Execution Copy

                             STILWELL FINANCIAL INC.

                         Liquid Yield Option (TM) Notes

                                    due 2031

                                  $930,709,000

                              (Zero Coupon-Senior)

                                    INDENTURE

                           Dated as of April 30, 2001

                            The Chase Manhattan Bank

                                     TRUSTEE

                   (TM)Trademark of Merrill Lynch & Co., Inc.


<PAGE>



                             CROSS REFERENCE TABLE*
<TABLE>
<CAPTION>
<S>                                                                                                   <C>
IA Section..................................................................................          Indenture Section
310(a)(1)...................................................................................                 7.10
    (a)(2)..................................................................................                 7.10
    (a)(3)..................................................................................                 N.A.
    (a)(4)..................................................................................                 N.A.
    (b).....................................................................................              7.08; 7.10
    (c).....................................................................................                 N.A.
311(a)......................................................................................                 7.11
    (b).....................................................................................                 7.11
    (c)......................................................................................                N.A.
312(a)......................................................................................                 2.05
    (b).....................................................................................                13.03
    (c).....................................................................................                13.03
313(a)......................................................................................                 7.06
    (b)(1)..................................................................................                 N.A.
    (b)(2)..................................................................................                 7.06
    (c).....................................................................................                13.02
    (d).....................................................................................                 7.06
314(a)......................................................................................          4.02; 4.03; 13.02
    (b).....................................................................................                 N.A.
    (c)(1)..................................................................................                13.04
    (c)(2)..................................................................................                13.04
    (c)(3)..................................................................................                 N.A.
    (d).....................................................................................                 N.A.
    (e).....................................................................................                13.05
    (f).....................................................................................                 N.A.
315(a)......................................................................................                 7.01
    (b).....................................................................................             7.05; 13.02
    (c).....................................................................................                 7.01
    (d).....................................................................................                 7.01
    (e).....................................................................................                 6.11
316(a) (last sentence)......................................................................                 2.08
    (a)(1)(A)...............................................................................                 6.05
    (a)(1)(B)...............................................................................                 6.04
    (a)(2)..................................................................................                 N.A.
    (b).....................................................................................                 6.07
    317(a)(1)...............................................................................                 6.08
    (a)(2)..................................................................................                 6.09
    (b).....................................................................................                 2.04
318(a)......................................................................................                13.01
N.A. means Not Applicable.
------------------------
</TABLE>

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


<PAGE>



                               TABLE OF CONTENTS*
<TABLE>
<CAPTION>
                                                                                                                     Page
<S>                                                                                                                  <C>
                                    ARTICLE 1
                   DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01       Definitions.....................................................................................     1
SECTION 1.02       Other Definitions...............................................................................     5
SECTION 1.03       Incorporation by Reference of Trust Indenture Act...............................................     7
SECTION 1.04       Rules of Construction...........................................................................     7
SECTION 1.05       Acts of Holders.................................................................................     7

                                    ARTICLE 2
                                 THE SECURITIES

SECTION 2.01       Form and Dating.................................................................................     9
SECTION 2.02       Execution and Authentication....................................................................    10
SECTION 2.03       Registrar, Paying Agent, Conversion Agent and Bid Solicitation Agent............................    11
SECTION 2.04       Paying Agent to Hold Money and Securities in Trust..............................................    11
SECTION 2.05       Securityholder Lists............................................................................    12
SECTION 2.06       Transfer and Exchange...........................................................................    12
SECTION 2.07       Replacement Securities..........................................................................    14
SECTION 2.08       Outstanding Securities; Determinations of Holders' Action.......................................    14
SECTION 2.09       Temporary Securities............................................................................    15
SECTION 2.10       Cancellation....................................................................................    16
SECTION 2.11       Persons Deemed Owners...........................................................................    16
SECTION 2.12       Global Securities...............................................................................    16
SECTION 2.13       CUSIP Numbers...................................................................................    21

                                    ARTICLE 3
                            REDEMPTION AND PURCHASES

SECTION 3.01       Right to Redeem; Notices to Trustee.............................................................    21
SECTION 3.02       Selection of Securities to Be Redeemed..........................................................    22
SECTION 3.03       Notice of Redemption............................................................................    22
SECTION 3.04       Effect of Notice of Redemption..................................................................    23
SECTION 3.05       Deposit of Redemption Price.....................................................................    23
SECTION 3.06       Securities Redeemed in Part.....................................................................    24
SECTION 3.07       Conversion Arrangement on Call for Redemption...................................................    24
SECTION 3.08       Purchase of Securities at Option of the Holder..................................................    24
SECTION 3.09       Purchase of Securities at Option of the Holder upon Change in Control...........................    31
SECTION 3.10       Effect of Purchase Notice or Change in Control Purchase Notice..................................    34
SECTION 3.11       Deposit of Purchase Price or Change in Control Purchase Price...................................    35
</TABLE>

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


<PAGE>


<TABLE>
<S>                                                                                                                     <C>
SECTION 3.12      Securities Purchased in Part....................................................................      35
SECTION 3.13      Covenant to Comply With Securities Laws Upon Purchase of Securities.............................      36
SECTION 3.14      Repayment to the Company........................................................................      36

                                    ARTICLE 4
                                    COVENANTS

SECTION 4.01      Payment of Securities...........................................................................      36
SECTION 4.02      SEC and Other Reports...........................................................................      37
SECTION 4.03      Compliance Certificate..........................................................................      37
SECTION 4.04      Further Instruments and Acts....................................................................      38
SECTION 4.05      Maintenance of Office or Agency.................................................................      38
SECTION 4.06      Delivery of Certain Information.................................................................      38
SECTION 4.07      Calculation of Original Issue Discount..........................................................      38

                                    ARTICLE 5
                              SUCCESSOR CORPORATION

SECTION 5.01      When Company May Merge or Transfer Assets.......................................................      39

                                    ARTICLE 6
                              DEFAULTS AND REMEDIES

SECTION 6.01      Events of Default...............................................................................      40
SECTION 6.02      Acceleration....................................................................................      42
SECTION 6.03      Other Remedies..................................................................................      43
SECTION 6.04      Waiver of Past Defaults.........................................................................      43
SECTION 6.05      Control by Majority.............................................................................      43
SECTION 6.06      Limitation on Suits.............................................................................      43
SECTION 6.07      Rights of Holders to Receive Payment............................................................      44
SECTION 6.08      Collection Suit by Trustee......................................................................      44
SECTION 6.09      Trustee May File Proofs of Claim................................................................      44
SECTION 6.10      Priorities......................................................................................      45
SECTION 6.11      Undertaking for Costs...........................................................................      46
SECTION 6.12      Waiver of Stay, Extension or Usury Laws.........................................................      46

                                    ARTICLE 7
                                     TRUSTEE

SECTION 7.01      Duties of Trustee...............................................................................      46
SECTION 7.02      Rights of Trustee...............................................................................      47
SECTION 7.03      Individual Rights of Trustee....................................................................      49
SECTION 7.04      Trustee's Disclaimer............................................................................      49
SECTION 7.05      Notice of Defaults..............................................................................      49
SECTION 7.06      Reports by Trustee to Holders...................................................................      49
SECTION 7.07      Compensation and Indemnity......................................................................      50
SECTION 7.08      Replacement of Trustee..........................................................................      51
SECTION 7.09      Successor Trustee by Merger.....................................................................      51
SECTION 7.10      Eligibility; Disqualification...................................................................      51
</TABLE>
<PAGE>

<TABLE>
<S>                                                                                                                     <C>
SECTION 7.11      Preferential Collection of Claims Against Company...............................................      52

                                    ARTICLE 8
                             DISCHARGE OF INDENTURE

SECTION 8.01      Discharge of Liability on Securities............................................................      52
SECTION 8.02      Repayment to the Company........................................................................      52

                                    ARTICLE 9
                                   AMENDMENTS

SECTION 9.01      Without Consent of Holders......................................................................      53
SECTION 9.02      With Consent of Holders.........................................................................      53
SECTION 9.03      Compliance with Trust Indenture Act.............................................................      54
SECTION 9.04      Revocation and Effect of Consents, Waivers and Actions..........................................      54
SECTION 9.05      Notation on or Exchange of Securities...........................................................      55
SECTION 9.06      Trustee to Sign Supplemental Indentures.........................................................      55
SECTION 9.07      Effect of Supplemental Indentures...............................................................      55

                                   ARTICLE 10
  SPECIAL TAX EVENT CONVERSION; PAYMENT OF INTEREST ON FAILURE TO OBTAIN RATING

SECTION 10.01     Optional Conversion to Semiannual Coupon Note Upon Tax Event....................................      55
SECTION 10.02     Payment of Interest on Failure to Obtain Rating.................................................      56

                                   ARTICLE 11
                                   CONVERSION

SECTION 11.01     Conversion Privilege............................................................................      56
SECTION 11.02     Conversion Procedure............................................................................      57
SECTION 11.03     Fractional Shares...............................................................................      59
SECTION 11.04     Taxes on Conversion.............................................................................      59
SECTION 11.05     Company to Provide Stock........................................................................      59
SECTION 11.06     Adjustment for Change In Capital Stock..........................................................      59
SECTION 11.07     Adjustment for Rights Issue.....................................................................      60
SECTION 11.08     Adjustment for Other Distributions..............................................................      61
SECTION 11.09     When Adjustment May Be Deferred.................................................................      64
SECTION 11.10     When No Adjustment Required.....................................................................      64
SECTION 11.11     Notice of Adjustment............................................................................      65
SECTION 11.12     Voluntary Increase..............................................................................      65
SECTION 11.13     Notice of Certain Transactions..................................................................      65
SECTION 11.14     Reorganization of Company; Special Distributions................................................      65
SECTION 11.15     Company Determination Final.....................................................................      66
SECTION 11.16     Trustee's Adjustment Disclaimer.................................................................      66
SECTION 11.17     Simultaneous Adjustments........................................................................      67
SECTION 11.18     Successive Adjustments..........................................................................      67
SECTION 11.19     Rights Issued in Respect of Common Stock Issued Upon Conversion.................................      67
</TABLE>
<PAGE>

<TABLE>

                                   ARTICLE 12
                               PAYMENT OF INTEREST

<S>                                                                                                                     <C>
SECTION 12.01     Interest Payments...............................................................................      67
SECTION 12.02     Defaulted Interest..............................................................................      68
SECTION 12.03     Interest Rights Preserved.......................................................................      69

                                   ARTICLE 13
                                  MISCELLANEOUS

SECTION 13.01     Trust Indenture Act Controls....................................................................      69
SECTION 13.02     Notices; Address of Agency in Manhattan.........................................................      69
SECTION 13.03     Communication by Holders with Other Holders.....................................................      70
SECTION 13.04     Certificate and Opinion as to Conditions Precedent..............................................      70
SECTION 13.05     Statements Required in Certificate or Opinion...................................................      70
SECTION 13.06     Separability Clause.............................................................................      71
SECTION 13.07     Rules by Trustee, Paying Agent, Conversion Agent and Registrar..................................      71
SECTION 13.08     Calculations....................................................................................      71
SECTION 13.09     Legal Holidays..................................................................................      71
SECTION 13.10     GOVERNING LAW...................................................................................      71
SECTION 13.11     No Recourse Against Others......................................................................      71
SECTION 13.12     Successors......................................................................................      72
SECTION 13.13     Multiple Originals..............................................................................      72
</TABLE>

<PAGE>


     INDENTURE  dated as of April 30, 2001 between  STILWELL  FINANCIAL  INC., a
Delaware  corporation  ("Company"),  and The Chase  Manhattan  Bank,  a New York
banking corporation ("Trustee").

     Each party agrees as follows for the benefit of the other party and for the
equal  and  ratable  benefit  of the  Holders  of  the  Company's  Liquid  Yield
Option(TM) Notes due 2031 (Zero Coupon - Senior) ("Securities"):

                                    ARTICLE 1

                   DEFINITIONS AND INCORPORATION BY REFERENCE

     SECTION 1.01 Definitions.

     "144A Global Security" means a permanent Global Security in the form of the
Security  attached  hereto  as  Exhibit  A-1,  and  that is  deposited  with and
registered  in the  name  of the  Depositary,  representing  Securities  sold in
reliance on Rule 144A under the Securities Act.

     "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 or cause the  direction  of 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.

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

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

     "Business Day" means each day of the year other than a Saturday or a Sunday
or other day on which banking  institutions in The City of New York are required
or authorized to close.

     "Capital  Stock" for any corporation  means any and all shares,  interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) stock issued by that corporation.

     "Certificated  Securities"  means  Securities  that  are in the form of the
Securities attached hereto as Exhibit A-2.


                                       1
<PAGE>


     "Common Stock" shall mean the shares of Common Stock,  $0.01 par value,  of
the Company as it exists on the date of this  Indenture  or any other  shares of
Capital  Stock of the Company into which the Common Stock shall be  reclassified
or changed.

     "Company"  means the party named as the "Company" in the first paragraph of
this  Indenture  until  a  successor  replaces  it  pursuant  to the  applicable
provisions of this Indenture and,  thereafter,  shall mean such  successor.  The
foregoing  sentence shall  likewise  apply to any  subsequent  such successor or
successors.

     "Company  Request"  or  "Company  Order"  means a written  request or order
signed in the name of the Company by any two Officers.

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

     "Debt" means with respect to the Company at any date, without  duplication,
obligations (other than nonrecourse obligations) for borrowed money or evidenced
by bonds, debentures, notes or similar instruments.

     "Default"  means any event which is, or after  notice or passage of time or
both would be, an Event of Default.

     "Global Securities" means Securities that are in the form of the Securities
attached  hereto as Exhibit  A-1,  and to the extent  that such  Securities  are
required to bear the Legend required by Section 2.06, such Securities will be in
the form of a 144A Global Security.

     "Holder"  or  "Securityholder"  means a person in whose name a Security  is
registered on the Registrar's books.

     "Indenture"  means this Indenture,  as amended or supplemented from time to
time in accordance  with the terms hereof,  including the  provisions of the TIA
that are deemed to be a part hereof.

     "Institutional  Accredited  Investor Security" means a Security in the form
of the Security attached hereto as Exhibit A-2, representing  Securities sold to
institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3) and
(7) under the Securities Act).

     "Interest  Payment Date" means each date specified as such in section 11(d)
of the Securities.

     "Issue  Date" of any  Security  means  the date on which the  Security  was
originally issued or deemed issued as set forth on the face of the Security.

                                       2
<PAGE>


     "Issue  Price" of any  Security  means,  in  connection  with the  original
issuance of such Security, the initial issue price at which the Security is sold
as set forth on the face of the Security.

     "Officer"  means the Chairman of the Board,  the Vice  Chairman,  the Chief
Executive Officer, the President,  any Executive Vice President, any Senior Vice
President,  any Vice President,  the Treasurer or the Secretary or any Assistant
Treasurer or Assistant Secretary of the Company.

     "Officers'   Certificate"  means  a  written  certificate   containing  the
information  specified  in Sections  13.04 and 13.05,  signed in the name of the
Company  by any  two  Officers,  and  delivered  to the  Trustee.  An  Officers'
Certificate  given  pursuant  to Section  4.03 shall be signed by an  authorized
financial  or  accounting  Officer  of the  Company  but  need not  contain  the
information specified in Sections 13.04 and 13.05.

     "Opinion of Counsel" means a written  opinion  containing  the  information
specified in Sections  13.04 and 13.05,  from legal counsel who is acceptable to
the  Trustee.  The counsel may be an employee  of, or counsel to, the Company or
the Trustee.

     "Original Issue Discount" of any Security means the difference  between the
Issue Price and the Principal Amount at Maturity of the Security as set forth on
the face of the Security.

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

     "Principal  Amount at Maturity" of a Security means the Principal Amount at
Maturity as set forth on the face of the Security.

     "Purchase  Date" means each date  specified  as such in section 7(a) of the
Securities.

     "Purchase  Price" means,  with respect to any Purchase Date, the applicable
amount specified as such in section 7(a) of the Securities.

     "Redemption  Date"  or  "redemption  date"  means  the date  specified  for
redemption of the Securities in accordance  with the terms of the Securities and
this Indenture.

     "Redemption  Price" or "redemption  price" shall have the meaning set forth
in section 6 of the Securities.

     "Regular Record Date" means, with respect to any Interest Payment Date, the
date specified in section 11(d) of the Securities.

     "Responsible  Officer"  means,  when used with respect to the Trustee,  any
officer within the corporate trust department of the Trustee, including any vice
president,  assistant vice president,  assistant secretary, trust officer or any
other officer of the Trustee who customarily


                                       3
<PAGE>


performs  functions  similar to those  performed  by the Persons who at the time
shall be such officers,  respectively,  or to whom any corporate trust matter is
referred  because  of  such  person's  knowledge  of and  familiarity  with  the
particular   subject   and  who  shall  have  direct   responsibility   for  the
administration of this Indenture.

     "Required  Rating" shall have the meaning set forth in section 11(c) of the
Securities.

     "Restricted  Security"  means a Security  required to bear the  restrictive
legend set forth in the form of Security  set forth in  Exhibits  A-1 and A-2 of
this Indenture.

     "Rule  144A"  means Rule 144A under the  Securities  Act (or any  successor
provision), as it may be amended from time to time.

     "SEC" means the Securities and Exchange Commission.

     "Securities"  means any of the Company's Liquid Yield Option Notes due 2031
(Zero Coupon-Senior), as amended or supplemented from time to time, issued under
this Indenture.

     "Securityholder"  or  "Holder"  means a person in whose name a Security  is
registered on the Registrar's books.

     "Significant  Subsidiary",  as  such  term  is  defined  in  Rule  1-02  of
Regulation S-X under the Securities Act of 1933, as amended.

     "Special Record Date" means for the payment of any Defaulted Interest,  the
date fixed by the Trustee pursuant to Section 12.02.

     "Stated  Maturity",   when  used  with  respect  to  any  Security  or  any
installment  of  semiannual  or  contingent  interest  thereon,  means  the date
specified  in such  Security  as the fixed date on which an amount  equal to the
Principal  Amount at Maturity of such Security or such installment of semiannual
or contingent interest is due and payable.

     "Subsidiary"  means (i) a  corporation,  a majority of whose  Capital Stock
with voting power, under ordinary  circumstances,  to elect directors is, at the
date of  determination,  directly or indirectly owned by the Company,  by one or
more  Subsidiaries of the Company or by the Company and one or more Subsidiaries
of the Company,  (ii) a partnership  in which the Company or a Subsidiary of the
Company  holds a  majority  interest  in the  equity  capital or profits of such
partnership,  or (iii) any other person (other than a corporation)  in which the
Company, a Subsidiary of the Company or the Company and one or more Subsidiaries
of the Company, directly or indirectly, at the date of determination, has (x) at
least a  majority  ownership  interest  or (y) the power to elect or direct  the
election of a majority of the directors or other governing body of such person.

     "Tax Event"  means that the  Company  shall have  received an opinion  from
independent  tax counsel  experienced  in such matters to the effect that, on or
after April 30, 2001, as a result of (a) any amendment to, or change  (including
any announced  prospective change) in,


                                       4
<PAGE>


the laws (or any  regulations  thereunder) of the United States or any political
subdivision or taxing  authority  thereof or therein or (b) any amendment to, or
change in, an  interpretation  or application of such laws or regulations by any
legislative body, court,  governmental agency or regulatory  authority,  in each
case which amendment or change is enacted,  promulgated,  issued or announced or
which  interpretation  is issued or announced  or which  action is taken,  on or
after April 30, 2001, there is more than an insubstantial risk that amounts that
are treated as interest on the  Securities  for United States federal income tax
purposes including amounts that are so treated based on the comparable yield and
the projected payment schedule set forth in Annex C hereof and any "net positive
adjustments",   as  defined  in  Treasury  Regulation  Section   1.1275-4(b)(6),
resulting  from any interest  described in Article 12 hereof and from amounts of
liquidated  damages payable  pursuant to the  registration  rights agreement but
excluding  any  other  "net  positive  adjustments"  either  (i)  would  not  be
deductible on a current accrual basis or (ii) would not be deductible  under any
other  method,  in either case in whole or in part, by the Company (by reason of
deferral,  disallowance,  or  otherwise)  for United States  federal  income tax
purposes.

     "TIA"  means  the Trust  Indenture  Act of 1939 as in effect on the date of
this Indenture,  provided,  however,  that in the event the TIA is amended after
such date, TIA means, to the extent  required by any such amendment,  the TIA as
so amended.

     "trading  day" means a day during  which  trading in  securities  generally
occurs on the New York Stock  Exchange  or, if the Common Stock is not listed on
the New York  Stock  Exchange,  on the  principal  other  national  or  regional
securities  exchange on which the Common  Stock is then listed or, if the Common
Stock is not  listed on a  national  or  regional  securities  exchange,  on the
National Association of Securities Dealers Automated Quotation System or, if the
Common Stock is not quoted on the National  Association  of  Securities  Dealers
Automated  Quotation  System,  on the principal other market on which the Common
Stock is then traded.

     "Trustee"  means the party named as the "Trustee" in the first paragraph of
this  Indenture  until  a  successor  replaces  it  pursuant  to the  applicable
provisions of this Indenture and,  thereafter,  shall mean such  successor.  The
foregoing  sentence shall  likewise  apply to any  subsequent  such successor or
successors.

     SECTION 1.02 Other Definitions.

<TABLE>
                                                                                                    Defined in
Term                                                                                                Section
<S>                                                                                                      <C>
"Act".................................................................................................   1.05(a)
"Agent Members".......................................................................................   2.12(e)
"Associate"...........................................................................................   3.09(a)
"Average Sale Price"..................................................................................  11.01
"Bankruptcy Law"......................................................................................   6.01
"beneficial owner"....................................................................................   3.09(a)
"Bid Solicitation Agent'..............................................................................   2.03
"cash"................................................................................................   3.08(b)
"Change in Control"...................................................................................   3.09(a)
</TABLE>

                                       5
<PAGE>

<TABLE>

<S>                                                                                                      <C>
"Change in Control Purchase Date".....................................................................   3.09(a)
"Change in Control Purchase Notice"...................................................................   3.09(c)
"Change in Control Purchase Price"....................................................................   3.09(a)
"Company Notice"......................................................................................   3.08(e)
"Company Notice Date".................................................................................   3.08(c)
"Conversion Agent"....................................................................................   2.03
"Conversion Date".....................................................................................  11.02
"Conversion Rate".....................................................................................  11.01
"Custodian"...........................................................................................   6.01
"Defaulted Interest"..................................................................................  12.03
"Depositary"..........................................................................................   2.01(a)
"DTC".................................................................................................   2.01(a)
"Event of Default"....................................................................................   6.01
"Exchange Act"........................................................................................   3.08(d)
"Ex-Dividend Date".................................................................................... 11.08(b)
"Ex-Dividend Time"....................................................................................  11.01
"Extraordinary Cash Dividend".........................................................................  11.08
"Institutional Accredited Investors"..................................................................   2.01(b)
"Legal Holiday".......................................................................................  13.08
"Legend"..............................................................................................   2.06(f)
"LYON Market Price"...................................................................................  Exhibit A-1
"Market Price"........................................................................................   3.08(d)
"Measurement Period".................................................................................. 11.08(a)
"noncontingent Bond Method"...........................................................................   4.07
"Notice of Default"...................................................................................   6.01
"Option Exercise Date"................................................................................  10.01
"Paying Agent"........................................................................................   2.03
"Protected Purchaser..................................................................................   2.07(a)
"Post-Distribution Price"............................................................................. 11.08(b)
"Purchase Notice".....................................................................................   3.08(a)
"QIB".................................................................................................   2.01(a)
"Registrar"...........................................................................................   2.03
"Regular Record Date".................................................................................  10.01
"Relevant Cash Dividends"............................................................................. 11.08(a)
"Restated Principal Amount"...........................................................................  10.01
"Rights"..............................................................................................  11.19
"Rights Agreement"....................................................................................  11.19
"Rule 144A Information"...............................................................................   4.06
"Sale Price"..........................................................................................   3.08(d)
"Securities Act"......................................................................................   3.08(d)
"Special Record Date".................................................................................  12.02
"Tax Event Date"......................................................................................  10.01
"Time of Determination"...............................................................................  11.01
</TABLE>


                                       6
<PAGE>


     SECTION 1.03 Incorporation by Reference of Trust Indenture Act.

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

     "Commission" means the SEC.

     "indenture securities" means the Securities.

     "indenture security holder" means a Securityholder.

     "indenture to be qualified" means this Indenture.

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

     "obligor" on the indenture securities means the Company.

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

     SECTION 1.04 Rules of Construction.

     Unless the context otherwise requires:

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

     (2)  an accounting term not otherwise  defined has the meaning  assigned to
          it in accordance with generally accepted  accounting  principles as in
          effect from time to time;

     (3)  "or" is not exclusive;

     (4)  "including" means including, without limitation; and

     (5)  words in the  singular  include  the  plural,  and words in the plural
          include the singular.

     SECTION 1.05 Acts of Holders.

     (a)  Any request, demand, authorization, direction, notice, consent, waiver
or other action  provided by this  Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments (which may take the form
of an  electronic  writing or  messaging  or  otherwise  be in  accordance  with
customary procedures of the Depositary or the Trustee) of substantially  similar
tenor  signed by such  Holders in person or by agent duly  appointed  in writing
(which may be in electronic  form);  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


                                       7
<PAGE>


sometimes  referred  to as the  "Act" of  Holders  signing  such  instrument  or
instruments.  Proof  of  execution  of  any  such  instrument  or  of a  writing
appointing  any such agent (either of which may be in electronic  form) shall be
sufficient  for any purpose of this  Indenture  and  conclusive  in favor of the
Trustee and the Company, if made in the manner provided in this Section.

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

     (c)  The ownership of Securities shall be proved by the register maintained
by the Registrar.

     (d)  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.

     (e)  If the Company  shall  solicit from the Holders any  request,  demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a resolution of the Board of Directors,  fix in
advance a record  date for the  determination  of Holders  entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the  Company  shall have no  obligation  to do so. If such a record  date is
fixed, such request, demand,  authorization,  direction, notice, consent, waiver
or other Act may be given before or after such record date, but only the Holders
of record at the close of  business  on such  record  date shall be deemed to be
Holders  for the  purposes  of  determining  whether  Holders  of the  requisite
proportion of outstanding  Securities  have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that  purpose the  outstanding  Securities  shall be computed as of
such record date; provided that no such  authorization,  agreement or consent by
the Holders on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than six months
after the record date.


                                       8
<PAGE>


                                    ARTICLE 2

                                 THE SECURITIES

     SECTION 2.01 Form and Dating.

     The Securities and the Trustee's  certificate  of  authentication  shall be
substantially  in the form of  Exhibits  A-1 and A-2,  which  are a part of this
Indenture.  The Securities may have notations,  legends or endorsements required
by law, stock exchange rule or usage (provided that any such notation, legend or
endorsement  required  by usage is in a form  acceptable  to the  Company).  The
Company shall provide any such notations, legends or endorsements to the Trustee
in writing. Each Security shall be dated the date of its authentication.

          (a) 144A  Global  Securities.  Securities  offered and sold within the
     United  States to  qualified  institutional  buyers as defined in Rule 144A
     ("QIBs") in reliance on Rule 144A shall be issued, initially in the form of
     a 144A Global  Security,  which shall be deposited  with the Trustee at its
     Corporate  Trust Office,  as custodian for the Depositary and registered in
     the name of The  Depository  Trust Company  ("DTC") or the nominee  thereof
     (such  depositary,  or any  successor  thereto,  and any such nominee being
     hereinafter referred to as the "Depositary"),  duly executed by the Company
     and  authenticated  by the Trustee as hereinafter  provided.  The aggregate
     Principal Amount at Maturity of the 144A Global Securities may from time to
     time be increased or  decreased by  adjustments  made on the records of the
     Trustee and the Depositary as hereinafter provided.

          (b) Institutional  Accredited Investor Securities.  Except as provided
     in this  Section  2.01,  2.06 or 2.12,  owners of  beneficial  interests in
     Global  Securities  will not be  entitled to receive  physical  delivery of
     Certificated  Securities.  Securities  offered  and sold  within the United
     States to institutional  accredited investors as defined in Rule 501(a)(1),
     (2)  (3)  and (7)  under  the  Securities  Act  ("Institutional  Accredited
     Investors")  shall be  issued,  initially  in the form of an  Institutional
     Accredited   Investor   Security,   duly   executed   by  the  Company  and
     authenticated by the Trustee as hereinafter provided.

          (c) Global Securities in General. Each Global Security shall represent
     such of the outstanding  Securities as shall be specified  therein and each
     shall provide that it shall  represent the  aggregate  Principal  Amount at
     Maturity of outstanding  Securities from time to time endorsed  thereon and
     that the aggregate  Principal Amount at Maturity of outstanding  Securities
     represented  thereby  may from time to time be  reduced  or  increased,  as
     appropriate, to reflect exchanges, redemptions and conversions.

     Any  adjustment of the aggregate  Principal  Amount at Maturity of a Global
Security  to reflect the amount of any  increase  or  decrease in the  Principal
Amount at Maturity of outstanding  Securities  represented thereby shall be made
by the Trustee in accordance  with  instructions  given by the Holder thereof as
required by Section  2.12 hereof and shall be made on the records of the Trustee
and the Depositary.


                                       9
<PAGE>


          (d) Book-Entry  Provisions.  This Section  2.01(d) shall apply only to
     Global Securities deposited with or on behalf of the Depositary.

     The Company shall execute and the Trustee  shall,  in accordance  with this
Section  2.01(d),   authenticate  and  deliver  initially  one  or  more  Global
Securities that (a) shall be registered in the name of the Depositary, (b) shall
be delivered by the Trustee to the  Depositary  or pursuant to the  Depositary's
instructions and (c) shall bear legends substantially to the following effect:

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

     TRANSFERS OF THIS GLOBAL  SECURITY SHALL BE LIMITED TO TRANSFERS,  IN WHOLE
     BUT NOT IN PART,  TO  NOMINEES  OF THE  DEPOSITORY  TRUST  COMPANY  OR TO A
     SUCCESSOR THEREOF OR SUCH SUCCESSOR'S  NOMINEE AND TRANSFERS OF PORTIONS OF
     THIS GLOBAL  SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
     THE RESTRICTIONS  SET FORTH IN ARTICLE TWO OF THE INDENTURE  REFERRED TO ON
     THE REVERSE HEREOF."

