<PAGE>   1
                                                                 EXHIBIT 4




                          HOME SHOPPING NETWORK, INC.

                   5.875% CONVERTIBLE SUBORDINATED DEBENTURES
                               DUE MARCH 1, 2006

                                   INDENTURE

                           Dated as of March 1, 1996

                    UNITED STATES TRUST COMPANY OF NEW YORK

                                    Trustee
<PAGE>   2

                            CROSS - REFERENCE TABLE*

<TABLE>
<CAPTION>
Trust Indenture
Act Section                                                         Indenture Section
<S>                                                                          <C>
310 (a)(l)                                                                   7.10
    (a)(2)                                                                   7.10
    (a)(3)                                                                   N.A.
    (a)(4)                                                                   N.A.
    (a)(5)                                                                   7.8; 7.10; 13.2
       (b)                                                                   7.10
       (c)                                                                   N.A.
   311 (a)                                                                   7.11
       (b)                                                                   7.11
       (c)                                                                   N.A.
   312 (a)                                                                   2.5
       (b)                                                                   13.3
       (c)                                                                   13.3
   313 (a)                                                                   7.6
       (b)(1)                                                                N.A.
       (b)(2)                                                                7.6; 7.7
       (c)                                                                   7.6; 13.2
       (d)                                                                   7.6
   314 (a)                                                                   4.3; 4.4; 13.2
       (b)                                                                   N.A.
       (c)(l)                                                                13.4
       (c)(2)                                                                13.4
       (c)(3)                                                                N.A.
       (d)                                                                   N.A.
       (e)                                                                   13.5
       (f)                                                                   N.A.
   315 (a)                                                                   7.1
       (b)                                                                   7.5; 13.2
       (c)                                                                   7.1
       (d)                                                                   7.1
       (e)                                                                   6.11
   316 (a)(last sentence)                                                    2.9
       (a)(1)(A)                                                             6.5
       (a)(1)(B)                                                             6.4
       (a)(2)                                                                N.A.
       (b)                                                                   6.7
       (c)                                                                   2.13
   317 (a)(l)                                                                6.8
       (a)(2)                                                                6.9
       (b)                                                                   2.4
   318 (a)                                                                   13.1
       (b)                                                                   N.A.
       (c)                                                                   13.1
</TABLE>

                                      N.A. means not applicable.

*      This Cross-Reference Table is not part of this Indenture.
<PAGE>   3
                               TABLE OF CONTENTS

<TABLE>
<S>                                                                                                                    <C>
ARTICLE 1.                              DEFINITIONS AND INCORPORATION BY REFERENCE  . . . . . . . . . . . . . . . . .   1
         SECTION 1.1  DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
         SECTION 1.2  OTHER DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
         SECTION 1.3  INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT . . . . . . . . . . . . . . . . . . . . . . .  10
         SECTION 1.4  RULES OF CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10

ARTICLE 2.  THE DEBENTURES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
         SECTION 2.1  FORM AND DATING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
         SECTION 2.2  EXECUTION AND AUTHENTICATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
         SECTION 2.3  REGISTRAR AND PAYING AGENT  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         SECTION 2.4  PAYING AGENT TO HOLD MONEY IN TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
         SECTION 2.5  LISTS OF HOLDERS OF THE DEBENTURES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
         SECTION 2.6  TRANSFER AND EXCHANGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
         SECTION 2.7  REPLACEMENT DEBENTURES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
         SECTION 2.8  OUTSTANDING DEBENTURES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
         SECTION 2.9  TREASURY DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
         SECTION 2.10  TEMPORARY DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
         SECTION 2.11  CANCELLATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
         SECTION 2.12  DEFAULTED INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
         SECTION 2.13  RECORD DATE  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
         SECTION 2.14  CUSIP NUMBER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
         SECTION 2.15  COMPUTATION OF INTEREST  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
         SECTION 2.16  SECURITIES IN GLOBAL FORM  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21
         SECTION 2.17  PERSONS DEEMED OWNERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22

ARTICLE 3.  REDEMPTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
         SECTION 3.1  NOTICES TO TRUSTEE  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  22
         SECTION 3.2  NOTICE OF REDEMPTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  23
         SECTION 3.3  EFFECT OF NOTICE OF REDEMPTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
         SECTION 3.4  DEPOSIT OF REDEMPTION PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  24
         SECTION 3.5  DEBENTURES REDEEMED IN PART . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25
         SECTION 3.6  OPTIONAL REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25
         SECTION 3.7  NO MANDATORY REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  25
         SECTION 3.8  SELECTION OF DEBENTURES TO BE REDEEMED  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26

ARTICLE 4.  COVENANTS   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26
         SECTION 4.1  PAYMENT OF DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  26
         SECTION 4.2  MAINTENANCE OF OFFICE OR AGENCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
         SECTION 4.3  REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
         SECTION 4.4  COMPLIANCE CERTIFICATE  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
         SECTION 4.5  STAY, EXTENSIONS AND USURY LAWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28
         SECTION 4.6  [INTENTIONALLY DELETED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  28
         SECTION 4.7  OFFER TO PURCHASE UPON CHANGE OF CONTROL  . . . . . . . . . . . . . . . . . . . . . . . . . . .  28
         SECTION 4.8  CORPORATE EXISTENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
         SECTION 4.9  PAYMENTS FOR CONSENT  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
         SECTION 4.10  CALCULATION OF ORIGINAL ISSUE DISCOUNT . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33

</TABLE>




                                       i
<PAGE>   4

<TABLE>
<S>                                                                                                                    <C>
ARTICLE 5.  SUCCESSORS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
         SECTION 5.1  MERGER, CONSOLIDATION, OR SALE OF ASSETS  . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
         SECTION 5.2  SUCCESSOR CORPORATION SUBSTITUTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34

ARTICLE 6.  CERTAIN DEFAULT PROVISIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
         SECTION 6.1  EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
         SECTION 6.2  ACCELERATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  36
         SECTION 6.3  OTHER REMEDIES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
         SECTION 6.4  WAIVER OF PAST DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
         SECTION 6.5  CONTROL BY MAJORITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
         SECTION 6.6  LIMITATION ON SUITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  39
         SECTION 6.7  RIGHTS OF HOLDERS OF DEBENTURES TO RECEIVE PAYMENT  . . . . . . . . . . . . . . . . . . . . . .  39
         SECTION 6.8  COLLECTION SUIT BY TRUSTEE  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  40
         SECTION 6.9  TRUSTEE MAY FILE PROOFS OF CLAIM  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  40
         SECTION 6.10  PRIORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  41
         SECTION 6.11  UNDERTAKING FOR COSTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  41

ARTICLE 7.  TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  42
         SECTION 7.1  DUTIES OF TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  42
         SECTION 7.2  RIGHTS OF TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  43
         SECTION 7.3  INDIVIDUAL RIGHTS OF TRUSTEE  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  44
         SECTION 7.4  TRUSTEE'S DISCLAIMER  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  44
         SECTION 7.5  NOTICE OF DEFAULTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  45
         SECTION 7.6  REPORTS BY TRUSTEE TO HOLDERS OF THE DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . .  45
         SECTION 7.7  COMPENSATION AND INDEMNITY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  45
         SECTION 7.8  REPLACEMENT OF TRUSTEE  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  47
         SECTION 7.9  SUCCESSOR TRUSTEE BY MERGER, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  48
         SECTION 7.10  ELIGIBILITY; DISQUALIFICATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  48
         SECTION 7.11  PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY  . . . . . . . . . . . . . . . . . . . . . .  48

ARTICLE 8.  REGISTRATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  49
         SECTION 8.1  SHELF REGISTRATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  49
         SECTION 8.2  ADDITIONAL INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  51
         SECTION 8.3  REGISTRATION PROCEDURE  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  51
         SECTION 8.4  INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  52
         SECTION 8.5  REGISTRATION EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  54

ARTICLE 9.  AMENDMENT, SUPPLEMENT AND WAIVER  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
         SECTION 9.1  WITHOUT CONSENT OF HOLDERS OF DEBENTURES  . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
         SECTION 9.2  WITH CONSENT OF HOLDERS OF DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  55
         SECTION 9.3  COMPLIANCE WITH TRUST INDENTURE ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  57
         SECTION 9.4  REVOCATION AND EFFECT OF CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  57
         SECTION 9.5  NOTATION ON OR EXCHANGE OF DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  57
         SECTION 9.6  TRUSTEE TO SIGN AMENDMENTS, ETC.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  58

ARTICLE 10.  SUBORDINATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  58
         SECTION 10.1  AGREEMENT TO SUBORDINATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  58
         SECTION 10.2  LIQUIDATION; DISSOLUTION; BANKRUPTCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  58
         SECTION 10.3  DEFAULT ON SENIOR DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  60
</TABLE>





                                       ii
<PAGE>   5
<TABLE>
<S>                                                                                                                    <C>
         SECTION 10.4  ACCELERATION OF DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  61
         SECTION 10.5  WHEN DISTRIBUTION MUST BE PAID OVER  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  61
         SECTION 10.6  NOTICE BY COMPANY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  62
         SECTION 10.7  SUBROGATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  62
         SECTION 10.8  RELATIVE RIGHTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  63
         SECTION 10.9  SUBORDINATION NOT AFFECTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  64
         SECTION 10.10  DISTRIBUTION OR NOTICE TO REPRESENTATIVE  . . . . . . . . . . . . . . . . . . . . . . . . . .  64
         SECTION 10.11  RIGHTS OF TRUSTEE AND PAYING AGENT  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  65
         SECTION 10.12  AUTHORIZATION TO EFFECT SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .  65
         SECTION 10.14  AMENDMENTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  65
         SECTION 10.15  NO WAIVER, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  66
         SECTION 10.16  NO SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  66

ARTICLE 11.  CONVERSION OF DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  66
         SECTION 11.1  CONVERSION PRIVILEGES AND CONVERSION PRICE . . . . . . . . . . . . . . . . . . . . . . . . . .  66
         SECTION 11.2  EXERCISE OF CONVERSION PRIVILEGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  67
         SECTION 11.3  FRACTIONAL SHARES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  68
         SECTION 11.4  ADJUSTMENT OF CONVERSION PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  68
         SECTION 11.5  NOTICE OF ADJUSTMENTS OF CONVERSION PRICE. . . . . . . . . . . . . . . . . . . . . . . . . . .  71
         SECTION 11.6  NOTICE OF CERTAIN CORPORATE ACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  72
         SECTION 11.7  COMPANY TO RESERVE COMMON STOCK  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  73
         SECTION 11.8  TAXES ON CONVERSION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  73
         SECTION 11.9  COVENANT AS TO COMMON STOCK  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  73
         SECTION 11.10  CANCELLATION OF CONVERTED DEBENTURES  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  73
         SECTION 11.11  EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER, SHARE EXCHANGE OR SALE . . . . . . . . . .  73

ARTICLE 12.  DEFEASANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  74
         SECTION 12.1  DEFEASANCE AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  74
         SECTION 12.2  CONDITIONS TO DEFEASANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  75
         SECTION 12.3  DEPOSITED MONEY TO BE HELD IN TRUST;
                     OTHER MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  76
         SECTION 12.4  REPAYMENT TO COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  77
         SECTION 12.5  REINSTATEMENT  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  77

ARTICLE 13.  MISCELLANEOUS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  78
         SECTION 13.1  TRUST INDENTURE ACT CONTROLS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  78
         SECTION 13.2  NOTICES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  78
         SECTION 13.3  COMMUNICATION BY HOLDERS OF DEBENTURES
              WITH OTHER HOLDERS OF DEBENTURES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  79
         SECTION 13.4  CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . .  79
         SECTION 13.5  STATEMENTS REQUIRED IN CERTIFICATE OR OPINION  . . . . . . . . . . . . . . . . . . . . . . . .  80
         SECTION 13.6  RULES BY TRUSTEE AND AGENTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  81
         SECTION 13.7  NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
              EMPLOYEES AND STOCKHOLDERS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  81
         SECTION 13.8  GOVERNING LAW  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  81
</TABLE>





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<TABLE>
         <S>          <C>                                                                                              <C>
         SECTION 13.9  NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS  . . . . . . . . . . . . . . . . . . . . . . . .  81
         SECTION 13.10  SUCCESSORS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  81
         SECTION 13.11  SEVERABILITY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  81
         SECTION 13.12  COUNTERPART ORIGINALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  81
         SECTION 13.13  TABLE OF CONTENTS HEADINGS, ETC.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  82
</TABLE>





                                       iv
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                 INDENTURE dated as of March 1, 1996 by and between Home
Shopping Network, Inc., a Delaware corporation (the "Company"), and United
States Trust Company of New York, [a ________ banking association with its
principal corporate office in ____________], as trustee (the "Trustee").

                 The Company and the Trustee agree as follows for the benefit
of each other and for the equal and ratable benefit of the Holders of the
5.875% Convertible Subordinated Debentures due March 1, 2006 of the Company
(the "Debentures"):


                                   ARTICLE 1.
                   DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.1  DEFINITIONS

                 "Additional Interest" means all additional interest, if any,
payable pursuant to Article 8 hereof.

                 "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 purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise.

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

                 "BNY Facility Agreement" means that certain Letter of Credit
Facility Agreement, dated as of the September 28, 1995, among Home Shopping
Club, Inc., HSN Mail Order, Inc. and HSN Direct, Inc., as applicants, the
Company and HSN Realty, Inc., as guarantors, The Bank of New York, as issuer
and as administrative agent, and The Bank of New York Company, Inc., as a
participant, as amended by the First Amendment thereto, dated as of February
13, 1996, and as otherwise amended and in effect from time to time.

                 "Bankruptcy Law" means Title 11 of the United States Code or
any similar federal or state law for the relief of debtors.

                 "Board of Directors" means, with respect to any Person, the
Board of Directors of such Person, or any authorized committee of the Board of
Directors of such Person.
<PAGE>   8

                 "Business Day" means any day other than a Legal Holiday.

                 "Capital Stock" means any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, including, without limitation, with respect to partnerships, partnership
interests (whether general or limited) and any other interest or participation
that confers on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, such partnership.

                 "Change of Control" means an event or series of events as a
result of which (i) any "person" or "group" (as such terms are used in Sections
13(d) or 14(d) of the Exchange Act) (other than a member of the Control Group)
acquires "beneficial ownership" (as determined in accordance with Rule 13d-3
under the Exchange Act), directly or indirectly, of more than 50% of the total
voting power of the outstanding Voting Stock (as defined below) of the Company;
provided, however, that any such person or group shall not be deemed to be the
beneficial owner of, or to beneficially own, any Voting Stock tendered in a
tender or exchange offer until such Voting Stock is accepted for purchase or
exchange under such tender or exchange offer, or (ii) the Common Stock of the
Company (or other equity securities into which the Debentures are then
convertible or into which the Common Stock of the Company shall have been
reclassified or changed) is neither listed for trading on a United States
national securities exchange nor approved for trading on an established
over-the-counter trading market in the United States; provided, however that no
such Change of Control shall be deemed to have occurred pursuant to clause (i)
of this definition as a result of any event or series of events to the extent
that (x) the Closing Price of the Common Stock (or other equity securities into
which the Debentures are then convertible or into which the Common Stock of the
Company shall have been reclassified or changed) for any five trading days
during the ten trading days immediately preceding the event or series of events
that would otherwise constitute a Change of Control is at least equal to 105%
of the Conversion Price in effect on the last such trading day and at least
fifteen Business Days prior to the consummation of the Change of Control (a)
the Holders of the Debentures shall have received written notice of such event
or series of events that would otherwise constitute a Change of Control and (b)
the Company shall have published in The Wall Street Journal, or if no longer
published, in a newspaper of general circulation a notice of the Change of
Control (both such notices to contain the information required by (i), (ii),
(v) and (x) of Section 4.7(b)) or (y) such Change of Control results from a
transaction or series of transactions (including any tender or exchange offer
subject to the provisions of the Exchange Act, whether by the issuer or
otherwise) available to the holders of the Voting Stock in general (including
holders of Debentures who





                                       2
<PAGE>   9

would be entitled to tender or otherwise participate therein upon the
conversion thereof) in which the weighted average price paid by such person or
group to acquire such Voting Stock in such transaction or series of
transactions exceeds the then applicable Conversion Price of the Debentures.

                 "Closing Price" means, for any trading day, the last reported
sale price of the Common Stock regular way on such day or, in case no such
reported sales takes place on such day, the average of the reported closing bid
and asked prices regular way on such day, in either case on the New York Stock
Exchange or, if the Common Stock is not listed or admitted to trading or, if
not listed or admitted to trading on any national securities exchange, on the
Nasdaq National Market or, if the Common Stock is not listed or admitted to
trading on any national securities exchange or quoted on the Nasdaq National
Market, the average of the closing bid and asked prices in the over-the-counter
market as furnished by the New York Stock Exchange member firm selected from
time to time by the Company for that purpose.  If the Common Stock is not
listed or admitted to trading in any national securities exchange, quoted on
such National Market System or listed in any list of bid and asked prices in
the over-the-counter market, "Closing Price" shall mean the fair market value
of the Common Stock as determined in good faith by the Board of Directors.

                 "Common Stock" means the Common Stock, par value $.01 per
share, of the Company.

                 "Company" means the party named as such in this Indenture
until a successor replaces it pursuant to this Indenture and thereafter means
such successor.

                 "Controlled Affiliate" means any Person in which one or more
members of the Control Group (including their respective Subsidiaries and other
Controlled Affiliates), directly or indirectly, collectively own (i) in the
case of a corporation, a majority of the outstanding Capital Stock of such
corporation with voting power under ordinary circumstances, to elect directors
or (ii) in the case of any other Person (other than a corporation), a majority
ownership interest and the power to generally direct the policies, management
and affairs thereof.

                 "Control Group" means, as of any date, (i)
Tele-Communications, Inc., Liberty Media Corporation, Mr.  Barry Diller, Silver
Management Company, and Silver King Communications, Inc.; (ii) any Person that
acquires, directly or indirectly, through a Spin-Off Transaction or otherwise,
a substantial portion of the assets currently held, directly or indirectly, by
Liberty Media Corporation, if no Person or Persons (other than (x) a member or
members of the Control Group, (y) any entity formed in connection with or as a
result of such Spin-Off





                                       3
<PAGE>   10

Transaction (a "Spin-Off Transaction Person"), or (z) any Person or group which
acquires equity securities of such Spin- Off Transaction Person representing a
majority of the voting power of the outstanding equity securities of such
Spin-Off Transaction Person solely as a result of such Spin-Off Transaction)
shall thereupon beneficially own, directly or indirectly, more than 50% of the
Voting Stock of the Company; (iii) the respective successors of each of the
foregoing; and (iv) their respective Controlled Affiliates.

                 "Conversion Price" shall have the meaning set forth in 
Article 11 hereof.


                 "Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 13.2 hereof or such other address
as to which the Trustee shall give notice to the Company.

