<PAGE>   1
                                                                     Exhibit 4.5


     INDENTURE dated as of [_______], 2001 between Orion Power Holdings, Inc., a
Delaware corporation (as further defined below, the "Company"), and Wilmington
Trust Company, 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 Notes:

                                   ARTICLE 1.

                   DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01. Definitions.

     "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,"
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; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms "controlling, "controlled by" and "under common control
with" shall have correlative meanings.

     "Agent" means any Registrar, Paying Agent or Conversion Agent.

     "Agent Member" means any member of, or participant in, the Depositary.

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

     "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or state
law of any jurisdiction relating to bankruptcy, insolvency, winding up,
liquidation, reorganization or relief of debtors.

     "Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act. The terms "Beneficially Owns" and
"Beneficially Owned" shall have correlative meanings.

     "Board of Directors" means (1) with respect to a corporation, the board of
directors of the corporation or any duly authorized committee of such board of
directors and, (2) with respect to any other Person, the board or committee of
such Person serving a similar function.
<PAGE>   2
     "Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors of the Company and to be in full force and effect on the date of
such certification and delivered to the Trustee.

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

     "Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents, however designated, of corporate stock or
other equity participations, including partnership interests, whether general or
limited, of the Person.

     "Change of Control" means the occurrence of any of the following:

          (1) the direct or indirect sale, transfer, conveyance or other
     disposition (other than by way of merger or consolidation), in one or a
     series of related transactions, of all or substantially all of the
     properties or assets of the Company and its Subsidiaries, taken as a whole,
     to any "person" (as that term is used in Section 13(d)(3) of the Exchange
     Act) other than a Principal or Related Party of a Principal;

          (2) the adoption of a plan relating to the liquidation or dissolution
     of the Company;

          (3) the consummation of any transaction (including, without
     limitation, any merger or consolidation) the result of which is that any
     "person" (as defined above), other than the Principals and their Related
     Parties or a Permitted Group, becomes the Beneficial Owner, directly or
     indirectly, of more than 50% of the Voting Stock of the Company, measured
     by voting power rather than number of shares;

          (4) the first day on which a majority of the members of the Board of
     Directors of the Company are not Continuing Directors; or

          (5) a "Termination of Listing" occurs, which means that the Common
     Stock is neither listed for trading on a United States national securities
     exchange nor quoted on the Nasdaq National Market.

     Notwithstanding the foregoing, a Change of Control shall not be deemed to
have occurred if (i) the Closing Price Per Share of the Common Stock for any
five Trading Days within the period of 10 consecutive Trading Days ending
immediately after the later of the Change of Control or the public announcement
of the Change of Control (in the case of a Change of Control under clause (3)
above) or the period of 10 consecutive Trading Days ending immediately before
the Change of Control (in the case of a Change of Control under clause (1)
above) shall equal or exceed 105% of the Conversion Price of

                                       2
<PAGE>   3
the Notes in effect on each such Trading Day or (ii) all of the consideration
(excluding cash payments for fractional shares and cash payments made pursuant
to dissenters' appraisal rights) in a merger or consolidation otherwise
constituting a Change of Control under clause (3) above issuable to holders of
Common Stock consists of shares of common stock traded on a national securities
exchange or quoted on the Nasdaq National Market (or will be so traded or quoted
immediately following such merger or consolidation) and as a result of such
merger or consolidation the Notes become convertible into such common stock.

     "Closing Price Per Share" means, with respect to the Common Stock, for any
day, (i) the closing sale price (or, if no closing sale price is reported, the
last reported sale price) (regular way) on the New York Stock Exchange or, (ii)
if the Common Stock is not listed for trading on the New York Stock Exchange,
the last reported sale price (regular way) per share or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices regular way, in either case, on the principal national
securities exchange on which the Common Stock is listed or admitted to trading,
(iii) if the Common Stock is not so listed or admitted to trading on a national
securities exchange, the last reported bid price (regular way) on the Nasdaq
National Market, or (iv) if the Common Stock is not quoted on the Nasdaq
National Market or listed or admitted to trading on any national securities
exchange, the average of the closing bid prices in the over-the-counter market
as furnished by any New York Stock Exchange member firm selected from time to
time by the Company for that purpose.

     "Commission" or "SEC" means the Securities and Exchange Commission.

     "common stock" includes any stock of any class of capital stock which has
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the issuer
thereof and which is not subject to redemption by the issuer thereof.

     "Common Stock" means the Common Stock, par value $.01 per share, of the
Company authorized at the date of this instrument as originally executed.
Subject to the provisions of Section 10.11, shares issuable on conversion or
repurchase of Notes shall include only shares of Common Stock or shares of any
class or classes of common stock resulting from any reclassification or
reclassifications thereof; provided, however, that if at any time there shall be
more than one such resulting class, the shares so issuable on conversion of
Notes shall include shares of all such classes, and the shares of each such
class then so issuable shall be substantially in the proportion which the total
number of shares of such class resulting from all such reclassifications bears
to the total number of shares of all such classes resulting from all such
reclassifications.

     "Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the


                                       3
<PAGE>   4
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.

     "Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who:

          (1) was a member of the Board of Directors on the Issue Date;

          (2) was nominated for election or elected to the Board of Directors
     with the approval of a majority of the Continuing Directors who were
     members of such board of directors at the time of such nomination or
     election; or

          (3) is a designee of a Principal or a Related Party of a Principal or
     was nominated by a Principal or Related Party.

     "Conversion Agent" means any Person authorized by the Company to convert
Notes in accordance with Article 10. The Company has initially appointed the
Trustee as its Conversion Agent pursuant to Section 2.03 hereof.

     "Conversion Price" shall equal U.S.$1,000 divided by the Conversion Rate
(rounded to the nearest cent).

     "Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 12.02 or such other address as to which the Trustee
may give notice to the Company.

     "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.

     "Depositary" means, with respect to any Notes (including any Global Notes),
a clearing agency that is registered under the Exchange Act and is designated by
the Company to act as Depositary for such Notes (or any successor securities
clearing agency so registered).

     "Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature.

     "DTC" means The Depository Trust Company, a New York corporation.

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


                                       4
<PAGE>   5
     "Global Note" means a Note that is registered in the Note Register for the
Notes in the name of a Depositary or a nominee thereof.

     "Guarantee" or "guarantee" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness, measured as the lesser of the
aggregate outstanding amount of the Indebtedness so guaranteed and the face
amount of the Guarantee.

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

     "Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:

          (1) in respect of borrowed money;

          (2) evidenced by bonds, notes, debentures or similar instruments; or

          (3) representing capital lease obligations.

The amount of any Indebtedness outstanding as of any date shall be (i) the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount; and (ii) the principal amount (or portion of the discounted
rental stream attributable to principal in the case of capitalized leases)
thereof, together with any interest thereon that is more than 30 days past due,
in the case of any other Indebtedness.

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

     "Interest Payment Date" means the Stated Maturity of an installment of
interest on the Notes.

     "Issue Date" means [__________], 2001.

     "Legal Holiday," when used with respect to any place of payment or Place of
Conversion, as the case may be, means a Saturday, a Sunday or a day on which
banking institutions in The City of New York, at such place of payment or Place
of Conversion, as the case may be, are authorized by law, regulation or
executive order to remain closed. If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue on such payment for
the intervening period.


                                       5
<PAGE>   6
     "Maturity," when used with respect to any Notes, means the date on which
the principal of such Notes becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption, exercise of the repurchase right set forth in Article 11 or
otherwise.

     "Non-global Note" means a Note that is in definitive, full registered form,
without interest coupons, and that is not a Global Note.

     "Notes" means the Company's [____]% Convertible Senior Notes due 2008 and
more particularly means any Notes authenticated and delivered under this
Indenture.

     "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, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.

     "Officers' Certificate" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, the chief financial officer or the treasurer of the Company that meets
the requirements of Section 12.05.

     "Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 12.05. The
counsel may be an employee of or counsel to the Company or any Subsidiary of the
Company.

      "Permitted Group" means any group of investors that is deemed to be a
"person" (as that term is used in Section 13(d)(3) of the Exchange Act) by
virtue of the Stockholders Agreement, as the same may be amended, modified or
supplemented from time to time, provided that no single Person (other than a
Principal and its Related Parties) Beneficially Owns (together with its
Affiliates) more of the Voting Stock of the Company than is Beneficially Owned
by such group of investors than is then collectively Beneficially Owned by the
Principal and their Related Parties in the aggregate.

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

      "Place of Conversion" means any city in which any Conversion Agent is
located.

     "Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.08 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.


                                       6
<PAGE>   7
     "Principal" means Goldman, Sachs & Co. or any of its Affiliates,
Constellation Energy Group Inc. or any of its Affiliates, Mitsubishi Corporation
or any of its Affiliates or Tokyo Electric Power Company International B.V. or
any of its Affiliates or each member of the Company's executive management as of
the date of this Indenture.

     "Record Date Period" means the period from the close of business of any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date.

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

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

     "Regular Record Date" for interest payable in respect of any Note on any
Interest Payment Date means the [_____] or [_____] (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date.

     "Related Party" means:

          (1) any controlling stockholder, 80% (or more) owned subsidiary, or
     immediate family member (in the case of an individual) of any Principal; or

          (2) any trust, corporation, partnership or other entity, the
     beneficiaries, stockholders, partners, owners or Persons beneficially
     holding an 80% or more controlling interest of which consist of any one or
     more Principals and/or such other Persons referred to in the immediately
     preceding clause (1).

     "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) with direct responsibility for the
administration of this Indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.

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

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

     "Significant Subsidiary" means any Subsidiary of the Company which is a
"Significant Subsidiary" as defined in Rule 1-02(w) of Regulation S-X under the
Exchange Act.


                                       7
<PAGE>   8
     "Stated Maturity," when used with respect to the principal amount of any
Note or such payment of interest thereon, means the date specified in such Note
as the fixed date on which the principal of such Note or such installment of
interest is due and payable.

     "Stockholders Agreement" means the Amended and Restated Stockholders'
Agreement, dated as of November 5, 1999, by and among the Company, GS Capital
Partners II, L.P. (and certain Affiliates), Constellation Power Source, Inc.,
Mitsubishi Corporation and Affiliates and Tokyo Electric Power Company
International B.V., as such agreement may be amended from time to time.

     "Subsidiary" means, with respect to any Person:

          (1) any corporation, association or other business entity of which at
     least 50% of the total voting power of shares of Capital Stock entitled
     (without regard to the occurrence of any contingency) to vote in the
     election of directors, managers or trustees thereof is at the time owned or
     controlled, directly or indirectly, by such Person or one or more of the
     other Subsidiaries of that Person (or a combination thereof) and, in the
     case of any such entity of which 50% of the total voting power of shares of
     Capital Stock is so owned or controlled by such Person or one or more of
     the other Subsidiaries of such Person, such Person and its Subsidiaries
     also has the right to control the management of such entity pursuant to
     contract or otherwise; and

          (2) any partnership (a) the sole general partner or the managing
     general partner of which is such Person or a Subsidiary of such Person or
     (b) the only general partners of which are such Person or of one or more
     Subsidiaries of such Person (or any combination thereof).

     "Successor Note" of any particular Note means every Note issued after, and
evidencing all or a portion of the same debt as that evidenced by, such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.08 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.

     "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA; provided, however, that in the event the Trust Indenture Act of
1939 is amended after such date, then "TIA" means, to the extent required by
such amendment, the Trust Indenture Act of 1939 as so amended.

     "Trading Day" means (i) if the Common Stock is quoted on the Nasdaq
National Market or any other system of automated dissemination of quotations of
securities prices, days on which trades may be effected through such system, or
(ii) if the Common Stock

                                       8
<PAGE>   9
is listed or admitted for trading on the New York Stock Exchange or any other
national or regional securities exchange, days on which such national or
regional securities exchange is open for business, or (iii) if the Common Stock
is not listed on a national or regional securities exchange or quoted on the
Nasdaq National Market or any other system of automated dissemination of
quotation of securities prices, days on which the Common Stock is traded regular
way in the over-the-counter market and for which a closing bid and a closing
asked price for the Common Stock are available.

     "Trustee" means Wilmington Trust Company until a successor replaces
Wilmington Trust Company in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.

     "Underwriters" means Goldman, Sachs & Co., Credit Suisse First Boston
Corporation, Deutsche Banc Alex. Brown Inc. and Merrill Lynch, Pierce, Fenner &
Smith Incorporated.

     "Underwriting Agreement" means the Underwriting Agreement, dated as of
[__________], 2001, among the Company, Credit Suisse First Boston Corporation as
Independent Underwriter and the Underwriters, as such agreement may be amended
from time to time.

     "Voting Stock" of any Person as of any date means the Capital Stock of such
Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.

Section 1.02. Other Definitions.

<TABLE>
<CAPTION>
                                                     Defined in
      Term                                            Section
      ----                                            -------
<S>                                                  <C>
      "Arrangement Purchaser"......................     3.08
      "Authentication Order".......................     2.02
      "Change of Control Offer"....................    11.01
      "Constituent Person".........................    10.11
      "Conversion Rate"............................    10.01
      "Event of Default"...........................     6.01
      "Non-Electing Share".........................    10.11
</TABLE>


                                       9
<PAGE>   10
<TABLE>
<CAPTION>
                                                     Defined in
           Term                                       Section
           ----                                      ----------
<S>                                                  <C>
      "Note Register"..............................     2.03
      "Paying Agent"...............................     2.03
      "Payment Default"............................     6.01
      "Registrar"..................................     2.03
      "Repurchase Date"............................    11.03
      "Repurchase Price"...........................    11.01
</TABLE>

Section 1.03. 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.

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

          "indenture securities" means the Notes;

          "indenture security Holder" means a Holder of a Note;

          "indenture to be qualified" means this Indenture;

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

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

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

Section 1.04. Rules of Construction.


     Unless the context otherwise requires:

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


                                       10
<PAGE>   11
     (b) an accounting term not otherwise defined has the meaning assigned to it
in accordance with GAAP;

     (c) "or" is not exclusive;

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

     (e) provisions apply to successive events and transactions;

     (f) references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement of successor sections or rules adopted
by the Commission from time to time;

     (g) references to any statute, law, rule or regulation shall be deemed to
refer to the same as from time to time amended and in effect and to any
successor statute, law, rule or regulation; and

     (h) references to any contract, agreement or instrument shall mean the same
as amended, modified, supplemented or amended and restated from time to time, in
each case, in accordance with any applicable restrictions contained in this
Indenture.

                                   ARTICLE 2.

                                    THE NOTES

Section 2.01. Form and Dating.

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

     The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Company and the Trustee,
by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby. However, to the extent any provision of
any Note conflicts with the express provisions of this Indenture, the provisions
of this Indenture shall govern and be controlling.

     Upon their original issuance, Notes issued as contemplated by the
Underwriting Agreement shall be issued in the form of one or more Global Notes
in definitive, fully registered form without interest coupons. Such Global Note
shall be registered in the

                                       11
<PAGE>   12
name of DTC, as Depositary, or its nominee and deposited with the Trustee, as
custodian for DTC, for credit by DTC to the respective accounts of beneficial
owners of the Notes represented thereby (or such other accounts as they may
direct).

Section 2.02. Execution and Authentication.

     Two Officers shall sign the Notes for the Company by manual or facsimile
signature.

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

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

     At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Notes executed by the Company to the Trustee
for authentication; and the Trustee shall authenticate and deliver such Notes
upon a written order of the Company signed by an Officer of the Company (an
"Authentication Order"). Such Authentication Order shall specify the amount of
Notes to be authenticated and the date on which the Notes are to be
authenticated and whether the Notes are to be issued as one or more Global Notes
and such other information as the Company may include or the Trustee may
reasonably request. The aggregate principal amount of Notes that may be
outstanding under this Indenture at any time may not exceed $200,000,000 (or
$230,000,000 if the Underwriters exercise in full their over-allotment option
pursuant to the Underwriting Agreement), except as provided in Section 2.08.

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

Section 2.03. Registrar; Conversion Agent; and Paying Agent.