          (e) Certificated Securities. Securities not issued as interests in the
     Global Securities will be issued in certificated form  substantially in the
     form of Exhibit A-2 attached hereto.

     SECTION 2.02 Execution and Authentication.

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

     Securities bearing the manual or facsimile  signatures of an individual who
was at the time of the  execution of the  Securities  the proper  Officer of the
Company shall bind the Company,  notwithstanding that such individual has ceased
to hold such office prior to the  authentication and delivery of such Securities
or did not hold such office at the date of authentication of such Securities.


                                       10
<PAGE>


     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 duly
executed  by the Trustee by manual  signature  of an  authorized  officer of the
Trustee,  and such certificate  upon any Security shall be conclusive  evidence,
and the only  evidence,  that  such  Security  has been duly  authenticated  and
delivered hereunder.

     The Trustee shall authenticate and deliver Securities for original issue in
an aggregate  Principal Amount at Maturity of up to $930,709,000  upon a Company
Order without any further action by the Company.  The aggregate Principal Amount
at Maturity of Securities  outstanding at any time may not exceed the amount set
forth in the foregoing sentence, except as provided in Section 2.07.

     The Securities  shall be issued only in registered form without coupons and
only in denominations of $1,000 of Principal Amount at Maturity and any integral
multiple thereof.

     SECTION 2.03 Registrar, Paying Agent, Conversion Agent and Bid Solicitation
Agent.

     The Company  shall  maintain an office or agency  where  Securities  may be
presented for registration of transfer or for exchange ("Registrar"),  an office
or agency where  Securities  may be presented  for purchase or payment  ("Paying
Agent") and an office or agency where Securities may be presented for conversion
("Conversion  Agent").  The Company shall also appoint a bid solicitation  agent
(the "Bid  Solicitation  Agent") to act pursuant to section 5 of the Securities.
The Registrar  shall keep a register of the Securities and of their transfer and
exchange. The Company may have one or more co-registrars, one or more additional
paying  agents and one or more  additional  conversion  agents.  The term Paying
Agent  includes any  additional  paying agent,  including any named  pursuant to
Section 4.05.  The term  Conversion  Agent  includes any  additional  conversion
agent, including any named pursuant to Section 4.05.

     The  Company  shall enter into an  appropriate  agency  agreement  with any
Registrar or  co-registrar,  Paying Agent,  Conversion Agent or Bid Solicitation
Agent (other than the Trustee).  The agreement shall implement the provisions of
this Indenture  that relate to such agent.  The Company shall notify the Trustee
of the name and  address of any such agent.  If the Company  fails to maintain a
Registrar, Paying Agent, Conversion Agent or Bid Solicitation Agent, the Trustee
shall act as such and shall be entitled  to  appropriate  compensation  therefor
pursuant to Section  7.07.  The Company or any  Subsidiary  or an  Affiliate  of
either  of them may act as  Paying  Agent,  Registrar,  Conversion  Agent or co-
registrar.  None of the Company or any  Subsidiary or any Affiliate of either of
them may act as Bid Solicitation Agent.

     The Company initially appoints the Trustee as Registrar,  Conversion Agent,
Paying Agent and Bid Solicitation Agent in connection with the Securities.

     SECTION 2.04 Paying Agent to Hold Money and Securities in Trust.

     Except as otherwise  provided  herein,  by no later than 10 a.m.,  New York
City time,  on or prior to each due date of payments in respect of any Security,
the Company shall


                                       11
<PAGE>


deposit with the Paying Agent a sum of money (in immediately  available funds if
deposited on the due date) or Common Stock sufficient to make such payments when
so becoming  due.  The Company  shall  require each Paying Agent (other than the
Trustee) to agree in writing  that the Paying  Agent shall hold in trust for the
benefit of Securityholders or the Trustee all money and Common Stock held by the
Paying Agent for the making of payments in respect of the  Securities  and shall
notify the Trustee of any default by the Company in making any such payment.  At
any time during the  continuance  of any such  default,  the Paying Agent shall,
upon the written request of the Trustee,  forthwith pay to the Trustee all money
and Common Stock so held in trust. If the Company,  a Subsidiary or an Affiliate
of either of them acts as Paying Agent,  it shall segregate the money and Common
Stock  held by it as Paying  Agent and hold it as a  separate  trust  fund.  The
Company at any time may require a Paying Agent to pay all money and Common Stock
held  by it to the  Trustee  and to  account  for any  funds  and  Common  Stock
disbursed by it. Upon doing so, the Paying Agent shall have no further liability
for the money or Common Stock.

     SECTION 2.05 Securityholder Lists.

     The  Trustee  shall  preserve  in  as  current  a  form  as  is  reasonably
practicable  the most recent list  available to it of the names and addresses of
Securityholders. If the Trustee is not the Registrar, the Company shall cause to
be  furnished  to the Trustee at least  semiannually  on May 1 and  November 1 a
listing of Securityholders dated within 15 days of the date on which the list is
furnished  and at such other  times as the Trustee may request in writing a list
in such form and as of such date as the  Trustee may  reasonably  require of the
names and addresses of Securityholders.

     SECTION 2.06 Transfer and Exchange.

     Subject to Section 2.12 hereof,

     (a) upon surrender for  registration of transfer of any Security,  together
with a  written  instrument  of  transfer  satisfactory  to the  Registrar  duly
executed by the Securityholder or such Securityholder's attorney duly authorized
in writing,  at the office or agency of the Company  designated  as Registrar or
co-registrar  pursuant to Section  2.03,  the  Company  shall  execute,  and the
Trustee upon receipt of a Company Order shall  authenticate and deliver,  in the
name of the designated transferee or transferees,  one or more new Securities of
any authorized  denomination  or  denominations,  of a like aggregate  Principal
Amount at  Maturity.  The  Company  shall not  charge a service  charge  for any
registration  of transfer or exchange,  but the Company may require payment of a
sum sufficient to pay all taxes,  assessments or other governmental charges that
may be imposed in connection  with the  registration  of transfer or exchange of
the Securities from the Securityholder  requesting such registration of transfer
or exchange.

     At the option of the Holder,  Certificated  Securities may be exchanged for
other  Securities of any authorized  denomination  or  denominations,  of a like
aggregate  Principal Amount at Maturity,  upon surrender of the Securities to be
exchanged,  together with a written  instrument of transfer  satisfactory to the
Registrar duly executed by the Securityholder or such Securityholder's  attorney
duly  authorized in writing,  at such office or agency.  Whenever any Securities
are so surrendered for exchange, the Company shall execute, and the Trustee upon


                                       12
<PAGE>


receipt of a Company Order shall authenticate and deliver,  the Securities which
the Holder making the exchange is entitled to receive.

     The  Company  shall not be  required to make,  and the  Registrar  need not
register,  transfers or exchanges of Securities selected for redemption (except,
in the case of Securities to be redeemed in part, the portion  thereof not to be
redeemed) or any  Securities in respect of which a Purchase  Notice or Change in
Control  Purchase  Notice has been given and not withdrawn by the Holder thereof
in  accordance  with  the  terms  of  this  Indenture  (except,  in the  case of
Securities to be purchased in part, the portion  thereof not to be purchased) or
any  Securities  for a period  of 15 days  before  the  mailing  of a notice  of
redemption of Securities to be redeemed.

     (b)  Notwithstanding  any  provision to the contrary  herein,  so long as a
Global  Security  remains  outstanding  and  is  held  by or on  behalf  of  the
Depositary,  transfers of a Global Security,  in whole or in part, shall be made
only in accordance  with Section 2.12 and this Section  2.06(b).  Transfers of a
Global  Security shall be limited to transfers of such Global Security in whole,
or in part, to nominees of the Depositary or to a successor of the Depositary or
such successor's nominee.

     (c)  Successive registrations  and registrations of transfers and exchanges
as  aforesaid  may be  made  from  time  to  time  as  desired,  and  each  such
registration shall be noted on the register for the Securities.

     (d)  Any Registrar appointed  pursuant to Section 2.03 hereof shall provide
to the  Trustee  such  information  as the  Trustee  may  reasonably  require in
connection with the delivery by such Registrar of Securities  upon  registration
of transfer or exchange of Securities.

     (e)  No Registrar  shall be required to make  registrations  of transfer or
exchange  of  Securities  during  any  periods  designated  in the  text  of the
Securities or in this  Indenture as periods  during which such  registration  of
transfers and exchanges need not be made.

     (f)  If Securities are issued upon the registration of  transfer,  exchange
or replacement of Securities subject to restrictions on transfer and bearing the
legends set forth on the form of Security  attached  hereto as Exhibits  A-1 and
A-2  setting  forth such  restrictions  (collectively,  the  "Legend"),  or if a
request is made to remove the Legend on a  Security,  the  Securities  so issued
shall bear the Legend,  or the Legend shall not be removed,  as the case may be,
unless  there is delivered to the Company and the  Registrar  such  satisfactory
evidence,  which  shall  include  an Opinion of  Counsel,  as may be  reasonably
required  by the  Company  and the  Registrar,  that  neither the Legend nor the
restrictions on transfer set forth therein are required to ensure that transfers
thereof comply with the provisions of Rule 144A or Rule 144 under the Securities
Act or that such Securities are not "restricted"  within the meaning of Rule 144
under the Securities Act. Upon (i) provision of such satisfactory  evidence,  or
(ii)  notification  by the Company to the Trustee and  Registrar  of the sale of
such Security pursuant to a registration statement that is effective at the time
of such sale,  the  Trustee,  at the written  direction  of the  Company,  shall
authenticate and deliver a Security that does not bear the Legend. If the Legend
is removed from the face of a Security and the Security is subsequently  held by
an Affiliate of the Company, the Legend shall be reinstated by the Company.


                                       13
<PAGE>


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

     SECTION 2.07 Replacement Securities.

     If (a) any mutilated  Security is  surrendered  to the Trustee,  or (b) the
Company  and  the  Trustee  receive  evidence  to  their   satisfaction  of  the
destruction,  loss or theft of any  Security,  and  there  is  delivered  to the
Company and the Trustee such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a protected purchaser within the
meaning of Article 8 of the  Uniform  Commercial  Code as in effect from time to
time in the  State of New York (a  "Protected  Purchaser"),  the  Company  shall
execute and upon its written request the Trustee shall authenticate and deliver,
in exchange for any such  mutilated  Security or in lieu of any such  destroyed,
lost or stolen  Security,  a new Security of like tenor and Principal  Amount at
Maturity, 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,  or is  about to be  purchased  by the
Company pursuant to Article 3 hereof, the Company in its discretion may, instead
of issuing a new Security, pay or purchase such Security, as the case may be.

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


     SECTION 2.08 Outstanding Securities; Determinations of Holders' Action.

     Securities outstanding at any time are all the Securities  authenticated by
the Trustee  except for those  cancelled by it,  those paid  pursuant to Section
2.07 delivered to it for  cancellation  and those described in this Section 2.08
as not  outstanding.  A Security  does not


                                       14
<PAGE>


cease to be  outstanding  because the Company or an Affiliate  thereof holds the
Security;  provided,  however,  that in  determining  whether the Holders of the
requisite  Principal Amount at Maturity of Securities have given or concurred in
any  request,  demand,  authorization,  direction,  notice,  consent  or  waiver
hereunder,  Securities  owned  by the  Company  or any  other  obligor  upon the
Securities  or any  Affiliate  of the  Company  or 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.  Subject to the foregoing,  only Securities outstanding at the time
of such determination shall be considered in any such determination  (including,
without limitation, determinations pursuant to Articles 6 and 9).

     If a Security is replaced  pursuant to Section 2.07, the replaced  Security
ceases to be  outstanding  unless the  Trustee  and the  Company  receive  proof
satisfactory  to each of them that the replaced  Security is held by a Protected
Purchaser unaware that such Security has been replaced.

     If the  Paying  Agent  holds,  in  accordance  with  this  Indenture,  on a
Redemption  Date, or on the Business Day following the Purchase Date or a Change
in  Control  Purchase  Date,  or on Stated  Maturity,  money or  securities,  if
permitted  hereunder,  sufficient to pay Securities  payable on that date,  then
immediately  after  such  Redemption  Date,  Purchase  Date,  Change in  Control
Purchase  Date or Stated  Maturity,  as the case may be, such  Securities  shall
cease to be  outstanding  and Original  Issue  Discount and interest  (including
contingent  interest),  if any,  on  such  Securities  shall  cease  to  accrue;
provided, that if such Securities are to be redeemed,  notice of such redemption
has been duly given pursuant to this Indenture.

     If a Security is  converted  in  accordance  with Article 11, then from and
after the time of conversion on the Conversion  Date,  such Security shall cease
to be outstanding and Original Issue Discount and interest (including contingent
interest), if any, shall cease to accrue on such Security.

     SECTION 2.09 Temporary Securities.

     Pending the preparation of definitive Securities,  the Company may execute,
and the Trustee upon receipt of a Company Order 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 conclusively evidenced
by their execution of such Securities.

     If  temporary  Securities  are issued,  the Company  will cause  definitive
Securities to be prepared without  unreasonable  delay. After the preparation of
definitive  Securities,  the  temporary  Securities  shall be  exchangeable  for
definitive  Securities upon surrender of the temporary  Securities at the office
or agency of the Company  designated for such purpose  pursuant to Section 2.03,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities,  the Company shall execute and the Trustee upon receipt of


                                       15
<PAGE>


a Company  Order shall  authenticate  and  deliver in  exchange  therefor a like
Principal   Amount  at  Maturity  of   definitive   Securities   of   authorized
denominations. Until so exchanged the temporary Securities shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities.

     SECTION 2.10 Cancellation.

     All Securities surrendered for payment, purchase by the Company pursuant to
Article 3, conversion, redemption or registration of transfer or exchange 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 all Securities so delivered shall be promptly  cancelled by the
Trustee.  The Company may not issue new Securities to replace  Securities it has
paid or  delivered  to the  Trustee  for  cancellation  or that any  Holder  has
converted  pursuant to Article 11. 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  accordance  with the
Trustee's customary procedure.

     SECTION 2.11 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 the Security or the payment
of any Redemption  Price,  Purchase Price or Change in Control Purchase Price in
respect thereof, and interest (including  contingent interest,  if any) thereon,
for the purpose of conversion 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 2.12 Global Securities.

     (a)  Notwithstanding  any   other  provisions  of  this  Indenture  or  the
Securities,  (A) transfers of a Global  Security,  in whole or in part, shall be
made only in accordance with Section 2.06 and Section  2.12(a)(i),  (B) transfer
of a beneficial interest in a Global Security for a Certificated  Security shall
comply with Section 2.06 and Section  2.12(a)(ii)  below, and (C) transfers of a
Certificated  Security  shall comply with Section 2.06 and Section  2.12(a)(iii)
and (iv) below.

          (i)  Transfer  of  Global  Security.  A  Global  Security  may  not be
     transferred,  in whole or in part, to any Person other than the  Depositary
     or a nominee or any  successor  thereof,  and no such  transfer to any such
     other  Person may be  registered;  provided  that this clause (i) shall not
     prohibit any transfer of a Security that is issued in exchange for a Global
     Security but is not itself a Global Security.  No transfer of a Security to
     any Person shall be effective under this Indenture or the Securities unless
     and until such  Security  has been  registered  in the name of


                                       16
<PAGE>


     such Person.  Nothing in this Section  2.12(a)(i)  shall prohibit or render
     ineffective  any  transfer of a  beneficial  interest in a Global  Security
     effected in accordance with the other provisions of this Section 2.12(a).

          (ii)  Restrictions  on Transfer of a  Beneficial  Interest in a Global
     Security for a  Certificated  Security.  A beneficial  interest in a Global
     Security  may not be  exchanged  for a  Certificated  Security  except upon
     satisfaction  of the  requirements  set forth  below.  Upon  receipt by the
     Trustee of a request  for  transfer  of a  beneficial  interest in a Global
     Security  in  accordance  with  Applicable  Procedures  for a  Certificated
     Security in the form satisfactory to the Trustee, together with:

     (a) so long as the Securities are Restricted Securities,  certification, in
the form set forth in Exhibit  B-1,  and,  if  requested  by the  Company or the
Registrar,  certification  in the  form set  forth in  Exhibit  B-2,  that  such
beneficial   interest  in  the  Global  Security  is  being  transferred  to  an
Institutional  Accredited Investor in accordance with subparagraphs (a)(1), (2),
(3) or (7) of Rule 501 under the Securities Act;

     (b) written instructions to the Trustee to make, or direct the Registrar to
make,  an  adjustment  on its books and  records  with  respect  to such  Global
Security to reflect a decrease in the aggregate  Principal Amount at Maturity of
the Securities represented by the Global Security,  such instructions to contain
information  regarding the Depositary account to be credited with such decrease;
and

     (c) if the Company or Registrar so requests, an Opinion of Counsel or other
evidence  reasonably  satisfactory  to  them  as  to  the  compliance  with  the
restrictions set forth in the Legend,

then the Trustee shall cause,  or direct the  Registrar to cause,  in accordance
with the standing  instructions  and procedures  existing between the Depositary
and the  Registrar,  the  aggregate  Principal  Amount at Maturity of Securities
represented  by the Global  Security to be decreased by the aggregate  Principal
Amount at Maturity of the Certificated Security to be issued, shall authenticate
and deliver such Certificated Security and shall debit or cause to be debited to
the account of the Person specified in such  instructions a beneficial  interest
in the  Global  Security  equal  to the  Principal  Amount  at  Maturity  of the
Certificated Security so issued.

          (iii)  Transfer  and  Exchange  of   Certificated   Securities.   When
     Certificated Securities are presented to the Registrar with a request:

               (x) to register the transfer of such Certificated Securities; or

               (y)  to  exchange  such  Certificated  Securities  for  an  equal
          Principal  Amount at  Maturity  of  Certificated  Securities  of other
          authorized denominations,


                                       17
<PAGE>


the Registrar  shall  register the transfer or make the exchange as requested if
its reasonable  requirements  for such transaction are met;  provided,  however,
that the  Certificated  Securities  surrendered for  registration of transfer or
exchange:

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

          (b) so  long  as  such  Securities  are  Restricted  Securities,  such
     Securities  are being  transferred  or  exchanged  pursuant to an effective
     registration  statement under the Securities Act or pursuant to clause (A),
     (B)  or  (C)  below,  and  are  accompanied  by  the  following  additional
     information and documents, as applicable:

               (A) if such  Certificated  Securities are being  delivered to the
          Registrar  by a Holder for  registration  in the name of such  Holder,
          without transfer, a certification from such Holder to that effect; or

               (B) if such Certificated  Securities are being transferred to the
          Company, a certification to that effect; or

               (C)  if  such  Certificated   Securities  are  being  transferred
          pursuant to an exemption from registration (i) a certification to that
          effect (in the form set forth in Exhibit B-1 and B-2,  if  applicable)
          and (ii) if the  Company  or  Registrar  so  requests,  an  Opinion of
          Counsel or other evidence  reasonably  satisfactory  to them as to the
          compliance with the restrictions set forth in the Legend.

          (iv)  Restrictions  on  Transfer  of a  Certificated  Security  for  a
     Beneficial Interest in a Global Security.  A Certificated  Security may not
     be exchanged  for a beneficial  interest in a Global  Security  except upon
     satisfaction of the requirements set forth below.

     Upon receipt by the Trustee of a  Certificated  Security,  duly endorsed or
     accompanied by appropriate instruments of transfer, in form satisfactory to
     the Trustee, together with:

               (a)  so  long  as  the  Securities  are  Restricted   Securities,
          certification,  in the  form set  forth  in  Exhibit  B-1,  that  such
          Certificated Security is being transferred to a QIB in accordance with
          Rule 144A; and

               (b) written  instructions  directing  the Trustee to make,  or to
          direct the  Registrar to make,  an adjustment on its books and records
          with  respect to such  Global  Security  to reflect an increase in the
          aggregate  Principal Amount at Maturity of the Securities  represented
          by the Global  Security,  such  instructions  to  contain  information
          regarding the Depositary account to be credited with such increase,


                                       18
<PAGE>


          then the Trustee shall cancel such Certificated Security and cause, or
          direct  the  Registrar  to  cause,  in  accordance  with the  standing
          instructions  and procedures  existing  between the Depositary and the
          Registrar,  the aggregate  Principal  Amount at Maturity of Securities
          represented  by the Global  Security to be increased by the  aggregate
          Principal  Amount  at  Maturity  of the  Certificated  Security  to be
          exchanged,  and shall credit or cause to be credited to the account of
          the Person specified in such instructions a beneficial interest in the
          Global  Security  equal to the  Principal  Amount at  Maturity  of the
          Certificated  Security so cancelled.  If no Global Securities are then
          outstanding, the Company shall issue and the Trustee upon receipt of a
          Company  Order  shall  authenticate  a  new  Global  Security  in  the
          appropriate Principal Amount at Maturity.

     (b)  Subject to the succeeding paragraph, every Security shall  be  subject
to the restrictions on transfer provided in the Legend including the delivery of
an Opinion of Counsel,  if so  provided.  Whenever  any  Restricted  Security is
presented  or  surrendered  for  registration  of transfer or for exchange for a
Security  registered in a name other than that of the Holder, such Security must
be accompanied by a certificate in  substantially  the form set forth in Exhibit
B-1, dated the date of such surrender and signed by the Holder of such Security,
as to compliance with such restrictions on transfer.  The Registrar shall not be
required to accept for such  registration  of transfer or exchange  any Security
not so accompanied by a properly completed certificate.

     (c) The restrictions  imposed by the Legend upon the transferability of any
Security  shall cease and terminate when such Security has been sold pursuant to
an effective  registration  statement under the Securities Act or transferred in
compliance  with Rule 144 under the Securities  Act (or any successor  provision
thereto) or, if earlier, upon the expiration of the holding period applicable to
sales  thereof  under Rule 144(k)  under the  Securities  Act (or any  successor
provision).  Any Security as to which such  restrictions  on transfer shall have
expired in  accordance  with their terms or shall have  terminated  may,  upon a
surrender of such Security for exchange to the Registrar in accordance  with the
provisions  of  this  Section  2.12   (accompanied,   in  the  event  that  such
restrictions  on transfer have  terminated by reason of a transfer in compliance
with Rule 144 or any  successor  provision,  by an  Opinion  of  Counsel  having
substantial  experience  in  practice  under the  Securities  Act and  otherwise
reasonably acceptable to the Company,  addressed to the Company, the Trustee and
the  Registrar  and in form  acceptable  to the Company,  to the effect that the
transfer  of such  Security  has been made in  compliance  with Rule 144 or such
successor  provision),  be  exchanged  for a new  Security,  of like  tenor  and
aggregate  Principal  Amount at Maturity,  which shall not bear the  restrictive
Legend.  The  Company  shall  inform the  Trustee of the  effective  date of any
registration  statement registering the Securities under the Securities Act. The
Trustee and the Registrar shall not be liable for any action taken or omitted to
be taken by it in good faith in accordance  with the  aforementioned  Opinion of
Counsel or registration statement.

     (d) As used in the preceding two  paragraphs of this Section 2.12, the term
"transfer"  encompasses  any  sale,  pledge,  transfer,  hypothecation  or other
disposition of any Security.


                                       19
<PAGE>


     (e) The  provisions of clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:

          (1)  Notwithstanding  any other  provisions  of this  Indenture or the
               Securities,  except as provided in Section 2.12(a)(ii),  a Global
               Security  shall  not be  exchanged  in  whole  or in  part  for a
               Security  registered  in the name of any  Person  other  than the
               Depositary  or one or  more  nominees  thereof,  provided  that a
               Global Security may be exchanged for Securities registered in the
               names of any person  designated  by the  Depositary  in the event
               that (i) the  Depositary  has  notified  the  Company  that it is
               unwilling  or unable to  continue as  Depositary  for such Global
               Security or such Depositary has ceased to be a "clearing  agency"
               registered under the Exchange Act, and a successor  Depositary is
               not  appointed  by the Company  within 90 days,  (ii) the Company
               decides to discontinue  use of the system of book-entry  transfer
               through DTC (or any successor  depositary);  or (iii) an Event of
               Default  has  occurred  and is  continuing  with  respect  to the
               Securities.  Any Global Security exchanged pursuant to clause (i)
               or (ii) above shall be so exchanged in whole and not in part, and
               any Global Security  exchanged pursuant to clause (iii) above may
               be exchanged in whole or from time to time in part as directed by
               the  Depositary.  Any  Security  issued in exchange  for a Global
               Security  or any  portion  thereof  shall be a  Global  Security;
               provided  that any such  Security so issued that is registered in
               the  name of a Person  other  than the  Depositary  or a  nominee
               thereof shall not be a Global Security.

          (2)  Securities  issued  in  exchange  for a  Global  Security  or any
               portion thereof shall be issued in definitive,  fully  registered
               form, without interest coupons, shall have an aggregate Principal
               Amount  at  Maturity  equal to that of such  Global  Security  or
               portion  thereof to be so exchanged,  shall be registered in such
               names and be in such authorized  denominations  as the Depositary
               shall  designate and shall bear the applicable  legends  provided
               for herein. Any Global Security to be exchanged in whole shall be
               surrendered by the Depositary to the Trustee, as Registrar.  With
               regard to any Global  Security to be  exchanged  in part,  either
               such Global  Security shall be so surrendered for exchange or, if
               the  Trustee is acting as  custodian  for the  Depositary  or its
               nominee  with  respect to such  Global  Security,  the  Principal
               Amount at Maturity  thereof shall be reduced,  by an amount equal
               to  the  portion  thereof  to be so  exchanged,  by  means  of an
               appropriate  adjustment made on the records of the Trustee.  Upon
               any such surrender or adjustment,  the Trustee shall authenticate
               and deliver the Security issuable on such exchange to or upon the
               order of the Depositary or an authorized representative thereof.

          (3)  Subject to the  provisions  of clause (5) below,  the  registered
               Holder may grant  proxies  and  otherwise  authorize  any Person,
               including  Agent Members (as defined  below) and persons that may
               hold interests through


                                       20
<PAGE>


               Agent  Members,  to take any  action  which a holder is  entitled
               totake under this Indenture or the Securities.

          (4)  In the event of the occurrence of any of the events  specified in
               clause (1) above, the Company will promptly make available to the
               Trustee  a  reasonable  supply  of  Certificated   Securities  in
               definitive, fully registered form, without interest coupons.

          (5)  Neither  any  members  of, or  participants  in,  the  Depositary
               (collectively,  the  "Agent  Members")  nor any other  Persons on
               whose  behalf  Agent  Members may act shall have any rights under
               this Indenture with respect to any Global Security  registered in
               the name of the Depositary or any nominee  thereof,  or under any
               such Global Security,  and the Depositary or such nominee, as the
               case may be, may be treated by the  Company,  the Trustee and any
               agent of the  Company or the  Trustee as the  absolute  owner and
               holder  of such  Global  Security  for all  purposes  whatsoever.
               Notwithstanding  the foregoing,  nothing herein shall prevent the
               Company,  the  Trustee or any agent of the Company or the Trustee
               from giving effect to any written  certification,  proxy or other
               authorization furnished by the Depositary or such nominee, as the
               case may be, or impair,  as  between  the  Depositary,  its Agent
               Members and any other  person on whose behalf an Agent Member may
               act,  the  operation  of  customary  practices  of  such  Persons
               governing the exercise of the rights of a holder of any Security.

     SECTION 2.13 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 change in the CUSIP numbers.

                                    ARTICLE 3

                            REDEMPTION AND PURCHASES

     SECTION 3.01 Right to Redeem; Notices to Trustee.

     The Company,  at its option,  may redeem the Securities in accordance  with
the provisions of sections 6 and 8 of the  Securities.  If the Company elects to
redeem Securities  pursuant to section 6 of the Securities,  it shall notify the
Trustee in writing of the Redemption  Date, the Principal  Amount at Maturity of
Securities to be redeemed, the Redemption Price and the amount of semiannual and
contingent interest, if any, payable on the Redemption Date.


                                       21
<PAGE>


     The  Company  shall give the  notice to the  Trustee  provided  for in this
Section 3.01 by a Company  Order,  at least 20 days before the  Redemption  Date
(unless a shorter notice shall be satisfactory to the Trustee).

     SECTION 3.02 Selection of Securities to Be Redeemed.

     If less than all the  Securities  are to be  redeemed,  the  Trustee  shall
select the  Securities  to be redeemed pro rata or by lot or by any other method
the  Trustee  considers  fair and  appropriate  (so long as such  method  is not
prohibited by the rules of any stock  exchange on which the  Securities are then
listed). The Trustee shall make the selection at least 15 days but not more than
60 days before the Redemption  Date from  outstanding  Securities not previously
called for redemption.

     Securities  and portions of them the Trustee  selects shall be in Principal
Amounts at Maturity of $1,000 or an integral  multiple of $1,000.  Provisions of
this  Indenture  that apply to Securities  called for  redemption  also apply to
portions of  Securities  called for  redemption.  The Trustee  shall  notify the
Company promptly of the Securities or portions of Securities to be redeemed.

     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 may be treated by the
Trustee as outstanding for the purpose of such selection.

     SECTION 3.03 Notice of Redemption.

     At least 15 days but not more than 60 days before a  Redemption  Date,  the
Company shall mail a notice of redemption by first-class mail,  postage prepaid,
to each Holder of Securities to be redeemed.

