<PAGE>
                                                                     Exhibit 4.2






                             JEFFERIES GROUP, INC.,

                                     Issuer


                                       and


                              THE BANK OF NEW YORK,

                                     Trustee




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

                                    INDENTURE

                          Dated as of January __, 2002

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




                             Subordinated Securities
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE

<S>                                                                         <C>

ARTICLE I     DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.....    1

      Section 1.01   Definitions..........................................    1

      Section 1.02   Compliance Certificates and Opinions.................    8

      Section 1.03   Form of Documents Delivered to Trustee...............    9

      Section 1.04   Acts of Holders; Record Dates........................    9

      Section 1.05   Notices, Etc., to Trustee and Company................   11

      Section 1.06   Notice to Holders; Waiver............................   12

      Section 1.07   Conflict with Trust Indenture Act....................   12

      Section 1.08   Effect of Headings and Table of Contents.............   13

      Section 1.09   Successors and Assigns...............................   13

      Section 1.10   Separability Clause..................................   13

      Section 1.11   Benefits of Indenture................................   13

      Section 1.12   Governing Law........................................   13

      Section 1.13   Legal Holidays.......................................   13

ARTICLE II    SECURITY FORMS..............................................   14

      Section 2.01   Forms Generally......................................   14

      Section 2.02   Form of Face of Security.............................   14

      Section 2.03   Form of Reverse of Security..........................   16

      Section 2.04   Form of Legend for Global Securities.................   22

      Section 2.05   Form of Trustee's Certificate of Authentication......   22

ARTICLE III   THE SECURITIES..............................................   23

      Section 3.01   Amount Unlimited; Issuable in Series.................   23

      Section 3.02   Denominations........................................   25

      Section 3.03   Execution, Authentication, Delivery and Dating.......   26

      Section 3.04   Temporary Securities.................................   27

      Section 3.05   Registration, Registration of Transfer and Exchange..   27

      Section 3.06   Mutilated, Destroyed, Lost and Stolen Securities.....   29

      Section 3.07   Payment of Interest; Interest Rights Preserved.......   30

      Section 3.08   Persons Deemed Owners................................   31
</TABLE>


                                       i
<PAGE>
                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                            PAGE

<S>                                                                         <C>
      Section 3.09   Cancellation.........................................   31

      Section 3.10   Computation of Interest..............................   31

      Section 3.11   CUSIP Numbers........................................   32

ARTICLE IV    Satisfaction and Discharge..................................   32

      Section 4.01   Satisfaction and Discharge of Indenture..............   32

      Section 4.02   Application of Trust Money...........................   33

ARTICLE V     Remedies....................................................   33

      Section 5.01   Events of Default....................................   33

      Section 5.02   Acceleration of Maturity; Rescission and Annulment...   35

      Section 5.03   Collection of Indebtedness and Suits for Enforcement
                     by Trustee...........................................   36

      Section 5.04   Trustee May File Proofs of Claim.....................   36

      Section 5.05   Trustee May Enforce Claims Without Possession of
                     Securities...........................................   37

      Section 5.06   Application of Money Collected.......................   37

      Section 5.07   Limitation on Suits..................................   38

      Section 5.08   Unconditional Right of Holders to Receive Principal,
                     Premium and Interest and to Convert..................   38

      Section 5.09   Restoration of Rights and Remedies...................   38

      Section 5.10   Rights and Remedies Cumulative.......................   39

      Section 5.11   Delay or Omission Not Waiver.........................   39

      Section 5.12   Control by Holders...................................   39

      Section 5.13   Waiver of Past Defaults..............................   39

      Section 5.14   Undertaking for Costs................................   40

      Section 5.15   Waiver of Usury, Stay or Extension Laws..............   40

ARTICLE VI    The Trustee.................................................   40

      Section 6.01   Duties of Trustee....................................   41

      Section 6.02   Rights of Trustee....................................   42

      Section 6.03   Individual Rights of Trustee.........................   43

      Section 6.04   Trustee's Disclaimer.................................   43

      Section 6.05   Notice of Default....................................   43

      Section 6.06   Reports by Trustee to Holders........................   43
</TABLE>


                                       ii
<PAGE>
                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                            PAGE

<S>                                                                         <C>
      Section 6.07   Compensation and Indemnity...........................   43

      Section 6.08   Replacement of Trustee...............................   44

      Section 6.09   Successor Trustee by Merger, Etc.....................   45

      Section 6.10   Eligibility; Disqualification........................   45

      Section 6.11   Preferential Collection of Claims against Company....   46

ARTICLE VII   Holders' Lists and Reports by Trustee and Company...........   46

      Section 7.01   Company to Furnish Trustee Names and Addresses of
                     Holders..............................................   46

      Section 7.02   Preservation of Information; Communications to
                     Holders..............................................   46

      Section 7.03   Reports by Trustee...................................   47

      Section 7.04   Reports by Company...................................   47

ARTICLE VIII  Consolidation, Merger, Conveyance, Transfer or Lease........   47

      Section 8.01   When Company May Merge, Etc..........................   47

      Section 8.02   Successor Corporation Substituted....................   48

ARTICLE IX    Supplemental Indentures.....................................   48

      Section 9.01   Supplemental Indentures Without Consent of Holders...   48

      Section 9.02   Supplemental Indentures with Consent of Holders......   49

      Section 9.03   Execution of Supplemental Indentures.................   50

      Section 9.04   Effect of Supplemental Indentures....................   50

      Section 9.05   Conformity with Trust Indenture Act..................   51

      Section 9.06   Reference in Securities to Supplemental Indentures...   51

ARTICLE X     Covenants...................................................   51

      Section 10.01  Payment of Securities................................   51

      Section 10.02  Maintenance of Office or Agency......................   51

      Section 10.03  Money for Securities Payments to Be Held in Trust....   52

      Section 10.04  Corporate Existence..................................   53

      Section 10.05  Payment of Taxes and Other Claims....................   53

      Section 10.06  Compliance Certificate; Notice of Default............   53

      Section 10.07  Waiver of Stay, Extension or Usury Laws..............   54

ARTICLE XI    Redemption of Securities....................................   54
</TABLE>

                                      iii
<PAGE>
                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                            PAGE

<S>                                                                         <C>
      Section 11.01  Applicability of Article.............................   54

      Section 11.02  Election to Redeem; Notice to Trustee................   54

      Section 11.03  Selection by Trustee of Securities to Be Redeemed....   55

      Section 11.04  Notice of Redemption.................................   55

      Section 11.05  Deposit of Redemption Price..........................   56

      Section 11.06  Securities Payable on Redemption Date................   56

      Section 11.07  Securities Redeemed in Part..........................   57

ARTICLE XII   Sinking Funds...............................................   57

      Section 12.01  Applicability of Article.............................   57

      Section 12.02  Satisfaction of Sinking Fund Payments with Securities   57

      Section 12.03  Redemption of Securities for Sinking Fund............   58

ARTICLE XIII  Redemption upon a Designated Event and a Rating Decline.....   58

      Section 13.01  Redemption by Holders................................   58

      Section 13.02  Redemption by Company................................   60

      Section 13.03  Other Provisions.....................................   60

ARTICLE XIV   Defeasance and Covenant Defeasance..........................   60

      Section 14.01  Company's Option to Effect Defeasance or Covenant
                     Defeasance...........................................   60

      Section 14.02  Defeasance and Discharge.............................   61

      Section 14.03  Covenant Defeasance..................................   61

      Section 14.04  Conditions to Defeasance or Covenant Defeasance......   62

      Section 14.05  Deposited Money and U.S. Government Obligations to be
                     Held in Trust; Other Miscellaneous Provisions........   63

      Section 14.06  Reinstatement........................................   64

ARTICLE XV    Conversion of Securities....................................   64

      Section 15.01  Applicability; Conversion Privilege and Conversion
                     Price................................................   64

      Section 15.02  Exercise of Conversion Privilege.....................   65

      Section 15.03  Fractions of Shares..................................   66

      Section 15.04  Adjustment of Conversion Price.......................   66

      Section 15.05  Notice of Adjustments of Conversion Price............   69
</TABLE>


                                       iv
<PAGE>
                                TABLE OF CONTENTS
                                   (continued)

<TABLE>
<CAPTION>
                                                                            PAGE

<S>                                                                         <C>
      Section 15.06  Notice of Certain Corporate Action...................   69

      Section 15.07  Company to Reserve Common Stock......................   70

      Section 15.08  Taxes on Conversions.................................   70

      Section 15.09  Covenant as to Common Stock..........................   70

      Section 15.10  Cancellation of Converted Securities.................   70

      Section 15.11  Provisions in Case of Consolidation, Merger or Sale
                     of Assets............................................   70

      Section 15.12  Responsibility of Trustee............................   71

ARTICLE XVI   Subordination of Securities.................................   71

      Section 16.01  Securities Subordinate to Senior Indebtedness........   71

      Section 16.02  Payment Over of Proceeds Upon Dissolution, Etc.......   72

      Section 16.03  Prior Payment to Senior Indebtedness Upon
                     Acceleration of Securities...........................   73

      Section 16.04  No Payment When Senior Indebtedness in Default.......   73

      Section 16.05  Payment Permitted If No Default......................   74

      Section 16.06  Subrogation to Rights of Holders of Senior
                     Indebtedness.........................................   74

      Section 16.07  Provisions Solely to Define Relative Rights..........   74

      Section 16.08  Trustee to Effectuate Subordination..................   75

      Section 16.09  No Waiver of Subordination Provisions................   75

      Section 16.10  Notice to Trustee....................................   75

      Section 16.11  Reliance on Judicial Order or Certificate of
                     Liquidating Agent....................................   76

      Section 16.12  Trustee Not Fiduciary for Holders of Senior
                     Indebtedness.........................................   76

      Section 16.13  Rights of Trustee as Holder of Senior Indebtedness;
                     Preservation of Trustee's Rights.....................   76

      Section 16.14  Article Applicable to Paying Agents..................   77

      Section 16.15  Certain Conversions Deemed Payment...................   77

      Section 16.16  Trust Moneys Not Subordinated........................   77
</TABLE>





                                       v
<PAGE>
                             Jefferies Group, Inc.
                 Certain Sections of this Indenture relating to
                 Sections 3.10 through 3.18, inclusive, of the
                          Trust Indenture Act of 1939:

<TABLE>
<CAPTION>
Trust Indenture
Act Section                                                                                         Indenture Section

<S>          <C>                                                                                    <C>
Section 310  (a)(1)     .........................................................................        6.10
             (a)(2)     .........................................................................        6.10
             (a)(3)     .........................................................................        Not Applicable
             (a)(4)     .........................................................................        Not Applicable
             (a)(5)     .........................................................................        6.10
             (b)        .........................................................................        6.08
                        .........................................................................         6.10
             (c)        .........................................................................        Not Applicable
Section 311  (a)        .........................................................................        6.11
             (b)        .........................................................................        6.11
             (c)        .........................................................................         Not Applicable
Section 312  (a)        .........................................................................        7.01
                        .........................................................................        7.02
             (b)        .........................................................................        7.02
             (c)        .........................................................................        7.02
Section 313  (a)         .........................................................................        6.06
                        .........................................................................        7.03
             (b)        .........................................................................        6.06
                        .........................................................................        7.03
             (c)        .........................................................................        6.06
                        .........................................................................        7.03
             (d)        .........................................................................        7.03
Section 314  (a)        .........................................................................        7.04
             (a)(4)     .........................................................................        1.01
                        .........................................................................        10.06
             (b)        .........................................................................        Not Applicable
             (c)(1)     .........................................................................        10.2
             (c)(2)     .........................................................................        10.2
             (c)(3)     .........................................................................        Not Applicable
             (d)        .........................................................................        Not Applicable
             (e)        .........................................................................        10.2
Section 315  (a)        .........................................................................        6.01
             (b)        .........................................................................        6.05
             (c)        .........................................................................        6.01
             (d)        .........................................................................        6.01
             (e)        .........................................................................        5.14
Section 316  (a)        .........................................................................        10.1
             (a)(1)(A)  .........................................................................        5.02
                        .........................................................................        5.12
             (a)(1)(B)  .........................................................................        5.13
             (a)(2)     .........................................................................        Not Applicable
             (b)        .........................................................................        5.08
             (c)        .........................................................................        10.4
Section 317  (a)(1)     .........................................................................        5.03
             (a)(2)     .........................................................................        5.04
             (b)        .........................................................................        10.03
Section 318  (a)        .........................................................................        1.07
</TABLE>

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

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


                                       VI
<PAGE>
            INDENTURE, dated as of _______ __, 2002, between Jefferies Group,
Inc., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at 11100
Santa Monica Boulevard, Los Angeles, California 90025 and The Bank of New York,
a New York banking corporation, as Trustee (herein called the "Trustee").

                             RECITALS OF THE COMPANY

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

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

            NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

                                    ARTICLE I

                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

Section 1.01 Definitions.

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

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

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

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

            (4)   the words "Article" and "Section" refer to an Article and
      Section, respectively, of this Indenture; and


                                       1
<PAGE>
            (5)   the words "herein", "hereof" and "hereunder" and other words
      of similar import refer to this Indenture as a whole and not to any
      particular Article, Section or other subdivision.

            (6)   Certain terms used principally in Articles VI, X, XIII and
      XIV, are defined in those Articles.

