Event of Default; (ii)
the Company shall be in default with respect to any of its obligations under the
Trust Preferred Securities Guarantee relating to the Trust; or (iii) the Company
shall have given notice of its election to defer payments of interest on such
Debentures by extending the interest payment period as provided in this
Indenture and such period, or any extension thereof, shall be continuing, then

                  (a) the Company shall not, and will not permit any Subsidiary
         to, declare or pay any dividends on, make any distributions with
         respect to, or redeem, purchase, acquire or make a liquidation payment
         with respect to, any of its capital stock (other than (1) dividends or
         distributions in shares of, or options, warrants or rights to subscribe
         for or purchase shares of, common stock of the Company or such
         Subsidiary, (2) any declaration of a dividend in connection with the
         implementation of a shareholder's rights plan, or the issuance of stock
         under any such plan in the future, or the redemption or repurchase of
         any such rights pursuant thereto, (3) purchases of common stock of the
         Company related to the issuance of such common stock under any of the
         Company's employee benefit plans for its directors, officers or
         employees, (4) as a result of a reclassification of any class or series
         of the Company's capital stock solely into another class or series of
         the Company's capital stock, or (5) declarations or payments of
         dividends or distributions payable by a Subsidiary of the Company to
         the Company or to any of the Company's Subsidiaries);

                  (b) the Company shall not, and will not permit any Subsidiary
         to, make any payment of interest, principal or premium, if any, or
         repay, repurchase or redeem any debt securities issued by the Company
         which rank pari passu with or junior to the Debentures;

                  (c) the Company shall not make any guarantee payments with
         respect to any guarantee by the Company of the debt securities of any
         Subsidiary of the Company if such guarantee ranks pari passu with or
         junior in interest to the Debentures; provided, however, that the
         Company may make payments pursuant to its obligations under the Trust
         Preferred Securities Guarantee; and

                  (d) the Company shall not redeem, purchase or acquire less
         than all of the Outstanding Debentures or any of the Trust Preferred
         Securities.

         SECTION 5.7 COVENANTS AS TO THE TRUST.

         For so long as the Trust Securities of the Trust remain outstanding,
the Company shall (i) maintain 100% direct or indirect ownership of the Common
Securities of the Trust; provided, however, that any permitted successor of the
Company under this Indenture may succeed to the Company's ownership of the
Common Securities; (ii) not voluntarily terminate, wind up or liquidate the
Trust, except upon prior approval of the Federal Reserve if then so required
under applicable capital guidelines, policies or regulations of the Federal
Reserve; (iii) use its reasonable efforts to cause the Trust (a) to remain a
business trust (and to avoid involuntary dissolution, termination, winding up or
liquidation), except in connection with a distribution of

                                      -27-
<PAGE>

Debentures, the redemption of all of the Trust Securities of the Trust or
certain mergers, consolidations or amalgamations, each as permitted by the Trust
Agreement and (b) to otherwise continue not to be treated as an association
taxable as a corporation or partnership for United States federal income tax
purposes; and (iv) use its reasonable efforts to cause each holder of Trust
Securities to be treated as owning an individual beneficial interest in the
Debentures. In connection with the distribution of the Debentures to the holders
of the Trust Preferred Securities issued by the Trust upon a Dissolution Event,
the Company shall use its reasonable efforts to list such Debentures on any
applicable stock exchange or self-regulatory organization as the Trust Preferred
Securities are then listed, if any.

         SECTION 5.8 COVENANTS AS TO PURCHASES.

         Except upon the exercise by the Company of its right to redeem the
Debentures pursuant to Section 3.1 upon the occurrence and continuation of a
Special Event, the Company shall not purchase any Debentures, in whole or in
part, held by the Property Trustee on behalf of the Trust prior to June 30,
2007.

         SECTION 5.9 WAIVER OF USURY, STAY OR EXTENSION LAWS.

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

                                   ARTICLE VI

                       DEBENTUREHOLDERS' LISTS AND REPORTS
                         BY THE COMPANY AND THE TRUSTEE

         SECTION 6.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
DEBENTUREHOLDERS.

         The Company shall furnish or cause to be furnished to the Trustee (a)
on a quarterly basis on each regular record date (as described in Section 2.5) a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the holders of the Debentures as of such regular record date,
provided that the Company shall not be obligated to furnish or cause to furnish
such list at any time that the list shall not differ in any respect from the
most recent list furnished to the Trustee by the Company (in the event the
Company fails to provide such list on a quarterly basis, the Trustee shall be
entitled to rely on the most recent list provided by the Company); and (b) at
such other times as the Trustee may request in writing within 30 days after the
receipt by the Company of any such request, a list of similar form and content
as of a date not more than 15 days prior to the time such list is furnished;
provided, however, that, in either case, no such list need be furnished if the
Trustee shall be the Debenture Registrar.

                                      -28-
<PAGE>

         SECTION 6.2 PRESERVATION OF INFORMATION; COMMUNICATIONS WITH
DEBENTUREHOLDERS.

                  (a) The Trustee shall preserve, in as current a form as is
         reasonably practicable, all information as to the names and addresses
         of the holders of Debentures contained in the most recent list
         furnished to it as provided in Section 6.1 and as to the names and
         addresses of holders of Debentures received by the Trustee in its
         capacity as Debenture Registrar (if acting in such capacity).

                  (b) The Trustee may destroy any list furnished to it as
         provided in Section 6.1 upon receipt of a new list so furnished.

                  (c) Debentureholders may communicate with other
         Debentureholders with respect to their rights under this Indenture or
         under the Debentures, subject to Section 312(b) of the Trust Indenture
         Act if applicable.

         SECTION 6.3 REPORTS BY THE COMPANY.

                  (a) The Company covenants and agrees to transmit to the
         Trustee such additional information, documents and reports with respect
         to compliance by the Company with the conditions and covenants provided
         for in this Indenture as may be required from time to time by such
         rules and regulations, including Section 314(a)(4) of the Trust
         Indenture Act, if applicable.

                  (b) The Company covenants and agrees to transmit to the
         Trustee in the same form as filed with the Federal Reserve (i) its
         annual audited consolidated financial statements within 90 days
         following the end of its fiscal year, (ii) its quarterly consolidated
         financial statements within 45 days after the end of the first three
         fiscal quarters of each fiscal year (each a "Quarter"), and (iii) the
         following financial data for each Quarter, within 45 days after the end
         of each Quarter, and for each fiscal year, within 90 days after the end
         of each fiscal year:

                           Capital: RATIO OF "TIER 1 CAPITAL" TO RISK WEIGHTED
                  ASSETS;

                           Asset Quality: RATIO OF NONPERFORMING ASSETS TO LOANS
                  AND OTHER REAL ESTATE OWNED, RATIO OF RESERVES TO
                  NONPERFORMING LOANS, AND RATIO OF NET CHARGE-OFFS TO LOANS;

                           Earnings: RETURN ON ASSETS, NET INTEREST MARGIN, AND
                  EFFICIENCY RATIO; AND

                           Liquidity: RATIO OF LOANS TO ASSETS, RATIO OF LOANS
                  TO DEPOSITS, TOTAL ASSETS, AND NET INCOME.

         SECTION 6.4 REPORTS BY THE TRUSTEE.

                  (a) On or before July 15 in each year in which any of the
         Debentures are Outstanding, the Trustee shall transmit by mail, first
         class postage prepaid, to the

                                      -29-
<PAGE>

         Debentureholders, as their names and addresses appear upon the
         Debenture Register, a brief report dated as of the preceding May 15, if
         and to the extent required under Section 313(a) of the Trust Indenture
         Act, if applicable (it being understood that no such report shall be
         required if none of the events set forth in Section 313(a) of the Trust
         Indenture Act has occurred during the period to which such report would
         relate).

                  (b) The Trustee shall comply with Sections 313(b) and 313(c)
         of the Trust Indenture Act, if applicable.

                  (c) A copy of each such report shall, at the time of such
         transmission to Debentureholders, be filed by the Trustee with the
         Company, with each stock exchange or applicable self-regulatory
         organization upon which any Debentures are listed (if so listed) and
         also with the Commission. The Company agrees to notify the Trustee when
         any Debentures become listed on any stock exchange or other applicable
         self-regulatory organization.

                  (d) If at any time following the date hereof the Property
         Trustee no longer holds the Debentures, the Trustee covenants and
         agrees to transmit by mail, first class postage prepaid, to the
         Debentureholders, as their names and addresses appear upon the
         Debenture Register, any information, documents and reports required to
         be transmitted to the Trustee pursuant to Section 6.3 as soon as
         practicable after the receipt of such information from the Company.

                                   ARTICLE VII

                  REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
                               ON EVENT OF DEFAULT

         SECTION 7.1 EVENTS OF DEFAULT.

                  (a) Whenever used herein with respect to the Debentures,
         "Event of Default" means any one or more of the following events that
         has occurred and is continuing:

                  (i)      the Company defaults in the payment of any
                           installment of interest upon any of the Debentures,
                           as and when the same shall become due and payable,
                           and continuance of such default for a period of 30
                           days; provided, however, that a valid extension of an
                           interest payment period by the Company in accordance
                           with the terms of this Indenture shall not constitute
                           a default in the payment of interest for this
                           purpose;

                  (ii)     the Company defaults in the payment of the principal
                           on the Debentures as and when the same shall become
                           due and payable whether at maturity, upon redemption,
                           by declaration or otherwise;

                  (iii)    the Company fails to observe or perform any other of
                           its covenants or agreements with respect to the
                           Debentures for a period of 90 days after the date on
                           which written notice of such failure, requiring the
                           same to be remedied and stating that such notice is a
                           "Notice of Default" hereunder,

                                      -30-
<PAGE>

                           shall have been given to the Company by the Trustee,
                           by registered or certified mail, or to the Company
                           and the Trustee by the holders of at least 25% in
                           principal amount of the Debentures at the time
                           Outstanding;

                  (iv)     the Company pursuant to or within the meaning of any
                           Bankruptcy Law (1) commences a voluntary case; (2)
                           consents to the entry of an order for relief against
                           it in an involuntary case; (3) consents to the
                           appointment of a Custodian of it or for all or
                           substantially all of its property; or (4) makes a
                           general assignment for the benefit of its creditors;

                  (v)      a court of competent jurisdiction enters an order
                           under any Bankruptcy Law that (1) is for relief
                           against the Company in an involuntary case; (2)
                           appoints a Custodian of the Company for all or
                           substantially all of its property; or (3) orders the
                           liquidation of the Company, and the order or decree
                           remains unstayed and in effect for 90 days; or

                  (vi)     the Trust shall have voluntarily or involuntarily
                           dissolved, wound-up its business or otherwise
                           terminated its existence except in connection with
                           (1) the distribution of Debentures to holders of
                           Trust Securities in liquidation of their interests in
                           the Trust; (2) the redemption of all of the
                           outstanding Trust Securities of the Trust; or (3)
                           certain mergers, consolidations or amalgamations,
                           each as permitted by the Trust Agreement.

