<PAGE>


                                                                       Exhibit 3


                           CERTIFICATE OF DESIGNATIONS

                                       OF

                          8.00% REDEEMABLE CONVERTIBLE
                    PREFERRED STOCK SETTING FORTH THE POWERS,
                        PREFERENCES AND RIGHTS, AND THE
                         QUALIFICATIONS, LIMITATIONS AND
                 RESTRICTIONS THEREOF, OF SUCH PREFERRED STOCK
                          OF LUCENT TECHNOLOGIES INC.

         Pursuant to Section 151 of the General Corporation Law of the State of
Delaware, Lucent Technologies Inc., a Delaware corporation (the "Company"), does
hereby certify that a committee of the Board of Directors of the Company (the
"Board of Directors"), pursuant to the authority duly conferred thereon by the
Board of Directors, duly adopted the following resolution and that such
resolution has not been modified and is in full force and effect:

         RESOLVED that, pursuant to the authority vested in the Board of
Directors in accordance with the provisions of the Restated Certificate of
Incorporation of the Company (the "Restated Certificate of Incorporation") and
the authority conferred by the Board of Directors on this committee of the Board
of Directors, a series of preferred stock of the Company is hereby created and
the designation and number of shares thereof and the voting powers, preferences
and relative, participating, optional and other special rights of the shares of
such series, and the qualifications, limitations and restrictions thereof, are
as set forth below in this Certificate of Designations (this "Certificate"):

         SECTION 1. Number; Designation; Registered Form. (a) The shares of such
series shall be designated as "8.00% Redeemable Convertible Preferred Stock"
(the "Preferred Stock") and shall have a par value of $1.00 per share. The
number of shares constituting the Preferred Stock shall be 1,885,000.
Certificates for shares of Preferred Stock shall be issuable only in registered
form.

          (b) All shares of Preferred Stock redeemed, purchased, exchanged,
converted or otherwise acquired by the Company shall be retired and canceled
and, upon the taking of any action required by applicable law, shall be restored
to the status of authorized but unissued shares of preferred stock of the
Company, without designation as to series, and may thereafter be reissued.

          (c) Capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in Section 11 below.






<PAGE>

         SECTION 2. Ranking. The Preferred Stock will rank, with respect to
dividend rights and rights upon liquidation, winding-up or dissolution:

         (a) junior to Senior Stock and the Company's existing and future debt
obligations;

          (b) on a parity with Parity Stock; and

          (c) senior to Junior Stock.

         SECTION 3. Dividends. (a) If the conditions to payment set forth in
Section 3(b)(ii) below are satisfied, the Board of Directors, or any duly
authorized committee thereof, shall declare non-cumulative dividends at the
annual rate of 8.00% of the aggregate applicable Accreted Liquidation
Preference, as such may be adjusted from time to time pursuant to Section 3(d)
hereof, to be payable on each Dividend Payment Date, as set forth below.
Dividends are payable on February 1 and August 1 of each year (each, a "Dividend
Payment Date"), beginning on February 1, 2002. If any of those dates is not a
Business Day, then dividends will be payable on the next succeeding Business
Day. The dividends payable on any Dividend Payment Date will accrue from the
beginning of the Dividend Period for that Dividend Payment Date. The first
Dividend Period will begin on August 6, 2001, even if shares of Preferred Stock
are issued after that date. Dividends will be payable to holders of record as
they appear in the Company's stock records at the close of business on January 1
and July 1 of each year (each, a "Dividend Payment Record Date"). Dividends
payable on the shares of Preferred Stock for any period other than a full
semi-annual period will be computed on the basis of a 360-day year consisting of
twelve 30-day months. All references in this Certificate to dividends or to a
dividend rate shall be deemed to include Additional Dividends or to reflect any
adjustment to the dividend rate applicable to the Preferred Stock pursuant to
Section 3(d) hereof, as the case may be, if such Additional Dividends are then
payable, as described in Section 3(d) below.