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

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

            "Attributable Debt" means, as to any particular lease under which
any Person is at the time liable and at any date as of which the amount thereof
is to be determined, the total net amount of rent required to be paid by such
Person under such lease during the remaining primary term thereof, discounted
from the respective due dates thereof to such date at the rate of [10 1/8%] per
annum. The net amount of rent required to be paid under any such lease for any
such period shall be the aggregate amount of rent payable by the lessee with
respect to such period after excluding amounts required to be paid on account of
maintenance and repairs, insurance, taxes, assessments, water rates and similar
charges, and after giving appropriate credit for lease payments payable to such
Person by any sublessee. In the case of any lease which is terminable by the
lessee upon the payment of a penalty, such net amount shall also include the
amount of such penalty, but no rent shall be considered as required to be paid
under such lease subsequent to the first date upon which it may be so
terminated.

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

            "Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.

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

            "Business Day", when used with respect to any Place of Payment,
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment are authorized or obligated
by law or executive order to close.

            "Capital Lease Obligation" means, at any time any determination
thereof is made, the amount of the liability in respect of a capital lease that
would at such time be so required to be capitalized on the balance sheet in
accordance with generally accepted accounting principles.



                                       2
<PAGE>
            "Capital Stock", as applied to the stock of any corporation, means
the capital stock of every class whether now or hereafter authorized, regardless
of whether such capital stock shall be limited to a fixed sum or percentage with
respect to the rights of the holders thereof to participate in dividends and in
the distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of such corporation.

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

            "Common Stock" includes any stock of any class of the Company 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
Company and which is not subject to redemption by the Company. However, subject
to the provisions of Section 3.01(17) and (18) and Section 15.11, shares
issuable on conversion of Securities shall include only shares of the class
designated as Common Stock of the Company at the date of this instrument or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have 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 Company and which are not subject to redemption
by the Company; provided that if at any time there shall be more than one such
resulting class, 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 applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.

            "Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, a Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.

            "Corporate Trust Office" means the principal office of the Trustee
in New York, New York at which at any particular time its corporate trust
business shall be administered, which office as of the date hereof is located at
5 Penn Plaza, 13th Floor, New York, NY 10001.

            "Corporation" means a corporation, association, company, joint-stock
company or business trust.

            "Covenant Defeasance" has the meaning specified in Section 14.03.

            "Defaulted Interest" has the meaning specified in Section 3.07.

            "Defeasance" has the meaning specified in Section 14.02.

            "Defeasible Series" has the meaning specified in Section 14.01.



                                       3
<PAGE>
            "Depositary" means, with respect to Securities of any series
issuable in whole or in part in the form of one or more Global Securities, a
clearing agency registered under the Exchange Act that is designated to act as
Depositary for such Securities as contemplated by Section 3.01.

            "Designated Event" has the meaning specified in Section 13.01.

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

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

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

            "Guaranty" 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, letters of
credit and reimbursement agreements in respect thereof), or all or any part of
any Indebtedness.

            "Hedging Obligations" means, with respect to any Person, the
Obligations of such Person under interest rate swap agreements, interest rate
cap agreements, and interest rate collar agreements, and other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.

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

            "Indebtedness" means, with respect to any Person, any indebtedness
of such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures of similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or representing Capital
Lease Obligations or the balance deferred and unpaid of the purchase price of
any property or representing any Hedging Obligations, except any such balance
that constitutes an accrued expense or trade payable, if and to the extent any
of the foregoing indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with generally accepted accounting principles, and also
includes, to the extent not otherwise included, the Guaranty of any indebtedness
of such Person or any other Person.

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



                                       4
<PAGE>
            "Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.

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

            "Lien" means any mortgage, lien, pledge, charge, security interest,
or other encumbrance of any kind, whether or not filed, recorded or otherwise
perfected under applicable law.

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

            "Notice of Default" means a written notice of the kind specified in
Section 5.01(4).

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

            "Officers' Certificate" means a certificate signed by the Chairman
of the Board, a Vice Chairman of the Board, the President or a Vice President,
and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 10.06 shall be the
principal executive, financial or accounting officer of the Company.

            "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company.

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

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

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

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



                                       5
<PAGE>
            (3)   Securities as to which Defeasance has been effected pursuant
      to Section 14.02; and

            (4)   Securities which have been paid pursuant to Section 3.06 or in
      exchange for or in lieu of which other Securities have been authenticated
      and delivered pursuant to this Indenture, other than any such Securities
      in respect of which there shall have been presented to the Trustee proof
      satisfactory to it that such Securities are held by a bona fide purchaser
      in whose hands such Securities are valid obligations of the Company;

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

            "Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.

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

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

            "Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.06 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.



                                       6
<PAGE>
            "Rating Decline" has the meaning specified in Section 13.01.

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

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

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

            "Responsible Officer", when used with respect to the Trustee, means
any vice president, any assistant treasurer, any trust officer or assistant
trust officer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject and who shall direct responsibility for
the administration of this Indenture.

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

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

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

            "Senior Indebtedness" means the principal of (and premium, if any),
accrued interest (including interest accruing on or after the filing in
bankruptcy or reorganization relating to the Company whether or not a claim for
post-filing interest is allowed in such proceedings), fees, charges, expenses,
reimbursement obligations, guarantees and other amounts owing with respect to
all Indebtedness of the Company (including Indebtedness of others guaranteed by
the Company) other than the Securities, in any such case whether outstanding on
the date of this Indenture or the date Securities of any series are issued
hereunder or thereafter created, incurred or assumed, unless in any case in the
instrument creating or evidencing any such Indebtedness or obligation or
pursuant to which the same is outstanding it is provided that such Indebtedness
or obligation is not superior in right of payment to the Securities or it is
provided that such obligation is subordinated to senior indebtedness to
substantially the same extent as the Securities are subordinated to Senior
Indebtedness.

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

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



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

            "Subject Securities" has the meaning specified in Section 13.01.

            "Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.

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

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

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

            "Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".

Section 1.02 Compliance Certificates and Opinions.

            Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.

            Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
provided for in Section 10.06) shall include

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



                                       8
<PAGE>
            (2)   a brief statement as to the nature and scope of the
      examination or investigation upon which the statements or opinions
      contained in such certificate or opinion are based;

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

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

Section 1.03 Form of Documents Delivered to Trustee.

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

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

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

Section 1.04 Acts of Holders; Record Dates.

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



                                       9
<PAGE>
            The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.

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

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

            The Company may, in the circumstances permitted by the Trust
Indenture Act, set any day as the record date for the purpose of determining the
Holders of Outstanding Securities of any series entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given or taken by Holders
of Securities of such series. With regard to any record date set pursuant to
this paragraph, the Holders of Outstanding Securities of the relevant series on
such record date (or their duly appointed agents), and only such Persons, shall
be entitled to give or take the relevant action, whether or not such Holders
remain Holders after such record date. With regard to any action that may be
given or taken hereunder only by Holders of a requisite principal amount of
Outstanding Securities of any series (or their duly appointed agents) and for
which a record date is set pursuant to this paragraph, the Company may, at its
option, set an expiration date after which no such action purported to be given
or taken by any Holder shall be effective hereunder unless given or taken on or
prior to such expiration date by Holders of the requisite principal amount of
Outstanding Securities of such series on such record date (or their duly
appointed agents). On or prior to any expiration date set pursuant to this
paragraph, the Company may, on one or more occasions at its option, extend such
date to any later date. Nothing in this paragraph shall prevent any Holder (or
any duly appointed agent thereof) from giving or taking, after any such
expiration date, any action identical to, or, at any time, contrary to or
different from, the action or purported action to which such expiration date
relates, in which event the Company may set a record date in respect thereof
pursuant to this paragraph. Nothing in this paragraph shall be construed to
render ineffective any action taken at any time by the Holders (or their duly
appointed agents) of the requisite principal amount of Outstanding Securities of
the relevant series on the date such action is so taken. Notwithstanding the
foregoing or the Trust Indenture Act, the Company shall not set a record date
for, and the provisions of this paragraph shall not apply with respect to, any
notice, declaration or direction referred to in the next paragraph.

            The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.02, if an Event of Default with respect to
Securities of such series has occurred and is continuing and the Trustee


                                       10
<PAGE>
shall not have given such a declaration to the Company, (iii) any request to
institute proceedings referred to in Section 5.07(2) or (iv) any direction
referred to in Section 5.12, in each case with respect to Securities of such
series. Promptly after any record date is set pursuant to this paragraph, the
Trustee shall notify the Company and the Holders of Outstanding Series of such
series of any such record date so fixed and the proposed action. The Holders of
Outstanding Securities of such series on such record date (or their duly
appointed agents), and only such Persons, shall be entitled to join in such
notice, declaration or direction, whether or not such Holders remain Holders
after such record date; provided that, unless such notice, declaration or
direction shall have become effective by virtue of Holders of the requisite
principal amount of Outstanding Securities of such series on such record date
(or their duly appointed agents) having joined therein on or prior to the 90th
day after such record date, such notice, declaration or direction shall
automatically and without any action by any Person be cancelled and of no
further effect. Nothing in this paragraph shall be construed to prevent a Holder
(or a duly appointed agent thereof) from giving, before or after the expiration
of such 90-day period, a notice, declaration or direction contrary to or
different from, or, after the expiration of such period, identical to, the
notice, declaration or direction to which such record date relates, in which
event a new record date in respect thereof shall be set pursuant to this
paragraph. Nothing in this paragraph shall be construed to render ineffective
any notice, declaration or direction of the type referred to in this paragraph
given at any time to the Trustee and the Company by Holders (or their duly
appointed agents) of the requisite principal amount of Outstanding Securities of
the relevant series on the date such notice, declaration or direction is so
given.

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

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

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

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

            (2)   the Company by the Trustee or by any Holder shall be
      sufficient for every purpose hereunder (unless otherwise herein expressly
      provided) if in writing and mailed, first-class postage prepaid, to the
      Company addressed to it at the address of its principal office specified
      in the first paragraph of this instrument or at any other address
      previously furnished in writing to the Trustee by the Company.







                                       11
<PAGE>
Section 1.06 Notice to Holders; Waiver.

            Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at his address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.

            In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.

Section 1.07 Conflict with Trust Indenture Act.

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

            The following Trust Indenture Act terms used in this Indenture have
the following meanings:

            "commission" means the United States Securities and Exchange
            Commission.

            "indenture securities" means the Securities.

            "indenture security holder" means a Holder.

            "indenture to be qualified" means this Indenture.

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

            "obligor on the indenture securities" means the Company and any
            other obligor on the Securities.



                                       12
<PAGE>
            All other Trust Indenture Act terms used in this Indenture that are
defined by the Trust Indenture Act, defined by the Trust Indenture Act
referenced to another statute or defined by any Commission Rule and not
otherwise defined herein have the meanings defined to them thereby.

Section 1.08 Effect of Headings and Table of Contents.

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

Section 1.09 Successors and Assigns.

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

Section 1.10 Separability Clause.

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

Section 1.11 Benefits of Indenture.

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

Section 1.12 Governing Law.

            This Indenture and the Securities shall be governed by and construed
in accordance with the law of the State of New York, but without regard to
principles of conflicts of laws.

Section 1.13 Legal Holidays.

            In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security or the last date on which a Holder has the right
to convert his Securities shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of the Securities of any series which specifically
states that such provision shall apply in lieu of this Section)) payment of
interest or principal (and premium, if any) or conversion of the Securities need
not be made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, or on such last day for conversion, provided that no interest shall
accrue for the period from and after such Interest Payment Date, Redemption Date
or Stated Maturity, as the case may be.



                                       13
<PAGE>
                                   ARTICLE II

                                 SECURITY FORMS

Section 2.01 Forms Generally.

            The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 3.03 for the authentication and delivery of such
Securities.

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

Section 2.02 Form of Face of Security.

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

                              JEFFERIES GROUP, INC.


No. _______________                                               $_____________



            Jefferies Group, Inc., a corporation duly organized and existing
under the laws of Delaware (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _______________________________________, or
registered assigns, the principal sum of __________________________________
Dollars on ________________________________ [if the Security is to bear interest
prior to Maturity, insert -- , and to pay interest thereon from
____________________ or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually on _______________
and ______________ in each year, commencing _________________, at the rate of
______ per annum, until the principal hereof is paid or made available for
payment [if applicable, insert -- , and at the rate of ___% per annum on any
overdue principal and premium and on any overdue installment of interest]. The
interest so payable, and punctually paid or duly provided for, on any Interest


                                       14
<PAGE>
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the ________ or _______ (whether or not a Business Day), as the case may be,
next preceding such Interest Payment Date. Any such interest not so punctually
paid or duly provided for will forthwith cease to be payable to the Holder on
such Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture].

            [If the Security is not to bear interest prior to Maturity, insert
-- The principal of this Security shall not bear interest except in the case of
a default in payment of principal upon acceleration, upon redemption or at
Stated Maturity and in such case the overdue principal of this Security shall
bear interest at the rate of ____% per annum which shall accrue from the date of
such default in payment to the date payment of such principal has been made or
duly provided for. Interest on any overdue principal shall be payable on demand.
Any such interest on any overdue principal that is not so paid on demand shall
bear interest at the rate of _____% per annum which shall accrue from the date
of such demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand.]

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

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

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











                                       15
<PAGE>
            IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.

Dated:


                                          JEFFERIES GROUP, INC.