     The Company shall maintain an office or agency where Notes may be presented
for registration of transfer or for exchange or conversion ("Registrar" and with
respect to conversion, "Conversion Agent") and an office or agency where Notes
may be presented for payment ("Paying Agent"). The Registrar shall keep a
register of the Notes and of their transfer, exchange and conversion (the
register maintained in such office, the "Note Register"). The Company may
appoint one or more co-registrars or conversion agents and one or more
additional paying agents. The term "Registrar" includes any co-registrar, the
term "Conversion Agent" includes any co-conversion agent and the term "Paying


                                       12
<PAGE>   13
Agent" includes any additional paying agent. The Company may change any Paying
Agent, Registrar or Conversion Agent without notice to any Holder. The Company
shall promptly notify the Trustee in writing of the name and address of any
Agent not a party to this Indenture. If the Company fails to appoint or maintain
another entity as Registrar, Paying Agent or Conversion Agent, the Trustee
shall act as such. The Company or any of its Subsidiaries may act as Paying
Agent, Registrar or Conversion Agent.

     The Company initially appoints DTC to act as Depositary with respect to the
Global Notes.

     The Company initially appoints the Trustee to act as the Registrar, Paying
Agent and Conversion Agent and to act as custodian with respect to the Global
Notes.

Section 2.04. 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
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium, if any, or interest on the Notes, 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 money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money. If the Company or a Subsidiary acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee shall serve as Paying Agent for
the Notes.

Section 2.05. Holder Lists.

     The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders 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 the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).

Section 2.06. Global Notes; Non-global Notes; Book-entry Provisions.

     (1) Global Notes.

          (i) Each Global Note authenticated under this Indenture shall be
     registered in the name of the Depositary designated by the Company for such


                                       13
<PAGE>   14
     Global Note or a nominee thereof and delivered to such Depositary or a
     nominee thereof or custodian therefor, and each such Global Note shall
     constitute a single Note for all purposes of this Indenture.

          (ii) Except for exchanges of Global Notes for definitive, Non-global
     Notes at the sole discretion of the Company, no Global Note may be
     exchanged in whole or in part for Notes registered, and no transfer of a
     Global Note in whole or in part may be registered, in the name of any
     Person other than the Depositary for such Global Note or a nominee thereof
     unless (A) such Depositary (i) has notified the Company that it is
     unwilling or unable to continue as Depositary for such Global Note or (ii)
     has ceased to be a clearing agency registered as such under the Exchange
     Act or announces an intention permanently to cease business or does in fact
     do so or (B) there shall have occurred and be continuing an Event of
     Default with respect to such Global Note. In case of an event under clause
     (A) of the preceding sentence, if a successor Depositary for such Global
     Note is not appointed by the Company within 90 days after the Company
     receives such notice or becomes aware of such ineligibility, the Company
     will execute, and the Trustee, upon receipt of an Officers' Certificate
     directing the authentication and delivery of Notes, will authenticate and
     deliver, Notes, in any authorized denominations in an aggregate principal
     amount equal to the principal amount of such Global Note in exchange for
     such Global Note.

          (iii) If any Global Note is to be exchanged for other Notes or
     canceled in whole, it shall be surrendered by or on behalf of the
     Depositary or its nominee to the Trustee, as Note Registrar, for exchange
     or cancellation, as provided in this Article 2. If any Global Note is to be
     exchanged for other Notes or canceled in part, or if another Note is to be
     exchanged in whole or in part for a beneficial interest in any Global Note,
     in each case, as provided in Section 2.07, then either (A) such Global Note
     shall be so surrendered for exchange or cancellation, as provided in this
     Article 2, or (B) the principal amount thereof shall be reduced or
     increased by an amount equal to the portion thereof to be so exchanged or
     canceled, or equal to the principal amount of such other Note to be so
     exchanged for a beneficial interest therein, as the case may be, by means
     of an appropriate adjustment made on the records of the Trustee, as
     Registrar, whereupon the Trustee, in accordance with the Applicable
     Procedures, shall instruct the Depositary or its authorized representative
     to make a corresponding adjustment to its records. Upon any such surrender
     or adjustment of a Global Note, the Trustee shall, as provided in this
     Article 2, authenticate and deliver any Notes issuable in exchange for such
     Global Note (or any portion thereof) to or upon the order of, and
     registered in such names as may be directed by, the Depositary or its
     authorized representative. Upon the request of the Trustee in connection
     with the occurrence of any of the events specified in the preceding
     paragraph, the Company shall promptly make available to the Trustee a
     reasonable supply of

                                       14
<PAGE>   15
     Notes that are not in the form of Global Notes. The Trustee shall be
     entitled to rely upon any order, direction or request of the Depositary or
     its authorized representative which is given or made pursuant to this
     Article 2 if such order, direction or request is given or made in
     accordance with the Applicable Procedures.

          (iv) Every Note authenticated and delivered upon registration of
     transfer of, or in exchange for or in lieu of, a Global Note or any portion
     thereof, whether pursuant to this Article 2 or otherwise, shall be
     authenticated and delivered in the form of, and shall be, a registered
     Global Note, unless such Note is registered in the name of a Person other
     than the Depositary for such Global Note or a nominee thereof, in which
     case such Note shall be authenticated and delivered in definitive, fully
     registered form, without interest coupons.

          (v) The Depositary or its nominee, as registered owner of a Global
     Note, shall be the Holder of such Global Note for all purposes under this
     Indenture and the Notes, and owners of beneficial interests in a Global
     Note shall hold such interests pursuant to the Applicable Procedures.
     Accordingly, any such owner's beneficial interest in a Global Note will be
     shown only on, and the transfer of such interest shall be effected only
     through, records maintained by the Depositary or its nominee or its Agent
     Members and such owners of beneficial interests in a Global Note will not
     be considered the owners or holders thereof.

     (2) Non-global Notes. Notes issued upon the events described in Section
2.06(1)(ii) shall be in definitive, fully registered form, without interest
coupons.

     Section 2.07. Registration; Registration of Transfer and Exchange.

     (1) Upon surrender for registration of transfer of any Note at an office or
agency of the Company designated pursuant to Section 2.03 for such purpose, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Notes of any
authorized denominations and of a like aggregate principal amount and bearing
such restrictive legends as may be required by this Indenture.

     At the option of the Holder, and subject to the other provisions of this
Section 2.07, Notes may be exchanged for other Notes of any authorized
denomination and of a like aggregate principal amount, upon surrender of the
Notes to be exchanged at any such office or agency. Whenever any Notes are so
surrendered for exchange, and subject to the other provisions of this Section
2.07, the Company shall execute, and the Trustee shall authenticate and deliver,
the Notes which the Holder making the exchange is entitled to receive. Every
Note presented or surrendered for registration of transfer or for exchange shall
(if so required by the Company or the Registrar) be duly endorsed, or

                                       15
<PAGE>   16
be accompanied by a written instrument of transfer in form satisfactory to the
Company, the Trustee and the Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.

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

     No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes except as provided in Section 2.08, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Notes, other than exchanges pursuant to Section 2.06,
9.05, 10.02 or 11.03 (other than where the shares of Common Stock are to be
issued or delivered in a name other than that of the Holder of the Note) not
involving any transfer and other than any stamp and other duties, if any, which
may be imposed in connection with any such transfer or exchange by the United
States or any political subdivision thereof or therein, which shall be paid by
the Company.

     In the event of a redemption of the Notes, neither the Company nor the
Registrar will be required (a) to register the transfer of or exchange Notes for
a period of 15 days immediately preceding the date notice is given identifying
the serial numbers of the Notes called for such redemption or (b) to register
the transfer of or exchange any Note, or portion thereof, called for redemption.

     (2) Certain Transfers and Exchanges. Notwithstanding any other provision of
this Indenture or the Notes, transfers and exchanges of Notes and beneficial
interests in a Global Note of the kinds specified in this Section 2.07(2) shall
be made only in accordance with this Section 2.07(2).

          (i) A beneficial interest in a Global Note may be exchanged for a
     Non-global Note only as provided in Section 2.06(1)(ii)

     (3) Neither the Trustee, the Paying Agent nor any of their agents shall (i)
have any duty to monitor compliance with or with respect to any federal or state
or other securities or tax laws or (ii) have any duty to obtain documentation on
any transfers or exchanges other than as specifically required hereunder.

Section 2.08. Replacement Notes.

     If any mutilated Note is surrendered to the Trustee or the Company and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon receipt of an
Authentication Order, shall

                                       16
<PAGE>   17
authenticate a replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Company, an indemnity 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 and any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Company and the
Trustee may charge for their expenses in replacing a Note.

     Every replacement Note is an additional legally binding obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.

Section 2.09. Outstanding Notes.

     The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions of this Indenture, and those described in this
Section as not outstanding. Except as set forth in Section 2.10, a Note does not
cease to be outstanding because either of the Company or an Affiliate of the
Company holds the Note.

     If a Note is replaced pursuant to Section 2.08, it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Note is
held by a bona fide purchaser.

     If the principal amount of any Note is considered paid under Section 4.01,
it ceases to be outstanding and interest on it ceases to accrue.

     If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a Redemption Date, Repurchase Date or maturity date,
money, or in the case of a repurchase and subject to the conditions set forth in
Article 11, shares of Common Stock, sufficient to pay Notes payable on that
date, then on and after that date such Notes shall be deemed to be no longer
outstanding and shall cease to accrue interest.

     If a Note is converted into Common Stock pursuant to Article 10, it ceases
to be outstanding and interest on it ceases to accrue on the day of surrender of
such Note for Conversion.

Section 2.10. Treasury Notes.

     In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, or whether the Holders
of the requisite principal amount of outstanding Notes are present at a meeting
of Holders of Notes for quorum purposes, Notes owned by the Company, or by any
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the

                                       17
<PAGE>   18
Company, shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, or any such determination as to the presence
of a quorum, only Notes that a Responsible Officer of the Trustee knows are so
owned shall be so disregarded.

Section 2.11. Temporary Notes.

     Until certificates representing Notes are ready for delivery, the Company
may prepare and the Trustee, upon receipt of an Authentication Order, shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form
of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as shall be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes.

     Holders of temporary Notes shall be entitled to all of the benefits of this
Indenture.

Section 2.12. Cancellation.

     The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar, Conversion Agent and Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange, conversion
or payment. The Trustee and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, conversion, payment, replacement or
cancellation and shall dispose of such canceled Notes in its customary manner.
The Company may not issue new Notes to replace Notes that they have paid or that
have been delivered to the Trustee for cancellation.

Section 2.13. Defaulted Interest.

     If the Company defaults in a payment of interest on the Notes, it 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 on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01. The Company shall notify the Trustee in writing of the
amount of defaulted interest proposed to be paid on each Note and the date of
the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date; provided that no such special record date
shall be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.


                                       18
<PAGE>   19
Section 2.14. Computation of Interest.

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

Section 2.15. CUSIP Numbers.

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

                                   ARTICLE 3.

                            REDEMPTION AND PREPAYMENT

Section 3.01. Notices to Trustee.

     If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07, 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 clause of this Indenture pursuant to which the redemption
shall occur, (ii) the Redemption Date, (iii) the principal amount of Notes to be
redeemed and (iv) the Redemption Price.

Section 3.02. Selection of Notes to Be Redeemed.

     If less than all of the Notes are to be redeemed or purchased in an offer
to purchase at any time, the Trustee shall select the Notes to be redeemed or
purchased among the Holders of the Notes in compliance with the requirements of
the principal national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis, by lot or in
accordance with any other method the Trustee considers fair and appropriate. In
the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected, unless otherwise provided herein, not less than 30 nor more
than 60 days prior to the Redemption Date by the Trustee from the outstanding
Notes not previously called for redemption. If any Note selected for partial
redemption is converted in part before termination of the conversion right with
respect to the portion of the Note so selected, the converted portion of such
Note shall be deemed (so far as may be) to be the portion selected for
redemption. Notes which have been converted during a selection of Notes to be
redeemed may be treated by the Trustee as outstanding for the purpose of such
selection.


                                       19
<PAGE>   20
     The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.

Section 3.03. 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 Notes are to be redeemed at its registered
address.

     The notice shall identify the Notes (including applicable CUSIP numbers) to
be redeemed and shall state:

     (a) the Redemption Date;

     (b) the Redemption Price;

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

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

     (e) that Notes 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 Notes called for redemption ceases to accrue on and after the
Redemption Date;

     (g) the paragraph of the Notes and/or Section of this Indenture pursuant to
which the Notes called for redemption are being redeemed;

     (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 Notes; and


                                       20
<PAGE>   21
     (i) the Conversion Rate, the date on which the right to convert the Notes
to be redeemed will terminate and the places where Notes may be surrendered for
conversion or the procedures for surrendering Notes.

     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 45 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.

Section 3.04. Effect of Notice of Redemption.

     Once notice of redemption is mailed in accordance with Section 3.03, Notes
called for redemption become irrevocably due and payable on the Redemption Date
at the Redemption Price. A notice of redemption may not be conditional.

Section 3.05. Deposit of Redemption Price.

     At or prior to 10:00 a.m., New York City time, on the Redemption Date, the
Company shall deposit with the Trustee or with the Paying Agent money sufficient
to pay the Redemption Price of and accrued interest on all Notes to be redeemed
on that date. The Trustee or the Paying Agent shall promptly return to the
Company any money deposited with the Trustee or the Paying Agent by the Company
in excess of the amounts, including but not limited to any amounts in respect of
Notes that are converted (subject to Section 10.02), necessary to pay the
Redemption Price of, and accrued interest on, all Notes 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 Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after a
Regular Record Date but on or prior to the related Interest Payment Date, then
any accrued and unpaid interest shall be paid to the Person in whose name such
Note was registered at the close of business on such Regular Record Date. If any
Note 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 and
such Note shall remain convertible 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 Notes and in Section 4.01.

Section 3.06. Notes Redeemed in Part.

      Upon surrender of a Note that is redeemed in part, the Company shall issue
and, upon the Company's written request, the Trustee shall authenticate for the
Holder at the

                                       21
<PAGE>   22
expense of the Company a new Note equal in principal amount to the unredeemed
portion of the Note surrendered.

Section 3.07. Optional Redemption.

     (a) The Company shall not have the option to redeem the Notes pursuant to
this Section 3.07 prior to [_____________], 2004. Thereafter, the Company shall
have the option to redeem the Notes, in whole or from time to time in part, in
cash upon not less than 30 nor more than 60 days' notice, at the Redemption
Prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest thereon, if any, to the applicable Redemption Date,
if redeemed during the twelve-month period beginning on [_____________] of the
years indicated below:

<TABLE>
<CAPTION>
                 Year                        Percentage
                 ----                        ----------
<S>                                          <C>
              2004                           [________]%
              2005                           [________]%
              2006 and thereafter                100%
</TABLE>

     (b) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Section 3.01 through 3.06.

Section 3.08. Conversion Arrangement on Call for Redemption.

     In connection with any redemption of Notes, the Company may arrange for the
purchase and conversion of any Notes by an agreement with one or more investment
bank or other purchasers (the "Arrangement Purchasers") to purchase such
securities by paying to the Trustee in trust for the Holders, on or before the
Redemption Date an amount not less than the applicable Redemption Price,
together with interest accrued to the Redemption Date of such Notes.
Notwithstanding anything to the contrary contained in this Article 3, the
obligation of the Company to pay the Redemption Price, together with the
interest accrued to the Redemption Date, shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such Arrangement Purchasers.
If such an agreement is entered into (a copy of which shall be filed with the
Trustee prior to the close of business on the Business Day immediately prior to
the Redemption Date), any Notes called for redemption that are not duly
surrendered for conversion by the Holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law and consistent with
any agreement or agreements with such Arrangement Purchasers, to be acquired by
such Arrangement Purchasers from such Holders and (notwithstanding anything to
the contrary contained in Article 10) surrendered by such Arrangement Purchasers
for conversion, all as of immediately prior to the close of business on the
Redemption Date (and the right to convert any such Notes shall be extended
through such

                                       22
<PAGE>   23
time), subject to payment of the above amount as aforesaid. At the direction of
the Company, the Trustee shall hold and dispose of any such amount paid to it by
the Arrangement Purchasers to the Holders in the same manner as it would monies
deposited with it by the Company for the redemption of Notes. Without the
Trustee's prior written consent, no arrangement between the Company and such
Arrangement Purchasers for the purchase and conversion of any Notes shall
increase or otherwise affect any of the powers, duties, responsibilities or
obligations of the Trustee as set forth in this Indenture, and the Company
agrees to indemnify the Trustee from, and hold it harmless against, any loss,
liability or expense arising out of or in connection with any such arrangement
for the purchase and conversion of any Notes between the Company and such
Arrangement Purchasers, including the costs and expenses, including reasonable
legal fees, incurred by the Trustee in the defense of any claim or liability
arising out of or in connection with the exercise or performance of any of its
powers, duties, responsibilities or obligations under this Indenture.