          (b) (i) The Company may pay dividends, at its option, in cash or by
delivering shares of Common Stock to the Transfer Agent on behalf of the holders
of the Preferred Stock, to be sold on the holders' behalf for cash. By and on
acquiring the Preferred Stock, each holder is deemed to appoint the Transfer
Agent as such holder's agent for any such sale, and the Transfer Agent will
serve as a designated agent of the holders of the Preferred Stock in making any
such sales. To pay dividends in shares of Common Stock, the Company must deliver
to the Transfer Agent a number of shares of Common Stock which, when sold by the
Transfer Agent on the holders' behalf, will result in net cash proceeds to be
distributed to the holders in an amount equal to the cash dividend otherwise




                                       2






<PAGE>

payable to the holders of Preferred Stock. If the Company pays dividends in
shares of Common Stock by delivering them to the Transfer Agent, those shares
will be owned beneficially by the holders of the Preferred Stock upon delivery
to the Transfer Agent, and the Transfer Agent will hold those shares and the net
cash proceeds from the sale of those shares for the exclusive benefit of the
holders until the Dividend Payment Date at which time a proportion of the net
cash proceeds equal to the non-cash component of the declared dividend and any
declared Paydown Amount of the Preferred Stock will be distributed to the
holders entitled thereto with any remainder to continue to be held by the
Transfer Agent for the exclusive benefit of the holders and pooled with the net
cash proceeds from future sales of Common Stock delivered to the Transfer Agent
pursuant to this paragraph. If a registered holder as of a particular Dividend
Payment Record Date provides an irrevocable notice to the Transfer Agent on or
before that Dividend Payment Record Date not to sell shares of Common Stock held
on behalf of that holder, to the extent the Company elects to pay such dividend
by delivering shares of Common Stock to provide cash to pay all or a portion of
the dividends or Paydown Amount payable to such holder, the Transfer Agent will
deliver to or for the account of the holder promptly after their receipt by the
Transfer Agent, shares of Common Stock having a value equal to the cash
dividends otherwise payable to such holder based on the average of the Sale
Prices of Common Stock over the five Trading Day period ending on the third
Business Day prior to the applicable Dividend Payment Date. Those shares will be
treated as restricted securities, will bear a legend to that effect and will be
issued in physical certificated form. In lieu of issuing fractional shares of
Common Stock, the Company will deliver scrip that will entitle the holder to
receive a full share of Common Stock upon surrender of such scrip aggregating a
full share.

         (ii) To pay dividends on any Dividend Payment Date, whether in cash or
in shares of Common Stock, (A) the Company shall have funds legally available to
make such payment and (B) such payment shall not, as determined by the Board of
Directors, continue or cause a default under any provision of applicable law or
the Restated Certificate of Incorporation or the by-laws of the Company or any
agreement or other instrument binding upon the Company or any of its
Subsidiaries or any judgment, order or decree of any governmental body, agency
or court having jurisdiction over the Company or any of its Subsidiaries. In
addition, in order to pay dividends on any Dividend Payment Date in shares of
Common Stock, (w) the shares of Common Stock delivered to the Transfer Agent
shall have been duly authorized, (x) the Company shall have provided to the
Transfer Agent an effective registration statement under the Securities Act
permitting the immediate sale of the shares of Common Stock in the public
market, (y) the shares of Common Stock, once purchased by the purchasers
thereof, shall be validly issued, fully paid and nonassessable and (z) such
shares shall have been registered under the Securities Exchange Act, if
required, and




                                       3






<PAGE>

shall be listed or admitted for trading on each United States securities
exchange or market on which the Common Stock is then listed.

         If the Company is prohibited from paying dividends in cash because the
condition set forth in clause (B) of this Section 3(b)(ii) is not satisfied, the
Company must file, not later than 60 days after the initial issuance of the
Preferred Stock, a registration statement for the purpose of satisfying the
condition set forth in clause (x) of this Section 3(b)(ii) and shall use its
reasonable best efforts to satisfy the conditions to paying such dividends in
shares of Common Stock that are set forth in clauses (w) through (z) of this
Section 3(b)(ii).