     The notice shall identify the Securities to be redeemed and shall state:

          (1)  the Redemption Date;

          (2)  the Redemption Price and, to the extent known at the time of such
               notice, the amount of semiannual and contingent interest, if any,
               payable on the Redemption Date;

          (3)  the Conversion Rate;

          (4)  the name and address of the Paying Agent and Conversion Agent;

          (5)  that  Securities  called for  redemption  may be converted at any
               time  before the close of  business  on the second  Business  Day
               immediately preceding the Redemption Date;


                                       22
<PAGE>


          (6)  that  Holders  who want to convert  Securities  must  satisfy the
               requirements set forth in section 9 of the Securities;

          (7)  that Securities  called for redemption must be surrendered to the
               Paying Agent to collect the  Redemption  Price and semiannual and
               contingent interest, if any;

          (8)  if fewer than all the outstanding  Securities are to be redeemed,
               the certificate  number and Principal  Amounts at Maturity of the
               particular Securities to be redeemed;

          (9)  that,  unless  the  Company  defaults  in making  payment of such
               Redemption Price and semiannual and contingent interest,  if any,
               Original  Issue Discount and interest  (including  semiannual and
               contingent interest), if any, on Securities called for redemption
               will cease to accrue on and after the Redemption Date; and

          (10) the CUSIP number of the Securities.

     At the Company's  request,  the Trustee shall give the notice of redemption
in the Company's  name and at the Company's  expense,  provided that the Company
makes such request at least five Business Days (unless a shorter period shall be
satisfactory to the Trustee) prior to the date such notice of redemption must be
mailed.

     SECTION 3.04 Effect of Notice of Redemption.

     Once notice of redemption is given, Securities called for redemption become
due and payable on the  Redemption  Date and at the Redemption  Price  (together
with accrued  semiannual and contingent  interest,  if any, to but not including
the date of  redemption)  stated in the notice except for  Securities  which are
converted in accordance with the terms of this Indenture.  Upon surrender to the
Paying Agent,  such Securities  shall be paid at the Redemption  Price (together
with accrued  semiannual and contingent  interest,  if any, to but not including
the date of redemption) stated in the notice.

     SECTION 3.05 Deposit of Redemption Price.

     Prior to 10:00  a.m.  (New  York City  time) on any  Redemption  Date,  the
Company  shall  deposit with the Paying Agent (or if the Company or a Subsidiary
or an Affiliate of either of them is the Paying Agent,  shall segregate and hold
in trust) money  sufficient to pay the Redemption  Price of, and any accrued and
unpaid  semiannual  and  contingent  interest to but not  including  the date of
redemption  with  respect to, all  Securities  to be redeemed on that date other
than  Securities or portions of  Securities  called for  redemption  which on or
prior thereto have been delivered by the Company to the Trustee for cancellation
or have been converted. The Paying Agent shall as promptly as practicable return
to the Company any money, not required for that purpose because of conversion of
Securities  pursuant to Article 11. If such money is then held by the Company in
trust and is not  required  for such  purpose it shall be  discharged  from such
trust.


                                       23
<PAGE>


     SECTION 3.06 Securities Redeemed in Part.

     Upon  surrender of a Security  that is redeemed in part,  the Company shall
execute  and the  Trustee  shall  authenticate  and  deliver to the Holder a new
Security in an authorized  denomination equal in Principal Amount at Maturity to
the unredeemed portion of the Security surrendered.

     SECTION 3.07 Conversion Arrangement on Call for Redemption.

     In connection with any redemption of Securities, the Company may arrange at
or shortly  before the time of the redemption for the purchase and conversion of
any Securities called for redemption by an agreement with one or more investment
banks or other  purchasers to purchase such  Securities by paying to the Trustee
in trust for the  Securityholders,  on or prior to 10:00 a.m. New York City time
on the Redemption Date, an amount that, together with any amounts deposited with
the Trustee by the Company for the  redemption of such  Securities,  is not less
than the  Redemption  Price  of,  and any  accrued  and  unpaid  semiannual  and
contingent interest with respect to, such Securities.  Notwithstanding  anything
to the contrary  contained in this Article 3, the  obligation  of the Company to
pay the Redemption Prices of such Securities shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such  purchasers.  If such an
agreement is entered into, any Securities not duly surrendered for conversion by
the Holders thereof may, at the option of the Company, be deemed, to the fullest
extent  permitted  by law,  acquired by such  purchasers  from such  Holders and
(notwithstanding  anything to the contrary  contained in Article 11) surrendered
by such purchasers for conversion,  all as of immediately  prior to the close of
business on the Business Day prior to the Redemption Date, subject to payment of
the above  amount as  aforesaid.  The Trustee  shall hold and pay to the Holders
whose  Securities  are  selected for  redemption  any such amount paid to it for
purchase and conversion in the same manner as it would moneys  deposited with it
by the Company for the  redemption of  Securities.  Without the Trustee's  prior
written consent,  no arrangement between the Company and such purchasers for the
purchase and conversion of any Securities shall increase or otherwise affect any
of the powers,  duties,  responsibilities  or  obligations of the Trustee as set
forth in this  Indenture,  and the Company agrees to indemnify the Trustee from,
and hold it harmless against,  any loss,  liability or expense arising out of or
in connection  with any such  arrangement for the purchase and conversion of any
Securities  between  the Company and such  purchasers,  including  the costs and
expenses  incurred  by the  Trustee  in the  defense  of any claim or  liability
arising out of or in connection  with the exercise or  performance of any of its
powers, duties, responsibilities or obligations under this Indenture.

     SECTION 3.08 Purchase of Securities at Option of the Holder.

     (a)  General.  Securities  shall be  purchased  by the Company  pursuant to
section 7(a) of the Securities at the option of the Holder thereof, upon:

          (1) delivery to the Paying Agent by the Holder of a written  notice of
     purchase (a "Purchase  Notice") at any time from the opening of business on
     the date that is at least 20 Business  Days prior to a Purchase  Date until
     the close of business on such Purchase Date stating:


                                       24
<PAGE>


               (A) the certificate  number of the Security which the Holder will
          deliver to be purchased,

               (B) the  portion  of the  Principal  Amount  at  Maturity  of the
          Security which the Holder will deliver to be purchased,  which portion
          must be a  Principal  Amount at  Maturity  of  $1,000  or an  integral
          multiple thereof,

               (C) that such Security shall be purchased as of the Purchase Date
          pursuant  to the terms and  conditions  specified  in section 7 of the
          Securities and in this Indenture, and

               (D) in the event the Company elects, pursuant to Section 3.08(b),
          to pay the  Purchase  Price to be paid as of such  Purchase  Date,  in
          whole or in part,  in shares of Common  Stock but such  portion of the
          Purchase Price shall  ultimately be payable to such Holder entirely in
          cash because any of the conditions to payment of the Purchase Price in
          Common Stock is not  satisfied  prior to the close of business on such
          Purchase  Date, as set forth in Section  3.08(d),  whether such Holder
          elects (i) to withdraw such  Purchase  Notice as to some or all of the
          Securities  to  which  such  Purchase  Notice  relates   (stating  the
          Principal Amount at Maturity and certificate numbers of the Securities
          as to which such withdrawal shall relate),  or (ii) to receive cash in
          respect of the entire  Purchase  Price for all Securities (or portions
          thereof) to which such Purchase Notice relates; and

          (2)  delivery  of such  Security  to the Paying  Agent prior to, on or
     after the Purchase Date (together with all necessary  endorsements)  at the
     offices of the Paying Agent,  such delivery being a condition to receipt by
     the Holder of the Purchase Price  therefor;  provided,  however,  that such
     Purchase  Price shall be so paid  pursuant to this Section 3.08 only if the
     Security so delivered to the Paying Agent shall  conform in all respects to
     the description  thereof in the related Purchase  Notice,  as determined by
     the Company.

     If a Holder,  in such Holder's Purchase Notice and in any written notice of
withdrawal delivered by such Holder pursuant to the terms of Section 3.10, fails
to indicate  such  Holder's  choice with  respect to the  election  set forth in
clause (D) of Section 3.08(a)(1), such Holder shall be deemed to have elected to
receive cash in respect of the Purchase Price for all Securities subject to such
Purchase Notice in the circumstances set forth in such clause (D).

     The  Company  shall  purchase  from the Holder  thereof,  pursuant  to this
Section  3.08,  a portion of a Security if the  Principal  Amount at Maturity of
such  portion is $1,000 or an integral  multiple of $1,000.  Provisions  of this
Indenture  that apply to the  purchase  of all of a  Security  also apply to the
purchase of such portion of such Security.

     Any purchase by the Company contemplated pursuant to the provisions of this
Section 3.08 shall be  consummated  by the delivery of the  consideration  to be
received by the Holder  (including  accrued and unpaid semiannual and contingent
interest, if any) promptly following the later of the Purchase Date and the time
of delivery of the Security.


                                       25
<PAGE>


     Notwithstanding  anything herein to the contrary,  any Holder delivering to
the Paying Agent the Purchase Notice  contemplated by this Section 3.08(a) shall
have the right to withdraw such  Purchase  Notice at any time prior to the close
of business on the Purchase  Date by delivery of a written  notice of withdrawal
to the Paying Agent in accordance with Section 3.10.

     The Paying Agent shall promptly  notify the Company of the receipt by it of
any Purchase Notice or written notice of withdrawal thereof.

     (b)  Company's  Right to Elect  Manner of Payment of  Purchase  Price.  The
Securities to be purchased  pursuant to Section  3.08(a) may be paid for, at the
election of the Company,  in U.S. legal tender  ("cash") or Common Stock,  or in
any combination of cash and Common Stock, subject to the conditions set forth in
Sections  3.08(c) and (d). The Company shall  designate,  in the Company  Notice
delivered  pursuant to Section  3.08(e),  whether the Company will  purchase the
Securities  for  cash  or  Common  Stock,  or,  if a  combination  thereof,  the
percentages  or amounts of the Purchase  Price of Securities in respect of which
it will pay in cash or Common Stock; provided that the Company will pay cash for
fractional  interests in Common Stock. For purposes of determining the existence
of potential  fractional  interests,  all Securities  subject to purchase by the
Company  held by a Holder  shall be  considered  together  (no  matter  how many
separate  certificates  are to be presented).  Each Holder whose  Securities are
purchased  pursuant to this Section 3.08 shall  receive the same  percentage  of
cash or Common  Stock in  payment  of the  Purchase  Price for such  Securities,
except (i) as provided in Section  3.08(d) with regard to the payment of cash in
lieu of fractional shares of Common Stock and (ii) in the event that the Company
is unable to purchase  the  Securities  of a Holder or Holders for Common  Stock
because any necessary  qualifications or registrations of the Common Stock under
applicable  state  securities laws cannot be obtained,  the Company may purchase
the  Securities  of such Holder or Holders for cash.  The Company may not change
its election with respect to the  consideration (or components or percentages of
components  thereof) to be paid once the Company has given its Company Notice to
Securityholders  except  pursuant to this Section 3.08(b) or pursuant to Section
3.08(d) in the event of a failure to satisfy,  prior to the close of business on
the Purchase Date, any condition to the payment of the Purchase  Price, in whole
or in part, in Common Stock.

     At least three  Business Days before the Company  Notice Date,  the Company
shall deliver an Officers' Certificate to the Trustee specifying:

     (i) the manner of payment selected by the Company,

     (ii) the information required by Section 3.08(e),

     (iii) if the  Company  elects to pay the  Purchase  Price,  or a  specified
     percentage  thereof, in Common Stock, that the conditions to such manner of
     payment set forth in Section  3.08(d)  have been or will be complied  with,
     and

     (iv)  whether  the Company  desires the Trustee to give the Company  Notice
     required by Section 3.08(e).


                                       26
<PAGE>


     (c)  Purchase  with  Cash.  On each  Purchase  Date,  at the  option of the
Company,  the Purchase Price of Securities in respect of which a Purchase Notice
pursuant to Section 3.08(a) has been given, or a specified  percentage  thereof,
may be paid by the Company with cash equal to the  aggregate  Purchase  Price of
such  Securities.  If the Company elects to purchase  Securities  with cash, the
Company Notice, as provided in Section 3.08(e), shall be sent to Holders (and to
beneficial  owners as required by applicable law) not less than 20 Business Days
prior to such Purchase Date (the "Company Notice Date").

     (d) Payment by Issuance of Common  Stock.  On each  Purchase  Date,  at the
option of the Company,  the Purchase  Price of  Securities in respect of which a
Purchase  Notice  pursuant to Section  3.08(a)  has been  given,  or a specified
percentage  thereof,  may be paid by the Company by the  issuance of a number of
shares of Common Stock equal to the quotient obtained by dividing (i) the amount
of cash to which the  Securityholders  would have been  entitled had the Company
elected  to pay all or such  specified  percentage,  as the case may be,  of the
Purchase Price of such Securities in cash by (ii) the Market Price of a share of
Common Stock, subject to the next succeeding paragraph.

     The Company will not issue a fractional share of Common Stock in payment of
the Purchase  Price.  Instead the Company  will pay cash for the current  market
value of the fractional share. The current market value of a fraction of a share
shall be  determined  by  multiplying  the  Market  Price by such  fraction  and
rounding  the product to the  nearest  whole cent.  It is  understood  that if a
Holder elects to have more than one Security purchased,  the number of shares of
Common  Stock  shall  be based  on the  aggregate  amount  of  Securities  to be
purchased.

     If the Company  elects to purchase the Securities by the issuance of shares
of Common Stock, the Company Notice,  as provided in Section  3.08(e),  shall be
sent to the Holders (and to beneficial owners as required by applicable law) not
later than the Company Notice Date.

     The  Company's  right to exercise its  election to purchase the  Securities
pursuant to Section 3.08 through the issuance of shares of Common Stock shall be
conditioned upon:

          (i) the Company's  not having given its Company  Notice of an election
     to pay entirely in cash and its giving of timely Company Notice of election
     to purchase all or a specified  percentage  of the  Securities  with Common
     Stock as provided herein;

          (ii) the shares of Common  Stock  having been  admitted for listing or
     admitted for listing subject to notice of issuance on the principal  United
     States securities  exchange on which the Common Stock is then listed or, if
     the Common  Stock is not then listed on a national  or regional  securities
     exchange,  as quoted on the  National  Association  of  Securities  Dealers
     Automated Quotation System;

          (iii) the  registration  of the shares of Common Stock to be issued in
     respect of the payment of the Purchase  Price under the  Securities  Act of
     1933, as amended (the "Securities Act"), or the Securities  Exchange Act of
     1934, as amended (the "Exchange Act"), in each case, if required;


                                       27
<PAGE>


          (iv) any necessary  qualification  or  registration  under  applicable
     state  securities  laws  or the  availability  of an  exemption  from  such
     qualification and registration; and

          (v) the  receipt by the  Trustee of an  Officers'  Certificate  and an
     Opinion of Counsel  each  stating that (A) the terms of the issuance of the
     Common Stock are in  conformity  with this  Indenture and (B) the shares of
     Common Stock to be issued by the Company in payment of the  Purchase  Price
     in respect of  Securities  have been duly  authorized  and, when issued and
     delivered  pursuant  to the  terms  of this  Indenture  in  payment  of the
     Purchase Price in respect of the Securities,  will be validly issued, fully
     paid and non-assessable and, to the best of such counsel's knowledge,  free
     from  preemptive  rights,  and, in the case of such Officers'  Certificate,
     stating that conditions  (i), (ii),  (iii) and (iv) above and the condition
     set forth in the second succeeding sentence have been satisfied and, in the
     case of such Opinion of Counsel,  stating that conditions  (ii),  (iii) and
     (iv) above have been satisfied.

     Such  Officers'  Certificate  shall  also set forth the number of shares of
Common  Stock to be issued  for each  $1,000  Principal  Amount at  Maturity  of
Securities  and the Sale Price of a share of Common  Stock on each  trading  day
during the period for which the Market Price is calculated.  The Company may pay
the  Purchase  Price  (or any  portion  thereof)  in  Common  Stock  only if the
information  necessary  to  calculate  the Market  Price is published in a daily
newspaper of national circulation. If the foregoing conditions are not satisfied
with  respect  to a Holder  or  Holders  prior to the close of  business  on the
Purchase Date and the Company has elected to purchase the Securities pursuant to
this Section 3.08  through the issuance of shares of Common  Stock,  the Company
shall pay the entire  Purchase Price of the Securities of such Holder or Holders
in cash.

     The "Market Price" means the average of the Sale Prices of the Common Stock
for the five  trading day period  ending on the third  Business Day prior to the
applicable  Purchase  Date (if the third  Business  Day prior to the  applicable
Purchase Date is a trading day, or if not, then on the last trading day prior to
such third  Business  Day),  appropriately  adjusted  to take into  account  the
occurrence,  during  the period  commencing  on the first of such  trading  days
during such five  trading day period and ending on such  Purchase  Date,  of any
event  described in Section  11.06,  11.07 or 11.08;  subject,  however,  to the
conditions set forth in Sections 11.09 and 11.10.

     The "Sale  Price" of the  Common  Stock on any date means the  closing  per
share sale price (or, if no closing sale price is  reported,  the average of the
bid and ask  prices  or, if more than one in either  case,  the  average  of the
average bid and  average  ask prices) on such date as reported in the  composite
transactions  for the principal United States  securities  exchange on which the
Common Stock is traded or, if the Common Stock is not listed on a United  States
national  or  regional  securities   exchange,   as  reported  by  the  National
Association of Securities Dealers Automated  Quotation System or by the National
Quotation Bureau Incorporated.

     (e) Notice of Election.  The Company's  notice of election to purchase with
cash or Common  Stock or any  combination  thereof  shall be sent to the Holders
(and to beneficial


                                       28
<PAGE>


owners as required by applicable law) in the manner provided in Section 13.02 at
the time  specified  in Section  3.08(c) or (d),  as  applicable  (the  "Company
Notice").  Such  Company  Notice  shall state the manner of payment  elected and
shall contain the following information:

     In the  event the  Company  has  elected  to pay the  Purchase  Price (or a
specified percentage thereof) with Common Stock, the Company Notice shall:

          (1) state that each Holder  will  receive  Common  Stock with a Market
     Price determined as of a specified date prior to the Purchase Date equal to
     such specified  percentage of the Purchase Price of the Securities  held by
     such  Holder  (except  any  cash  amount  to be paid in lieu of  fractional
     shares);

          (2) set forth the method of calculating the Market Price of the Common
     Stock; and

          (3) state  that because  the  Market  Price of  Common  Stock  will be
     determined  prior to the Purchase  Date,  Holders will bear the market risk
     with respect to the value of the Common Stock to be received  from the date
     such Market Price is determined to the Purchase Date.

     In any case, each Company Notice shall include a form of  PurchaseNotice to
be completed by a Securityholder and shall state:

          (i)  the Purchase Price, the Conversion Rate and, to the extent known
          at the time of such notice,  the amount of semiannual  and  contingent
          interest, if any, that will be accrued and payable with respect to the
          Securities as of the Purchase Date;

          (ii) the name and  address  of the  Paying  Agent  and the Conversion
          Agent;

          (iii) that Securities as to which a Purchase Notice has been given may
          be  converted  pursuant  to Article 11 hereof  only if the  applicable
          Purchase  Notice has been  withdrawn in  accordance  with the terms of
          this Indenture;

          (iv) that  Securities  must be  surrendered  to the  Paying  Agent  to
          collect  payment of the Purchase  Price and  semiannual and contingent
          interest, if any;

          (v)  that the Purchase  Price for any  Security as to which a Purchase
          Notice has been given and not  withdrawn,  together  with any  accrued
          semiannual and contingent interest payable with respect thereto,  will
          be paid promptly following the later of the Purchase Date and the time
          of surrender of such Security as described in (iv);

          (vi) the  procedures  the Holder must follow to exercise  rights under
          Section 3.08 and a brief description of those rights;

          (vii) briefly, the conversion rights of the Securities;


                                       29
<PAGE>


          (viii) the procedures for  withdrawing a Purchase  Notice  (including,
          without limitation, for a conditional withdrawal pursuant to the terms
          of Section 3.08(a)(1)(D) or Section 3.10);

          (ix)  that,   unless  the  Company   defaults  in  making  payment  of
          suchPurchase  Price and semiannual and  contingent  interest,  if any,
          Original  Issue  Discount  and  interest  (including   semiannual  and
          contingent interest),  if any, on Securities  surrendered for purchase
          will cease to accrue on and after the Purchase Date; and

          (x)the CUSIP number of the Securities.

     At the Company's request, the Trustee shall give such Company Notice in the
Company's name and at the Company's  expense;  provided,  however,  that, in all
cases, the text of such Company Notice shall be prepared by the Company.

     Upon  determination  of the actual  number of shares of Common  Stock to be
delivered  for each  $1,000  Principal  Amount at Maturity  of  Securities,  the
Company  will  issue a press  release  and  publish  such  determination  on the
Company's web site.

     (f)  Covenants of the Company.  All shares of Common Stock  delivered  upon
purchase of the  Securities  shall be newly  issued  shares or treasury  shares,
shall be duly authorized, validly issued, fully paid and nonassessable and shall
be free from preemptive  rights and free of any lien or adverse claim created by
or arising through the Company.

     (g) Procedure upon Purchase.  The Company shall deposit cash (in respect of
a cash purchase  under Section  3.08(c) or for  fractional  interests or for any
accrued and unpaid semiannual or contingent  interest,  as applicable) or shares
of Common Stock, or a combination thereof, as applicable, at the time and in the
manner as provided in Section 3.11,  sufficient  to pay the  aggregate  Purchase
Price of, and any accrued and unpaid  semiannual  and  contingent  interest with
respect to, all  Securities  to be purchased  pursuant to this Section  3.08. As
soon as  practicable  after the Purchase Date, the Company shall deliver to each
Holder  entitled to receive Common Stock through the Paying Agent, a certificate
for the  number of full  shares of  Common  Stock  issuable  in  payment  of the
Purchase Price and cash in lieu of any fractional interests. The person in whose
name the certificate for Common Stock is registered shall be treated as a holder
of record of shares of Common Stock on the Business Day  following  the Purchase
Date.  No payment or  adjustment  will be made for dividends on the Common Stock
the record date for which occurred on or prior to the Purchase Date.

     (h) Taxes.  If a Holder of a Security is paid in Common Stock,  the Company
shall pay any  documentary,  stamp or similar  issue or transfer tax due on such
issue of shares of Common  Stock.  However,  the  Holder  shall pay any such tax
which is due because the Holder requests the shares of Common Stock to be issued
in a name other than the Holder's  name.  The Paying Agent may refuse to deliver
the certificates representing the Common Stock being issued in a name other than
the Holder's  name until the Paying Agent  receives a sum  sufficient to pay any
tax which will be due because  the shares of Common  Stock are to be issued in a
name other than the Holder's name.  Nothing herein shall preclude any income tax
withholding required by law or regulations.


                                       30
<PAGE>


     SECTION 3.09  Purchase of Securities at Option of the Holder upon Change in
Control.

     (a) If on or prior to the date specified in section 7(b) of the Securities,
there shall have occurred a Change in Control,  Securities shall be purchased by
the Company,  at the option of the Holder thereof, at a purchase price specified
in section 7(b) of the Securities (the "Change in Control Purchase  Price"),  as
of the date that is no later than 35 Business  Days after the  occurrence of the
Change in  Control  but in no event  prior to the date on which  such  Change in
Control occurs (the "Change in Control Purchase Date"),  subject to satisfaction
by or on behalf of the Holder of the requirements set forth in Section 3.09(c).

     A "Change  in  Control"  shall be deemed to have  occurred  at such time as
either of the following events shall occur:

          (i) There shall be consummated  any share exchange,  consolidation  or
          merger of the  Company  pursuant  to which the Common  Stock  would be
          converted into cash,  securities or other property, in each case other
          than a share exchange, consolidation or merger of the Company in which
          the  holders  of the  Common  Stock  immediately  prior  to the  share
          exchange,  consolidation  or merger have,  directly or indirectly,  at
          least a majority of the total  voting  power in the  aggregate  of all
          classes of Capital Stock of the  continuing  or surviving  corporation
          immediately after the share exchange, consolidation or merger; or

          (ii) There is a report filed on Schedule  13D or TO (or any  successor
          schedule,  form or report)  pursuant to the Exchange  Act,  disclosing
          that any person (for the purposes of this  Section  3.09 only,  as the
          term "person" is used in Section  13(d)(3) or Section  14(d)(2) of the
          Exchange Act) or any such person's Affiliates or Associates has become
          the beneficial owner (as the term "beneficial  owner" is defined under
          Rule 13d-3 or any successor rule or regulation  promulgated  under the
          Exchange  Act) of 50% or more of the voting  power of the Common Stock
          then outstanding; provided, however, that a person shall not be deemed
          beneficial  owner  of,  or to own  beneficially,  (A)  any  securities
          tendered  pursuant to a tender or exchange  offer made by or on behalf
          of such person or any of such person's  Affiliates or Associates until
          such  tendered  securities  are  accepted  for  purchase  or  exchange
          thereunder,  or (B) any  securities if such  beneficial  ownership (1)
          arises solely as a result of a revocable  proxy  delivered in response
          to a proxy or consent  solicitation  made  pursuant to the  applicable
          rules and regulations under the Exchange Act, and (2) is not also then
          reportable  on  Schedule  13D (or any  successor  schedule)  under the
          Exchange Act.

     Notwithstanding the foregoing  provisions of this Section 3.09, a Change in
Control  shall not be  deemed to have  occurred  by virtue of the  Company,  any
Subsidiary, any employee stock ownership plan or any other employee benefit plan
of the Company or any  Subsidiary,  or any person  holding  Common  Stock for or
pursuant  to the terms of any such  employee  benefit  plan,  filing or becoming
obligated  to file a report  under or in response to Schedule 13D or Schedule TO
(or any successor  schedule,  form or report) under the Exchange Act  disclosing
beneficial  ownership by it of shares of Common Stock,  whether in excess of 50%


                                       31
<PAGE>


or otherwise. Further, for the avoidance of doubt, a Change in Control shall not
be deemed to have occurred by virtue  solely of Thomas H. Bailey  ceasing at any
time to have the  contractual  right to  nominate  a  majority  of the  board of
directors of Janus Capital Corporation.

     "Associate"  shall have the meaning  ascribed to such term in Rule 12b-2 of
the General  Rules and  Regulations  under the Exchange Act, as in effect on the
date hereof.

     (b) Within 15 Business  Days after the  occurrence  of a Change in Control,
the  Company  shall mail a written  notice of Change in Control by first-  class
mail to the Trustee and to each Holder (and to beneficial  owners as required by
applicable  law). The notice shall include a form of Change in Control  Purchase
Notice to be completed by the Securityholder and shall state:

          (1)  briefly,  the events  causing a Change in Control and the date of
          such Change in Control;

          (2) the date by which the Change in Control  Purchase  Notice pursuant
          to this Section 3.09 must be given;

          (3) the Change in Control Purchase Date;

          (4) the Change in Control  Purchase  Price and, to the extent known at
          the time of such  notice,  the  amount of  semiannual  and  contingent
          interest, if any, that will be accrued and payable with respect to the
          Securities as of the Change in Control Purchase Date;

          (5) the name and address of the Paying Agent and the Conversion Agent;

          (6) the Conversion Rate and any adjustments thereto;

          (7) that  Securities as to which a Change in Control  Purchase  Notice
          has been given may be converted  pursuant to Article 11 hereof only if
          the Change in Control Purchase Notice has been withdrawn in accordance
          with the terms of this Indenture;

          (8) that Securities must be surrendered to the Paying Agent to collect
          payment of the Change in Control  Purchase  Price and  semiannual  and
          contingent interest, if any;

          (9) that the Change in Control  Purchase  Price for any Security as to
          which a Change in Control  Purchase Notice has been duly given and not
          withdrawn,   together  with  any  accrued  semiannual  and  contingent
          interest payable with respect thereto, will be paid promptly following
          the  later of the  Change  in  Control  Purchase  Date and the time of
          surrender of such Security as described in (8);

          (10) briefly, the procedures the Holder must follow to exercise rights
          under this Section 3.09;


                                       32
<PAGE>


          (11) briefly, the conversion rights of the Securities;

          (12) the  procedures  for  withdrawing  a Change in  Control  Purchase
          Notice;

          (13)  that,  unless the  Company  defaults  in making  payment of such
          Change  in  Control  Purchase  Price  and  semiannual  and  contingent
          interest,  if any,  Original  Issue  Discount and interest  (including
          semiannual and contingent interest), if any, on Securities surrendered
          for  purchase  will cease to accrue on and after the Change in Control
          Purchase Date; and

          (14) the CUSIP number of the Securities.

     (c) A Holder may  exercise  its rights  specified  in Section  3.09(a) upon
delivery of a written notice of purchase (a "Change in Control Purchase Notice")
to the Paying  Agent at any time prior to the close of business on the Change in
Control Purchase Date, stating:

          (1) the  certificate  number of the  Security  which the  Holder  will
          deliver to be purchased;

          (2) the portion of the  Principal  Amount at Maturity of the  Security
          which the Holder will deliver to be  purchased,  which portion must be
          $1,000 or an integral multiple thereof; and

          (3) that such  Security  shall be purchased  pursuant to the terms and
          conditions specified in section 7 of the Securities.

     The delivery of such Security to the Paying Agent prior to, on or after the
Change in Control  Purchase Date (together with all necessary  endorsements)  at
the  offices of the Paying  Agent  shall be a  condition  to the  receipt by the
Holder of the Change in Control Purchase Price therefor; provided, however, that
such Change in Control  Purchase Price shall be so paid pursuant to this Section
3.09 only if the Security so delivered to the Paying Agent shall  conform in all
respects to the  description  thereof set forth in the related Change in Control
Purchase Notice.

     The  Company  shall  purchase  from the Holder  thereof,  pursuant  to this
Section  3.09,  a portion of a Security if the  Principal  Amount at Maturity of
such  portion is $1,000 or an integral  multiple of $1,000.  Provisions  of this
Indenture  that apply to the  purchase  of all of a  Security  also apply to the
purchase of such portion of such Security.

     Any purchase by the Company contemplated pursuant to the provisions of this
Section 3.09 shall be  consummated  by the delivery of the  consideration  to be
received  by the  Holder  (together  with  accrued  and  unpaid  semiannual  and
contingent  interest,  if any)  promptly  following  the later of the  Change in
Control  Purchase  Date and the time of delivery  of the  Security to the Paying
Agent in accordance with this Section 3.09.