                 "Credit Agreement" means that certain Second Amended and
Restated Credit Agreement, dated as of August 30, 1994, among the Company, as
borrower, Home Shopping Club, Inc. and HSN Realty, Inc., as guarantors, the
banks that are parties thereto, LTCB Trust Company, as agent for such banks, as
administrative agent for such banks and as collateral agent for such banks, and
The Bank of New York Company, Inc., Toronto Dominion [Texas], Inc. and Bank of
Montreal, as co-agents, as amended by the First Amendment thereto, dated as of
March 29, 1995, as further amended by the Second Amendment thereto, dated as of
June 28, 1995, as further amended by the Third Amendment thereto, dated as of
September 28, 1995, as further amended by the Fourth Amendment thereto, dated
as of February 13, 1996, and as otherwise amended and in effect from time to
time.

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

                 "Default" means any event that is, or with the passage of time
or the giving of notice or both would be, an Event of Default as set forth in
Article 6 hereof.

                 "Designated Senior Debt" shall mean (i) any and all
obligations of the Company to pay principal, interest, fees and any other
amount under, or in connection with, the Credit Agreement, (ii) any and all
obligations of the Company and the other obligors under the BNY Facility
Agreement to pay principal, interest, fees and any other amount under, or in
connection with, unreimbursed drawings under the letters of credit issued under
the BNY Facility Agreement and the stated amount of all such outstanding
letters of credit under which drawings have not yet been made and (iii)
indebtedness incurred by the Company (and/or any of the other obligors under
the BNY Facility Agreement) to refund, refinance, repurchase or extend any of
the foregoing.





                                       4
<PAGE>   11


                 "Distribution" means, for purposes of Article 10 hereof, a
distribution consisting of cash, securities or other property, by set-off or
otherwise.

                 "Effectiveness Period" means the period which commences on the
Issuance Date and ends on the earlier to occur of (x) the third anniversary of
the Issuance Date and (y) such time as there are no Transfer Restricted
Securities outstanding.

                 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

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

                 "Government Obligations" means direct Obligations of, or
Obligations guaranteed by, the United States of America for the payment of
which is pledged the full faith and credit of the United States of America.

                 "Holder" means a Person in whose name a Debenture is
registered on the books of the Company or the Registrar kept for that purpose.

                 "Indebtedness" means with respect to any Person, (i) any
obligation, contingent or otherwise, of such Person (a) for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of
such Person or only to a portion thereof), (b) evidenced by a note, debenture
or similar instrument (including a purchase money obligation), (c) for the
payment of any money under a lease required to be capitalized on the balance
sheet of the lessee under generally accepted accounting principles, (d) in
respect of letters of credit (including reimbursement obligations with respect
thereto) or (e) to pay the deferred purchase price of property or services;
(ii) any obligation of others which the Person has directly or indirectly
guaranteed (including any monetary obligation of a keep-well or similar
nature); (iii) any obligation secured by a mortgage, pledge, lien, encumbrance,
charge or adverse claim affecting title or resulting in an encumbrance to which
the property or assets of such person are subject, whether or not the
obligations secured thereby shall have been assumed by or shall otherwise be
such person's legal liability; (iv) to the extent not otherwise included,
obligations under currency swap agreements and interest rate protection
agreements or similar agreements; and (v) any and all deferrals, renewals,
extensions





                                       5
<PAGE>   12

and refundings of, or amendments, modifications or supplements to, any
liability of the kind described in any of the preceding clauses (i), (ii),
(iii), or (iv); provided, that Indebtedness shall not include accounts payable
or any other indebtedness to trade creditors created or assumed by the Company
in the ordinary course of business.

                 "Indenture" means this Indenture, as amended or supplemented
from time to time.

                 "Issuance Date" means the closing date for the sale and
original issuance of the Debentures.

                 "Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in The City of New York or at a place of payment in the
state in which the Corporate Trust Office of the Trustee is located are
authorized by law, regulation or executive order to remain closed.  If a date
on which any notice, payment or other action is required hereunder to be taken
or made is a Legal Holiday at a place of payment or in the state in which the
Corporate Trust Office of the Trustee is located, such action may be taken or
made at that place on the next succeeding day that is not a Legal Holiday, and,
if applicable, interest shall not accrue for the intervening period.

                 "Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).

                 "NASD" means the National Association of Securities Dealers,
Inc.

                 "Obligations" means any principal, interest, premiums,
penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness.

                 "Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, any Vice-President, the Treasurer, any
Assistant Treasurer, the Controller, the Secretary or any Assistant Secretary
of such Person.

                 "Officers' Certificate" means a certificate signed on behalf
of the Company by two Officers of the Company, one of whom





                                       6
<PAGE>   13

must be the principal executive officer, principal financial officer, or
principal accounting officer of the Company, that meets the requirements of
Section 13.5 hereof.

                 "Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Trustee, that meets the requirements of Section
13.5 hereof.  The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.

                 "Payment Blockage Notice" shall have the meaning provided in
Article 10 hereof.

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

                 "Prospectus" means any prospectus included in the Shelf
Registration Statement, as amended or supplemented by any subsequent prospectus
and by all other amendments thereto, including post-effective amendments and
all materials incorporated by reference into such Prospectus.

                 "Registration Default" shall have the meaning as defined in
Article 8 hereof.

                 "Representative"  means (a) so long as any Obligations are
outstanding under the Credit Agreement or the BNY Facility Agreement, LTCB
Trust Company, as Agent for the banks parties to the Credit Agreement, or The
Bank of New York, as administrative agent under the BNY Facility Agreement or
such other trustee, agent or representative designated as such pursuant to an
intercreditor agreement among the creditors in respect of the Designated Senior
Debt and any additional Senior Debt and (b) thereafter the indenture trustee or
other trustee, agent or representative for any Senior Debt.

                 "Responsible Officer" when used with respect to the Trustee,
means any officer within the Corporate Trust Administration of the Trustee (or
any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer of the Trustee to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.

                 "SEC" means the Securities and Exchange Commission.

                 "Securities Act" means the Securities Act of 1933, as amended.





                                       7
<PAGE>   14


                 "Senior Debt" shall mean the principal of, premium, if any,
and interest (including interest which accrues after a petition in bankruptcy
is filed by or against the Company) on and other amounts due on or in
connection with any Indebtedness of the Company, whether outstanding on the
date of this Indenture or thereafter created, incurred, assumed, guaranteed or
in effect guaranteed by the Company (including all deferrals, renewals,
extensions or refundings of, or amendments, modifications or supplements to the
foregoing); provided, however, that Senior Debt does not include (i) any
particular Indebtedness in which the instrument creating or evidencing the same
or the assumption or guarantee thereof expressly provides that such
Indebtedness shall not be senior in right of payment to, or is pari passu with,
or is subordinated or junior to, the Debentures or (ii) the Debentures.

                 "Shelf Deadline Date" shall have the meaning set forth in
Article 8 hereof.

                 "Shelf Registration Statement" means the shelf registration
statement of the Company relating to the registration for resale of Transfer
Restricted Securities, which is filed pursuant to the provisions of this
Indenture, including the Prospectus included therein, all amendments and
supplements to the Shelf Registration Statement (including post-effective
amendments) and all exhibits and materials incorporated by reference therein.

                 "Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.

                 "Spin-Off Transaction" means any transaction or series of
related transactions resulting in the holders of outstanding equity securities
of a member of the Control Group (either separately or together with the
holders of other series or classes of securities) acquiring (or having the
right to acquire upon the exercise of rights, warrants or similar securities)
equity securities of any Person which, directly or indirectly, holds equity
securities of the Company on a pro rata basis based upon such holders'
ownership of one or more classes or series of equity securities of such member
of the Control Group on the record or other similar date for such transaction.

                 "Standstill Period" shall have the meaning set forth in 
Article 6 hereof.

                 "Subordinated Reorganization Securities" shall have the
meaning set forth in Article 10 hereof.





                                       8
<PAGE>   15

                 "Subsidiary" means with respect to any Person, (i) a
corporation a majority of whose Capital Stock with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such Person, by one or more Subsidiaries of such Person or by such Person
and one or more Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, one or more Subsidiaries thereof or such
Person and one or more Subsidiaries thereof, directly or indirectly, at the
date of determination thereof has at least a majority ownership interest and
the power to generally direct the policies, management and affairs thereof.

                 "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Section
Section 7aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA, except as provided in Section 9.3 hereof and except to
the extent any amendment to the TIA retroactively applies to this Indenture.

                 "Transfer Restricted Security" means, the Debentures and the
Common Stock of the Company issuable upon conversion thereof unless or until
the first to occur of (x) the third anniversary of the Issue Date and (ii) the
effectiveness of the Shelf Registration Statement.

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

                 "Voting Stock" means the Common Stock of the Company, the
Class B Common Stock of the Company and any other capital stock or similar
interests of any class or classes (however designated) of the Company, the
holders of which are generally at the time entitled, as such holders, to vote
upon matters which may be submitted to a vote of stockholders at any annual or
special meeting.

SECTION 1.2  OTHER DEFINITIONS

<TABLE>
<CAPTION>
                 Term                                 Defined in Section   
                 ----                                 ------------------   
         <S>                                                   <C>         
         "Change of Control Offer"                              4.7        
         "Change of Control Payment"                            4.7        
         "Change of Control Purchase Date"                      4.7        
         "Change of Control Purchase Notice"                    4.7        
         "Conversion Agent"                                     2.3        
         "Covenant Defeasance"                                 12.3        
         "Event of Default"                                     6.1        
         "Legal Defeasance"                                    12.2        
         "Paying Agent"                                         2.3        
         "Payment Blockage Notice"                             10.3        
         "Registrar"                                            2.3        
</TABLE>





                                       9
<PAGE>   16


SECTION 1.3  INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT

                 Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture,
other than those provisions of the TIA that may be excluded herefrom, which
provisions shall be excluded to the extent specifically excluded from this
Indenture.

                 The following TIA terms used in this Indenture have the
following meanings:

                 "indenture securities" means the Debentures;

                 "indenture security holder" means a Holder of a Debenture;

                 "indenture to be qualified" means this Indenture;

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

                 "obligor" on the Debentures means the Company and any
        successor obligor upon the Debentures.

                 All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by a rule or
regulation promulgated by the SEC under the TIA have the meanings so assigned
to them.

SECTION 1.4  RULES OF CONSTRUCTION

                 Unless the context otherwise requires:

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

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

                 (3)      "or" is not exclusive;

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

                 (5)      provisions apply to successive events and 
transactions; and

                 (6)      references to sections of or rules under the
Securities Act or the Exchange Act shall be deemed to include substitute,
replacement or successor sections or rules adopted by the SEC from time to
time.





                                       10
<PAGE>   17

                                   ARTICLE 2.
                                 THE DEBENTURES

SECTION 2.1  FORM AND DATING

                 The Debentures and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A hereto, the terms of which are
incorporated in and made part of this Indenture.  In addition to those set
forth in Exhibit A, the Debentures may have notations, legends or endorsements
approved as to form by the Company and required by law, stock exchange rule,
agreements to which the Company is subject, or usage.  Each Debenture shall be
dated the date of its authentication.  The Debentures will be issued in fully
registered form, without coupons, and will be initially issuable only in
denominations of $10,000 and any integral multiple of $1,000 in excess thereof;
provided, that following the effectiveness of the Shelf Registration Statement
the Debentures shall be issuable in minimum denominations of $1,000 and any
integral multiple in excess thereof.  The Debentures are not issuable in bearer
form and the Debentures may be issued in whole or in part in the form of one or
more global Debentures as contemplated by Section 2.16.

SECTION 2.2  EXECUTION AND AUTHENTICATION

                 Two Officers of the Company shall sign the Debentures for the
Company by manual or facsimile signature.  The Company's seal shall be
reproduced on the Debentures and may be in facsimile form.

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

                 A Debenture shall not be valid until authenticated by the
manual signature of the Trustee.  The signature of the Trustee shall be
conclusive evidence that the Debenture has been authenticated under this
Indenture.  The form of Trustee's certificate of authentication to be borne by
the Debentures shall be substantially as set forth in Exhibit A hereto.

                 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, and the Trustee shall, subject to
the provisions hereof and of such Debentures, authenticate said Debentures and
deliver said Debentures to or upon the written order of the Company, signed by
two Officers of the Company, without any further action by the Company.

                 The aggregate principal amount of the Debentures outstanding
at any time shall not exceed $100,000,000 (except as





                                       11
<PAGE>   18

provided in Section 2.7 hereof).  The Debentures shall be subordinated in right
of payment to Senior Debt as provided in Article 10 hereof.  Unless the context
otherwise requires, the Debentures shall constitute one series for all purposes
under this Indenture, including without limitation, amendments, waivers,
approvals, redemptions, and Change of Control Offers.

                 The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate the Debentures.  Unless limited by the terms of
such appointment, an authenticating agent may authenticate the Debentures
whenever the Trustee may do so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.

SECTION 2.3  REGISTRAR AND PAYING AGENT

                 The Company shall maintain in the City of New York (i) an
office or agency where the Debentures may be presented for registration of
transfer or for exchange (including any co-registrar, the "Registrar"); (ii) an
office or agency where the Debentures may be presented for payment ("Paying
Agent"); and (iii) an office or agency where the Debentures may be presented
for conversion ("Conversion Agent").  The Registrar shall keep a register of
the Debentures and of their transfer and exchange.  The Company may appoint one
or more co-registrars, one or more additional paying agents and one or more
additional Conversion Agents.  The terms "Paying Agents" and "Conversion
Agents" include any additional paying agent or conversion agent, respectively.
The Company may change any Paying Agent, Registrar or co-registrar without
prior notice to any Holder of a Debenture.  The Company shall promptly notify
the Trustee and the Trustee shall promptly notify the Holders of the Debentures
of the name and address of any Agent not a party to this Indenture.  The
Company may act as Paying Agent, Conversion Agent, Registrar or co-registrar.
The Company shall enter into an appropriate agency agreement with any Agent not
a party to this Indenture, which shall be subject to any obligations imposed by
the provisions of the TIA. The agreement shall implement the provisions of this
Indenture that relate to such Agent.  The Company shall notify the Trustee of
the name and address of any such Agent.  If the Company fails to maintain a
Conversion Agent, Registrar or Paying Agent, or fails to give the foregoing
notice, the Trustee shall act as such, and shall be entitled to appropriate
compensation in accordance with Section 7.7 hereof.

                 The Company initially appoints the Trustee as Registrar,
Paying Agent and Conversion Agent with respect to the Debentures.





                                       12
<PAGE>   19

SECTION 2.4  PAYING AGENT TO HOLD MONEY IN TRUST

                 The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent shall hold in trust for the
benefit of the Holders of the Debentures or the Trustee all money held by the
Paying Agent for the payment of principal of, and interest (and any Additional
Interest, if any) on the Debentures (for purposes of this Section 2.4 the
"Debenture Funds"), and shall notify the Trustee of any Default by the Company
in making any such payment.  While any such Default continues, the Trustee may
require a Paying Agent to pay all Debenture Funds held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all Debenture Funds
held by it to the Trustee.  Upon payment over to the Trustee, the Paying Agent
(if other than the Company) shall have no further liability for the Debenture
Funds delivered to the Trustee. If the Company acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the Holders of
the Debentures subject to Article 10 hereof, all Debenture Funds held by it as
Paying Agent.  Upon any bankruptcy or reorganization proceeding relating to the
Company, the Trustee shall serve as Paying Agent for the Debentures and the
Company shall require each Paying Agent to agree in writing to turn over to the
Trustee immediately thereupon all money held by each such Paying Agent.

SECTION 2.5  LISTS OF HOLDERS OF THE DEBENTURES

                 The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders of the Debentures and shall otherwise comply with TIA
Section 312(a).  If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least seven Business Days before each interest payment date
and at such other times as the Trustee may request in writing a list in such
form and as of such date as the Trustee may reasonably require of the names and
addresses of Holders of the Debentures, including the aggregate principal
amount of the Debentures held by each thereof, and the Company shall otherwise
comply with TIA Section 312(a).

SECTION 2.6  TRANSFER AND EXCHANGE

         (a)     Transfer and Exchange of Definitive Debentures.  When any of
the Debentures are presented to the Registrar with a request:

               (x)        to register the transfer of the Debentures; or

               (y)        to exchange such Debentures for an equal principal
                          amount of Debentures of other authorized
                          denominations,





                                       13
<PAGE>   20

the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Debentures presented or surrendered for register of transfer or exchange:

                 (i)      shall be duly endorsed or accompanied by a written
         instruction of transfer in form satisfactory to the Registrar; duly
         executed by the Holder thereof or by his attorney duly authorized in
         writing; and

                 (ii)     in the case of a Debenture that is a Transfer
         Restricted Security, such request shall be accompanied by the
         following additional information and documents, as applicable:

                          (A)     if such Transfer Restricted Security is being
                                  delivered to the Registrar by a Holder for
                                  registration in the name of such Holder,
                                  without transfer, a certification from such
                                  Holder to that effect (in substantially the
                                  form of Exhibit A hereto); or

                          (B)     if such Transfer Restricted Security is being
                                  transferred to a "qualified institutional
                                  buyer" (as defined in Rule 144A under the
                                  Securities Act) in accordance with Rule 144A
                                  under the Securities Act or pursuant to an
                                  exemption from registration in accordance
                                  with Rule 144 or Rule 904 under the
                                  Securities Act or pursuant to an effective
                                  registration statement under the Securities
                                  Act, a certification from such Holder to that
                                  effect (in substantially the form of Exhibit
                                  A hereto) and, in the case of a transfer
                                  pursuant to an exemption from registration in
                                  accordance with Rule 144 or Rule 904 under
                                  the Securities Act, an Opinion of Counsel
                                  from such Holder or the transferee reasonably
                                  acceptable to the Company and to the
                                  Registrar to the effect that such transfer is
                                  in compliance with the Securities Act; or

                          (C)     if such Transfer Restricted Security is being
                                  transferred in reliance on another exemption
                                  from the registration requirements of the
                                  Securities Act, a certification from such
                                  Holder to that effect (in substantially the
                                  form of Exhibit A hereto) and an Opinion of
                                  Counsel from such Holder or the transferee
                                  reasonably acceptable to the Company and to
                                  the Registrar to the effect that such





                                       14
<PAGE>   21

                                  transfer is in compliance with the Securities 
                                  Act.

                 (b)  Legends.

                 (i)      Except as permitted by the following paragraphs (ii)
         and (iii), each Debenture shall bear legends in substantially the
         following form:

                 "THE SECURITY REPRESENTED HEREBY (OR ITS PREDECESSOR) WAS
                 ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM THE
                 REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS
                 AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE SOLD OR
                 OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
                 APPLICABLE EXEMPTION THEREFROM AND IN ANY EVENT MAY BE SOLD OR
                 OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH THE INDENTURE
                 (COPIES OF WHICH MAY BE OBTAINED FROM THE COMPANY).