                  (b) In each and every such case referred to in items (i)
         through (vi) of Section 7.1(a), unless the principal of all the
         Debentures shall have already become due and payable, either the
         Trustee or the holders of not less than 25% in aggregate principal
         amount of the Debentures then Outstanding hereunder, by notice in
         writing to the Company (and to the Trustee if given by such
         Debentureholders) may declare the principal of all the Debentures to be
         due and payable immediately, and upon any such declaration the same
         shall become and shall be immediately due and payable, notwithstanding
         anything contained in this Indenture or in the Debentures.

                  (c) At any time after the principal of the Debentures shall
         have been so declared due and payable, and before any judgment or
         decree for the payment of the money due shall have been obtained or
         entered as hereinafter provided, the holders of a majority in aggregate
         principal amount of the Debentures then Outstanding hereunder, by
         written notice to the Company and the Trustee, may rescind and annul
         such declaration and its consequences if: (i) the Company has paid or
         deposited with the Trustee a sum sufficient to pay all matured
         installments of interest upon all the Debentures and the principal of
         any and all Debentures that shall have become due otherwise than by
         acceleration (with interest upon such principal, and, to the extent
         that such payment is enforceable under applicable law, upon overdue
         installments of interest, at the rate per annum expressed in the
         Debentures to the date of such payment or deposit) and the amount
         payable to the Trustee under Section 9.7; and (ii) any and all Events
         of Default under this Indenture, other than the nonpayment of principal
         on Debentures that shall not have become due by their terms, shall have
         been remedied or waived as provided in

                                      -31-
<PAGE>

         Section 7.6. No such rescission and annulment shall extend to or shall
         affect any subsequent default or impair any right consequent thereon.

                  (d) In case the Trustee shall have proceeded to enforce any
         right with respect to Debentures under this Indenture and such
         proceedings shall have been discontinued or abandoned because of such
         rescission or annulment or for any other reason or shall have been
         determined adversely to the Trustee, then and in every such case the
         Company and the Trustee shall be restored respectively to their former
         positions and rights hereunder, and all rights, remedies and powers of
         the Company and the Trustee shall continue as though no such
         proceedings had been taken.

         SECTION 7.2 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.

                  (a) The Company covenants that (i) in case it shall default in
         the payment of any installment of interest on any of the Debentures,
         and such default shall have continued for a period of 90 Business Days;
         or (ii) in case it shall default in the payment of the principal of any
         of the Debentures when the same shall have become due and payable,
         whether upon maturity of the Debentures or upon redemption or upon
         declaration or otherwise, then, upon demand of the Trustee, the Company
         shall pay to the Trustee, for the benefit of the holders of the
         Debentures, the whole amount that then shall have become due and
         payable on all such Debentures for principal or interest, or both, as
         the case may be, with interest upon the overdue principal and (to the
         extent that payment of such interest is enforceable under applicable
         law; and, if the Debentures are held by the Trust or a trustee of the
         Trust, without duplication of any other amounts paid by the Trust or
         trustee in respect thereof) upon overdue installments of interest at
         the rate per annum expressed in the Debentures; and, in addition
         thereto, such further amount as shall be sufficient to cover the costs
         and expenses of collection, and the amount payable to the Trustee under
         Section 9.7.

                  (b) If the Company shall fail to pay such amounts set forth in
         section 7.2(a) forthwith upon such demand, the Trustee, in its own name
         and as trustee of an express trust, shall be entitled and empowered to
         institute any action or proceedings at law or in equity for the
         collection of the sums so due and unpaid, and may prosecute any such
         action or proceeding to judgment or final decree, and may enforce any
         such judgment or final decree against the Company or other obligor upon
         the Debentures and collect any money adjudged or decreed to be payable
         in the manner provided by law out of the property of the Company or
         other obligor upon the Debentures, wherever situated.

                  (c) In case of any receivership, insolvency, liquidation,
         bankruptcy, reorganization, readjustment, arrangement, composition or
         judicial proceedings affecting the Company or the creditors or property
         of either, the Trustee shall have power to intervene in such
         proceedings and take any action therein that may be permitted by the
         court and shall (except as may be otherwise provided by law) be
         entitled to file such proofs of claim and other papers and documents as
         may be necessary or advisable in order to have the claims of the
         Trustee and of the holders of the Debentures allowed for the entire
         amount due and payable by the Company under this Indenture at the date
         of institution of such proceedings and for any additional amount that
         may become due and

                                      -32-
<PAGE>

         payable by the Company after such date, and to collect and receive any
         money or other property payable or deliverable on any such claim, and
         to distribute the same after the deduction of the amount payable to the
         Trustee under Section 9.7; and any receiver, assignee or trustee in
         bankruptcy or reorganization is hereby authorized by each of the
         holders of the Debentures to make such payments to the Trustee, and, in
         the event that the Trustee shall consent to the making of such payments
         directly to such Debentureholders, to pay to the Trustee any amount due
         it under Section 9.7.

                  (d) All rights of action and of asserting claims under this
         Indenture, or under any of the terms established with respect to the
         Debentures, may be enforced by the Trustee without the possession of
         any of such Debentures, or the production thereof at any trial or other
         proceeding relative thereto, and any such suit or proceeding instituted
         by the Trustee shall be brought in its own name as trustee of an
         express trust, and any recovery of judgment shall, after provision for
         payment to the Trustee of any amounts due under Section 9.7, be for the
         ratable benefit of the holders of the Debentures. If an Event of
         Default hereunder occurs and is continuing, the Trustee may in its
         discretion proceed to protect and enforce the rights vested in it by
         this Indenture by such appropriate judicial proceedings as the Trustee
         shall in good faith deem most effectual to protect and enforce any of
         such rights, either at law or in equity or in bankruptcy or otherwise,
         whether for the specific enforcement of any covenant or agreement
         contained in this Indenture or in aid of the exercise of any power
         granted in this Indenture, or to enforce any other legal or equitable
         right vested in the Trustee by this Indenture or by law. Nothing
         contained herein shall be deemed to authorize the Trustee to authorize
         or consent to or accept or adopt on behalf of any Debentureholder any
         plan of reorganization, arrangement, adjustment or composition
         affecting the Debentures or the rights of any holder thereof or to
         authorize the Trustee to vote in respect of the claim of any
         Debentureholder in any such proceeding.

         SECTION 7.3 APPLICATION OF MONEY COLLECTED.

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

         FIRST: To the payment of reasonable costs and expenses of collection
and of all amounts payable to the Trustee under Section 9.7;

         SECOND: To the payment of all Senior Indebtedness of the Company if and
to the extent required by Article XVI; and

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

                                      -33-
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         SECTION 7.4 LIMITATION ON SUITS.

                  (a) Except as set forth in this Indenture, no holder of any
         Debenture shall have any right by virtue or by availing of any
         provision of this Indenture to institute any suit, action or proceeding
         in equity or at law upon or under or with respect to this Indenture or
         for the appointment of a receiver or trustee, or for any other remedy
         hereunder, unless (i) such holder previously shall have given to the
         Trustee written notice of an Event of Default and of the continuance
         thereof with respect to the Debentures specifying such Event of
         Default, as hereinbefore provided; (ii) the holders of not less than
         25% in aggregate principal amount of the Debentures then Outstanding
         shall have made written request upon the Trustee to institute such
         action, suit or proceeding in its own name as trustee hereunder; (iii)
         such holder or holders shall have offered to the Trustee such
         reasonable security or indemnity as it may require against the costs,
         expenses and liabilities to be incurred therein or thereby; and (iv)
         the Trustee for 60 days after its receipt of such notice, request and
         offer of security or indemnity, shall have failed to institute any such
         action, suit or proceeding, and during such 60 day period, the holders
         of a majority in principal amount of the Debentures do not give the
         Trustee a direction inconsistent with the request.

                  (b) Notwithstanding anything contained herein to the contrary
         or any other provisions of this Indenture, the right of any holder of
         the Debentures to receive payment of the principal of and interest on
         the Debentures, as therein provided, on or after the respective due
         dates expressed in such Debenture (or in the case of redemption, on the
         redemption date), or to institute suit for the enforcement of any such
         payment on or after such respective dates or redemption date, shall not
         be impaired or affected without the consent of such holder and by
         accepting a Debenture hereunder it is expressly understood, intended
         and covenanted by the taker and holder of every Debenture with every
         other such taker and holder and the Trustee, that no one or more
         holders of the Debentures shall have any right in any manner whatsoever
         by virtue or by availing of any provision of this Indenture to affect,
         disturb or prejudice the rights of the holders of any other of such
         Debentures, or to obtain or seek to obtain priority over or preference
         to any other such holder, or to enforce any right under this Indenture,
         except in the manner herein provided and for the equal, ratable and
         common benefit of all holders of Debentures. For the protection and
         enforcement of the provisions of this Section 7.4, each and every
         Debentureholder and the Trustee shall be entitled to such relief as can
         be given either at law or in equity.

         SECTION 7.5 RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER.

                  (a) Except as otherwise expressly provided herein, all powers
         and remedies given by this Article VII to the Trustee or to the
         Debentureholders shall, to the extent permitted by law, be deemed
         cumulative and not exclusive of any other powers and remedies available
         to the Trustee or the holders of the Debentures, by judicial
         proceedings or otherwise, to enforce the performance or observance of
         the covenants and agreements contained in this Indenture or otherwise
         established with respect to such Debentures.