     Notwithstanding  anything herein to the contrary,  any Holder delivering to
the Paying  Agent the Change in Control  Purchase  Notice  contemplated  by this
Section 3.09(c) shall have the right to withdraw such Change in Control Purchase
Notice  at any time  prior to the close


                                       33
<PAGE>


of  business  on the Change in Control  Purchase  Date by  delivery of a written
notice of withdrawal to the Paying Agent in accordance with Section 3.10.

     The Paying Agent shall promptly  notify the Company of the receipt by it of
any Change in Control Purchase Notice or written withdrawal thereof.

     The Company  shall not be required  to comply with this  Section  3.09 if a
third  party mails a written  notice of Change in Control in the manner,  at the
times and otherwise in  compliance  with this Section 3.09 and  repurchases  all
Securities for which a Change in Control  Purchase Notice shall be delivered and
not withdrawn.

     SECTION  3.10  Effect of  Purchase  Notice or  Change in  Control  Purchase
Notice.

     Upon  receipt  by the  Paying  Agent of the  Purchase  Notice  or Change in
Control  Purchase  Notice  specified in Section 3.08(a) or Section  3.09(c),  as
applicable,  the Holder of the Security in respect of which such Purchase Notice
or  Change in  Control  Purchase  Notice,  as the case may be,  was given  shall
(unless such Purchase  Notice or Change in Control  Purchase Notice is withdrawn
as specified in the following two paragraphs)  thereafter be entitled to receive
solely the Purchase Price or Change in Control  Purchase  Price, as the case may
be, and any accrued and unpaid semiannual and contingent interest,  with respect
to such Security.  Such Purchase  Price or Change in Control  Purchase Price and
semiannual  and  contingent  interest,  if any,  shall  be paid to such  Holder,
subject to receipt of funds  and/or  securities  by the Paying  Agent,  promptly
following the later of (x) the Purchase  Date or the Change in Control  Purchase
Date, as the case may be, with respect to such Security (provided the conditions
in Section 3.08(a) or Section 3.09(c),  as applicable,  have been satisfied) and
(y) the time of  delivery  of such  Security  to the Paying  Agent by the Holder
thereof  in the manner  required  by Section  3.08(a)  or  Section  3.09(c),  as
applicable.  Securities  in  respect  of which a  Purchase  Notice  or Change in
Control  Purchase  Notice,  as the case may be,  has  been  given by the  Holder
thereof may not be converted  pursuant to Article 11 hereof on or after the date
of the delivery of such Purchase Notice or Change in Control Purchase Notice, as
the case may be,  unless  such  Purchase  Notice or Change in  Control  Purchase
Notice, as the case may be, has first been validly withdrawn as specified in the
following two paragraphs.

     A Purchase Notice or Change in Control Purchase Notice, as the case may be,
may be withdrawn  by means of a written  notice of  withdrawal  delivered to the
office of the Paying Agent in accordance  with the Purchase  Notice or Change in
Control Purchase  Notice,  as the case may be, at any time prior to the close of
business on the Purchase  Date or the Change in Control  Purchase  Date,  as the
case may be, specifying:

     (1) the certificate  number of the Security in respect of which such notice
     of withdrawal is being submitted,

     (2) the Principal  Amount at Maturity of the Security with respect to which
     such notice of withdrawal is being submitted, and


                                       34
<PAGE>


     (3) the  Principal  Amount at  Maturity,  if any,  of such  Security  which
     remains  subject  to the  original  Purchase  Notice or  Change in  Control
     Purchase  Notice,  as the  case  may  be,  and  which  has  been or will be
     delivered for purchase by the Company.

     A written notice of withdrawal of a Purchase  Notice may be in the form set
forth in the  preceding  paragraph  or may be in the  form of (i) a  conditional
withdrawal  contained  in a  Purchase  Notice  pursuant  to the terms of Section
3.08(a)(1)(D)  or (ii) a conditional  withdrawal  containing the information set
forth in Section  3.08(a)(1)(D)  and the preceding  paragraph and contained in a
written  notice of withdrawal  delivered to the Paying Agent as set forth in the
preceding paragraph.

     There  shall be no  purchase of any  Securities  pursuant  to Section  3.08
(other than  through the  issuance  of Common  Stock in payment of the  Purchase
Price,  including  cash in lieu  of  fractional  shares)  or 3.09 if  there  has
occurred (prior to, on or after, as the case may be, the giving,  by the Holders
of such  Securities,  of the  required  Purchase  Notice or  Change  in  Control
Purchase  Notice,  as the case  may be) and is  continuing  an Event of  Default
(other than a default in the payment of the Purchase  Price or Change in Control
Purchase  Price,  as the case may be, and any accrued and unpaid  semiannual and
contingent  interest  with  respect to such  Securities).  The Paying Agent will
promptly  return to the  respective  Holders  thereof  any  Securities  (x) with
respect to which a Purchase Notice or Change in Control Purchase Notice,  as the
case may be, has been withdrawn in compliance with this  Indenture,  or (y) held
by it during the continuance of an Event of Default (other than a default in the
payment of the Purchase Price or Change in Control  Purchase  Price, as the case
may be, and any accrued  and unpaid  semiannual  and  contingent  interest  with
respect to such Securities) in which case, upon such return, the Purchase Notice
or Change in Control  Purchase  Notice with respect  thereto  shall be deemed to
have been withdrawn.

     SECTION 3.11 Deposit of Purchase Price or Change in Control Purchase Price.

     Prior to 10:00 a.m.  (local  time in The City of New York) on the  Business
Day following the Purchase Date or the Change in Control  Purchase  Date, as the
case may be, the Company shall deposit with the Trustee or with the Paying Agent
(or, if the Company or a Subsidiary  or an Affiliate of either of them is acting
as the Paying  Agent,  shall  segregate and hold in trust as provided in Section
2.04) an amount of money (in  immediately  available  funds if deposited on such
Business Day) or Common  Stock,  if permitted  hereunder,  sufficient to pay the
aggregate  Purchase Price or Change in Control  Purchase  Price, as the case may
be, of, and any accrued  and unpaid  semiannual  and  contingent  interest  with
respect to, all the Securities or portions  thereof which are to be purchased as
of the Purchase Date or Change in Control Purchase Date, as the case may be.

     SECTION 3.12 Securities Purchased in Part.

     Any Security  which is to be purchased only in part shall be surrendered at
the office of the Paying Agent (with, if the Company or the Trustee so requires,
due endorsement by, or a written  instrument of transfer in form satisfactory to
the  Company  and the  Trustee  duly


                                       35
<PAGE>


executed by, the Holder  thereof or such Holder's  attorney  duly  authorized in
writing) and the Company shall execute and the Trustee  shall  authenticate  and
deliver to the Holder of such Security,  without service charge,  a new Security
or  Securities,  of any authorized  denomination  as requested by such Holder in
aggregate  Principal  Amount at  Maturity  equal to, and in  exchange  for,  the
portion of the Principal Amount at Maturity of the Security so surrendered which
is not purchased.

     SECTION  3.13  Covenant to Comply  With  Securities  Laws Upon  Purchase of
Securities.

     In connection  with any offer to purchase or purchase of  Securities  under
Section 3.08 or 3.09 hereof (provided that such offer or purchase constitutes an
"issuer  tender  offer" for purposes of Rule 13e-4 (which term,  as used herein,
includes any successor  provision thereto) under the Exchange Act at the time of
such offer or purchase),  the Company shall to the extent  applicable (i) comply
with Rule 13e-4 and Rule 14e-1  under the  Exchange  Act,  (ii) file the related
Schedule TO (or any successor schedule,  form or report) under the Exchange Act,
and (iii) otherwise  comply with all Federal and state  securities laws so as to
permit the rights and  obligations  under Sections 3.08 and 3.09 to be exercised
in the time and in the manner specified in Sections 3.08 and 3.09.

     SECTION 3.14 Repayment to the Company.

     The  Trustee and the Paying  Agent shall  return to the Company any cash or
shares of Common  Stock that remain  unclaimed  as provided in section 15 of the
Securities, together with interest or dividends, if any, thereon (subject to the
provisions  of Section  7.01(f)),  held by them for the payment of the  Purchase
Price or Change in Control Purchase Price, as the case may be, or semiannual and
contingent  interest,  if any;  provided,  however,  that to the extent that the
aggregate  amount of cash or shares of Common  Stock  deposited  by the  Company
pursuant to Section  3.11  exceeds  the  aggregate  Purchase  Price or Change in
Control  Purchase  Price,  as the case may be,  of, and the  accrued  and unpaid
semiannual and contingent  interest,  if any, with respect to, the Securities or
portions  thereof  which the Company is obligated to purchase as of the Purchase
Date or Change in Control Purchase Date, as the case may be, whether as a result
of withdrawal or otherwise,  then promptly  after the Business Day following the
Purchase  Date or Change  in  Control  Purchase  Date,  as the case may be,  the
Trustee  shall return any such excess to the Company  together  with interest or
dividends, if any, thereon (subject to the provisions of Section 7.01(f)).


                                    ARTICLE 4

                                    COVENANTS

     SECTION 4.01 Payment of Securities.

     The Company shall  promptly make all payments in respect of the  Securities
on the dates and in the manner  provided in the  Securities  or pursuant to this
Indenture.  Any  amounts to be given to the  Trustee or Paying  Agent,  shall be
deposited with the Trustee or Paying Agent by 10:00 a.m., New York City time, by
the Company.  Principal Amount at


                                       36
<PAGE>


Maturity,  Restated  Principal  Amount,  Issue Price plus accrued Original Issue
Discount,  Redemption Price,  Purchase Price,  Change in Control Purchase Price,
semiannual and  contingent  interest,  if any,  shall be considered  paid on the
applicable  date due if on such date  (or,  in the case of a  Purchase  Price or
Change in Control  Purchase  Price, on the Business Day following the applicable
Purchase  Date or  Change  in  Control  Purchase  Date,  as the case may be) the
Trustee or the Paying Agent holds, in accordance  with this Indenture,  money or
securities, if permitted hereunder, sufficient to pay all such amounts then due.

     The Company shall, to the extent  permitted by law, pay interest on overdue
amounts  at the  rate  per  annum  set  forth in  section  1 of the  Securities,
compounded semiannually,  which interest shall accrue from the date such overdue
amount was originally due to the date payment of such amount, including interest
thereon,  has been made or duly provided for. All such interest shall be payable
on demand.

     SECTION 4.02 SEC and Other Reports.

     The Company shall file with the Trustee, within 15 days after it files such
annual and quarterly reports, information,  documents and other reports with the
SEC,  copies of its annual  report and of the  information,  documents and other
reports (or copies of such  portions of any of the  foregoing  as the SEC may by
rules and regulations  prescribe) which the Company is required to file with the
SEC  pursuant  to  Section  13 or 15(d) of the  Exchange  Act.  In the event the
Company  is at any time no  longer  subject  to the  reporting  requirements  of
Section 13 or 15(d) of the  Exchange  Act,  it shall  continue  to  provide  the
Trustee with reports containing substantially the same information as would have
been  required to be filed with the SEC had the Company  continued  to have been
subject to such  reporting  requirements.  In such event,  such reports shall be
provided at the times the Company  would have been  required to provide  reports
had it  continued  to have been  subject  to such  reporting  requirements.  The
Company  also shall  comply with the other  provisions  of TIA  Section  314(a).
Delivery  of such  reports,  information  and  documents  to the  Trustee is for
informational  purposes  only and the  Trustee's  receipt  of the same shall not
constitute   constructive  notice  of  any  information   contained  therein  or
determinable  from  information  contained  therein,   including  the  Company's
compliance  with any of its  covenants  hereunder  (as to which the  Trustee  is
entitled to rely exclusively on Officers' Certificates).

     SECTION 4.03 Compliance Certificate.

     The Company shall  deliver to the Trustee  within 120 days after the end of
each  fiscal  year of the  Company  (beginning  with the fiscal  year  ending on
December 31, 2001) an Officers' Certificate,  stating whether or not to the best
knowledge  of the signers  thereof the Company is in default in the  performance
and observance of any of the terms,  provisions and conditions of this Indenture
(without  regard  to any  period  of grace or  requirement  of  notice  provided
hereunder) and if the Company shall be in default,  specifying all such defaults
and the nature and status thereof of which they may have knowledge.

                                       37
<PAGE>


     SECTION 4.04 Further Instruments and Acts.

     Upon  request of the  Trustee,  the Company  will  execute and deliver such
further  instruments and do such further acts as may be reasonably  necessary or
proper to carry out more effectively the purposes of this Indenture.

     SECTION 4.05 Maintenance of Office or Agency.

     The Company  will  maintain in the  Borough of  Manhattan,  The City of New
York, an office or agency of the Trustee, Registrar, Paying Agent and Conversion
Agent where  Securities  may be presented  or  surrendered  for  payment,  where
Securities may be surrendered for registration of transfer,  exchange, purchase,
redemption or conversion and where notices and demands to or upon the Company in
respect of the Securities  and this  Indenture may be served.  The office of The
Chase  Manhattan  Bank,  located at 450 West 33rd  Street,  New York,  NY, 10001
(Attention:  Institutional  Trust  Services)  shall  initially be such office or
agency for all of the aforesaid purposes.  The Company shall give prompt written
notice to the Trustee of the location, and of any change in the location, of any
such office or agency  (other than a change in the location of the office of the
Trustee).  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
address of the Trustee set forth in Section 13.02.

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

     SECTION 4.06 Delivery of Certain Information.

     At any time when the  Company is not  subject to Section 13 or 15(d) of the
Exchange  Act,  upon  the  request  of a  Holder  or any  beneficial  holder  of
Securities or shares of Common Stock,  which are  restricted  securities  issued
upon  conversion  thereof,  the  Company  will  promptly  furnish or cause to be
furnished  Rule  144A  Information  (as  defined  below)  to such  Holder or any
beneficial  holder of Securities or holder of shares of Common Stock issued upon
conversion of  Securities,  or to a  prospective  purchaser of any such security
designated  by any such  holder,  as the case may be, to the extent  required to
permit  compliance by such Holder or holder with Rule 144A under the  Securities
Act in connection with the resale of any such security.  "Rule 144A Information"
shall be such information as is specified  pursuant to Rule 144A(d)(4) under the
Securities Act.

     SECTION 4.07 Calculation of Original Issue Discount.

     The Company agrees,  and each Holder and any beneficial owner of a Security
by its purchase  thereof shall be deemed to agree,  to treat,  for United States
federal income tax purposes, the Securities as debt instruments that are subject
to Section 1.1275-4(b) of the treasury regulations promulgated by the Department
of Treasury  pursuant to the  Internal

                                       38
<PAGE>


Revenue Code of 1986, as amended (the "Treasury Regulations"). For United States
federal income tax purposes,  the Company shall accrue  interest with respect to
outstanding   Securities   as  original   issue   discount   according   to  the
"noncontingent  bond method," set forth in section  1.1275-4(b)  of the Treasury
Regulations,  using the comparable  yield set forth in Annex C to this Indenture
compounded  semiannually and the projected  payment schedule attached as Annex C
to this Indenture.  The Company shall file with the Trustee  promptly at the end
of each calendar  year (i) a written  notice  specifying  the amount of original
issue discount for United States federal  income tax purposes  (including  daily
rates and accrual  periods)  accrued on outstanding  Securities as of the end of
such year and (ii) such other  specific  information  relating to such  original
issue discount as may then be relevant under the Internal  Revenue Code of 1986,
as amended from time to time,  including the amount of any adjustment made under
the  noncontingent  bond  method to  account  for the  amount of any  difference
between the amount of an actual payment and the amount of a projected payment.

     The Company  acknowledges  and agrees,  and each Holder and any  beneficial
holder of a Security by its purchase  thereof shall be deemed to acknowledge and
agree,  that (i) the  comparable  yield means the annual yield the Company would
pay, as of the Issue Date, on a fixed-rate  nonconvertible debt security with no
contingent payments, but with terms and conditions otherwise comparable to those
of the LYONs, (ii) the schedule of projected payments is determined on the basis
of an  assumption  of linear  growth of the stock price and a constant  dividend
yield and is not determined for any purpose other than for the  determination of
interest  accruals  and  adjustments  thereof in respect of the  Securities  for
United States federal income tax purposes and (iii) the comparable yield and the
schedule of projected  payments do not constitute a projection or representation
regarding the amounts payable on the Securities.

     SECTION 4.08 Rating.

     The Company will use its best reasonable  efforts to obtain a credit rating
on the Securities from Moody's Investors Service, Inc. or from Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc.

                                    ARTICLE 5

                              SUCCESSOR CORPORATION

     SECTION 5.01 When Company May Merge or Transfer Assets.

     The  Company  shall not  consolidate  with or merge  with or into any other
person or convey,  transfer or lease all or substantially  all of its properties
and assets to any person, unless:

     (a) either (1) the Company shall be the  continuing  corporation or (2) the
person (if other than the Company)  formed by such  consolidation  or into which
the Company is merged or the person which  acquires by  conveyance,  transfer or
lease the properties and assets of the Company  substantially as an entirety (i)
shall be organized and validly  existing  under the laws of the United States or
any State thereof or the District of Columbia and (ii) shall  expressly  assume,
by an indenture  supplemental hereto,  executed and delivered to the Trustee, in
form

                                       39
<PAGE>


satisfactory  to the Trustee,  all of the  obligations  of the Company under the
Securities and this Indenture;

     (b) immediately after giving effect to such  transaction,  no Default shall
have occurred and be continuing; and

     (c)  the  Company  shall  have   delivered  to  the  Trustee  an  Officers'
Certificate  and an Opinion of Counsel,  each stating  that such  consolidation,
merger,  conveyance,  transfer  or lease and,  if a  supplemental  indenture  is
required in  connection  with such  transaction,  such  supplemental  indenture,
comply with this Article 5 and that all conditions precedent herein provided for
relating to such transaction have been satisfied.

     For purposes of the foregoing, the transfer (by lease, assignment,  sale or
otherwise) of the properties and assets of one or more Subsidiaries  (other than
to the Company or another  Subsidiary),  which, if such assets were owned by the
Company,  would constitute all or substantially all of the properties and assets
of the Company,  shall be deemed to be the transfer of all or substantially  all
of the properties and assets of the Company.

     The successor person formed by such consolidation or into which the Company
is merged or the successor person to which such conveyance, transfer or lease is
made shall succeed to, and be substituted  for, and may exercise every right and
power of, the  Company  under  this  Indenture  with the same  effect as if such
successor had been named as the Company herein;  and  thereafter,  except in the
case of a lease and any  obligations  the Company may have under a  supplemental
indenture  pursuant to Section 11.14,  the Company shall be discharged  from all
obligations and covenants  under this Indenture and the  Securities.  Subject to
Section 9.06, the Company, the Trustee and the successor person shall enter into
a supplemental  indenture to evidence the succession  and  substitution  of such
successor person and such discharge and release of the Company.

                                    ARTICLE 6

                              DEFAULTS AND REMEDIES

     SECTION 6.01 Events of Default.

An "Event of Default" occurs if:

     (1) the Company  defaults in payment of any  contingent  interest or of any
     semiannual  interest  which  becomes  payable  pursuant  to  Section  10.01
     following  the  occurrence of a Tax Event or pursuant to Section 10.02 as a
     result of the Company's failure to obtain a Required Rating, which default,
     in any case, continues for 30 days;

     (2) the Company defaults in the payment of the Principal Amount at Maturity
     (or, if the  Securities  have been  converted  to  semiannual  coupon notes
     following  a Tax Event  pursuant  to  Article  10, the  Restated  Principal
     Amount),  Issue Price plus  accrued  Original  Issue  Discount,  Redemption
     Price,  Purchase Price or


                                       40
<PAGE>


     Change in Control  Purchase Price on any Security when the same becomes due
     and payable at its Stated Maturity, upon redemption, upon declaration, when
     due for purchase by the Company or otherwise;

     (3)  the  Company  fails  to  comply  with  any  of its  agreements  in the
     Securities or this  Indenture  (other than those referred to in clauses (1)
     and (2) above) and such failure  continues for 60 days after receipt by the
     Company of a Notice of Default;

     (4) (a) the Company fails to make any payment by the end of any  applicable
     grace period after  maturity of Debt in an amount in excess of  $10,000,000
     and  continuance  of such  failure,  or (b) the  acceleration  of Debt  has
     occurred in an amount in excess of  $10,000,000  because of a default  with
     respect to such Debt  without  such Debt  having  been  discharged  or such
     acceleration having been cured, waived,  rescinded or annulled, in the case
     of (a) or (b) above,  for a period of 30 days after  receipt by the Company
     of a Notice of  Default;  provided,  however,  that if any such  failure or
     acceleration  referred  to in (a) or (b)  above  shall  cease or be  cured,
     waived,  rescinded or annulled, then the Event of Default by reason thereof
     shall be deemed not to have occurred; or

     (5) the  Company  or any  Significant  Subsidiary  pursuant  to or under or
     within the meaning of any Bankruptcy Law:

          (A) commences a voluntary case or proceeding;

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

          (C)  consents  to the  appointment  of a  Custodian  of it or for  any
          substantial part of its property;

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

          (E) files a  petition  in  bankruptcy  or answer  or  consent  seeking
          reorganization or relief; or

          (F) consents to the filing of such petition or the  appointment  of or
          taking possession by a Custodian; or

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

          (A) is for relief against the Company or any Significant Subsidiary in
          an involuntary  case or proceeding,  or adjudicates the Company or any
          Significant Subsidiary insolvent or bankrupt;


                                       41
<PAGE>


          (B) appoints a Custodian of the Company or any Significant  Subsidiary
          or for any substantial part of its property; or

          (C)  orders  the  winding  up or  liquidation  of the  Company  or any
          Significant Subsidiary;

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

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

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

     A Default  under  clause (3) or clause (4) above is not an Event of Default
until the  Trustee  notifies  the  Company,  or the  Holders  of at least 25% in
aggregate Principal Amount at Maturity of the Securities at the time outstanding
notify the Company and the Trustee, of the Default and the Company does not cure
such  Default  (and such  Default is not waived)  within the time  specified  in
clause (3) or clause (4) above after  actual  receipt of such  notice.  Any such
notice must specify the Default,  demand that it be remedied and state that such
notice is a "Notice of Default".

     The Company shall  deliver to the Trustee,  within 30 days after it becomes
aware of the  occurrence  thereof,  written  notice of any event  which with the
giving of notice or the lapse of time, or both, would become an Event of Default
under clause (3) or clause (4) above,  its status and what action the Company is
taking or proposes to take with respect thereto.

     SECTION 6.02 Acceleration.

     If an Event of Default (other than an Event of Default specified in Section
6.01(5) or (6) in respect of the Company) occurs and is continuing,  the Trustee
by Notice to the Company,  or the Holders of at least 25% in aggregate Principal
Amount at Maturity of the  Securities at the time  outstanding  by notice to the
Company and the Trustee, may declare the Issue Price plus accrued Original Issue
Discount  through the date of  declaration,  and any accrued and unpaid interest
(including  semiannual  and  contingent  interest)  through  the  date  of  such
declaration,  on all the Securities to be immediately due and payable. Upon such
a declaration,  such Issue Price plus accrued Original Issue Discount,  and such
accrued and unpaid interest (including semiannual and contingent  interest),  if
any, shall be due and payable  immediately.  If an Event of Default specified in
Section  6.01(5) or (6) in respect of the Company occurs and is continuing,  the
Issue  Price plus  accrued  Original  Issue  Discount  plus  accrued  and unpaid
interest  (including  semiannual  and contingent  interest),  if any, on all the
Securities  shall  become  and  be  immediately  due  and  payable  without  any
declaration or other act on the part of the Trustee or any Securityholders.  The
Holders  of a  majority  in  aggregate  Principal  Amount  at  Maturity  of  the
Securities at the time outstanding, by notice to the Trustee (and without notice
to any other Securityholder) may rescind an acceleration and its consequences if
the  rescission  would not  conflict  with any  judgment  or  decree  and if all
existing  Events of Default have been cured or waived  except  nonpayment of the
Issue  Price plus  accrued  Original  Issue  Discount  plus  accrued


                                       42
<PAGE>


and unpaid interest that have become due solely as a result of acceleration  and
if all amounts due to the Trustee  under  Section  7.07 have been paid.  No such
rescission  shall affect any subsequent  Default or impair any right  consequent
thereto.

     SECTION 6.03 Other Remedies.

     If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of the Issue Price plus accrued Original
Issue  Discount  plus any  accrued  and unpaid  interest  (including  semiannual
interest and contingent  interest),  if any, on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.

     The Trustee may maintain a proceeding  even if the Trustee does not possess
any of the  Securities  or  does  not  produce  any  of  the  Securities  in the
proceeding.  A  delay  or  omission  by the  Trustee  or any  Securityholder  in
exercising  any  right or remedy  accruing  upon an Event of  Default  shall not
impair the right or remedy or  constitute a waiver of, or  acquiescence  in, the
Event of Default.  No remedy is exclusive  of any other  remedy.  All  available
remedies are cumulative.

     SECTION 6.04 Waiver of Past Defaults.

     Subject to Section 6.02,  the Holders of a majority in aggregate  Principal
Amount at Maturity of the Securities at the time  outstanding,  by notice to the
Trustee (and without notice to any other Securityholder),  may waive an existing
Default and its consequences except (1) an Event of Default described in Section
6.01(1) or (2), (2) a Default in respect of a provision  that under Section 9.02
cannot be amended without the consent of each  Securityholder  affected or (3) a
Default which  constitutes a failure to convert any Security in accordance  with
the terms of Article 11. When a Default is waived,  it is deemed  cured,  but no
such  waiver  shall  extend to any  subsequent  or other  Default  or impair any
consequent  right.  This Section 6.04 shall be in lieu of Section  316(a)1(B) of
the TIA and such  Section  316(a)1(B)  is hereby  expressly  excluded  from this
Indenture, as permitted by the TIA.

     SECTION 6.05 Control by Majority.

     The Holders of a majority in aggregate  Principal Amount at Maturity of the
Securities  at the time  outstanding  may direct  the time,  method and place of
conducting  any  proceeding  for  any  remedy  available  to the  Trustee  or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or that
the  Trustee  determines  in good faith is unduly  prejudicial  to the rights of
other  Securityholders or would involve the Trustee in personal liability unless
the Trustee is offered indemnity  satisfactory to it. This Section 6.05 shall be
in lieu of Section  316(a)1(A) of the TIA and such Section  316(a)1(A) is hereby
expressly excluded from this Indenture, as permitted by the TIA.

     SECTION 6.06 Limitation on Suits.

     A  Securityholder  may not pursue any remedy with respect to this Indenture
or the Securities unless:

                                       43
<PAGE>


     (1) the Holder gives to the Trustee written notice stating that an Event of
     Default is continuing;

     (2) the Holders of at least 25% in aggregate  Principal  Amount at Maturity
     of the  Securities at the time  outstanding  make a written  request to the
     Trustee to pursue the remedy;

     (3) such  Holder or Holders  offer to the  Trustee  security  or  indemnity
     satisfactory to the Trustee against any loss, liability or expense;

     (4) the  Trustee  does not  comply  with the  request  within 60 days after
     receipt of such notice, request and offer of security or indemnity; and

     (5) the Holders of a majority in aggregate  Principal Amount at Maturity of
     the Securities at the time  outstanding do not give the Trustee a direction
     inconsistent with the request during such 60-day period.

     A Securityholder  may not use this Indenture to prejudice the rights of any
other  Securityholder  or to  obtain a  preference  or  priority  over any other
Securityholder.

     SECTION 6.07 Rights of Holders to Receive Payment.

     Notwithstanding  any other  provision of this  Indenture,  the right of any
Holder  to  receive  payment  of the  Principal  Amount at  Maturity  (or if the
Securities have been converted to semiannual  coupon notes following a Tax Event
pursuant to Article 10, the Restated Principal Amount), Issue Price plus accrued
Original Issue Discount,  Redemption  Price,  Purchase Price,  Change in Control
Purchase  Price  as the case  may be,  and  contingent  interest  or  semiannual
interest,  if any, in respect of the Securities held by such Holder, on or after
the respective due dates expressed in the Securities or any Redemption Date, and
to convert the  Securities in  accordance  with Article 11, or to bring suit for
the  enforcement  of any such payment on or after such  respective  dates or the
right to  convert,  shall not be  impaired  or  affected  adversely  without the
consent of such Holder.

     SECTION 6.08 Collection Suit by Trustee.

     If an Event of Default  described  in Section  6.01(1) or (2) occurs and is
continuing,  the Trustee may recover  judgment in its own name and as trustee of
an express  trust against the Company for the whole amount owing with respect to
the Securities and the amounts provided for in Section 7.07.

     SECTION 6.09 Trustee May File Proofs of Claim.

     In case  of the  pendency  of any  receivership,  insolvency,  liquidation,
bankruptcy,  reorganization,   arrangement,  adjustment,  composition  or  other
judicial  proceeding  relative  to the  Company  or any other  obligor  upon the
Securities  or the  property  of the  Company or of such other  obligor or their
creditors,  the  Trustee  (irrespective  of  whether  the  Principal  Amount  at
Maturity,  Issue Price plus accrued Original Issue Discount,  Redemption  Price,
Purchase  Price,  Change  in  Control  Purchase  Price as the  case may be,  and
contingent interest or semiannual


                                       44
<PAGE>


interest,  if any, in respect of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee  shall have made any demand on the  Company  for the payment of any such
amount) shall be entitled and empowered,  by  intervention in such proceeding or
otherwise,

     (a) to file and prove a claim for the whole amount of the Principal  Amount
     at Maturity,  Issue Price plus accrued Original Issue Discount,  Redemption
     Price, Purchase Price, Change in Control Purchase Price as the case may be,
     and contingent  interest or semiannual  interest,  if any, and to file such
     other papers or documents as may be necessary or advisable in order to have
     the  claims  of  the  Trustee  (including  any  claim  for  the  reasonable
     compensation,  expenses,  disbursements  and advances of the  Trustee,  its
     agents and counsel or any other amounts due the Trustee under Section 7.07)
     and of the Holders allowed in such judicial proceeding, and

     (b) to  collect  and  receive  any  moneys  or other  property  payable  or
     deliverable on any such claims and to distribute the same;

     and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
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 the
Trustee  any  amount  due  it  for  the   reasonable   compensation,   expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07.