                 EACH HOLDER OF THIS SECURITY REPRESENTS TO THE COMPANY THAT
                 (A) SUCH HOLDER WILL NOT SELL OR OTHERWISE TRANSFER THIS
                 SECURITY PRIOR TO THE DATE WHICH IS THREE YEARS AFTER THE
                 LATER OF THE ORIGINAL ISSUE DATE AND THE LAST DATE ON WHICH
                 THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
                 THIS SECURITY (OR ANY PREDECESSOR), OTHER THAN (I) TO A
                 QUALIFIED INSTITUTIONAL PREDECESSOR), OTHER THAN (II) IN AN
                 OFFSHORE TRANSACTION COMPLYING WITH REGULATION S UNDER THE
                 SECURITIES ACT, (III) TO AN ACCREDITED INVESTOR THAT, PRIOR TO
                 SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A
                 U.S.  BROKER-DEALER) TO THE COMPANY AND UNITED STATES TRUST
                 COMPANY OF NEW YORK, AS TRUSTEE, A SIGNED LETTER CONTAINING
                 CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
                 RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH
                 LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND, IN THE CASE OF
                 CLAUSE (I), (II) OR (III), SUCH OTHER DOCUMENTS, CERTIFICATES
                 AND OPINIONS AS THE COMPANY OR THE TRUSTEE MAY REASONABLY
                 REQUEST, (IV) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM
                 REGISTRATION UNDER THE SECURITIES ACT (IN WHICH CASE THE
                 HOLDER SHALL HAVE RECEIVED THE PRIOR WRITTEN AUTHORIZATION OF
                 THE COMPANY OR SHALL PROVIDE AN OPINION OF COUNSEL
                 SATISFACTORY TO THE COMPANY AND ADDRESSED TO THE COMPANY AND
                 THE TRUSTEE), (V) PURSUANT TO AN EFFECTIVE REGISTRATION
                 STATEMENT UNDER THE SECURITIES ACT, OR (VI) TO THE COMPANY OR
                 ANY SUBSIDIARY THEREOF; AND THAT (B) THE HOLDER WILL, AND EACH
                 SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
                 SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A)
                 ABOVE AND TO DELIVER TO THE TRANSFEREE PRIOR TO SALE A COPY OF
                 A





                                       15
<PAGE>   22

                 NOTICE TO INVESTORS DESCRIBING SUCH RESTRICTIONS (COPIES OF
                 WHICH MAY BE OBTAINED FROM THE COMPANY)."

                 (ii)     Upon any sale or transfer of a Debenture bearing the
         legends set forth in (i) above pursuant to Rule 144 under the
         Securities Act or pursuant to an effective registration statement
         under the Securities Act, the Registrar shall permit the Holder
         thereof to exchange such Debenture for a Debenture that does not bear
         such legends and rescind any restriction on the transfer of such
         Debenture; provided, however, that with respect to any request for an
         exchange of a Debenture for a Debenture that does not bear such
         legends, which request is made in reliance upon Rule 144, the Holder
         thereof shall certify in writing to the Registrar that such request is
         being made pursuant to Rule 144 (such certification to be
         substantially in the form of Exhibit A hereto).

         (c)     General Provisions Relating To Transfers and Exchanges.

                 (i)      To permit registrations of transfers and exchanges,
         the Company shall execute and the Trustee shall authenticate the
         Debentures at the Registrar's request.

                 (ii)     No service charge shall be made to a Holder for any
         registration of transfer or exchange, but the Company or the Registrar
         may require a Holder, among other things, to furnish appropriate
         endorsements and transfer documents and to pay a sum sufficient to
         cover any transfer tax or similar governmental charge payable in
         connection therewith (other than any such transfer taxes or similar
         governmental charge payable upon exchange or transfer pursuant to
         Sections 2.7, 2.10, 3.5, 4.7 or 9.5 hereof).

                (iii)     The Registrar shall not be required to register the
         transfer of or exchange any Debenture selected for redemption in whole
         or in part or tendered for repurchase pursuant to Section 4.7 hereof,
         except the unredeemed or unrepurchased portion of any Debenture being
         redeemed or repurchased in part, as the case may be.

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

                  (v)      The Company or the Registrar shall not be required to
         register the transfer or exchange of a Debenture between a record date
         and the next succeeding interest payment date.





                                       16
<PAGE>   23

                 (vi)     Prior to due presentment for the registration of a
         transfer of any Debenture, the Trustee, any Agent and the Company may
         deem and treat the person in whose name any Debenture is registered as
         the absolute owner of such Debenture for the purpose of receiving
         payment of principal of, interest and Additional Interest, if any, on
         such Debenture, and neither the Trustee, any Agent nor the Company
         shall be affected by notice to the contrary.

                (vii)     The Trustee shall authenticate the Debentures upon
         receipt of an Officers' Certificate instructing it to do so.

         (d)     Global Certificate Debentures.  Notwithstanding any other
provision of this Section, unless and until it is exchanged in whole or in part
for Debentures in definitive form, a global Debenture representing all or a
portion of the Debentures may not be transferred except as a whole by the
depositary for the Debentures to a nominee of such depositary or by a nominee
of such depositary to such depositary or another nominee of such depositary or
by such depositary or any such nominee to a successor depositary for the
Debentures or a nominee of such successor depositary.

                 A global Debenture may be exchanged only as provided in this 
Section 2.6(d).

                 If at any time the depositary with respect to a global
Debenture or Debentures representing all or a portion of the Debentures
notifies the Company that it is unwilling, unable or ineligible to continue as
such depositary, the Company shall appoint a successor depositary with respect
to such Debenture.  If a successor depositary is not so appointed by the
Company within 90 days after the Company receives such notice, the Company will
execute and the Trustee, upon receipt of a written order of the Company for the
authentication and delivery of definitive Debentures (or, if such written order
has previously been delivered, then upon receipt of written instructions from
the person or persons specified in such written order), will authenticate and
deliver Debentures of such series in definitive form equal in aggregate
principal amount to the principal amount of the global Debenture(s) in exchange
for such global Debenture(s).

                 The Company may at any time and in its sole discretion
determine that the Debentures issued in the form of one or more global
Debentures shall no longer be represented by such global Debenture(s).  In such
event, the Company will execute and the Trustee, upon receipt of a written
order of the Company for the authentication and delivery of definitive
Debentures (or, if such written order has previously been delivered, then upon
receipt of written instructions from the person or persons specified in such
written order), will authenticate and deliver Debentures in





                                       17
<PAGE>   24

definitive form equal in aggregate principal amount to the principal amount of
the global Debenture(s) in exchange for such global Debenture(s).

                 In any exchange provided for herein, the Company will execute
and the Trustee will authenticate and deliver Debentures in definitive
registered form in authorized denominations as provided in Section 2.1 hereof.

                 Upon the exchange of a global Debenture in definitive form,
such global Debenture shall be cancelled by the Trustee, unless endorsement of
the surrendered global Debenture is contemplated by Section 2.16.

                 Definitive Debentures issued in exchange for a global
Debenture pursuant to this Section shall be registered in such names and in
such authorized denominations as the depositary for such global Debenture shall
instruct the Registrar in writing, pursuant to instructions from its direct or
indirect participants or otherwise.  The Company and the Trustee shall be fully
protected in relying upon written directions from the depositary as to the
names and addresses in which the Debentures are to be issued, and in no event
shall have any liability to any Person claiming any right in or to any of the
Debentures issued pursuant to directions received from the depositary.  The
Trustee shall deliver such definitive Debentures to the persons in whose names
such Debentures are so registered.

                 If a definitive Debenture is issued in exchange for any
portion of a global Debenture after the close of business at the office or
agency where such exchange occurs on any regular record date, or special record
date, and before the opening of business at such office or agency on the
relevant interest payment date, interest and Additional Interest, if any, will
be payable on such interest payment date in respect of such definitive
Debenture, to the person to whom interest and Additional Interest, if any, in
respect of such portion of such global Debenture is payable in accordance with
the provisions of this Indenture.

SECTION 2.7  REPLACEMENT DEBENTURES

                 If (i) any mutilated Debenture is surrendered to the Trustee,
or (ii) the Company and the Trustee receive evidence to their satisfaction of
the destruction, loss or theft of any Debenture, and there is delivered to the
Company and the Trustee security or indemnity as may be required by them to
save each of them and any Agent harmless, then in the absence of notice to the
Company or the Trustee that such Debenture has been acquired by a bona fide
purchaser, the Company shall issue and the Trustee shall authenticate a
replacement Debenture, if the Trustee's and the Company's requirements for
replacements of Debentures are met.  If required by the Trustee or the Company,
an indemnity





                                       18
<PAGE>   25

bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent or any
authenticating agent from any loss which any of them may suffer if a Debenture
is replaced.  The Company and the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
and any other expenses incurred by it in connection with replacing a Debenture.

                 Every Replacement Debenture shall represent an Obligation of
the Company and shall be entitled to all of the benefits of this Indenture
equally and ratably with all other Debentures duly issued hereunder.

SECTION 2.8  OUTSTANDING DEBENTURES

                 The Debentures outstanding at any time are all the Debentures
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation and those described in this Section 2.8 as not
outstanding.  If a Debenture is replaced pursuant to Section 2.7 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Debenture is held by a bona fide purchaser.  If the principal
amount of any Debenture is considered paid under Section 4.1 hereof, it ceases
to be outstanding and interest on it ceases to accrue.  Subject to Section 2.9
hereof, a Debenture does not cease to be outstanding because the Company, a
Subsidiary of the Company or an Affiliate of the Company holds the Debenture.

SECTION 2.9  TREASURY DEBENTURES

                 In determining whether the Holders of the required principal
amount of Debentures have concurred in any direction, waiver or consent,
Debentures owned by the Company, or any of its Subsidiaries or any of its
Affiliates shall be considered as though not outstanding, except that for
purposes of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Debentures which the Trustee is
advised by the Company are so owned shall be so considered.  Notwithstanding
the foregoing, Debentures that are to be acquired by the Company, or any
Subsidiary of the Company or any of its Affiliates pursuant to an exchange
offer, tender offer or other agreement shall not be deemed to be owned by the
Company, a Subsidiary of the Company or its Affiliates until legal title to
such Debentures passes to the Company, such Subsidiary or such Affiliate, as
the case may be.

SECTION 2.10  TEMPORARY DEBENTURES

                 Until permanent Debentures are ready for delivery, the Company
may prepare, and the Trustee shall authenticate,





                                       19
<PAGE>   26

temporary Debentures.  The temporary Debentures shall be substantially in the
form of permanent Debentures but may have variations that the Company and the
Trustee consider appropriate for temporary Debentures.  Without unreasonable
delay upon the request of a Holder, the Company shall prepare and the Trustee,
upon receipt of the written order of the Company signed by two Officers of the
Company, shall authenticate permanent Debentures in exchange for temporary
Debentures.  Until such exchange, temporary Debentures shall be entitled to the
same rights, benefits and privileges as permanent Debentures.

SECTION 2.11  CANCELLATION

                 The Company may at any time deliver Debentures to the Trustee
for cancellation.  The Registrar and Paying Agent shall forward to the Trustee
any Debentures surrendered to them for registration of transfer, repurchase,
exchange or payment.  The Trustee shall cancel all Debentures surrendered for
registration of transfer, repurchase, exchange, payment, replacement or
cancellation and shall destroy cancelled Debentures (subject to the record
retention requirement of the Exchange Act), unless the Company directs
cancelled Debentures to be returned to it.  The Company may not issue new
Debentures to replace Debentures that it has redeemed, repurchased or paid or
that have been delivered to the Trustee for cancellation.

SECTION 2.12  DEFAULTED INTEREST

                 If the Company defaults in a payment of interest on the
Debentures, the Company shall pay the defaulted interest in any lawful manner
plus, to the extent lawful, interest payable on the defaulted interest, to the
Persons who are Holders of the Debentures on a subsequent special record date,
which date shall be at the earliest practicable date but in all events at least
five Business Days prior to the payment date, in each case at the rate provided
in the Debentures.  The Company shall fix each such special record date and
payment date, and shall, promptly thereafter, notify the Trustee of any such
date.  At least 15 days before the special record date, the Company (or the
Trustee, in the name of and at the expense of the Company) shall mail to
Holders of the Debentures a notice that states the special record date, the
related payment date and the amount of such interest to be paid, and at the
same time the Company shall deposit with the Trustee an amount of money equal
to the aggregate amount proposed to be paid in respect of such defaulted
interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when deposited to
be held in trust for the benefit of the Persons entitled to such defaulted
interest as in this Section 2.12 provided.





                                       20
<PAGE>   27

SECTION 2.13  RECORD DATE

                 The record date for purposes of determining the identity of
Holders of the Debentures entitled to vote or consent to any action by vote or
consent authorized or permitted under this Indenture shall be determined as
provided for in TIA Section 316(c).

SECTION 2.14  CUSIP NUMBER

                 The Company in issuing the Debentures may use "CUSIP" numbers
and, if it does so, the Trustee shall use the CUSIP numbers in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP numbers printed in the notice or on the Debentures and
that reliance may be placed only on the other identification numbers printed on
the Debentures.  The Company will promptly notify the Trustee of any change in
any CUSIP number.

SECTION 2.15  COMPUTATION OF INTEREST

                 Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months.

SECTION 2.16  SECURITIES IN GLOBAL FORM

                 In connection with the issuance of a global Debenture, the
Company shall execute, and the Trustee shall, in accordance with the written
order of the Company, authenticate and deliver one or more global Debentures in
permanent form that (i) shall be registered in the name of the depositary for
such global Debenture(s) or its nominee, (ii) shall be delivered by the Trustee
to such depositary or pursuant to such depositary's instructions, and (iii)
shall bear a legend substantially to the following effect:  "Unless and until
it is exchanged in whole or in part for Debentures in definitive form as
provided in Section 2.6(d) of the Indenture, this Debenture may not be
transferred except as a whole by the depositary to a nominee of the depositary
or by a nominee of the depositary to the depositary or another nominee of the
depositary or by the depositary or any such nominee to a successor depositary
or a nominee of such successor depositary."  Each depositary designated by the
Company for a global Debenture in registered form must be, to the extent
required by applicable law or regulation, a clearing agency registered under
the Exchange Act, any other applicable statute or regulation, at the time of
its designation and at all times that it serves as depositary.  Any such global
Debenture shall represent such of the outstanding Debentures represented
thereby as shall be specified thereon and may provide that it shall represent
the aggregate amount of outstanding Debentures from time to time endorsed
thereon and that the aggregate amount of





                                       21
<PAGE>   28

the Debentures represented thereby may from time to time be increased or
decreased to reflect exchanges.  Any endorsement of a Debenture in global form
to reflect the amount, or any increase or decrease in the amount, or changes in
the rights of Holders, of outstanding Debentures represented thereby shall be
made in such manner and upon instructions given by such person or persons as
shall be specified in a written order of the Company to be delivered to the
Trustee.  The Trustee shall deliver and redeliver any Debenture in permanent
global form in the manner and upon instructions given by the person or persons
specified in an applicable written order of the Company.

SECTION 2.17  PERSONS DEEMED OWNERS

                 No holder of any beneficial interest in any global Debenture
held on its behalf by a depositary shall have any rights under this Indenture
with respect to such global Debenture, and such depositary (or its nominee, if
such global Debenture is registered in the name of a nominee) may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
owner of such global Debenture for all purposes whatsoever.  None of the
Company, the Trustee, any Paying Agent or the Registrar will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a global
Debenture or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.

                 Notwithstanding the foregoing, with respect to any global
Debenture, nothing herein shall prevent the Company, the Trustee or any agent
of the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by any depositary, as a Holder, with
respect to such global Debenture or impair, as between such depositary and
owners of beneficial interests in such global Debenture, the operation of
customary practices governing the exercise of the rights of such depositary (or
its nominee) as Holder of such global Debenture.


                                   ARTICLE 3.
                                   REDEMPTION

SECTION 3.1  NOTICES TO TRUSTEE

                 If the Company elects to redeem Debentures pursuant to the
optional redemption provisions of Section 3.6 hereof, it shall furnish to the
Trustee, at least 30 days but not more than 60 days before a redemption date,
an Officers' Certificate setting forth (i) the redemption date, (ii) the
principal amount of Debentures to be redeemed, and (iii) the applicable
redemption price.





                                       22
<PAGE>   29


SECTION 3.2  NOTICE OF REDEMPTION

                 At least 30 days but not more than 60 days before a redemption
date, the Company shall mail or cause to be mailed, by first class mail, a
notice of redemption to each Holder whose Debentures are to be redeemed at its
registered address.

                 The notice shall identify the Debentures (including CUSIP
number, if any, and, in the case of a partial redemption, the principal amount
of the Debentures) to be redeemed and shall state:

         (a)     the redemption date;

         (b)     the redemption price (including accrued interest to the
redemption date);

         (c)     if any Debenture is being redeemed in part, the portion of the
principal amount of such Debenture to be redeemed and that, after the
redemption date upon surrender of such Debenture, a new Debenture in principal
amount equal to the unredeemed portion shall be issued upon cancellation of the
original Debenture;

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

         (e)     that Debentures called for redemption must be surrendered to
the Paying Agent to collect the redemption price;

         (f)     that, unless the Company defaults in making such redemption
payment, interest on Debentures (or portion thereof) called for redemption
ceases to accrue on and after the redemption date;

         (g)     a statement of the conversion rights of the Holder of the
Debenture and the Conversion Price then in effect; and

         (h)     that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on the
Debentures.

                 At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that
the Company shall have delivered to the Trustee, at least 30 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as
provided in the preceding paragraph.  Failure to give any required notice of
redemption as to any Debenture, or any defect in any such notice, shall not
affect the validity of the call for redemption of any Debentures in respect of
which no such failure or defect has occurred.  Any notice mailed as provided





                                       23
<PAGE>   30

herein shall be effective when sent and shall be conclusively presumed to have
been given, whether or not actually received by any Holder.

SECTION 3.3  EFFECT OF NOTICE OF REDEMPTION

                 Once notice of redemption is mailed in accordance with Section
3.2 hereof, Debentures called for redemption become irrevocably due and payable
on the redemption date at the redemption price.  A notice of redemption may not
be conditional.  On and after the redemption date, unless the Company defaults
in the payment of the redemption price, interest will cease to accrue on the
Debentures or portions thereof called for redemption and all rights of Holders
with respect to such Debentures will terminate except for the right to receive
payment of the redemption price upon surrender for redemption.

SECTION 3.4  DEPOSIT OF REDEMPTION PRICE

                 One Business Day prior to the redemption date, the Company
shall deposit with the Paying Agent money sufficient to pay the principal of,
accrued interest on and accrued Additional Interest, if any, on all Debentures
to be redeemed on the redemption date.  The Paying Agent shall promptly return
to the Company any money deposited with the Paying Agent by the Company in
excess of the amounts necessary to pay the redemption price of, accrued
interest and accrued Additional Interest, if any, on, all Debentures to be
redeemed.

                 If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Debentures or the portions of Debentures called for redemption, whether or
not such Debentures are presented for payment.  If a Debenture is redeemed on
or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest (and Additional Interest, if
any) as of such record date shall be paid to the Person in whose name such
Debenture was registered at the close of business on such record date.  If any
Debenture called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the
Debentures.  Any funds deposited by the Company pursuant to the preceding
paragraph that are not claimed by the Holders within one year of such deposit
shall be returned to the Company, subject to the requirements of any applicable
law which would require a different disposition of such funds.