                                      -34-
<PAGE>

                  (b) No delay or omission of the Trustee or of any holder of
         any of the Debentures to exercise any right or power accruing upon any
         Event of Default occurring and continuing as aforesaid shall impair any
         such right or power, or shall be construed to be a waiver of any such
         default or an acquiescence therein; and, subject to the provisions of
         Section 7.4, every power and remedy given by this Article VII or by law
         to the Trustee or the Debentureholders may be exercised from time to
         time, and as often as shall be deemed expedient, by the Trustee or by
         the Debentureholders.

         SECTION 7.6 CONTROL BY DEBENTUREHOLDERS.

         The holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding, determined in accordance with Article X,
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee; provided, however, that such direction shall not
be in conflict with any rule of law or with this Indenture. Subject to the
provisions of Section 9.1(b), the Trustee shall have the right to decline to
follow any such direction if the Trustee in good faith shall, by a Responsible
Officer or Officers of the Trustee, determine that the proceeding so directed
would involve the Trustee in personal liability. The holders of a majority in
aggregate principal amount of the Debentures at the time Outstanding affected
thereby, determined in accordance with Article X, may on behalf of the holders
of all of the Debentures waive any past default in the performance of any of the
covenants contained herein and its consequences, except (i) a default in the
payment of the principal of or interest on, any of the Debentures as and when
the same shall become due by the terms of such Debentures otherwise than by
acceleration (unless such default has been cured and a sum sufficient to pay all
matured installments of interest and principal has been deposited with the
Trustee (in accordance with Section 7.1(c)); (ii) a default in the covenants
contained in Section 5.7; or (iii) in respect of a covenant or provision hereof
which cannot be modified or amended without the consent of the holder of each
Outstanding Debenture affected; provided, however, that if the Debentures are
held by the Trust or a trustee of the Trust, such waiver or modification to such
waiver shall not be effective until the holders of a majority in liquidation
preference of Trust Securities shall have consented to such waiver or
modification to such waiver; provided further, that if the consent of the holder
of each Outstanding Debenture is required, such waiver shall not be effective
until each holder of the Trust Securities of the Trust shall have consented to
such waiver. Upon any such waiver, the default covered thereby shall be deemed
to be cured for all purposes of this Indenture and the Company, the Trustee and
the holders of the Debentures shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.

         SECTION 7.7 UNDERTAKING TO PAY COSTS.

         All parties to this Indenture agree, and each holder of any Debentures
by such holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party

                                      -35-
<PAGE>

litigant; but the provisions of this Section 7.7 shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Debentureholder, or
group of Debentureholders holding more than 10% in aggregate principal amount of
the Outstanding Debentures, to any suit instituted by any Debentureholder for
the enforcement of the payment of the principal of or interest on the
Debentures, on or after the respective due dates expressed in such Debenture or
established pursuant to this Indenture or to any suit instituted against the
Trustee unless it shall have been finally adjudicated in such suit that the
Trustee was negligent, committed an act of willful misconduct, or acted in bad
faith.

         SECTION 7.8 DIRECT ACTION; RIGHT OF SET-OFF.

         In the event that an Event of Default has occurred and is continuing
and such event is attributable to the failure of the Company to pay interest on
or principal of the Debentures on an Interest Payment Date or Maturity Date, as
applicable, then a holder of Trust Preferred Securities may institute a legal
proceeding directly against the Company for enforcement of payment to such
holder of the principal of or interest on such Debentures having a principal
amount equal to the aggregate Liquidation Amount of the Trust Preferred
Securities of such holder (a "Direct Action"). In connection with such Direct
Action, the Company will have a right of set-off under this Indenture to the
extent of any payment made by the Company to such holder of the Trust Preferred
Securities with respect to such Direct Action.

                                  ARTICLE VIII

                      FORM OF DEBENTURE AND ORIGINAL ISSUE

         SECTION 8.1 FORM OF DEBENTURE.

         The Debenture and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the forms contained as Exhibit A to
this Indenture, attached hereto and incorporated herein by reference.

         SECTION 8.2 ORIGINAL ISSUE OF DEBENTURES.

         Debentures in the aggregate principal amount of Four Million One
Hundred Twenty-Five Thousand Dollars ($4,125,000) may, upon execution of this
Indenture, be executed by the Company and delivered to the Trustee for
authentication. The Trustee shall thereupon authenticate and deliver said
Debentures to or upon the written order of the Company, signed by its Chief
Executive Officer, President, or any Vice President and its Treasurer or an
Assistant Treasurer, without any further action by the Company.

                                   ARTICLE IX

                             CONCERNING THE TRUSTEE

         SECTION 9.1 CERTAIN DUTIES AND RESPONSIBILITIES OF THE TRUSTEE.

                  (a) The Trustee, prior to the occurrence of an Event of
         Default and after the curing of all Events of Default that may have
         occurred, shall undertake to perform with

                                      -36-
<PAGE>

         respect to the Debentures such duties and only such duties as are
         specifically set forth in this Indenture. In case an Event of Default
         has occurred that has not been cured or waived, the Trustee shall
         exercise such of the rights and powers vested in it by this Indenture,
         and use the same degree of care and skill in their exercise, as a
         prudent Person would exercise or use under the circumstances in the
         conduct of its own affairs. No implied covenants shall be read into
         this Indenture against the Trustee.

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

                  (i)      prior to the occurrence of an Event of Default and
                           after the curing or waiving of all such Events of
                           Default that may have occurred:

                           (A)      the duties and obligations of the Trustee
                                    shall with respect to the Debentures be
                                    determined solely by the express provisions
                                    of this Indenture, and the Trustee shall not
                                    be liable with respect to the Debentures
                                    except for the performance of such duties
                                    and obligations as are specifically set
                                    forth in this Indenture, and no implied
                                    covenants or obligations shall be read into
                                    this Indenture against the Trustee; and

                           (B)      in the absence of bad faith on the part of
                                    the Trustee, the Trustee may with respect to
                                    the Debentures conclusively rely, as to the
                                    truth of the statements and the correctness
                                    of the opinions expressed therein, upon any
                                    certificates or opinions furnished to the
                                    Trustee and conforming to the requirements
                                    of this Indenture; but 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 be under a duty to examine the same to
                                    determine whether or not they conform to the
                                    requirements of this Indenture;

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

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

                                      -37-
<PAGE>

                  (iv)     none of the provisions contained in this Indenture
                           shall require the Trustee to expend or risk its own
                           funds or otherwise incur personal financial liability
                           in the performance of any of its duties or in the
                           exercise of any of its rights or powers, if there is
                           reasonable ground for believing that the repayment of
                           such funds or liability is not reasonably assured to
                           it under the terms of this Indenture or adequate
                           indemnity against such risk is not reasonably assured
                           to it.

         SECTION 9.2 NOTICE OF DEFAULTS.

         Within five (5) Business Days after actual knowledge by a Responsible
Officer of the Trustee of the occurrence of any default hereunder with respect
to the Debentures, the Trustee shall transmit by mail to all holders of the
Debentures, as their names and addresses appear in the Debenture Register,
notice of such default, unless such default shall have been cured or waived;
provided, however, that, except in the case of a default in the payment of the
principal or interest (including any Additional Interest) on any Debenture, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of the
directors and/or Responsible Officers of the Trustee determines in good faith
that the withholding of such notice is in the interests of the holders of such
Debentures; and provided, further, that in the case of any default of the
character specified in Section 7.1(a)(iii), no such notice to holders of
Debentures need be sent until at least 30 days after the occurrence thereof. For
the purposes of this Section 9.2, the term "default" means any event which is,
or after notice or lapse of time or both, would become, an Event of Default with
respect to the Debentures.

         SECTION 9.3 CERTAIN RIGHTS OF TRUSTEE.

         Except as expressly set forth in Section 9.1(b):

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

                  (b) Any request, direction, order or demand of the Company
         mentioned herein shall be sufficiently evidenced by a Board Resolution
         or an instrument signed in the name of the Company by its President or
         any Vice President and by the Secretary or an Assistant Secretary or
         the Treasurer or an Assistant Treasurer thereof (unless other evidence
         in respect thereof is specifically prescribed herein);

                  (c) The Trustee shall not be deemed to have knowledge of a
         default or an Event of Default, other than an Event of Default
         specified in Section 7.1(a)(i) or (ii), unless and until it receives
         written notification of such Event of Default from the Company or by
         holders of at least 25% of the aggregate principal amount of the
         Debentures at the time Outstanding;

                  (d) The Trustee may consult with counsel and the written
         advice of such counsel or any Opinion of Counsel shall be full and
         complete authorization and

                                      -38-
<PAGE>

         protection in respect of any action taken or suffered or omitted
         hereunder in good faith and in reliance thereon;

                  (e) The Trustee shall be under no obligation to exercise any
         of the rights or powers vested in it by this Indenture at the request,
         order or direction of any of the Debentureholders, pursuant to the
         provisions of this Indenture, unless such Debentureholders shall have
         offered to the Trustee reasonable security or indemnity against the
         costs, expenses and liabilities that may be incurred therein or
         thereby; nothing contained herein shall, however, relieve the Trustee
         of the obligation, upon the occurrence of an Event of Default of which
         a Responsible Officer of the Trustee has actual knowledge (that is
         continuing and has not been cured or waived) to exercise with respect
         to the Debentures such of the rights and powers vested in it by this
         Indenture, and to use the same degree of care and skill in its
         exercise, as a prudent person would exercise or use under the
         circumstances in the conduct of his or her own affairs;

                  (f) The Trustee shall not be liable for any action taken or
         omitted to be taken by it in good faith and believed by it to be
         authorized or within the discretion or rights or powers conferred upon
         it by this Indenture;

                  (g) The Trustee shall not be bound to make any investigation
         into the facts or matters stated in any resolution, certificate,
         statement, instrument, opinion, report, notice, request, consent,
         order, approval, bond, security, or other papers or documents, unless
         requested in writing so to do by the holders of not less than a
         majority in principal amount of the Outstanding Debentures, determined
         as provided in Article X; provided, however, that if the payment within
         a reasonable time to the Trustee of the costs, expenses or liabilities
         likely to be incurred by it in the making of such investigation is, in
         the opinion of the Trustee, not reasonably assured to the Trustee by
         the security afforded to it by the terms of this Indenture, the Trustee
         may require reasonable indemnity against such costs, expenses or
         liabilities as a condition to so proceeding. The reasonable expense of
         every such examination shall be paid by the Company or, if paid by the
         Trustee, shall be repaid by the Company upon demand; and

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

         SECTION 9.4 TRUSTEE NOT RESPONSIBLE FOR RECITALS, ETC.