     Nothing  herein  contained  shall be deemed to  authorize  the  Trustee  to
authorize  or  consent to or accept or adopt on behalf of any Holder any plan of
reorganization,  arrangement, adjustment or composition affecting the 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.

     SECTION 6.10 Priorities.

     If the Trustee  collects any money pursuant to this Article 6, it shall pay
out the money in the following order:

     FIRST: to the Trustee for amounts due under Section 7.07;

     SECOND: to Securityholders for amounts due and unpaid on the Securities for
the  Principal  Amount at  Maturity,  Issue Price plus  accrued  Original  Issue
Discount, Redemption Price, Purchase Price, Change in Control Purchase Price, as
the case  may be,  and  contingent  interest  or  semiannual  interest,  if any,
ratably,  without preference or priority of any kind,  according to such amounts
due and payable on the Securities; and

     THIRD: the balance, if any, to the Company.

     The  Trustee  may fix a record  date and  payment  date for any  payment to
Securityholders  pursuant  to this  Section  6.10.  At least 15 days before such
record date,


                                       45
<PAGE>


the  Trustee  shall mail to each  Securityholder  and the  Company a notice that
states the record date, the payment date and the amount to be paid.

     SECTION 6.11 Undertaking for Costs.

     In any suit for the enforcement of any right or remedy under this Indenture
or in any suit  against  the  Trustee  for any action  taken or omitted by it as
Trustee,  a court in its discretion may require the filing by any party litigant
(other than the Trustee) in the suit of an  undertaking  to pay the costs of the
suit,  and the court in its discretion may assess  reasonable  costs,  including
reasonable attorneys' fees and expenses, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a
suit by a Holder  pursuant to Section 6.07 or a suit by Holders of more than 10%
in  aggregate  Principal  Amount  at  Maturity  of the  Securities  at the  time
outstanding. This Section 6.11 shall be in lieu of Section 315(e) of the TIA and
such  Section  315(e) is hereby  expressly  excluded  from  this  Indenture,  as
permitted by the TIA.

     SECTION 6.12 Waiver of Stay, Extension or Usury Laws.

     The Company  covenants  (to the extent that it may  lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the  benefit or  advantage  of, any stay or  extension  law or any usury or
other law wherever enacted,  now or at any time hereafter in force,  which would
prohibit or forgive the Company from paying all or any portion of the  Principal
Amount at Maturity, Issue Price plus accrued Original Issue Discount, Redemption
Price, Purchase Price, Change in Control Purchase Price, as the case may be, and
contingent interest or semiannual interest, if any, in respect of Securities, or
any interest on such amounts,  as contemplated  herein,  or 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 7

                                     TRUSTEE

     SECTION 7.01 Duties of Trustee.

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

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

     (1) the Trustee need perform  only those duties that are  specifically  set
     forth in this Indenture and no others; and


                                       46
<PAGE>


     (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,  but in case of any
     such   certificates   or  opinions  which  by  any  provision   hereof  are
     specifically  required to be furnished to the  Trustee,  the Trustee  shall
     examine the  certificates  and  opinions to  determine  whether or not they
     conform to the  requirements  of this  Indenture,  but need not  confirm or
     investigate the accuracy of mathematical calculations or other facts stated
     therein.

     This Section 7.01(b) shall be in lieu of Section 315(a) of the TIA and such
Section 315(a) is hereby expressly excluded from this Indenture, as permitted by
the TIA.

     (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  (c) does not limit the effect of paragraph (b) of this
     Section 7.01;

     (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; and

     (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 6.05.

     Subparagraphs  (c)(1), (2) and (3) shall be in lieu of Sections  315(d)(1),
315(d)(2) and 315(d)(3) of the TIA and such  Sections  315(d)(1),  315(d)(2) and
315(d)(3) are hereby expressly excluded from this Indenture, as permitted by the
TIA.

     (d)  Every  provision  of this  Indenture  that in any way  relates  to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.01.

     (e) The Trustee  may refuse to perform  any duty or  exercise  any right or
power or extend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity  satisfactory to it against any loss,  liability or
expense.

     (f) Money held by the  Trustee in trust  hereunder  need not be  segregated
from other funds except to the extent  required by law.  The Trustee  (acting in
any capacity  hereunder)  shall be under no liability  for interest on any money
received by it hereunder unless otherwise agreed in writing with the Company.

     SECTION 7.02 Rights of Trustee.

     Subject to its duties and responsibilities  under the provisions of Section
7.01,  and,  except as expressly  excluded from this Indenture  pursuant to said
Section 7.01, under the TIA,


                                       47
<PAGE>


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

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

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

     (d) the  Trustee  shall not be liable for any action  taken,  suffered,  or
omitted to be taken by it in good faith which it believes  to be  authorized  or
within its rights or powers conferred under this Indenture;

     (e) the Trustee may consult with  counsel  selected by it and any advice or
Opinion of Counsel shall be full and complete  authorization  and  protection in
respect of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or Opinion of Counsel;

     (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 security or indemnity  satisfactory to
it against the costs,  expenses and liabilities which may be incurred therein or
thereby;

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

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

     (i) the Trustee  shall not be deemed to have notice of any Default or Event
of Default  unless a  Responsible  Officer of the Trustee  has actual  knowledge
thereof or unless


                                       48
<PAGE>


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;

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

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

     SECTION 7.03 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 or its Affiliates
with the same  rights it would have if it were not  Trustee.  Any Paying  Agent,
Registrar,  Conversion  Agent or co-registrar  may do the same with like rights.
However, the Trustee must comply with Sections 7.10 and 7.11.

     SECTION 7.04 Trustee's Disclaimer.

     The Trustee makes no  representation as to the validity or adequacy of this
Indenture or the  Securities,  it shall not be accountable for the Company's use
or application of the proceeds from the Securities,  it shall not be responsible
for any statement in the  registration  statement for the  Securities  under the
Securities Act or in the Indenture or the Securities (other than its certificate
of  authentication),  or the  determination  as to which  beneficial  owners are
entitled to receive any notices hereunder.

     SECTION 7.05 Notice of Defaults.

     If a Default  occurs and if it is known to the Trustee,  the Trustee  shall
give to each Securityholder notice of the Default within 90 days after it occurs
unless such  Default  shall have been cured or waived  before the giving of such
notice. Except in the case of a Default described in Section 6.01(1) or (2), the
Trustee may withhold the notice if and so long as a committee of its Responsible
Officers  in  good  faith  determines  that  withholding  the  notice  is in the
interests of Securityholders.  The second sentence of this Section 7.05 shall be
in lieu of the proviso to Section  315(b) of the TIA and such  proviso is hereby
expressly excluded from this Indenture, as permitted by the TIA.

     SECTION 7.06 Reports by Trustee to Holders.

     Within 60 days after each May 15 beginning  with the May 15  following  the
date of this Indenture,  the Trustee shall mail to each  Securityholder  a brief
report  dated  as of such


                                       49
<PAGE>


May 15 that  complies  with TIA Section  313(a),  if  required  by such  Section
313(a). The Trustee also shall comply with TIA Section 313(b).

     A copy of each report at the time of its mailing to  Securityholders  shall
be  filed  with the SEC and  each  securities  exchange,  if any,  on which  the
Securities  are  listed.  The  Company  agrees to  promptly  notify the  Trustee
whenever the  Securities  become  listed on any  securities  exchange and of any
delisting thereof.

     SECTION 7.07 Compensation and Indemnity.

     The Company agrees:

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

     (b) to reimburse the Trustee upon its request for all reasonable  expenses,
     disbursements  and advances  incurred or made by the Trustee in  accordance
     with any provision of this Indenture (including the reasonable compensation
     and the expenses,  advances and  disbursements  of its agents and counsel),
     except any such expense,  disbursement or advance as may be attributable to
     its negligence or bad faith; and

     (c) to indemnify  the Trustee or any  predecessor  Trustee and their agents
     for, and to hold them harmless against, any loss, damage, claim, liability,
     cost or expense (including reasonable attorney's fees and taxes (other than
     taxes based upon,  measured by or determined by the income of the Trustee))
     incurred without  negligence or bad faith on its part, arising out of or in
     connection with the acceptance or administration  of this trust,  including
     the  reasonable  costs and expenses of defending  itself  against any claim
     (whether  asserted  by the  Company or any  Holder or any other  Person) or
     liability  in  connection  with the exercise or  performance  of any of its
     powers or duties hereunder.

     To secure the Company's payment  obligations in this Section 7.07,  Holders
shall  have  been  deemed to have  granted  to the  Trustee a lien  prior to the
Securities  on all money or property  held or collected  by the Trustee,  except
that held in trust to pay the  Principal  Amount at  Maturity,  Issue Price plus
accrued Original Issue Discount,  Redemption  Price,  Purchase Price,  Change in
Control Purchase Price, contingent interest or interest, if any, as the case may
be, on particular Securities.

     The  Company's  payment  obligations  pursuant to this  Section  7.07 shall
survive the discharge of this  Indenture and the  resignation  or removal of the
Trustee.  When the Trustee  incurs  expenses  after the  occurrence of a Default
specified  in Section  6.01(5) or (6),  the expenses  including  the  reasonable
charges and expenses of its  counsel,  are  intended to  constitute  expenses of
administration under any Bankruptcy Law.


                                       50
<PAGE>


     SECTION 7.08 Replacement of Trustee.

     The Trustee may resign by so notifying the Company;  provided,  however, no
such resignation  shall be effective until a successor  Trustee has accepted its
appointment  pursuant  to this  Section  7.08.  The  Holders  of a  majority  in
aggregate Principal Amount at Maturity of the Securities at the time outstanding
may remove the Trustee by so notifying the Trustee and the Company.  The Company
shall remove the Trustee if:

             (1) the Trustee fails to comply with Section 7.10;

             (2) the Trustee is adjudged bankrupt or insolvent;

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

             (4) the Trustee otherwise becomes incapable of acting.

     If the Trustee  resigns or is removed or if a vacancy  exists in the office
of Trustee for any reason, the Company shall promptly appoint,  by resolution of
its Board of Directors, a successor Trustee.

     A successor  Trustee shall deliver a written  acceptance of its appointment
to the retiring Trustee and to the Company satisfactory in form and substance to
the retiring  Trustee and the Company.  Thereupon the  resignation or removal of
the retiring  Trustee shall become  effective,  and the successor  Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture.  The
successor Trustee shall mail a notice of its succession to Securityholders.  The
retiring  Trustee shall promptly  transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 7.07.

     If a  successor  Trustee  does not take  office  within  30 days  after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders  of a  majority  in  aggregate  Principal  Amount  at  Maturity  of  the
Securities  at  the  time  outstanding  may  petition  any  court  of  competent
jurisdiction  at the expense of the Company for the  appointment  of a successor
Trustee.

     If the Trustee fails to comply with Section 7.10,  any  Securityholder  may
petition any court of competent  jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.

     SECTION 7.09 Successor Trustee by Merger.

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

     SECTION 7.10 Eligibility; Disqualification.

     The Trustee  shall at all times  satisfy the  requirements  of TIA Sections
310(a)(1) and 310(b).  The Trustee (or its parent holding  company) shall have a
combined  capital and


                                       51
<PAGE>


surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition.  Nothing  herein  contained  shall prevent the Trustee from
filing  with the  Commission  the  application  referred  to in the  penultimate
paragraph of TIA Section 310(b).

     SECTION 7.11 Preferential Collection of Claims Against Company.

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

                                    ARTICLE 8

                             DISCHARGE OF INDENTURE

     SECTION 8.01 Discharge of Liability on Securities.

     When (i) the Company  delivers to the  Trustee all  outstanding  Securities
(other than Securities  replaced  pursuant to Section 2.07) for  cancellation or
(ii) all  outstanding  Securities  have  become due and  payable and the Company
deposits  with the  Trustee,  the Paying  Agent (if the Paying  Agent is not the
Company or any  Subsidiary or any Affiliate of either of them) or the Conversion
Agent cash or, if  expressly  permitted  by the terms of the  Securities  or the
Indenture,  Common  Stock  sufficient  to pay all  amounts  due and owing on all
outstanding  Securities  (other  than  Securities  replaced  pursuant to Section
2.07),  and if in either case the Company pays all other sums payable  hereunder
by the Company,  then this Indenture shall, subject to Section 7.07, cease to be
of  further  effect.  The  Trustee  shall  join in the  execution  of a document
prepared  by the  Company  acknowledging  satisfaction  and  discharge  of  this
Indenture on demand of the Company  accompanied by an Officers'  Certificate and
Opinion of Counsel and at the cost and expense of the Company.

     SECTION 8.02 Repayment to the Company.

     The Trustee and the Paying  Agent shall  return to the Company upon written
request any money or securities  held by them for the payment of any amount with
respect to the  Securities  that  remains  unclaimed  for two years,  subject to
applicable unclaimed property law. After return to the Company, Holders entitled
to the money or  securities  must look to the  Company  for  payment  as general
creditors unless an applicable  abandoned property law designates another person
and the Trustee  and the Paying  Agent  shall have no further  liability  to the
Securityholders  with  respect  to such  money or  securities  for  that  period
commencing after the return thereof.


                                       52
<PAGE>


                                    ARTICLE 9

                                   AMENDMENTS

     SECTION 9.01 Without Consent of Holders.

     The  Company and the Trustee  may amend this  Indenture  or the  Securities
without the consent of any Securityholder:

     (1) to cure any ambiguity, omission, defect or inconsistency;

     (2) to comply with Article 5 or Section 11.14;

     (3) to secure  the  Company's  obligations  under the  Securities  and this
     Indenture;

     (4)  to  add  to  the   Company's   covenants   for  the   benefit  of  the
     Securityholders  or to  surrender  any  right or power  conferred  upon the
     Company;

     (5) to make any change to comply with the TIA, or any amendment thereto, or
     to  comply  with  any  requirement  of  the  SEC  in  connection  with  the
     qualification of the Indenture under the TIA, or as necessary in connection
     with the registration of the Securities under the Securities Act; or

     (6) to make any  change  that does not  adversely  affect the rights of any
     Holders.

     Notwithstanding the foregoing, no amendment contemplated pursuant to clause
(1), (3), (4) or (5) of the preceding  paragraph may be made without the written
consent of the Holders of at least a majority in aggregate  Principal  Amount at
Maturity of Securities at the time  outstanding if such amendment may materially
and adversely affect the interests of the Holders.

     SECTION 9.02 With Consent of Holders.

     With the written consent of the Holders of at least a majority in aggregate
Principal  Amount at Maturity of the  Securities  at the time  outstanding,  the
Company and the Trustee may amend this  Indenture  or the  Securities.  However,
without  the  consent of each  Securityholder  affected,  an  amendment  to this
Indenture or the Securities may not:

     (1) change the  provisions  of this  Indenture  that relate to modifying or
     amending this Indenture;

     (2) make any change in the manner or rate of  accrual  in  connection  with
     Original Issue  Discount,  make any change in the manner of calculation of,
     or that  adversely  affects the right to receive,  semiannual or contingent
     interest,  reduce  the rate of  interest  referred  to in  section 1 of the
     Securities,  reduce the rate of interest  referred to in Section 10.01 upon
     the  occurrence of a Tax Event,  or extend the


                                       53
<PAGE>


     time for payment of  Original  Issue  Discount,  semiannual  or  contingent
     interest or interest, if any, on any Security;

     (3) reduce the Principal Amount at Maturity, Restated Principal
     Amount or the Issue Price of or extend the Stated Maturity of any Security;

     (4)  reduce  the  Redemption  Price,  Purchase  Price or Change in  Control
     Purchase Price of any Security;

     (5) make any Security payable in money or securities other than that stated
     in the Security;

     (6) make any change in Section  6.04,  Section 6.07 or this  Section  9.02,
     except to increase any percentage set forth therein;

     (7) make any  change  that  adversely  affects  the  right to  convert  any
     Security;

     (8) make any change that adversely affects the right to require the Company
     to purchase the  Securities in  accordance  with the terms thereof and this
     Indenture; or

     (9) impair the right to  convert,  or receive  payment  with  respect to, a
     Security,  or right to institute  suit for the  enforcement  of any payment
     with respect to, or conversion of, the Securities.

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

     After an amendment under this Section 9.02 becomes  effective,  the Company
shall mail to each Holder a notice briefly describing the amendment.

     SECTION 9.03 Compliance with Trust Indenture Act.

     Every supplemental indenture executed pursuant to this Article shall comply
with the TIA.

     SECTION 9.04 Revocation and Effect of Consents, Waivers and Actions.

     Until an amendment,  waiver or other action by Holders becomes effective, a
consent thereto by a Holder of a Security  hereunder is a continuing  consent by
the  Holder  and every  subsequent  Holder of that  Security  or  portion of the
Security that evidences the same obligation as the consenting Holder's Security,
even if notation of the consent,  waiver or action is not made on the  Security.
However, any such Holder or subsequent Holder may revoke the consent,  waiver or
action as to such  Holder's  Security or portion of the  Security if the Trustee
receives  the  notice of  revocation  before the date the  amendment,  waiver or
action  becomes  effective.  After  an  amendment,   waiver  or  action  becomes
effective, it shall bind every Securityholder.



                                       54
<PAGE>


     SECTION 9.05 Notation on or Exchange of Securities.

     Securities   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  so  modified  as to  conform,  in the  opinion  of the Board of
Directors,  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.

     SECTION 9.06 Trustee to Sign Supplemental Indentures.

     The Trustee shall sign any supplemental  indenture  authorized  pursuant to
this Article 9 if the amendment  contained therein does not adversely affect the
rights,  duties,  liabilities  or  immunities  of the Trustee.  If it does,  the
Trustee may, but need not,  sign such  supplemental  indenture.  In signing such
supplemental indenture the Trustee shall receive, and (subject to the provisions
of Section  7.01) shall be fully  protected in relying  upon, in addition to the
documents required by Section 13.04, an Officers'  Certificate and an Opinion of
Counsel  stating  that  such  amendment  is  authorized  or  permitted  by  this
Indenture.

     SECTION 9.07 Effect of Supplemental Indentures.

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

                                   ARTICLE 10

 SPECIAL TAX EVENT CONVERSION; PAYMENT OF INTEREST ON FAILURE TO OBTAIN RATING

     SECTION 10.01 Optional Conversion to Semiannual Coupon Note Upon Tax Event.

     From and after (i) the date (the "Tax Event Date") of the  occurrence  of a
Tax Event and (ii) the date the Company  exercises  the option  provided  for in
this Section  10.01,  whichever  is later (the later of such dates,  the "Option
Exercise  Date"),  at the  option  of the  Company,  interest  in lieu of future
Original Issue Discount shall accrue at the rate per annum  specified in section
11(a) of the  Securities  on a restated  principal  amount  per $1,000  original
Principal  Amount at Maturity (the  "Restated  Principal  Amount")  equal to the
Issue Price plus Original Issue  Discount  accrued  through the Option  Exercise
Date and shall be payable  semiannually each Interest Payment Date to holders of
record at the close of business on the related  "Regular Record Date".  Interest
will be  computed  on the basis of a 360-day  year  comprised  of twelve  30-day
months and will accrue from the most recent date on which interest has been paid
or, if no interest has been paid, from the Option Exercise Date.  Within 15 days
of the  occurrence of a Tax Event,  the Company  shall mail a written  notice of
such Tax Event by facsimile  and  first-class  mail to the Trustee and within 15
days of its exercise of such option the


                                       55
<PAGE>


Company shall mail a written notice of the Option Exercise Date by facsimile and
first-class  mail to the  Trustee  and by first class mail to the Holders of the
Securities.  From and after the Option  Exercise  Date, (i) the Company shall be
obligated to pay at Stated Maturity in lieu of the Principal  Amount at Maturity
of a Security,  the Restated  Principal  Amount  thereof plus accrued and unpaid
interest  with respect to any Security,  (ii) "Issue Price and accrued  Original
Issue Discount," "Issue Price plus Original Issue Discount" or similar words, as
used  herein,  shall mean  Restated  Principal  Amount  plus  accrued and unpaid
interest with respect to any Security and (iii) contingent  interest shall cease
to accrue on the Securities.  Securities  authenticated  and delivered after the
Option Exercise Date may, and shall if required by the Trustee,  bear a notation
in a form  approved by the Trustee as to the  conversion  of the  Securities  to
semiannual  coupon notes.  No other  changes to the Indenture  shall result as a
result of the events described in Section 10.01.

     SECTION 10.02 Payment of Interest on Failure to Obtain Rating.

     If by the close of business on the 150/th/ day  following  the  issuance of
the  Securities  (or if  such  150/th/  day  is not a  Business  Day,  the  next
succeeding  Business  Day) the  Company  has not  obtained  at least  one of the
Required  Ratings and furnished to the Trustee  written  evidence of such rating
from the applicable credit rating agency,  then from and after such 150/th/ day,
semiannual interest shall accrue at a rate of 0.50% per annum on the Issue Price
of the Securities and shall be payable in cash on each Interest  Payment Date to
holders of record at the close of business on the related  Regular  Record Date.
Such  interest  will be computed  on the basis of a 360-day  year  comprised  of
twelve 30-day months and will accrue from the most recent date on which interest
has been paid or, if no interest has been paid,  from the 150/th/ day  following
the issuance of the Securities.  Interest payable pursuant to this Section 10.02
shall be in addition to any accrued Original Issue Discount, contingent interest
payable  pursuant to section 5 of the Securities or semiannual  interest payable
pursuant to Section  10.01,  and shall continue to accrue and be payable on each
Security  for so long as it  remains  outstanding,  whether  or not the  Company
subsequently obtains any Required Rating on the Securities.

                                   ARTICLE 11

                                   CONVERSION

     SECTION 11.01 Conversion Privilege.

     A Holder of a Security may convert such  Security  into Common Stock at any
time during the period stated in section 9 of the Securities. Upon determination
that  Holders are or will be entitled to convert  their  Securities  into Common
Stock in accordance with section 9 of the  Securities,  the Company will issue a
press release and publish such  determination  on the  Company's  web site.  The
number of shares of Common  Stock  issuable  upon  conversion  of a Security per
$1,000 of Principal Amount at Maturity thereof (the "Conversion  Rate") shall be
that set forth in section 9 in the  Securities,  subject to adjustment as herein
set forth.


                                       56
<PAGE>


     A Holder may  convert a portion of the  Principal  Amount at  Maturity of a
Security if the portion is $1,000 or an integral multiple of $1,000.  Provisions
of this  Indenture  that apply to  conversion of all of a Security also apply to
conversion of a portion of a Security.

     "Average  Sale  Price"  means the  average of the Sale Prices of the Common
Stock for the shorter of

     (i) 30  consecutive  trading days ending on the last full trading day prior
     to the Time of  Determination  with  respect  to the  rights,  warrants  or
     options or distribution in respect of which the Average Sale Price is being
     calculated, or

     (ii) the period (x) commencing on the date next succeeding the first public
     announcement of (a) the issuance of rights,  warrants or options or (b) the
     distribution,  in each case,  in respect of which the Average Sale Price is
     being calculated and (y) proceeding through the last full trading day prior
     to the Time of  Determination  with  respect  to the  rights,  warrants  or
     options or distribution in respect of which the Average Sale Price is being
     calculated  (excluding  days  within  such  period,  if any,  which are not
     trading days), or

     (iii) the period,  if any, (x)  commencing on the date next  succeeding the
     Ex-Dividend Time with respect to the next preceding (a) issuance of rights,
     warrants  or  options  or (b)  distribution,  in each  case,  for  which an
     adjustment  is required by the  provisions  of Section  11.06(4),  11.07 or
     11.08 and (y)  proceeding  through  the last full  trading day prior to the
     Time of  Determination  with respect to the rights,  warrants or options or
     distribution in respect of which the Average Sale Price is being calculated
     (excluding days within such period, if any, which are not trading days).

     In the event that the  Ex-Dividend  Time (or in the case of a  subdivision,
combination or  reclassification,  the effective date with respect thereto) with
respect to a dividend,  subdivision,  combination or  reclassification  to which
Section  11.06(1),  (2), (3) or (5) applies occurs during the period  applicable
for calculating "Average Sale Price" pursuant to the definition in the preceding
sentence,  "Average Sale Price" shall be calculated  for such period in a manner
determined  by the Board of  Directors  to reflect the impact of such  dividend,
subdivision,  combination  or  reclassification  on the Sale Price of the Common
Stock during such period.

     "Time of  Determination"  means the time and date of the earlier of (i) the
determination of stockholders entitled to receive rights, warrants or options or
a  distribution,  in each case, to which Section 11.07 or 11.08 applies and (ii)
the  time  ("Ex-Dividend   Time")  immediately  prior  to  the  commencement  of
"ex-dividend"  trading for such rights,  warrants or options or  distribution on
the New York Stock  Exchange  or such other  national  or  regional  exchange or
market on which the Common Stock is then listed or quoted.

     SECTION 11.02 Conversion Procedure.

     To convert a Security a Holder must satisfy the  requirements  in section 9
of the Securities. The date on which the Holder satisfies all those requirements
is the conversion date


                                       57
<PAGE>


(the "Conversion  Date").  As soon as practicable after the Conversion Date, the
Company shall deliver to the Holder, through the Conversion Agent, a certificate
for the number of full shares of Common Stock  issuable upon the  conversion and
cash in lieu of any fractional share  determined  pursuant to Section 11.03. The
person  in whose  name the  certificate  is  registered  shall be  treated  as a
stockholder of record on and after the Conversion Date; provided,  however, that
no  surrender  of a Security  on any date when the stock  transfer  books of the
Company shall be closed shall be effective to  constitute  the person or persons
entitled  to receive  the shares of Common  Stock  upon such  conversion  as the
record  holder or holders of such shares of Common Stock on such date,  but such
surrender  shall be effective to  constitute  the person or persons  entitled to
receive such shares of Common Stock as the record holder or holders  thereof for
all purposes at the close of business on the next  succeeding  day on which such
stock transfer books are open; such  conversion  shall be at the Conversion Rate
in effect  on the date  that such  Security  shall  have  been  surrendered  for
conversion,  as if the stock  transfer books of the Company had not been closed.
Upon  conversion of a Security,  such person shall no longer be a Holder of such
Security.

     No  payment  or  adjustment  will  be  made  for  dividends  on,  or  other
distributions  with  respect  to, any Common  Stock  except as  provided in this
Article 11. On conversion of a Security,  that portion of accrued Original Issue
Discount (or interest,  if the Company has exercised its option  provided for in
Section  10.01)  attributable  to the  period  from the Issue  Date (or,  if the
Company has exercised the option provided for in Section 10.01, the later of (x)
the date of such  exercise and (y) the date on which  interest was last paid) of
the  Security  through  but  not  including  the  Conversion  Date  and  accrued
semiannual and contingent  interest with respect to the converted Security shall
not be cancelled,  extinguished  or forfeited,  but rather shall be deemed to be
paid in  full  to the  Holder  thereof  through  delivery  of the  Common  Stock
(together  with the cash  payment,  if any,  in lieu of  fractional  shares)  in
exchange for the Security  being  converted  pursuant to the  provisions  hereof
(except to the extent  that  interest  in lieu of Original  Issue  Discount  and
semiannual and contingent  interest are paid in cash as provided in section 9 of
the  Securities);  and the fair  market  value of such  shares of  Common  Stock
(together  with any such cash  payment in lieu of  fractional  shares)  shall be
treated as issued,  to the extent thereof,  first in exchange for Original Issue
Discount (or interest,  if the Company has exercised its option  provided for in
Section 10.01) accrued  through the Conversion  Date and accrued  semiannual and
contingent interest,  and the balance, if any, of such fair market value of such
Common Stock (and any such cash payment)  shall be treated as issued in exchange
for the Issue Price of the Security being  converted  pursuant to the provisions
hereof.

     If the Holder  converts more than one Security at the same time, the number
of shares of Common Stock  issuable  upon the  conversion  shall be based on the
total Principal Amount at Maturity of the Securities converted.

     If the last day on which a Security may be  converted  is a Legal  Holiday,
the Security may be surrendered  on the next  succeeding day that is not a Legal
Holiday.

     Upon  surrender of a Security that is converted in part,  the Company shall
execute,  and the Trustee shall  authenticate  and deliver to the Holder,  a new
Security in an authorized  denomination equal in Principal Amount at Maturity to
the unconverted portion of the Security surrendered.


                                       58
<PAGE>


     SECTION 11.03 Fractional Shares.

     The  Company  will not  issue a  fractional  share  of  Common  Stock  upon
conversion of a Security. Instead, the Company will deliver cash for the current
market value of the fractional  share.  The current market value of a fractional
share shall be determined,  to the nearest  1/1,000th of a share, by multiplying
the Sale  Price  of the  Common  Stock,  on the last  trading  day  prior to the
Conversion  Date,  of a full share by the  fractional  amount and  rounding  the
product to the nearest whole cent.

     SECTION 11.04 Taxes on Conversion.

     If a Holder  converts a Security,  the Company  shall pay any  documentary,
stamp or  similar  issue or  transfer  tax due on the  issue of shares of Common
Stock upon the conversion.  However,  the Holder shall pay any such tax which is
due because the Holder requests the shares to be issued in a name other than the
Holder's  name.  The  Conversion  Agent may refuse to deliver  the  certificates
representing  the Common  Stock being  issued in a name other than the  Holder's
name until the  Conversion  Agent receives a sum sufficient to pay any tax which
will be due  because  the  shares  are to be  issued  in a name  other  than the
Holder's name. Nothing herein shall preclude any tax withholding required by law
or regulations.

     SECTION 11.05 Company to Provide Stock.

     The Company shall,  prior to issuance of any Securities  under this Article
11, and from time to time as may be necessary, reserve out of its authorized but
unissued  Common Stock a  sufficient  number of shares of Common Stock to permit
the conversion of the Securities.

     All shares of Common Stock  delivered  upon  conversion  of the  Securities
shall be newly  issued  shares or  treasury  shares,  shall be duly and  validly
issued and fully paid and nonassessable and shall be free from preemptive rights
and free of any lien or adverse claim.