                                       24
<PAGE>   31

SECTION 3.5  DEBENTURES REDEEMED IN PART

                 Upon surrender of a Debenture that is redeemed in part, the
Company shall issue and, upon the Company's written direction, the Trustee
shall authenticate for the Holder at the expense of the Company a new Debenture
equal in principal amount to the unredeemed portion of the Debenture
surrendered.

SECTION 3.6  OPTIONAL REDEMPTION

                 At any time on or after March 1, 1998, the Company may, at its
option, upon not less than 30, nor more than 60 days' notice, on the date
specified in such notice, redeem all or a portion of the Debentures by
prepaying all or a portion of the principal amount of the Debentures (in
integral multiples of $1000), at the following redemption prices (expressed as
percentages of the principal amount to be redeemed) plus accrued and unpaid
interest, and any accrued and unpaid Additional Interest on such principal
amount as of the redemption date:

If redeemed during the 12 month period beginning March 1 of the years
indicated:

<TABLE>
<CAPTION>
                 Year                              Redemption Price
                 ----                              ----------------
                 <S>                                    <C>
                 1998                                   104.700%
                 1999                                   104.113%
                 2000                                   103.525%
                 2001                                   102.938%
                 2002                                   102.350%
                 2003                                   101.763%
                 2004                                   101.175%
                 2005                                   100.588%
</TABLE>

and, on or after March 1, 2006, at a redemption price equal to 100% of the
principal amount plus accrued and unpaid interest, and any accrued and unpaid
Additional Interest related thereto.

provided, however, that the Debentures may not be redeemed prior to March 1,
1999 unless the Closing Price of the Common Stock equals or exceeds 140% of the
then effective Conversion Price of the Debentures for at least 20 out of 30
consecutive trading days ending within 20 calendar days before the mailing of
the notice to be provided in connection with such redemption.

SECTION 3.7  NO MANDATORY REDEMPTION

                 Except as set forth below under Section 4.7 hereof, the
Company shall not be required to make mandatory redemption or sinking fund
payments with respect to the Debentures.





                                       25
<PAGE>   32

SECTION 3.8  SELECTION OF DEBENTURES TO BE REDEEMED

                 If less than all the Debentures are to be redeemed, the
particular Debentures (or portions thereof) to be redeemed shall be selected
from Debentures by lot or by such method as the Trustee considers fair and
appropriate (and in such manner as complies with applicable requirements of any
stock exchange on which the Debentures are listed) and which may provide for
the selection for redemption of portions in principal amount of $1,000 or any
integral multiple thereof).  Provisions of this Indenture that apply to
Debentures called for redemption also apply to portions of Debentures called
for redemption.  If any Debenture selected for partial redemption is converted
in part after such selection but before the termination of the conversion right
with respect to the portion of the Debenture so selected, the converted portion
of such Debenture shall be deemed (so far as may be practicable) to be the
portion selected for redemption.

                                   ARTICLE 4.
                                   COVENANTS

SECTION 4.1  PAYMENT OF DEBENTURES

                 The Company shall pay or cause to be paid the principal of,
Additional Interest, if any, and interest on the Debentures on the dates and in
the manner provided in the Debentures and in this Indenture.  Principal,
Additional Interest, if any, and interest, as applicable, shall be considered
paid on the date due if the Paying Agent, if other than the Company, holds as
of 10:00 a.m. Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, Additional Interest, if any, and interest then due.

                 The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at
the applicable interest rate on the Debentures to the extent lawful.  Any such
default interest payments shall be made in the same manner and in accordance
with the same provisions as regular interest payments.

                 The Company shall notify the Trustee of the Company's
obligation, if any, to pay Additional Interest to any Holders of Debentures no
later than five Business Days following the occurrence of the event giving rise
to the Company's obligation to pay such Additional Interest.





                                       26
<PAGE>   33

SECTION 4.2  MAINTENANCE OF OFFICE OR AGENCY

                 The Company shall maintain in the Borough of Manhattan, City
of New York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Debentures may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Debentures and this Indenture
may be served.  The Company shall give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency.  If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.

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

                 The Company hereby designates the Corporate Trust Office of
the Trustee at 114 West 47th Street, New York, NY 10036 as one such office or
agency of the Company in accordance with Section 2.3 hereof.

SECTION 4.3  REPORTS

                 Whether or not required by the rules and regulations of the
SEC, for so long as any Debentures are outstanding, the Company shall furnish
to the Trustee within 15 days after it files them with the SEC copies of the
annual report and of any other information, documents and other reports which
the Company files with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act.  The Company shall also comply with the provisions of TIA Section 314(a).

SECTION 4.4  COMPLIANCE CERTIFICATE

         (a)     The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year of the Company, an Officers' Certificate
stating whether or not, to the knowledge of such officer, the Company has
complied with all conditions and covenants on its part contained in this
Indenture, and if such officer has obtained knowledge of any default by the
Company in





                                       27
<PAGE>   34

the performance, observance or fulfillment of any such condition or covenant,
specifying each such default and the nature thereof.

         (b)     The Company shall, so long as any of the Debentures are
outstanding, promptly deliver to the Trustee upon any such Officer becoming
aware of any Default or Event of Default, an Officers' Certificate specifying
any such Default or Event of Default and what action the Company is taking or
proposes to take with respect thereto.

SECTION 4.5  STAY, EXTENSIONS AND USURY LAWS

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

SECTION 4.6  [INTENTIONALLY DELETED]

SECTION 4.7  OFFER TO PURCHASE UPON CHANGE OF CONTROL

         (a)     Subject to Section 10.3 hereof, upon the occurrence of a
Change of Control, at any time after the Issuance Date and on or prior to the
maturity of the Debentures, the Company shall commence an offer in the manner
provided by this Section 4.7 (the "Change of Control Offer") to repurchase each
Holder's Debentures at an offer price in cash equal to 100% of the aggregate
principal amount thereof plus accrued and unpaid interest and Additional
Interest, if any, thereon (the "Change of Control Payment") at the change of
control purchase date, which shall be a business day no earlier than 15
Business Days nor later than 30 Business Days from the date of the mailing of
the notice required by Section 4.7(b) hereof (the "Change of Control Purchase
Date").  If a Change of Control shall have occurred, the Company shall purchase
the Debentures of an electing Holder by delivering the Change of Control
Payment on the Change of Control Purchase Date subject to satisfaction by the
Holder of any relevant requirements herein.

         (b)     Within 15 Business Days after the occurrence of a Change of
Control, the Company will mail a notice to the Trustee and to each Holder and
at such time will cause a copy of such notice to be published in The Wall
Street Journal, or if no





                                       28
<PAGE>   35

longer published, in a national newspaper of general circulation, stating:

                   (i)    the events causing such Change of Control and the
         date of the consummation of the Change of Control;

                  (ii)    the Change of Control Purchase Date;

                 (iii)    the amount of the Change of Control Payment;

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

                   (v)    the Conversion Price and any adjustments thereto
         resulting from such Change of Control, if any;

                  (vi)    that Debentures as to which a Change of Control
         Purchase Notice has been tendered to the Company may thereafter be
         converted in accordance with Article 11 hereof only if the Change of
         Control Purchase Notice has been withdrawn in accordance with the
         terms of this Indenture;

                 (vii)    that tendered Debentures will cease to accrue
         interest after the Change of Control Purchase Date;

                (viii)    that the Change of Control Payment for any Debenture
         as to which a Change of Control Purchase Notice has been duly given
         and not withdrawn will be paid promptly following the later of the
         Change of Control Purchase Date and the time of surrender of such
         Debenture as described in clause (h);

                  (ix)    the procedures the Holder must follow to exercise
          rights under this Section 4.7;

                   (x)    a brief description of the conversion rights of the 
          Debentures; and

                  (xi)    the procedures for withdrawing a Change of Control 
          Purchase Notice.

         (c)     A Holder may exercise its rights specified in this Section 4.7
by delivering a written notice of purchase (a "Change of Control Purchase
Notice") to the Paying Agent at any time prior to the close of business on the
Change of Control Purchase Date, stating:

                   (i)     the certificate number of the Debenture that such
          Holder will deliver to be purchased;

                  (ii)     the portion of the principal amount of such Debenture
          (in increments of the minimum authorized $1,000 denomination) that
          such Holder will deliver to be purchased;





                                       29
<PAGE>   36


                 (iii)    that such Debenture is to be purchased by the Company
          pursuant to the terms and conditions of this Indenture.

                 The delivery of such Debenture (together with all necessary
endorsements) to the Paying Agent prior to the close of business on the Change
of Control Purchase Date at the offices of the Paying Agent shall be a
condition to the receipt by the Holder of the Change of Control Payment
therefor, provided, however, that such Change of Control Payment shall be paid
pursuant to this Section 4.7 only if the Debenture so delivered to the Paying
Agent shall conform in all respects to the description thereof set forth in the
related Change of Control Purchase Notice and such notice shall have been
received by the Paying Agent prior to the close of business on the Change of
Control Purchase Date.

                 The Company shall purchase from the Holder thereof, pursuant
to this Section 4.7, a portion of the Debenture if such portion is equal to the
minimum authorized denomination for Debentures or an integral multiple of
$1,000 in excess thereof.  Provisions of this Indenture that apply to the
purchase of a Debenture also apply to the purchase of a portion of such
Debenture.

                 The Paying Agent shall advise the Company, on a daily basis
following the mailing of the notice of the Change of Control to Holders as
contemplated by this Section 4.7, of all Change of Control Purchase Notices and
all written notices of withdrawal thereof received by the Paying Agent.

                 Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Change of Control Purchase Notice
contemplated by this Section 4.7 shall have the right to withdraw such Change
of Control Purchase Notice at any time prior to the close of business on the
Change of Control Purchase Date by delivery of a written notice of withdrawal
to the Paying Agent in the form of a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Debentures to have been purchased, the principal amount of the Debentures which
remains subject to the original Change of Control Purchase Notice and which has
been or will be delivered for purchase by the Company (if applicable) and a
statement that such Holder is withdrawing his election to have such Debentures
purchased.

                 Notwithstanding anything herein to the contrary, for so long
as any Designated Senior Debt is outstanding, in the event of the occurrence of
any event or series of events which constitute a Change of Control under clause
(ii) of the definition of such term under this Indenture (that does not
otherwise constitute a Change of Control under clause (i) of the definition of
such term), the





                                       30
<PAGE>   37

Company shall not commence its Change of Control Offer resulting from such
Change of Control until the later to occur of (i) April 15, 1997 and (ii) 15
Business Days following the occurrence of such Change of Control; provided that
the purchase of any Debentures pursuant to this Section 4.7 shall in any event
be subject to the provisions of Article 6 and Article 10 hereof.

         (d)     Upon receipt by the Company of the Change of Control Purchase
Notice, the Holder of the Debenture in respect of which such Change of Control
Purchase Notice was given shall (unless such Change of Control Purchase Notice
is withdrawn as specified herein) thereafter be entitled to receive solely the
Change of Control Payment with result to such Debenture.  Such Change of
Control Payment shall be paid to such Holder promptly following the later of
(x) the second Business Day next following the Change of Control Purchase Date
with respect to such Debenture and (y) the time of delivery of such Debenture
to the Paying Agent by the Holder thereof.  If a Change of Control Purchase
Notice has been timely given by a Holder in respect of a Debenture, such
Debenture may not be converted pursuant to the provisions of Article 11 on or
after the date of the delivery of such Change of Control Purchase Notice,
unless such Change of Control Purchase Notice has first been validly withdrawn
as specified herein.  The purchase of any Debentures pursuant to this Section
4.7 shall also be subject to the restrictions of Article 10.

         (e)     On or before the second Business Day next following the Change
of Control Purchase Date, the Company shall deposit with the Trustee or with
the Paying Agent (or, if the Company or a Subsidiary is acting as the Paying
Agent, shall segregate and hold in trust) an amount of money sufficient to pay
the aggregate Change of Control Payment of all the Debentures or portions
thereof with respect to which a Change of Control Purchase Notice has been
delivered and not withdrawn and which are to be purchased as of the Change of
Control Purchase Date.

         (f)     Any Debenture which is to be purchased only in part shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Debenture, without service charge, a new Debenture or Debentures, of any
authorized denomination as required by such holder, in aggregate principal
amount equal to, and in exchange for, the portion of the principal amount of
the Debenture so surrendered which is not purchased and, if a global Debenture
is so surrendered, the Company shall execute and the Trustee shall authenticate
and deliver to the depositary for such global Debenture, without service
charge, a new global Debenture





                                       31
<PAGE>   38

in a denomination equal to and in exchange for the unpurchased portion of the
principal amount of the global Debenture so surrendered.

         (g)     In connection with any Change of Control Offer under this
Section 4.7 (provided that such offer or purchase constitutes an "issuer tender
offer" for purposes of Rule 13e-4 of the General Rules and Regulations under
the Exchange Act ("Rule 13e-4", which term, as used herein, includes any
successor provision thereto) at the time of such offer or purchase), the
Company shall (i) comply with Rule 13e-4, (ii) file the related Schedule 13E-4
(or any successor schedule, form or report) under the Exchange Act, and (iii)
otherwise comply with all Federal securities law, and use reasonable efforts to
comply with all state securities laws, regulating the Change of Control Offer
and delivery of the Change of Control Payment upon purchase of the Debentures,
so as to permit the rights and obligations under this Section 4.7 to be
exercised in the time and in the manner specified in this Section 4.7.

         (h)     To the extent that the aggregate amount of cash deposited by
the Company pursuant to this Section 4.7 exceeds the aggregate Change of
Control Payment of the Debentures or portions thereof that the Company is
obligated to purchase pursuant to this Section 4.7, then promptly after the
second Business Day next following the Change of Control Purchase Date the
Trustee or the Paying Agent, as the case may be, shall return any such excess
to the Company.

         (i)     Notwithstanding anything to the contrary in this Indenture, if
the Company shall have deposited with the Trustee or with the Paying Agent (or,
if the Company or a subsidiary is acting as the Paying Agent, shall segregate
and hold in trust) an amount of money sufficient to pay the aggregate Change of
Control Payment for all the Debentures or portions thereof which are required
to be purchased as of the Change of Control Purchase Date pursuant to this
Section 4.7, then from and after such date all obligations of the Company in
respect of such Debentures or portions thereof shall cease and be discharged.

         (j)     The Company may omit in any particular instance to comply with
any term, provision or condition set forth in this Section 4.7 with respect to
the Debentures if before the time for such compliance the Holders of at least a
majority in principal amount of the outstanding Debentures shall 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.  The Company





                                       32
<PAGE>   39

shall provide to the Trustee an Officers' Certificate that such a waiver has
been given, which Officers' Certificate shall contain the terms, provisions or
conditions waived thereby.

SECTION 4.8  CORPORATE EXISTENCE

                 The Company shall do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate existence and the
corporate, partnership or other existence of each of its Significant
Subsidiaries; provided that the foregoing shall not prohibit or otherwise
restrict any merger or consolidation (i) not prohibited by Article 5 hereof or
(ii) among the Company and one or more of its Subsidiaries (including its
Significant Subsidiaries) or among one or more of its Subsidiaries (including
Significant Subsidiaries).

SECTION 4.9  PAYMENTS FOR CONSENT

                 Neither the Company nor any of its Subsidiaries shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder of any Debentures for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Debentures unless such consideration is
offered to be paid or agreed to be paid to all Holders of the Debentures that
consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or agreement.

SECTION 4.10  CALCULATION OF ORIGINAL ISSUE DISCOUNT

                 If the Debentures are determined to have been issued with any
original issue discount, the Company shall file with the Trustee promptly at
the end of each calendar year a written notice specifying the amount of
original issue discount (including daily rates and accrued periods), if any,
accrued on outstanding Debentures as of the end of such year.


                                   ARTICLE 5.
                                   SUCCESSORS

SECTION 5.1  MERGER, CONSOLIDATION, OR SALE OF ASSETS

                 The Company shall not consolidate with or merge with or into
or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions, to another corporation, Person or entity unless (i) the Company
is the surviving corporation or the entity or the Person formed by or surviving
any such consolidation or merger (if other than the Company) or to which such
sale, assignment, transfer, lease, conveyance or





                                       33
<PAGE>   40

other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the
Debentures and this Indenture pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee; and (iii) immediately after such
transaction no Default or Event of Default exists.

SECTION 5.2  SUCCESSOR CORPORATION SUBSTITUTED

                 Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Company in accordance with Section 5.1 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged (if other than the Company) or to which such sale, assignment, transfer,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such consolidation, merger,
sale, lease, conveyance or other disposition, the provisions of this Indenture
referring to the "Company" shall refer instead to the successor corporation and
not to the Company), 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; provided, however, that the predecessor Company
shall not be relieved from the obligation to pay the principal of, interest and
Additional Interest, if any, on the Debentures except in the case of a sale of
all or substantially all of the Company's assets that meets the requirements of
Section 5.1 hereof.


                                   ARTICLE 6.
                           CERTAIN DEFAULT PROVISIONS

SECTION 6.1  EVENTS OF DEFAULT

                 An "Event of Default" occurs if:

         (a)     the Company defaults in the payment of interest on, or
Additional Interest, if any, on the Debentures (whether or not such payment is
prohibited by the subordination provisions of Article 10 hereof) when the same
becomes due and payable and such default continues for a period of 30 days;

         (b)      the Company defaults in the payment of principal of the
Debentures (whether or not such payment is prohibited by the subordination
provisions of Article 10 hereof) when the same becomes due and payable at
maturity, upon redemption, upon





                                       34
<PAGE>   41

purchase by the Company pursuant to a Change of Control Purchase Notice or
otherwise;

         (c)     the Company fails to comply with any of its other covenants
(including, but not limited to, the covenant to commence a Change of Control
Offer upon the occurrence of a Change of Control) in, the Debentures, or this
Indenture after the giving of notice and the failure to cure as specified
below;

         (d)     maturity of any Senior Debt is accelerated by the applicable
holder(s) or its or their Representative, if the aggregate principal amount
(or, if applicable, issue price plus accrued original issue discount, if any)
of the Senior Debt the maturity of which has been accelerated exceeds $10
million, unless within 30 days after the Company's receipt of written notice of
such Default hereunder such acceleration is rescinded or annulled, such Senior
Debt is paid or such acceleration is contested by appropriate proceedings and
all consequences thereof that would have a material adverse effect on the
Company stayed (without the Company's having posted a bond or surety or entered
into a similar arrangement);

         (e)     a final judgment or final judgments (in each case not subject
to further appeal) for the payment of money in excess of $5,000,000 are entered
by a court or courts of competent jurisdiction against the Company or any of
its Subsidiaries and such judgments are not paid, discharged or stayed for a
period of more than 90 days of the entry of the last of such judgments and are
not being contested by the Company in good faith;

         (f)     pursuant to or within the meaning of any Bankruptcy Law, the
Company, any of its Subsidiaries that is a Significant Subsidiary or any group
of Subsidiaries that, taken together, would constitute a Significant
Subsidiary:

                   (i)    commences a voluntary case,

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

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

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

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

                 (i)      is for relief against the Company or any Subsidiary
         or group of Subsidiaries that is a Significant Subsidiary of the
         Company in an involuntary case,





                                       35
<PAGE>   42


                 (ii)     appoints a Custodian of the Company or any Subsidiary
         or group of Subsidiaries that is a Significant Subsidiary of the
         Company or for all or substantially all of the property of the Company
         or any Subsidiary or group of Subsidiaries that is a Significant
         Subsidiary of the Company, or

                (iii)     orders the liquidation of the Company or any
         Subsidiary or group of Subsidiaries that is a Significant Subsidiary 
         of the Company,

and the order or decree remains unstayed and in effect for 90 consecutive days.