                  (a) The Recitals contained herein and in the Debentures shall
         be taken as the statements of the Company, and the Trustee assumes no
         responsibility for the correctness of the same.

                  (b) The Trustee makes no representations as to the validity or
         sufficiency of this Indenture or of the Debentures.

                  (c) The Trustee shall not be accountable for the use or
         application by the Company of any of the Debentures or of the proceeds
         of such Debentures, or for the use

                                      -39-
<PAGE>

         or application of any money paid over by the Trustee in accordance with
         any provision of this Indenture, or for the use or application of any
         money received by any Paying Agent other than the Trustee.

         SECTION 9.5 MAY HOLD DEBENTURES.

         The Trustee or any Paying Agent or Debenture Registrar, in its
individual or any other capacity, may become the owner or pledgee of Debentures
with the same rights it would have if it were not Trustee, Paying Agent or
Debenture Registrar.

         SECTION 9.6 MONEYS HELD IN TRUST.

         Subject to the provisions of Section 13.5, all money received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except such as it
may agree with the Company to pay thereon.

         SECTION 9.7 COMPENSATION AND REIMBURSEMENT.

                  (a) The Company covenants and agrees to pay to the Trustee,
         and the Trustee shall be entitled to, such reasonable compensation
         (which shall not be limited by any provision of law in regard to the
         compensation of a trustee of an express trust), as the Company and the
         Trustee may from time to time agree in writing, for all services
         rendered by it in the execution of the trusts hereby created and in the
         exercise and performance of any of the powers and duties hereunder of
         the Trustee, and, except as otherwise expressly provided herein, the
         Company shall pay or reimburse the Trustee upon its request for all
         reasonable expenses, disbursements and advances incurred or made by the
         Trustee in accordance with any of the provisions of this Indenture
         (including the reasonable compensation and the expenses and
         disbursements of its counsel and of all Persons not regularly in its
         employ) except any such expense, disbursement or advance as may arise
         from its negligence or bad faith. The Company also covenants to
         indemnify the Trustee (and its officers, agents, directors and
         employees) for, and to hold it harmless against, any loss, liability,
         claim, action, suit, cost or expense incurred without negligence or bad
         faith on the part of the Trustee and arising out of or in connection
         with the acceptance or administration of this Indenture, including the
         reasonable costs and expenses of defending itself against any claim of
         liability in the premises.

                  (b) The obligations of the Company under this Section 9.7 to
         compensate and indemnify the Trustee and to pay or reimburse the
         Trustee for expenses, disbursements and advances shall constitute
         additional indebtedness hereunder. Such additional indebtedness shall
         be secured by a lien prior to that of the Debentures upon all property
         and funds held or collected by the Trustee as such, except funds held
         in trust for the benefit of the holders of particular Debentures.

                                      -40-
<PAGE>

         SECTION 9.8 RELIANCE ON OFFICERS' CERTIFICATE.

         Except as expressly set forth in Section 9.1(b), whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
suffering or omitting to take any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the
Trustee and such certificate, in the absence of negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any action taken,
suffered or omitted to be taken by it under the provisions of this Indenture
upon the faith thereof.

         SECTION 9.9 DISQUALIFICATION; CONFLICTING INTERESTS.

         If the Trustee has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Company shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act, if the Trust Indenture Act is then applicable to this
Indenture.

         SECTION 9.10 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

         There shall at all times be a Trustee with respect to the Debentures
issued hereunder which shall at all times be a corporation or national banking
association organized and doing business under the laws of the United States of
America or any State or Territory thereof or of the District of Columbia, or a
corporation or other Person permitted to act as trustee by the Commission,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000, and subject to supervision or
examination by federal, state, territorial, or District of Columbia authority.
If such Person publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 9.10, the combined capital and surplus of such
Person shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published. The Company may not, nor may
any Person directly or indirectly controlling, controlled by, or under common
control with the Company, serve as Trustee. In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
9.10, the Trustee shall resign immediately in the manner and with the effect
specified in Section 9.11.

         SECTION 9.11 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

                  (a) The Trustee or any successor hereafter appointed, may at
         any time resign by giving written notice thereof to the Company and by
         transmitting notice of resignation by mail, first class postage
         prepaid, to the Debentureholders, as their names and addresses appear
         upon the Debenture Register. Upon receiving such notice of resignation,
         the Company shall promptly appoint a successor trustee with respect to
         this Indenture and Debentures by written instrument, in duplicate,
         executed by order of the Board of Directors, one copy of which
         instrument shall be delivered to the resigning Trustee and one copy to
         the successor trustee. If no successor trustee shall have been so
         appointed and have accepted appointment within 30 days after the
         mailing of such notice of resignation, the resigning Trustee may
         petition any court of competent jurisdiction for the

                                      -41-
<PAGE>

         appointment of a successor trustee with respect to this Indenture and
         Debentures, or any Debentureholder who has been a bona fide holder of a
         Debenture or Debentures for at least six months may, subject to the
         provisions of Sections 9.9 and 9.10, on behalf of himself and all
         others similarly situated, petition any such court for the appointment
         of a successor trustee. Such court may thereupon after such notice, if
         any, as it may deem proper and prescribe, appoint a successor trustee.

                  (b) In case at any time any one of the following shall occur:

                  (i)      the Trustee shall fail to comply with the provisions
                           of Section 9.9 after written request therefor by the
                           Company or by any Debentureholder who has been a bona
                           fide holder of a Debenture or Debentures for at least
                           six months; or

                  (ii)     the Trustee shall cease to be eligible in accordance
                           with the provisions of Section 9.10 and shall fail to
                           resign after written request therefor by the Company
                           or by any such Debentureholder; or

                  (iii)    the Trustee shall become incapable of acting, or
                           shall be adjudged a bankrupt or insolvent, or
                           commence a voluntary bankruptcy proceeding, or a
                           receiver of the Trustee; or

                  (iv)     of its property shall be appointed or consented to,
                           or any public officer shall take charge or control of
                           the Trustee or of its property or affairs for the
                           purpose of rehabilitation, conservation or
                           liquidation;

then, in any such case, the Company may remove the Trustee with respect to this
Indenture and all Debentures and appoint a successor trustee by written
instrument, in duplicate, executed by order of the Board of Directors, one copy
of which instrument shall be delivered to the Trustee so removed and one copy to
the successor trustee, or, subject to the provisions of Section 9.10, unless the
Trustee's duty to resign is stayed as provided herein, any Debentureholder who
has been a bona fide holder of a Debenture or Debentures for at least six months
may, on behalf of that holder and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. Such court may thereupon after such notice,
if any, as it may deem proper and prescribe, remove the Trustee and appoint a
successor trustee.

                  (c) The holders of a majority in aggregate principal amount of
         the Debentures at the time Outstanding may at any time remove the
         Trustee by so notifying the Trustee and the Company and may appoint a
         successor Trustee with the consent of the Company.

                  (d) Any resignation or removal of the Trustee and appointment
         of a successor trustee with respect to this Indenture and Debentures
         pursuant to any of the provisions of this Section 9.11 shall become
         effective upon acceptance of appointment by the successor trustee as
         provided in Section 9.12.

                                      -42-
<PAGE>

                  (e) Any successor trustee appointed pursuant to this Section
         9.11 may be appointed with respect to this Indenture and Debentures,
         and at any time there shall be only one Trustee with respect to this
         Indenture and Debentures.

         SECTION 9.12 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

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

                  (b) Upon request of any successor trustee, the Company shall
         execute any and all instruments for more full and certain vesting in
         and confirming to such successor trustee all such rights, powers and
         trusts referred to in paragraph (a) of this Section 9.12.

                  (c) No successor trustee shall accept its appointment unless
         at the time of such acceptance such successor trustee shall be
         qualified and eligible under this Article IX.

                  (d) Upon acceptance of appointment by a successor trustee as
         provided in this Section 9.12, the Company shall transmit notice of the
         succession of such trustee hereunder by mail, first class postage
         prepaid, to the Debentureholders, as their names and addresses appear
         upon the Debenture Register. If the Company fails to transmit such
         notice within ten days after acceptance of appointment by the successor
         trustee, the successor trustee shall cause such notice to be
         transmitted at the expense of the Company.

         SECTION 9.13 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS.

         Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person
succeeding to the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such Person shall be qualified
under the provisions of Section 9.9 and eligible under the provisions of Section
9.10, without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding. In case any Debentures shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Debentures so authenticated with the same effect as if such
successor Trustee had itself authenticated such Debentures.

                                      -43-
<PAGE>

         SECTION 9.14 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.

         The Trustee shall comply with Section 311(a) of the Trust Indenture
Act, if applicable, excluding any creditor relationship described in Section
311(b) of the Trust Indenture Act. A Trustee who has resigned or been removed
shall be subject to Section 311(a) of the Trust Indenture Act to the extent
applicable and included therein.

                                    ARTICLE X

                         CONCERNING THE DEBENTUREHOLDERS

         SECTION 10.1 EVIDENCE OF ACTION BY HOLDERS.

                  (a) Whenever in this Indenture it is provided that the holders
         of a majority or specified percentage in aggregate principal amount of
         the Debentures may take any action (including the making of any demand
         or request, the giving of any notice, consent or waiver or the taking
         of any other action), the fact that at the time of taking any such
         action the holders of such majority or specified percentage have joined
         therein may be evidenced by any instrument or any number of instruments
         of similar tenor executed by such holders of Debentures in Person or by
         agent or proxy appointed in writing.