Section 3.09. Mandatory Redemption.

     The Company shall not be required to make mandatory redemption payments
with respect to the Notes.

                                   ARTICLE 4.

                                    COVENANTS

Section 4.01. Payment of Notes.

     The Company shall pay or cause to be paid the principal, premium, if any,
and interest on the Notes on the dates and in the manner provided in the Notes.
Principal, premium, if any, and interest shall be considered paid on the date
due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. New York City time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, 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 rate equal to
1% per annum in excess of the then applicable interest rate on the Notes to the
extent lawful; the Company shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.


                                       23
<PAGE>   24
Section 4.02. Maintenance of Office or Agency.

           The Company shall maintain in the Borough of Manhattan, The 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 Notes may be
surrendered for conversion, redemption, repurchase, registration of transfer or
for exchange and where notices and demands to or upon the Company in respect of
the Notes 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 Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company 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 Wilmington Trust Company as one
such office or agency of the Company in accordance with Section 2.03.

Section 4.03. Reports.

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

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


                                       24
<PAGE>   25
Section 4.04. Compliance Certificate.

           (a) The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge the Company
has kept, observed, performed and fulfilled each and every covenant contained in
this Indenture and is not in default in the performance or observance of any of
the terms, provisions and conditions of this Indenture (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.

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

Section 4.05. Taxes.

           The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate proceedings
or where the failure to effect such payment is not adverse in any material
respect to the Holders of the Notes.

Section 4.06. Stay, Extension 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.


                                       25
<PAGE>   26
Section 4.07. Corporate Existence.

           Subject to Article 5, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its corporate
existence, and the corporate, partnership or other existence of each of its
Significant Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Significant Subsidiary and (ii) the rights (charter and statutory),
licenses and franchises of the Company and its Significant Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any of its Significant Subsidiaries, if the Board of Directors of the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Significant Subsidiaries, taken
as a whole, and that the loss thereof is not adverse in any material respect to
the Holders of the Notes.

Section 4.08. Payments for Consent.

           The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, pay or cause to be paid any consideration to or for
the benefit of any Holder of Notes for or as an inducement to any consent,
waiver or amendment of any of the terms or provisions of this Indenture or the
Notes unless such consideration is offered to be paid and is paid to all Holders
of the Notes 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 4.09. Registration and Listing.

           The Company (i) will effect all registrations with, and obtain all
approvals by, all governmental authorities that may be necessary under any
United States Federal or state law (including the Securities Act, the Exchange
Act and state securities and Blue Sky laws) before the shares of Common Stock
issuable upon conversion of Notes are issued and delivered, and qualified or
listed as contemplated by clause (ii); and (ii) will qualify the shares of
Common Stock required to be issued and delivered upon conversion of Notes, prior
to such issuance or delivery, for trading on the New York Stock Exchange or, if
the Common Stock is not then traded on the New York Stock Exchange, list the
Common Stock on each national securities exchange or quotation system on which
outstanding Common Stock is listed or quoted at the time of such delivery.

Section 4.10. Waiver of Certain Covenants.

           The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 4.05 and 4.07 (other than with
respect to the existence of the Company (subject to Article 5)) (other than a
covenant or condition which under

                                       26
<PAGE>   27
Article 9 cannot be modified or amended without the consent of the Holder of
each outstanding Note affected), if before the time for such compliance the
Holders shall either (i) through the written consent (or as otherwise in
accordance with the Applicable Procedures) of the Holders of at least a majority
in aggregate principal amount of the Notes then outstanding or (ii) by the
adoption of a resolution, at a meeting of Holders of the outstanding Notes at
which a quorum is present, by the Holders of at least 66 2/3% in principal
amount of the outstanding Notes represented at such meeting or, if less, by the
Holders of at least a majority in aggregate principal amount of all outstanding
Notes, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant 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 or any Paying or Conversion Agent in respect of
any such covenant or condition shall remain in full force and effect.

                                   ARTICLE 5.

                                   SUCCESSORS

Section 5.01. Merger, Consolidation, or Sale of Assets.

           (1) The Company may not, directly or indirectly: (1) consolidate or
merge with or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of its properties or assets, in one or more related
transactions, to another Person; unless:

           (2) either: (a) the Company is the surviving corporation; or (b) the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, conveyance or other
disposition shall have been made is a Person organized or existing under the
laws of the United States, any state thereof or the District of Columbia
(provided that if the Person formed by or surviving any such consolidation or
merger with the Company is not a corporation, a corporate co-issuer shall also
be an obligor with respect to the Notes);

           (3) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made assumes all the
obligations of the Company under the Notes and this Indenture pursuant to
agreements reasonably satisfactory to the Trustee; and

           (4) immediately after such transaction, no Default or Event of
Default exists.


                                       27
<PAGE>   28
           In addition, the Company may not, directly or indirectly, lease all
or substantially all of its properties or assets, in one or more related
transactions, to any other Person.

           This Section 5.01 shall not apply to a sale, assignment, transfer,
conveyance or other disposition of assets between or among the Company and any
of its Subsidiaries.

Section 5.02. 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 5.01, the successor Person (if other
than the Company) formed by such consolidation or into which the Company is
merged or to which such transfer is made shall succeed to and (except in the
case of a lease) be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named therein as the Company, and (except in the case of a
lease) the Company shall be released from the obligations under the Notes and
this Indenture, except with respect to any obligations that arise from, or are
related to, such transaction.

                                   ARTICLE 6.

                              DEFAULTS AND REMEDIES

Section 6.01. Events of Default.

           An "Event of Default" occurs if:

           (a) the Company defaults in the payment when due of interest on the
Notes and such default continues for a period of 30 days;

           (b) the Company defaults in payment when due of the principal of or
premium, if any, on the Notes;

           (c) the Company fails to comply with any of the notice or repurchase
provisions of Article 11;

           (d) the Company fails to comply with any of its other covenants or
agreements in this Indenture for 30 days after written notice thereof has been
given to the Company by the Trustee or to the Company and the Trustee by Holders
of at least 25% of the aggregate principal amount of the Notes outstanding;

           (e) the Company or any of its Significant Subsidiaries defaults under
any mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any Indebtedness for money borrowed (or
the payment of

                                       28
<PAGE>   29
which is guaranteed by the Company or any of its Significant Subsidiaries)
whether such Indebtedness or guarantee now exists or is created after the Issue
Date, if that default:

                     (1) is caused by a failure to pay at final stated maturity
           the principal amount on such Indebtedness prior to the expiration of
           the grace period provided in such Indebtedness on the date of such
           default (a "Payment Default"); or

                      (2) results in the acceleration of such Indebtedness prior
           to its express maturity,

and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates $25
million or more;

           (f) the Company or any of its Significant Subsidiaries pursuant to or
within the meaning of Bankruptcy Law:

                      (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, or

                      (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 of its
           Significant Subsidiaries in an involuntary case;

                      (ii) appoints a custodian of the Company or any of its
           Significant Subsidiaries or for all or substantially all of the
           property of the Company or any of its Significant Subsidiaries; or

                      (iii) orders the liquidation of the Company or any of its
           Significant Subsidiaries;

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

Section 6.02. Acceleration.


                                       29
<PAGE>   30
           In the case of an Event of Default arising from clause (f) or (g) of
Section 6.01 with respect to the Company, all outstanding Notes shall become due
and payable immediately without further action or notice. If any other Event of
Default 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 Notes by
notice to the Company and the Trustee may declare all the Notes to be due and
payable immediately. The Holders of a majority in aggregate principal amount of
the Notes then outstanding by written notice to the Trustee may on behalf of all
of the Holders rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default (except nonpayment of principal, interest or premium that has become due
solely because of the acceleration) have been cured or waived.

Section 6.03. Other Remedies.

           If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal, premium, if
any, and interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.

           The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note 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 6.04. Waiver of Existing Defaults.

           Holders, either (i) through the written consent (or as otherwise in
accordance with the Applicable Procedures) of the Holders of at least a majority
in aggregate principal amount of the then outstanding Notes by notice to the
Trustee or (ii) by the adoption of a resolution, at a meeting of Holders of the
outstanding Notes at which a quorum is present, by the Holders of at least 66
2/3% in principal amount of the outstanding Notes represented at such meeting
or, if less, by the Holders of at least a majority in aggregate principal amount
of all outstanding Notes by notice to the Trustee, may on behalf of the Holders
of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except (x) a continuing Default or Event of Default in
the payment of the principal of, premium, if any, or interest on, the Notes
(including in connection with an offer to purchase) or (y) in respect of a
covenant or provision hereof which under Article 9 cannot be modified or amended
without the consent of each Holder of each outstanding Note affected (provided,
however, that the Holders of a majority in aggregate principal amount of the
then outstanding Notes 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


                                       30
<PAGE>   31
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 6.05. Control by Majority.

           Holders of a majority in principal amount of the then outstanding
Notes 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. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines may be
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability. The Trustee may take any other action which it
deems proper that is not inconsistent with any such directive.

Section 6.06. Limitation on Suits.

No Holder of a Note will have any right to institute any proceeding under this
Indenture, or for the appointment of a receiver or a trustee or for any other
remedy under this Indenture or the Notes unless:

           (a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;

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

           (c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity reasonably 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 Notes do not give the Trustee a direction
inconsistent with the request and offer.

           A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.

Section 6.07. Rights of Holders of Notes to Receive Payment and to Convert.

           Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium, if any, and
interest on the Note, on or

                                       31
<PAGE>   32
after the Maturity dates (including in connection with a redemption and/or an
offer to purchase), or to convert such Note in accordance with Article 10, or to
bring suit for the enforcement of any such payment on or after such respective
dates or of such right to convert, shall be absolute and unconditional and shall
not be impaired or affected without the consent of such Holder.

Section 6.08. Collection Suit by Trustee.

           If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, 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, premium, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, 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 6.09. Trustee May File Proofs of Claim.

           The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), their creditors or their property and
shall be entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to 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 7.07. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 out of the
estate in any such proceeding, shall be denied for any reason, payment of the
same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties that the
Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.

Section 6.10. Priorities.


                                       32
<PAGE>   33
           If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:

                      First: to the Trustee, its agents and attorneys for
                      amounts due under Section 7.07, including payment of all
                      compensation, expense and liabilities incurred, and all
                      advances made, by the Trustee and the costs and expenses
                      of collection;

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

                      Third: 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 Notes 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 and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.07, or a suit by Holders of more than 10%
in principal amount of the then outstanding Notes.

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




                                       33
<PAGE>   34
                                   ARTICLE 7.

                                     TRUSTEE

Section 7.01. 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 person would exercise or use under the circumstances in the conduct of
such person's 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 Trustee need
           perform only those duties that are specifically set forth in this
           Indenture 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 required to be furnished to the Trustee hereunder 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
           (but need not confirm or investigate the accuracy of any mathematical
           calculations or other facts stated therein).

           (c) The Trustee may not be relieved from liabilities 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 6.05.

           (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 7.01.


                                       34
<PAGE>   35
           (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, claim,
damage 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) 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 or
other paper or documents.

Section 7.02. Rights of Trustee.

           (a) The Trustee may conclusively rely upon any document (whether in
its original or facsimile form) 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 of its own selection and the written advice or opinion 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.

           (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) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity

                                       35
<PAGE>   36
satisfactory to it against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.

           (g) The Trustee shall not be charged with knowledge of any Default or
Event of Default unless either (i) a Responsible Officer of the Trustee shall
have actual knowledge of such Default or Event of Default or (ii) written notice
of such Default or Event of Default shall have been given to and received by a
Responsible Officer of the Trustee by the Company or any Holder.

Section 7.03. Individual Rights of Trustee.

           The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the Commission
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.

Section 7.04. 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 Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes 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 the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.

Section 7.05. Notice of Defaults.

           If a Default or Event of Default occurs and is continuing and if it
is known to a Responsible Officer of the Trustee, the Trustee shall mail to
Holders of Notes a notice of the Default or Event of Default within 90 days
after the Trustee acquires knowledge thereof. Except in the case of a Default or
Event of Default in payment of principal of, premium, if any, or interest on any
Note, 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 Notes.

Section 7.06. Reports by Trustee to Holders of the Notes.

           Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Notes remain outstanding, the
Trustee shall mail to

                                       36
<PAGE>   37
the Holders of the Notes 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
Notes shall be mailed to the Company and filed with the Commission and each
stock exchange on which the Notes are listed in accordance with TIA
Section 313(d). The Company shall promptly notify the Trustee when the
Notes are listed on any stock exchange or delisted therefrom.

Section 7.07. Compensation and Indemnity.

           The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.

           The Company shall fully indemnify the Trustee against any and all
losses, liabilities, claims, damages or expenses (including reasonable legal
fees and 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 7.07) and 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 may be attributable to its gross
negligence or willful misconduct. 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.
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.

           The obligations of the Company in this Section 7.07 shall survive
resignation or removal of the Trustee and the satisfaction and discharge of this
Indenture.

           To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee,

                                       37
<PAGE>   38
except that held in trust to pay principal and interest on particular Notes.
Such lien shall survive the resignation or removal of the Trustee and the
satisfaction and discharge of this Indenture.

           When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(f) or (g) 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.

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

Section 7.08. 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 Notes 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;

           (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 Notes 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 at least 10% in principal amount of the then outstanding Notes
may petition at the expense of the Company any court of competent jurisdiction
for the appointment of a successor Trustee.


                                       38
<PAGE>   39
           If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10, such Holder
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 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. 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
7.07. Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the Company's obligations under Section 7.07 shall continue for the benefit of
the retiring Trustee.

Section 7.09. 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 has a combined capital and surplus of at least $50 million
as set forth in its most recent published annual report of condition.

           This Indenture shall always have a Trustee who 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 the 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.

Section 7.12. Other Capacities.

           All references in this Indenture to the Trustee shall be deemed to
refer to the Trustee in its capacity as Trustee and in its capacities as Agent,
to the extent acting under such capacities, and every provision of this
Indenture relating to the conduct or affecting

                                       39
<PAGE>   40
the liability or offering protection, immunity or indemnity to the Trustee shall
be deemed to apply with the same force and effect to the Trustee acting in its
capacities as any Agent.

                                   ARTICLE 8.

                          MEETINGS OF HOLDERS OF NOTES

Section 8.01. Purposes for Which Meetings May Be Called.

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

Section 8.02. Call, Notice and Place of Meetings.

           (1) The Trustee may at any time call a meeting of Holders of Notes
for any purpose specified in Section 8.01, to be held at such time and at such
place in the Borough of Manhattan, The City of New York, as the Trustee shall
determine. Notice of every meeting of Holders of Notes, setting forth the time
and the place of such meeting and in general terms the action proposed to be
taken at such meeting, shall be given, in the manner provided in Section 12.02,
not less than 21 nor more than 180 days prior to the date fixed for the meeting.

           (2) In case at any time the Company, pursuant to a Board Resolution,
or the Holders of at least 10% in principal amount of the outstanding Notes
shall have requested the Trustee to call a meeting of the Holders of Notes for
any purpose specified in Section 8.01, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within 21 days after
receipt of such request or shall not thereafter proceed to cause the meeting to
be held as provided herein, then the Company or the Holders of Notes in the
amount specified, as the case may be, may determine the time and the place in
the Borough of Manhattan, The City of New York, for such meeting and may call
such meeting for such purposes by giving notice thereof as provided in paragraph
(1) of this Section.