                 A Default under clause (c) is not an Event of Default until
the Trustee notifies the Company, or the Holders of at least 25% in principal
amount of the then outstanding Debentures notify the Company and the Trustee,
of the Default and the Company does not cure the Default in all material
respects within 60 days after receipt of the notice.  The notice must specify
the Default, demand that it be remedied and state that the notice is a "Notice
of Default."

SECTION 6.2  ACCELERATION

         (a)     Subject to the provisions of Section 6.2(b) hereof, if an
Event of Default (other than an Event of Default specified in clauses (f) and
(g) of Section 6.1 hereof relating to the Company or any Significant
Subsidiary) occurs and is continuing, the Trustee, by notice to the Company, or
the Holders of at least 25% in principal amount of the then outstanding
Debentures, by notice to the Company and the Trustee, may declare the unpaid
principal of and any accrued interest on and all other Obligations with respect
to all the Debentures to be due and payable.  Upon such declaration the
principal of, and interest and Additional Interest, if any, on the Debentures
shall be due and payable immediately.  Subject to the provisions of Section
6.2(b) hereof, if an Event of Default specified in clause (f) or (g) of Section
6.1 hereof occurs, such an amount shall ipso facto become and be immediately
due and payable without any declaration or other act on the part of the Trustee
or any Holder.

         (b)     At any time when there is outstanding any Senior Debt, in the
event of any "Event of Default" under this Article 6, neither the Trustee nor
any Holder of a Debenture shall, for a period (the "Standstill Period") of 180
days commencing on the date of occurrence of such Event of Default (or such
shorter period as is applicable if such Event of Default is cured or waived or
ceases to exist): (i) by declaration accelerate (including pursuant to the last
sentence of Section 6.2(a)), the maturity of the principal of and accrued
interest on, or other amount with respect to any of the Indebtedness owing
under the





                                       36
<PAGE>   43

Debenture or this Indenture, unless the Senior Debt shall have been
accelerated, (ii) commence any judicial action or proceeding to collect the
payment of principal of or interest on or other amount with respect to any of
the Indebtedness owing under the Debentures or this Indenture, unless any
holders of the Senior Debt shall have commenced judicial action or proceedings
to collect payment of the principal of or interest on any Senior Debt or (iii)
commence an involuntary case or proceeding in bankruptcy against the Company,
unless any holders of the Senior Debt shall have commenced such a case or
proceeding.  After the end of the Standstill Period, but subject to all other
terms and provisions of this Indenture (other than the preceding terms of this
Section 6.2), the Trustee or Holders of Debentures shall be free to accelerate
(if then permitted under this Indenture) the maturity of the Indebtedness under
the Debentures or this Indenture, to commence any judicial action or proceeding
to collect the Indebtedness under the Debentures or this Indenture or to
commence an involuntary case or proceeding in bankruptcy against the Company.
Notwithstanding the foregoing, no Standstill Period shall commence within 180
days after the expiration of any prior Standstill Period, if any.  In addition
to the foregoing, unless the maturity of the Senior Debt has already been
accelerated, if the Trustee or the Holders of at least 25% in principal amount
of the then outstanding Debentures desire to accelerate the maturity of the
Debentures or the Indebtedness evidenced by this Indenture, it shall give at
least two Business Days' prior written notice to the Representative of Senior
Debt of its intent to accelerate prior to effecting such acceleration (which
notice may be given during the Standstill Period).

         (c)     At any time during the continuation of a Standstill Period
arising from the occurrence of an "Event of Default" as defined in this
Indenture, the Representative of Senior Debt or any of the holders of the
Senior Debt may cure such Event of Default, and the Holders of the Debentures
shall accept such cure.  In addition, if (i) the Senior Debt has been
accelerated as a result of any event of default under such Senior Debt and (ii)
such event of default subsequently is cured or waived and any such acceleration
is rescinded by the Representative of the Senior Debt or the holders of the
Senior Debt, then (x) any Event of Default existing under Section 6.1(d) of
this Indenture solely as a result of such event of default or acceleration
under the Senior Debt shall be deemed cured (effective as of the date of the
cure or waiver of such event of default under the Senior Debt) and (y) the
Holders of the Debentures shall rescind any acceleration of the Debentures
attributable solely thereto; provided, however, that such Event of Default
under this Agreement shall be deemed cured and such rescission of the
acceleration of the Debentures shall be effective only if the cure of the event
of default under the Senior Debt and the rescission of any such acceleration
under the Senior Debt occurs





                                       37
<PAGE>   44

prior to the time that the Trustee or the Holders of at least 25% in principal
amount of the then outstanding Debentures has commenced any judicial action or
proceeding or any involuntary case or proceeding in bankruptcy as permitted by
Section 6.2(a) hereof.  The Trustee or any Holder of a Debenture that desires
to commence any judicial action or proceeding or any involuntary case or
proceeding in bankruptcy as permitted by Section 6.2(a) hereof shall give at
least five Business Days' prior written notice to the Representative of the
Senior Debt before commencing such judicial action or proceeding or such
involuntary case or proceeding in bankruptcy.

SECTION 6.3  OTHER REMEDIES

                 Subject to Section 6.2, if an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of, and interest and Additional Interest, if any, on the
Debentures or to enforce the performance of any provision of the Debentures or
this Indenture.

                 The Trustee may maintain a proceeding even if it does not
possess any of the Debentures or does not produce any of them in the
proceeding.  A delay or omission by the Trustee or any Holder of a Debenture in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default.  All remedies are cumulative to the extent permitted by law.

SECTION 6.4  WAIVER OF PAST DEFAULTS

                 Holders of not less than a majority in aggregate principal
amount of the Debentures then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Debentures waive an existing Default or
Event of Default and its consequences hereunder, except a continuing Default or
Event of Default in the payment of the principal of, or interest on the
Debentures, and Additional Interest, if any (provided, however, that the
Holders of a majority in aggregate principal amount of the then outstanding
Debentures may rescind an acceleration and its consequences, including any
related payment default that resulted from such acceleration).  Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereon.

SECTION 6.5  CONTROL BY MAJORITY

                 Holders of a majority in principal amount of the then
outstanding Debentures may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it.





                                       38
<PAGE>   45

However, the Trustee may refuse to follow any direction that (a) conflicts with
law or this Indenture or (b) the Trustee determines may be unduly prejudicial
to the rights of other Holders of Debentures or that may involve the Trustee in
personal liability unless, in the case of clause (b) above, it is given
satisfactory indemnity pursuant to Section 7.1(e) hereof.

SECTION 6.6  LIMITATION ON SUITS

                 Subject to the provisions of Section 6.2(b) and (c) hereof, a
Holder of a Debenture may pursue a remedy with respect to this Indenture or the
Debentures if, and only if all of the following occur:

         (a)     the Holder of a Debenture gives to the Trustee written notice
of a continuing Event of Default or the Trustee receives such notice from the
Company;

         (b)     the Holders of at least 25% in principal amount of the then
outstanding Debentures make a written request to the Trustee to pursue the
remedy;

         (c)     such Holder of a Debenture or Holders of Debentures offer and,
if requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;

         (d)     the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and

         (e)     during such 60-day period the Holders of a majority in
principal amount of the then outstanding Debentures do not give the Trustee a
direction inconsistent with the request.

                 A Holder of a Debenture may not use this Indenture to
prejudice the rights of another Holder of a Debenture or to obtain a preference
or priority over another Holder of a Debenture. Nothing contained in this
Section 6.6 shall affect the right of a Holder of a Debenture to sue for
enforcement of any overdue payment thereon.

SECTION 6.7  RIGHTS OF HOLDERS OF DEBENTURES TO RECEIVE PAYMENT

                 Notwithstanding any other provision of this Indenture , the
right of any Holder of a Debenture to receive payment of principal of and
interest on the Debentures, and Additional Interest, if any, on or after the
respective due dates expressed in the Debentures, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.





                                       39
<PAGE>   46

SECTION 6.8  COLLECTION SUIT BY TRUSTEE

                 Subject to Article 10, if an Event of Default specified in
Section 6.1(a) or (b) hereof occurs and is continuing and the maturity of the
Debentures is accelerated in accordance with Section 6.2, the Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Company for the whole amount of principal of, and interest
remaining unpaid on the Debentures, premium thereon and Additional Interest, if
any, to the extent lawful, interest and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses disbursements and advances of the Trustee,
its agents and counsel.

SECTION 6.9  TRUSTEE MAY FILE PROOFS OF CLAIM

                 Subject to Article 10, in case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other similar judicial proceeding relative to the
Company or any other obligor upon the Debentures or the property of the Company
or of such other obligor or their creditors, the Trustee (irrespective of
whether the principal of the Debentures shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Company for the payment of
overdue principal or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise,

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

         (b)  to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same in accordance with
the Indenture; and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or similar official in any such judicial proceeding is hereby
authorized by each Holder 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 the Holders, to pay the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section 7.7
hereof.





                                       40
<PAGE>   47

                 Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
of any Debenture any proposal, plan of reorganization, arrangement, adjustment
or composition or other similar arrangement affecting the Debentures or the
rights of any Holder thereof, or to authorize the Trustee to vote in respect of
the claim of any Holder in any such proceeding.

SECTION 6.10  PRIORITIES

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

                          First:  to the holders of Senior Debt of the Company,
         to the extent required by Article 10 hereof.

                          Second:  to the Trustee, its agents and attorneys for 
         amounts due under Section 7.7 hereof;

                          Third:  to Holders of Debentures for amounts due and
         unpaid on the Debentures for principal, and Additional Interest, if
         any, and interest, ratably, without preference or priority of any
         kind, according to the amounts due and payable on the Debentures for
         principal, and Additional Interest, if any, and interest,
         respectively, and any other Obligations due and payable; and

                          Fourth:  to the Company or to such party as a court 
         of competent jurisdiction shall direct.

The Trustee may fix a record date and payment date for any payment to Holders
of Debentures pursuant to this Section 6.10.

SECTION 6.11  UNDERTAKING FOR COSTS

                 In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant.  This Section does not apply to a suit by the Trustee, a suit by a
Holder of a Debenture pursuant to Section 6.7 hereof, or a suit by Holders of
more than 10% in principal amount of the then outstanding Debentures.





                                       41
<PAGE>   48


                                   ARTICLE 7.
                                    TRUSTEE

SECTION 7.1  DUTIES OF TRUSTEE

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

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

                 (i)      the duties of the Trustee shall be determined solely
         by the express provisions of this Indenture and the TIA and the
         Trustee need perform only those duties that are specifically set forth
         in this Indenture and the TIA and no others, and no implied covenants
         or obligations shall be read into this Indenture against the Trustee;
         and

                 (ii)     in the absence of bad faith on its part, the Trustee
         may conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon certificates or
         opinions furnished to the Trustee and conforming to the requirements
         of this Indenture.  However, the Trustee shall examine the
         certificates and opinions to determine whether or not they conform to
         the requirements of this Indenture.

         (c)     The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

                 (i)      this paragraph does not limit the effect of paragraph
         (b) of this Section;

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

                 (iii)    the Trustee shall not be liable with respect to any
         action it takes or omits to take in good faith in accordance with a
         direction received by it pursuant to Section 6.5 hereof.

         (d)     Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.





                                       42
<PAGE>   49

         (e)     No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability.  The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.

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

         (g)     Except with respect to Sections 4.1 (other than with respect
to Additional Interest, if any) and 4.3 herein, the Trustee shall have no duty
to inquire as to the performance of the Company's covenants in Article 4
hereof.  In addition, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default except (i) any Event of Default occurring pursuant
to Sections 6.1(a), 6.1(b), 4.1 (other than with respect to Additional
Interest, if any), (ii) any Default or Event of Default as may be set forth in
an Officer's Certificate provided pursuant to Section 4.4 hereof or of which
the Trustee shall have received written notification or (iii) any Default or
Event of Default under the Credit Agreement or the BNY Facility Agreement of
which the Trustee shall have received written notification from the
Representative.  For purposes of the immediately preceding sentence, receipt by
the Trustee of any report or document furnished pursuant to Section 4.3 hereof
which contains information regarding any Default or Event of Default shall not
constitute receipt by the Trustee of notice of such Default or Event of
Default.

SECTION 7.2  RIGHTS OF TRUSTEE

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

         (b)     Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel.  The Trustee may
consult with counsel, the reasonable cost of which will be borne by the
Company, and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.





                                       43
<PAGE>   50

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

         (d)     The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.

         (e)     Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.

         (f)     Subject to the provisions of Section 7.1(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, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further inquiry
or investigation, it shall be entitled to examine the books, records and
premises of the Company personally or by agent or attorney;

         (g)     The Trustee shall not be deemed to have knowledge of the
occurrence of a Change of Control until the Trustee receives written notice
thereof from the Company or the Representative.

SECTION 7.3  INDIVIDUAL RIGHTS OF TRUSTEE

                 The Trustee in its individual or any other capacity may become
the owner or pledgee of Debentures and may otherwise deal with the Company, any
of its Subsidiaries or any Affiliate of the Company with the same rights it
would have if it were not the Trustee.  However, in the event that the Trustee
acquires any conflicting interest (as such term is used in the TIA) it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign.  Any Agent may do the same with like rights and
duties.  The Trustee is also subject to Sections 7.10 and 7.11 hereof.

SECTION 7.4  TRUSTEE'S DISCLAIMER

                 The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the
Debentures, it shall not be accountable for the Company's use of the proceeds
from the Debentures or any money paid to the Company or upon the Company's
direction under any provision of this Indenture, it shall not be responsible
for the use or application of any money received by any Paying Agent other than





                                       44
<PAGE>   51

the Trustee, and it shall not be responsible for any statement or recital
herein or any statement in the Debentures or any other document in connection
with the sale of the Debentures or pursuant to this Indenture other than its
certificate of authentication.

SECTION 7.5  NOTICE OF DEFAULTS

                 If a Default or Event of Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to the Holders of the
Debentures a notice of the Default or Event of Default within 90 days after it
occurs.  Except in the case of a Default or Event of Default in payment of
principal of, or interest or Additional Interest, if any, on any Debenture, the
Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of the Holders of the Debentures.

SECTION 7.6  REPORTS BY TRUSTEE TO HOLDERS OF THE DEBENTURES

                 Within 60 days after each September 1st beginning with the
September 1st following the date of this Indenture, and for so long as
Debentures remain outstanding, the Trustee shall mail to the Holders of the
Debentures a brief report dated as of such reporting date that complies with
TIA Section 313(a) (but if no event described in TIA Section 313(a) has
occurred within the twelve months preceding the reporting date, no report need
be transmitted).  The Trustee also shall comply with TIA Section 313(b)(2).
The Trustee shall also transmit by mail all reports as required by TIA Section
313(c).

                 A copy of each report at the time of its mailing to the
Holders of Debentures shall be mailed to the Company and filed with the SEC and
each stock exchange on which the Debentures are listed in accordance with TIA
Section 313(d).  The Company shall promptly notify the Trustee when the
Debentures are listed on any stock exchange.

SECTION 7.7  COMPENSATION AND INDEMNITY

                 The Company shall pay to the Trustee from time to time
reasonable compensation, as agreed upon by the Company and the Trustee prior to
the date of this Indenture for its acceptance of this Indenture and services
hereunder or as thereafter agreed upon.  The Trustee's compensation shall not
be limited by any law on compensation of a trustee of an express trust.  In
addition to compensation for its services, the Company shall reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in accordance with any provisions of this
Indenture, as agreed upon by the Company and the Trustee prior to the date of
this Indenture or as





                                       45
<PAGE>   52

thereafter agreed upon, (including the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel).

                 The Company shall jointly and severally indemnify the Trustee
and its officers, directors, employees and agents from and against any and all
losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Indenture,
including the costs and expenses of enforcing this Indenture against the
Company (including this Section 7.7), and of defending itself against any claim
(whether asserted by the Company or any Holder or any other person) or
liability in connection with the exercise or performance of any of its powers
or duties hereunder, except to the extent any such loss, liability or expense
is caused by the negligence or bad faith of the Trustee. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company
of its obligations hereunder (except to the extent any such failure prejudices
the ability of the Company to defend against such claim).  The Company shall
defend the claim and the Trustee shall cooperate in the defense.  The Trustee
may have separate counsel and the Company shall pay the reasonable fees and
expenses of such counsel.  The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.  Any
such payments and reimbursements shall be made with interest, accruing from the
date any such payment or reimbursement is due up to and including the date such
payment or reimbursement is paid, at the rate borne by the Debentures.

                 The obligations of the Company under this Section 7.7 shall
survive the satisfaction and discharge of this Indenture.

                 To secure all payments due to the Trustee under this
Indenture, the Trustee shall have a Lien prior to the Debentures but
subordinate to the Senior Debt on all money or property held or collected by
the Trustee, except that held in trust to pay principal, and interest on
particular Debentures.  Such Lien shall survive the satisfaction and discharge
of this Indenture.  Subject to Section 6.10, the Trustee's right to receive
payment of any amounts due under this Section 7.7 shall not be subordinate to
any other liability or Indebtedness of the Company (other than the Senior Debt)
(even though the Debentures may be so subordinated).

                 When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1(g) or (h) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.





                                       46
<PAGE>   53

                 The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.

SECTION 7.8  REPLACEMENT OF TRUSTEE

                 A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.

                 The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company.  The
Holders of a majority in principal amount of the then outstanding Debentures
may remove the Trustee by so notifying the Trustee and the Company in writing.
The Company may remove the Trustee if:

         (a)     the Trustee fails to comply with Section 7.10 hereof;

         (b)     the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law:

         (c)     a Custodian or public officer takes charge of the Trustee or
its property; or

         (d)     the Trustee becomes incapable of acting.

                 If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.  Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding
Debentures may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.

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

                 If the Trustee, after written request by any Holder of a
Debenture, fails to comply with Section 7.10 hereof, such Holder of a Debenture
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

                 A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company.  Thereupon, the
resignation or removal of the retiring Trustee





                                       47
<PAGE>   54

shall become effective, and the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture.  The successor Trustee
shall mail a notice of its succession to Holders of the Debentures.  The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, provided all sums owing to the Trustee hereunder have
been paid and subject to the Lien provided for in Section 7.7 hereof.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the
Company's obligations under Section 7.7 hereof shall continue for the benefit
of the retiring Trustee.

SECTION 7.9  SUCCESSOR TRUSTEE BY MERGER, ETC.

                 If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.

SECTION 7.10  ELIGIBILITY; DISQUALIFICATION

                 There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that, together with its Subsidiaries, has a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition.  If, at any time, the Trustee
shall cease to be eligible in accordance with the provisions of this Section
7.10, the Trustee shall resign immediately in the manner and with the effects
specified in this Article 7.  Nothing in this Indenture shall prevent the
Trustee from filing with the SEC the application referred to in the second to
last paragraph of TIA Section 310(b).