                  (b) If the Company shall solicit from the Debentureholders any
         request, demand, authorization, direction, notice, consent, waiver or
         other action, the Company may, at its option, as evidenced by an
         Officers' Certificate, fix in advance a record date for the
         determination of Debentureholders entitled to give such request,
         demand, authorization, direction, notice, consent, waiver or other
         action, but the Company shall have no obligation to do so. If such a
         record date is fixed, such request, demand, authorization, direction,
         notice, consent, waiver or other action may be given before or after
         the record date, but only the Debentureholders of record at the close
         of business on the record date shall be deemed to be Debentureholders
         for the purposes of determining whether Debentureholders of the
         requisite proportion of Outstanding Debentures have authorized or
         agreed or consented to such request, demand, authorization, direction,
         notice, consent, waiver or other action, and for that purpose the
         Outstanding Debentures shall be computed as of the record date;
         provided, however, that no such authorization, agreement or consent by
         such Debentureholders on the record date shall be deemed effective
         unless it shall become effective pursuant to the provisions of this
         Indenture not later than six months after the record date.

         SECTION 10.2 PROOF OF EXECUTION BY DEBENTUREHOLDERS.

         Subject to the provisions of Section 9.1(b), proof of the execution of
any instrument by a Debentureholder (such proof shall not require notarization)
or his agent or proxy and proof of the holding by any Person of any of the
Debentures shall be sufficient if made in the following manner:

                  (a) The fact and date of the execution by any such Person of
         any instrument may be proved in any reasonable manner acceptable to the
         Trustee or the Company.

                  (b) The ownership of Debentures shall be proved by the
         Debenture Register of such Debentures or by a certificate of the
         Debenture Registrar thereof.

                                      -44-
<PAGE>

                  (c) The Trustee or the Company may require such additional
         proof of any matter referred to in this Section 10.2 as it shall deem
         necessary.

         SECTION 10.3 WHO MAY BE DEEMED OWNERS.

         Prior to the due presentment for registration of transfer of any
Debenture, the Company, the Trustee, any Paying Agent, any Authenticating Agent
and any Debenture Registrar may deem and treat the Person in whose name such
Debenture shall be registered upon the books of the Company as the absolute
owner of such Debenture (whether or not such Debenture shall be overdue and
notwithstanding any notice of ownership or writing thereon made by anyone other
than the Debenture Registrar) for the purpose of receiving payment of or on
account of the principal of and interest on such Debenture (subject to Section
2.3) and for all other purposes; and neither the Company nor the Trustee nor any
Paying Agent nor any Authenticating Agent nor any Debenture Registrar shall be
affected by any notice to the contrary.

         SECTION 10.4 CERTAIN DEBENTURES OWNED BY COMPANY DISREGARDED.

         In determining whether the holders of the requisite aggregate principal
amount of Debentures have concurred in any direction, consent or waiver under
this Indenture, the Debentures that are owned by the Company or any other
obligor on the Debentures or by any Person directly or indirectly controlling or
controlled by or under common control with the Company or any other obligor on
the Debentures shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination, except that (i) for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver, only Debentures that the Trustee actually knows
are so owned shall be so disregarded; and (ii) for the purposes of this Section
10.4, the Trust shall be deemed to not be controlled by the Company. The
Debentures so owned that have been pledged in good faith may be regarded as
Outstanding for the purposes of this Section 10.4, if the pledgee shall
establish to the satisfaction of the Trustee the pledgee's right so to act with
respect to such Debentures and that the pledgee is not a Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In case of a dispute as to
such right, any decision by the Trustee taken upon the advice of counsel shall
be full protection to the Trustee.

         SECTION 10.5 ACTIONS BINDING ON FUTURE DEBENTUREHOLDERS.

         At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 10.1, of the taking of any action by the holders of the
majority or percentage in aggregate principal amount of the Debentures specified
in this Indenture in connection with such action, any holder of a Debenture that
is shown by the evidence to be included in the Debentures the holders of which
have consented to such action may, by filing written notice with the Trustee,
and upon proof of holding as provided in Section 10.2, revoke such action so far
as concerns such Debenture. Except as aforesaid, any such action taken by the
holder of any Debenture shall be conclusive and binding upon such holder and
upon all future holders and owners of such Debenture, and of any Debenture
issued in exchange therefor, on registration of transfer thereof or in place
thereof, irrespective of whether or not any notation in regard thereto is made
upon such Debenture. Any action taken by the holders of the majority or
percentage in aggregate

                                      -45-
<PAGE>

principal amount of the Debentures specified in this Indenture in connection
with such action shall be conclusively binding upon the Company, the Trustee and
the holders of all the Debentures.

                                   ARTICLE XI

                             SUPPLEMENTAL INDENTURES

         SECTION 11.1 SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF
DEBENTUREHOLDERS.

         In addition to any supplemental indenture otherwise authorized by this
Indenture, the Company and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act as then in effect, if applicable),
without the consent of the Debentureholders, for one or more of the following
purposes:

                  (a) to cure any ambiguity, defect, or inconsistency herein, or
         in the Debentures;

                  (b) to comply with Article X;

                  (c) to provide for uncertificated Debentures in addition to or
         in place of certificated Debentures;

                  (d) to add to the covenants of the Company for the benefit of
         the holders of all or any of the Debentures or to surrender any right
         or power herein conferred upon them to add to, delete from, or revise
         the conditions, limitations, and restrictions on the authorized amount,
         terms, or purposes of issue, authentication, and delivery of
         Debentures, as herein set forth;

                  (e) to make any change that does not adversely affect the
         rights of any Debentureholder in any material respect;

                  (f) to provide for the issuance of and establish the form and
         terms and conditions of the Debentures, to establish the form of any
         certifications required to be furnished pursuant to the terms of this
         Indenture or of the Debentures, or to qualify or maintain the
         qualification of this Indenture under the Trust Indenture Act, if
         applicable; or

                  (g) to evidence a consolidation or merger involving the
         Company as permitted under Section 12.1.

The Trustee is hereby authorized to join with the Company in the execution of
any such supplemental indenture, and to make any further appropriate agreements
and stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture that affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section

                                      -46-
<PAGE>

11.1 may be executed by the Company and the Trustee without the consent of the
holders of any of the Debentures at the time Outstanding, notwithstanding any of
the provisions of Section 11.2.

         SECTION 11.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF DEBENTUREHOLDERS.

         With the consent (evidenced as provided in Section 10.1) of the holders
of not less than a majority in aggregate principal amount of the Debentures at
the time Outstanding, the Company, when authorized by Board Resolutions, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect, if applicable) for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Indenture or of any supplemental indenture or of modifying in any manner
not covered by Section 11.1 the rights of the holders of the Debentures under
this Indenture; provided, however, that no such supplemental indenture shall
without the consent of the holders of each Debenture then Outstanding and
affected thereby, (i) extend the fixed maturity of any Debentures, reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, without the consent of the holder of each Debenture so
affected; or (ii) reduce the aforesaid percentage of Debentures, the holders of
which are required to consent to any such supplemental indenture; provided
further, that if the Debentures are held by the Trust or a trustee of the Trust,
such supplemental indenture shall not be effective until the holders of a
majority in liquidation preference of Trust Securities of the Trust shall have
consented to such supplemental indenture; provided further, that if the consent
of the holder of each Outstanding Debenture is required, such supplemental
indenture shall not be effective until each holder of the Trust Securities of
the Trust shall have consented to such supplemental indenture. It shall not be
necessary for the consent of the Debentureholders affected thereby under this
Section 11.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

         SECTION 11.3 EFFECT OF SUPPLEMENTAL INDENTURES.

         Upon the execution of any supplemental indenture pursuant to the
provisions of this Article XI, this Indenture shall be and be deemed to be
modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this Indenture
of the Trustee, the Company and the holders of Debentures shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.

         SECTION 11.4 DEBENTURES AFFECTED BY SUPPLEMENTAL INDENTURES.

         Debentures affected by a supplemental indenture, authenticated and
delivered after the execution of such supplemental indenture pursuant to the
provisions of this Article XI, may bear a notation in form approved by the
Company, provided such form meets the requirements of any national securities
exchange or automated quotation service upon which the Debentures may be listed
or quoted, as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Debentures so modified as to conform, in the
opinion of the Board of Directors of the Company, to any modification of this
Indenture contained in any such

                                      -47-
<PAGE>

supplemental indenture may be prepared by the Company, authenticated by the
Trustee (upon written order of the Company) and delivered in exchange for the
Debentures then Outstanding.

         SECTION 11.5 EXECUTION OF SUPPLEMENTAL INDENTURES.

                  (a) Upon the request of the Company, accompanied by its Board
         Resolutions authorizing the execution of any such supplemental
         indenture, and upon the filing with the Trustee of evidence of the
         consent of Debentureholders required to consent thereto as aforesaid,
         the Trustee shall join with the Company in the execution of such
         supplemental indenture unless such supplemental indenture affects the
         Trustee's own rights, duties or immunities under this Indenture or
         otherwise, in which case the Trustee may in its discretion, but shall
         not be obligated to, enter into such supplemental indenture. The
         Trustee, subject to the provisions of Sections 9.1(b), may receive an
         Opinion of Counsel as conclusive evidence that any supplemental
         indenture executed pursuant to this Article XI is authorized or
         permitted by, and conforms to, the terms of this Article XI and that it
         is proper for the Trustee under the provisions of this Article XI to
         join in the execution thereof.

                  (b) Promptly after the execution by the Company and the
         Trustee of any supplemental indenture pursuant to the provisions of
         this Section 11.5, the Trustee shall transmit by mail, first class
         postage prepaid, a notice, setting forth in general terms the substance
         of such supplemental indenture, to the Debentureholders as their names
         and addresses appear upon the Debenture Register. Any failure of the
         Trustee to mail such notice, or any defect therein, shall not, however,
         in any way impair or affect the validity of any such supplemental
         indenture.

                                   ARTICLE XII

                              SUCCESSOR CORPORATION

         SECTION 12.1 COMPANY MAY CONSOLIDATE, ETC.