                                          By:
                                              ----------------------------

                                              Name
                                              Title:

Attest:


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


Section 2.03 Form of Reverse of Security.

            This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of ______, 2002 (herein called the
"Indenture"), between the Company and ___________________, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee, the holders of
Senior Indebtedness and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof [if applicable,
insert --, limited in aggregate principal amount to $___________].

            [If applicable, insert -- Subject to and upon compliance with the
provisions of the Indenture, the Holder of this Security is entitled, at his
option, at any time on or before the close of business on __________, or in case
this Security or a portion hereof is called for redemption, then in respect of
this Security or such portion hereof until and including, but (unless the
Company defaults in making the payment due upon redemption) not after, the close
of business on the 10th calendar day before the Redemption Date, to convert this
Security (or any portion of the principal amount hereof which is $1,000 or an
integral multiple thereof), at the principal amount hereof, or of such portion,
into fully paid and non-assessable shares (calculated as to each conversion to
the nearest 1/100 of a share) of Common Stock of the Company at a conversion
price per share of Common Stock equal to $_____ per each share of Common Stock
(or at the current adjusted conversion price if an adjustment has been made as
provided in the Indenture) by surrender of this Security, duly endorsed or
assigned to the Company or in blank, to the Company at its office or agency in
_________, accompanied by written notice to the Company that the Holder hereof
elects to convert this Security, or if less than the entire principal amount
hereof is to be converted, the portion hereof to be converted, and, in case such
surrender shall be made during the period from the close of business on any
Regular Record Date next


                                       16
<PAGE>
preceding any Interest Payment Date to the opening of business on such Interest
Payment Date (unless this Security or the portion thereof being converted has
been called for redemption on a Redemption Date within such period), also
accompanied by payment in funds acceptable to the Company of an amount equal to
the interest payable on such Interest Payment Date on the principal amount of
this Security then being converted. Subject to the aforesaid requirement for
payment and, in the case of a conversion after the Regular Record Date next
preceding any Interest Payment Date and on or before such Interest Payment Date,
to the right of the Holder of this Security (or any Predecessor Security) of
record at such Regular Record Date to receive an installment of interest (with
certain exceptions provided in the Indenture), no payment or adjustment is to be
made on conversion for interest accrued hereon or for dividends on the Common
Stock issued on conversion. No fractions of shares or scrip representing
fractions of shares will be issued on conversion, but instead of any fractional
interest the Company shall pay a cash adjustment as provided in the Indenture.
The conversion price 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 or the transfer of substantially all of
the assets of the Company, the Indenture shall be amended, without the consent
of any Holders of Securities, so that this Security, if then outstanding, will
be convertible thereafter, during the period this Security shall be convertible
as specified above, only into the kind and amount of securities, cash and other
property receivable upon the consolidation, merger or transfer by a holder of
the number of shares of Common Stock into which this Security might have been
converted immediately prior to such consolidation, merger or transfer (assuming
such holder of Common Stock 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).]

            [If applicable, insert -- The Securities are subject to redemption
at the election of the Holders thereof, in whole or in part, and in limited
circumstances at the election of the Company, in whole, following the occurrence
of a Designated Event and a Rating Decline. Such redemptions will be made at a
Redemption Price equal to 100% of the principal amount, together with accrued
interest to the Redemption Date, as provided for in Article XIII of the
Indenture. [The Securities are not otherwise subject to redemption prior to
maturity, and no sinking fund is provided for the Securities.]]

            [If applicable, insert -- The Securities of this series are subject
to redemption upon not less than 30 days' notice by mail, [if applicable, insert
-- (1) on _____________ in any year commencing with the year ______ and ending
with the year 20__ ______ through operation of the sinking fund for this series
at a Redemption Price equal to 100% of the principal amount, and (2)] at any
time [if applicable, insert -- on or after __________, 20__], as a whole or in
part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed [if applicable,
insert -- on or before _______________, __%, and if redeemed] during the
12-month period beginning _____________ of the years indicated,

<TABLE>
<CAPTION>
                     Redemption                              Redemption
Year                 Price               Year                Price
----                 -----               ----                -----
<S>                  <C>                 <C>                 <C>


</TABLE>





                                       17
<PAGE>
and thereafter at a Redemption Price equal to _______% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]

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


<TABLE>
<CAPTION>
                                 Redemption Price        Redemption Price For
                                  For Redemption         Redemption Otherwise
                                Through Operation       Than Through Operation
Year                           of the Sinking Fund        of the Sinking Fund
----                           -------------------        -------------------
<S>                            <C>                      <C>


</TABLE>



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

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

            [If applicable, insert -- The sinking fund for this series provides
for the redemption on ______________ in each year beginning with the year
_______ and ending with the year _______ of [if applicable, insert -- not less
than $___________ ("mandatory sinking fund") and not more than] $___________
aggregate principal amount of Securities of this series. Securities of this
series acquired or redeemed by the Company otherwise than through [if


                                       18
<PAGE>
applicable, insert mandatory] sinking fund payments [if applicable, insert and
Securities surrendered for conversion] may be credited against subsequent [if
applicable, insert -- mandatory] sinking fund payments otherwise required to be
made [if applicable, insert -- in the inverse order in which they become due].

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

            The indebtedness evidenced by this Security is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness, and this Security is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take action
as may be necessary or appropriate to effectuate the subordination so provided
and (c) appoints the Trustee his attorney-in-fact for any and all such purposes.

            [If applicable, insert -- The Indenture contains provisions for
defeasance at any time of [(1) the entire indebtedness of this Security or (2)]
certain restrictive covenants and Events of Default with respect to this
Security, in each case upon compliance with certain conditions set forth in the
Indenture.]

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

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

            The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future


                                       19
<PAGE>
Holders of this Security and of any Security issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

            As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.

            Subject to the rights of holders of Senior Indebtedness, as set
forth in the Indenture, no other reference herein to the Indenture and no other
provision of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of (and premium, if any) and interest on this Security at the times,
place and rate, and in the coin or currency, herein prescribed or to convert
this Security as provided in the Indenture.

            As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registerable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

            The Securities of this series are issuable only in registered form
without coupons in denominations of [$1,000] and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

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

            Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name


                                       20
<PAGE>
this Security is registered as the owner hereof for all purposes, whether or not
this Security be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary.

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

            [If applicable, insert --



                           [FORM OF CONVERSION NOTICE]

To:   JEFFERIES GROUP, INC.

            The undersigned owner of this Security hereby irrevocably exercises
the option to convert this Security, or portion hereof (which is $1,000 or an
integral multiple thereof) below designated, into shares of Common Stock of
Jefferies Group, Inc., in accordance with the terms of the Indenture referred to
in this Security, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional shares and any
Securities, representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Security.

Dated:

Fill in for registration of
 shares of Common Stock and
 Securities if to be issued
 otherwise than to the
 registered holder.
                                    Principal Amount to be
                                      converted (in an
                                      integral multiple of
                                      $1,000, if less than
                                      all):
                                    $
-------------------------------
Name


-------------------------------
Address


-------------------------------     -------------------------------------
(Please print name and                  Signature
 address, including zip code
 number)




                                       21
<PAGE>
SOCIAL SECURITY OR OTHER
TAXPAYER IDENTIFYING                [SIGNATURE GUARANTEED --
NUMBER                                required only if Common
                                      Common Stock and Securities
                                      are to be issued and delivered
                                      to other than registered holder]
[____________________________]


Section 2.04 Form of Legend for Global Securities.

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

            This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a Depositary
or a nominee thereof. This Security may not be transferred to, or registered or
exchanged for Securities registered in the name of, any Person other than the
Depositary or a nominee thereof and no such transfer may be registered, except
in the limited circumstances described in the Indenture. Every Security
authenticated and delivered upon registration of transfer of, or in exchange for
or in lieu of, this Security shall be a Global Security subject to the
foregoing, except in such limited circumstances.

Section 2.05 Form of Trustee's Certificate of Authentication.

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

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

                                    THE BANK OF NEW YORK, as Trustee


                                    By: _______________________
                                        Authorized Signatory

                                    Dated: __________________






                                       22
<PAGE>
                                   ARTICLE III

                                 THE SECURITIES

Section 3.01 Amount Unlimited; Issuable in Series.

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

            The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 3.03,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,

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

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

            (3)   the Person to whom any interest on a Security of the series
      shall be payable, if other than the Person in whose name that Security (or
      one or more Predecessor Securities) is registered at the close of business
      on the Regular Record Date for such interest;

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

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

            (6)   the place or places where the principal of and any premium and
      interest on Securities of the series shall be payable;

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

            (8)   the obligation, if any, of the Company to redeem or purchase
      Securities of the series pursuant to any sinking fund or analogous
      provisions or at the option of a Holder thereof and the period or periods
      within which, the price or prices at which and


                                       23
<PAGE>
      the terms and conditions upon which Securities of the series shall be
      redeemed or purchased, in whole or in part, pursuant to such obligation;

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

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

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

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

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

            (14)  the applicability, nonapplicability, or variation, of Article
      XIII with respect to the Securities of such Series;

            (15)  if applicable, that the Securities of the series shall be
      subject to either or both of Defeasance or Covenant Defeasance as provided
      in Article XIV; provided that no series of Securities that is convertible
      into Common Stock as provided in Article XV or convertible into or
      exchangeable for any other securities pursuant to Section 3.01(18) shall
      be subject to Defeasance pursuant to Section 14.02;

            (16)  if and as applicable, that the Securities of the series shall
      be issuable in whole or in part in the form of one or more Global
      Securities and, in such case, the Depositary or Depositaries for such
      Global Security or Global Securities and any circumstances other than
      those set forth in Section 3.05 in which any such Global Security may be
      transferred to, and registered and exchanged for Securities registered in
      the name of, a Person other than the Depositary for such Global Security
      or a nominee thereof and in which any such transfer may be registered;

            (17)  the terms and conditions, if any, pursuant to which the
      Securities are convertible into Common Stock of the Company pursuant to
      Article XV, and any variation thereof;



                                       24
<PAGE>
            (18)  the terms and conditions, if any, pursuant to which the
      Securities are convertible into or exchangeable for any other securities;

            (19)  any addition to or change in the covenants set forth in
      Article X which applies to Securities of the series; and

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

            All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolution referred to above and (subject to Section 3.03) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.

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

            The Company may, from time to time, by adoption of a Board
Resolution and subject to compliance with any other applicable provisions of
this Indenture, without the consent of the Holders, create and issue pursuant to
this Indenture additional securities of any series of Securities ("Add On
Securities") having terms and conditions identical to those of such series of
Outstanding Securities, except that such Add On Securities:

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

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

            (iii) may have terms specified in such Board Resolution for such Add
On Securities making appropriate adjustments to this Article III applicable to
such Add On Securities in order to conform to and ensure compliance with the
Securities Act (or applicable securities laws) which are not adverse in any
material respect to the Holder of any Outstanding Securities (other than such
Add On Securities) and which shall not affect the rights or duties of the
Trustee.

Section 3.02 Denominations.

            The Securities of each series shall be issuable only in registered
form without coupons in such denominations as shall be specified as contemplated
by Section 3.01. In the absence of any such specified denomination with respect
to the Securities of any series, the Securities of such series shall be issuable
in denominations of $1,000 and any integral multiple thereof.



                                       25
<PAGE>
Section 3.03 Execution, Authentication, Delivery and Dating.

            The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President, one of its
Vice Presidents or its Treasurer, under its corporate seal reproduced thereon
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Securities may be manual or facsimile.

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

            At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities of any Series executed by
the Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Securities, and the Trustee in
accordance with the Company Order shall authenticate and deliver such
Securities. If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 2.01 and 3.01, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be
fully protected in relying upon, an Opinion of Counsel stating,

            (1)   if the form of such Securities has been established by or
      pursuant to Board Resolution as permitted by Section 2.01, that such form
      has been established in conformity with the provisions of this Indenture;

            (2)   if the terms of such Securities have been established by or
      pursuant to Board Resolution as permitted by Section 3.01, that such terms
      have been established in conformity with the provisions of this Indenture;
      and

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

            If such form or terms have been so established, the Trustee shall
not be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.

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


                                       26
<PAGE>
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.

            Each Security shall be dated the date of its authentication.

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

Section 3.04 Temporary Securities.

            Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.

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

Section 3.05 Registration, Registration of Transfer and Exchange.

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



                                       27
<PAGE>
            Upon surrender for registration of transfer of any Security of any
series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount and tenor.

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

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

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

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

            The Company shall not be required (1) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
11.03 and ending at the close of business on the day of such mailing, or (2) to
register the transfer of or exchange any Security so selected for redemption in
whole or in part, except the unredeemed portion of any Security being redeemed
in part.

            Notwithstanding any other provision in this Indenture, no Global
Security may be transferred to, or registered or exchanged for Securities
registered in the name of; any Person other than the Depositary for such Global
Security or any nominee thereof, and no such transfer may be registered, unless
(1) such Depositary (A) notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security or (B) has ceased to be a
clearing agency registered under the Exchange Act, (2) the Company executes and
delivers to the Trustee a Company Order that such Global Security shall be so
transferable, registrable and exchangeable, and such transfers shall be
registrable, (3) there shall have occurred and be continuing an Event of Default
with respect to the Securities evidenced by such Global Security or (4) there
shall exist such other circumstances, if any, as have been specified for this
purpose as


                                       28
<PAGE>
contemplated by Section 3.01. Notwithstanding any other provision in this
Indenture, a Global Security to which the restriction set forth in the preceding
sentence shall have ceased to apply may be transferred only to, and may be
registered and exchanged for Securities registered only in the name or names of,
such Person or Persons as the Depositary for such Global Security shall have
directed and no transfer thereof other than such a transfer may be registered.

            Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security to which the
restriction set forth in the first sentence of the preceding paragraph shall
apply, whether pursuant to this Section, Section 3.04, 3.06, 9.06 or 11.07 or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security.

Section 3.06 Mutilated, Destroyed, Lost and Stolen Securities.

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

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

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

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

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

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



                                       29
<PAGE>
Section 3.07 Payment of Interest; Interest Rights Preserved.

            Except as otherwise provided as contemplated by Section 3.01 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.

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

            (1)   The Company may elect to make payment of any Defaulted
      Interest to the Persons in whose names the Securities of such series (or
      their respective Predecessor Securities) are registered at the close of
      business on a Special Record Date for the payment of such Defaulted
      Interest, which shall be fixed in the following manner. The Company shall
      notify the Trustee in writing of the amount of Defaulted Interest proposed
      to be paid on each Security of such series and the date of the proposed
      payment, and at the same time the Company shall deposit with the Trustee
      an amount of money equal to the aggregate amount proposed to be paid in
      respect of such Defaulted Interest or shall make arrangements satisfactory
      to the Trustee for such deposit prior to the date of the proposed payment,
      such money when deposited to be held in trust for the benefit of the
      Persons entitled to such Defaulted Interest as in this Clause provided.
      Thereupon the Trustee shall fix a Special Record Date for the payment of
      such Defaulted Interest which shall be not more than 15 days and not less
      than 10 days prior to the date of the proposed payment and not less than
      10 days after the receipt by the Trustee of the notice of the proposed
      payment. The Trustee shall promptly notify the Company of such Special
      Record Date and, in the name and at the expense of the Company, shall
      cause notice of the proposed payment of such Defaulted Interest and the
      Special Record Date therefor to be mailed, first-class postage prepaid, to
      each Holder of Securities of such series at his address as it appears in
      the Security Register, not less than 10 days prior to such Special Record
      Date. Notice of the proposed payment of such Defaulted Interest and the
      Special Record Date therefor having been so mailed, such Defaulted
      Interest shall be paid to the Persons in whose names the Securities of
      such series (or their respective Predecessor Securities) are registered at
      the close of business on such Special Record Date and shall no longer be
      payable pursuant to the following Clause (2).

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



                                       30
<PAGE>
            Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.

            Subject to the provisions of Section 15.02, in the case of any
Security which is converted after any Regular Record Date and on or prior to the
next succeeding Interest Payment Date, interest whose Stated Maturity is on such
Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on such Regular Record Date. Except as otherwise expressly provided in
the immediately preceding sentence in the case of any Security which is
converted, interest whose Stated Maturity is after the date of conversion of
such Security, shall not be payable.

Section 3.08 Persons Deemed Owners.

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

Section 3.09 Cancellation.

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

Section 3.10 Computation of Interest.

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



                                       31
<PAGE>
Section 3.11 CUSIP Numbers.

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

                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

Section 4.01 Satisfaction and Discharge of Indenture.

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

            (1)   either

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

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

                        (i)   have become due and payable, or

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

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

            and the Company, in the case of (i), (ii) or (iii) above, has
            deposited or caused to be deposited with the Trustee as trust funds
            in trust for the purpose an amount sufficient to pay and discharge
            the entire indebtedness on such Securities not


                                       32
<PAGE>
            theretofore delivered to the Trustee for cancellation, for principal
            and any premium and interest to the date of such deposit (in the
            case of Securities which have become due and payable) or to the
            Stated Maturity or Redemption Date, as the case may be;

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

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

            Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 6.07, 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 4.02 shall
survive such satisfaction and discharge.

Section 4.02 Application of Trust Money.

            All money deposited with the Trustee pursuant to Section 4.01 shall
be held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and any
premium and interest for whose payment such money has been deposited with the
Trustee.

                                    ARTICLE V

                                    REMEDIES

Section 5.01 Events of Default.

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

            (1)   default in the payment of any interest upon any Security of
      that series when it becomes due and payable, and continuance of such
      default for a period of 30 days; or

            (2)   default in the payment of the principal of (or premium, if
      any, on) any Security of that series at its Maturity; or



                                       33
<PAGE>
            (3)   default in the deposit of any sinking fund payment, when and
      as due by the terms of a Security of that series, and the continuance of
      such default for a period of 30 days; or

            (4)   default in the performance, or breach, of any covenant or
      warranty of the Company in this Indenture (other than a covenant or
      warranty a default in whose performance or whose breach is elsewhere in
      this Section specifically dealt with or which has expressly been included
      in this Indenture solely for the benefit of series of Securities other
      than that series), and continuance of such default or breach for a period
      of 90 days after there has been given, by registered or certified mail, to
      the Company by the Trustee or to the Company and the Trustee by the
      Holders of at least 25% in principal amount of the Outstanding Securities
      of that series a written notice specifying such default or breach and
      requiring it to be remedied and stating that such notice is a "Notice of
      Default" hereunder; or

            (5)   the Company shall fail to pay any Indebtedness in excess of
      $10,000,000 owing by the Company, or any interest or premium thereon, when
      due (whether by scheduled maturity, required prepayment, acceleration,
      demand or otherwise), and such failure shall continue after the applicable
      grace period, if any, specified in the agreement or instrument relating to
      such Indebtedness, or the Company shall fail to perform any term, covenant
      or agreement on its part to be performed under any agreement or instrument
      evidencing or securing or relating to any such Indebtedness, if the effect
      of such failure in either case is that the maturity of such Indebtedness
      is duly accelerated, without such Indebtedness having been discharged or
      such acceleration having been rescinded or annulled, in each such case,
      within a period of 10 days after there shall have been given, by
      registered or certified mail, to the Company by the Trustee or to the
      Company and the Trustee by Holders of at least 25% in principal amount of
      the Outstanding Securities of that series, a written notice specifying
      such default and requiring the Company to cause such Indebtedness to be
      discharged or cause such acceleration to be rescinded or annulled, as the
      case may be, and stating that such notice is a "Notice of Default"
      hereunder (the Trustee shall not be deemed to have knowledge of a default
      under this subsection (5) unless it shall have actual knowledge thereof);
      provided, however, that, subject to the provisions of Sections 6.01 and
      6.05, the Trustee shall not be deemed to have knowledge of such failure to
      pay unless either (A) a Responsible Officer of the Trustee shall have
      actual knowledge of such failure to pay or (B) the Trustee shall have
      received written notice thereof from the Company, from any Holder, from
      the holder of any such Indebtedness or from the trustee thereunder; or

            (6)   the entry by a court having jurisdiction in the premises of
      (A) a decree or order for relief in respect of the Company in an
      involuntary case or proceeding under any applicable Federal or State
      bankruptcy, insolvency, reorganization or other similar law or (B) a
      decree or order adjudging the Company a bankrupt or insolvent, or
      approving as properly filed a petition seeking reorganization,
      arrangement, adjustment or composition of or in respect of the Company
      under any applicable Federal or State law, or appointing a custodian,
      receiver, liquidator, assignee, trustee, sequestrator or other similar
      official of the Company or of any substantial part of its property, or
      ordering the winding up or


                                       34
<PAGE>
      liquidation of its affairs, and the continuance of any such decree or
      order for relief or any such other decree or order unstayed and in effect
      for a period of 60 consecutive days; or

            (7)   the commencement by the Company of a voluntary case or
      proceeding under any applicable Federal or State bankruptcy, insolvency,
      reorganization or other similar law or of any other case or proceeding to
      be adjudicated a bankrupt or insolvent, or the consent by it to the entry
      of a decree or order for relief in respect of the Company in an
      involuntary case or proceeding under any applicable Federal or State
      bankruptcy, insolvency, reorganization or other similar law or to the
      commencement of any bankruptcy or insolvency case or proceeding against
      it, or the filing by it of a petition or answer or consent seeking
      reorganization or relief under any applicable Federal or State law, or the
      consent by it to the filing of such petition or to the appointment of or
      taking possession by a custodian, receiver, liquidator, assignee, trustee,
      sequestrator or other similar official of the Company or of any
      substantial part of its property, or the making by it of an assignment for
      the benefit of creditors, or the admission by it in writing of its
      inability to pay its debts generally as they become due, or the taking of
      corporate action by the Company in furtherance of any such action; or

            (8)   any other Event of Default provided with respect to Securities
      of that series.

Section 5.02 Acceleration of Maturity; Rescission and Annulment.

            If an Event of Default with respect to Securities of any series at
the time Outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
any of the Securities of that series are Original Issue Discount Securities,
such portion of the principal amount of such Securities as may be specified in
the terms thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.

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

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

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

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



                                       35
<PAGE>
                  (C)   to the extent that payment of such interest is lawful,
            interest upon overdue interest at the rate or rates prescribed
            therefor in such Securities, and

                  (D)   all sums paid or advanced by the Trustee hereunder and
            the reasonable compensation, expenses, disbursements and advances of
            the Trustee, its agents and counsel;

      and

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

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

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

            The Company covenants that if:

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

            (2)   default is made in the payment of the principal of (or
      premium, if any, on) any Security at the Maturity thereof,

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

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

Section 5.04 Trustee May File Proofs of Claim.

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


                                       36
<PAGE>
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07.

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

Section 5.05 Trustee May Enforce Claims Without Possession of Securities.

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

Section 5.06 Application of Money Collected.

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

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

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

                  THIRD: To the Company.




                                       37
<PAGE>
Section 5.07 Limitation on Suits.

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

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

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

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

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

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

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

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

            Notwithstanding any other provision in this Indenture, but subject
to Article XVI, the Holder of any Security shall have the right, which is
absolute and unconditional, to receive payment of the principal of and any
premium and (subject to Section 3.07) interest on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to convert such Security in accordance
with Article XV and to institute suit for the enforcement of any such payment
and right to convert, and such rights shall not be impaired without the consent
of such Holder.

Section 5.09 Restoration of Rights and Remedies.

            If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all


                                       38
<PAGE>
rights and remedies of the Trustee and the Holders shall continue as though no
such proceeding had been instituted.

Section 5.10 Rights and Remedies Cumulative.

            Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 3.06, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.

Section 5.11 Delay or Omission Not Waiver.

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

Section 5.12 Control by Holders.

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

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

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

            (3)   subject to the provisions of Section 6.01, the Trustee shall
      have the right to decline to follow any such direction if the Trustee in
      good faith share, by a Responsible Officer or Officers of the Trustee,
      determine, and the Trustee shall have received a legal opinion stating,
      that the proceedings so directed would involve the Trustee in personal
      liability.

Section 5.13 Waiver of Past Defaults.

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


                                       39
<PAGE>
            (1)   in the payment of the principal of or any premium or interest
      on any Security of such series, or

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

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

Section 5.14 Undertaking for Costs.

            In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall apply to any suit instituted by the Trustee, to any suit instituted by any
Holders of the Securities, or group of Holders of the Securities, holding in the
aggregate more than 10% of principal amount of the Outstanding Securities of any
series, or to any suit instituted by any Holder of the Outstanding Securities
for the enforcement of the payment of principal of or interest on any
Outstanding Securities held by such Holder, on or after the respective due dates
expressed in such Outstanding Securities, and provided, further, that neither
this Section nor the Trust Indenture Act shall be deemed to authorize any court
to require such an undertaking or to make such an assessment in any suit
instituted by the Company or in any suit for the enforcement of the right to
convert any Security in accordance with Article XV.

Section 5.15 Waiver of Usury, Stay or Extension Laws.

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

                                   ARTICLE VI

                                   THE TRUSTEE

            The Trustee hereby accepts the trust imposed upon it by this
Indenture and covenants and agrees to perform the same, as herein expressed.



                                       40
<PAGE>
Section 6.01 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 their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.

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

            (1)   The Trustee need perform only those duties as are specifically
      set forth in this Indenture and no others, and no covenants or obligations
      shall be implied in or read into this Indenture.

            (2)   In the absence of bad faith on its part, the Trustee may
      conclusively rely, as to the truth of the statements and the correctness
      of the opinions expressed therein, upon certificates or opinions furnished
      to the Trustee and conforming to the requirements of this Indenture.
      However, in the case of any such certificates or opinions which by any
      provision hereof are specifically required to be furnished to the Trustee,
      the Trustee shall be under a duty to examine the same to determine whether
      or not they substantially conform to the requirements of this Indenture
      (but need not confirm or investigate the accuracy of mathematical
      calculations or other facts stated therein).

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

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

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

            (3)   The Trustee shall not be liable with respect to any action it
      takes or omits to take in good faith in accordance with a direction
      received by it pursuant to Section 5.12.

            (d)   No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture.

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

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



                                       41
<PAGE>
Section 6.02 Rights of Trustee.

            Subject to Section 6.01:

            (a)   The Trustee may rely conclusively on 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 any document.

            (b)   Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such certificate or opinion.

            (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 which it believes to be authorized or within its
rights or powers.

            (e)   The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney at the sole cost of the
Company and shall incur no liability or additional liability of any kind by
reason of such investigation.