          (c) If the Company is unable to pay dividends in full on the Preferred
Stock on any Dividend Payment Date as described above in Section 3(a), the
Accreted Liquidation Preference will be increased as of the first day of the
immediately succeeding Dividend Period by the Accretion Amount in respect of the
unpaid dividends. If the Company elects to pay a portion of the dividends
payable on the Preferred Stock on a Dividend Payment Date and to accrete the
unpaid portion, the Company will pay the current portion equally and ratably to
the holders of Preferred Stock. The amount of dividends payable for any Dividend
Period following a non-payment of dividends will be calculated on the basis of
the Accreted Liquidation Preference as of the first day of the relevant Dividend
Period.

         The Company may pay all or a portion of the amount by which the
aggregate Accreted Liquidation Preference exceeds the aggregate Initial
Liquidation Preference on any Dividend Payment Date. The Company may make such
payment by either of the methods described in Section 3(b). The aggregate
Accreted Liquidation Preference will be reduced as of the first day of the
immediately succeeding Dividend Period by the amount of such payment (the
"Paydown Amount").

         The Company will use its reasonable best efforts to provide Notice to
the holders of the Preferred Stock not later than 15 days prior to each Dividend
Payment Date if the Company determines that it will not pay dividends on that
Dividend Payment Date. If a development occurs less than 15 days prior to a
Dividend Payment Date that will prevent the Company from paying dividends on
that Dividend Payment Date, and the Company has not already provided Notice, the
Company will provide prompt Notice to the holders and the Transfer Agent. The
Notice will indicate whether the Company will accrete all or a portion of the
dividends, as well as the amount of the dividends to be accreted and whether the
portion of dividends to be paid will be paid in cash or in Common Stock
delivered to the Transfer Agent.




                                       4






<PAGE>


          (d) (i) With respect to the first 90-day period immediately following
the occurrence of a Registration Default, the applicable dividend rate or
accretion rate on the Preferred Stock for the relevant period will be increased
by 0.25% per year (the "Additional Dividends") from and including the date of
the Registration Default. The applicable dividend rate or accretion rate will
increase by an additional 0.25% per year with respect to any subsequent 90-day
period, but in no event will the additional dividend rate or accretion rate
exceed 1.00% per year in the aggregate regardless of the number of Registration
Defaults, until all Registration Defaults have been cured. Following the cure of
all Registration Defaults, the accrual or accretion of Additional Dividends with
respect to the Preferred Stock shall cease in accordance with the terms of the
Registration Rights Agreement.

         (ii) If, after the cure of all Registration Defaults then in effect,
there is a subsequent Registration Default, the additional dividend rate or
accretion rate for that subsequent Registration Default shall initially be
0.25%, regardless of the additional dividend rate or accretion rate in effect
with respect to any prior Registration Default at the time of the cure of that
Registration Default.

         (iii) The Company shall notify the Transfer Agent within five Business
Days after each and every date on which a Registration Default occurs.
Additional Dividends payable by the Company, shall be payable to the record
holders of shares of Preferred Stock on each Dividend Payment Date in the manner
provided for the payment or accretion of regular dividends.

         SECTION 4. Liquidation Preference.

         (a) Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Company, each holder of Preferred Stock shall be entitled to
payment out of the assets of the Company available for distribution of an amount
equal to the aggregate Accreted Liquidation Preference attributable to the
shares held by such holder, plus an amount equal to all accrued and unpaid
dividends on those shares from, and including, the immediately preceding
Dividend Payment Date to, but excluding, the date of liquidation, dissolution or
winding up, before any distribution is made on any Junior Stock, including
Common Stock. After payment in full of the aggregate Accreted Liquidation
Preference and an amount equal to all accrued and unpaid dividends to which
holders of shares of Preferred Stock are entitled, such holders shall not be
entitled to any further participation in any distribution of the assets of the
Company. If, upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Company, the amounts payable with respect to shares of
Preferred Stock and all other Parity Stock are not paid in full, the holders of
shares of Preferred Stock and the holders of the Parity Stock shall share
equally and ratably in any distribution of assets of the Company





                                       5






<PAGE>

in proportion to the full liquidation preference and an amount equal to all
accrued and unpaid dividends, if any, to which each such holder is entitled.