Section 8.03. Persons Entitled to Vote at Meetings.

           To be entitled to vote at any meeting of Holders of Notes, a Person
shall be (i) a Holder of one or more outstanding Notes, or (ii) a Person
appointed by an instrument in writing as proxy for a Holder or Holders of one or
more outstanding Notes by such Holder or Holders. The only Persons who shall be
entitled to be present or to speak at any meeting of Holders shall be the
Persons entitled to vote at such meeting and their counsel,

                                       40
<PAGE>   41
any representatives of the Trustee and its counsel and any representatives of
the Company and its counsel.

Section 8.04. Quorum; Action.

           The Persons entitled to vote a majority in principal amount of the
outstanding Notes shall constitute a quorum. In the absence of a quorum within
30 minutes of the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Notes, be dissolved. In any other case,
the meeting may be adjourned for a period of not less than 10 days as determined
by the chairman of the meeting prior to the adjournment of such meeting. In the
absence of a quorum at any such adjourned meeting, such adjourned meeting may be
further adjourned for a period not less than 10 days as determined by the
chairman of the meeting prior to the adjournment of such adjourned meeting
(subject to repeated applications of this sentence). Notice of the reconvening
of any adjourned meeting shall be given as provided in Section 8.02(1), except
that such notice need be given only once not less than five days prior to the
date on which the meeting is scheduled to be reconvened. Notice of the
reconvening of an adjourned meeting shall state expressly the percentage of the
principal amount of the outstanding Notes which shall constitute a quorum.

           Subject to the foregoing, at the reconvening of any meeting adjourned
for a lack of a quorum, the Persons entitled to vote 25% in principal amount of
the outstanding Notes at the time shall constitute a quorum for the taking of
any action set forth in the notice of the original meeting.

           At a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid, any resolution and all matters (other than a
covenant or condition which under Section 9.02 cannot be modified or amended
without the consent of the Holder of each outstanding Note affected) shall be
effectively passed and decided if passed or decided by the lesser of (i) the
Holders of not less than a majority in principal amount of outstanding Notes and
(ii) the Persons entitled to vote not less than 66-2/3% in principal amount of
outstanding Notes represented and entitled to vote at such meeting.

           Any resolution passed or decisions taken at any meeting of Holders of
Notes duly held in accordance with this Section shall be binding on all the
Holders of Notes whether or not present or represented at the meeting. The
Trustee shall, in the name and at the expense of the Company, notify all the
Holders of Notes of any such resolutions or decisions pursuant to Section 12.02.

           Section 2.09 shall determine which Notes are considered to be
"outstanding" for purposes of this Section 8.04.

Section 8.05. Determination of Voting Rights; Conduct and Adjournment of
Meetings.

                                       41
<PAGE>   42
           (1) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Notes in regard to proof of the holding of Notes and of
the appointment of proxies and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall deem appropriate.

           (2) The Trustee shall, by an instrument in writing, appoint a
temporary chairman (which may be the Trustee) of the meeting, unless the meeting
shall have been called by the Company or by Holders of Notes as provided in
Section 8.02(2), in which case the Company or the Holders of Notes calling the
meeting, as the case may be, shall in like manner appoint a temporary chairman.
A permanent chairman and a permanent secretary of the meeting shall be elected
by vote of the Persons entitled to vote a majority in principal amount of the
outstanding Notes represented at the meeting.

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

           (4) Any meeting of Holders of Notes duly called pursuant to Section
8.02 at which a quorum is present may be adjourned from time to time by Persons
entitled to vote a majority in principal amount of the outstanding Notes
represented at the meeting, and the meeting may be held as so adjourned without
further notice.

Section 8.06. Counting Votes and Recording Action of Meetings.

           The vote upon any resolution submitted to any meeting of Holders of
Notes shall be by written ballots on which shall be subscribed the signatures of
the Holders of Notes or of their representatives by proxy and the principal
amounts at Stated Maturity and serial numbers of the outstanding Notes held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting. A
record, at least in duplicate, of the proceedings of each meeting of Holders of
Notes shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more Persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 8.02 and, if
applicable, Section 8.04. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy



                                       42
<PAGE>   43
shall be delivered to the Company and another to the Trustee to be preserved by
the Trustee, the latter to have attached thereto the ballots voted at the
meeting. Any record so signed and verified shall be conclusive evidence of the
matters therein stated.

                                   ARTICLE 9.

                        AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01. Without Consent of Holders of Notes.

           Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or the Notes without the consent
of any Holder of a Note:

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

           (b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;

           (c) to provide for the assumption of the Company's obligations to
Holders of Notes in the case of a merger or consolidation or sale of all or
substantially all of the assets of the Company pursuant to Article 5;

           (d) to make any change that would provide any additional rights or
benefits to the Holders of Notes or that does not adversely affect the legal
rights under this Indenture of any such Holder;

           (e) to comply with requirements of the Commission in order to effect
or maintain the qualification of this Indenture under the TIA or otherwise as
necessary to comply with applicable law;

           (f) to make provision with respect to the conversion rights of
Holders of Notes pursuant to Section 10.11 or to make provision with respect to
the repurchase rights of Holders of Notes pursuant to Section 11.04; or

           (g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee.

           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
7.02, 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

                                       43
<PAGE>   44
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 9.02. With Consent of Holders of Notes.

           Except as provided below in this Section 9.02, this Indenture or the
Notes may be amended or supplemented with either (i) the written consent (or as
otherwise in accordance with the Applicable Procedures) of the Holders of at
least a majority in aggregate principal amount of the Notes then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or a tender offer or exchange offer for, Notes), or (ii) by the adoption of
a resolution, at a meeting of Holders of the outstanding Notes at which a quorum
is present, by the Holders of at least 66 2/3% in principal amount of the
outstanding Notes represented at such meeting or, if less, by the Holders of at
least a majority in aggregate principal amount of all outstanding Notes. Section
2.09 shall determine which Notes are considered to be "outstanding" for purposes
of this Section 9.02.

           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 satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02, the Trustee shall join
with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly 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 Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or supplement, but it shall be sufficient if such consent approves the substance
thereof.

           After an amendment or supplement under this Section 9.02 becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment or supplement. 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.

           However, without the consent or affirmative vote of each Holder
affected, an amendment or supplement under this Section 9.02 may not (with
respect to any Notes held by a non-consenting Holder):

           (a) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, or reduce the principal amount of, or the
premium, if any, or the

                                       44
<PAGE>   45
rate of interest payable thereon, or reduce the amount payable upon a redemption
or Change of Control, or change the place or currency of payment of the
principal of, premium, if any, or interest on any Note (including any payment of
Redemption Price or Repurchase Price in respect of such Note) or impair the
right to institute suit for the enforcement of any payment in respect of any
Note on or after the Stated Maturity thereof (or, in the case of redemption or
any repurchase, on or after the Redemption Date or Repurchase Date, as the case
may be) or, except as permitted by Section 10.11, adversely affect the right of
Holders to convert any Note as provided in Article 10; or

           (b) reduce the requirements of Section 8.04 for quorum or voting, or
reduce the percentage in principal amount of the outstanding Notes the consent
of whose Holders is required for any such supplemental indenture or the consent
of whose Holders is required for any waiver of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences provided for in this Indenture; or

           (c) modify the obligation of the Company to maintain an office or
agency in the Borough of Manhattan, The City of New York, pursuant to Section
4.02; or

           (d) modify any of the provisions of this Section or Section 4.10 or
6.04, except to increase any percentage contained herein or therein or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each outstanding Note affected
thereby; or

           (e) modify the provisions of Article 11 relating to notice and
repurchase (including, without limitation, those relating to the Repurchase Date
and the Repurchase Price (whether payable in cash or shares of Common Stock)) in
a manner adverse to the Holders.

Section 9.03. Compliance with Trust Indenture Act.

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

Section 9.04. Revocation and Effect of Consents.

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

                                       45
<PAGE>   46
Section 9.05. Notation on or Exchange of Notes.

      The Trustee may place an appropriate notation about an amendment or
supplement on any Note thereafter authenticated. The Company in exchange for all
Notes may issue and the Trustee shall, upon receipt of an Authentication Order,
authenticate new Notes that reflect the amendment or supplement.

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

Section 9.06. 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
approves it. In executing any amended or supplemental indenture, the Trustee
shall be entitled to receive and (subject to Section 7.01) shall be fully
protected in relying upon, in addition to the documents required by Section
10.04, an Officer's 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.

                               CONVERSION OF NOTES

Section 10.01. Conversion Privilege and Conversion Rate.

      Subject to and upon compliance with the provisions of this Article, at the
option of the Holder thereof, any Note may be converted into fully paid and
nonassessable shares (calculated as to each conversion to the nearest 1/100th of
a share) of Common Stock of the Company at the Conversion Rate, determined as
hereinafter provided, in effect at the time of conversion. Such conversion right
shall commence on the initial issuance date of the Notes and expire at the close
of business on the Business Day prior to the date of Maturity of the Notes,
subject, in the case of conversion of any Global Note, to any Applicable
Procedures. In case a Note or portion thereof is called for redemption at the
election of the Company or the Holder thereof exercises his right to require the
Company to repurchase the Note following a Change in Control, such conversion
right in respect of the Note, or portion thereof so called, shall expire at the
close of business on the Business Day prior to the Redemption Date or the
Repurchase Date, as the case may be, unless the Company defaults in making the
payment due upon redemption or repurchase, as the case may be (in each case
subject as aforesaid to any Applicable Procedures with respect to any Global
Note).


                                       46
<PAGE>   47
      The rate at which shares of Common Stock shall be delivered upon
conversion (herein called the "Conversion Rate") shall be initially
[___________] shares of Common Stock for each U.S.$1,000 principal amount of
Notes. The Conversion Rate shall be adjusted in certain instances as provided in
this Article 10.

Section 10.02. Exercise of Conversion Privilege.

      In order to exercise the conversion privilege, the Holder of any Note to
be converted shall surrender such Note, duly endorsed in blank, at any office or
agency of the Company maintained for that purpose pursuant to Section 4.02,
accompanied by a duly signed conversion notice substantially in the form set
forth in Exhibit A stating that the Holder elects to convert such Note or, if
less than the entire principal amount thereof is to be converted, the portion
thereof to be converted. Each Note surrendered for conversion (in whole or in
part) during the Record Date Period shall (except in the case of any Note or
portion thereof which has been called for redemption on a Redemption Date
occurring within such Record Date Period and, as a result, the right to convert
would terminate in such period) be accompanied by payment in New York Clearing
House funds 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 such
Note (or part thereof, as the case may be) being surrendered for conversion,
provided that if any Note (or portion thereof) has been called for redemption on
a Redemption Date occurring during the Record Date Period, and is surrendered
for conversion during such period, the Holder of such Note on the related
Regular Record Date will be entitled to receive the interest accruing on such
Note from the Interest Payment Date next preceding the date of such conversion
to such succeeding Interest Payment Date and the Holder of such Note who
converts such Note or portion thereof during such period shall not be required
to pay such interest upon surrender of such Note for conversion. The interest so
payable on such Interest Payment Date with respect to any Note (or portion
thereof, if applicable) which is surrendered for conversion during the Record
Date Period shall be paid to the Holder of such Note as of such Regular Record
Date in an amount equal to the interest that would have been payable on such
Note if such Note had been converted as of the close of business on such
Interest Payment Date. Except as provided in this paragraph, no cash payment or
adjustment shall be made upon any conversion on account of any interest accrued
from the Interest Payment Date next preceding the conversion date, in respect of
any Note (or part thereof, as the case may be) surrendered for conversion, or on
account of any dividends on the Common Stock issued upon conversion. The
Company's delivery to the Holder of the number of shares of Common Stock (and
cash in lieu of fractions thereof, as provided in this Indenture) into which a
Note is convertible will be deemed to satisfy the Company's obligation to pay
the principal amount of the Note.

      Notes shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Notes for conversion in
accordance with the foregoing provisions, and at such time the rights of the
Holders of such Notes as Holders


                                       47
<PAGE>   48
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 deliver to the Trustee,
for delivery to the Holder, 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 10.03.

      In the case of any Note which 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 Note or
Notes of authorized denominations in an aggregate principal amount equal to the
unconverted portion of the principal amount of such Note. A Note may be
converted in part, but only if the principal amount of such Note to be converted
is any integral multiple of U.S. $1,000 and the principal amount of such Note to
remain outstanding after such conversion is equal to U.S. $1,000 or any integral
multiple of $1,000 in excess thereof.

Section 10.03. Fractions of Shares.

      No fractional shares of Common Stock shall be issued upon conversion of
any Note or Notes. If more than one Note shall be surrendered for conversion at
one time by the same Holder, the number of full shares which shall be issuable
upon conversion thereof shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof) so surrendered.
Instead of any fractional share of Common Stock which would otherwise be
issuable upon conversion of any Note or Notes (or specified portions thereof),
the Company shall calculate and pay a cash adjustment in respect of such
fraction (calculated to the nearest 1/100th of a share) in an amount equal to
the same fraction of the Closing Price Per Share at the close of business on the
day of conversion (or round up the number of shares of Common Stock issuable
upon conversion of any Note or Notes to the nearest whole share).

Section 10.04. Adjustment of Conversion Rate.

      The Conversion Rate shall be subject to adjustments from time to time as
follows:

      (1) In case the Company shall pay or make a dividend or other distribution
on shares of any class of capital stock payable in shares of Common Stock, the
Conversion Rate in effect at the opening of business on the day following the
date fixed for the determination of shareholders entitled to receive such
dividend or other distribution shall be increased by dividing such Conversion
Rate by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of shares and
the total number of shares constituting such dividend or other distribution,


                                       48
<PAGE>   49
such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. If, after any such date
fixed for determination, any dividend or distribution is not in fact paid, the
Conversion Rate shall be immediately readjusted, effective as of the date the
Board of Directors determines not to pay such dividend or distribution, to the
Conversion Rate that would have been in effect if such determination date had
not been fixed. For the purposes of this paragraph (1), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.

      (2) In case the Company shall issue rights, options or warrants to all or
substantially all holders of its Common Stock entitling them to subscribe for or
purchase shares of Common Stock, or securities convertible into shares of Common
Stock, at a price per share less than the current market price per share
(determined as provided in paragraph (8) of this Section 10.04) of the Common
Stock on the date fixed for the determination of stockholders entitled to
receive such rights, options or warrants (other than any rights, options or
warrants that by their terms will also be issued to any Holder upon conversion
of a Note into shares of Common Stock without any action required by the Company
or any other Person), the Conversion Rate in effect at the opening of business
on the day following the date fixed for such determination shall be increased by
dividing such Conversion Rate by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
current market price and the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. If, after any such date fixed for determination, any such rights,
options or warrants are not in fact issued, or are not exercised prior to the
expiration thereof, the Conversion Rate shall be immediately readjusted,
effective as of the date such rights, options or warrants expire, or the date
the Board of Directors determines not to issue such rights, options or warrants,
to the Conversion Rate that would have been in effect if the unexercised rights,
options or warrants had never been granted or such determination date had not
been fixed, as the case may be. For the purposes of this paragraph (2), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of Common
Stock. The Company will not issue any rights, options or warrants in respect of
shares of Common Stock held in the treasury of the Company.


                                       49
<PAGE>   50
      (3) In case outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Conversion Rate in effect at the opening of business
on the day following the day upon which such subdivision or combination becomes
effective shall be proportionately reduced, such increase or reduction, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.