                 This Indenture shall always have a Trustee which satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).

SECTION 7.11  PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY

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





                                       48
<PAGE>   55

                                   ARTICLE 8.
                                  REGISTRATION

SECTION 8.1  SHELF REGISTRATION

         (a)     The Company shall use its reasonable best efforts to cause to
be filed on or prior to the date which is six months after the Issuance Date
(the "Shelf Deadline Date"), the Shelf Registration Statement pursuant to Rule
415 under the Securities Act (which Shelf Registration Statement shall provide
for resales of the Transfer Restricted Securities by the Holders thereof), on
such form as the Company deems appropriate, and shall use its reasonable best
efforts to cause such Shelf Registration Statement to be declared effective by
the SEC.  The Company shall use its reasonable best efforts to keep such Shelf
Registration Statement effective, supplemented and amended as required by the
provisions hereof, to the extent necessary to ensure that it is available for
resales of the Transfer Restricted Securities entitled to the benefit of this
Section 8.1, and to ensure that it conforms with the requirements of this
Indenture, the Securities Act and the policies, rules and regulations of the
SEC as announced from time to time, for the Effectiveness Period.

         (b)     No Holder of Transfer Restricted Securities may sell any of
its Transfer Restricted Securities pursuant to the Shelf Registration Statement
pursuant to this Section 8.1 unless and until such Holder furnishes to the
Company in writing, within 20 Business Days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with the Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein or any amendment or supplement thereto.  No Holder
of Transfer Restricted Securities shall be entitled to Additional Interest
pursuant to Section 8.2 hereof unless and until each such Holder shall have
provided all such reasonably requested information.  In connection with any
sale of Transfer Restricted Securities pursuant to the Shelf Registration
Statement, each Holder agrees to furnish as promptly as practicable to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading.

         (c)     Notwithstanding anything to the contrary contained herein, if
at any time after the filing of the Shelf Registration Statement or after it is
declared effective by the SEC, the Company determines, in its reasonable
business judgment, that such registration and offering could reasonably be
expected to interfere with or otherwise adversely affect any financing,
acquisition, corporate reorganization, or other material transaction or
development involving the Company or any of its Affiliates require the Company
to disclose matters that otherwise would not be required to be disclosed at
such time, then the





                                       49
<PAGE>   56

Company may require the suspension of resales of the Transfer Restricted
Securities by giving notice to the Trustee and Holders of Transfer Restricted
Securities.  Any such notice need not specify the reasons for such suspension
if the Company determines, in its reasonable business judgment, that doing so
could reasonably be expected to interfere with or adversely affect such
transaction or development or would result in the disclosure of material
non-public information.  In the event that such notice is given, then until the
Company has determined, in its reasonable business judgment, that such
registration and offering would no longer interfere with the matters described
in the preceding sentence and has given notice thereof to such Holders of
Transfer Restricted Securities, the Company's obligations with respect to
registration pursuant to Article 8 hereunder will be suspended.

         (d)     The Company's obligations under this Indenture shall be
conditioned upon the compliance with the following by Holders of the
Debentures:

                 (i)      Each holder shall cooperate with the Company in
         connection with the preparation of the Shelf Registration Statement,
         and for so long as the Company is obligated to keep the Shelf
         Registration Statement effective, each Holder will provide to the
         Company, in writing, for use in the Shelf Registration Statement, all
         information regarding each Holder and such other information as may be
         necessary to enable the Company to prepare the Shelf Registration
         Statement and any Prospectus (including any supplement or amendment
         thereto) covering the Transfer Restricted Securities and to maintain
         the currency and effectiveness thereof;

                 (ii)     Each Holder shall permit the Company, the agents or
         broker-dealers in any offering or other distribution of Transfer
         Restricted Securities and their respective representatives and agents
         to examine such documents and records and shall supply any information
         as they may reasonably request in connection with the offering or
         other distribution of Transfer Restricted Securities in which such
         Holders propose to participate;

                 (iii)    Each Holder shall enter into such agreements with the
         Company and any agent, broker-dealer or similar securities industry
         professional containing representations, warranties, indemnities and
         agreements as are in each case customarily entered into and made by
         selling stockholders, and will cause its counsel to give any legal
         opinions customarily given, in secondary distributions under similar
         circumstances.





                                       50
<PAGE>   57

SECTION 8.2  ADDITIONAL INTEREST

                 If the Shelf Registration Statement is not filed with the SEC
by the Company on or prior to the Shelf Deadline Date (a "Registration
Default"), the Company hereby agrees to pay each Holder of Debentures,
Additional Interest on the principal amount of the Debentures held by such
holders.  Following a Registration Default, Additional Interest will accrue
from and after the date of such Registration Default at an initial rate of 0.5%
per annum on the principal amount of the Debentures and such rate will increase
in increments of 0.5% per annum at each subsequent six month anniversary of
such Registration Default until the date on which the Shelf Registration
Statement is filed with the SEC, on which date such rate will be fixed and
Additional Interest will continue to accrue at such fixed rate until the Shelf
Registration Statement is declared effective by the SEC.  Accrued and unpaid
Additional Interest (together with stated interest on the Debentures) will be
payable (as determined by the regular record dates for the payment of interest)
by the Company along with and in the same manner as any accrued but unpaid
interest on each subsequent interest payment date following the occurrence of
the Registration Default or upon maturity of the Debentures or earlier
redemption or repurchase pursuant to the terms hereof, notwithstanding a cure
of such Registration Default prior to such interest payment date, date of
maturity or earlier redemption or repurchase.

SECTION 8.3  REGISTRATION PROCEDURE

         (a)     In connection with the Shelf Registration Statement, the
Company shall:

                 (i)      use its reasonable best efforts to cause the Shelf
         Registration Statement to remain effective during the Effectiveness
         Period;

                 (ii)     as expeditiously as practicable prepare and file with
         the SEC any amendments and supplements to the Shelf Registration
         Statement and the prospectus included in the Shelf Registration
         Statement as may be necessary to keep the Shelf Registration Statement
         effective for the Effectiveness Period;

                 (iii)    as expeditiously as practicable furnish to any
         selling Holder such reasonable numbers of copies of the Prospectus,
         including a preliminary Prospectus, in conformity with the
         requirements of the Securities Act, and such other documents as such
         selling Holder may reasonably request in order to facilitate the
         public sale or other disposition of the Transfer Restricted Securities
         owned by such selling Holder;





                                       51
<PAGE>   58

                 (iv)     use its reasonable best efforts to qualify the
         Indenture under the TIA; and

                  (v)     as expeditiously as practicable use its reasonable
         best efforts to register or qualify the Transfer Restricted Securities
         covered by the Shelf Registration Statement under the securities or
         Blue Sky laws of such states as any selling Holder shall reasonably
         request, and to do any and all other acts and things that may be
         necessary or desirable to enable such selling Holder to consummate the
         public sale or other disposition in such states of the Transfer
         Restricted Securities owned by such selling Holder.

         (b)     If the Company has delivered preliminary or final prospectuses
to the selling Holders after requests therefor, and after having done so the
Prospectus is amended to comply with the provisions of the Securities Act or
sales are to be suspended under Section 8.1(c) hereof, the Company shall
promptly notify such Holders and, if requested, such Holders shall immediately
cease making offers of Transfer Restricted Securities and return all
Prospectuses to the Company.  The Company shall as  promptly as practicable
provide such Holders with revised Prospectuses and, following receipt of the
revised Prospectuses, such Holders shall be free to resume making offers of the
Transfer Restricted Securities.

SECTION 8.4  INDEMNIFICATION

         (a)     The Company will indemnify each Holder, each of its officers,
directors and partners, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, with respect to which
registration, qualification or compliance has been effected pursuant to Section
8.1, against all expenses, claims, losses, damages or liabilities (or actions
in respect thereof), including any of the foregoing incurred in settlement of
any litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in the
Registration Statement, or other document (or any amendment or supplement
thereto), incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
promulgated under the Securities Act applicable to the Company in connection
with any such registration, qualification or compliance, and the Company will
reimburse each such Holder, each of its officers and directors, and each person
controlling such Holder, for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, provided that





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<PAGE>   59

the Company will not be liable in any such case to the extent that any such
claim, loss, damage, liability or expense (i) arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission, made in
reliance upon and in conformity with written information furnished to the
Company by such Holder or controlling person specifically for use therein; (ii)
arises out of or is based on the failure of such Holder to deliver the most
recent Prospectus (or supplement or amendment thereto provided by the Company);
or (iii) arises out of or is based upon the delivery of a Prospectus by such
Holder following such time as the Company has notified the Holders that such
Prospectus must be amended or supplemented or during a period when resales are
suspended by the Company pursuant to Section 8.1(c) hereof.

         (b)     Each Holder will indemnify the Company, each of its directors
and officers, each person who controls the Company within the meaning of
Section 15 of the Securities Act, and each other such Holder, each of its
officers and directors and each person controlling such other Holder within the
meaning of Section 15 of the Securities Act, against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in the Registration Statement or other document (or any amendment or
supplement thereto), incident to any such registration, qualification or
compliance based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
and will reimburse the Company, such other Holders, such directors, officers or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, (i)
that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in the Registration Statement or other document (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Holder specifically for
use therein; (ii) arises out of or is based on the failure of such Holder to
deliver the most recent Prospectus available or supplement or amendment thereto
provided by the Company; or (iii) arises out of or is based upon the delivery
of a Prospectus by such Holder following such time as the Company has notified
the Holders that such Prospectus must be amended or supplemented or during a
period when resales are suspended by the Company pursuant to Section 8.1(c)
hereof.  Notwithstanding the foregoing, the liability of each Holder under this
Section 8.4(b) shall be limited to an amount equal to the gross proceeds
received by such Holder in connection with the sale of shares by such Holder,
unless such liability arises out of or is based on willful conduct by such
Holder.





                                       53
<PAGE>   60


         (c)     Each party seeking indemnification under this Section 8.4 (the
"Indemnified Party") shall give notice to the party from which it is seeking
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting therefrom, provided that the Indemnified Party may
participate in such defense at such party's expense, and provided further that
the failure of any Indemnified Party to give notice as provided herein shall
not relieve the Indemnifying Party of its obligations under this Section 8.4
unless the failure to give such notice is materially prejudicial to an
Indemnifying Party's ability to defend such action and provided further, that
the Indemnifying Party shall not assume the defense for matters as to which, it
has been advised by a written opinion of counsel to such Indemnified Party
there is a conflict of interest or separate and different defenses that result
in such a conflict of interest.  No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.

SECTION 8.5  REGISTRATION EXPENSES

                 All expenses incident to the Company's performance of or
compliance with the registration requirements of this Indenture will be borne
by the Company, regardless of whether a Registration Statement becomes
effective, including without limitation:  (i) all registration and filing fees
and expenses (including filings made by any Holder with the NASD; (ii) all fees
and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing, messenger and delivery
services and telephone; (iv) all fees and disbursements of counsel for the
Company; (v) any application and filing fees in connection with listing the
Transfer Restricted Securities on a national securities exchange or automated
quotation system including the listing of the Common Stock issuable upon
conversion of the Debentures; and (vi) all fees and disbursements of
independent certified public accountants of the Company (including the expenses
of any special audit and comfort letters required by or incident to such
performance).

                 The Company will, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any Person, including special experts,
retained by the Company.





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<PAGE>   61


                                   ARTICLE 9.
                        AMENDMENT, SUPPLEMENT AND WAIVER

SECTION 9.1  WITHOUT CONSENT OF HOLDERS OF DEBENTURES

                 Notwithstanding Section 9.2 of this Indenture, the Company and
the Trustee may amend or supplement this Indenture or the Debentures without
the consent of any Holder of a Debenture:

         (a)     to cure any ambiguity, defect or inconsistency;

         (b)     except as otherwise provided in this Indenture; to provide for
uncertificated or book entry Debentures in addition to or in place of
certificated Debentures;

         (c)     to provide for the assumption of the Company's obligations to
the Holders of the Debentures in the case of a merger or consolidation pursuant
to Article 5 or Article 11 hereof, as the case may be;

         (d)     to make any change that would provide any additional rights or
benefits to the Holders of the Debentures or that does not adversely affect the
legal rights hereunder of any Holder of the Debenture; or

         (e)     to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.

                 Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 7.2 hereof, the Trustee shall join with the Company in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this 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 such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.

SECTION 9.2  WITH CONSENT OF HOLDERS OF DEBENTURES

                 Except as provided below in this Section 9.2, the Company and
the Trustee may amend or supplement this Indenture or the Debentures with the
consent of the Holders of at least a majority in principal amount of the
Debentures then outstanding (including consents obtained in connection with a
tender offer or exchange offer for the Debentures), and, subject to Sections
6.4 and 6.7 hereof, any existing Default or Event of Default (other than a
Default or Event of Default in the payment of the principal of, or Additional
Interest, if any, or interest on the





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<PAGE>   62

Debentures, except a payment default resulting from an acceleration that has
been rescinded) or compliance with any provision of this Indenture or the
Debentures may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Debentures (including consents
obtained in connection with a tender offer or exchange offer for the
Debentures).

                 Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
reasonably satisfactory to the Trustee of the consent of the Holders of
Debentures as aforesaid, and upon receipt by the Trustee of the documents
described in Section 7.2 hereof, the Trustee shall join with the Company in the
execution of such amended or supplemental Indenture unless such amended or
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 amended or
supplemental Indenture.

                 It shall not be necessary for the consent of the Holders of
Debentures under this Section 9.2 to approve the particular form of any
proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.

                 After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders of Debentures affected
thereby a notice briefly describing the amendment, supplement or waiver.  Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver.  Subject to Sections 6.4 and 6.7 hereof, the
Holders of a majority in aggregate principal amount of the Debentures then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Debentures. However, without the consent
of each Holder affected, an amendment or waiver may not (with respect to any
Debentures held by a non-consenting Holder):

         (a)     reduce the principal amount of Debentures whose Holders must
consent to an amendment, supplement or waiver;

         (b)     reduce the principal of or change the fixed maturity of any
Debenture or alter any of the provisions with respect to the redemption of the
Debentures in a manner adverse to the Holders of the Debentures;

         (c)     reduce the rate of or change the time for payment of interest,
on any Debenture;





                                       56
<PAGE>   63

         (d)     waive a Default or Event of Default in the payment of
principal of or interest or Additional Interest, if any, on the Debentures
(except a rescission of acceleration of the Debentures by the Holders of at
least a majority in aggregate principal amount of the then outstanding
Debentures and a waiver of the payment default that resulted from such
acceleration);

         (e)     make any Debenture payable in money other than that stated in
the Debentures;

         (f)     make any change in the provisions of this Indenture relating
to waivers of past Defaults or Events of Default or the rights of Holders of
Debentures to receive payments of principal of, or interest or Additional
Interest, if any, on the Debentures; or

         (g)     make any change in Section 6.4 or 6.7 hereof or in the
foregoing amendment and waiver provisions.

SECTION 9.3  COMPLIANCE WITH TRUST INDENTURE ACT

                 Every amendment or supplement to this Indenture or the
Debentures shall be set forth in an amended or supplemental Indenture that
complies with the TIA as then in effect.

SECTION 9.4  REVOCATION AND EFFECT OF CONSENTS

                 Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Debenture is a continuing consent by the Holder
of a Debenture and every subsequent Holder of a Debenture or portion of a
Debenture that evidences the same debt as the consenting Holder's Debenture,
even if notation of the consent is not made on any Debenture.  However, any
such Holder of a Debenture or subsequent Holder of a Debenture may revoke the
consent as to its Debenture if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective.  An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.

SECTION 9.5  NOTATION ON OR EXCHANGE OF DEBENTURES

                 The Company may place an appropriate notation about an
amendment, supplement or waiver on any Debenture thereafter authenticated.  The
Company in exchange for all Debentures may issue and the Trustee shall
authenticate new Debentures that reflect the amendment, supplement or waiver.

                 Failure to make the appropriate notation or issue a new
Debenture shall not affect the validity and effect of such amendment,
supplement or waiver.





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<PAGE>   64

SECTION 9.6  TRUSTEE TO SIGN AMENDMENTS, ETC.

                 The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental Indenture until the Board
of Directors of the Company approves it.  In executing any amended or
supplemental Indenture, the Trustee shall be entitled to receive and (subject
to Section 7.1 hereof) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that the execution of such
amended or supplemental indenture is authorized or permitted by this Indenture.


                                  ARTICLE 10.
                                 SUBORDINATION

SECTION 10.1  AGREEMENT TO SUBORDINATE

                 The Company, the Trustee and each Holder by accepting a
Debenture agrees that the Indebtedness evidenced by the Debentures is
subordinated in right of payment, to the extent and in the manner provided in
this Article, to the prior payment in full, in cash or cash equivalents, of all
Senior Debt of the Company (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed), and that the subordination is for
the benefit of the holders of Senior Debt of the Company.

SECTION 10.2  LIQUIDATION; DISSOLUTION; BANKRUPTCY

                 (a)      In the event of (i) any insolvency or bankruptcy
proceeding, or any receivership, liquidation, reorganization or other similar
proceeding in connection therewith, relative to the Company or its property, or
(ii) any proceeding for voluntary liquidation, dissolution or other winding up
of the Company, and whether or not involving insolvency or bankruptcy, or (iii)
any assignment for the benefit of creditors, or (iv) any distribution,
division, marshaling or application of any of the properties or assets of the
Company or the proceeds thereof, to creditors, voluntary or involuntary, and
whether or not involving legal proceedings, then and in any such event:

                 (1)      holders of Senior Debt of the Company shall be
                          entitled to receive payment in full, in cash or cash
                          equivalents, of all Obligations due in respect of
                          such Senior Debt of the Company (including interest
                          after the commencement of any such proceeding at the
                          rate specified in the applicable Senior Debt of the
                          Company, regardless





                                       58
<PAGE>   65

                          of whether such post-petition interest is allowed in
                          such proceeding) before Holders shall be entitled to
                          demand or receive any payment with respect to the
                          Debentures (except that Holders may receive
                          securities including, without limitation,
                          Subordinated Reorganization Securities, that are
                          subordinated on terms no less favorable than the
                          Debentures to (a) Senior Debt of the Company and (b)
                          any securities issued in exchange for Senior Debt of
                          the Company); and

                 (2)      until all Obligations with respect to Senior Debt of
                          the Company (as provided in subsection (1) above) are
                          paid in full, any distribution to which Holders would
                          be entitled but for this Article shall be made to
                          holders of Senior Debt of the Company (except that
                          Holders may receive securities including, without
                          limitation, Subordinated Reorganization Securities,
                          that are subordinated on terms no less favorable than
                          the Debentures to (a) Senior Debt of the Company and
                          (b) any securities issued in exchange for Senior Debt
                          of the Company), ratably according to the respective
                          aggregate amounts remaining unpaid thereon, and the
                          Holders of Debentures hereby irrevocably authorize,
                          empower and direct all receivers, trustees,
                          liquidators, conservators and others having authority
                          in the premises to effect all such payments and
                          deliveries.