            (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, order or
direction of any of the Holders, pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity satisfactory to it against the costs, expenses and liabilities which
may be incurred therein or thereby.

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

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

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





                                       42
<PAGE>
Section 6.03 Individual Rights of Trustee.

            The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company, its
Subsidiaries, or their respective Affiliates with the same rights it would have
if it were not Trustee. Any Paying Agent or Security Registrar may do the same
with like rights. However, the Trustee must comply with Sections 6.08, 6.09 and
6.10.

Section 6.04 Trustee's Disclaimer.

            The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Securities and it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities, other than the Trustee's
certificate of authentication, or the use or application of any funds received
by a Paying Agent other than the Trustee.

Section 6.05 Notice of Default.

            If an Event of Default with respect to Securities of any series
occurs and is continuing and if it is known to the Trustee, the Trustee shall
mail to each Holder of Securities of such series notice of the uncured Event of
Default within 90 days after such Event of Default occurs. Except in the case of
an Event of Default in payment of principal (or premium, if any) of, or interest
on, any Security, the Trustee may withhold the notice if and so long as a
Responsible Officer in good faith determines that withholding the notice is in
the interest of the Holders of Securities of such series.

Section 6.06 Reports by Trustee to Holders.

            Within 60 days after each February 15 beginning with the February 15
following the date of this Indenture, the Trustee shall mail to each Holder a
brief report dated as of such February 15 that complies with Trust Indenture Act
Section 313(a) if such report is required by such Trust Indenture Act Section
313(a). The Trustee also shall comply with Trust Indenture Act Sections 313(b)
and 313(c).

            The Company shall promptly notify the Trustee in writing if the
Securities of any series become listed on any stock exchange or automatic
quotation system.

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

Section 6.07 Compensation and Indemnity.

            The Company shall pay to the Trustee from time to time such
compensation for its services as the Company and the Trustee shall from time to
time agree in writing. 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 upon request for all reasonable disbursements, expenses
and advances incurred or made by it. Such expenses shall include the


                                       43
<PAGE>
reasonable compensation, disbursements and expenses of the Trustee's agents,
accountants, experts and counsel.

            The Company shall indemnify each of the Trustee (in its capacity as
Trustee) and any predecessor Trustee and each of their respective officers,
directors, attorneys-in-fact and agents for, and hold it harmless against, any
claim, demand, expense (including but not limited to reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel), loss, charges
(including taxes (other than taxes based upon the income of the Trustee)) or
liability incurred by them without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of this trust and
their rights or duties hereunder including the reasonable costs and expenses of
defending themselves against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The Trustee
shall notify the Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. The Company shall defend the claim and the Trustee
shall provide reasonable cooperation at the Company's expense 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 written consent which consent shall not be unreasonably
withheld. The Company need not reimburse any expense or indemnify against any
loss or liability to the extent incurred by the Trustee as determined by a court
of competent jurisdiction to have been caused by its own negligence, bad faith
or willful misconduct.

            To secure the Company's payment obligations in this Section 6.07,
the Trustee shall have a lien prior to the Securities on all assets held or
collected by the Trustee, in its capacity as Trustee, except assets held in
trust to pay principal and premium, if any, of or interest on particular
Securities.

            When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 5.01(6) or (7) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.

            The Company's obligations under this Section 6.07 and any lien
arising hereunder shall survive the resignation or removal of the Trustee, the
discharge of the Company's obligations pursuant to Article IV of this Indenture
and any rejection or termination of this Indenture under any Bankruptcy Law.

Section 6.08 Replacement of Trustee.

            The Trustee may resign at any time with respect to the Securities of
one or more series by so notifying the Company in writing. The Holder or Holders
of a majority in principal amount of the outstanding Securities of a series may
remove the Trustee with respect to Securities of such series by so notifying the
Company and the Trustee in writing and may appoint a successor trustee with
respect to Securities of such series with the Company's consent. The Company may
remove the Trustee if:

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

            (2)   the Trustee is adjudged bankrupt or insolvent;



                                       44
<PAGE>
            (3)   a receiver, custodian, or other public officer takes charge of
      the Trustee or its property; or

            (4)   the Trustee becomes incapable of acting.

            If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee, with respect to the Securities of one or more series, for any
reason, the Company shall promptly appoint a successor Trustee, with respect to
Securities of that or those series. Within one year after the successor Trustee
with respect to a series of Securities takes office, the Holder or Holders of a
majority in principal amount of the Securities of such series may appoint a
successor Trustee with respect to such series to replace the successor Trustee
appointed by the Company.

            A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided that all sums owing to the Trustee provided for in Section 6.07
have been paid, the retiring Trustee shall transfer all property held by it as
Trustee with respect to such series of Securities to the successor Trustee,
subject to the lien provided in Section 6.07, the resignation or removal of the
retiring Trustee shall become effective, and the successor Trustee shall have
all the rights, powers and duties of the Trustee under this Indenture. A
successor Trustee with respect to one or more series of Securities shall mail
notice of its succession to each Holder of Securities of that or those series.

            If a successor Trustee with respect to a series of Securities does
not take office within 60 days after the retiring Trustee resigns or is removed,
the retiring Trustee, the Company or the Holder or Holders of at least 10% in
principal amount of the outstanding Securities of that series may petition at
the expense of the Company any court of competent jurisdiction for the
appointment of a successor Trustee with respect to such series.

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

            Notwithstanding replacement of the Trustee pursuant to this Section
6.08, the Company's obligations under Section 6.07 shall continue for the
benefit of the retiring Trustee.

Section 6.09 Successor Trustee by Merger, Etc.

            If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee.

Section 6.10 Eligibility; Disqualification.

            The Trustee shall at all times satisfy the requirements of Trust
Indenture Act Section 310(a)(1) and Trust Indenture Act Section 310(a)(5). The
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition. The Trustee shall
comply with Trust Indenture Act Section 310(b).



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<PAGE>
Section 6.11 Preferential Collection of Claims against Company.

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

                                   ARTICLE VII

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

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

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

            (1)   semi-annually, not more than 15 days after each Regular Record
      Date, a list for each series of Securities, in such form as the Trustee
      may reasonably require, of the names and addresses of the Holders of
      Securities of such series as of the Regular Record Date, as the case may
      be, and

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

excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.

Section 7.02 Preservation of Information; Communications to Holders.

            The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.01 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.01 upon receipt of a new list so furnished.

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

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




                                       46
<PAGE>
Section 7.03 Reports by Trustee.

            The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.

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

Section 7.04 Reports by Company.

            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 Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 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 Officer's Certificates.)

                                  ARTICLE VIII

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 8.01 When Company May Merge, Etc.

            The Company may not, in a single transaction or through a series of
related transactions, consolidate with or merge with or into any other person,
or, directly or indirectly, sell, lease, assign, transfer or convey its
properties and assets as an entirety or substantially as an entirety (computed
on a consolidated basis) to another person or group of affiliated persons,
unless:

            (1)   the Company shall be the continuing person, or the person (if
      other than the Company) formed by such consolidation or into which the
      Company is merged or to which all or substantially all of the properties
      and assets of the Company are transferred as an entirety or substantially
      as an entirety (the Company or such other person being hereinafter
      referred to as the "Surviving Person"), shall be a corporation organized
      and validly existing under the laws of the United States, any State
      thereof or the District of Columbia, and shall expressly assume, by an
      indenture supplemental hereto, executed and delivered to the Trustee, in
      form and substance satisfactory to the Trustee, all the obligations of the
      Company under the Securities and this Indenture and the Indenture, so
      supplemented, shall remain in full force and effect;



                                       47
<PAGE>
            (2)   immediately after giving effect to such transaction and the
      assumption of the obligations as set forth in clause (1), above, no Event
      of Default shall have occurred and be continuing; and

            (3)   if a supplemental indenture is required in connection with
      such transaction, the Company has delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel, each stating that such
      consolidation, merger, assignment, or transfer and such supplemental
      indenture comply with this Article VIII and that all conditions precedent
      herein provided relating to such transaction have been satisfied.

Section 8.02 Successor Corporation Substituted.

            Upon any consolidation or merger, or any transfer of assets in
accordance with Section 8.01, the Surviving Person formed by such consolidation
or into which the Company is merged or to which such transfer is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such Surviving
Person had been named as the Company herein. When a Surviving Person duly
assumes all of the obligations of the Company pursuant hereto and pursuant to
the Securities, the predecessor shall be relieved of the performance and
observance of all obligations and covenants of this Indenture and the
Securities, including but not limited to the obligation to make payment of the
principal of and interest, if any, on all the Securities then outstanding, and
the Company may thereupon or any time thereafter be liquidated and dissolved.

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

Section 9.01 Supplemental Indentures Without Consent of Holders.

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

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

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

            (3)   to add any additional Events of Default; or



                                       48
<PAGE>
            (4)   to add to or change any of the provisions of this Indenture to
      such extent as shall be necessary to permit or facilitate the issuance of
      Securities in bearer form, registrable or not registrable as to principal,
      and with or without interest coupons, or to permit or facilitate the
      issuance of Securities in uncertificated form; or

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

            (6)   to secure the Securities pursuant to the requirements of
      Article X or otherwise; or

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

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

            (9)   to make provision with respect to the conversion rights of
      Holders pursuant to the requirements of Article XV; or

            (10)  to cure any ambiguity, to correct or supplement any provision
      herein which may be defective or inconsistent with any other provision
      herein, or to make any other provisions with respect to matters or
      questions arising under this Indenture, provided that such action pursuant
      to this clause (10) shall not adversely affect the interests of the
      Holders of Securities of any series in any material respect.

Section 9.02 Supplemental Indentures with Consent of Holders.

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

            (1)   change the Stated Maturity of the principal of, or any
      installment of principal of or interest on, any Security, or reduce the
      principal amount thereof or the rate of interest thereon or any premium
      payable upon the redemption thereof, or reduce the amount of the principal
      of an Original Issue Discount Security that would be due and


                                       49
<PAGE>
      payable upon a declaration of acceleration of the Maturity thereof
      pursuant to Section 5.02, or change any Place of Payment where, or the
      coin or currency in which, any Security or any premium or interest thereon
      is payable, or impair the right to institute suit for the enforcement of
      any such payment on or after the Stated Maturity thereof (or, in the case
      of redemption, on or after the Redemption Date), or adversely affect the
      right to convert any Security as provided in Article XV, or modify the
      provisions of this Indenture with respect to the subordination of the
      Securities in a manner adverse to the Holders, or

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

            (3)   modify any of the provisions of this Section or Section 5.13,
      except to increase any such percentage or to provide that certain other
      provisions of this Indenture cannot be modified or waived without the
      consent of the Holder of each Outstanding Security affected thereby,
      provided, however, that this clause shall not be deemed to require the
      consent of any Holder with respect to changes in the references to "the
      Trustee" and concomitant changes in this Section or the deletion of this
      proviso, in accordance with the requirements of Sections 6.11 and 9.01(8).

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

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

Section 9.03 Execution of Supplemental Indentures.

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

Section 9.04 Effect of Supplemental Indentures.

            Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form


                                       50
<PAGE>
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.

Section 9.05 Conformity with Trust Indenture Act.

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

Section 9.06 Reference in Securities to Supplemental Indentures.

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

                                    ARTICLE X

                                    COVENANTS

Section 10.01 Payment of Securities.

            The Company covenants and agrees for the benefit of each series of
Securities that it will pay the principal of and interest on the Securities of
that series on the dates and in the manner provided in the Securities of that
series and this Indenture. An installment of principal, premium, if any, or
interest on the Securities shall be considered paid on the date it is due if the
Trustee or Paying Agent (other than the Company or an Affiliate of the Company)
holds for the benefit of the Holders, on that date, immediately available funds
deposited and designated for and sufficient to pay the installment.

            The Company shall pay interest on overdue principal and on overdue
installments of interest at the rate specified in the Securities compounded
semi-annually, to the extent lawful.

Section 10.02 Maintenance of Office or Agency.

            The Company shall maintain in the Place of Payment for any series of
Securities, an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange where Securities of any series that is
convertible may be surrendered for conversion, and where notices and demands to
or upon the Company in respect of the Securities of that series 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.



                                       51
<PAGE>
            The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series 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 each Place of Payment for Securities of any series 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 initially designates the principal
corporate trust office of the Trustee as such office of the Company.

Section 10.03 Money for Securities Payments to Be Held in Trust.

            If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.

            Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, on or prior to each due date of the principal of
or any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.

            The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will (1) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and (2)
during the continuance of any default by the Company (or any other obligor upon
the Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.

            The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.

            Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of or any premium
or interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall


                                       52
<PAGE>
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in New York City, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.

Section 10.04 Corporate Existence.

            Subject to Article VIII, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and the corporate or other existence of each of its Subsidiaries in
accordance with the respective organizational documents of each of them and the
rights (charter and statutory) and corporate franchises of the Company and each
of its Subsidiaries; provided, however, that the Company shall not be required
to preserve, with respect to itself, any right or franchise, and with respect to
any of its Subsidiaries, any such existence, right or franchise, if (a) 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 (b) the
loss thereof is not disadvantageous in any material respect to the Holders.

Section 10.05 Payment of Taxes and Other Claims.