          (b) Neither the voluntary sale, conveyance, exchange or transfer (for
cash, shares of stock, securities or other consideration) of all or
substantially all of the property or assets of the Company nor the
consolidation, merger or amalgamation of the Company with or into any other
entity or the consolidation, merger or amalgamation of any other entity with or
into the Company shall be deemed to be a voluntary or involuntary liquidation,
dissolution or winding-up of the Company.

         SECTION 5. Redemption. Shares of Preferred Stock shall be redeemable as
provided below.

          (a) Mandatory Redemption. (i) On August 1, 2031, the Company will be
obligated, subject to having legally available funds, to redeem all Outstanding
shares of Preferred Stock at the Redemption Price, upon not less than 30 nor
more than 60 days' prior Notice to the holders.

         (ii) The Company may, at its option, elect to pay the Redemption Price
in cash or in shares of Common Stock valued at a discount of 5% from the Market
Price of the Common Stock, or any combination thereof. The Company may pay the
Redemption Price in shares of its Common Stock only if such shares are eligible
for immediate sale in the public market by non-affiliates of the Company absent
a registration statement.

          (b) Redemption at the Company's Option. (i) The shares of Preferred
Stock shall not be redeemable at any time prior to August 15, 2006 (the "Initial
Redemption Date"). After the Initial Redemption Date, the Company will have the
option to redeem any Outstanding shares of Preferred Stock, out of funds legally
available for payment on account of such redemption, at the Redemption Price
upon not less than 30 nor more than 60 days' prior Notice.

         (ii) The Company may, at its option, elect to pay the Redemption Price
in cash or in shares of Common Stock valued at a discount of 5% from the Market
Price of the Common Stock, or any combination thereof. Notwithstanding the
foregoing, the Company may pay such Redemption Price, whether in cash or in
shares of Common Stock, only if the Company has funds legally available for such
payment and may pay such Redemption Price in shares of Common Stock only if such
shares are eligible for immediate sale in the public market by non-affiliates of
the Company absent a registration statement. In the case of any partial
redemption, the Company will select the shares of Preferred Stock to be redeemed
on a pro rata basis, by lot or any other method that the Company, in its
discretion,



                                       6





<PAGE>

deems fair and appropriate. However, the Company may redeem all of the shares
of Preferred Stock held by any holders of fewer than 100 shares of Preferred
Stock (or all the shares of Preferred Stock held by holders who would hold fewer
than 100 shares of Preferred Stock as a result of such redemption).

         (iii) If fewer than all the shares of Preferred Stock represented by
any share certificate are to be so redeemed, then, for the purposes of
determining the number of such shares which will remain after redemption, any
shares represented thereby which were converted before termination of the
conversion right with respect to such shares shall be regarded as not having
formed a part of the shares elected for redemption.

         (iv) If the Company elects to redeem the Preferred Stock in the manner
described in this Section 5(b), the Company shall give Notice of such redemption
(the "Redemption Notice") to the holders of record of shares of Preferred Stock
not fewer than 30 days nor more than 60 days before the Redemption Date
provided, however, that no failure to give such Redemption Notice nor any
deficiency therein shall affect the validity of the procedure for the redemption
of any shares of the Preferred Stock to be redeemed except as to the holder or
holders to whom the Company has failed to give said Redemption Notice or except
as to the holder or holders whose Redemption Notice was defective. All such
Redemption Notices shall identify the Preferred Stock to be redeemed (including
CUSIP number) and shall state:

                  (A) the Redemption Date;