         Nothing contained in this Indenture or in any of the Debentures shall
prevent any consolidation or merger of the Company with or into any other Person
(whether or not affiliated with the Company, as the case may be), or successive
consolidations or mergers in which the Company, as the case may be, or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance, transfer or other disposition of the property of the Company, as the
case may be, or its successor or successors as an entirety, or substantially as
an entirety, to any other Person (whether or not affiliated with the Company, as
the case may be, or its successor or successors) authorized to acquire and
operate the same; provided, however, the Company hereby covenants and agrees
that, (i) upon any such consolidation, merger, sale, conveyance, transfer or
other disposition, the due and punctual payment, in the case of the Company, of
the principal of and interest on all of the Debentures, according to their tenor
and the due and punctual performance and observance of all the covenants and
conditions of this Indenture to be kept or performed by the Company as the case
may be, shall be expressly assumed, by supplemental indenture (which shall
conform to the provisions of the Trust Indenture Act, to the extent the Trust
Indenture Act is then applicable to this Indenture or such supplemental
indenture)

                                      -48-
<PAGE>

satisfactory in form to the Trustee in its good faith and executed and delivered
to the Trustee by the entity formed by such consolidation, or into which the
Company, as the case may be, shall have been merged, or by the entity which
shall have acquired such property; (ii) in case the Company consolidates with or
merges into another Person or conveys or transfers its properties and assets
substantially as an entirety to any Person, the successor Person is organized
under the laws of the United States or any state or the District of Columbia;
and (iii) immediately after giving effect thereto, no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing.

         SECTION 12.2 SUCCESSOR PERSON SUBSTITUTED.

                  (a) In case of any such consolidation, merger, sale,
         conveyance, transfer or other disposition and upon the assumption by
         the successor Person, by supplemental indenture, executed and delivered
         to the Trustee and satisfactory in form to the Trustee in good faith,
         of, in the case of the Company, the due and punctual payment of the
         principal of and interest on all of the Debentures Outstanding and the
         due and punctual performance of all of the covenants and conditions of
         this Indenture to be performed by the Company, as the case may be, such
         successor Person shall succeed to and be substituted for the Company,
         with the same effect as if it had been named as the Company herein, and
         thereupon the predecessor Person shall be relieved of all obligations
         and covenants under this Indenture and the Debentures.

                  (b) In case of any such consolidation, merger, sale,
         conveyance, transfer or other disposition such changes in phraseology
         and form (but not in substance) may be made in the Debentures
         thereafter to be issued as may be appropriate.

                  (c) Nothing contained in this Indenture or in any of the
         Debentures shall prevent the Company from merging into itself or
         acquiring by purchase or otherwise all or any part of the property of
         any other Person (whether or not affiliated with the Company).

         SECTION 12.3 EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE.

         The Trustee, subject to the provisions of Section 9.1(b), may receive
an Opinion of Counsel as conclusive evidence that any such consolidation,
merger, sale, conveyance, transfer or other disposition, and any such
assumption, comply with the provisions of this Article XII.

                                  ARTICLE XIII

                           SATISFACTION AND DISCHARGE

         SECTION 13.1 SATISFACTION AND DISCHARGE OF INDENTURE.

         If at any time: (a) the Company shall have delivered to the Trustee for
cancellation all Debentures theretofore authenticated (other than any Debentures
that shall have been destroyed, lost or stolen and that shall have been replaced
or paid as provided in Section 2.9) and the principal and accrued interest of
all Debentures for whose payment money or Governmental Obligations have
theretofore been deposited in trust or segregated and held in trust by the

                                      -49-
<PAGE>

Company (and thereupon repaid to the Company or discharged from such trust, as
provided in Section 13.5); or (b) all such Debentures not theretofore delivered
to the Trustee for cancellation shall have become due and payable, or are by
their terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Company shall deposit or cause to be
deposited with the Trustee as trust funds the entire amount in money or
Governmental Obligations sufficient or a combination thereof, sufficient in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay at
maturity or upon redemption all Debentures not theretofore delivered to the
Trustee for cancellation, including principal and interest due or to become due
to such date of maturity or date fixed for redemption, as the case may be, and
if the Company shall also pay or cause to be paid all other sums payable
hereunder by the Company; then this Indenture shall thereupon cease to be of
further effect except for the provisions of Sections 2.3, 2.7, 2.9, 5.1, 5.2,
5.3, 9.7 and 9.10, that shall survive until the date of maturity or redemption
date, as the case may be, and Section 13.5, that shall survive to such date and
thereafter, and the Trustee, on demand of the Company and at the cost and
expense of the Company, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture.

         SECTION 13.2 DISCHARGE OF OBLIGATIONS.

         If at any time all Debentures not heretofore delivered to the Trustee
for cancellation or that have not become due and payable as described in Section
13.1 shall have been paid by the Company by depositing irrevocably with the
Trustee as trust funds money or an amount of Governmental Obligations sufficient
in the opinion of a nationally recognized certified public accounting firm to
pay at maturity or upon redemption all Debentures not theretofore delivered to
the Trustee for cancellation, including principal and interest due or to become
due to such date of maturity or date fixed for redemption, as the case may be,
and if the Company shall also pay or cause to be paid all other sums payable
hereunder by the Company, then after the date such moneys or Governmental
Obligations, as the case may be, are deposited with the Trustee, the obligations
of the Company under this Indenture shall cease to be of further effect except
for the provisions of Sections 2.3, 2.7, 2.9, 5.1, 5.2, 5.3, 9.6, 9.7, 9.10 and
13.5 that shall survive until such Debentures shall mature and be paid.
Thereafter, Sections 9.7 and 13.5 shall survive.

         SECTION 13.3 DEPOSITED MONEY TO BE HELD IN TRUST.

         All money or Governmental Obligations deposited with the Trustee
pursuant to Sections 13.1 or 13.2 shall be held in trust and shall be available
for payment as due, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent), to the holders of the Debentures for
the payment or redemption of which such moneys or Governmental Obligations have
been deposited with the Trustee.

         SECTION 13.4 PAYMENT OF MONEY HELD BY PAYING AGENTS.

         In connection with the satisfaction and discharge of this Indenture,
all moneys or Governmental Obligations then held by any Paying Agent under the
provisions of this Indenture shall, upon demand of the Company, be paid to the
Trustee and thereupon such Paying Agent shall be released from all further
liability with respect to such money or Governmental Obligations.

                                      -50-
<PAGE>

         SECTION 13.5 REPAYMENT TO COMPANY.

         Any money or Governmental Obligations deposited with any Paying Agent
or the Trustee, or then held by the Company in trust, for payment of principal
of or interest on the Debentures that are not applied but remain unclaimed by
the holders of such Debentures for at least two years after the date upon which
the principal of or interest on such Debentures shall have respectively become
due and payable, shall be repaid to the Company, as the case may be, on May 31
of each year or (if then held by the Company) shall be discharged from such
trust; and thereupon the Paying Agent and the Trustee shall be released from all
further liability with respect to such moneys or Governmental Obligations, and
the holder of any of the Debentures entitled to receive such payment shall
thereafter, as an unsecured general creditor, look only to the Company for the
payment thereof.

                                   ARTICLE XIV

                IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
                                  AND DIRECTORS

         SECTION 14.1 NO RECOURSE.

         No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of the Debentures, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, stockholder, officer or
director, past, present or future, as such, of the Company or of any predecessor
or successor Person, either directly or through the Company or any such
predecessor or successor Person, whether by virtue of any constitution, statute
or rule of law, or by the enforcement of any assessment or penalty or otherwise;
it being expressly understood that this Indenture and the obligations issued
hereunder are solely corporate (or other entity, as the case may be)
obligations, and that no such personal liability whatever shall attach to, or is
or shall be incurred by, the incorporators, stockholders, officers or directors
as such, of the Company or of any predecessor or successor Person, or any of
them, because of the creation of the indebtedness hereby authorized, or under or
by reason of the obligations, covenants or agreements contained in this
Indenture or in any of the Debentures or implied therefrom; and that any and all
such personal liability of every name and nature, either at common law or in
equity or by constitution or statute, and any and all such rights and claims
against, every such incorporator, stockholder, officer or director as such,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Debentures or implied therefrom, are hereby expressly waived
and released as a condition of, and as a consideration for, the execution of
this Indenture and the issuance of such Debentures.

                                      -51-
<PAGE>

                                   ARTICLE XV

                            MISCELLANEOUS PROVISIONS

         SECTION 15.1 EFFECT ON SUCCESSORS AND ASSIGNS.

         All the covenants, stipulations, promises and agreements in this
Indenture contained by or on behalf of the Company shall bind its respective
successors and assigns, whether so expressed or not.

         SECTION 15.2 ACTIONS BY SUCCESSOR.

         Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
corresponding board, committee or officer of any Person that shall at the time
be the lawful successor of the Company.

         SECTION 15.3 SURRENDER OF COMPANY POWERS.

         The Company by instrument in writing executed by appropriate authority
of its Board of Directors and delivered to the Trustee may surrender any of the
powers reserved to the Company, and thereupon such power so surrendered shall
terminate both as to the Company, as the case may be, and as to any successor
Person.

         SECTION 15.4 NOTICES.

         Except as otherwise expressly provided herein any notice or demand that
by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Debentures to or on the Company may
be given or served by being deposited first class postage prepaid in a
post-office letterbox addressed (until another address is filed in writing by
the Company with the Trustee), as follows: United Bancorporation of Alabama,
Inc., P. O. Box 8, 200 East Nashville Avenue, Atmore, Alabama 36504 , Attention:
Chief Executive Officer. Any notice, election, request or demand by the Company
or any Debenture holder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or made in writing at the
Corporate Trust Office of the Trustee.

         SECTION 15.5 GOVERNING LAW.

         This Indenture and each Debenture shall be deemed to be a contract made
under the internal laws of the State of Delaware and for all purposes shall be
construed in accordance with the laws of said State, without regard to its
choice of law provisions. Any action or proceeding arising out of this
Indenture, as supplemented or amended, in any way shall be brought and enforced
exclusively in the applicable United States District Court in the State of
Delaware or in the event such court lacks jurisdiction, in the applicable
Delaware State Court.