      (4) In case the Company shall, by dividend or otherwise, distribute to all
or substantially all holders of its Common Stock evidences of its indebtedness,
shares of any class of capital stock or other property (including cash or assets
or securities, but excluding (i) any rights, options or warrants referred to in
paragraph (2) of this Section and any other rights, options or warrants that by
their terms will also be issued to any Holder upon conversion of a Note into
shares of Common Stock without any action required by the Company or any other
Person, (ii) any dividend or distribution paid exclusively in cash, (iii) any
dividend or distribution referred to in paragraph (1) of this Section and (iv)
mergers or consolidations to which Section 10.11 applies), the Conversion Rate
shall be adjusted so that the same shall equal the rate determined by dividing
the Conversion Rate in effect immediately prior to the close of business on the
date fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the current market
price per share (determined as provided in paragraph (8) of this Section 10.04)
of the Common Stock on the date fixed for such determination less the then fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a Board Resolution filed with the Trustee) of the
portion of the assets, shares or evidences of indebtedness so distributed
applicable to one share of Common Stock and the denominator shall be such
current market price per share of the Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
distribution. If after any such date fixed for determination, any such
distribution is not in fact made, the Conversion Rate shall be immediately
readjusted, effective as of the date the Board of Directors determines not to
make such distribution, to the Conversion Rate that would have been in effect if
such determination date had not been fixed.

      (5) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock cash (excluding any cash that is distributed as part
of a distribution referred to in paragraph (4) of this Section or cash
distributed upon a merger or consolidation to which Section 10.11 applies) in an
aggregate amount that, combined together with (i) the aggregate amount of any
other all-cash distributions to all holders of its Common Stock made exclusively
in cash within the 365-day period preceding the date


                                       50
<PAGE>   51
of payment of such distribution and in respect of which no adjustment pursuant
to paragraphs (5) and (6) of this Section 10.04 has been made and (ii) the
aggregate of any cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) of consideration payable in respect of any tender offer by the
Company or any of its Subsidiaries for all or any portion of the Common Stock
concluded within the 365-day period preceding the date of payment of such
distribution and in respect of which no adjustment pursuant to paragraphs (5)
and (6) of this Section 10.04 has been made (the "combined cash and tender
amount") exceeds 10.0% of the product of the current market price per share
(determined as provided in paragraph (8) of this Section 10.04) of the Common
Stock on the date for the determination of holders of shares of Common Stock
entitled to receive such distribution times the number of shares of Common Stock
outstanding on such date (the "aggregate current market price"), then, and in
each such case, immediately after the close of business on such date for
determination, the Conversion Rate shall be adjusted so that the same shall
equal the rate determined by dividing the Conversion Rate in effect immediately
prior to the close of business on the date fixed for determination of the
stockholders entitled to receive such distribution by a fraction (i) the
numerator of which shall be equal to the current market price per share
(determined as provided in paragraph (8) of this Section 10.04) of the Common
Stock on the date fixed for such determination less an amount equal to the
quotient of (x) the excess of such combined cash and tender amount over such
aggregate current market price divided by (y) the number of shares of Common
Stock outstanding on such date for determination and (ii) the denominator of
which shall be equal to the current market price per share (determined as
provided in paragraph (8) of this Section 10.04) of the Common Stock on such
date fixed for determination.

      (6) In case a tender offer made by the Company or any Subsidiary for all
or any portion of the Common Stock shall expire and such tender offer (as
amended upon the expiration thereof) shall require the payment to stockholders
(based on the acceptance (up to any maximum specified in the terms of the tender
offer) of Purchased Shares (as defined below)) of an aggregate consideration
having a fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) that
combined together with (i) the aggregate of the cash plus the fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution), as of the expiration of such
tender offer, of consideration payable in respect of any other tender offer by
the Company or any Subsidiary for all or any portion of the Common Stock
expiring within the 365-day period preceding the expiration of such tender offer
and in respect of which no adjustment pursuant to paragraphs (5) and (6) of this
Section 10.04 has been made and (ii) the aggregate amount of any cash
distributions to all holders of the Common Stock within the 365-day period
preceding the expiration of such tender offer and in respect of which no
adjustment pursuant to paragraphs (5) and (6) of this Section 10.04 has been
made (the "combined tender and cash amount") exceeds 10.0% of the product of the


                                       51
<PAGE>   52
current market price per share of the Common Stock (determined as provided in
paragraph (8) of this Section 10.04) as of the last time (the "Expiration Time")
tenders could have been made pursuant to such tender offer (as it may be
amended) times the number of shares of Common Stock outstanding (including any
tendered shares) as of the Expiration Time, then, and in each such case
immediately prior to the opening of business on the day after the date of the
Expiration Time, the Conversion Rate shall be adjusted so that the same shall
equal the rate determined by dividing the Conversion Rate immediately prior to
close of business on the date of the Expiration Time by a fraction (i) the
numerator of which shall be equal to (A) the product of (I) the current market
price per share of the Common Stock (determined as provided in paragraph (8) of
this Section 10.04) on the date of the Expiration Time multiplied by (II) the
number of shares of Common Stock outstanding (including any tendered shares) on
the Expiration Time less (B) the combined tender and cash amount, and (ii) the
denominator of which shall be equal to the product of (A) the current market
price per share of the Common Stock (determined as provided in paragraph (8) of
this Section 10.04) as of the Expiration Time multiplied by (B) the number of
shares of Common Stock outstanding (including any tendered shares) as of the
Expiration Time less the number of all shares validly tendered and not withdrawn
as of the Expiration Time (the shares deemed so accepted up to any such maximum,
being referred to as the "Purchased Shares").

      (7) The reclassification of Common Stock into securities other than Common
Stock (other than any reclassification upon a consolidation or merger to which
Section 10.11 applies) shall be deemed to involve (a) a distribution of such
securities other than Common Stock to all holders of Common Stock (and the
effective date of such reclassification shall be deemed to be "the date fixed
for the determination of stockholders entitled to receive such distribution" and
"the date fixed for such determination" within the meaning of paragraph (4) of
this Section 10.04), and (b) a subdivision or combination, as the case may be,
of the number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification shall be
deemed to be "the day upon which such subdivision becomes effective" or "the day
upon which such combination becomes effective," as the case may be, and "the day
upon which such subdivision or combination becomes effective" within the meaning
of paragraph (3) of this Section 10.04).

      (8) For the purpose of any computation under paragraph (2), (4), (5) or
(6) of this Section 10.04, the current market price per share of Common Stock on
any date shall be calculated by the Company and be the average of the daily
Closing Price Per Share for the five consecutive Trading Days selected by the
Company commencing not more than 10 Trading Days before, and ending not later
than the earlier of the day in question and the day before the "ex" date with
respect to the issuance or distribution requiring such computation. For purposes
of this paragraph, the term "`ex' date," when used with respect to any issuance
or distribution, means the first date on which the Common Stock


                                       52
<PAGE>   53
trades the regular way in the applicable securities market or on the applicable
securities exchange without the right to receive such issuance or distribution.

      (9) No adjustment in the Conversion Rate shall be required unless such
adjustment (plus any adjustments not previously made by reason of this paragraph
(9)) would require an increase or decrease of at least one percent in such rate;
provided, however, that any adjustments which by reason of this paragraph (9)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Article shall be made to
the nearest cent or to the nearest one-hundredth of a share, as the case may be.

      (10) The Company may make such increases in the Conversion Rate, for the
remaining term of the Notes or any shorter term, in addition to those required
by paragraphs (1), (2), (3), (4), (5) and (6) of this Section 10.04, as it
considers to be advisable in order to avoid or diminish any income tax to any
holders of shares of Common Stock resulting from any dividend or distribution of
stock or issuance of rights or warrants to purchase or subscribe for stock or
from any event treated as such for income tax purposes. The Company shall have
the power to resolve any ambiguity or correct any error in this paragraph (10)
and its actions in so doing shall, absent manifest error, be final and
conclusive.

      (11) Notwithstanding the foregoing provisions of this Section 10.04, no
adjustment of the Conversion Rate shall be required to be made (a) upon the
issuance of shares of Common Stock pursuant to any present or future plan for
the reinvestment of dividends or (b) because of a tender or exchange offer of
the character described in

      Rule 13e-4(h)(5) under the Exchange Act or any successor rule thereto.

      (12) To the extent permitted by applicable law, the Company from time to
time may increase the Conversion Rate by any amount for any period of time if
the period is at least twenty (20) days, the increase is irrevocable during such
period, and the Board of Directors shall have made a determination that such
increase would be in the best interests of the Company, which determination
shall be conclusive; provided, however, that no such increase shall be taken
into account for purposes of determining whether the Closing Price Per Share of
the Common Stock equals or exceeds 105% of the Conversion Price in connection
with an event which would otherwise be a Change of Control. Whenever the
Conversion Rate is increased pursuant to the preceding sentence, the Company
shall give notice of the increase to the Holders in the manner provided in
Section 12.02 at least fifteen (15) days prior to the date the increased
Conversion Rate takes effect, and such notice shall state the increased
Conversion Rate and the period during which it will be in effect.

Section 10.05. Notice of Adjustments of Conversion Rate.


                                       53
<PAGE>   54
      Whenever the Conversion Rate is adjusted as herein provided:

      (1) the Company shall compute the adjusted Conversion Rate in accordance
with Section 10.04 and shall prepare a certificate signed by the Chief Financial
Officer of the Company setting forth the adjusted Conversion Rate and showing in
reasonable detail the facts upon which such adjustment is based, and such
certificate shall promptly be filed with the Trustee and with each Conversion
Agent; and

      (2) upon each such adjustment, a notice stating that the Conversion Rate
has been adjusted and setting forth the adjusted Conversion Rate shall be
required, and as soon as practicable after it is required, such notice shall be
provided by the Company to all Holders in accordance with Section 12.02.

      Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate or the information and
calculations contained therein, except to exhibit the same to any Holder of
Notes desiring inspection thereof at its office during normal business hours,
and shall not be deemed to have knowledge of any adjustment in the Conversion
Rate unless and until a Responsible Officer of the Trustee shall have received
such a certificate. Until a Responsible Officer of the Trustee receives such a
certificate, the Trustee and each Conversion Agent may assume without inquiry
that the last Conversion Rate of which the Trustee has knowledge of remains in
effect.

Section 10.06. Notice of Certain Corporate Action.

      In case:

      (1) the Company shall declare a dividend (or any other distribution) on
its Common Stock payable (i) otherwise than exclusively in cash or (ii)
exclusively in cash in an amount that would require any adjustment pursuant to
Section 10.04; or

      (2) the Company shall authorize the granting to all or substantially all
of the holders of its Common Stock of rights, options or warrants to subscribe
for or purchase any shares of capital stock of any class or of any other rights;
or

      (3) of any reclassification of the Common Stock, or of any consolidation,
merger or share exchange to which the Company is a party and for which approval
of any stockholders of the Company is required, or of the conveyance, sale,
transfer or lease of all or substantially all of the assets of the Company; or

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


                                       54
<PAGE>   55
then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Notes pursuant to Section 4.02, and shall cause to
be provided to all Holders in accordance with Section 12.02, at least 20 days
(or 10 days in any case specified in clause (1) or (2) above) prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, rights, options or warrants, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to
such dividend, distribution, rights, options or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, conveyance,
transfer, sale, lease, dissolution, liquidation or winding up is expected to
become effective, and the date as of 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, conveyance, transfer, sale, lease, dissolution,
liquidation or winding up. Neither the failure to give such notice or the notice
referred to in the following paragraph nor any defect therein shall affect the
legality or validity of the proceedings described in clauses (1) through (4) of
this Section 10.06. If at the time the Trustee shall not be the conversion
agent, a copy of such notice shall also forthwith be filed by the Company with
the Trustee.

      The Company shall cause to be filed at the Corporate Trust Office and each
office or agency maintained for the purpose of conversion of Notes pursuant to
Section 4.02, and shall cause to be provided to all Holders in accordance with
Section 12.02, notice of any tender offer by the Company or any Subsidiary for
all or any portion of the Common Stock at or about the time that such notice of
tender offer is provided to the public generally.

Section 10.07. Company to Reserve Common Stock.

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

Section 10.08. Taxes on Conversions.

      Except as provided in the next sentence, the Company will pay any and all
taxes and duties that may be payable in respect of the issue or delivery of
shares of Common Stock on conversion of Notes pursuant hereto. The Company shall
not, however, be required to pay any tax or duty which may be payable in respect
of any transfer involved in the issue and delivery of shares of Common Stock in
a name other than that of the Holder of the Note or Notes 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


                                       55
<PAGE>   56
any such tax or duty, or has established to the satisfaction of the Company that
such tax or duty has been paid.

Section 10.09. Covenant as to Common Stock.

      The Company agrees that all shares of Common Stock which may be delivered
upon conversion of Notes, upon such delivery, will have been duly authorized and
validly issued and will be fully paid and nonassessable and, except as provided
in Section 10.08, the Company will pay all taxes, liens and charges with respect
to the issue thereof.

Section 10.10. Cancellation of Converted Notes.

      All Notes delivered for conversion shall be delivered to the Trustee or
its agent to be canceled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 2.12.

Section 10.11. Provision in Case of Consolidation, Merger or Sale of Assets.

      In case of any consolidation or merger of the Company with or into any
other Person, any merger of another Person with or into the Company (other than
a merger which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Company) or any
conveyance, sale, transfer or lease of all or substantially all of the assets of
the Company, the Person formed by such consolidation or resulting from such
merger or which acquires such assets, as the case may be, shall execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each Note then outstanding shall have the right thereafter, during the period
such Note shall be convertible as specified in Section 10.01, to convert such
Note only into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, conveyance, sale, transfer or lease
by a holder of the number of shares of Common Stock of the Company into which
such Note might have been converted immediately prior to such consolidation,
merger, conveyance, sale, transfer or lease, assuming such holder of Common
Stock of the Company (i) is not (A) a Person with which the Company consolidated
or merged with or into or which merged into or with the Company or to which such
conveyance, sale, transfer or lease was made, as the case may be (a "Constituent
Person"), or (B) an Affiliate of a Constituent Person and (ii) failed to
exercise his rights of election, if any, as to the kind or amount of securities,
cash and other property receivable upon such consolidation, merger, conveyance,
sale, transfer or lease (provided that if the kind or amount of securities, cash
and other property receivable upon such consolidation, merger, conveyance, sale,
transfer, or lease is not the same for each share of Common Stock of the Company
held immediately prior to such consolidation, merger, conveyance, sale, transfer
or lease by others than a Constituent Person or an Affiliate thereof and in
respect of which such rights of election shall not have been exercised
("Non-electing Share"), then for the purpose of this Section 10.11


                                       56
<PAGE>   57
the kind and amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer or lease by the holders of
each Non-electing Share shall be deemed to be the kind and amount so receivable
per share by a plurality of the Non-electing Shares). Such supplemental
indenture shall provide for adjustments which, for events subsequent to the
effective date of such supplemental indenture, shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article. The above
provisions of this Section 10.11 shall similarly apply to successive
consolidations, mergers, conveyances, sales, transfers or leases. Notice of the
execution of such a supplemental indenture shall be given by the Company to the
Holder of each Note as provided in Section 12.02 promptly upon such execution.

      Neither the Trustee nor any Conversion Agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or other securities or property or cash receivable by Holders of Notes
upon the conversion of their Notes after any such consolidation, merger,
conveyance, transfer, sale or lease or to any such adjustment, but may accept as
conclusive evidence of the correctness of any such provisions, and shall be
protected in relying upon, an Opinion of Counsel with respect thereto, which the
Company shall cause to be furnished to the Trustee.

Section 10.12. Rights Issued in Respect of Common Stock.

      Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"):

            (i)   are deemed to be transferred with such shares of Common Stock,

            (ii)  are not exercisable, and

            (iii) are also issued in respect of future issuances of Common Stock

shall not be deemed distributed for purposes of Sections 10.04(2) and 10.04(4)
until the occurrence of the earliest Trigger Event. In addition, in the event of
any distribution of rights or warrants, or any Trigger Event with respect
thereto, that shall have resulted in an adjustment to the Conversion Rate under
Section 10.04(2), (1) in the case of any such rights or warrants which shall all
have been redeemed or repurchased without exercise by any holders thereof, the
Conversion Rate shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as though
it were a cash distribution, equal to the per share redemption or repurchase
price received by a holder of Common Stock with respect to such rights or
warrants (assuming such holder had retained such rights or warrants), made to
all holders of Common Stock


                                       57
<PAGE>   58
as of the date of such redemption or repurchase, and (2) in the case of any such
rights or warrants all of which shall have expired without exercise by any
holder thereof, the Conversion Price shall be readjusted as if such issuance had
not occurred.