            The Company shall, and shall cause each of its Subsidiaries to, pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges (including
withholding taxes and any penalties, interest and additions to taxes) levied or
imposed upon the Company or any of its Subsidiaries or properties and assets of
the Company or any of its Subsidiaries and (ii) all lawful claims, whether for
labor, materials, supplies, service or anything else, which have become due and
payable and which by law have or may become a Lien upon the property and assets
of the Company or any of its Subsidiaries; provided, however, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings and for which disputed
amounts adequate reserves have been established in accordance with generally
accepted accounting principles.

Section 10.06 Compliance Certificate; Notice of Default.

            (a)   The Company shall deliver to the Trustee within 120 days after
the end of its fiscal year an Officers' Certificate (one of the signatories of
which shall be the Company's principal executive officer, principal financial
officer or principal accounting officer) complying with Section 314(a)(4) of the
Trust Indenture Act and stating that a review of its activities and the
activities of 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 (all without regard to


                                       53
<PAGE>
periods of grace, which shall be deemed fulfilled unless and until the
expiration of such periods) or notice requirements) and further stating, as to
each such officer signing such certificate, whether or not the signer knows of
any failure by the Company or any Subsidiary of the Company to comply with any
conditions or covenants in this Indenture and, if such signer does know of such
a failure to comply, the certificate shall describe such failure with
particularity. The Officers' Certificate shall also notify the Trustee should
the relevant fiscal year end on any date other than the current fiscal year end
date.

            (b)   The Company shall, so long as any of the Securities of any
series are outstanding, deliver to the Trustee, immediately upon becoming aware
of any Event of Default with respect to such series under this Indenture, an
Officers' Certificate specifying such Event of Default and what action the
Company is taking or proposes to take with respect thereto. The Trustee shall
not be deemed to have knowledge of a an Event of Default unless one of its
Responsible Officers receives notice of the Event of Default giving rise thereto
from the Company or any of the Holders.

Section 10.07 Waiver of Stay, Extension or Usury Laws.

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

                                   ARTICLE XI

                            REDEMPTION OF SECURITIES

Section 11.01 Applicability of Article.

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

Section 11.02 Election to Redeem; Notice to Trustee.

            The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee


                                       54
<PAGE>
of such Redemption Date, of the principal amount of Securities of such series to
be redeemed and, if applicable, of the tenor of the Securities to be redeemed.
In the case of any redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.

Section 11.03 Selection by Trustee of Securities to Be Redeemed.

            If less than all the Securities of any series are to be redeemed
(unless all of the Securities of such series and of a specified tenor are to be
redeemed), the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series. If less than
all of the Securities of such series and of a specified tenor are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series and specified tenor not previously called for
redemption in accordance with the preceding sentence.

            If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Securities which have
been converted during a selection of Securities to be redeemed shall be treated
by the Trustee as Outstanding for the purpose of such selection.

            The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.

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

Section 11.04 Notice of Redemption.

            Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.

            All notices of redemption shall state:

            (1)   the Redemption Date,

            (2)   the Redemption Price,



                                       55
<PAGE>
            (3)   if less than all the Outstanding Securities of any series are
      to be redeemed, the identification (and, in the case of partial redemption
      of any Securities, the principal amounts) of the particular Securities to
      be redeemed,

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

            (5)   in the case of any Securities that are convertible pursuant to
      Article XV, the conversion price or rate, the date on which the right to
      convert the principal of the Securities to be redeemed will terminate and
      the place or places where such Securities may be surrendered for
      conversion,

            (6)   the place or places where such Securities are to be
      surrendered for payment of the Redemption Price,

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

            (8)   applicable CUSIP Numbers.

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

Section 11.05 Deposit of Redemption Price.

            Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, all the Securities which are to be redeemed
on that date other than any Securities called for redemption on that date which
have been converted prior to the date of such deposit.

            If any Security called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security or any Predecessor Security to receive interest as
provided in the last paragraph of Section 3.07) be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from such
trust.

Section 11.06 Securities Payable on Redemption Date.

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


                                       56
<PAGE>
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
3.07.

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

Section 11.07 Securities Redeemed in Part.

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

                                   ARTICLE XII

                                  SINKING FUNDS

Section 12.01 Applicability of Article.

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

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

Section 12.02 Satisfaction of Sinking Fund Payments with Securities.

            The Company (1) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been converted pursuant to Article XV or which
have been redeemed either at the election of the Company pursuant to the terms
of such Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, in each case in satisfaction
of all or any part of any sinking fund payment with respect to the Securities of
such series required to be made pursuant to the terms of such Securities as
provided for by the terms of such series; provided that such Securities have not
been previously so credited. Such


                                       57
<PAGE>
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.

Section 12.03 Redemption of Securities for Sinking Fund.

            Not less than 60 days prior to each sinking fund payment date for
any series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 12.02 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 11.03 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 11.04. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 11.06 and 11.07.

                                  ARTICLE XIII

                       REDEMPTION UPON A DESIGNATED EVENT
                              AND A RATING DECLINE

Section 13.01 Redemption by Holders.

            Subject to Section 3.01(14), in the event that there occurs (a) a
Designated Event (as hereinafter defined) at any time on or prior to Maturity,
and (b) a Rating Decline (as hereinafter defined), each Holder of a Security
that is of a series to which this Article XIII is applicable (for purposes of
this Article XIII, a "Subject Security") shall have the right, at the Holder's
option, to require the Company to redeem all or any portion (which shall be
$1,000 or an integral multiple thereof) of such Subject Security on the date
that is 90 days after the last to occur of public notice of the occurrence of
the Designated Event and the Rating Decline, at a redemption price equal to 100%
of the principal amount thereof, plus accrued interest to the Redemption Date.

            On or before the twenty-eighth day after the last to occur of public
notice of the occurrence of the Designated Event and the Rating Decline, the
Company is obligated to notify the Trustee of such events, and promptly
thereafter to mail, or cause to be mailed first-class, postage prepaid, to each
Holder of any Subject Securities, at the address of such Holder appearing in the
Security Register, a notice regarding the Designated Event, the Rating Decline,
and the redemption right. The notice shall include the Redemption Date, the date
by which the redemption right must be exercised, the Redemption Price, and the
procedure which the Holder must follow to exercise this right.

            To exercise this right, the Holder of such Subject Securities must
deliver on or before a date selected by the Company, which date shall be not
more than 10 days prior to the


                                       58
<PAGE>
Redemption Date, written notice to the Company (or an agent designated by the
Company for such purpose) of the Holder's exercise of such right, together with
the Subject Securities with respect to which the right is being exercised, duly
endorsed or assigned to the Company or in blank. Such written notice by a Holder
shall, unless otherwise required by law, be irrevocable.

            As used herein, a "Designated Event" shall be deemed to have
occurred at such a time as any "person" or "group" (as such terms are used for
purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not
applicable) becomes the "beneficial owner" (as the term is used in Rules 13d-3
and 13d-5 under the Exchange Act, whether or not applicable, except that a
person shall be deemed to have "beneficial ownership" of all shares that any
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 50% of the total voting power entitled to vote in the election of directors
of the Company; provided, however, that a Designated Event shall not be deemed
to have occurred (i) as a result of the formation of such a "group" or the
acquisition of shares of Capital Stock of the Company by such group if such
group includes existing Affiliates and/or persons who beneficially own in the
aggregate, as of the date of this Indenture, 20% or more of the outstanding
shares of Capital Stock of the Company on the date of this Indenture, or (ii) by
virtue of the Company, any Subsidiary, any employee stock ownership plan or any
other employee benefit plan of the Company or of any Subsidiary, or any other
person holding Capital Stock of the Company for or pursuant to the terms of any
such employee benefit plan, becoming a beneficial owner, directly or indirectly,
of more than 50% of the total voting power entitled to vote in the election of
directors of the Company.

            As used herein, a "Rating Decline" shall be deemed to have occurred
if on any date within the 90-day period following public notice of the
occurrence of a Designated Event (which 90-day period shall be extended with
respect to either Rating Agency (as hereinafter defined) for so long as the
rating of the Securities is under publicly announced consideration for possible
downgrade relating to such Designated Event by such Rating Agency) (i) in the
event the Securities are rated by one Rating Agency or by both Rating Agencies
on the Rating Date (as hereinafter defined) as Investment Grade (as hereinafter
defined), the rating of the Securities by such Rating Agency or by either of
such Rating Agencies (as the case may be) shall be below Investment Grade; or
(ii) in the event the Securities are rated by both Rating Agencies on the Rating
Date below Investment Grade, the rating of the Securities by either Rating
Agency shall be at least one Full Rating Category (as hereinafter defined) below
the rating of the Securities by such Rating Agency on the Rating Date.

            As used herein, "Rating Agency" shall mean Standard & Poor's
Corporation and its successors ("S&P"), and Moody's Investors Service and its
successors ("Moody's"), or if S&P or Moody's or both shall not make a rating on
the Securities publicly available, a nationally recognized statistical rating
organization or organizations, as the case may be, selected by the Company which
shall be substituted for S&P or Moody's or both, as the case may be; "Investment
Grade" shall mean BBB- or higher by S&P or Baa3 or higher by Moody's or the
equivalent of such ratings by S&P or Moody's or by any other Rating Agency
selected as provided above, and "Rating Date" shall mean the date which is 121
days prior to public notice of the occurrence of a Designated Event.



                                       59
<PAGE>
            As used herein, the term, "Full Rating Category" shall mean (i) with
respect to S&P, any of the following categories BB, B, CCC, CC, and C; (ii) with
respect to Moody's, any of the following categories: Ba, B, Caa, Ca, and C; and
(iii) with respect to any other Rating Agency, the equivalent of any such
category of S&P or Moody's used by such other Rating Agency. In determining
whether the rating of the Securities has decreased by the equivalent of one Full
Rating Category, gradation within Full Rating Categories (+ and - for S&P, 1, 2,
and 3 for Moody's; or the equivalent gradation for another Rating Agency) shall
be taken into account (e.g., with respect to S&P, a decline in a rating from BB+
to BB-, or from BB to B+, will constitute a decrease of less than one Full
Rating Category).

Section 13.02 Redemption by Company.

            In the event the aggregate principal amount of the Subject
Securities that are surrendered for redemption on any such Redemption Date is a
least 90% of the aggregate principal amount of the Subject Securities
Outstanding at the close of business on the day next preceding such Redemption
Date, the remaining Subject Securities not so redeemed will be subject to
redemption as a whole, at the Company's option, upon not less than 30 days'
notice mailed to each Holder at the address of such Holder appearing in the
Security Register, on a date of redemption selected by the Company that is
within 60 days after such Redemption Date, at a Redemption Price equal to 100%
of the principal amount, plus accrued interest to such date of redemption
selected by the Company.

Section 13.03 Other Provisions.

            With respect to any redemption at the option of the Holders of
Securities, as hereinabove provided, (x) the first clause of Section 11.06 shall
read as follows: "Notice by the Holder of such Holder's exercise of the
redemption right having been duly given," and (y) if any Security delivered by
the Holder upon exercise of the redemption right is, at the option of the
Holder, to be redeemed in part only, the written notice delivered by the Holder
to the Company as aforesaid shall state the principal amount of the Security
which is to be redeemed.

            Notwithstanding the foregoing, the Holders shall not have the
redemption right described above if, prior to the occurrence of the Designated
Event, the Company has effected a defeasance or covenant defeasance of the
Securities as provided in Article XIV.

                                   ARTICLE XIV

                       DEFEASANCE AND COVENANT DEFEASANCE

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

            The Company may elect, at its option by Board Resolution at any
time, to have either Section 14.02 or Section 14.03 applied to the Outstanding
Securities of any series designated pursuant to Section 3.01 as being defeasible
pursuant to this Article XIV (hereinafter called a "Defeasible Series"), upon
compliance with the conditions set forth below in this Article XIV; provided
that Section 14.02 shall not apply to any series of Securities that is
convertible


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<PAGE>
into Common Stock as provided in Article XV or convertible into or exchangeable
for any other securities pursuant to Section 3.01(18).

Section 14.02 Defeasance and Discharge.

            Upon the Company's exercise of the option provided in Section 14.01
to have this Section 14.02 applied to the Outstanding Securities of any
Defeasible Series and subject to the proviso to Section 14.01, the Company shall
be deemed to have been discharged from its obligations with respect to the
Outstanding Securities of such series as provided in this Section on and after
the date the conditions set forth in Section 14.04 are satisfied (hereinafter
called "Defeasance"). For this purpose, such Defeasance means that the Company
shall be deemed to have paid and discharged the entire indebtedness represented
by the Outstanding Securities of such series and to have satisfied all its other
obligations under the Securities of such series and this Indenture insofar as
the Securities of such series are concerned (and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging the same), subject
to the following which shall survive until otherwise terminated or discharged
hereunder: (1) the rights of Holders of Securities of such series to receive,
solely from the trust fund described in Section 14.04 and as more fully set
forth in such Section, payments in respect of the principal of and any premium
and interest on such Securities of such series when payments are due, (2) the
Company's obligations with respect to the Securities of such series under
Sections 3.04, 3.05, 3.06, 10.02 and 10.03, (3) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and (4) this Article XIV. Subject
to compliance with this Article XIV, the Company may exercise its option
provided in Section 14.01 to have this Section 14.02 applied to the Outstanding
Securities of any Defeasible Series notwithstanding the prior exercise of its
option provided in Section 14.01 to have Section 14.03 applied to the
Outstanding Securities of such series.