                 As used herein the term "Subordinated Reorganization
Securities" means securities issued to the holders of the Debentures pursuant
to a court order or decree made by a court of competent jurisdiction in a
reorganization under applicable federal bankruptcy law which order or decree
(1) gives effect to, and states that effect is given to, the subordination of
the Debentures to the Senior Debt and the rights conferred to the holders of
the Senior Debt set forth herein and (2) states that the total distribution to
the holders of the Senior Debt provides for full payment of all of the allowed
claims of the holders of the Senior Debt.

                 (b)      Following the occurrence of an event of default in
respect of the Designated Senior Debt (but only during the continuation thereof
or until such default is waived or such Designated Senior Debt is paid in full
or all Obligations related thereto are deemed satisfied), the holders of the
Debentures irrevocably authorize and empower (without imposing any obligation
on) each holder of Designated Senior Debt at the time outstanding and such
holder's Representative to demand, sue for, collect and receive such holder's
ratable share of all such payments and distributions and to receipt therefor,
and to file





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<PAGE>   66

and prove all claims therefor and take all such other action (including the
right to vote such Designated Senior Debt holder's ratable share of the
Debentures) in the name of the Holders of the Debentures or otherwise, as such
Designated Senior Debt holder or such holder's Representative may determine to
be necessary or appropriate for the enforcement of this Section 10.2.

                 (c)      Following the occurrence of an event of default in
respect of the Designated Senior Debt (but only during the continuance thereof
or until such default is waived or such Designated Senior Debt is paid in full
or all Obligations related thereto are deemed satisfied), the Holders of the
Debentures shall execute and deliver to each holder of Designated Senior Debt
and such holder's Representative all such further instruments confirming the
above authorization, and all such powers of attorney, proofs of claim,
assignments of claim and other instruments, and shall take all such other
action as may be reasonably requested by such holder or such holder's
Representative, in order to enable such holder to enforce all claims upon or in
respect of such holder's ratable share of the Debentures.

SECTION 10.3  DEFAULT ON SENIOR DEBT

                 The Company may not make any payment or distribution to the
Trustee or any Holder in respect of Obligations with respect to the Debentures
and may not acquire from the Trustee or any Holder (whether pursuant to Section
3.6 or Section 4.7 hereof or otherwise) any Debentures for cash or property
other than securities, including without limitation, Subordinated
Reorganization Securities, that are subordinated on terms no less favorable
than the Debentures to (a) Senior Debt of the Company and (b) any securities
issued in exchange for Senior Debt of the Company) until all principal and
other Obligations with respect to the Senior Debt of the Company have been paid
in full, or otherwise satisfied, in cash (or such other manner satisfactory to
the holders thereof), if:

                 (i)      a default in the payment of any principal of,
         premium, if any, or interest on or fees relating to Senior Debt of the
         Company occurs through maturity, acceleration or otherwise and is
         continuing beyond any applicable grace period under the agreement,
         indenture or other document governing such Senior Debt of the Company;
         or

                 (ii)     a default, other than a payment default, on Senior
         Debt of the Company (including, but not limited to, a default on
         Senior Debt which results from the acceleration of the Debentures)
         occurs and is continuing that would give rise to the right of holders
         of such Senior Debt of the Company to accelerate such Senior Debt and
         the Trustee





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<PAGE>   67

         receives a notice of the default (a "Payment Blockage Notice") from a
         Person who may give it pursuant to Section 10.11 hereof; no such
         non-payment default that existed or was continuing on the date of
         delivery of any such notice to the Trustee shall be, or be made, the
         basis for a subsequent notice.

                 The Company may and shall resume payments on and distributions
in respect of the Debentures and may acquire them upon the earlier of:

                 (1)      the date upon which the default to which reference is
                          made in the preceding sentence of this Section 10.3
                          is cured or waived or such Senior Debt is paid in
                          full or all obligations thereunder are otherwise
                          satisfied, or

                 (2)      in the case of a default referred to in Section
                          10.3(ii) hereof, on the 180th calendar day after
                          receipt of a Payment Blockage Notice;

if this Article otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.

                 Any payment of interest on the Debentures that is prohibited
by operation of this Section 10.3 shall, for a period of up to a cumulative,
aggregate of 180 days from the time such payment or payments would otherwise be
due, be added to the principal of the Debentures and shall bear interest at the
stated rate of interest on the Debentures from the date that such interest
payment would otherwise have been payable as provided in this Indenture.

SECTION 10.4  ACCELERATION OF DEBENTURES

                 If payment of the Debentures is accelerated because of an
Event of Default, the Company shall promptly notify holders of Senior Debt of
the Company of the acceleration.

SECTION 10.5  WHEN DISTRIBUTION MUST BE PAID OVER

                 In the event that the Trustee or any Holder receives any
payment of any Obligations in respect of the Debentures at a time such payment
is prohibited by Section 10.3 hereof, such payment shall be held by the Trustee
or such Holder, in trust for the benefit of, and shall be paid forthwith over
and delivered, upon written request, to, the holders of Senior Debt of the
Company as their interests may appear or their Representative under the
indenture or other agreement (if any) pursuant to which Senior Debt of the
Company may have been issued, as their respective interests may appear, for
application to the payment of all Obligations with respect to Senior Debt of
the Company





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<PAGE>   68

remaining unpaid to the extent necessary to pay such Obligations in full in
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt of the Company.

                 Upon any payment or distribution of assets or securities
referred to in this Article 10, the Holders of the Debentures shall be entitled
to rely upon an order or decree of a court of competent jurisdiction in which
such dissolution, winding up, liquidation or reorganization proceedings are
pending, and upon a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making any such payment or
distribution, delivered to the Holders of the Debentures for the purpose of
ascertaining the Persons entitled to participate in such distribution, the
holders of Senior Debt and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or this Article 10.

                 With respect to the holders of Senior Debt of the Company, the
Trustee undertakes to perform only such obligations on the part of the Trustee
as are specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of Senior Debt of the Company shall be
read into this Indenture against the Trustee.  The Trustee shall not be deemed
to owe any fiduciary duty to the holders of Senior Debt of the Company, and
shall not be liable to any such holders if the Trustee shall pay over or
distribute to or on behalf of Holders or the Company or any other Person, money
or assets to which any holders of Senior Debt of the Company shall be entitled
by virtue of this Article 10, except if such payment is made as a result of the
willful misconduct or gross negligence of the Trustee.

SECTION 10.6  NOTICE BY COMPANY

                 The Company shall promptly notify the Trustee, the
Representative and the Paying Agent of any facts known to the Company that
would cause a payment of any Obligations with respect to the Debentures to
violate this Article, but failure to give such notice shall not affect the
subordination of the Debentures to the Senior Debt of the Company as provided
in this Article.

SECTION 10.7  SUBROGATION

                 Upon the payment in full of all amounts payable under or in
respect of the Senior Debt of the Company, each Holder of a Debenture shall be
subrogated to the rights of the holders of such Senior Debt to receive payments
or distributions of the Company made on such Senior Debt until the Debentures
shall be paid in full; and for the purposes of such subrogation, no payments or
distributions to holders of such Senior Debt to which





                                       62
<PAGE>   69

such Holder of a Debenture would be entitled except for the provisions of this
Indenture, and no payment over pursuant to the provisions of this Indenture to
holders of such Senior Debt by such Holder of a Debenture, shall, as between
the Company, its creditors other than holders of such Senior Debt and the
Holder of a Debenture, be deemed to be a payment by the Company to or on
account of such Senior Debt, it being understood that the provisions of this
Article 10 are solely for the purpose of defining the relative rights of the
holders of such Senior Debt, on the one hand, and the Holders of the
Debentures, on the other hand.

                 If any payment or distribution to which any Holder of a
Debenture would otherwise have been entitled but for the provisions of this
Article 10 shall have been applied, pursuant to the provisions of this Article
10, to the payment of all amounts payable under the Senior Debt of the Company,
then and in such case, such Holder of a Debenture shall be entitled to receive
from the holders of such Senior Debt at the time outstanding any payments or
Distributions received by such holders of such Senior Debt in excess of the
amount sufficient to pay all amounts payable under or in respect of, the Senior
Debt of the Company in full.

SECTION 10.8  RELATIVE RIGHTS

                 This Article defines the relative rights of Holders and
holders of Senior Debt of the Company.  Nothing in this Indenture shall:

                 (1)      impair, as between the Company and the Holders, the
                          obligation of the Company, which is absolute and
                          unconditional, to pay principal of, interest and
                          Additional Interest, if any, on the Debentures in
                          accordance with their terms;

                 (2)      affect the relative rights of Holders and creditors
                          of the Company other than their rights in relation to
                          holders of Senior Debt of the Company; or

                 (3)      prevent the Trustee or any Holder from exercising its
                          available remedies upon a Default or Event of
                          Default, subject to the rights of holders and owners
                          of Senior Debt of the Company to exercise their
                          rights with respect to such Senior Debt or to receive
                          distributions and payments otherwise payable to
                          Holders.

                 If the Company fails because of this Article 10 to pay
principal of or interest or Additional Interest, if any, on a





                                       63
<PAGE>   70

Debenture on the due date, the failure is still a Default or Event of Default.

SECTION 10.9  SUBORDINATION NOT AFFECTED

                 The terms of this Article 10, the subordination effected
hereby and the rights of the holders of Senior Debt shall not be affected by
(i) any amendment of or addition or supplement to any Senior Debt or any
instrument or agreement relating thereto; (ii) any exercise or non-exercise of
any right, power or remedy under or in respect of any Senior Debt or any
instrument, agreement or document relating thereto; (iii) any sale, exchange,
release or other transaction affecting all or any part of any property at any
time pledged or mortgaged to secure, or however securing, Senior Debt; (iv) any
waiver, consent, release, indulgence, extension, renewal, modification, delay
or other action, inaction or omission, in respect of any Senior Debt or any
instrument, agreement or document relating thereto; or (v) any application by
any holder or holders of Senior Debt thereof of any amount or sum (by
whomsoever paid or however realized) to Senior Debt, whether or not any Holder
of Debentures shall have had notice or knowledge of any of the foregoing.

                 For all purposes of this Article 10, Senior Debt shall not be
deemed to have been paid in full unless the holders thereof (or their duly
authorized representatives) shall have received cash or cash equivalents equal
to the amount of all principal, interest, premium and all other amounts due in
respect of Senior Debt at the time outstanding.

SECTION 10.10  DISTRIBUTION OR NOTICE TO REPRESENTATIVE

                 Whenever a distribution is to be made or a notice given to
holders of Senior Debt of the Company, the distribution may be made and the
notice given to the Representative of the Senior Debt.

                 Upon any payment or distribution of assets of the Company
referred to in this Article 10, the Trustee and the Holders shall be entitled
to rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt of the Company and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 10.





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SECTION 10.11  RIGHTS OF TRUSTEE AND PAYING AGENT

                 Notwithstanding the provisions of this Article 10 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 or
distribution by the Trustee under Section 10.3, and the Trustee and the Paying
Agent may continue to make payments on the Debentures, unless the Trustee shall
have received at its Corporate Trust Office prior to the date of such payment a
Payment Blockage Notice.  Only a Representative of Senior Debt of the Company
may give a Payment Blockage Notice.  Nothing in this Article 10 shall impair
the claims of, or payments to, the Trustee under or pursuant to Section 7.7
hereof.

                 The Trustee in its individual or any other capacity may hold
Senior Debt of the Company with the same rights it would have if it were not
Trustee.  Any Agent may do the same with like rights.

SECTION 10.12  AUTHORIZATION TO EFFECT SUBORDINATION

                 Each Holder of a Debenture by the Holder's acceptance thereof
authorizes and directs the Trustee on the Holder's behalf to take such action
as may be necessary or appropriate to effectuate the subordination as provided
in this Article 10, and appoints the Trustee to act as the Holder's
attorney-in-fact for any and all such purposes.  If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.9 hereof relating to the Company at least 30 days
before the expiration of the time to file such claim, any Representative of
Senior Debt of the Company is hereby authorized, but is not required, to file
an appropriate claim for and on behalf of the Holders of the Debentures.

SECTION 10.13  NOTICE OF SUBORDINATION

                 Each Debenture shall include a statement to the effect that
payments of such Debenture are subordinate to the payment in full of Senior
Debt.

SECTION 10.14  AMENDMENTS

                 The provisions of Sections 4.7, 6.2 and this Article 10 and
the definitions of Designated Senior Debt, Senior Debt, Change of Control, BNY
Facility Agreement, Credit Agreement and Representative and the provisions of
the Debentures relating to the subordination terms thereof, in each case, shall
not be amended or modified without the written consent of the Representative of
the then outstanding Senior Debt of the Company.





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SECTION 10.15  NO WAIVER, ETC.

                 No right of any present or future holder of any Senior Debt to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act by the Representative or
any such holder, or by any noncompliance by the Company, the Trustee or any
Holder of a Debenture with the terms and provisions and covenants herein or in
the Credit Agreement or in the BNY Facility Agreement or in any one or more
documents or instruments creating or evidencing the Senior Debt regardless of
any knowledge thereof any such holder may have or otherwise be charged with.

SECTION 10.16  NO SECURITY

                 Other than as expressly provided in favor of the Trustee in
Section 7.7 hereof, so long as any of the Senior Debt shall not have been paid
in full, the Company shall not, and shall not permit any of its Subsidiaries
to, give, and no Holder of Debentures shall demand, accept or receive, any
security, including any Lien on any of the assets of the Company nor its
Subsidiaries, whether direct or indirect, for any Debenture.

                 The provisions of this Article 10 are intended to be for the
benefit of, and shall be enforceable directly by, the Representative and the
holders of the Senior Debt.


                                  ARTICLE 11.
                            CONVERSION OF DEBENTURES

SECTION 11.1  CONVERSION PRIVILEGES AND CONVERSION PRICE

                 Subject to and upon compliance with the provisions of this
Article, at the option of the Holder thereof, (i) at any time after 60 days
following the Issuance Date or (ii) in case the Debentures, or any portion
thereof, are called for redemption or repurchased by the Company upon the
occurrence of a Change of Control then (a) in the case of redemption, until and
including, but not after the close of business on the date of redemption
(unless the Company defaults in making the payment due upon redemption) or (b)
in the case of a Holder that has exercised its right to require the Company to
purchase such Debenture in connection with a Change of Control Offer pursuant
to Section 4.7 hereof to (but not including) the close of business on the
Change of Control Purchase Date (unless the Company defaults in making the
payments due upon such purchase), but only if such Holder withdraws its
election to exercise such right prior to such time, then any Debenture or any
portion of the principal amount thereof that is $1,000 or an integral multiple
of $1,000 in excess thereof may be converted at the principal amount thereof,
or of such portion thereof, into fully paid and non-assessable shares





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(calculated as to each conversion to the nearest 1/100 of a share) of Common
Stock of the Company, at the Conversion Price, determined as hereinafter
provided, in effect at the time of conversion.  In case a Debenture or portion
thereof is called for redemption or is repurchased upon the occurrence of a
Change of Control, such conversion right in respect of the Debenture, or
portion so called, shall expire at the close of business on the redemption date
or the repurchase date, unless the Company defaults in making the payment due
upon redemption or such repurchase.

                 The price at which shares of Common Stock shall be delivered
upon conversion (herein called the "Conversion Price") shall be initially
$12.00 per share of Common Stock.  This Conversion Price shall be adjusted from
time to time as provided in this Article 11.

SECTION 11.2  EXERCISE OF CONVERSION PRIVILEGE

                 In order to exercise the conversion privilege, the Holder of
any Debenture to be converted shall surrender such Debenture, duly endorsed or
assigned to the Company or in blank at any office or agency of the Company
maintained for that purpose pursuant to Section 2.3, accompanied by written
notice to the Company at such office or agency that the Holder elects to
convert such Debenture or, if less than the entire principal amount thereof is
to be converted, the portion thereof to be converted.  Debentures surrendered
for conversion during the period from the close of business on any interest
record date next preceding any interest payment date shall (except in the case
of Debentures or portions thereof that have been called for redemption, on such
interest payment date or on a redemption date within the period beginning on
such interest record date and ending on such interest payment date) be
accompanied by payment to the Company by wire transfer or certified check or
other funds acceptable to the Company of an amount equal to the interest
payable on such interest payment date on the principal amount of Debentures
being surrendered for conversion.  Subject to the provisions of Section 2.12
relating to the payment of defaulted interest by the Company, the interest
payment with respect to a Debenture called for redemption on a redemption date
during the period from the close of business on any interest record date next
preceding any interest payment date to the opening of business on such interest
payment date shall be payable on such interest payment date to the Holder of
such Debenture at the close of business on such interest record date
notwithstanding the conversion of such Debenture after such interest record
date and prior to such interest payment date, and the Holder converting such
Debenture need not include a payment of such interest payment amount upon
surrender of such Debenture for conversion.  Except as provided in the
preceding sentence and subject to Section 2.12, no payment or adjustment shall
be made





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<PAGE>   74

upon any conversion on account of any interest accrued on the Debentures
surrendered for conversion or on account of any dividends on the Common Stock
issued upon conversion.

                 Debentures shall be deemed to have been converted immediately
prior to the close of business on the day of surrender of such Debentures for
conversion in accordance with the foregoing provisions, and at such time, the
rights of the Holder of such Debentures as Holders shall cease; and the Person
or Persons entitled to receive the Common Stock, issuable upon conversion shall
be treated for all purposes as the record holder or holders of such Common
Stock at such time.  As promptly as practicable on or after the conversion
date, the Company shall issue and shall deliver at such office or agency, a
certificate or certificates for the number of full shares of Common Stock
issuable upon conversion, together with payment in lieu of any fraction of a
share, as provided in Section 11.3.

                 In the case of any Debenture that is converted in part only,
upon such conversion the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the Company,
a new Debenture or Debentures of authorized denominations in an aggregate
principal amount equal to the unconverted portion of the principal amount of
such Debenture.

SECTION 11.3  FRACTIONAL SHARES

                 No fractional shares of Common Stock shall be issued upon
conversion of Debentures.  If more than one Debenture shall be surrendered for
conversion at one time by the same Holder the number of full shares of Common
Stock that shall be issuable upon conversion thereof shall be computed on the
basis of the aggregate principal amount of the Debentures (or, specified
portions thereof) so surrendered.  Instead of any fractional share of Common
Stock that would otherwise be issuable upon conversion of any Debenture or
Debentures (or, specified portions thereof), the Company shall pay a cash
adjustment in respect of such fraction in an amount equal to the same fraction
of the Closing Price on the last day prior to the date of conversion.