     The  Company  will  endeavor  promptly to comply with all federal and state
securities laws regulating the offer and delivery of shares of Common Stock upon
conversion  of  Securities,  if any,  and will list or cause to have quoted such
shares  of  Common  Stock  on  each  national  securities  exchange  or  in  the
over-the-counter  market or such other  market on which the Common Stock is then
principally listed or quoted.

     SECTION 11.06 Adjustment for Change In Capital Stock.

     If, after the Issue Date of the Securities, the Company:

     (1) pays a dividend or makes a  distribution  on its Common Stock in shares
     of its Common Stock;

     (2) subdivides its outstanding shares of Common Stock into a greater number
     of shares;

     (3) combines its  outstanding  shares of Common Stock into a smaller number
     of shares;


                                       59
<PAGE>


     (4) pays a dividend or makes a  distribution  on its Common Stock in shares
     of its  Capital  Stock  (other  than  Common  Stock or rights,  warrants or
     options for its Capital Stock); or

     (5)  issues by  reclassification  of its  Common  Stock  any  shares of its
     Capital  Stock  (other  than  rights,  warrants  or options for its Capital
     Stock),  then the conversion  privilege and the  Conversion  Rate in effect
     immediately  prior to such action shall be adjusted so that the Holder of a
     Security  thereafter  converted may receive the number of shares of Capital
     Stock of the  Company  which  such  Holder  would  have  owned  immediately
     following such action if such Holder had converted the Security immediately
     prior to such action.

     The adjustment shall become effective  immediately after the record date in
the case of a dividend or distribution and immediately  after the effective date
in the case of a subdivision, combination or reclassification.

     If after an  adjustment  a Holder of a  Security  upon  conversion  of such
Security  may  receive  shares of two or more  classes of  Capital  Stock of the
Company,  the Conversion Rate shall thereafter be subject to adjustment upon the
occurrence of an action taken with respect to any such class of Capital Stock as
is  contemplated  by this Article 11 with respect to the Common Stock,  on terms
comparable to those applicable to Common Stock in this Article 11.

     SECTION 11.07 Adjustment for Rights Issue.

     If after the Issue Date of the  Securities,  the  Company  distributes  any
rights,  warrants or options to all holders of its Common Stock  entitling them,
for  a  period   expiring  within  60  days  after  the  record  date  for  such
distribution,  to purchase shares of Common Stock at a price per share less than
the  Sale  Price  of the  Common  Stock  as of the  Time of  Determination,  the
Conversion Rate shall be adjusted in accordance with the formula:

                               R'   =     R    x            (O + N)
                                                            -------
                                                         (O + (N x P)/M)

        where:

        R' = the adjusted Conversion Rate.

        R  = the current Conversion Rate.

        O  = the number of shares of Common Stock outstanding on the record date
for the distribution to which this Section 11.07 is being applied.

        N  = the number of additional shares of Common Stock offered pursuant to
the distribution.

        P  = the offering price per share of the additional shares.


                                       60
<PAGE>


        M  = the Average Sale Price, minus, in the case of (i) a distribution to
which Section  11.06(4)  applies or (ii) a  distribution  to which Section 11.08
applies,  for which,  in each case, (x) the record date shall occur on or before
the record date for the distribution to which this Section 11.07 applies and (y)
the  Ex-Dividend  Time  shall  occur  on or  after  the  date  of  the  Time  of
Determination for the distribution to which this Section 11.07 applies, the fair
market  value (on the record  date for the  distribution  to which this  Section
11.07 applies) of the

     (1) Capital  Stock of the Company  distributed  in respect of each share of
     Common Stock in such Section 11.06(4) distribution and

     (2) assets of the Company or debt  securities  or any  rights,  warrants or
     options to purchase  securities  of the Company  distributed  in respect of
     each share of Common Stock in such Section 11.08 distribution.

     The Board of Directors  shall determine fair market values for the purposes
of this Section 11.07.

     The adjustment shall become effective immediately after the record date for
the  determination of shareholders  entitled to receive the rights,  warrants or
options  to which this  Section  11.07  applies.  If all of the shares of Common
Stock subject to such rights, warrants or options have not been issued when such
rights,  warrants or options expire,  then the Conversion Rate shall promptly be
readjusted  to the  Conversion  Rate  which  would  then  be in  effect  had the
adjustment  upon the issuance of such  rights,  warrants or options been made on
the  basis of the  actual  number of shares  of  Common  Stock  issued  upon the
exercise of such rights, warrants or options.

     No adjustment  shall be made under this Section 11.07 if the application of
the formula  stated  above in this  Section  11.07 would result in a value of R'
that is equal to or less than the value of R.

     SECTION 11.08 Adjustment for Other Distributions.

     (a) If, after the Issue Date of the Securities,  the Company distributes to
all holders of its Common  Stock any of its assets  excluding  distributions  of
Capital  Stock or equity  interests  referred  to in Section  11.08(b),  or debt
securities  or any rights,  warrants or options to  purchase  securities  of the
Company  (including  securities  or cash,  but excluding  (x)  distributions  of
Capital Stock referred to in Section 11.06 and distributions of rights, warrants
or options  referred to in Section  11.07 and (y) cash  dividends  or other cash
distributions that are paid out of consolidated current net earnings or earnings
retained in the  business as shown on the books of the Company  unless such cash
dividends or other cash  distributions  are Extraordinary  Cash Dividends),  the
Conversion  Rate  shall  be  adjusted,  subject  to the  provisions  of  Section
11.08(c), in accordance with the formula:

                                       61
<PAGE>


                                   R' = R x M
                                   ----------
                                       M-F

where:

       R' = the adjusted Conversion Rate.

       R  = the current Conversion Rate.

       M  = the Average Sale  Price,  minus,  in  the case  of a distribution to
which Section 11.06(4) applies,  for which (i) the record date shall occur on or
before the record  date for the  distribution  to which  this  Section  11.08(a)
applies  and (ii) the  Ex-Dividend  Time shall occur on or after the date of the
Time of  Determination  for the  distribution  to which  this  Section  11.08(a)
applies, the fair market value (on the record date for the distribution to which
this Section 11.08(a)  applies) of any Capital Stock of the Company  distributed
in respect of each share of Common Stock in such Section 11.06(4) distribution.

       F  = the  fair  market  value (on the record date for the distribution to
which this Section 11.08(a) applies) of the assets, securities, rights, warrants
or options  to be  distributed  in respect of each share of Common  Stock in the
distribution to which this Section 11.08(a) is being applied (including,  in the
case of cash dividends or other cash distributions giving rise to an adjustment,
all such cash distributed concurrently).

     The Board of Directors  shall determine fair market values for the purposes
of this Section 11.08(a).

     The adjustment shall become effective immediately after the record date for
the determination of shareholders  entitled to receive the distribution to which
this Section 11.08(a) applies.

     For  purposes  of this  Section  11.08(a),  the  term  "Extraordinary  Cash
Dividend"  shall mean any cash  dividend  with  respect to the Common  Stock the
amount of which,  together  with the aggregate  amount of cash  dividends on the
Common Stock to be aggregated  with such cash  dividend in  accordance  with the
provisions of this  paragraph,  equals or exceeds the threshold  percentage  set
forth in item (i)  below.  For  purposes  of item (i)  below,  the  "Measurement
Period" with  respect to a cash  dividend on the Common Stock shall mean the 365
consecutive  day period  ending on the date prior to the  Ex-Dividend  Time with
respect to such cash dividend, and the "Relevant Cash Dividends" with respect to
a cash dividend on the Common Stock shall mean the cash  dividends on the Common
Stock with Ex-Dividend Times occurring in the Measurement Period.

     (i) If, upon the date prior to the Ex-Dividend  Time with respect to a cash
     dividend on the Common Stock,  the  aggregate  amount of such cash dividend
     together with the amounts of all Relevant Cash Dividends  equals or exceeds
     on a per share  basis 5% of the Sale Price of the Common  Stock on the last
     trading day preceding the date of  declaration by the Board of Directors of
     the cash  dividend with respect to which this  provision is being  applied,
     then such cash dividend


                                       62
<PAGE>


     together  with  all  Relevant  Cash  Dividends,  shall be  deemed  to be an
     Extraordinary  Cash  Dividend  and for purposes of applying the formula set
     forth above in this  Section  11.08(a),  the value of "F" shall be equal to
     (y) the aggregate amount of such cash dividend  together with the amount of
     all Relevant Cash Dividends, minus (z) the aggregate amount of all Relevant
     Cash  Dividends  for which a prior  adjustment in the  Conversion  Rate was
     previously made under this Section 11.08(a).

     In making the determinations required by item (i) above, the amount of cash
     dividends  paid on a per share  basis and the amount of any  Relevant  Cash
     Dividends  specified in item (i) above, shall be appropriately  adjusted to
     reflect the occurrence during such period of any event described in Section
     11.06.

     (b) If, after the Issue Date of the Securities, the Company pays a dividend
or makes a distribution to all holders of its Common Stock consisting of Capital
Stock of any class or series, or similar equity  interests,  of or relating to a
Subsidiary or other business unit of the Company,  the Conversion  Rate shall be
adjusted in accordance with the formula:

                        R'  =     R x       (1 + F/M)

where:

     R' = the adjusted Conversion Rate.

     R  = the current Conversion Rate.

     M  = the  average  of  the Post-Distribution Prices of the Common Stock for
the 10 trading days  commencing on and including the fifth trading day after the
date on which "ex-dividend  trading" commences for such dividend or distribution
on the principal United States exchange or market which such securities are then
listed or quoted (the "Ex-Dividend Date").

     F  = the fair market value of the securities distributed in respect of each
share of Common Stock for which this Section  11.08(b)  shall mean the number of
securities  distributed  in respect of each share of Common Stock  multiplied by
the average of the Post-Distribution  Prices of those securities distributed for
the 10 trading days  commencing on and including the fifth trading day after the
Ex-Dividend Date.

     "Post-Distribution  Price" of Capital Stock or any similar equity  interest
on any date means the closing per unit sale price (or, if no closing  sale price
is  reported,  the  average  of the bid and ask  prices  or, if more than one in
either case,  the average of the average bid and the average ask prices) on such
date for trading of such units on a "when  issued"  basis  without due bills (or
similar  concept) as reported in the  composite  transactions  for the principal
United States securities exchange on which such Capital Stock or equity interest
is traded or, if the Capital  Stock or equity  interest,  as the case may be, is
not listed on a United  States  national or  regional  securities  exchange,  as
reported by the National  Association of Securities Dealers Automated  Quotation
System or by the National Quotation Bureau Incorporated; provided that if on any
date such units have not traded on a "when issued" basis, the  Post-Distribution
Price shall be the


                                       63
<PAGE>


closing  per unit sale price  (or,  if no closing  sale price is  reported,  the
average  of the bid and ask  prices  or, if more than one in  either  case,  the
average of the  average bid and the average ask prices) on such date for trading
of such units on a "regular way" basis without due bills (or similar concept) as
reported  in  the  composite   transactions  for  the  principal  United  States
securities exchange on which such Capital Stock or equity interest is traded or,
if the Capital Stock or equity interest,  as the case may be, is not listed on a
United  States  national or  regional  securities  exchange,  as reported by the
National  Association of Securities Dealers Automated Quotation System or by the
National Quotation Bureau  Incorporated.  In the absence of such quotation,  the
Company shall be entitled to determine the Post-Distribution  Price on the basis
of such  quotations  which  reflect the  post-distribution  value of the Capital
Stock or equity interests as it considers appropriate.

     (c) In the event that,  with respect to any  distribution  to which Section
11.08(a) would otherwise  apply,  the difference "M-F" as defined in the formula
set forth in Section  11.08(a)  is less than $1.00 or "F" is equal to or greater
than "M", then the adjustment provided by Section 11.08(a) shall not be made and
in  lieu  thereof  the   provisions   of  Section  11.14  shall  apply  to  such
distribution.

     SECTION 11.09 When Adjustment May Be Deferred.

     No adjustment  in the  Conversion  Rate need be made unless the  adjustment
would require an increase or decrease of at least 1% in the Conversion Rate. Any
adjustments that are not made shall be carried forward and taken into account in
any subsequent adjustment.

     All calculations under this Article 11 shall be made to the nearest cent or
to the nearest 1/1,000th of a share, as the case may be.

     SECTION 11.10 When No Adjustment Required.

     No adjustment need be made for a transaction  referred to in Section 11.06,
11.07, 11.08 or 11.14 if  Securityholders  are to participate in the transaction
on a basis and with notice that the Board of Directors determines to be fair and
appropriate  in light of the basis and notice on which  holders of Common  Stock
participate  in the  transaction.  Such  participation  by  Securityholders  may
include  participation upon conversion provided that an adjustment shall be made
at such time as the Securityholders are no longer entitled to participate.

     No adjustment  need be made for rights to purchase Common Stock pursuant to
a Company plan for reinvestment of dividends or interest.

     No adjustment need be made for a change in the par value or no par value of
the Common Stock.

     To the extent the Securities become convertible pursuant to this Article 11
into cash, no adjustment need be made  thereafter as to the cash.  Interest will
not accrue on the cash.

                                       64
<PAGE>

     SECTION 11.11 Notice of Adjustment.

     Whenever the Conversion  Rate is adjusted,  the Company shall promptly mail
to  Securityholders a notice of the adjustment.  The Company shall file with the
Trustee  and the  Conversion  Agent  such  notice  and a  certificate  from  the
Company's independent public accountants briefly stating the facts requiring the
adjustment and the manner of computing it. The  certificate  shall be conclusive
evidence that the adjustment is correct.  Neither the Trustee nor any Conversion
Agent  shall  be under  any  duty or  responsibility  with  respect  to any such
certificate  except  to  exhibit  the  same to any  Holder  desiring  inspection
thereof.

     SECTION 11.12 Voluntary Increase.

     The  Company  from time to time may  increase  the  Conversion  Rate by any
amount for any period of time.  Whenever the Conversion  Rate is increased,  the
Company  shall  mail to  Securityholders  and  file  with  the  Trustee  and the
Conversion Agent a notice of the increase.  The Company shall mail the notice at
least 15 days before the date the increased  Conversion  Rate takes effect.  The
notice shall state the  increased  Conversion  Rate and the period it will be in
effect.

     A voluntary  increase of the Conversion  Rate does not change or adjust the
Conversion  Rate  otherwise  in effect for purposes of Section  11.06,  11.07 or
11.08.

     SECTION 11.13 Notice of Certain Transactions.

     If:

     (1) the Company  takes any action that would  require an  adjustment in the
     Conversion  Rate  pursuant  to  Section  11.06,  11.07 or 11.08  (unless no
     adjustment is to occur pursuant to Section 11.10); or

     (2) the  Company  takes  any  action  that  would  require  a  supplemental
     indenture pursuant to Section 11.14; or

     (3) there is a liquidation or dissolution of the Company;

     then the Company  shall mail to  Securityholders  and file with the Trustee
and the  Conversion  Agent a  notice  stating  the  proposed  record  date for a
dividend  or  distribution  or the  proposed  effective  date of a  subdivision,
combination,  reclassification,  consolidation,  merger, binding share exchange,
transfer, liquidation or dissolution. The Company shall file and mail the notice
at least 15 days  before  such  date.  Failure to file or mail the notice or any
defect in it shall not affect the validity of the transaction.

     SECTION 11.14 Reorganization of Company; Special Distributions.

     If the Company is a party to a  transaction  subject to Section 5.01 (other
than a sale  of all or  substantially  all of the  assets  of the  Company  in a
transaction  in which the  holders  of Common  Stock  immediately  prior to such
transaction  do not receive  securities,  cash or other assets of the Company or
any other person) or a merger or binding share  exchange which


                                       65
<PAGE>

reclassifies or changes the outstanding Common Stock of the Company,  the person
obligated  to  deliver  securities,  cash or other  assets  upon  conversion  of
Securities  shall  enter  into  a  supplemental  indenture.  If  the  issuer  of
securities  deliverable  upon  conversion  of  Securities is an Affiliate of the
successor Company, that issuer shall join in the supplemental indenture.

     The supplemental  indenture shall provide that the Holder of a Security may
convert it into the kind and amount of  securities,  cash or other  assets which
such Holder would have received  immediately  after the  consolidation,  merger,
binding  share  exchange or transfer if such Holder had  converted  the Security
immediately  before the  effective  date of the  transaction,  assuming  (to the
extent  applicable)  that such  Holder  (i) was not a  constituent  person or an
Affiliate of a  constituent  person to such  transaction;  (ii) made no election
with respect  thereto;  and (iii) was treated  alike with the  plurality of non-
electing Holders. The supplemental indenture shall provide for adjustments which
shall be as nearly  equivalent as may be practical to the  adjustments  provided
for in this Article 11. The successor  Company shall mail to  Securityholders  a
notice briefly describing the supplemental indenture.

     If this Section applies, neither Section 11.06 nor 11.07 applies.

     If the Company makes a  distribution  to all holders of its Common Stock of
any of its assets,  or debt  securities  or any  rights,  warrants or options to
purchase  securities  of the Company  that,  but for the  provisions  of Section
11.08(c),  would  otherwise  result  in an  adjustment  in the  Conversion  Rate
pursuant to the  provisions of Section  11.08,  then,  from and after the record
date for  determining  the  holders of Common  Stock  entitled  to  receive  the
distribution,  a Holder of a Security  that converts such Security in accordance
with the provisions of this Indenture  shall upon such conversion be entitled to
receive,  in addition to the shares of Common  Stock into which the  Security is
convertible,  the kind and amount of securities, cash or other assets comprising
the  distribution  that such  Holder  would  have  received  if such  Holder had
converted the Security  immediately prior to the record date for determining the
holders of Common Stock entitled to receive the distribution.

     SECTION 11.15 Company Determination Final.

     Any  determination  that the  Company or the Board of  Directors  must make
pursuant to Section 11.03,  11.06, 11.07, 11.08, 11.09, 11.10, 11.14 or 11.17 is
conclusive.

     SECTION 11.16 Trustee's Adjustment Disclaimer.

     The Trustee has no duty to determine when an adjustment  under this Article
11 should be made,  how it should be made or what it should be. The  Trustee has
no duty to determine  whether a supplemental  indenture under Section 11.14 need
be entered into or whether any  provisions  of any  supplemental  indenture  are
correct. The Trustee shall not be accountable for and makes no representation as
to the validity or value of any  securities or assets issued upon  conversion of
Securities.  The Trustee shall not be responsible  for the Company's  failure to
comply  with  this  Article  11.  Each  Conversion  Agent  shall  have  the same
protection under this Section 11.16 as the Trustee.


                                       66
<PAGE>


     SECTION 11.17 Simultaneous Adjustments.

     In the event that this Article 11 requires  adjustments  to the  Conversion
Rate under more than one of Sections  11.06(4),  11.07 or 11.08,  and the record
dates for the  distributions  giving rise to such adjustments shall occur on the
same  date,  then  such  adjustments  shall  be made  by  applying,  first,  the
provisions of Section 11.06, second, the provisions of Section 11.08 and, third,
the provisions of Section 11.07.

     SECTION 11.18 Successive Adjustments.

     After an  adjustment  to the  Conversion  Rate under this  Article  11, any
subsequent  event  requiring an adjustment  under this Article 11 shall cause an
adjustment to the Conversion Rate as so adjusted.

     SECTION 11.19 Rights Issued in Respect of Common Stock Issued Upon
Conversion.

     Each share of Common Stock issued upon conversion of Securities pursuant to
this  Article 11 shall be entitled to receive the  appropriate  number of common
stock or preferred stock purchase rights, as the case may be (the "Rights"),  if
any,  that  all  shares  of  Common  Stock  are  entitled  to  receive,  and the
certificates  representing  the Common Stock issued upon such  conversion  shall
bear such  legends,  if any, in each case as may be provided by the terms of any
shareholder rights agreement adopted by the Company,  as the same may be amended
from time to time (in each  case,  a  "Rights  Agreement").  Provided  that such
Rights Agreement requires that each share of Common Stock issued upon conversion
of Securities  at any time prior to the  distribution  of separate  certificates
representing   the  Rights  be   entitled   to  receive   such   Rights,   then,
notwithstanding  anything  else to the  contrary in this Article 11, there shall
not be any adjustment to the conversion privilege or Conversion Rate as a result
of  the  issuance  of  Rights,   the   distribution  of  separate   certificates
representing the Rights, the exercise or redemption of such Rights in accordance
with any such Rights  Agreement,  or the  termination  or  invalidation  of such
Rights.

                                   ARTICLE 12

                               PAYMENT OF INTEREST

     SECTION 12.01 Interest Payments.

     Semiannual or contingent  interest on any Security that is payable in cash,
and is  punctually  paid or duly provided  for, on any  applicable  payment date
shall be paid to the person in whose name that  Security  is  registered  at the
close of business on the Regular  Record Date or accrual  date,  as the case may
be, for such interest at the office or agency of the Company maintained for such
purpose.  Each installment of semiannual or contingent  interest on any Security
shall be paid in  same-day  funds by transfer  to an account  maintained  by the
payee  located  inside the United  States,  if the Trustee  shall have  received
proper  wire  transfer  instructions  from such payee not later than the related
Regular  Record  Date or  accrual  date,  as the  case  may be,  or,  if no such
instructions have been received by check drawn on a bank in The


                                       67
<PAGE>


City of New York mailed to the payee at its address set forth on the Registrar's
books.  In the case of a permanent  Global  Security,  semiannual  or contingent
interest payable on any applicable  payment date will be paid to the Depositary,
with  respect to that portion of such  permanent  Global  Security  held for its
account by Cede & Co. for the  purpose  of  permitting  such party to credit the
interest  received  by it in respect of such  permanent  Global  Security to the
accounts of the beneficial owners thereof.

     SECTION 12.02 Defaulted Interest.

     Except  as  otherwise  specified  with  respect  to  the  Securities,   any
semiannual  or contingent  interest on any Security that is payable,  but is not
punctually  paid or duly provided for,  within 30 days  following any applicable
payment date (herein called "Defaulted  Interest",  which term shall include any
accrued  and  unpaid  interest  that has  accrued  on such  defaulted  amount in
accordance  with  section  1 of the  Securities),  shall  forthwith  cease to be
payable to the registered  Holder thereof on the relevant Regular Record Date or
accrual date, as the case may be, 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  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  and the date of the proposed  payment  (which
     shall  not be less  than 20 days  after  such  notice  is  received  by the
     Trustee),  and at the same time the Company  shall deposit with the Trustee
     an amount of money  equal to the  aggregate  amount  proposed to be paid in
     respect of such Defaulted Interest or shall make arrangements  satisfactory
     to the  Trustee  for such  deposit on or prior to the date of the  proposed
     payment,  such money when  deposited to be held in trust for the benefit of
     the persons entitled to such Defaulted Interest as in this clause provided.
     Thereupon  the Trustee  shall fix a special  record date for the payment of
     such  Defaulted  Interest which shall be not more than 15 days and not less
     than 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 "Special Record Date").  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 at his address as it appears
     on the list of Securityholders maintained pursuant to Section 2.05 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 mailed as aforesaid,  such Defaulted  Interest shall be paid to
     the persons in whose names the  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   in  any  other  lawful  manner  not   inconsistent   with  the
     requirements  of

                                       68
<PAGE>


     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.

     SECTION 12.03 Interest Rights Preserved.

     Subject to the  foregoing  provisions  of this Article 12 and Section 2.06,
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
semiannual and contingent interest accrued and unpaid, and to accrue, which were
carried by such other Security.

                                   ARTICLE 13

                                  MISCELLANEOUS

     SECTION 13.01 Trust Indenture Act Controls.

     If any provision of this  Indenture  limits,  qualifies,  or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.

     SECTION 13.02 Notices; Address of Agency in Manhattan.

     Any   request,   demand,   authorization,   notice,   waiver,   consent  or
communication  shall be in writing and  delivered  in person or mailed by first-
class mail,  postage  prepaid,  addressed as follows or transmitted by facsimile
transmission  (confirmed  by  guaranteed  overnight  courier)  to the  following
facsimile numbers:

     if to the Company:

             Stilwell Financial Inc.
             920 Main Street, 21/st/ flr.
             Kansas City, MO 64105-2008
             Telephone No.
             Facsimile No.

             Attention:  Chief Financial Officer

     if to the Trustee:

             The Chase Manhattan Bank
             450 West 33/rd/ Street
             New York, NY  10001
             Telephone No.:  (212) 946-7550
             Facsimile No.:  (212) 946-8162

             Attention:  Institutional Trust Services

                                       69
<PAGE>


     The  Company  or the  Trustee  by notice  given to the other in the  manner
provided  above may designate  additional or different  addresses for subsequent
notices or communications.

     Any notice or communication  given to a  Securityholder  shall be mailed to
the   Securityholder,   by   first-class   mail,   postage   prepaid,   at   the
Securityholder's  address  as it  appears  on  the  registration  books  of  the
Registrar  and  shall  be  sufficiently  given  if so  mailed  within  the  time
prescribed.

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

     If the Company mails a notice or communication to the  Securityholders,  it
shall mail a copy to the Trustee and each  Registrar,  Paying Agent,  Conversion
Agent or co-registrar.

     SECTION 13.03 Communication by Holders with Other Holders.

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

     SECTION 13.04 Certificate and Opinion as to Conditions Precedent.

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

     (1) an Officers'  Certificate  stating that, in the opinion of the signers,
     all conditions  precedent,  if any, provided for in this Indenture relating
     to the proposed action have been complied with; and

     (2) an Opinion of Counsel stating that, in the opinion of such counsel, all
     such conditions precedent have been complied with.

     SECTION 13.05 Statements Required in Certificate or Opinion.

     Each Officers' Certificate or Opinion of Counsel with respect to compliance
with a covenant or condition provided for in this Indenture shall include:

     (1) a statement  that each  person  making such  Officers'  Certificate  or
     Opinion of Counsel has read such covenant or condition;

     (2) a brief  statement  as to the  nature and scope of the  examination  or
     investigation  upon which the  statements  or  opinions  contained  in such
     Officers' Certificate or Opinion of Counsel are based;

                                       70
<PAGE>


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

     (4) a statement  that,  in the  opinion of such  person,  such  covenant or
     condition has been complied with.

     SECTION 13.06 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  13.07  Rules  by  Trustee,  Paying  Agent,  Conversion  Agent  and
Registrar.

     The  Trustee  may make  reasonable  rules for  action  by or a  meeting  of
Securityholders.  The Registrar,  Conversion Agent and the Paying Agent may make
reasonable rules for their functions.

     SECTION 13.08 Calculations.

     The  calculation of the Purchase Price,  Change in Control  Purchase Price,
Conversion  Rate,  Market  Price,  Sale Price of the Common Stock and each other
calculation to be made hereunder (other than the LYON Market Price) shall be the
obligation of the Company.  All calculations made by the Company as contemplated
pursuant to this Section 13.08 shall be final and binding on the Company and the
Holders absent manifest error. The Trustee,  Paying Agent,  Conversion Agent and
Bid  Solicitation  Agent shall not be  obligated  to  recalculate,  recompute or
confirm any such calculations.

     SECTION 13.09 Legal Holidays.

     A "Legal  Holiday" is any day other than a Business  Day. If any  specified
date  (including a date for giving notice) is a Legal Holiday,  the action shall
be taken on the next  succeeding  day that is not a Legal  Holiday,  and, if the
action to be taken on such date is a payment in respect  of the  Securities,  no
Original  Issue Discount or interest,  if any, shall accrue for the  intervening
period.

     SECTION 13.10 GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN
THIS INDENTURE AND THE SECURITIES.

     SECTION 13.11 No Recourse Against Others.

     A director,  officer,  employee, agent,  representative,  or stockholder or
equity  holder,  as such,  of the Company  shall not have any  liability for any
obligations  of the Company


                                       71
<PAGE>

under the  Securities or this Indenture or for any claim based on, in respect of
or by reason of such  obligations  or their  creation.  By accepting a Security,
each Securityholder  shall waive and release all such liability.  The waiver and
release shall be part of the consideration for the issue of the Securities.

     SECTION 13.12 Successors.

     All agreements of the Company in this  Indenture and the  Securities  shall
bind its successor.  All agreements of the Trustee in this Indenture  shall bind
its successor.

     SECTION 13.13 Multiple Originals.

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


                                       72
<PAGE>


     IN WITNESS WHEREOF, the undersigned,  being duly authorized,  have executed
this Indenture on behalf of the  respective  parties hereto as of the date first
above written.

                                     STILWELL FINANCIAL INC.

                                     By:
                                        ---------------------------
                                     Name:
                                     Title:

                                     THE CHASE MANHATTAN BANK,
                                           as Trustee

                                     By:
                                        ---------------------------
                                     Name:
                                     Title:


                                       73
<PAGE>




                                   EXHIBIT A-1

                        [FORM OF FACE OF GLOBAL SECURITY]

     FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL  REVENUE CODE,  THIS
SECURITY IS ISSUED WITH AN  INDETERMINATE  AMOUNT OF ORIGINAL ISSUE DISCOUNT FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE DATE IS APRIL 30, 2001, AND
THE YIELD TO MATURITY FOR PURPOSES OF ACCRUING  ORIGINAL ISSUE DISCOUNT IS 7.51%
PER ANNUM.

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

     TRANSFERS OF THIS GLOBAL  SECURITY  SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY,  OR TO A SUCCESSOR
THEREOF OR SUCH  SUCCESSOR'S  NOMINEE AND  TRANSFERS  OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE  RESTRICTIONS
SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

     THIS SECURITY AND THE SHARES OF COMMON STOCK  ISSUABLE  UPON  CONVERSION OF
THIS  SECURITY HAVE NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933, AS
AMENDED (THE  "SECURITIES  ACT"),  OR ANY STATE  SECURITIES  LAWS.  NEITHER THIS
SECURITY,  THE SHARES OF COMMON STOCK ISSUABLE UPON  CONVERSION OF THIS SECURITY
NOR ANY  INTEREST OR  PARTICIPATION  HEREIN OR THEREIN MAY BE  REOFFERED,  SOLD,
ASSIGNED,  TRANSFERRED,  PLEDGED,  ENCUMBERED  OR  OTHERWISE  DISPOSED OF IN THE
ABSENCE OF SUCH  REGISTRATION OR UNLESS SUCH  TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.