Section 14.03 Covenant Defeasance.

            Upon the Company's exercise of the option provided in Section 14.01
to have this Section 14.03 applied to the Outstanding Securities of any
Defeasible Series, (1) the Company shall be released from its obligations under
Section 8.01, and Sections 10.04 and 10.05, and Article XIII, and (2) the
occurrence of any event specified in Sections 5.01(3), 5.01(4) (with respect to
any of Sections 8.01, 10.04 and 10.05, and Article XIII), 5.01(5) and 5.01(8)
shall be deemed not to be or result in an Event of Default, in each case with
respect to the Outstanding Securities of such series as provided in this Section
on and after the date the conditions set forth in Section 14.04 are satisfied
(hereinafter called "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
specified Section (to the extent so specified in the case of Section 5.01(4)),
whether directly or indirectly by reason of any reference elsewhere herein to
any such Section or by reason of any reference in any such Section to any other
provision herein or in any other document, but the remainder of this Indenture
and the Securities of such series shall be unaffected thereby.




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<PAGE>
Section 14.04 Conditions to Defeasance or Covenant Defeasance.

            The following shall be the conditions to application of either
Section 14.02 or Section 14.03 to the Outstanding Securities of any Defeasible
Series:

            (1)   The Company shall irrevocably have deposited or caused to be
      deposited with the Trustee (or another trustee that satisfies the
      requirements contemplated by Section 6.09 and agrees to comply with the
      provisions of this Article XIV applicable to it) as trust funds in trust
      for the purpose of making the following payments, specifically pledged as
      security for, and dedicated solely to, the benefit of the Holders of
      Outstanding Securities of such series, (A) money in an amount, or (B) U.S.
      Government Obligations that through the scheduled payment of principal and
      interest in respect thereof in accordance with their terms will provide,
      not later than one day before the due date of any payment, money in an
      amount, or (C) a combination thereof, in each case sufficient, in the
      opinion of a nationally recognized firm of independent public accountants
      expressed in a written certification thereof delivered to the Trustee, to
      pay and discharge, and which shall be applied by the Trustee (or any such
      other qualifying trustee) to pay and discharge, the principal of and any
      premium and interest on the Securities of such series on the respective
      Stated Maturities, in accordance with the terms of this Indenture and the
      Securities of such series. As used herein, "U.S. Government Obligation"
      means (x) any security that is (i) a direct obligation of the United
      States of America for the payment of which full faith and credit of the
      United States of America is pledged or (ii) an obligation of a Person
      controlled or supervised by and acting as an agency or instrumentality of
      the United States of America the payment of which is unconditionally
      guaranteed as a full faith and credit obligation by the United States of
      America, which, in either case (i) or (ii), is not callable or redeemable
      at the option of the issuer thereof, and (y) any depositary receipt issued
      by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as
      amended) as custodian with respect to any U.S. Government Obligation
      specified in Clause (x) and held by such custodian for the account of the
      holder of such depositary receipt, or with respect to any specific payment
      of principal of or interest on any such U.S. Government Obligation,
      provided that (except as required by law) such custodian is not authorized
      to make any deduction from the amount payable to the holder of such
      depositary receipt from any amount received by the custodian in respect of
      the U.S. Government Obligation or the specific payment of principal or
      interest evidenced by such depositary receipt.

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



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

            (4)   The Company shall have delivered to the Trustee an Officer's
      Certificate to the effect that the Securities of such series, if then
      listed on any securities exchange, will not be delisted as a result of
      such deposit.

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

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

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

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

            (9)   Such Defeasance or Covenant Defeasance shall not result in the
      trust arising from such deposit constituting an investment company within
      the meaning of the Investment Company Act of 1940, as amended, unless such
      trust shall be qualified under such Act or exempt from regulation
      thereunder.

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

            All money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee or other qualifying trustee (solely for
purposes of this Section and Section 14.06, the Trustee and any such other
trustee are referred to collectively as the "Trustee") pursuant to Section 14.04
in respect of the Securities of any Defeasible Series shall be held in trust and
applied by the Trustee, in accordance with the provisions of the Securities of
such series and this Indenture, to the payment, either directly or through any
such Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of Securities of such series, of all sums
due and to become due thereon in respect of


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principal and any premium and interest, but money so held in trust need not be
segregated from other funds except to the extent required by law.

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

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

Section 14.06 Reinstatement.

            If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article XIV with respect to the Securities of any series by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Company's obligations under this Indenture and the Securities of such series
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article XIV with respect to Securities of such series until such time as
the Trustee or Paying Agent is permitted to apply all money held in trust
pursuant to Section 14.05 with respect to Securities of such series in
accordance with this Article XIV; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any Security of such
series following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of Securities of such series to receive
such payment from the money so held in trust.

                                   ARTICLE XV

                            CONVERSION OF SECURITIES

Section 15.01 Applicability; Conversion Privilege and Conversion Price.

            Securities of any series which are convertible into Common Stock of
the Company shall be convertible in accordance with their terms and (except as
otherwise specified as contemplated by Section 3.01 for Securities of any
series) in accordance with this Article.

            Subject to and upon compliance with the provisions of this Article,
at the option of the Holder thereof, any Security or any portion of the
outstanding principal amount thereof which is $1,000 or an integral multiple of
$1,000 may be converted at the principal amount thereof, or of such portion
thereof, into fully paid and nonassessable shares (calculated as to each
conversion to the nearest 1/100 of a share) of Common Stock of the Company at
the conversion price, determined as hereinafter provided, in effect at the time
of conversion. Such conversion right shall expire at the close of business on
the date specified for Securities of such series. In


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case a Security or portion thereof is called for redemption at the election of
the Company, such conversion right in respect of the Security or portion so
called shall expire at the close of business on the 10th calendar day before the
Redemption Date, unless the Company defaults in making the payment due upon
redemption.

            The price at which shares of Common Stock shall be delivered upon
conversion (herein called the "conversion price") shall be the price specified
in relation to Securities of such series pursuant to Section 3.01, as it shall
be adjusted in certain instances as provided in this Article.

Section 15.02 Exercise of Conversion Privilege.

            In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security, duly endorsed or
assigned to the Company or in blank, at any office or agency of the Company
maintained for that purpose pursuant to Section 10.02, accompanied by written
notice to the Company (which shall be substantially in the form set forth in
Section 2.03) at such office or agency that the Holder elects to convert such
Security or, if less than the entire principal amount thereof is to be
converted, the portion thereof to be converted. Securities surrendered for
conversion during the period from the close of business on any Regular Record
Date next preceding any Interest Payment Date to the opening of business on such
Interest Payment Date shall (except in the case of Securities or portions
thereof which have been called for redemption on a Redemption Date within such
period) be accompanied by payment in funds acceptable to the Company of an
amount equal to the interest payable on such Interest Payment Date on the
principal amount of Securities being surrendered for conversion. Subject to the
provisions of Section 3.07 relating to the payment of Defaulted Interest by the
Company, the interest payment with respect to a Security called for redemption
on a Redemption Date during the period from the close of business on any Regular
Record Date next preceding any Interest Payment Date to the opening of business
on such Interest Payment Date shall be payable on such Interest Payment Date to
the Holder of such Security at the close of business on such Regular Record Date
notwithstanding the conversion of such Security after such Regular Record Date
and prior to such Interest Payment Date, and the Holder converting such Security
need not include a payment of such interest payment amount upon surrender of
such Security for conversion. Except as provided in the preceding sentence and
subject to the final paragraph of Section 3.07, no payment or adjustment shall
be made upon any conversion on account of any interest accrued on the Securities
surrendered for conversion or on account of any dividends on the Common Stock
issued upon conversion.

            Securities shall be deemed to have been converted immediately prior
to the close of business on the day of surrender of such Securities for
conversion in accordance with the foregoing provisions, and at such time the
rights of the Holders of such Securities as Holders shall cease, and the Person
or Persons entitled to receive the Common Stock issuable upon conversion shall
be treated for all purposes as the record holder or holders of such Common Stock
at such time. As promptly as practicable on or after the conversion date, the
Company shall issue and shall deliver at such office or agency a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share, as
provided in Section 15.03.



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            In the case of any Security 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 Security or
Securities of authorized denominations in aggregate principal amount equal to
the unconverted portion of the principal amount of such Security.

Section 15.03 Fractions of Shares.

            No fractional shares of Common Stock shall be issued upon conversion
of Securities. If more than one Security 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 Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment in respect
of such fraction in an amount equal to the same fraction of the daily closing
price per share of Common Stock (consistent with Section 15.04(6) below) at the
close of business on the day of conversion.

Section 15.04 Adjustment of Conversion Price.

            (1)   In case the Company shall pay or make a dividend or other
      distribution on any class of capital stock of the Company in Common Stock,
      the conversion price in effect at the opening of business on the day
      following the date fixed for determination of stockholders entitled to
      receive such dividend or other distribution shall be reduced by
      multiplying such conversion price 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, such reduction to become
      effective immediately after the opening of business on the day following
      the date fixed for such determination. 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 or warrants to all
      holders of its Common Stock entitling them to subscribe for or purchase
      shares of Common Stock at a price per share less than the current market
      price per share (determined as provided in paragraph (6) of this Section)
      of the Common Stock on the date fixed for the determination of
      stockholders entitled to receive such rights or warrants (other than
      pursuant to a dividend reinvestment plan), the conversion price in effect
      at the opening of business on the day following the date fixed for such
      determination shall be reduced by multiplying such conversion price 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


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<PAGE>
      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 reduction to become effective immediately after the opening of
      business on the day following the date fixed for such determination. 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 or warrants in respect of shares of
      Common Stock held in the treasury of the Company.

            (3)   In case outstanding shares of Common Stock shall be subdivided
      into a greater number of shares of Common Stock, the conversion price in
      effect at the opening of business on the day following the day upon which
      such subdivision becomes effective shall be proportionately reduced, and,
      conversely, in case outstanding shares of Common Stock shall each be
      combined into a smaller number of shares of Common Stock, the conversion
      price in effect at the opening of business on the day following the day
      upon which such combination becomes effective shall be proportionately
      increased, such reduction or increase, 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 holders of its Common Stock evidences of its
      indebtedness or assets (including securities, but excluding any rights or
      warrants referred to in paragraph (2) of this Section, any dividend or
      distribution paid in cash out of the earned surplus of the Company and any
      dividend or distribution referred to in paragraph (1) of this Section),
      the conversion price shall be adjusted so that the same shall equal the
      price determined by multiplying the conversion price in effect immediately
      prior to the 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 (6) of this Section) 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 or evidences of indebtedness so distributed
      applicable to one share of Common Stock and the denominator shall all 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.

            (5)   The reclassification of Common Stock into securities other
      than Common Stock (other than any reclassification upon a consolidation or
      merger to which Section 15.11 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), and
      (b) a subdivision


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<PAGE>
      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, such "the day upon
      which such subdivision or combination becomes effective" within the
      meaning of paragraph (3) of this Section).

            (6)   For the purpose of any computation under paragraphs (2) and
      (4) of this Section, the current market price per share of Common Stock on
      any day shall be deemed to be the average of the daily closing prices for
      the five consecutive trading days (ie., Business Days on which the Common
      Stock is traded) selected by the Board of Directors commencing not more
      than 20 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 this purpose, the
      term "`ex' date", when used with respect to any issuance or distribution,
      shall mean the first date on which the Common Stock trades regular way on
      the applicable exchange or in the applicable market without the right to
      receive such issuance or distribution. The closing price for each day
      shall be the reported last sale price regular way 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 New York Stock
      Exchange or, if the Common Stock is not listed or admitted to trading on
      such Exchange, on the principal national securities exchange on which the
      Common Stock is listed or admitted to trading or, if not listed or
      admitted to trading on any national securities exchange, on the Nasdaq
      Stock Market or, if the Common Stock is not listed or admitted to trading
      on any national securities exchange or quoted on the Nasdaq Stock Market,
      the average of the closing bid and asked prices in the over-the-counter
      market as furnished by any New York Stock Exchange member firm selected
      from time to time by the Board of Directors for that purpose.

            (7)   The Company may make such reductions in the conversion price,
      in addition to those required by paragraphs (1), (2), (3) and (4) of this
      Section, 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 or for any other reasons. The Company shall have the
      power to resolve any ambiguity or correct any error in this paragraph (7)
      and its actions in so doing shall be final and conclusive.

            (8)   No adjustment in the conversion price shall be required unless
      such adjustment would require an increase or decrease of at least one
      percent in such conversion price; provided, however, that any adjustments
      which by reason of this paragraph (8) is 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 1/100 of a share, as the case may be.



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Section 15.05 Notice of Adjustments of Conversion Price.

            Whenever the conversion price is adjusted as herein provided:

            (a)   the Company shall compute the adjusted conversion price in
accordance with Section 15.04 and shall prepare a certificate signed by the
Treasurer of the Company setting forth the adjusted conversion price and showing
in reasonable detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed at each office or agency maintained for the
purpose of conversion of Securities pursuant to Section 10.02; and

            (b)   a notice stating that the conversion price has been adjusted
and setting forth the adjusted conversion price shall forthwith be required, and
as soon as practicable after it is required, such notice shall be mailed by the
Company to all Holders at their last addresses as they shall appear in the
Security Register.

Section 15.06 Notice of Certain Corporate Action.