         SECTION 15.6 TREATMENT OF DEBENTURES AS DEBT.

         The Company will treat the Debentures as indebtedness and not as equity
for federal income tax purposes. The provisions of this Indenture shall be
interpreted to further this treatment.

                                      -52-
<PAGE>

         SECTION 15.7 COMPLIANCE CERTIFICATES AND OPINIONS.

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

                  (b) Each certificate or opinion of the Company provided for in
         this Indenture and delivered to the Trustee with respect to compliance
         with a condition or covenant in this Indenture shall include (i) a
         statement that the Person making such certificate or opinion has read
         such covenant or condition; (ii) 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; (iii) a
         statement that, in the opinion of such Person, he has made such
         examination or investigation as, in the opinion of such Person, is
         necessary to enable him to express an informed opinion as to whether or
         not such covenant or condition has been complied with; and (iv) a
         statement as to whether or not, in the opinion of such Person, such
         condition or covenant has been complied with; provided, however, that
         each such certificate shall comply with the provisions of Section 314
         of the Trust Indenture Act, if applicable.

         SECTION 15.8 PAYMENTS ON BUSINESS DAYS.

         In any case where the date of maturity of interest or principal of any
Debenture or the date of redemption of any Debenture shall not be a Business
Day, then payment of interest or principal may (subject to Section 2.5(c)) be
made on the next succeeding Business Day with the same force and effect as if
made on the nominal date of maturity or redemption, and no interest shall accrue
for the period after such nominal date.

         SECTION 15.9 APPLICATION OF TRUST INDENTURE ACT; CONFLICT.

                  (a) Unless and until this Indenture is required to be
         qualified under the Trust Indenture Act, (i) the provisions of this
         Indenture that expressly relate to the Trust Indenture Act do not apply
         and shall not be given effect; and (ii) notwithstanding any other
         provision of this Indenture (including without limitation Sections 7.7,
         9.1(b), 9.7(a) and 9.8 hereof), no Trustee shall be liable for its own
         simple negligence, but shall only be liable for its own gross
         negligence.

                  (b) If the Indenture is required to be qualified under the
         Trust Indenture Act at any time, then if and to the extent that any
         provision of this Indenture limits, qualifies or conflicts with the
         duties imposed by Sections 310 to 317, inclusive, of the Trust
         Indenture Act, such imposed duties shall control.

                                      -53-
<PAGE>

         SECTION 15.10 COUNTERPARTS.

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

         SECTION 15.11 SEVERABILITY.

         In case any one or more of the provisions contained in this Indenture
or in the Debentures 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 provisions of this Indenture or of the Debentures,
but this Indenture and the Debentures shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.

         SECTION 15.12 ASSIGNMENT.

         The Company shall have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly owned Subsidiary of the Company, provided that, in the event of any such
assignment, the Company shall remain liable for all such obligations. Subject to
the foregoing, this Indenture is binding upon and inures to the benefit of the
parties thereto and their respective successors and assigns. This Indenture may
not otherwise be assigned by the parties hereto.

         SECTION 15.13 ACKNOWLEDGMENT OF RIGHTS; RIGHT OF SET OFF.

                  (a) The Company acknowledges that, with respect to any
         Debentures held by the Trust or a trustee of the Trust, if the Property
         Trustee fails to enforce its rights under this Indenture as the holder
         of the Debentures held as the assets of the Trust, any holder of Trust
         Preferred Securities may, to the extent permitted under applicable law,
         institute legal proceedings directly against the Company to enforce
         such Property Trustee's rights under this Indenture without first
         instituting any legal proceedings against such Property Trustee or any
         other person or entity. Notwithstanding the foregoing, if an Event of
         Default has occurred and is continuing and such event is attributable
         to the failure of the Company to pay interest or principal on the
         Debentures on the date such interest or principal is otherwise payable
         (or in the case of redemption, on the redemption date), the Company
         acknowledges that a holder of Trust Preferred Securities may directly
         institute a proceeding against the Company for enforcement of payment
         to such holder of the principal of or interest on the Debentures having
         a principal amount equal to the aggregate liquidation amount of the
         Trust Preferred Securities of such holder on or after the respective
         due date specified in the Debentures.

                  (b) Notwithstanding anything to the contrary contained in this
         Indenture, the Company shall have the right to setoff any payment it is
         otherwise required to make hereunder in respect of any Trust Securities
         to the extent that the Company has previously made, or is concurrently
         making, a payment to the holder of any such Trust Securities under the
         Trust Preferred Securities Guarantee or in connection with a proceeding
         for enforcement of payment of the principal of or interest on the
         Debentures directly brought by holders of any such Trust Securities.

                                      -54-
<PAGE>

                                   ARTICLE XVI

                           SUBORDINATION OF DEBENTURES

         SECTION 16.1 AGREEMENT TO SUBORDINATE.

         The Company covenants and agrees, and each holder of Debentures issued
hereunder by such holder's acceptance thereof likewise covenants and agrees,
that all Debentures shall be issued subject to the provisions of this Article
XVI; and each holder of a Debenture, whether upon original issue or upon
transfer or assignment thereof, accepts and agrees to be bound by such
provisions. The payment by the Company of the principal of and interest on all
Debentures issued hereunder shall, to the extent and in the manner hereinafter
set forth, be subordinated and junior in right of payment to the prior payment
in full of all Senior Debt, Subordinated Debt and Additional Senior Obligations
of the Company (collectively, "Senior Indebtedness") to the extent provided
herein, whether outstanding at the date of this Indenture or thereafter
incurred. No provision of this Article XVI shall prevent the occurrence of any
default or Event of Default hereunder. In no event shall the Debentures be
subordinate to the Company's (i) trade accounts payable, or (ii) accrued
liabilities arising in the ordinary course of business; however, the Debentures
shall be subordinate to (i) any Debt of the Company to any of its subsidiaries
and (ii) Debt to any employees of the Company.

         SECTION 16.2 DEFAULT ON SENIOR DEBT, SUBORDINATED DEBT OR ADDITIONAL
SENIOR OBLIGATIONS.

         In the event and during the continuation of any default by the Company
in the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness, or in the event that the maturity of any Senior
Indebtedness has been accelerated because of a default, then, in either case, no
payment shall be made by the Company with respect to the principal (including
redemption payments) of or interest on the Debentures. In the event that,
notwithstanding the foregoing, any payment shall be received by the Trustee when
such payment is prohibited by the preceding sentence of this Section 16.2, such
payment shall be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Indebtedness may have been issued, as their respective
interests may appear, but only to the extent that the holders of the Senior
Indebtedness (or their representative or representatives or a trustee) notify
the Trustee in writing within 90 days of such payment of the amounts then due
and owing on the Senior Indebtedness and only the amounts specified in such
notice to the Trustee shall be paid to the holders of Senior Indebtedness.

         SECTION 16.3 LIQUIDATION; DISSOLUTION; BANKRUPTCY.

                  (a) Upon any payment by the Company or distribution of assets
         of the Company of any kind or character, whether in cash, property or
         securities, to creditors upon any dissolution or winding-up or
         liquidation or reorganization of the Company, whether voluntary or
         involuntary or in bankruptcy, insolvency, receivership or other
         proceedings, all amounts due upon all Senior Indebtedness of the
         Company shall first be paid in full, or payment thereof provided for in
         money in accordance with its terms,

                                      -55-
<PAGE>

         before any payment is made by the Company on account of the principal
         or interest on the Debentures; and upon any such dissolution or
         winding-up or liquidation or reorganization, any payment by the
         Company, or distribution of assets of the Company of any kind or
         character, whether in cash, property or securities, to which the
         holders of the Debentures or the Trustee would be entitled to receive
         from the Company, except for the provisions of this Article XVI, shall
         be paid by the Company or by any receiver, trustee in bankruptcy,
         liquidating trustee, agent or other Person making such payment or
         distribution, or by the holders of the Debentures or by the Trustee
         under this Indenture if and to the extent received by them or it,
         directly to the holders of Senior Indebtedness of the Company (pro rata
         to such holders on the basis of the respective amounts of Senior
         Indebtedness held by such holders, as calculated by the Company) or
         their representative or representatives, or to the trustee or trustees
         under any indenture pursuant to which any instruments evidencing such
         Senior Indebtedness may have been issued, as their respective interests
         may appear, to the extent necessary to pay such Senior Indebtedness in
         full, in money or money's worth, after giving effect to any concurrent
         payment or distribution to or for the holders of such Senior
         Indebtedness, before any payment or distribution is made to the holders
         of Debentures or to the Trustee.

                  (b) In the event that, notwithstanding the foregoing, any
         payment or distribution of assets of the Company of any kind or
         character, whether in cash, property or securities, prohibited by the
         foregoing, shall be received by the Trustee before all Senior
         Indebtedness of the Company is paid in full, or provision is made for
         such payment in money in accordance with its terms, such payment or
         distribution shall be held in trust for the benefit of and shall be
         paid over or delivered to the holders of such Senior Indebtedness or
         their representative or representatives, or to the trustee or trustees
         under any indenture pursuant to which any instruments evidencing such
         Senior Indebtedness may have been issued, and their respective
         interests may appear, as calculated by the Company, for application to
         the payment of all Senior Indebtedness of the Company, as the case may
         be, remaining unpaid to the extent necessary to pay such Senior
         Indebtedness in full in money in accordance with its terms, after
         giving effect to any concurrent payment or distribution to or for the
         benefit of the holders of such Senior Indebtedness.