SECTION 11.4  ADJUSTMENT OF CONVERSION PRICE

                 (a)  The Conversion Price shall be adjusted from time to time
as follows:

                 (i)  In case the Company shall (i) declare a dividend or make
         a distribution in shares of its Common Stock payable in shares of its
         Common Stock; (ii) subdivide its outstanding Common Stock into a
         greater number of shares, or (iii) combine its outstanding Common
         Stock into a smaller number of shares, the Conversion Price in effect
         immediately





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<PAGE>   75

         prior thereto shall be adjusted so that the Holder of any Debenture
         thereafter surrendered for conversion shall be entitled to receive the
         number of shares of Common Stock of the Company which he would have
         owned or have been entitled to receive after the happening of any of
         the events described above had such Debenture been converted
         immediately prior to the happening of such event.  An adjustment made
         pursuant to this subsection (i) shall become effective immediately
         after the record date in the case of a dividend or distribution and
         shall become effective immediately after the effective date in the
         case of subdivision or combination;

             (ii)         In case the Company shall issue rights, options,
         warrants or securities convertible into Common Stock ("Convertible
         Securities") to all holders of its Common Stock entitling them to
         subscribe for or purchase Common Stock, at a price per share less than
         the current market price per share of Common Stock (as defined in
         subsection (iv) below) at the record date for the determination of
         shareholders entitled to receive such Convertible Securities, the
         Conversion Price in effect immediately prior thereto shall be adjusted
         so that the same shall equal the price determined by multiplying the
         Conversion Price in effect immediately prior to the date of issuance
         of such Convertible Securities by a fraction of which the numerator
         shall be the number of shares of Common Stock outstanding on the date
         of the issuance of such Convertible Securities plus the number of
         shares which the aggregate offering price of the total number of
         shares of Common Stock purchasable under such Convertible Securities
         so offered would purchase at such current market price, and of which
         the denominator shall be the number of shares of Common Stock
         outstanding on the date of issuance of such Convertible Securities
         plus the number of additional shares of Common Stock purchasable under
         such Convertible Securities offered for subscription or purchase.
         Such adjustment shall be made successively whenever any such
         Convertible Securities are issued, and shall become effective
         retroactively as of the record date for the determination of
         shareholders entitled to receive such Convertible Securities.  In
         determining whether any Convertible Securities entitle the holder to
         subscribe for or purchase shares of Common Stock at the less than such
         current market price, and in determining the aggregate offering price
         of such shares of Common Stock, there shall be taken into account any
         consideration received by the Company for such Convertible Securities
         and any amount payable upon the conversion or exercise thereof, the
         value of such consideration, if other than cash, to be determined by
         the Board of Directors;





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<PAGE>   76

                (iii)     In case the Company shall distribute to all holders
         of its Common Stock or all holders of Common Stock shall otherwise
         become entitled to receive, shares of capital stock of the Company
         (other than dividends or distributions on its Common Stock referred to
         in paragraph (i) above) or evidences of its indebtedness or rights,
         options, warrants or convertible securities providing the right to
         subscribe for or purchase any shares of the Company's Common Stock or
         evidences of its indebtedness (other than Convertible Securities
         referred to in paragraph (ii) above), or assets (including securities
         (other than Common Stock), but excluding cash dividends or
         distributions paid from retained earnings of the Company), then in
         each such case the Conversion Price shall be adjusted so that the same
         shall equal the price determined by multiplying the Conversion Price
         in effect immediately prior to the date of such distribution by a
         fraction of which the numerator shall be the current market price per
         share (as defined in subsection (iv) below) of the Common Stock on the
         record date mentioned below less the then fair market value (as
         determined in good faith by the Board of Directors of the Company, and
         described in a certificate filed with the Trustee) of the capital
         stock or assets or evidences of indebtedness so distributed or of such
         rights, options, warrants or convertible securities applicable to one
         share of Common Stock and the denominator shall be the current market
         price per share (as defined in subsection (iv) below) of the Common
         Stock.  Such adjustment shall be made whenever any such distribution
         is made, and shall become effective retroactively as of the record
         date for the determination of shareholders entitled to receive such
         distribution;

                 (iv)     For the purpose of any computation under subsections
         (ii) and (iii) above, the current market price per share of the Common
         Stock at any date shall mean the Closing Price for the trading day
         next preceding the day in question;

                 (v)      No adjustment in the Conversion Price shall be
         required unless such adjustment would require an increase or decrease
         of at least 1% in such price; provided, however, that any adjustments
         which by reason of this subsection (v) are not required to be made
         shall be carried forward and taken into account in any subsequent
         adjustment.  All calculations under this Article 11 shall be made to
         the nearest cent.  Anything in this Section 11.4 to the contrary
         notwithstanding, the Company shall be entitled to make such reductions
         in the Conversion Price, (in addition to those required by this
         Section 11.4) as it in its discretion shall determine to be advisable
         in order that any stock dividends, subdivision of shares, distribution
         of rights to purchase stock or securities, or a distribution of
         securities





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<PAGE>   77

         convertible into or exchangeable for stock hereafter made by the
         Company to its shareholders shall not be taxable;

                (vi)      In any case in which this Section 11.4 provides that
         an adjustment shall become effective retroactively as of a record date
         for an event, the Company may defer until the occurrence of such event
         (i) issuing to the Holder of any Debenture converted after such record
         date and before the occurrence of such event the additional shares of
         Common Stock issuable upon such conversion by reason of the adjustment
         required by such event over and above the Common Stock issuable upon
         such conversion before giving effect to such adjustment and (ii)
         paying to such Holder any amount in cash in lieu of any fractional
         share pursuant to Section 11.3;

               (vii)      The Trustee shall not be responsible for any 
         calculation made under this Section.

                 (b)  The Company from time to time may, to the extent
permitted by law and to the extent the Board of Directors of the Company has
determined that such decrease would be in the best interests of the Company,
reduce the Conversion Price by any amount for any period of at least 20 days,
in which case the Company shall give the Trustee and the Holders of the
Debentures at least 15 days' notice of such decrease.

SECTION 11.5  NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.

                 Whenever the Conversion Price is adjusted as herein provided:

         (a)     The Company shall compute the adjusted Conversion Price in
accordance with Section 11.4 and shall prepare a certificate signed by the
Treasurer of the Company setting forth the adjusted Conversion Price and
showing in reasonable detail the facts upon which such adjustment is based, and
such certificate shall forthwith be delivered to the Trustee and filed at each
office or agency maintained for the purpose of conversion of Debentures
pursuant to Section 2.3; and

         (b)     a notice setting forth that the Conversion Price has been
adjusted and setting forth the adjusted Conversion Price shall forthwith be
prepared by the Company and mailed to all Holders of Debentures at their last
address as they shall appear in the Debenture Register.





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<PAGE>   78

SECTION 11.6  NOTICE OF CERTAIN CORPORATE ACTION

                 In case:

         (a)     the Company shall declare a dividend (or any other
distribution) on its Common Stock payable otherwise than in cash; or

         (b)     the Company shall authorize the granting to the holders of its
Common Stock generally of rights, options warrants or convertible securities to
subscribe for or purchase any shares of Capital Stock of any class or of any
other rights; or

         (c)     of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding shares of Common
Stock), or of any consolidation or merger to which the Company is a party and
for which approval of any shareholders of the Company is required, or of the
sale or transfer of all or substantially all of the assets of the Company; or

         (d)  of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or

         (e)     the Company or any Subsidiary of the Company shall commence a
tender offer for all or a portion of the Company's outstanding shares of Common
Stock (or shall amend any such tender offer);

then, the Company shall notify the Trustee and cause to be filed at such office
or agency maintained for the purpose of conversion of Debentures pursuant to
Section 2.3, and shall cause to be mailed to all Holders of Debentures at their
last addresses as they shall appear in the Debenture Register, at least 20 days
(or 10 days in any case specified in Section 11.6(a) or 11.6(b) above) prior to
the applicable date specified in (x), (y) or (z) below, as applicable, a notice
stating (x) the date on which a record is to be taken for the purposes of such
dividends, distribution, rights or warrants, or, if a record is not to be
taken, the date as to which the holders of Common Stock of record to be
entitled to such dividend, distribution, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation or winding up is expected to become
effective, and the date on which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up,
or (z) the date on which such tender offer commenced, the date on which such
tender offer is scheduled to expire unless extended, the consideration offered
and the





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material terms thereof (or the material terms of any amendment thereto).

SECTION 11.7  COMPANY TO RESERVE COMMON STOCK

                 The Company shall at all time reserve and keep available, free
from preemptive rights, out of its authorized but unissued Common Stock, for
the purpose of effecting the conversion of Debentures, the full number of
shares of Common Stock then issuable upon the conversion of all outstanding
Debentures.

SECTION 11.8  TAXES ON CONVERSION

                 The Company will pay any and all taxes, other than any
franchise or income taxes, that may be payable in respect of the issue or
delivery of stock certificates representing shares of Common Stock on
conversion of Debentures pursuant hereto.  The Company shall not, however, be
required to pay any tax that may be payable in respect of any transfer involved
in the issue and delivery of shares of Common Stock in name other than that of
the Holder of the Debenture or Debentures to be converted, and no such issue or
delivery shall be made unless and until the Person requesting such issue has
paid to the Company the amount of any such tax, or has established to the
satisfaction of the Company that such tax has been paid.

SECTION 11.9  COVENANT AS TO COMMON STOCK

                 The Company covenants that all shares of Common Stock that may
be issued upon conversion of Debentures will, upon issue, be fully paid and
non-assessable and, except as provided in Section 11.8, the Company will pay
all taxes, liens and charges with respect to the issue thereof.

SECTION 11.10  CANCELLATION OF CONVERTED DEBENTURES

                 All Debentures delivered for conversion shall be delivered to
the Trustee to be cancelled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 2.11.

SECTION 11.11  EFFECT OF RECLASSIFICATION, CONSOLIDATION,
               MERGER, SHARE EXCHANGE OR SALE

                 If any of the following events occur, namely (i) any
reclassification or change of outstanding shares of Common Stock issuable upon
conversion of the Debentures (other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of  a
subdivision or combination), (ii) any consolidation with or merger of the
Company with or into another corporation shall be effected as a





                                       73
<PAGE>   80

result of which holders of Common Stock issuable upon conversion of the
Debentures shall be entitled to receive stock, securities or other property or
assets (including cash) with respect to or in exchange for such Common Stock or
(iii) any sale or conveyance of all or substantially all of the properties and
assets of the Company to any other corporation, then the Company or such
successor or purchasing corporation, as the case may be, shall execute with the
Trustee a supplemental indenture providing that each Debenture shall be
convertible into the kind and amount of shares of stock and other securities or
property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, sale or conveyance by a holder of a number of
shares of Common Stock issuable upon conversion of such Debentures immediately
prior to such reclassification, change, consolidation, merger, statutory share
exchange, sale or conveyance assuming such holder of the Debentures did not
exercise any rights of election as to the stock, other securities or property
or assets receivable in connection therewith.  Such supplemental indenture
shall provide adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article.  The Company shall
cause notice of the execution of such supplemental indenture to be mailed to
each Holder of Debentures, at his/her address appearing on the Debenture
Register.

                 The above provisions of this Section shall similarly apply to
successive reclassifications, consolidations, mergers and sales.


                                  ARTICLE 12.
                                   DEFEASANCE

SECTION 12.1  DEFEASANCE AND DISCHARGE

                 The Company shall, subject to the satisfaction of the
conditions set forth in Section 12.2 hereof, be deemed to have been discharged
from its obligations with respect to all outstanding Debentures on the date the
conditions set forth below are satisfied (hereinafter, "Defeasance").  For this
purpose, Defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Debentures,
which shall thereafter be deemed to be "Outstanding" only for the purposes of
Section 12.3 hereof and the other Sections of this Indenture referred to in (a)
and (b) below, and to have satisfied all its other Obligations under such
Debentures and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same),
except for the following provisions which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of outstanding
Debentures to receive solely from the trust fund described in Section 12.4





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<PAGE>   81

hereof, and as more fully set forth in such Section, payments in respect of the
principal of, and interest or Additional Interest, if any, on such Debentures
when such payments are due, (b) the Company's obligations with respect to such
Debentures under Article 2, Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.7 (but such
obligation shall continue only with respect to the Company's obligations
relating to a Change of Control described in clause (ii) of the definition of
such term) and Articles 8 and 11 hereof, (c) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and the Company's obligations in
connection therewith and (d) this Article 12.

SECTION 12.2  CONDITIONS TO DEFEASANCE

                 The following shall be the conditions to the application of
Section 12.1 hereof to the outstanding Debentures:

                 In order to exercise Defeasance:

         (a)     the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars or
Government Obligations, in an amount as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay the
principal of, and interest and Additional Interest if any, on the outstanding
Debentures on the stated date for payment thereof or on the applicable
redemption date or date of repurchase, as the case may be, of such principal
of, Additional Interest, if any, and interest on the outstanding Debentures;

         (b)     the Company shall have delivered to the Trustee an Opinion of
Counsel (which counsel may be an employee of the Company or any Subsidiary of
the Company) reasonably acceptable to the Trustee confirming that (A) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the Issuance Date, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon, such Opinion of Counsel shall confirm that, the Holders of the
outstanding Debentures will not recognize income, gain or loss for federal
income tax purposes as a result of such Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Defeasance had not occurred;

         (c)     no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or, insofar as Sections 6.1(f) and
6.1(g) hereof are concerned, at any time in the period ending on the 91st day
after the date of deposit (or greater period of time in which any such deposit
of trust funds may remain subject to Bankruptcy Law insofar as those apply to
the deposit by the Company);





                                       75
<PAGE>   82

         (d)     such Defeasance shall not result in a breach or violation of,
or constitute a default under, any material agreement or instrument (other than
this Indenture) to which the Company or any of its Subsidiaries is a party or
by which the Company or any of its Subsidiaries is bound;

         (e)     the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day (or such later day referred to in
(c) above) following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;

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

         (g)     the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal  Defeasance or the Covenant
Defeasance have been complied with.

SECTION 12.3     DEPOSITED MONEY TO BE HELD IN TRUST;
                 OTHER MISCELLANEOUS PROVISIONS

                 Subject to Section 12.4 hereof, all money deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
12.3 the "Trustee") pursuant to Section 12.2 hereof in respect of the
outstanding Debentures shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Debentures and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Debentures of all sums due and to become due thereon in respect of principal,
Additional Interest, if any, and interest, but such money 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 cash deposited
pursuant to Section 12.2 hereof 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 the outstanding Debentures.

                 Anything in this Article 12 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money held





                                       76
<PAGE>   83

by it as provided in Section 12.2 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 12.2(a) hereof) is in excess of the amount thereof that
would then be required to be deposited to effect an equivalent Defeasance.

SECTION 12.4  REPAYMENT TO COMPANY

                 Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of,
Additional Interest, if any, or interest, on any Debenture and remaining
unclaimed for one year after such principal, interest or Additional Interest,
if any, have become due and payable provided, however, that any funds held in
respect of Debentures which have been converted, or repurchased by the Company
pursuant to Section 4.7 or which have otherwise been acquired by the Company or
have otherwise ceased to be outstanding, shall be paid to the Company on its
request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Debenture shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once in The Wall Street Journal (national edition) or if no longer published,
in a national newspaper of general circulation, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such notification or publication, any unclaimed
balance of such money then remaining will be repaid to the Company.

SECTION 12.5  REINSTATEMENT

                 If the Trustee or Paying Agent is unable to apply any United
States dollars in accordance with Section 12.1 hereof, as the case may be, by
reason of, any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Company's obligations under this Indenture and the Debentures shall be revived
and reinstated as though no deposit had occurred pursuant to Section 12.1
hereof until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 12.1 hereof, as the case may be;
provided, however, that, if the Company makes any payment of principal of,
Additional Interest, if any, or interest, on any Debenture following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Debentures to receive such payment from the money held
by the Trustee or Paying Agent.





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<PAGE>   84



                                  ARTICLE 13.
                                 MISCELLANEOUS

SECTION 13.1  TRUST INDENTURE ACT CONTROLS

                 If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA Section 318(c), the imposed duties
shall control.

SECTION 13.2  NOTICES

                 Any notice or communication by the Company or the Trustee to
the other is duly given if in writing and delivered in Person or mailed by
first class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:

         If to the Company:

                 Home Shopping Network, Inc.
                 11831 30th Court North
                 St. Petersburg, Florida  33716
                 Telecopier No.: (813) 573-0866

         With copies to:

                 Home Shopping Network, Inc.
                 11831 30M Court North
                 St. Petersburg, Florida 33716
                 Telecopier No.:  (813) 573-0866
                 Attention:  General Counsel

                 and

                 Baker & Botts, L.L.P.
                 885 Third Avenue
                 New York, New York  10022
                 Telecopier No.: (212) 705-5125
                 Attention: Frederick H. McGrath, Esq.

         If to the Trustee:

                 United States Trust Company of New York
                 114 West 47th Street
                 New York, New York  10036
                 Telecopier No.:  (212) 852-1625
                 Attention:  Mr. Gerard F. Ganey





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<PAGE>   85

         With copies to:

                 Dow, Lohnes & Albertson
                 1200 New Hampshire Avenue, N.W.
                 Suite 800
                 Washington, D.C.  20036-6802
                 Telecopier No.:  (202) 776-2222
                 Attention:  Joseph Kelly, Jr., Esq.

                 The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.

                 All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by
hand, if personally delivered; five Business Days after being deposited in the
mail, postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.

                 Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on
the register kept by the Registrar. Any notice or communication shall also be
so mailed to any Person described in TIA Section 313(c), to the extent required
by the TIA. Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders.

                 If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the
addressee receives it.

                 If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.

SECTION 13.3  COMMUNICATION BY HOLDERS OF DEBENTURES
              WITH OTHER HOLDERS OF DEBENTURES

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





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<PAGE>   86

SECTION 13.4  CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT

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

         (a)     an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 13.5 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants provided for in this Indenture relating to
the proposed action have been satisfied; and

         (b)     an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 13.5 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.

SECTION 13.5  STATEMENTS REQUIRED IN CERTIFICATE OR OPINION

                 Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:

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

         (b)     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;

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

         (d)     a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.





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<PAGE>   87

SECTION 13.6  RULES BY TRUSTEE AND AGENTS

                 The Trustee may make reasonable rules for action by or at a
meeting of Holders.  The Registrar or Paying Agent may make reasonable rules
and set reasonable requirements for its functions.

SECTION 13.7  NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
              EMPLOYEES AND STOCKHOLDERS

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

SECTION 13.8  GOVERNING LAW

                 THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE AND THE DEBENTURES WITHOUT REGARD TO THE
CONFLICTS OF LAW RULES OR PROVISIONS THEREOF.

SECTION 13.9  NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS

                 This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of any
other Person.  Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.

SECTION 13.10  SUCCESSORS

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

SECTION 13.11  SEVERABILITY

                 In case any provision in this Indenture or in the Debentures
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 13.12  COUNTERPART ORIGINALS

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





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<PAGE>   88

SECTION 13.13  TABLE OF CONTENTS HEADINGS, ETC.

                 The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.

SIGNATURES:

March 1, 1996               HOME SHOPPING NETWORK, INC.
--------                    
                            
                            By:  /s/ James G. Held
                                 ---------------------------------------------
                                 Name:  James G. Held
                                 Title: President and Chief Executive Officer

March 1, 1996                UNITED STATES TRUST COMPANY         
--------                     OF NEW YORK                        
                            
                            
                            By:  /s/ Gerard F. Ganey
                                 ---------------------------------------------
                                 Name:  Gerard F. Ganey          
                                 Title: Senior Vice President   





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