     THE HOLDER OF THIS  SECURITY,  BY ITS ACCEPTANCE  HEREOF,  AGREES TO OFFER,
SELL,  OR  OTHERWISE  TRANSFER  SUCH  SECURITY,  PRIOR TO THE DATE (THE  "RESALE
RESTRICTION  TERMINATION  DATE"),  WHICH IS TWO  YEARS  AFTER  THE  LATER OF THE
ORIGINAL  ISSUE DATE HEREOF AND THE LAST DATE ON WHICH  STILWELL  FINANCIAL INC.
(THE "COMPANY" OR THE "ISSUER") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
THIS SECURITY (OR ANY  PREDECESSOR  OF SUCH SECURITY) ONLY (A) TO THE COMPANY OR
ANY  SUBSIDIARY  THEREOF,  (B) FOR SO LONG AS THE  SECURITIES  ARE  ELIGIBLE FOR


                                       1
<PAGE>


RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL  BUYER" AS  DEFINED  IN RULE 144A  UNDER THE  SECURITIES  ACT THAT
PURCHASES  FOR ITS OWN ACCOUNT OR FOR THE  ACCOUNT OF A QUALIFIED  INSTITUTIONAL
BUYER TO WHICH  NOTICE IS GIVEN THAT THE  TRANSFER  IS BEING MADE IN RELIANCE ON
RULE 144A, (C) TO AN INSTITUTIONAL  "ACCREDITED  INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (A)(1), (2),(3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING  THE  SECURITY  FOR ITS OWN  ACCOUNT,  OR FOR THE  ACCOUNT  OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION  WITH, ANY  DISTRIBUTION  IN VIOLATION OF
THE  SECURITIES  ACT, (D) PURSUANT TO A  REGISTRATION  STATEMENT  WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE  REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER,  SALE OR TRANSFER
PURSUANT TO CLAUSE (C) OR (E) TO REQUIRE THE  DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH
OF THE FOREGOING  CASES,  A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE
OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE  TRANSFEROR TO THE
TRUSTEE.

     THE FOREGOING  LEGEND MAY BE REMOVED FROM THIS SECURITY ON  SATISFACTION OF
THE CONDITIONS SPECIFIED IN THE INDENTURE.


                                       2
<PAGE>




                             STILWELL FINANCIAL INC.
                      Liquid Yield Option(TM) Note due 2031
                              (Zero Coupon-Senior)

No. R-
                                               CUSIP: 860831 AA4
Issue Date: April 30, 2001                     Original Issue Discount: $258.63
Issue Price:           $741.37                 (for each $1,000 Principal
(for each $1,000 Principal                     Amount at Maturity)
Amount at Maturity)

     STILWELL FINANCIAL INC., a Delaware corporation,  promises to pay to Cede &
Co.  or  registered   assigns,  the  Principal  Amount  at  Maturity  of DOLLARS
($--------) on April 30, 2031.

     This Security shall not bear interest except as specified on the other side
of this Security.  Original Issue Discount will accrue as specified on the other
side of this  Security.  This Security is  convertible as specified on the other
side of this Security.

     Additional  provisions  of this Security are set forth on the other side of
this Security.

Dated:       April 30, 2001                     STILWELL FINANCIAL INC.

                                                By
                                                    -------------------------
                                                    Title:

TRUSTEE'S CERTIFICATE OF
AUTHENTICATION

The Chase Manhattan Bank
as Trustee, certifies that this
is one of the
Securities referred
to in the within-mentioned Indenture.


By  --------------------------
    Authorized Officer



                                       3
<PAGE>




                         [FORM OF REVERSE SIDE OF LYON]
                      Liquid Yield Option(TM) Note due 2031
                              (Zero Coupon-Senior)

1.   Interest.

     This Security shall not bear interest,  except as specified in this section
or in sections 5 and 11 hereof.  If the Principal  Amount at Maturity  hereof or
any portion of such  Principal  Amount at Maturity is not paid when due (whether
upon acceleration  pursuant to Section 6.02 of the Indenture,  upon the date set
for payment of the Redemption Price pursuant to section 6 hereof,  upon the date
set for  payment  of the  Purchase  Price or Change in  Control  Purchase  Price
pursuant to section 7 hereof or upon the Stated Maturity of this Security) or if
interest (including semiannual or contingent interest, if any) due hereon or any
portion of such interest is not paid when due in accordance with section 5 or 11
hereof, then in each such case the overdue amount shall, to the extent permitted
by law, bear interest at the rate of 1.00% per annum,  compounded  semiannually,
which interest shall accrue from the date such overdue amount was originally due
to the date payment of such amount, including interest thereon, has been made or
duly provided for. All such interest shall be payable on demand.

     Original  Issue  Discount (the  difference  between the Issue Price and the
Principal  Amount at Maturity of the  Security),  in the period  during  which a
Security remains  outstanding,  shall accrue at 1.00% per annum, on a semiannual
bond  equivalent  basis using a 360-day year composed of twelve  30-day  months,
from the Issue Date of this Security.

2.   Method of Payment.

     Subject to the terms and conditions of the Indenture, the Company will make
payments in respect of Redemption  Prices,  Purchase  Prices,  Change in Control
Purchase Prices and at Stated Maturity to Holders who surrender  Securities to a
Paying Agent to collect such payments in respect of the Securities.  The Company
will pay any cash  amounts  in money of the  United  States  that at the time of
payment is legal tender for payment of public and private  debts.  However,  the
Company may make such cash payments by check payable in such money.

3.   Paying Agent, Conversion Agent, Registrar and Bid Solicitation Agent.

     Initially,  The Chase Manhattan Bank, a New York banking  corporation  (the
"Trustee"),  will act as  Paying  Agent,  Conversion  Agent,  Registrar  and Bid
Solicitation  Agent.  The  Company  may  appoint  and change  any Paying  Agent,
Conversion  Agent,  Registrar or co-registrar or Bid Solicitation  Agent without
notice,  other than notice to the Trustee  except that the Company will maintain
at least  one  Paying  Agent in the  State of New  York,  The City of New  York,
Borough  of  Manhattan,  which  shall  initially  be an  office or agency of the
Trustee.  The Company or any of its  Subsidiaries or any of their Affiliates may
act as Paying Agent,  Conversion Agent,  Registrar or co-registrar.  None of the
Company,  any of its  Subsidiaries or any of their  Affiliates  shall act as Bid
Solicitation Agent.


                                       4
<PAGE>


4.   Indenture.

     The Company issued the Securities  under an Indenture dated as of April 30,
2001 (the  "Indenture"),  between the Company and the Trustee.  The terms of the
Securities  include  those  stated in the  Indenture  and those made part of the
Indenture  by reference to the Trust  Indenture  Act of 1939,  as in effect from
time to time (the "TIA").  Capitalized  terms used herein and not defined herein
have the meanings ascribed thereto in the Indenture.  The Securities are subject
to all such terms, and Securityholders are referred to the Indenture and the TIA
for a statement of those terms.

     The Securities are general unsecured and unsubordinated  obligations of the
Company limited to $930,709,000  aggregate Principal Amount at Maturity (subject
to  Section  2.07  of  the  Indenture).  The  Indenture  does  not  limit  other
indebtedness of the Company, secured or unsecured.

5.   Contingent Interest.

     Subject to the accrual and record date provisions specified in this section
5, the Company shall pay contingent interest to the Holders during any six-month
period  (a  "Contingent  Interest  Period")  from May 1 to  October  30 and from
October 31 to April 30, commencing May 1, 2006, if the average LYON Market Price
for the Five-Day Period with respect to such  Contingent  Interest Period equals
120% or more of the sum of the Issue  Price of a  Security  and  Original  Issue
Discount  accrued thereon to the day immediately  preceding the first day of the
relevant Contingent Interest Period.

     The amount of contingent  interest  payable per $1,000  Principal Amount at
Maturity hereof in respect of any Quarterly Period within a Contingent  Interest
Period shall equal the greater of (x) Regular Cash Dividends paid by the Company
per share of Common Stock during that Quarterly Period  multiplied by the number
of shares of Common Stock into which $1,000  Principal Amount at Maturity hereof
is  convertible  pursuant  to section 9 hereof as of the  accrual  date for such
contingent  interest  and (y) 0.0625% of the average  LYON Market  Price for the
Five-Day Period with respect to such Contingent Interest Period.

     Contingent  interest,  if any,  will accrue and be payable to Holders as of
the record date for the related  Regular  Cash  Dividend  or, if no Regular Cash
Dividend is paid by the Company during a Quarterly  Period, to Holders as of the
15th day preceding the last day of the relevant Contingent Interest Period. Such
payments shall be paid on the payment date of the related  Regular Cash Dividend
or, if no Regular  Cash  Dividend  is paid by the Company  during any  Quarterly
Period,  on the last day of the relevant  Contingent  Interest Period.  Original
Issue  Discount  will  continue  to accrue at 1.00 % per  annum  whether  or not
contingent interest is paid.

     "Five-Day  Period" means,  with respect to any Contingent  Interest Period,
the five trading days ending on the second trading day immediately preceding the
first day of such Contingent Interest Period; provided,  however, if the Company
shall have  declared a Regular Cash Dividend on its Common Stock that is payable
during  such  Contingent  Interest  Period  but for  which the  record  date for
determining  stockholders  entitled  thereto  precedes  the  first  day of  such
Contingent  Interest Period,  then "Five-Day Period" shall mean, with respect to
such  Contingent


                                       5
<PAGE>


Interest  Period,  the five  trading  days  ending  on the  second  trading  day
immediately preceding such record date.

     "Regular Cash  Dividends"  means quarterly or other periodic cash dividends
on the Company's Common Stock as declared by the Company's Board of Directors as
part of its cash dividend payment  practices and that are not designated by them
as extraordinary or special or other nonrecurring dividends.

     "LYON Market Price" means, as of any date of determination,  the average of
the secondary  market bid  quotations  per $1,000  Principal  Amount at Maturity
obtained  by the Bid  Solicitation  Agent for $10  million  Principal  Amount at
Maturity of Securities at  approximately  4:00 p.m., New York City time, on such
determination  date from three recognized  securities dealers in The City of New
York  (none of which  shall be an  Affiliate  of the  Company)  selected  by the
Company; provided,  however, if (a) at least three such bids are not obtained by
the Bid Solicitation Agent or (b) in the Company's reasonable judgment,  the bid
quotations are not indicative of the secondary market value of the Securities as
of such  determination  date, then the LYON Market Price for such  determination
date shall equal (i) the Conversion Rate in effect as of such determination date
multiplied  by (ii) the  average  Sale  Price of the  Common  Stock for the five
trading days ending on such determination date,  appropriately  adjusted to take
into account the occurrence,  during the period  commencing on the first of such
trading   days  during  such  five   trading  day  period  and  ending  on  such
determination  date,  of any event  described in Section  11.06,  11.07 or 11.08
(subject  to the  conditions  set  forth in  Sections  11.09  and  11.10) of the
Indenture.

     The term  "Quarterly  Period"  shall mean,  with respect to any  Contingent
Interest  Period,  any quarterly  period within such Contingent  Interest Period
extending from May 1 to July 31, from August 1 to October 30, from October 31 to
January 31 or from February 1 to April 30.

     Upon  determination  that  Holders  will be entitled to receive  contingent
interest  which may become payable during a Contingent  Interest  Period,  on or
prior to the first day of such  Contingent  Interest  Period,  the Company shall
promptly  notify  the  Trustee  of such  determination  and shall  issue a press
release and publish such  information  on its web site.  The Company  shall also
notify the Trustee of the  declaration  of any Regular  Cash  Dividends  and the
related record and payment dates.

6.   Redemption at the Option of the Company.

     No  sinking  fund  is  provided  for the  Securities.  The  Securities  are
redeemable  as a whole,  or from time to time in part, at any time at the option
of the Company  for cash in  accordance  with the  Indenture  at the  Redemption
Prices set forth below, provided that the Securities are not redeemable prior to
April 30, 2006.

     The table below shows Redemption  Prices of a Security per $1,000 Principal
Amount at Maturity on the dates shown below and at Stated Maturity, which prices
reflect  accrued  Original  Issue  Discount  calculated  to each such date.  The
Redemption  Price of a Security  redeemed  between  such dates shall  include an
additional  amount  reflecting  the additional  Original Issue Discount  accrued
since the preceding date in the table but not including the Redemption Date.


                                       6
<PAGE>
<TABLE>
<CAPTION>

                                                           (1)                         (2)                       (3)
                                                                                     Accrued                   Redemption
                                                           LYON                   Original Issue                 Price
Redemption Date                                        Issue Price                   Discount                    (1) + (2)
---------------                                        -----------                   --------                    ---------
<S>                                                    <C>                        <C>                           <C>
April 30
2006...........................................              $741.37                     $37.91                   $779.28
2007...........................................               741.37                      45.73                    787.10
2008...........................................               741.37                      53.62                    794.99
2009...........................................               741.37                      61.59                    802.96
2010...........................................               741.37                      69.64                    811.01
2011...........................................               741.37                      77.77                    819.14
2012...........................................               741.37                      85.98                    827.35
2013...........................................               741.37                      94.27                    835.64
2014...........................................               741.37                     102.65                    844.02
2015...........................................               741.37                     111.11                    852.48
2016...........................................               741.37                     119.66                    861.03
2017...........................................               741.37                     128.29                    869.66
2018...........................................               741.37                     137.01                    878.38
2019...........................................               741.37                     145.81                    887.18
2020...........................................               741.37                     154.71                    896.08
2021...........................................               741.37                     163.69                    905.06
2022...........................................               741.37                     172.76                    914.14
2023...........................................               741.37                     181.93                    923.30
2024...........................................               741.37                     191.18                    932.56
2025...........................................               741.37                     200.53                    941.90
2026...........................................               741.37                     209.98                    951.35
2027...........................................               741.37                     219.51                    960.88
2028...........................................               741.37                     229.15                    970.52
2029...........................................               741.37                     238.88                    980.25
2030...........................................               741.37                     248.70                    990.07
At Stated Maturity.............................               741.37                     258.63                   1,000.00
</TABLE>

     If this Security has been  converted to a semiannual  coupon note following
the  occurrence  of a Tax  Event,  the  Redemption  Price  will be  equal to the
Restated Principal Amount plus accrued and unpaid interest from the date of such
conversion to but not including the Redemption Date.

     In addition to the Redemption  Price payable with respect to all Securities
or portions  thereof to be redeemed as of a Redemption Date, the Holders of such
Securities (or portions thereof) shall be entitled to receive accrued and unpaid
semiannual and contingent interest, if any, with respect thereto, which interest
shall be paid in cash on the Redemption Date.


                                       7
<PAGE>


7.   Purchase by the Company at the Option of the Holder.

     (a) Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase,  at the option of the Holder,  the Securities held
by such Holder on the following  Purchase  Dates and at the  following  Purchase
Prices per $1,000  Principal  Amount at  Maturity,  upon  delivery of a Purchase
Notice  containing the information set forth in the Indenture,  at any time from
the  opening  of  business  on the date that is 20  Business  Days prior to such
Purchase  Date  until  the  close of  business  on such  Purchase  Date and upon
delivery of the Securities to the Paying Agent by the Holder as set forth in the
Indenture.

             Purchase Date                                    Purchase Price

             April 30, 2002.............................             $748.80
             April 30, 2004.............................             $763.89
             April 30, 2006.............................             $779.28
             April 30, 2011.............................             $819.14
             April 30, 2016.............................             $861.03
             April 30, 2021.............................             $905.06
             April 30, 2026.............................             $951.35

     The Purchase  Price (equal to the Issue Price plus accrued  Original  Issue
Discount to the Purchase  Date) may be paid,  at the option of the  Company,  in
cash or by the  issuance  and delivery of shares of Common Stock of the Company,
or in any combination thereof.

     If  prior  to a  Purchase  Date  this  Security  has  been  converted  to a
semiannual  coupon note  following the  occurrence of a Tax Event,  the Purchase
Price will be equal to the  Restated  Principal  Amount plus  accrued and unpaid
interest from the date of conversion to the Purchase Date.

     (b) At the option of the Holder and subject to the terms and  conditions of
the  Indenture,  the Company shall become  obligated to purchase the  Securities
held by such Holder no later than 35  Business  Days after the  occurrence  of a
Change in Control of the Company but in no event prior to the date on which such
Change in Control occurs occurring on or prior to April 30, 2006 for a Change in
Control  Purchase  Price equal to the Issue Price plus  accrued  Original  Issue
Discount  to the  Change in  Control  Purchase  Date,  which  Change in  Control
Purchase  Price shall be paid in cash. If prior to a Change in Control  Purchase
Date this Security has been converted to a semiannual  coupon note following the
occurrence of a Tax Event,  the Change in Control  Purchase Price shall be equal
to the Restated  Principal Amount plus accrued and unpaid interest from the date
of conversion to the Change in Control Purchase Date.

     A third party may make the offer and purchase of the  Securities in lieu of
the Company in accordance with the Indenture.

     (c) In addition to the Purchase Price or Change in Control  Purchase Price,
as the case may be, payable with respect to all  Securities or portions  thereof
to be purchased as of the Purchase Date or the Change in Control  Purchase Date,
as the case may be, the Holders of such

                                       8
<PAGE>


Securities (or portions thereof) shall be entitled to receive accrued and unpaid
semiannual and contingent interest, if any, with respect thereto, which interest
shall be paid in cash  promptly  following the later of the Purchase Date or the
Change in Control Purchase Date, as the case may be, and the time of delivery of
such Securities to the Paying Agent pursuant to the Indenture.

     Holders have the right to withdraw any Purchase Notice or Change in Control
Purchase Notice, as the case may be, by delivering to the Paying Agent a written
notice of withdrawal in accordance with the provisions of the Indenture.

     If cash (and/or securities if permitted under the Indenture)  sufficient to
pay the Purchase Price or Change in Control  Purchase Price, as the case may be,
of, together with any accrued and unpaid semiannual and contingent interest with
respect  to,  all  Securities  or  portions  thereof to be  purchased  as of the
Purchase  Date or the Change in Control  Purchase  Date,  as the case may be, is
deposited  with the Paying Agent on the Business Day following the Purchase Date
or the Change in  Control  Purchase  Date,  as the case may be,  Original  Issue
Discount and interest (including  semiannual and contingent  interest),  if any,
shall cease to accrue on such Securities (or portions thereof) immediately after
such Purchase Date or Change in Control  Purchase  Date, as the case may be, and
the Holder  thereof  shall have no other rights as such (other than the right to
receive the Purchase Price or Change in Control  Purchase Price, as the case may
be, and accrued and unpaid  semiannual  and  contingent  interest,  if any, upon
surrender of such Security).

8.   Notice of Redemption.

     Notice of  redemption  will be mailed at least 15 days but not more than 60
days before the  Redemption  Date to each Holder of Securities to be redeemed at
the Holder's registered address. If money sufficient to pay the Redemption Price
of, and accrued and unpaid  semiannual  and  contingent  interest,  if any, with
respect  to,  all  Securities  (or  portions  thereof)  to be  redeemed  on  the
Redemption Date is deposited with the Paying Agent prior to or on the Redemption
Date, on such Redemption Date,  Original Issue Discount and interest  (including
semiannual  and  contingent  interest),  if any,  shall  cease to accrue on such
Securities or portions thereof.  Securities in denominations  larger than $1,000
of  Principal  Amount at  Maturity  may be redeemed in part but only in integral
multiples of $1,000 of Principal Amount at Maturity.

9.   Conversion.

     Subject to the  provisions of this section 9 and  notwithstanding  the fact
that any other  condition  to  conversion  has not been  satisfied,  Holders may
convert the  Securities  into Common Stock on a Conversion  Date in any calendar
quarter  commencing after June 30, 2001, if, as of the last day of the preceding
calendar  quarter,  the Sale Price of the  Common  Stock for at least 20 trading
days in a period of 30  consecutive  trading days ending on the last trading day
of such preceding calendar quarter is greater than the conversion trigger price.
The  "conversion  trigger  price" for any calendar  quarter shall be a reference
percentage,  beginning at 120%, and declining 0.084% per quarter thereafter,  of
the accreted  conversion price per share of Common Stock on the last trading day
of such preceding calendar quarter.

     The  "accreted  conversion  price" per share of Common  Stock as of any day
equals the quotient of:


                                       9
<PAGE>



     o the Issue Price and accrued  Original Issue Discount to that day, divided
       by

     o the number of shares of Common Stock  issuable upon  conversion of $1,000
       Principal Amount at Maturity of Securities on that day.

     For  illustrative  purposes  only,  the table  below  shows the  conversion
trigger  price  per  share of Common  Stock in  respect  of each of the first 20
calendar quarters.  These prices reflect the accreted conversion price per share
of Common Stock (assuming that no events occurred requiring an adjustment to the
initial  Conversion Rate of 17.1544 shares of Common Stock per $1,000  Principal
Amount of Maturity)  multiplied by the applicable  percentage for the respective
calendar quarter.  Thereafter, the accreted conversion price per share of Common
Stock increases each calendar quarter by the accrued Original Issue Discount for
the quarter and the applicable percentage declines by 0.084% per quarter.

<TABLE>
<CAPTION>

                                                                (1)                      (2)                     (3)
                                                               Accreted               Applicable               Conversion
                                                              Conversion              Reference             Trigger Price
      Quarter                                                    Price                Percentage                (1)x(2)
      -------                                                    -----                ----------                -------
<S>                                                           <C>                     <C>                   <C>
2001
   Third Quarter........................................           $43.30                  120.00%                  $51.95
   Fourth Quarter.......................................            43.40                  119.92%                   52.05
2002
   First Quarter........................................            43.51                  119.83%                   52.14
   Second Quarter.......................................            43.62                  119.75%                   52.23
   Third Quarter........................................            43.73                  119.66%                   52.33
   Fourth Quarter.......................................            43.84                  119.58%                   52.42
2003
   First Quarter........................................            43.95                  119.50%                   52.52
   Second Quarter.......................................            44.06                  119.41%                   52.61
   Third Quarter........................................            44.17                  119.33%                   52.70
   Fourth Quarter.......................................            44.28                  119.24%                   52.80
2004
   First Quarter........................................            44.39                  119.16%                   52.89
   Second Quarter.......................................           144.50                  119.08%                   52.99
   Third Quarter........................................            44.61                  118.99%                   53.08
   Fourth Quarter.......................................            44.72                  118.91%                   53.18
2005
   First Quarter........................................            44.83                  118.82%                   53.27
   Second Quarter.......................................            44.95                  118.74%                   53.37
   Third Quarter........................................            45.06                  118.66%                   53.46
   Fourth Quarter.......................................            45.17                  118.57%                   53.56
2006
   First Quarter........................................            45.28                  118.49%                   53.66
   Second Quarter.......................................            45.40                  118.40%                   53.75
</TABLE>

     Subject to the  provisions of this section 9 and  notwithstanding  the fact
any other  condition to conversion has not been  satisfied,  Holders may convert
the Securities into Common Stock on a Conversion Date during any period in which
the credit rating  assigned to the

                                       10
<PAGE>



Securities  by a Rating  Agency is at or below the  Applicable  Rating.  "Rating
Agency"  means  (1)  Moody's   Investors   Service,   Inc.  and  its  successors
("Moody's"),  or (2)  Standard & Poor's  Ratings  Services,  a  division  of The
McGraw-Hill   Companies   Inc.,  and  its  successors   ("Standard  &  Poor's").
"Applicable  Rating"  means a  credit  rating  that is more  than  three  rating
subcategories below the initial credit rating assigned to the LYONs.

     Subject to the  provisions of this section 9 and  notwithstanding  the fact
that any other  condition to  conversion  has not been  satisfied,  a Holder may
convert  into Common  Stock a Security  or portion of a Security  which has been
called for  redemption  pursuant to section 6 hereof but such  Securities may be
surrendered  for conversion  until the close of business on the second  Business
Day immediately preceding the Redemption Date.

     Subject to the  provisions of this section 9 and  notwithstanding  the fact
that any other condition to conversion has not been satisfied, in the event that
the Company  declares a dividend or  distribution  described in Section 11.07 of
the Indenture, or a dividend or a distribution described in Section 11.08 of the
Indenture where the fair market value of such dividend or distribution per share
of Common Stock,  as determined in the Indenture,  exceeds 15% of the Sale Price
of the  Common  Stock on the  Business  Day  immediately  preceding  the date of
declaration for such dividend or  distribution,  the Company will be required to
give notice to the Holders of the  Securities  at least 20 days prior to the Ex-
Dividend  Time  for  such  dividend  or  distribution,  and  Securities  may  be
surrendered for conversion at any time thereafter until the close of business on
the Business Day prior to the  Ex-Dividend  Time or until the Company  announces
that such dividend or distribution will not take place.

     Subject to the  provisions of this section 9 and  notwithstanding  the fact
that any other condition to conversion has not been satisfied,  in the event the
Company is a party to a consolidation, merger or binding share exchange pursuant
to which the Common  Stock would be  converted  into cash,  securities  or other
property as set forth in Section 11.14 of the  Indenture,  the Securities may be
surrendered  for conversion at any time from and after the date which is 15 days
prior to the date the Company announces the anticipated  effective time until 15
days after the actual effective date of such  transaction,  and at the effective
time of such  transaction the right to convert a Security into Common Stock will
be deemed to have changed into a right to convert it into the kind and amount of
cash,  securities or other  property of the Company or another  person which the
holder would have received if the holder had converted its Security  immediately
prior to the transaction.

     A Security in respect of which a Holder has delivered a Purchase  Notice or
Change in  Control  Purchase  Notice  exercising  the  option of such  Holder to
require the Company to purchase  such  Security  may be  converted  only if such
notice of exercise is withdrawn in accordance with the terms of the Indenture.

     The initial  Conversion  Rate is 17.1544  shares of Common Stock per $1,000
Principal Amount at Maturity,  subject to adjustment in certain events described
in the  Indenture.  The  Company  will  deliver  cash or a check  in lieu of any
fractional share of Common Stock.

     In the event the Company  exercises its option pursuant to Section 10.01 of
the Indenture to have interest in lieu of Original Issue Discount  accrue on the
Security  following a Tax Event,


                                       11
<PAGE>


the Holder will be entitled on  conversion  to receive the same number of shares
of Common Stock such Holder would have received if the Company had not exercised
such option.

     To convert a Security,  a Holder must (1) complete  and  manually  sign the
conversion  notice  below (or  complete  and  manually  sign a facsimile of such
notice) and deliver  such notice to the  Conversion  Agent,  (2)  surrender  the
Security to the  Conversion  Agent,  (3) furnish  appropriate  endorsements  and
transfer  documents  if required  by the  Conversion  Agent,  the Company or the
Trustee and (4) pay any transfer or similar tax, if required.

     Accrued  and  unpaid  interest  in  lieu of  Original  Issue  Discount  and
semiannual and contingent  interest will not be paid in cash on Securities  that
are converted;  provided,  however that  Securities  surrendered  for conversion
during the period,  in the case of interest in lieu of Original  Issue  Discount
payable under section 11(a) or semiannual  interest payable under section 11(c),
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
or, in the case of contingent  interest,  from the close of business on any date
on which  contingent  interest accrues to the opening of business on the date on
which such  contingent  interest is payable,  shall be entitled to receive  such
interest  in lieu  of  Original  Issue  Discount  or  semiannual  or  contingent
interest,  as the case may be, payable on such  Securities on the  corresponding
Interest  Payment Date or the date on which such contingent  interest is payable
and (except  Securities with respect to which the Company has mailed a notice of
redemption)  Securities  surrendered for conversion  during such periods must be
accompanied  by payment of an amount  equal to the  interest in lieu of Original
Issue  Discount or semiannual or contingent  interest with respect  thereto that
the registered Holder is to receive.

     A Holder may  convert a portion of a Security  if the  Principal  Amount at
Maturity of such portion is $1,000 or an integral multiple of $1,000. No payment
or adjustment  will be made for dividends on the Common Stock except as provided
in the Indenture.  On conversion of a Security, that portion of accrued Original
Issue Discount (or interest if the Company has exercised its option provided for
in section 11(a) hereof or is required to pay interest pursuant to section 11(c)
hereof)  attributable  to the period from the Issue Date (or, if the Company has
exercised the option  referred to in section 11(a) hereof,  the later of (w) the
date of such  exercise and (x) the date on which  interest was last paid and, if
the Company is required to pay interest  pursuant to section 11(c)  hereof,  the
later of (y) 150 days after the issuance of the  Securities  and (z) the date on
which  interest  was last  paid)  through  the  Conversion  Date and  (except as
provided  above)  accrued  contingent  interest  with  respect to the  converted
Security shall not be cancelled,  extinguished or forfeited, but rather shall be
deemed to be paid in full to the Holder  thereof  through  the  delivery  of the
Common Stock  (together  with the cash  payment,  if any, in lieu of  fractional
shares) in  exchange  for the  Security  being  converted  pursuant to the terms
hereof;  and the fair market value of such shares of Common Stock (together with
any such cash payment in lieu of fractional  shares) shall be treated as issued,
to the extent  thereof,  first in  exchange  for  Original  Issue  Discount  (or
interest,  if the Company has exercised its option provided for in section 11(a)
hereof or is required to pay interest  pursuant to section 11(c) hereof) accrued
through the Conversion Date and accrued contingent interest, and the balance, if
any, of such fair market value of such Common Stock (and any such cash  payment)
shall be treated as issued in exchange for the Issue Price of the Security being
converted pursuant to the provisions hereof.