Section 10.13. Responsibility of Trustee for Conversion Provisions.

      The Trustee, subject to the provisions of Section 7.01, and any Conversion
Agent shall not at any time be under any duty or responsibility to any Holder of
Notes to determine whether any facts exist which may require any adjustment of
the Conversion Rate, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed, herein or in any
supplemental indenture provided to be employed, in making the same, or whether a
supplemental indenture need be entered into. Neither the Trustee, subject to the
provisions of Section 7.01, nor any Conversion Agent shall be accountable with
respect to the validity or value (or the kind or amount) of any Common Stock, or
of any other Notes or property or cash, which may at any time be issued or
delivered upon the conversion of any Note; and it or they do not make any
representation with respect thereto. Neither the Trustee, subject to the
provisions of Section 7.01, nor any Conversion Agent shall be responsible for
any failure of the Company to make or calculate any cash payment or to issue,
transfer or deliver any shares of Common Stock or share certificates or other
Notes or property or cash upon the surrender of any Note for the purpose of
conversion; and the Trustee, subject to the provisions of Section 7.01, and any
Conversion Agent shall not be responsible for any failure of the Company to
comply with any of the covenants of the Company contained in this Article.

                                   ARTICLE 11.

                        REPURCHASE OF NOTES AT THE OPTION
                     OF THE HOLDER UPON A CHANGE OF CONTROL

Section 11.01. Right to Require Repurchase.

      If a Change of Control occurs, each Holder shall have the right, at the
Holder's option, but subject to the provisions of Section 11.02, to require the
Company to repurchase, and upon the exercise of such right the Company shall
repurchase, all of such Holder's Notes not theretofore called for redemption, or
any portion of the principal amount thereof that is equal to U.S. $1,000 or any
integral multiple of U.S. $1,000 in excess thereof (provided that no single Note
may be repurchased in part unless the portion of the principal amount of such
Note to be outstanding after such repurchase is equal to U.S. $1,000 or integral
multiples of U.S. $1,000 in excess thereof), pursuant to a Change of Control
Offer. Upon the occurrence of a Change of Control, the Company shall offer (a
"Change of Control Offer") a payment equal to 100% of the aggregate principal
amount of the Notes to be repurchased plus interest accrued to but excluding the


                                       58
<PAGE>   59
Repurchase Date (the "Repurchase Price"); provided, however, that installments
of interest on Notes whose Stated Maturity is on or prior to the Repurchase Date
shall be payable to the Holders of such Notes, or one or more Predecessor Notes,
registered as such on the relevant Record Date according to their terms. At the
option of the Company, the Repurchase Price may be paid in cash or, subject to
the fulfillment by the Company of the conditions set forth Section 11.02, by
delivery of shares of Common Stock having a fair market value equal to the
Repurchase Price. Whenever in this Indenture there is a reference, in any
context, to the principal of any Note as of any time, such reference shall be
deemed to include reference to the Repurchase Price payable in respect of such
Note to the extent that such Repurchase Price is, was or would be so payable at
such time, and express mention of the Repurchase Price in any provision of this
Indenture shall not be construed as excluding the Repurchase Price in those
provisions of this Indenture when such express mention is not made.

Section 11.02. Conditions to the Company's Election to Pay the Repurchase Price
               in Common Stock.

      Except as provided in the last paragraph of this Section 11.02, the
Company may elect to pay the Repurchase Price by delivery of shares of Common
Stock pursuant to Section 11.01 if and only if the following conditions shall
have been satisfied:

      (1) The shares of Common Stock deliverable in payment of the Repurchase
Price shall have a fair market value as of the Repurchase Date of not less than
the Repurchase Price. For purposes of Section 11.01 and this Section 11.02, the
fair market value of shares of Common Stock shall be determined by the Company
and shall be equal to 95% of the average of the Closing Prices Per Share of the
Common Stock for the five consecutive Trading Days immediately preceding and
including the fifth Trading Day prior to the Repurchase Date;

      (2) The Repurchase Price shall be paid only in cash in the event any
shares of Common Stock to be issued upon repurchase of Notes hereunder (i)
require registration under any federal securities law before such shares may be
freely transferable without being subject to any transfer restrictions under the
Securities Act upon repurchase and if such registration is not completed or does
not become effective prior to the Repurchase Date, and/or (ii) require
registration with or approval of any governmental authority under any state law
or any other federal law before such shares may be validly issued or delivered
upon repurchase and if such registration is not completed or does not become
effective or such approval is not obtained prior to the Repurchase Date (it
being understood that, in the case of this clause (ii) only, if (with respect to
any particular Holder) (x) the Company has been unable so to effect such
registration or obtain such approval after having used its reasonable best
efforts to do so and, as a result, such Holder would be unable to receive shares
of Common Stock or would receive shares of Common Stock that are not free from
restrictions on transfer and (y) the Company pays


                                       59
<PAGE>   60
the full amount of the Repurchase Price to such Holder in cash as provided in
Section 11.01, the condition set forth in this clause (ii) will be deemed to be
satisfied);

      (3) Payment of the Repurchase Price may not be made in shares of Common
Stock unless such Common Stock is, or shall have been listed on the New York
Stock Exchange or another national securities exchange, or approved for
quotation on the Nasdaq National Market, in any such case, prior to the
Repurchase Date; and

      (4) All shares of Common Stock which may be issued upon repurchase of
Notes will be issued out of the Company's authorized but unissued Common Stock
(including treasury stock) and, upon issuance, will be duly and validly issued
and fully paid and non-assessable and free of any preemptive or similar rights.

      If all of the conditions set forth in this Section 11.02 are not satisfied
in accordance with the terms thereof, the Repurchase Price shall be paid by the
Company only in cash.

Section 11.03. Notices; Method of Exercising Repurchase Right, Etc.

      (1) Within ten days following any Change of Control, the Company shall
mail a notice to each Holder (with a copy to the Trustee) describing the
transaction or transactions that constitute the Change of Control and stating:

            (i) the Repurchase Date, which shall not be less than 20 Business
      Days, nor will it exceed 30 Business Days from the date such notice is
      mailed (the "Repurchase Date");

            (ii)  the date by which the repurchase right must be exercised;

            (iii) the Repurchase Price, and whether the Repurchase Price shall
      be paid by the Company in cash or by delivery of shares of Common Stock;

            (iv) a description of the procedure which a Holder must follow to
      exercise a repurchase right, and the place or places where, or procedures
      by which, such Notes are to be surrendered for payment of the Repurchase
      Price and accrued interest, if any to the Repurchase Date;

            (v) that on the Repurchase Date the Repurchase Price, and accrued
      interest, if any to the Repurchase Date, will become due and payable upon
      each such Note designated by the Holder to be repurchased, and that
      interest thereon shall cease to accrue on and after said date;

            (vi) the Conversion Rate then in effect, the date on which the right
      to convert the principal amount of the Notes to be repurchased will
      terminate and the


                                       60
<PAGE>   61
      place or places where, or procedures by which, such Notes may be
      surrendered for conversion;

            (vii) the place or places that the Note with the "Option of Holder
      to Elect Purchase" as specified on the reverse of the Note shall be
      delivered;

            (viii) that any Note not tendered shall continue to accrue interest;

            (ix) that Holders shall be entitled to withdraw their election if
      the Paying Agent receives, not later than the close of business on the
      second Business Day preceding the Repurchase Date, a telegram, telex,
      facsimile transmission or letter setting forth the name of the Holder, the
      principal amount of Notes delivered for purchase, and a statement that
      such Holder is withdrawing his election to have the Notes purchased; and

            (x) that Holders whose Notes are being purchased only in part shall
      be issued new Notes equal in principal amount to the unpurchased portion
      of the Notes surrendered, which unpurchased portion must be equal to
      $1,000 in principal amount or an integral multiple thereof.

      No failure of the Company to give the foregoing notices or defect therein
shall limit any Holder's right to exercise a repurchase right or affect the
validity of the proceedings for the repurchase of Notes.

      If any of the foregoing provisions or other provisions of this Article 11
are inconsistent with applicable law, such law shall govern.

      (2) To exercise a repurchase right, a Holder shall deliver to the Trustee
on or before the date specified in the repurchase notice (i) written notice of
the Holder's exercise of such right, which notice shall set forth the name of
the Holder, the principal amount of the Notes to be repurchased (and, if any
Note is to repurchased in part, the serial number thereof, the portion of the
principal amount thereof to be repurchased and the name of the Person in which
the portion thereof to remain outstanding after such repurchase is to be
registered) and a statement that an election to exercise the repurchase right is
being made thereby, and, in the event that the Repurchase Price shall be paid in
shares of Common Stock, the name or names (with addresses) in which the
certificate or certificates for shares of Common Stock shall be issued, and (ii)
the Notes with respect to which the repurchase right is being exercised. The
right of the Holder to convert the Notes with respect to which the repurchase
right is being exercised shall continue until the close of business on the
Business Day prior to the Repurchase Date.

      (3) In the event a repurchase right shall be exercised in accordance with
the terms hereof, on the Repurchase Date, the Company shall accept for payment
all Notes or portions thereof properly tendered pursuant to the Change of
Control Offer, deposit with


                                       61
<PAGE>   62
or pay or cause to be paid to the Trustee the Repurchase Price in cash or shares
of Common Stock, as provided above, for payment by the Trustee to the Holder on
the Repurchase Date or, if shares of Common Stock are to be paid, as promptly
after the Repurchase Date as practicable; provided, however, that installments
of interest that mature on or prior to the Repurchase Date shall be payable in
cash to the Holders of such Notes, or one or more Predecessor Notes, registered
as such at the close of business on the relevant Regular Record Date; and
deliver or cause to be delivered to the Trustee the Notes so accepted together
with an Officers' Certificate stating the aggregate principal amount of Notes or
portions thereof being purchased by the Company.

      (4) If any Note (or portion thereof) surrendered for repurchase shall not
be so paid on the Repurchase Date, the principal amount of such Note (or portion
thereof, as the case may be) shall, until paid, bear interest to the extent
permitted by applicable law from the Repurchase Date at the rate specified
therein, and each Note shall remain convertible into Common Stock until the
principal of such Note (or portion thereof, as the case may be) shall have been
paid or duly provided for.

      (5) Any Note which is to be repurchased only in part shall be surrendered
to the Trustee (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly authorized
in writing), and the Company shall execute, and the Trustee shall authenticate
and mail (or cause to be transferred by book entry) to the Holder of such Note
without service charge, a new Note or Notes, containing identical terms and
conditions, each in an authorized denomination in aggregate principal amount
equal to and in exchange for the unrepurchased portion of the principal of the
Note so surrendered; provided that each such new Note shall be in principal
amount of $1,000 or an integral multiple thereof.

      (6) Any issuance of shares of Common Stock in respect of the Repurchase
Price shall be deemed to have been effected immediately prior to the close of
business on the Repurchase Date and the Person or Persons in whose name or names
any certificate or certificates for shares of Common Stock shall be issuable
upon such repurchase shall be deemed to have become on the Repurchase Date the
holder or holders of record of the shares represented thereby; provided,
however, that any surrender for repurchase on a date when the stock transfer
books of the Company shall be closed shall constitute the Person or Persons in
whose name or names the certificate or certificates for such shares are to be
issued as the record holder or holders thereof for all purposes at the opening
of business on the next succeeding day on which such stock transfer books are
open. No payment or adjustment shall be made for dividends or distributions on
any Common Stock issued upon repurchase of any Note declared prior to the
Repurchase Date.

      (7) No fractions of shares shall be issued upon repurchase of Notes. If
more than one Note shall be repurchased from the same Holder and the Repurchase
Price shall


                                       62
<PAGE>   63
be payable in shares of Common Stock, the number of full shares which shall be
issuable upon such repurchase shall be computed on the basis of the aggregate
principal amount of the Notes so repurchased. Instead of any fractional share of
Common Stock which would otherwise be issuable on the repurchase of any Note or
Notes, the Company will deliver to the applicable Holder its check for the
current market value of such fractional share or round up the number of shares
of Common Stock issuable upon conversion to the nearest whole share). The
current market value of a fraction of a share is determined by multiplying the
current market price of a full share by the fraction, and rounding the result to
the nearest cent. For purposes of this Section, the current market price of a
share of Common Stock is the Closing Price Per Share of the Common Stock on the
Trading Day immediately preceding the Repurchase Date.

      (8) Any issuance and delivery of certificates for shares of Common Stock
on repurchase of Notes shall be made without charge to the Holder of Notes being
repurchased for such certificates or for any tax or duty in respect of the
issuance or delivery of such certificates or the Notes represented thereby;
provided, however, that the Company shall not be required to pay any tax or duty
which may be payable in respect of (i) income of the Holder or (ii) any transfer
involved in the issuance or delivery of certificates for shares of Common Stock
in a name other than that of the Holder of the Notes being repurchased, and no
such issuance or delivery shall be made unless and until the Person requesting
such issuance or delivery has paid to the Company the amount of any such tax or
duty or has established, to the satisfaction of the Company, that such tax or
duty has been paid.

      (9) All Notes delivered for repurchase shall be delivered to the Trustee
to be canceled at the direction of the Trustee, which shall dispose of the same
as provided in Section 2.12.

      (10) The provisions described above that require the Company to make a
Change of Control Offer following a Change of Control shall be applicable
regardless of whether or not any other provisions in this Indenture are
applicable. Notwithstanding any other provision of this Article 11, the Company
shall not be required to make a Change of Control Offer upon a Change of Control
if a third party makes the Change of Control Offer in the manner, at the times
and otherwise in compliance with the requirements set forth in this Indenture
applicable to a Change of Control Offer made by the Company and purchases all
Notes validly tendered and not withdrawn under such Change of Control Offer.

Section 11.04. Consolidation, Merger, Etc.

      In the case of any merger, consolidation, conveyance, sale, transfer or
lease of all or substantially all of the assets of the Company to which Section
10.11 applies, in which the Common Stock of the Company is changed or exchanged
as a result into the right to


                                       63
<PAGE>   64
receive shares of stock and other Notes or property or assets (including cash)
which includes shares of Common Stock of the Company or common stock of another
Person that are, or upon issuance will be, traded on a United States national
securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States and such shares constitute
at the time such change or exchange becomes effective in excess of 50% of the
aggregate fair market value of such shares of stock and other securities,
property and assets (including cash) (as determined by the Company, which
determination shall be conclusive and binding), then the Person formed by such
consolidation or resulting from such merger or combination or which acquires the
properties or assets (including cash) of the Company, as the case may be, shall
execute and deliver to the Trustee a supplemental indenture (which shall comply
with the Trust Indenture Act as in force at the date of execution of such
supplemental indenture) modifying the provisions of this Indenture relating to
the right of Holders to cause the Company to repurchase the Notes following a
Change of Control, including without limitation the applicable provisions of
this Article 11 and the definitions of the Common Stock and Change of Control,
as appropriate, and such other related definitions set forth herein as
determined in good faith by the Company (which determination shall be conclusive
and binding), to make such provisions apply in the event of a subsequent Change
of Control to the common stock and the issuer thereof if different from the
Company and Common Stock of the Company (in lieu of the Company and the Common
Stock of the Company).

                                   ARTICLE 12.

                                  MISCELLANEOUS

Section 12.01. Trust Indenture Act Controls.


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

Section 12.02. Notices.

      Any notice or communication by the Company or the Trustee to the others 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:


                                       64
<PAGE>   65
      If to the Company:

      c/o Orion Power Holdings, Inc.
      7 East Redwood Street
      10th Floor
      Baltimore, Maryland  21202
      Telecopier No.:  (410) 234-0994
      Attention: Secretary

      With a copy to:

      Stroock & Stroock & Lavan LLP
      180 Maiden Lane
      New York, New York  10038
      Telecopier No.:  (212) 806-6006
      Attention: Martin H. Neidell, Esq.