            In case:

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

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

            (c)   of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding shares of Common
Stock), or of any consolidation, 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 sale or transfer of all or substantially all of the assets
of the Company; or

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

then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Securities pursuant to Section 10.02, and shall
cause to be mailed to all Holders at their last addresses as they shall appear
in the Security Register, at least 20 days (or 10 days in any case specified in
clause (a) or (b) 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 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 or warrants are to
be determined, or (y) the date on which such reclassification, consolidation,
merger, share exchange, sale, transfer, 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, share exchange, sale, transfer,
dissolution, liquidation or winding up. Neither the failure to give such notice
nor any defect


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therein shall affect the legality or validity of the proceedings described in
clauses (a) through (d) of this Section 15.06. 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.

            Not less than seven days prior to any date fixed for the
determination of stockholders entitled to receive such distribution, the Company
shall cause to be filed at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 10.02, and shall cause to be mailed
to all Holders at their last addresses as they shall appear in the Security
Register, a notice stating the date on which the such determination is to be
made, and briefly describing the import thereof. 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.

Section 15.07 Company to Reserve Common Stock.

            The Company shall at all times reserve and keep available out of its
authorized but unissued Common Stock, for the purpose of effecting the
conversion of Securities, the full number of shares of Common Stock then
issuable upon the conversion of all Outstanding Securities.

Section 15.08 Taxes on Conversions.

            The Company will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Securities pursuant hereto. The Company shall not, however, be required to pay
any tax 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 Security or Securities to be converted, and no such issue or delivery
shall be made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax, or has established to the satisfaction of
the Company that such tax has been paid.

Section 15.09 Covenant as to Common Stock.

            The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be fully paid and
nonassessable and, except as provided in Section 15.08, the Company will pay all
taxes, liens and charges with respect to the issue thereof.

Section 15.10 Cancellation of Converted Securities.

            All Securities delivered for conversion shall be delivered to the
Trustee to be cancelled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 3.09.

Section 15.11 Provisions in Case of Consolidation, Merger or Sale of Assets.

            In case of any consolidation of the Company with, or merger of the
Company into, any other Person, any merger of another Person 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 sale or transfer of all or substantially all of the


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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 convertible Security then outstanding shall have the right thereafter,
during the period such Security shall be convertible as specified in Section
15.01, to convert such Security only into the kind and amount of securities,
cash and other property receivable upon such consolidation, merger, sale or
transfer by a holder of the number of shares of Common Stock of the Company into
which such Security might have been converted immediately prior to such
consolidation, merger, sale or transfer, assuming such holder of Common Stock of
the Company 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, sale or transfer (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer is not the same for each share of Common Stock of the Company
in respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this Section the kind and amount
of securities, cash and other property receivable upon such consolidation,
merger, sale or transfer by 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 shall similarly apply to
successive consolidations, mergers, sales or transfers.

Section 15.12 Responsibility of Trustee.

            Neither the Trustee nor any conversion agent shall at any time be
under any duty or responsibility to any Holder of Securities to determine
whether any fact exists which may require any adjustment of the conversion
price, or with respect to the nature or extent of any such adjustment when made,
or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same. Neither the Trustee nor
any conversion agent shall be accountable with respect to the registration,
validity or value (or the kind or amount) of any shares of Common Stock, or of
any securities or property, which may at any time be issued or delivered upon
the conversion of any Security; and neither the Trustee nor any conversion agent
makes any representation with respect thereto. Neither the Trustee nor any
conversion agent shall be responsible for any failure of the Company to issue or
transfer or deliver any Common Stock or stock certificates or other securities
or property or to make any cash payment upon the surrender of any Security for
the purpose of conversion or to comply with any of the covenants of the Company
contained in this Article XV.

                                   ARTICLE XVI

                           SUBORDINATION OF SECURITIES

Section 16.01 Securities Subordinate to Senior Indebtedness.

            The Company covenants and agrees, and each Holder of a Security, by
his acceptance thereof, likewise covenants and agrees, that, to the extent and
in the manner


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<PAGE>
hereinafter set forth in this Article, the indebtedness represented by the
Securities and the payment of the principal of (and premium, if any) and
interest on each and all of the Securities are hereby expressly made subordinate
and subject in right of payment to the prior payment in full of all Senior
Indebtedness.

Section 16.02 Payment Over of Proceeds Upon Dissolution, Etc.

            In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets, or (b) any liquidation, dissolution or other winding
up of the Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of the Company, then and in any
such event the holders of Senior Indebtedness shall be entitled to receive
payment in full of all amounts due or to become due on or in respect of all
Senior Indebtedness, or provision shall be made for such payment in money or
money's worth, before the Holders of the Securities are entitled to receive any
payment on account of principal of (or premium, if any) or interest on the
Securities, and to that end the holders of Senior Indebtedness shall be entitled
to receive, for application to the payment thereof, any payment or distribution
of any kind or character, whether in cash, property or securities, which may be
payable or deliverable in respect of the Securities in any such case,
proceeding, dissolution, liquidation or other winding up or event.

            In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, before all Senior Indebtedness is paid
in full or payment thereof provided for, and if such fact shall, at or prior to
the time of such payment or distribution, have been made known to the Trustee
or, as the case may be, such Holder, then and in such event such payment or
distribution shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
Person making payment or distribution of assets of the Company for application
to the payment of all Senior Indebtedness remaining unpaid, to the extent
necessary to pay all Senior Indebtedness in full, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness.

            For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment which are subordinated
in right of payment to all Senior Indebtedness which may at the time be
outstanding to substantially the same extent as, or to a greater extent than,
the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the conveyance
or transfer of its properties and assets substantially as an entirety to another
Person upon the terms and conditions set forth in Article VII shall not be
deemed a dissolution, winding up, liquidation, reorganization, assignment for
the benefit of creditors or marshalling of assets and liabilities of the Company
for the purposes of this Section if the Person formed by such consolidation or
into which the Company is merged or which acquires by conveyance or transfer
such properties and assets substantially as an entirety, as the


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case may be, shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions set forth in Article VIII.

Section 16.03 Prior Payment to Senior Indebtedness Upon Acceleration of
              Securities.

            In the event that any Securities are declared due and payable before
their Stated Maturity, then and in such event the holders of Senior Indebtedness
outstanding at the time such Securities so become due and payable shall be
entitled to receive payment in full of all amounts due or to become due on or in
respect of such Senior Indebtedness, or provision shall be made for such payment
in money or money's worth, before the Holders of the Securities are entitled to
receive any payment by the Company on account of the principal of (or premium,
if any) or interest on the Securities or on account of the purchase or other
acquisition of Securities; provided, however, that nothing in this Section shall
prevent the satisfaction of any sinking fund payment in accordance with Article
XII by delivering and crediting pursuant to Section 12.02 Securities which have
been acquired (upon redemption or otherwise) prior to such default or which have
been converted pursuant to Article XV.

            In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to the Trustee or, as the case may
be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.

            The provisions of this Section shall not apply to any payment with
respect to which Section 16.02 would be applicable.

Section 16.04 No Payment When Senior Indebtedness in Default.

            (a)   In the event and during the continuation of any default in the
payment of principal of (or premium, if any) or interest on any Senior
Indebtedness beyond any applicable grace period with respect thereto, or in the
event that any event of default with respect to any Senior Indebtedness shall
have occurred and be continuing and shall have resulted in such Senior
Indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, unless and until such
event of default shall have been cured or waived or shall have ceased to exist
and such acceleration shall have been rescinded or annulled, or (b) in the event
any judicial proceeding shall be pending with respect to any such default in
payment or event of default, then no payment shall be made by the Company on
account of principal of (or premium, if any) or interest on the Securities or on
account of the purchase or other acquisition of Securities; provided, however,
that nothing in this Section shall prevent the satisfaction of any sinking fund
payment in accordance with Article XII by delivering and crediting pursuant to
Section 12.02 Securities which have been acquired (upon redemption or otherwise)
prior to such default or which have been converted pursuant to Article XV.

            In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made


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known to the Trustee or, as the case may be, such Holder, then and in such event
such payment shall be paid over and delivered forthwith to the Company.

            The provisions of this Section shall not apply to any payment with
respect to which Section 16.02 would be applicable.

Section 16.05 Payment Permitted If No Default.

            Nothing contained in this Article or elsewhere in this Indenture or
in any of the Securities shall prevent the Company, at any time except during
the pendency of any case, proceeding, dissolution, liquidation or other winding
up, assignment for the benefit of creditors or other marshalling of assets and
liabilities of the Company referred to in Section 16.02 or under the conditions
described in Section 16.03 or 16.04, from making payments at any time of
principal of (and premium, if any) or interest on the Securities.

Section 16.06 Subrogation to Rights of Holders of Senior Indebtedness.

            Subject to the payment in full of all Senior Indebtedness, the
Holders of the Securities shall be subrogated (equally and ratably with the
holders of all indebtedness of the Company which by its express terms is
subordinated to indebtedness of the Company to substantially the same extent as
the Securities are subordinated and is entitled to like rights of subrogation)
to the rights of the holders of such Senior Indebtedness to receive payments and
distributions of cash, property and securities applicable to the Senior
Indebtedness until the principal of (and premium, if any) and interest on the
Securities shall be paid in full. For purposes of such subrogation, no payments
or distributions to the holders of the Senior Indebtedness of any cash, property
or securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article, and no payments over
pursuant to the provisions of this Article to the holders of Senior Indebtedness
by Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to or on
account of the Senior Indebtedness.

Section 16.07 Provisions Solely to Define Relative Rights.

            The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall (a) impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Securities, the obligation
of the Company, which is absolute and unconditional (and which, subject to the
rights under this Article of the holders of Senior Indebtedness, is intended to
rank equally with all other general obligations of the Company), to pay to the
Holders of the Securities the principal of (and premium, if any) and interest on
the Securities as and when the same shall become due and payable in accordance
with their terms; or (b) affect the relative rights against the Company of the
Holders of the Securities and creditors of the Company other than the holders of
Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the


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rights, if any, under this Article of the holders of Senior Indebtedness to
receive cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder.

Section 16.08 Trustee to Effectuate Subordination.

            Each holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes.

Section 16.09 No Waiver of Subordination Provisions.

            No right of any present or future holder of any Senior Indebtedness
to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.

            Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
Senior Indebtedness, or otherwise amend or supplement in any manner Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Company and any other Person.

Section 16.10 Notice to Trustee.

            The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or from any trustee therefor; and,
prior to the receipt of any such written notice, the Trustee, subject to the
provisions of Section 6.01, shall be entitled in all respects to assume that no
such facts exist; provided, however, that if the Trustee shall not have received
the notice provided for in this Section at least three Business Days prior to
the date upon which by the terms hereof any money may become payable for any
purpose (including, without limitation, the payment of the principal of (and
premium, if any) or interest on any Security), then, anything herein contained
to the contrary notwithstanding, the Trustee shall have


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<PAGE>
full power and authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be affected by any
notice to the contrary which may be received by it within three Business Days
prior to such date.

            Subject to the provisions of Section 6.01, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of any
Person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.

Section 16.11 Reliance on Judicial Order or Certificate of Liquidating Agent.

            Upon any payment or distribution of assets of the Company referred
to in this Article, the Trustee, subject to the provisions of Section 6.01, and
the Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article.

Section 16.12 Trustee Not Fiduciary for Holders of Senior Indebtedness.

            The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall in good faith mistakenly pay over or distribute to Holders of Securities
or to the Company or to any other Person cash, property or securities to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
or otherwise.

Section 16.13 Rights of Trustee as Holder of Senior Indebtedness; Preservation
              of Trustee's Rights.

            The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.



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<PAGE>
            Nothing in this Article shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.07.

Section 16.14 Article Applicable to Paying Agents.

            In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that Section 16.13 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.

Section 16.15 Certain Conversions Deemed Payment.

            For the purposes of this Article only, (1) the issuance and delivery
of junior securities upon conversion of Securities in accordance with Article XV
shall not be deemed to constitute a payment or distribution on account of the
principal of or premium or interest on Securities or on account of the purchase
or other acquisition of Securities, and (2) the payment, issuance or delivery of
cash, property or securities (other than junior securities) upon conversion of a
Security shall be deemed to constitute payment on account of the principal of
such Security. For the purposes of this Section, the term "junior securities"
means (a) shares of any stock of any class of the Company and (b) securities of
the Company which are subordinated in right of payment to all Senior
Indebtedness which may be outstanding at the time of issuance or delivery of
such securities to substantially the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in this Article. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Securities, the right,
which is absolute and unconditional, of the Holder of any Security to convert
such Security in accordance with Article XV.

Section 16.16 Trust Moneys Not Subordinated.

            Notwithstanding anything contained herein to the contrary, payments
from moneys or the proceeds of U.S. Government Obligations held in trust under
Article XIV by the Trustee for the payment of principal of, premium, if any, and
interest on the Securities from the date of deposit (if made in compliance with
this Indenture) shall not be subordinated to the prior payment of any Senior
Indebtedness or subject to the restraints set forth in this Article, and none of
the Securityholders shall be obligated to pay over any such amount to the
Company or any holder of Senior Indebtedness of the Company or any other
creditor of the Company.

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






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

                                    JEFFERIES GROUP, INC.



                                    By ___________________________
                                       Name:
                                       Title:



                                    THE BANK OF NEW YORK



                                    By ___________________________
                                       Name:
                                       Title:








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