                                       12
<PAGE>


     The  Conversion  Rate will be adjusted for  dividends or  distributions  on
Common  Stock  payable in Common  Stock or other  Capital  Stock;  subdivisions,
combinations or certain reclassifications of Common Stock;  distributions to all
holders of Common Stock of certain rights to purchase  Common Stock for a period
expiring  within 60 days of the record date for such  distribution  at less than
the  Sale  Price  of  the  Common  Stock  at  the  Time  of  Determination;  and
distributions to such holders of assets  (including shares of Capital Stock of a
Subsidiary)  or debt  securities  of the  Company or certain  rights to purchase
securities of the Company  (excluding  certain cash dividends or distributions).
However,  no adjustment need be made if  Securityholders  may participate in the
transaction  or in  certain  other  cases.  The  Company  from  time to time may
voluntarily increase the Conversion Rate.

     If the  Company  is a party to a  consolidation,  merger or  binding  share
exchange  or a  transfer  of all or  substantially  all of its  assets,  or upon
certain  distributions  described  in the  Indenture,  the  right to  convert  a
Security  into  Common  Stock may be  changed  into a right to  convert  it into
securities, cash or other assets of the Company or another person.

     In the event that the Company pays a dividend of or makes a distribution on
shares of Common Stock of the Company consisting of Capital Stock of, or similar
equity  interests  in, a Subsidiary or other  business unit of the Company,  the
Conversion  Rate will be adjusted based on the market value of the securities so
distributed  relative to the market value of the Common Stock of the Company, in
each case based on the average  closing  prices of those  securities for the ten
trading days commencing on and including the fifth trading day after the date on
which  "ex-dividend"  trading commences for such dividend or distribution on the
principal  United States  securities  exchange or market on which the securities
are then listed or quoted.

10.  Conversion Arrangement on Call for Redemption.

     Any Securities  called for  redemption,  unless  surrendered for conversion
before  the  close of  business  on the  Redemption  Date,  may be  deemed to be
purchased  from the  Holders of such  Securities  at an amount not less than the
Redemption Price, by one or more investment  bankers or other purchasers who may
agree with the Company to purchase such Securities from the Holders,  to convert
them into Common Stock of the Company and to make payment for such Securities to
the Trustee in trust for such Holders.

11.  Tax Event; Failure to Obtain Required Rating

     (a) From and after (i) the date (the "Tax Event Date") of the occurrence of
a Tax Event and (ii) the date the Company  exercises  such option,  whichever is
later (the later of such dates, the "Option  Exercise  Date"),  at the option of
the Company,  interest in lieu of future Original Issue Discount shall accrue at
the rate of 1.00% per annum on a principal  amount per Security  (the  "Restated
Principal Amount") equal to the Issue Price plus Original Issue Discount accrued
through the Option Exercise Date.

     (b) From and after the Option Exercise Date,  contingent  interest provided
for in section 5 hereof shall cease to accrue on this Security.


                                       13
<PAGE>



     (c) If by the close of business on the 150/th/ day  following  the issuance
of the  Securities  (or if  such  150th  day is not a  Business  Day,  the  next
succeeding  Business  Day),  the Company has not  obtained at least one of (i) a
rating on the Securities, or a senior unsecured issuer rating on the Company, of
Baa2 or  better  by  Moody's  or (ii) a rating  on the  Securities,  or a senior
unsecured  issuer  rating on the Company,  of BBB or better by Standard & Poor's
(each,  a "Required  Rating"),  then from and after such 150/th/  day,  interest
shall  accrue  at the  rate  of  0.50%  per  annum  on the  Issue  Price  of the
Securities.

     (d) Interest  accrual on any Security  under  section  11(a) or 11(c) above
shall be payable  semiannually  on April 30 and October 30 of each year (each an
"Interest  Payment Date") to holders of record at the close of business on April
15 or October 15 (each a  "Regular  Record  Date")  immediately  preceding  such
Interest  Payment Date. Such interest will be computed on the basis of a 360-day
year comprised of twelve 30-day months and will accrue from the most recent date
to which  interest  has been paid or, if no  interest  has been  paid,  from the
Option  Exercise  Date in the case of section 11(a) or the date that is 150 days
after the issuance of the Securities (in the case of section 11(c)). Interest on
any Security that 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 is registered  at the close of business on the Regular  Record Date for
such  interest  at the  office  or  agency of the  Company  maintained  for such
purpose.  Each installment of interest on any Security shall be paid in same-day
funds by  transfer  to an account  maintained  by the payee  located  inside the
United States.

12.  Defaulted Interest

     Except as otherwise specified with respect to the Securities, any Defaulted
Interest on any Security shall  forthwith  cease to be payable to the registered
Holder thereof on the relevant  Regular Record Date or accrual date, as the case
may be, by virtue of having been such Holder, and such Defaulted Interest may be
paid by the Company as provided for in Section 12.02(b) of the Indenture.

13.  Denominations; Transfer; Exchange.

     The  Securities  are  in  fully  registered  form,   without  coupons,   in
denominations of $1,000 of Principal  Amount at Maturity and integral  multiples
of $1,000.  A Holder may transfer or exchange  Securities in accordance with the
Indenture.  The Registrar may require a Holder,  among other things,  to furnish
appropriate  endorsements  and transfer  documents and to pay any taxes and fees
required by law or permitted by the  Indenture.  The Registrar need not transfer
or exchange any  Securities  selected for redemption  (except,  in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or any  Securities  in respect  of which a Purchase  Notice or Change in Control
Purchase  Notice  has been  given and not  withdrawn  (except,  in the case of a
Security  to be  purchased  in  part,  the  portion  of the  Security  not to be
purchased)  or any  Securities  for a period of 15 days  before the mailing of a
notice of redemption of Securities to be redeemed.


                                       14
<PAGE>


14.  Persons Deemed Owners.

     The registered  Holder of this Security may be treated as the owner of this
Security for all purposes.

15.  Unclaimed Money or Securities.

     The Trustee and the Paying  Agent shall  return to the Company upon written
request any money or securities  held by them for the payment of any amount with
respect to the  Securities  that  remains  unclaimed  for two years,  subject to
applicable  unclaimed  property  laws.  After  return  to the  Company,  Holders
entitled  to the money or  securities  must look to the  Company  for payment as
general creditors unless an applicable abandoned property law designates another
person.

16.  Amendment; Waiver.

     Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Securities  may be amended with the written  consent of the Holders of at
least a majority in aggregate  Principal Amount at Maturity of the Securities at
the time  outstanding  and (ii) certain  Defaults may be waived with the written
consent of the Holders of a majority in aggregate  Principal  Amount at Maturity
of the  Securities at the time  outstanding.  Subject to certain  exceptions set
forth in the Indenture,  without the consent of any Securityholder,  the Company
and the Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency,  or to comply with Article 5 or Section 11.14
of the Indenture,  to secure the Company's obligations under this Security or to
add to the  Company's  covenants  for the benefit of the  Securityholders  or to
surrender any right or power conferred, or to comply with any requirement of the
SEC in connection with the  qualification  of the Indenture under the TIA, or as
necessary  in  connection  with the  registration  of the  Securities  under the
Securities  Act or to make any change that does not adversely  affect the rights
of any Holders.

17.  Defaults and Remedies.

     Under the Indenture,  Events of Default  include (i) default in the payment
of  contingent  interest  when the same becomes due and payable or of semiannual
interest  which  becomes  due and  payable  upon  exercise by the Company of its
option  provided for in section 11(a) hereof or pursuant to section 11(c) hereof
which default in any such case continues for 30 days; (ii) default in payment of
the Principal  Amount at Maturity (or, if the Securities  have been converted to
semiannual coupon notes following a Tax Event, the Restated  Principal  Amount),
Issue Price plus accrued  Original Issue Discount,  Redemption  Price,  Purchase
Price or Change in Control Purchase Price, as the case may be, in respect of the
Securities  when the same becomes due and payable;  (iii) failure by the Company
to comply with other  agreements in the Indenture or the Securities,  subject to
notice and lapse of time; (iv) (a) failure of the Company to make any payment by
the end of any  applicable  grace period after  maturity of Debt in an amount in
excess of $10,000,000, or (b) the acceleration of Debt in an amount in excess of
$10,000,000  because of a default  with  respect to such Debt  without such Debt
having been discharged or such acceleration having been cured, waived, rescinded
or annulled, subject to notice and lapse of time; provided, however, that if any
such failure or  acceleration  referred to in (a) or (b) above


                                       15
<PAGE>


shall  cease or be  cured,  waived,  rescinded  or  annulled,  then the Event of
Default by reason thereof shall be deemed not to have occurred;  and (v) certain
events  of  bankruptcy  or  insolvency.  If an Event of  Default  occurs  and is
continuing,  the Trustee,  or the Holders of at least 25% in aggregate Principal
Amount at Maturity of the  Securities at the time  outstanding,  may declare all
the Securities to be due and payable  immediately.  Certain events of bankruptcy
or insolvency are Events of Default which will result in the Securities becoming
due and payable immediately upon the occurrence of such Events of Default.

     Securityholders  may not enforce the Indenture or the Securities  except as
provided in the  Indenture.  The Trustee may refuse to enforce the  Indenture or
the Securities unless it receives indemnity or security reasonably  satisfactory
to it.  Subject to certain  limitations,  Holders  of a  majority  in  aggregate
Principal  Amount at  Maturity of the  Securities  at the time  outstanding  may
direct the  Trustee  in its  exercise  of any trust or power.  The  Trustee  may
withhold from Securityholders notice of any continuing Default (except a Default
in payment of amounts  specified  in clause (i) or (ii) above) if it  determines
that withholding notice is in their interests.

18.  Trustee Dealings with the Company.

     Subject to certain  limitations  imposed by the TIA, the Trustee  under the
Indenture,  in its  individual  or any other  capacity,  may become the owner or
pledgee of Securities and may otherwise deal with and collect  obligations  owed
to it by the Company or its  Affiliates  and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.

19.  No Recourse Against Others.

     A director,  officer,  employee, agent,  representative,  or stockholder or
equity  holder,  as such,  of the Company  shall not have any  liability for any
obligations  of the Company  under the  Securities  or the  Indenture or for any
claim  based  on,  in  respect  of or by  reason  of such  obligations  or their
creation.  By accepting a Security,  each Securityholder waives and releases all
such  liability.  The waiver and release are part of the  consideration  for the
issue of the Securities.

20.  Authentication.

     This  Security  shall not be valid  until an  authorized  signatory  of the
Trustee manually signs the Trustee's  Certificate of Authentication on the other
side of this Security.

21.  Abbreviations.

     Customary  abbreviations  may be used in the name of a Securityholder or an
assignee,  such as TEN COM  (=tenants  in  common),  TEN  ENT  (=tenants  by the
entireties),  JT TEN  (=joint  tenants  with  right of  survivorship  and not as
tenants in common),  CUST  (=custodian),  and U/G/M/A  (=Uniform  Gift to Minors
Act).

22.  Original Issue Discount Information Reporting Requirements.

     In accordance with the United States Treasury  Regulation Section 1.1275-3,
a Holder


                                       16
<PAGE>


may obtain the projected  payment  schedule by submitting a written  request for
such information to the following  representative of the Company: Gwen E. Royle,
c/o Stilwell  Financial  Inc.,  920 Main Street,  21/st/ Floor,  Kansas City, MO
64105.

23.  GOVERNING LAW.

     THE LAW OF THE  STATE OF NEW  YORK  SHALL  GOVERN  THE  INDENTURE  AND THIS
SECURITY.

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

     The Company will  furnish to any  Securityholder  upon written  request and
without charge a copy of the Indenture which has in it the text of this Security
in larger type. Requests may be made to:

             Stilwell Financial Inc.
             920 Main Street, 21st flr
             Kansas City, MO 64105-2008
             Attention:  Chief Financial Officer


                                       17
<PAGE>



                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to
------------------------------------------------------------------------
------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax ID no.)

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

and irrevocably appoint

------------------------ agent to transfer this Security on the books of the
Company. The agent may substitute another to act for him.

                                CONVERSION NOTICE

To convert this Security into Common Stock of the Company, check the box:

To convert only part of this Security, state the Principal Amount at Maturity to
be converted (which must be $1,000 or an integral multiple of $1,000):

$
 --------------------------

If you want the stock certificate made out in another person's name, fill in the
form below:
------------------------------------------------------------------------
------------------------------------------------------------------------
(Insert other person's soc. sec. or tax ID no.)

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

(Print or type other person's name, address and zip code)

Date:                               Your Signature:
      ----------------------------                  --------------------

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

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


                                       18
<PAGE>


                                   EXHIBIT A-2

                         [Form of Certificated Security]

     FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL  REVENUE CODE,  THIS
SECURITY IS ISSUED WITH AN  INDETERMINATE  AMOUNT OF ORIGINAL ISSUE DISCOUNT FOR
UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE DATE IS APRIL 30, 2001, AND
THE YIELD TO MATURITY FOR PURPOSES OF ACCRUING  ORIGINAL ISSUE DISCOUNT IS 7.51%
PER ANNUM.

     [INCLUDE  IF  SECURITY  IS  A  CERTIFICATED  SECURITY  TO  BE  HELD  BY  AN
INSTITUTIONAL  ACCREDITED  INVESTOR--IN CONNECTION WITH ANY TRANSFER, THE HOLDER
WILL DELIVER TO THE REGISTRAR  AND TRANSFER  AGENT SUCH  CERTIFICATES  AND OTHER
INFORMATION AS SUCH TRANSFER  AGENT MAY  REASONABLY  REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOLLOWING RESTRICTIONS.]

     THIS SECURITY AND THE SHARES OF COMMON STOCK  ISSUABLE  UPON  CONVERSION OF
THIS  SECURITY HAVE NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933, AS
AMENDED (THE  "SECURITIES  ACT"),  OR ANY STATE  SECURITIES  LAWS.  NEITHER THIS
SECURITY,  THE SHARES OF COMMON STOCK ISSUABLE UPON  CONVERSION OF THIS SECURITY
NOR ANY  INTEREST OR  PARTICIPATION  HEREIN OR THEREIN MAY BE  REOFFERED,  SOLD,
ASSIGNED,  TRANSFERRED,  PLEDGED,  ENCUMBERED  OR  OTHERWISE  DISPOSED OF IN THE
ABSENCE OF SUCH  REGISTRATION OR UNLESS SUCH  TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.

     THE HOLDER OF THIS  SECURITY,  BY ITS ACCEPTANCE  HEREOF,  AGREES TO OFFER,
SELL,  OR  OTHERWISE  TRANSFER  SUCH  SECURITY,  PRIOR TO THE DATE (THE  "RESALE
RESTRICTION  TERMINATION  DATE"),  WHICH IS TWO  YEARS  AFTER  THE  LATER OF THE
ORIGINAL  ISSUE DATE HEREOF AND THE LAST DATE ON WHICH  STILWELL  FINANCIAL INC.
(THE "COMPANY" OR THE "ISSUER") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
THIS SECURITY (OR ANY  PREDECESSOR  OF SUCH SECURITY) ONLY (A) TO THE COMPANY OR
ANY  SUBSIDIARY  THEREOF,  (B) FOR SO LONG AS THE  SECURITIES  ARE  ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL  BUYER" AS  DEFINED  IN RULE 144A  UNDER THE  SECURITIES  ACT THAT
PURCHASES  FOR ITS OWN ACCOUNT OR FOR THE  ACCOUNT OF A QUALIFIED  INSTITUTIONAL
BUYER TO WHICH  NOTICE IS GIVEN THAT THE  TRANSFER  IS BEING MADE IN RELIANCE ON
RULE 144A, (C) TO AN INSTITUTIONAL  "ACCREDITED  INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (A)(1), (2),(3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING  THE  SECURITY  FOR ITS OWN  ACCOUNT,  OR FOR THE  ACCOUNT  OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION  WITH, ANY  DISTRIBUTION  IN VIOLATION OF
THE SECURITIES ACT,


                                     A-2-1

<PAGE>



(D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE  SECURITIES  ACT OR (E)  PURSUANT TO ANOTHER  AVAILABLE  EXEMPTION  FROM THE
REGISTRATION  REQUIREMENTS OF THE SECURITIES  ACT,  SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE
(C) OR (E) TO REQUIRE  THE  DELIVERY  OF AN OPINION  OF  COUNSEL,  CERTIFICATION
AND/OR  OTHER  INFORMATION  SATISFACTORY  TO  EACH OF  THEM,  AND IN EACH OF THE
FOREGOING  CASES,  A CERTIFICATE  OF TRANSFER IN THE FORM APPEARING ON THE OTHER
SIDE OF THIS  SECURITY IS  COMPLETED  AND  DELIVERED  BY THE  TRANSFEROR  TO THE
TRUSTEE.

     THE FOREGOING  LEGEND MAY BE REMOVED FROM THIS SECURITY ON  SATISFACTION OF
THE CONDITIONS SPECIFIED IN THE INDENTURE.

                                     A-2-2

<PAGE>



                             STILWELL FINANCIAL INC.
                      Liquid Yield Option(TM) Note due 2031
                              (Zero Coupon-Senior)

No. R-                                         CUSIP:      860831 AA4
Issue Date: April 30, 2001                     Original Issue Discount: $258.63
Issue Price:       $741.37                     (for each $1,000 Principal
(for each $1,000 Principal                     Amount at Maturity)
Amount at Maturity)

     STILWELL FINANCIAL INC., a Delaware corporation,  promises to pay to [----]
or  registered  assigns,  the  Principal  Amount at Maturity  of [----]  DOLLARS
($[----]) on April 30, 2031.

     This Security shall not bear interest except as specified on the other side
of this Security.  Original Issue Discount will accrue as specified on the other
side of this  Security.  This Security is  convertible as specified on the other
side of this Security.

     Additional  provisions  of this Security are set forth on the other side of
this Security.

Dated:       April 30, 2001                         STILWELL FINANCIAL INC.

                                                    By
                                                        -----------------------
                                                        Title:

TRUSTEE'S CERTIFICATE OF
AUTHENTICATION

The Chase Manhattan Bank
as Trustee, certifies that this
is one of the Securities referred
to in the within-mentioned Indenture.

By
   ----------------------------
   Authorized Officer


                                     A-2-3

<PAGE>



                                   EXHIBIT B-1

                              Transfer Certificate

     In connection with any transfer of any of the Securities  within the period
prior to the  expiration of the holding  period  applicable to the sales thereof
under Rule 144(k) under the Securities Act of 1933, as amended (the  "Securities
Act") (or any successor  provision),  the undersigned  registered  owner of this
Security hereby  certifies with respect to $[----]  Principal Amount at Maturity
of the  above-captioned  securities  presented or surrendered on the date hereof
(the "Surrendered  Securities") for registration of transfer, or for exchange or
conversion where the securities issuable upon such exchange or conversion are to
be  registered  in a name other than that of the  undersigned  registered  owner
(each such transaction being a "transfer"), that such transfer complies with the
restrictive  legend set forth on the face of the Surrendered  Securities for the
reason checked below:

     o    A transfer of the Surrendered Securities is made to the Company or any
          subsidiaries; or

     o    The transfer of the  Surrendered  Securities  complies  with Rule 144A
          under the U.S.  Securities  Act of 1933,  as amended (the  "Securities
          Act"); or

     o    The  transfer of the  Surrendered  Securities  is to an  institutional
          accredited investor,  as described in Rule 501(a)(1),  (2), (3) or (7)
          of Regulation D under the Securities Act; or

     o    The transfer of the Surrendered Securities is pursuant to an effective
          registration statement under the Securities Act, or

     o    The transfer of the Surrendered  Securities is pursuant to an offshore
          transaction  in  accordance  with Rule 904 of  Regulation  S under the
          Securities Act; or

     o    The  transfer  of the  Surrendered  Securities  is pursuant to another
          available   exemption  from  the   registration   requirement  of  the
          Securities Act.

     and unless the box below is checked,  the undersigned confirms that, to the
undersigned's  knowledge,  such  Securities  are  not  being  transferred  to an
"affiliate"  of the Company as defined in Rule 144 under the  Securities Act (an
"Affiliate").

     o    The transferee is an Affiliate of the Company.

DATE:
      -----------------------                ---------------------------------
                                                       Signature(s)

                                     B-1-1

<PAGE>



            (If the registered owner is a corporation, partnership or
             fiduciary, the title of the Person signing on behalf of
                     such registered owner must be stated.)


                                     B-1-2

<PAGE>



                                   EXHIBIT B-2

             Form of Letter to be Delivered by Accredited Investors

Stilwell Financial Inc.
920 Main Street, 21/st/ flr.
Kansas City, MO 64105-2008

Attention:  Chief Financial Officer

The Chase Manhattan Bank
450 West 33/rd/ Street
New York, NY  10001

Attention: Institutional Trust Services

Dear Sirs:

     We are delivering this letter in connection  with the proposed  transfer of
$[-----]  Principal Amount at Maturity of the Liquid Yield Option Notes due 2031
("LYONs") of Stilwell Financial Inc. (the "Company"), which are convertible into
shares of the  Company's  Common  Stock,  $0.01 par value per share (the "Common
Stock").

We hereby confirm that:

          (i) we  are an  "accredited  investor"  within  the  meaning  of  Rule
     501(a)(1),  (2) or (3) under the  Securities  Act of 1933,  as amended (the
     "Securities  Act"),  or an  entity in which all of the  equity  owners  are
     accredited investors within the meaning of Rule 501(a)(1), (2) or (3) under
     the Securities Act (an "Institutional Accredited Investor");

          (ii) the  purchase  of LYONs by us is for our own  account  or for the
     account  of one or more  other  Institutional  Accredited  Investors  or as
     fiduciary  for the  account  of one or more  trusts,  each of  which  is an
     "accredited  investor"  within  the  meaning  of Rule  501(a)(7)  under the
     Securities Act and for each of which we exercise sole investment discretion
     or (B) we are a "bank,"  within  the  meaning  of  Section  3(a)(2)  of the
     Securities Act, or a "savings and loan  association"  or other  institution
     described in Section  3(a)(5)(A)  of the  Securities  Act that is acquiring
     LYONs as fiduciary for the account of one or more institutions for which we
     exercise sole investment discretion;

          (iii) we will  acquire  LYONs  having a  minimum  principal  amount at
     maturity of not less than  $250,000 for our own account or for any separate
     account for which we are acting;

                                      C-1

<PAGE>


          (iv) we have such  knowledge and  experience in financial and business
     matters  that  we are  capable  of  evaluating  the  merits  and  risks  of
     purchasing LYONs; and

          (v) we are not acquiring LYONs with a view to distribution  thereof or
     with any present intention of offering or selling LYONs or the Common Stock
     issuable upon conversion thereof,  except as permitted below; provided that
     the  disposition  of our property and property of any accounts for which we
     are acting as fiduciary shall remain at all times within our control.

     We  understand  that  the  LYONs  were  originally  offered  and  sold in a
transaction  not involving any public  offering  within the United States within
the  meaning of the  Securities  Act and that the LYONs and the shares of Common
Stock  (the  "Securities")  issuable  upon  conversion  thereof  have  not  been
registered  under the  Securities  Act,  and we agree,  on our own behalf and on
behalf of each account for which we acquire any LYONs,  that if in the future we
decide to resell or otherwise  transfer such  Securities  prior to the date (the
"Resale Restriction Termination Date") which is two years after the later of the
original  issuance  of the LYONs and the last  date on which the  Company  or an
affiliate of the Company was the owner of the Security,  such  Securities may be
resold or  otherwise  transferred  only (i) to  Stilwell  Financial  Inc. or any
subsidiary  thereof,  or (ii) for as long as the LYONs are  eligible  for resale
pursuant  to Rule  144A,  to a person it  reasonably  believes  is a  "qualified
institutional  buyer" (as  defined in Rule 144A under the  Securities  Act) that
purchases  for its own account or for the  account of a qualified  institutional
buyer to which  notice is given that the  transfer  is being made in reliance on
Rule 144A, or (iii) to an  Institutional  Accredited  Investor that is acquiring
the  Security  for its own  account,  or for the  account of such  Institutional
Accredited Investor for investment purposes and not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act,
or (iv) pursuant to another  available  exemption  from  registration  under the
Securities  Act (if  applicable),  or (v) pursuant to a  registration  statement
which has been declared effective under the Securities Act and, in each case, in
accordance with any applicable securities laws of any State of the United States
or any other  applicable  jurisdiction  and in  accordance  with the legends set
forth on the Securities.  We further agree to provide any person  purchasing any
of the  Securities  other  than  pursuant  to clause  (v) above from us a notice
advising such purchaser that resales of such securities are restricted as stated
herein.  We understand  that the trustee or the transfer  agent, as the case may
be,  for the  Securities  will not be  required  to accept for  registration  of
transfer any Securities pursuant to (iii) or (iv) above except upon presentation
of evidence  satisfactory  to the Company  that the  foregoing  restrictions  on
transfer have been complied with. We further understand that any Securities will
be in the form of definitive  physical  certificates and that such  certificates
will  bear a  legend  reflecting  the  substance  of  this  section  other  than
certificates representing Securities transferred pursuant to clause (v) above.

     We  acknowledge  that  the  Company,  others  and you  will  rely  upon our
confirmations,  acknowledgments and agreements set forth herein, and we agree to
notify  you  promptly  in writing if any of our  representations  or  warranties
herein ceases to be accurate and complete.

     THIS LETTER SHALL BE GOVERNED BY, AND  CONSTRUED IN  ACCORDANCE  WITH,  THE
INTERNAL LAWS OF THE STATE OF NEW YORK.

                                      C-2

<PAGE>

                                   ----------------------------
                                   (Name of Purchaser)

                               By:
                                   --------------------------
                                   Name:
                                   Title:
                                   Address:





                                      C-3


<PAGE>


                                     ANNEX C

                           Projected Payment Schedule*

Comparable Yield: 7.51% per annum

           Quarterly Period Ending                   Projected Payment per LYON

                June 1, 2006                                          0.00
                September 1, 2006                                     0.00
                December 1, 2006                                      0.00
                March 1, 2007                                         0.00
                June 1, 2007                                          0.00
                September 1, 2007                                     0.00
                December 1, 2007                                      0.00
                March 1, 2008                                         0.00
                June 1, 2008                                          0.00
                September 1, 2008                                     0.00
                December 1, 2008                                      0.00
                March 1, 2009                                         0.00
                June 1, 2009                                          0.61
                September 1, 2009                                     0.62
                December 1, 2009                                      0.64
                March 1, 2010                                         0.65
                June 1, 2010                                          0.67
                September 1, 2010                                     0.67
                December 1, 2010                                      0.70
                March 1, 2011                                         0.70
                June 1, 2011                                          0.73
                September 1, 2011                                     0.73
                December 1, 2011                                      0.76
                March 1, 2012                                         0.76
                June 1, 2012                                          0.79
                                                                     (Continued)

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

* The comparable yield means the annual yield the Company would pay, as of the
Issue Date, on a fixed-rate nonconvertible debt security with no contingent
payments, but with terms and conditions otherwise comparable to those of the
LYONs, and the schedule of projected payments has been determined on the basis
of an assumption of linear growth of the stock price and a constant dividend
yield and has not been determined for any purpose other than for the
determination of interest accruals and adjustments thereof in respect of the
Securities for United States federal income tax purposes. The comparable yield
and the schedule of projected payments do not constitute a projection or
representation regarding the amounts payable on Securities.

                                      C-1


<PAGE>



           Quarterly Period Ending                   Projected Payment per LYON

                September 1, 2012                                  0.80
                December 1, 2012                                   0.82
                March 1, 2013                                      0.83
                June 1, 2013                                       0.86
                September 1, 2013                                  0.87
                December 1, 2013                                   0.90
                March 1, 2014                                      0.90
                June 1, 2014                                       0.93
                September 1, 2014                                  0.94
                December 1, 2014                                   0.97
                March 1, 2015                                      0.98
                June 1, 2015                                       1.02
                September 1, 2015                                  1.02
                December 1, 2015                                   1.06
                March 1, 2016                                      1.07
                June 1, 2016                                       1.11
                September 1, 2016                                  1.11
                December 1, 2016                                   1.15
                March 1, 2017                                      1.16
                June 1, 2017                                       1.20
                September 1, 2017                                  1.21
                December 1, 2017                                   1.25
                March 1, 2018                                      1.26
                June 1, 2018                                       1.31
                September 1, 2018                                  1.32
                December 1, 2018                                   1.36
                March 1, 2019                                      1.37
                June 1, 2019                                       1.42
                September 1, 2019                                  1.43
                December 1, 2019                                   1.48
                March 1, 2020                                      1.49
                June 1, 2020                                       1.55
                September 1, 2020                                  1.56
                December 1, 2020                                   1.61
                March 1, 2021                                      1.63
                June 1, 2021                                       1.68
                September 1, 2021                                  1.69
                December 1, 2021                                   1.75
                March 1, 2022                                      1.77
                June 1, 2022                                       1.83
                September 1, 2022                                  1.84
                December 1, 2022                                   1.91
                March 1, 2023                                      1.92

                                                                     (Continued)

                                      C-2


<PAGE>



                Quarterly Period Ending              Projected Payment per LYON

                   June 1, 2023                                      1.99
                   September 1, 2023                                 2.00
                   December 1, 2023                                  2.07
                   March 1, 2024                                     2.09
                   June 1, 2024                                      2.16
                   September 1, 2024                                 2.18
                   December 1, 2024                                  2.25
                   March 1, 2025                                     2.27
                   June 1, 2025                                      2.35
                   September 1, 2025                                 2.37
                   December 1, 2025                                  2.45
                   March 1, 2026                                     2.47
                   June 1, 2026                                      2.56
                   September 1, 2026                                 2.58
                   December 1, 2026                                  2.66
                   March 1, 2027                                     2.69
                   June 1, 2027                                      2.78
                   September 1, 2027                                 2.80
                   December 1, 2027                                  2.90
                   March 1, 2028                                     2.92
                   June 1, 2028                                      3.02
                   September 1, 2028                                 3.05
                   December 1, 2028                                  3.15
                   March 1, 2029                                     3.18
                   June 1, 2029                                      3.29
                   September 1, 2029                                 3.31
                   December 1, 2029                                  3.43
                   March 1, 2030                                     3.46
                   June 1, 2030                                      3.57
                   September 1, 2030                                 3.60
                   December 1, 2030                                  3.73
                   March 1, 2031                                     3.76
                   April 30, 2031                                 6217.62


                                      C-3