      If to the Trustee:
      Wilmington Trust Company
      1100 North Market Street
      Wilmington, Delaware 19890
      Telecopier No.:  (302) 427-4749
      Attention: Corporate Trust Department

      The Company or the Trustee, by notice to the others, 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 (except that a
notice of change of address and a notice to the Trustee shall not be deemed to
have been given until actually received by the addressee).

      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 Sections 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.


                                       65
<PAGE>   66
      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 12.03. Communication by Holders of Notes with Other Holders of Notes.

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

Section 12.04. 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 12.05)
stating that, in the opinion of the signers, all conditions precedent and
covenants, if any, 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 12.05)
stating that, in the opinion of such counsel, all such conditions precedent and
covenants have been satisfied.

Section 12.05. Statements Required in Certificate or Opinion.

      Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Sections 314(a)(4)) shall comply with the provisions of TIA
Sections 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 to express an
informed opinion as to whether or not such covenant or condition has been
satisfied; and


                                       66
<PAGE>   67
      (d) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been satisfied.

Section 12.06. 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 12.07. No Personal Liability of Directors, Officers, Employees, Members
               and Stockholders.

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

Section 12.08. Governing Law.

      THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE AND THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. EACH OF THE PARTIES HERETO
AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
SITTING IN THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS INDENTURE OR THE NOTES.

Section 12.09. 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 12.10. Successors.

      All agreements of the Company in this Indenture and the Notes, as the case
may be, shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successors.


                                       67
<PAGE>   68
Section 12.11. Severability.

      In case any provision in this Indenture or the Notes, as the case may be,
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 12.12. Counterpart Originals.

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

Section 12.13. 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.

                                   ARTICLE 13.

                           SATISFACTION AND DISCHARGE

Section 13.01. Satisfaction and Discharge of Indenture.

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

      (1)   either

            (A) all Notes theretofore authenticated and delivered (other than
      (i) Notes which have been destroyed, lost or stolen and which have been
      replaced or paid as provided in Section 2.08 and (ii) Notes for whose
      payment money has theretofore been deposited in trust or segregated and
      held in trust by the Company and thereafter repaid to the Company or
      discharged from such trust,) have been delivered to the Trustee for
      cancellation; or

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

                  (i) have become due and payable, or


                                       68
<PAGE>   69
                  (ii) will become due and payable at their Stated Maturity
            within one year, or

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

      and the Company, in the case of (i), (ii) or (iii) above, has deposited or
      caused to be deposited with the Trustee as trust funds in trust for the
      purpose an amount sufficient to pay and discharge the entire indebtedness
      on such Notes not theretofore delivered to the Trustee for cancellation,
      for principal (and premium, if any) and interest to the date of such
      deposit (in the case of Notes which have become due and payable) or to the
      maturity or redemption thereof, as the case may be;

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

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

      Notwithstanding the satisfaction and discharge of this Indenture pursuant
to this Article 13, the obligations of the Company to the Trustee under Section
7.07, and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of clause (1) of this Section, the obligations of the Trustee
under Section 13.02 shall survive such satisfaction and discharge.

Section 13.02. Application of Trust Money.

      All money deposited with the Trustee pursuant to Section 13.01 shall be
held in trust and applied by it, in accordance with the provisions of the Notes
and this Indenture, to the payment, either directly or through any Paying Agent
as the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and interest for whose payment such money has been
deposited with the Trustee.

      All moneys deposited with the Trustee pursuant to Section 13.01 (and held
by it or any Paying Agent) for the payment of Notes subsequently converted shall
be returned to the Company upon a written request signed in the name of the
Company by an Officer.

                         [Signatures on following page]


                                       69
<PAGE>   70
      IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.

                                    ORION POWER HOLDINGS, INC.


                                    By_______________________________
                                       Name:
                                       Title:


                                    WILMINGTON TRUST COMPANY,
                                    as Trustee


                                    By_______________________________
                                       Name:
                                       Title:


                                       70
<PAGE>   71
                                                                       EXHIBIT A

                                 [FACE OF NOTE]

      THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL NOTE:

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

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

      UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES REFERRED TO IN THE
INDENTURE, THIS GLOBAL NOTE 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.


                                      A-1
<PAGE>   72
                             CUSIP NO. [___________]

                   [_____]% Convertible Senior Notes due 2008

No.  R-



                               $[________________]

                           ORION POWER HOLDINGS, INC.

promises to pay to


_________________________________________________________

or registered assigns,
the principal amount of  _____________________________________ Dollars
($______________________________)(1) on [_____________], 2008
Interest Payment Dates:  [_____________] and [_____________]
Regular Record Dates:  [_____________] and [_____________]
Subject to Restrictions set forth in this Note.



--------------------
(1)   If this Note is a Global Note, then insert: "(which principal amount may
      from time to time be increased or decreased to such other principal amount
      by adjustments made on the records of the Trustee hereinafter referred to
      in accordance with the Indenture)".


                                      A-2
<PAGE>   73
Dated:

ORION POWER HOLDINGS, INC.


By_______________________________
   Name:
   Title:


By_______________________________
   Name:
   Title:


This is one of the Notes referred to
in the within-mentioned Indenture:


WILMINGTON TRUST COMPANY,
   as Trustee


By_______________________________
   Authorized Signatory


                                      A-3
<PAGE>   74
                                 [BACK OF NOTE]

                   [_____]% Convertible Senior Notes due 2008

      Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.

      1. INTEREST. Orion Power Holdings, Inc., a Delaware corporation (as
further defined in the Indenture, the "Company"), promises to pay interest on
the principal amount of this Note at the rate of [_____]% per annum from
[________], 2001 until Maturity. The Company will pay interest semi-annually in
arrears on [_____________] and [_____________] of each year (each an "Interest
Payment Date"), or if any such day is not a Business Day, on the next succeeding
Business Day. Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a Regular Record Date
referred to on the face and the next succeeding Interest Payment Date, interest
shall accrue from such next succeeding Interest Payment Date. The first Interest
Payment Date shall be [_____________], 2001. The Company shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at a rate
that is 1% per annum in excess of the rate then in effect; and it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.

      2. METHOD OF PAYMENT. The Company shall pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on the [_____________] or [_____________] next preceding the
Interest Payment Date, even if such Notes are canceled after such record date
and on or before such Interest Payment Date, except as provided in Section 2.13
of the Indenture with respect to defaulted interest. The Notes will be payable
as to principal, premium, if any, and interest at the office or agency of the
Company maintained for such purpose within or without the City and State of New
York, or, at the option of the Company, payment of interest may be made by check
mailed to the Holders at their addresses set forth in the Note Register, and
provided that payment by wire transfer of immediately available funds will be
required with respect to principal of and interest and premium on all Global
Notes and all other Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent. Such payment shall be in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.


                                      A-4
<PAGE>   75
      3. PAYING AGENT, REGISTRAR AND CONVERSION AGENT. Initially, Wilmington
Trust Company, the Trustee under the Indenture, will act as Paying Agent,
Registrar and Conversion Agent. The Company may change any Paying Agent,
Registrar or Conversion Agent without notice to any Holder. The Company or any
of its Subsidiaries may act in any such capacity.

      4. INDENTURE. The Company issued the Notes under an Indenture dated as of
[_________], 2001 (the "Indenture") between the Company and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the TIA. The Notes are subject to all such terms,
and Holders are referred to the Indenture and the TIA Act for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are obligations of the Company limited to $200,000,000
million in principal amount (or $230,000,000 if the Underwriters exercise in
full their over-allotment option pursuant to the Underwriting Agreement) except
as provided in Section 2.08 of the Indenture.

      5. OPTIONAL REDEMPTION. The Company shall not have the option to redeem
the Notes prior to [_____________], 2004. Thereafter, the Company shall have the
option to redeem the Notes, in whole or in part, in cash upon not less than 30
nor more than 60 days' notice, at the Redemption Prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest thereon, if any, to the applicable Redemption Date, if redeemed during
the twelve-month period beginning on [______] of the years indicated below:

<TABLE>
<CAPTION>
                    Year                      Percentage
                    ----                      ----------
<S>                                           <C>
              2004                             [______]%
              2005                             [______]%
              2006 and thereafter                100.00%
</TABLE>

      6. NOTICE OF REDEMPTION. Notice of redemption will be mailed by first
class mail at least 30 days but not more than 60 days before the Redemption Date
to each Holder whose Notes are to be redeemed at its registered address. Notices
of redemption may not be conditional. No Notes of $1,000 or less may be redeemed
in part. Notes in denominations larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000, unless all of the Notes held by a Holder are
to be redeemed. On and after the Redemption Date, interest ceases to accrue on
Notes or portions thereof called for redemption.

      7. MANDATORY REDEMPTION. Except as otherwise provided in Paragraph 8
below, the Company shall not be required to make mandatory redemption payments
with respect to the Notes.


                                      A-5
<PAGE>   76
      8. REPURCHASE AT OPTION OF HOLDER. If a Change of Control occurs, the
Company shall make a Change of Control Offer to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a
purchase price equal to 100% of the principal amount thereof plus interest
accrued to the date of purchase. At the option of the Company, the Repurchase
Price may be paid in cash or, subject to the provisions of the Indenture, by
delivery of shares of Common Stock having a fair market value equal to the
Repurchase Price. For purposes of this paragraph, the fair market value of
shares of Common Stock shall be determined by the Company and shall be equal to
95% of the average of the Closing Prices Per Share for the five consecutive
Trading Days immediately preceding and including the fifth Trading Day prior to
the Repurchase Date. Within 10 days following any Change of Control, the Company
shall mail a notice to each Holder describing the transaction or transactions
that constitute the Change of Control and offering to repurchase Notes on the
Repurchase Date specified in such notice, pursuant to the procedures required by
the Indenture and described in such notice.

      9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a
Regular Record Date and the corresponding Interest Payment Date.

      10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated
as its owner for all purposes.

      11. AMENDMENT AND SUPPLEMENT. Subject to certain exceptions, the Indenture
or the Notes may be amended or supplemented with either (i) the written consent
(or as otherwise in accordance with the Applicable Procedures) of the Holders of
at least a majority in aggregate principal amount of the Notes then outstanding
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, Notes), or (ii) by the adoption of a
resolution, at a meeting of Holders of the outstanding Notes at which a quorum
is present, by the Holders of at least 66 2/3% in principal amount of the
outstanding Notes represented at such meeting or, if less, by the Holders of at
least a majority in aggregate principal amount of all outstanding Notes. Without
the consent of any Holder of a Note, the Company and the Trustee may amend or
supplement the Indenture or the Notes to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to


                                      A-6
<PAGE>   77
provide for the assumption of the Company's obligations to Holders of Notes in
the case of a merger or consolidation or sale of all or substantially all of the
assets of the Company, to make any change that would provide any additional
rights or benefits to the Holders of Notes or that does not adversely affect the
legal rights under the Indenture of any such Holder, or to comply with the
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the TIA or otherwise as necessary to comply with
applicable law.

      12. DEFAULTS AND REMEDIES. Each of the following is an Event of Default:
(i) default for 30 days in the payment when due of interest on the Notes, (ii)
default in payment when due of the principal of or premium, if any, on the
Notes, (iii) failure by the Company to comply with the notice or repurchase
provisions of Article 11 of the Indenture, (iv) failure by the Company for 30
days after written notice thereof has been given to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% of the
aggregate principal amount of the Notes outstanding to comply with any of its
other covenants or agreements in the Indenture, (v) default under any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Company or any
of its Significant Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Significant Subsidiaries), whether such Indebtedness or
guarantee now exists or is created after the Issue Date, if that default: (a) is
caused by a failure to pay at final stated maturity the principal amount of such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default"); or (b) results
in the acceleration of such Indebtedness prior to its express maturity, and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$25.0 million or more, or (vi) certain events of bankruptcy or insolvency with
respect to the Company or any of its Significant Subsidiaries. In the case of an
Event of Default arising from certain events of bankruptcy or insolvency with
respect to the Company, all outstanding Notes will become due and payable
without further action or notice. If any other Event of Default 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 Notes by notice to the Company and
the Trustee may declare all the Notes to be due and payable immediately. Holders
may not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in aggregate principal
amount of the then outstanding Notes may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes notice of
any continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest. Holders, either (i) through the written
consent (or as otherwise in accordance with the Applicable Procedures) of the
Holders of at least a majority in aggregate principal amount of the then
outstanding Notes by notice to the Trustee or


                                      A-7
<PAGE>   78
(ii) by the adoption of a resolution, at a meeting of Holders of the outstanding
Notes at which a quorum is present, by the Holders of at least 66 2/3% in the
principal amount of outstanding Notes represented at such meeting or, if less,
by the Holders of at least a majority in aggregate principal amount of all
outstanding Notes by notice to the Trustee, may on behalf of the Holders of all
of the Notes waive any existing Default or Event of Default and its consequences
under the Indenture, except a continuing Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes or in
respect of a covenant or provision of the Indenture under Article 9 thereof
which cannot be modified or amended without the consent of each outstanding Note
affected. The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture. Upon becoming aware of any Default or
Event of Default, the Company is required to deliver to the Trustee a statement
specifying such Default or Event of Default.

      13. Conversion. Subject to and upon compliance with the provisions of the
Indenture, the Holder of this Note is entitled, at his option, at any time on or
before the close of business on the Business Day prior to the date of Maturity,
or in case this Note or a portion hereof is called for redemption or the Holder
hereof has exercised his right to require the Company to repurchase this Note or
such portion hereof, then in respect of this Note until and including, but
(unless the Company defaults in making the payment due upon redemption or
repurchase, as the case may be) not after, the close of business on the Business
Day prior to the Redemption Date or the Repurchase Date, as the case may be, to
convert this Security (or any portion of the principal amount hereof that is an
integral multiple of U.S.$1,000, provided that the unconverted portion of such
principal amount is U.S.$1,000 or any integral multiple of U.S.$1,000 in excess
thereof) into fully paid and nonassessable shares of Common Stock of the Company
at an initial Conversion Rate of [_____________] shares of Common Stock for each
U.S.$1,000 principal amount of Notes (or at the current adjusted Conversion Rate
if an adjustment has been made as provided in the Indenture) by surrender of
this Note, duly endorsed or assigned to the Company or in blank and, in case
such surrender shall be made during the Record Date Period (except if this Note
or portion thereof has been called for redemption on a Redemption Date occurring
within such Record Date Period and, as a result, the right to convert would
terminate in such period), also accompanied by payment in New York Clearing
House funds 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 this
Note then being converted, and also the conversion notice hereon duly executed,
to the Company at the Corporate Trust Office of the Trustee, or at such other
office or agency of the Company, subject to any laws or regulations applicable
thereto and subject to the right of the Company to terminate the appointment of
any Conversion Agent (as defined below) as may be designated by it pursuant to
the Indenture; provided, further, that if this Note or portion hereof has been
called for redemption on a Redemption Date occurring during the Record Date
Period, and is surrendered for conversion during such period, then the Holder of
this Note on the related Regular Record Date will be entitled to receive


                                      A-8
<PAGE>   79
the interest accruing hereon from the Interest Payment Date next preceding the
date of such conversion to such succeeding Interest Payment Date and the Holder
of this Note who converts this Note or a portion hereof during such period shall
not be required to pay such interest upon surrender of this Note for conversion.
Subject to the provisions of the preceding sentence, no cash payment or
adjustment is to be made on conversion for interest accrued hereon from the
Interest Payment Date next preceding the day of conversion, or for dividends on
the Common Stock issued on conversion hereof. The Company shall thereafter
deliver to the Holder the fixed number of shares of Common Stock (together with
any cash adjustment, as provided in the Indenture) into which this Note is
convertible and such delivery will be deemed to satisfy the Company's obligation
to pay the principal amount of this Note. No fractions of shares or scrip
representing fractions of shares will be issued on conversion, but instead of
any fractional interest (calculated to the nearest 1/100th of a share) the
Company shall pay a cash adjustment as provided in the Indenture (or round up
the number of shares of Common Stock issuable upon conversion to the nearest
whole share).