                  (c) For purposes of this Article XVI, the words "cash,
         property or securities" shall not be deemed to include shares of stock
         of the Company as reorganized or readjusted, or securities of the
         Company or any other Person provided for by a plan of reorganization or
         readjustment, the payment of which is subordinated at least to the
         extent provided in this Article XVI with respect to the Debentures to
         the payment of all Senior Indebtedness of the Company, as the case may
         be, that may at the time be outstanding, provided that (i) such Senior
         Indebtedness is assumed by the new Person, if any, resulting from any
         such reorganization or readjustment; and (ii) the rights of the holders
         of such Senior Indebtedness are not, without the consent of such
         holders, altered by such reorganization or readjustment. The
         consolidation of the Company with, or the merger of the Company into,
         another Person or the liquidation or dissolution of the Company
         following the conveyance or transfer of its property as an entirety, or
         substantially as an entirety, to another Person upon the terms and
         conditions provided for in Article XII shall not be deemed a
         dissolution, winding-up, liquidation or

                                      -56-
<PAGE>

         reorganization for the purposes of this Section 16.3 if such other
         Person shall, as a part of such consolidation, merger, conveyance or
         transfer, comply with the conditions stated in Article XII. Nothing in
         Section 16.2 or in this Section 16.3 shall apply to claims of, or
         payments to, the Trustee under or pursuant to Section 9.7.

         SECTION 16.4 SUBROGATION.

                  (a) Subject to the payment in full of all Senior Indebtedness
         of the Company, the rights of the holders of the Debentures shall be
         subrogated to the rights of the holders of such Senior Indebtedness to
         receive payments or distributions of cash, property or securities of
         the Company, as the case may be, applicable to such Senior Indebtedness
         until the principal of and interest on the Debentures shall be paid in
         full; and, for the purposes of such subrogation, no payments or
         distributions to the holders of such Senior Indebtedness of any cash,
         property or securities to which the holders of the Debentures or the
         Trustee would be entitled except for the provisions of this Article
         XVI, and no payment pursuant to the provisions of this Article XVI to
         or for the benefit of the holders of such Senior Indebtedness by
         holders of the Debentures or the Trustee, shall, as between the
         Company, its creditors (other than holders of Senior Indebtedness), and
         the holders of the Debentures, be deemed to be a payment by the Company
         to or on account of such Senior Indebtedness. It is understood that the
         provisions of this Article XVI are and are intended solely for the
         purposes of defining the relative rights of the holders of the
         Debentures, on the one hand, and the holders of such Senior
         Indebtedness on the other hand.

                  (b) Nothing contained in this Article XVI or elsewhere in this
         Indenture or in the Debentures is intended to or shall impair, as
         between the Company, its creditors (other than the holders of Senior
         Indebtedness of the Company), and the holders of the Debentures, the
         obligation of the Company, which is absolute and unconditional, to pay
         to the holders of the Debentures the principal of and interest on the
         Debentures as and when the same shall become due and payable in
         accordance with their terms, or is intended to or shall affect the
         relative rights of the holders of the Debentures and creditors of the
         Company, as the case may be, other than the holders of Senior
         Indebtedness, as the case may be, nor shall anything herein or therein
         prevent the Trustee or the holder of any Debenture from exercising all
         remedies otherwise permitted by applicable law upon default under this
         Indenture, subject to the rights, if any, under this Article XVI of the
         holders of such Senior Indebtedness in respect of cash, property or
         securities of the Company, as the case may be, received upon the
         exercise of any such remedy.

                  (c) Upon any payment or distribution of assets of the Company
         referred to in this Article XVI, the Trustee, subject to the provisions
         of Section 9.1(b), and the holders of the Debentures shall be entitled
         to conclusively rely upon any order or decree made by any court of
         competent jurisdiction in which such dissolution, winding-up,
         liquidation or reorganization proceedings are pending, or a certificate
         of the receiver, trustee in bankruptcy, liquidation trustee, agent or
         other Person making such payment or distribution, delivered to the
         Trustee or to the holders of the Debentures, for the purposes of
         ascertaining the Persons entitled to participate in such distribution,
         the holders of

                                      -57-
<PAGE>

         Senior Indebtedness and other indebtedness of the Company, as the case
         may be, the amount thereof or payable thereon, the amount or amounts
         paid or distributed thereon and all other facts pertinent thereto or to
         this Article XVI.

         SECTION 16.5 TRUSTEE TO EFFECTUATE SUBORDINATION.

         Each holder of Debentures by such holder's acceptance thereof
authorizes and directs the Trustee on such holder's behalf to take such action
as the Company advises the Trustee in writing is necessary or appropriate to
effectuate the subordination provided in this Article XVI and appoints the
Trustee such holder's attorney-in-fact for any and all such purposes.

         SECTION 16.6 NOTICE BY THE COMPANY.

                  (a) The Company shall give prompt written notice to a
         Responsible Officer of the Trustee of any fact known to the Company
         that would prohibit the making of any payment of money to or by the
         Trustee in respect of the Debentures pursuant to the provisions of this
         Article XVI. Notwithstanding the provisions of this Article XVI or any
         other provision of this Indenture, the Trustee shall not be charged
         with knowledge of the existence of any facts that would prohibit the
         making of any payment of money to or by the Trustee in respect of the
         Debentures pursuant to the provisions of this Article XVI, unless and
         until a Responsible Officer of the Trustee shall have received written
         notice thereof from the Company or a holder or holders of Senior
         Indebtedness or from any trustee therefore; and before the receipt of
         any such written notice, the Trustee, subject to the provisions of
         Section 9.1(b), shall be entitled in all respects to assume that no
         such facts exist; provided, however, that if the Trustee shall not have
         received the notice provided for in this Section 16.6 at least two
         Business Days prior to the date upon which by the terms hereof any
         money may become payable for any purpose (including, without
         limitation, the payment of the principal of or interest on any
         Debenture), then, anything herein contained to the contrary
         notwithstanding, the Trustee shall have full power and authority to
         receive such money and to apply the same to the purposes for which they
         were received, and shall not be affected by any notice to the contrary
         that may be received by it within two Business Days prior to such date.

                  (b) The Trustee, subject to the provisions of Section 9.1(b),
         shall be entitled to conclusively rely on the delivery to it of a
         written notice by a Person representing himself to be a holder of
         Senior Indebtedness (or a trustee on behalf of such holder) to
         establish that such notice has been given by a holder of such Senior
         Indebtedness or a trustee on behalf of any such holder or holders. In
         the event that the Trustee determines in good faith that further
         evidence is required with respect to the right of any Person as a
         holder of such Senior Indebtedness to participate in any payment or
         distribution pursuant to this Article XVI, the Trustee may request such
         Person to furnish evidence to the reasonable satisfaction of the
         Trustee as to the amount of such Senior Indebtedness held by such
         Person, the extent to which such Person is entitled to participate in
         such payment or distribution and any other facts pertinent to the
         rights of such Person under this Article XVI, and, if such evidence is
         not furnished, the Trustee may defer any payment to such Person pending
         judicial determination as to the right of such Person to receive such
         payment.

                                      -58-
<PAGE>

         SECTION 16.7 RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS.

                  (a) The Trustee in its individual capacity shall be entitled
         to all the rights set forth in this Article XVI in respect of any
         Senior Indebtedness at any time held by it, to the same extent as any
         other holder of Senior Indebtedness, and nothing in this Indenture
         shall deprive the Trustee of any of its rights as such holder. The
         Trustee's right to compensation and reimbursement of expenses as set
         forth in Section 9.7 shall not be subject to the subordination
         provisions of the Article XVI.

                  (b) With respect to the holders of Senior Indebtedness, the
         Trustee undertakes to perform or to observe only such of its covenants
         and obligations as are specifically set forth in this Article XVI, and
         no implied covenants or obligations with respect to the holders of such
         Senior Indebtedness shall be read into this Indenture against the
         Trustee. The Trustee shall not be deemed to owe any fiduciary duty to
         the holders of such Senior Indebtedness and, subject to the provisions
         of Section 9.1(b), the Trustee shall not be liable to any holder of
         such Senior Indebtedness if it shall in good faith pay over or deliver
         to holders of Debentures, the Company or any other Person money or
         assets to which any holder of such Senior Indebtedness shall be
         entitled by virtue of this Article XVI or otherwise.

         SECTION 16.8 SUBORDINATION MAY NOT BE IMPAIRED.

                  (a) No right of any present or future holder of any Senior
         Indebtedness of the Company to enforce subordination as herein provided
         shall at any time in any way be prejudiced or impaired by any act or
         failure to act on the part of the Company or by any act or failure to
         act, in good faith, by any such holder, or by any noncompliance by the
         Company with the terms, provisions and covenants of this Indenture,
         regardless of any knowledge thereof that any such holder may have or
         otherwise be charged with.

                  (b) Without in any way limiting the generality of the
         foregoing paragraph, the holders of Senior Indebtedness of the Company
         may, at any time and from time to time, without the consent of or
         notice to the Trustee or the holders of the Debentures, without
         incurring responsibility to the holders of the Debentures and without
         impairing or releasing the subordination provided in this Article XVI
         or the obligations hereunder of the holders of the Debentures to the
         holders of such Senior Indebtedness, do any one or more of the
         following: (i) change the manner, place or terms of payment or extend
         the time of payment of, or renew or alter, such Senior Indebtedness, or
         otherwise amend or supplement in any manner such Senior Indebtedness or
         any instrument evidencing the same or any agreement under which such
         Senior Indebtedness is outstanding; (ii) sell, exchange, release or
         otherwise deal with any property pledged, mortgaged or otherwise
         securing such Senior Indebtedness; (iii) release any Person liable in
         any manner for the collection of such Senior Indebtedness; and (iv)
         exercise or refrain from exercising any rights against the Company and
         any other Person.

                            [SIGNATURE PAGE FOLLOWS]

                                      -59-
<PAGE>

         IN WITNESS WHEREOF, this Indenture is dated as set forth below and
effective as of the day and year first above written.

                                       United Bancorporation of Alabama, Inc.

                                       By:    /s/ Robert R. Jones
                                       Name:  Robert R. Jones
                                       Title: President
                                       Date:  6/18/02

                                       Wells Fargo Bank, National Association,
                                       AS TRUSTEE

                                       By:    /s/ Ann Roberts
                                       Name:  Ann Roberts
                                       Title: Vice President
                                       Date:  6/27/02
                                            ------------------------------------

                          [Signature Page to Indenture]

                                      -60-
<PAGE>

                                    EXHIBIT A

                        FLOATING RATE JUNIOR SUBORDINATED
                          DEFERRABLE INTEREST DEBENTURE
                    OF UNITED BANCORPORATION OF ALABAMA, INC.

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