      The Conversion Rate is subject to adjustment as provided in the Indenture.

      In addition, the Indenture provides that in case of certain consolidations
or mergers to which the Company is a party (other than a consolidation or merger
that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock) or any conveyance, transfer,
sale or lease of all or substantially all of the property and assets of the
Company, the Indenture shall be amended, without the consent of any Holders of
Notes, so that this Note, if then outstanding, will be convertible thereafter,
during the period this Note shall be convertible as specified above, only into
the kind and amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, transfer, sale or lease by a holder of the
number of shares of Common Stock of the Company into which this Note could have
been converted immediately prior to such consolidation, merger, conveyance,
transfer, sale or lease (assuming such holder of Common Stock is not a
Constituent Person or an Affiliate of a Constituent Person, failed to exercise
any rights of election and received per share the kind and amount received per
share by a plurality of Non-electing Shares). No adjustment in the Conversion
Rate will be made until such adjustment would require an increase or decrease of
at least one percent of such rate, provided that any adjustment that would
otherwise be made will be carried forward and taken into account in the
computation of any subsequent adjustment.

      14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.


                                      A-9
<PAGE>   80
      15. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.

      16. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE THIS NOTE AND THE INDENTURE WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

      17. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature (which may be by facsimile) of the Trustee or an
authenticating agent.

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

      19. CUSIP NUMBERS. No representation is made as to the accuracy of any
CUSIP numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.

      The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:

           Orion Power Holdings, Inc.
           7 East Redwood Street
           10th Floor
           Baltimore, Maryland  21202
           Attention:  Secretary
           Telecopier No.: (410) 234-0994


                                      A-10
<PAGE>   81
                                 ASSIGNMENT FORM


To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: _________________________________
                                               (Insert assignee's legal name)

________________________________________________________________________________
      (Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
              (Print or type assignee's name, address and zip code)

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

Date:______________________________


      Your Signature:__________________________________________________________
                    (Sign exactly as your name appears on the face of this Note)


      Signature Guarantee*:____________________________________________________

*   Participant in a recognized Signature Guarantee Medallion Program (or other
    signature guarantor acceptable to the Trustee).


                                      A-11
<PAGE>   82
                       OPTION OF HOLDER TO ELECT PURCHASE


      If you want to elect to have this Note purchased by the Company pursuant
to Article 11 of the Indenture, check below:

      / /     Purchase pursuant to Article 11

      If you want to elect to have only part of the Note purchased by the
Company pursuant to Article 11 of the Indenture, state the amount you elect to
have purchased:

$ ____________________________

Date:_________________________


      Your Signature:__________________________________________________________
                    (Sign exactly as your name appears on the face of this Note)


      Tax Identification No.:__________________________________________________


      Signature Guarantee*:____________________________________________________

*   Participant in a recognized Signature Guarantee Medallion Program (or other
    signature guarantor acceptable to the Trustee).


                                      A-12

<PAGE>   83
                                CONVERSION NOTICE


           The undersigned Holder of this Note hereby irrevocably exercises the
option to convert this Note, or any portion of the principal amount hereof
(which is U.S.$1,000 or an integral multiple of U.S.$1,000 in excess thereof,
provided that the unconverted portion of such principal amount is U.S. $1,000 or
any integral multiple of U.S. $1,000 in excess thereof) below designated, into
shares of Common Stock in accordance with the terms of the Indenture referred to
in this Note, and directs that such shares, together with a check in payment for
any fractional share and any Notes representing any unconverted principal amount
hereof, be delivered to and be registered in the name of the undersigned unless
a different name has been indicated below. If shares of Common Stock or Notes
are to be registered in the name of a Person other than the undersigned, (a) the
undersigned will pay all transfer taxes payable with respect thereto and (b)
signature(s) must be guaranteed by an Eligible Guarantor Institution with
membership in an approved signature guarantee program pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934. Any amount required to be paid by the
undersigned on account of interest accompanies this Note.

Dated:
       _________________________________________________________________________
                                              Signature(s)

If shares or Notes are to be registered in the
name of a Person other than the Holder, please
print such Person's name and address:


______________________________________________
(Name)


______________________________________________

______________________________________________
(Address)


______________________________________________
Social Security or other Identification
Number, if any


______________________________________________
[Signature Guaranteed]


If only a portion of the Notes is to be converted, please indicate:

1.         Principal amount to be converted:  U.S. $ ___________

2.         Principal amount and denomination of Notes
           representing unconverted principal amount to be issued:

           Amount: U.S. $___________           Denominations: U.S. $____________




                                      A-13
<PAGE>   84
(U.S.$1,000 or any integral multiple of U.S.$1,000 in excess thereof, provided
that the unconverted portion of such principal amount is U.S. $1,000 or any
integral multiple of U.S. $1,000 in excess thereof)




                                      A-14
<PAGE>   85
                           ORION POWER HOLDINGS, INC.

                                       and

                            WILMINGTON TRUST COMPANY,

                                   as Trustee



                                    ---------


                                    INDENTURE


                         Dated as of [__________], 2001


                                    ---------





                   [_____]% Convertible Senior Notes due 2008
<PAGE>   86
                             CROSS-REFERENCE TABLE*


<TABLE>
<CAPTION>
Trust Indenture Act Section                                                        Indenture Section
---------------------------                                                        -----------------
<S>                                                                                <C>
310(a)(1)......................................................................    7.10
(a)(2).........................................................................    7.10
(a)(3).........................................................................    N.A.
(a)(4).........................................................................    N.A.
(a)(5).........................................................................    7.10
(b)............................................................................    7.10
(c)............................................................................    N.A.
311(a).........................................................................    7.11
(b)............................................................................    7.11
(c)............................................................................    N.A.
312(a).........................................................................    2.05
(b)............................................................................    12.03
(c)............................................................................    12.03
313(a).........................................................................    7.06
(b)(1).........................................................................    12.03
(b)(2).........................................................................    7.07; 12.03
(c)............................................................................    7.06; 12.02
(d)............................................................................    7.06
314(a).........................................................................    4.03; 12.02
(b)............................................................................    12.02
(c)(1).........................................................................    12.04
(c)(2).........................................................................    12.04
(c)(3).........................................................................    N.A.
(d)............................................................................    N.A.
(e)............................................................................    12.05
(f)............................................................................    N.A.
315(a).........................................................................    7.01
(b)............................................................................    7.05; 12.02
(c)............................................................................    7.01
(d)............................................................................    7.01
(e)............................................................................    6.11
316(a) (last sentence).........................................................    2.10
(a)(1)(A)......................................................................    6.05
(a)(1)(B)......................................................................    6.04
(a)(2).........................................................................    N.A.
(b)............................................................................    6.07
(c)............................................................................    2.13
317(a)(1)......................................................................    6.08
(a)(2).........................................................................    6.09
(b)............................................................................    2.04
</TABLE>


                                       i
<PAGE>   87
<TABLE>
<CAPTION>
Trust Indenture Act Section                                                        Indenture Section
---------------------------                                                        -----------------
<S>                                                                                <C>
318(a).........................................................................    12.01
(b)............................................................................    N.A.
(c)............................................................................    12.01
</TABLE>


N.A. means Not Applicable.

* This Cross-Reference Table is not part of the Indenture.


                                       ii
<PAGE>   88
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                                Page
                                                                                                                                ----
<S>                                                                                                                             <C>
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.....................................................................         1

           Section 1.01.       Definitions................................................................................         1
           Section 1.02.       Other Definitions..........................................................................         9
           Section 1.03.       Incorporation by Reference of Trust Indenture Act..........................................        10
           Section 1.04.       Rules of Construction......................................................................        10

ARTICLE 2. THE NOTES......................................................................................................        11

           Section 2.01.       Form and Dating............................................................................        11
           Section 2.02.       Execution and Authentication...............................................................        12
           Section 2.03.       Registrar; Conversion Agent; and Paying Agent..............................................        12
           Section 2.04.       Paying Agent to Hold Money in Trust........................................................        13
           Section 2.05.       Holder Lists...............................................................................        13
           Section 2.06.       Global Notes; Non-global Notes; Book-entry Provisions......................................        13
           Section 2.07.       Registration; Registration of Transfer and Exchange........................................        15
           Section 2.08.       Replacement Notes..........................................................................        16
           Section 2.09.       Outstanding Notes..........................................................................        17
           Section 2.10.       Treasury Notes.............................................................................        17
           Section 2.11.       Temporary Notes............................................................................        18
           Section 2.12.       Cancellation...............................................................................        18
           Section 2.13.       Defaulted Interest.........................................................................        18
           Section 2.14.       Computation of Interest....................................................................        19
           Section 2.15.       CUSIP Numbers..............................................................................        19

ARTICLE 3. REDEMPTION AND PREPAYMENT......................................................................................        19

           Section 3.01.       Notices to Trustee.........................................................................        19
           Section 3.02.       Selection of Notes to Be Redeemed..........................................................        19
           Section 3.03.       Notice of Redemption.......................................................................        20
           Section 3.04.       Effect of Notice of Redemption.............................................................        21
           Section 3.05.       Deposit of Redemption Price................................................................        21
           Section 3.06.       Notes Redeemed in Part.....................................................................        21
           Section 3.07.       Optional Redemption........................................................................        22
           Section 3.08.       Conversion Arrangement on Call for Redemption..............................................        22
           Section 3.09.       Mandatory Redemption.......................................................................        23

ARTICLE 4. COVENANTS......................................................................................................        23

           Section 4.01.       Payment of Notes...........................................................................        23
</TABLE>


                                       iii
<PAGE>   89
<TABLE>
<S>                                                                                                                             <C>
           Section 4.02.       Maintenance of Office or Agency............................................................        24
           Section 4.03.       Reports....................................................................................        24
           Section 4.04.       Compliance Certificate.....................................................................        25
           Section 4.05.       Taxes......................................................................................        25
           Section 4.06.       Stay, Extension and Usury Laws.............................................................        25
           Section 4.07.       Corporate Existence........................................................................        26
           Section 4.08.       Payments for Consent.......................................................................        26
           Section 4.09.       Registration and Listing...................................................................        26
           Section 4.10.       Waiver of Certain Covenants................................................................        26

ARTICLE 5. SUCCESSORS.....................................................................................................        27

           Section 5.01.       Merger, Consolidation, or Sale of Assets...................................................        27
           Section 5.02.       Successor Corporation Substituted..........................................................        28

ARTICLE 6. DEFAULTS AND REMEDIES..........................................................................................        28

           Section 6.01.       Events of Default..........................................................................        28
           Section 6.02.       Acceleration...............................................................................        29
           Section 6.03.       Other Remedies.............................................................................        30
           Section 6.04.       Waiver of Existing Defaults................................................................        30
           Section 6.05.       Control by Majority........................................................................        31
           Section 6.06.       Limitation on Suits........................................................................        31
           Section 6.07.       Rights of Holders of Notes to Receive Payment and to Convert...............................        31
           Section 6.08.       Collection Suit by Trustee.................................................................        32
           Section 6.09.       Trustee May File Proofs of Claim...........................................................        32
           Section 6.10.       Priorities.................................................................................        32
           Section 6.11.       Undertaking for Costs......................................................................        33

ARTICLE 7. TRUSTEE........................................................................................................        34

           Section 7.01.       Duties of Trustee..........................................................................        34
           Section 7.02.       Rights of Trustee..........................................................................        35
           Section 7.03.       Individual Rights of Trustee...............................................................        36
           Section 7.04.       Trustee's Disclaimer.......................................................................        36
           Section 7.05.       Notice of Defaults.........................................................................        36
           Section 7.06.       Reports by Trustee to Holders of the Notes.................................................        36
           Section 7.07.       Compensation and Indemnity.................................................................        37
           Section 7.08.       Replacement of Trustee.....................................................................        38
           Section 7.09.       Successor Trustee by Merger, etc...........................................................        39
           Section 7.10.       Eligibility; Disqualification..............................................................        39
           Section 7.11.       Preferential Collection of Claims Against the Company......................................        39
           Section 7.12.       Other Capacities...........................................................................        39
</TABLE>


                                       iv
<PAGE>   90
<TABLE>
<S>                                                                                                                             <C>
ARTICLE 8. MEETINGS OF HOLDERS OF NOTES...................................................................................        40

           Section 8.01.       Purposes for Which Meetings May Be Called..................................................        40
           Section 8.02.       Call, Notice and Place of Meetings.........................................................        40
           Section 8.03.       Persons Entitled to Vote at Meetings.......................................................        40
           Section 8.04.       Quorum; Action.............................................................................        41
           Section 8.05.       Determination of Voting Rights; Conduct and Adjournment of Meetings........................        41
           Section 8.06.       Counting Votes and Recording Action of Meetings............................................        42

ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER...............................................................................        43

           Section 9.01.       Without Consent of Holders of Notes........................................................        43
           Section 9.02.       With Consent of Holders of Notes...........................................................        44
           Section 9.03.       Compliance with Trust Indenture Act........................................................        45
           Section 9.04.       Revocation and Effect of Consents..........................................................        45
           Section 9.05.       Notation on or Exchange of Notes...........................................................        46
           Section 9.06.       Trustee to Sign Amendments, etc............................................................        46

ARTICLE 10. CONVERSION OF NOTES...........................................................................................        46

           Section 10.01.      Conversion Privilege and Conversion Rate...................................................        46
           Section 10.02.      Exercise of Conversion Privilege...........................................................        47
           Section 10.03.      Fractions of Shares........................................................................        48
           Section 10.04.      Adjustment of Conversion Rate..............................................................        48
           Section 10.05.      Notice of Adjustments of Conversion Rate...................................................        53
           Section 10.06.      Notice of Certain Corporate Action.........................................................        54
           Section 10.07.      Company to Reserve Common Stock............................................................        55
           Section 10.08.      Taxes on Conversions.......................................................................        55
           Section 10.09.      Covenant as to Common Stock................................................................        56
           Section 10.10.      Cancellation of Converted Notes............................................................        56
           Section 10.11.      Provision in Case of Consolidation, Merger or Sale of Assets...............................        56
           Section 10.12.      Rights Issued in Respect of Common Stock...................................................        57
           Section 10.13.      Responsibility of Trustee for Conversion Provisions........................................        58

ARTICLE 11. REPURCHASE OF NOTES AT THE OPTION OF THE  HOLDER UPON A CHANGE OF CONTROL.....................................        58

           Section 11.01.      Right to Require Repurchase................................................................        58
           Section 11.02.      Conditions to the Company's Election to Pay the Repurchase Price in Common Stock...........        59
           Section 11.03.      Notices; Method of Exercising Repurchase Right, Etc........................................        60
           Section 11.04.      Consolidation, Merger, Etc.................................................................        63
</TABLE>


                                        v
<PAGE>   91
<TABLE>
<S>                                                                                                                             <C>
ARTICLE 12. MISCELLANEOUS.................................................................................................        64

           Section 12.01.      Trust Indenture Act Controls...............................................................        64
           Section 12.02.      Notices....................................................................................        64
           Section 12.03.      Communication by Holders of Notes with Other Holders of Notes..............................        66
           Section 12.04.      Certificate and Opinion as to Conditions Precedent.........................................        66
           Section 12.05.      Statements Required in Certificate or Opinion..............................................        66
           Section 12.06.      Rules by Trustee and Agents................................................................        67
           Section 12.07.      No Personal Liability of Directors, Officers, Employees, Members and Stockholders..........        67
           Section 12.08.      Governing Law..............................................................................        67
           Section 12.09.      No Adverse Interpretation of Other Agreements..............................................        67
           Section 12.10.      Successors.................................................................................        67
           Section 12.11.      Severability...............................................................................        68
           Section 12.12.      Counterpart Originals......................................................................        68
           Section 12.13.      Table of Contents, Headings, etc...........................................................        68

ARTICLE 13. SATISFACTION AND DISCHARGE....................................................................................        68

           Section 13.01.      Satisfaction and Discharge of Indenture....................................................        68
           Section 13.02.      Application of Trust Money.................................................................        69




EXHIBIT A.................................................................................................................       A-1
</TABLE>


                                       vi