                  (B) the Redemption Price;

                  (C) whether the Company will pay the Redemption Price of the
         Preferred Stock in cash or Common Stock or any combination thereof,
         specifying the percentages of each;

                  (D) if the Company elects to pay in Common Stock, the method
         of calculating the Market Price of the Common Stock;

                  (E) if fewer than all Outstanding shares of Preferred Stock
         are to be redeemed, the identification (and, in the case of partial
         redemption, the certificate number, the total number of shares
         represented thereby and the number of such shares being redeemed on the
         Redemption Date) of the particular shares of Preferred Stock to be
         redeemed;

                  (F) that, on the Redemption Date, the Redemption Price will
         become due and payable upon each such share of Preferred Stock to be





                                       7





<PAGE>

         redeemed and that dividends thereon will cease to accrue on and after
         said date;

                  (G) the conversion price, the date on which the right to
         convert Preferred Stock to be redeemed will terminate and the place or
         places where such Preferred Stock may be surrendered for conversion;
         and

                  (H) the place or places where such Preferred Stock is to be
         surrendered for payment of the Redemption Price.

The Redemption Notice shall be given by the Company or, at the Company's
request, by the Registrar in the name and at the expense of the Company;
provided, that if the Company so requests, it shall provide the Registrar
adequate time, as reasonably determined by the Registrar, to deliver the
Redemption Notice in a timely fashion.

          (v) Prior to any Redemption Date, the Company shall deposit with the
Registrar or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust) an amount of consideration sufficient to pay
the Redemption Price of all shares of Preferred Stock which are to be redeemed
on that date other than any Preferred Stock called for redemption on that date
that have been converted into shares of Common Stock prior to the date of such
deposit. If any shares of Preferred Stock called for redemption are converted,
any consideration deposited with the Registrar or with any Paying Agent or so
segregated and held in trust for the redemption of such shares of Preferred
Stock shall be paid or delivered to the Company upon Company Order or, if then
held by the Company, shall be discharged from such trust.

         (vi) Notice of redemption having been given as aforesaid, the
Redemption Price of the Preferred Stock so to be redeemed shall, on the
Redemption Date, become due and payable, and from and after such date (unless
the Company shall default in the payment of the Redemption Price), such shares
of Preferred Stock shall no longer be Outstanding, dividends on such Preferred
Stock shall cease to accrue, such shares shall cease to be convertible into
Common Stock and all rights of the holders thereof as stockholders of the
Company (except the right to receive the Redemption Price without interest)
shall cease. Upon surrender of any certificate representing any such share of
Preferred Stock for redemption in accordance with said notice, such Redemption
Price shall thereupon be paid.

        (vii) In the event any certificate that represents more than one share
of Preferred Stock, not all of which are subject to redemption, is surrendered
at any office or agency of the Company designated for that purpose (with, if the




                                       8





<PAGE>

Company or the Registrar so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Registrar
duly executed by, the holder thereof or such holder's attorney duly authorized
in writing), the Company shall execute, and the Registrar shall countersign and
deliver to the holder of such shares of Preferred Stock without service charge,
a new certificate or certificates, representing any number of shares of
Preferred Stock, as requested by such holder, in an aggregate amount equal to
the number of shares not redeemed and represented by the certificate so
surrendered.

          (c) Redemption at the Option of the Holder. (i) On the Redemption
Dates of August 2, 2004, August 2, 2007, August 2, 2010 and August 2, 2016, the
Company shall, at the option of the holder, be required, if funds are legally
available, to redeem at the Redemption Price any Outstanding shares of Preferred
Stock for which a written Redemption Notice has been properly delivered by the
holder to the Transfer Agent and not withdrawn. Holders may submit their shares
of Preferred Stock for redemption to the Transfer Agent at any time from the
opening of business on the date that is 45 Business Days prior to such
Redemption Date until the close of business on the Business Day that is three
(3) Business Days prior to such Redemption Date.

         The Company may, at its option, elect to pay the Redemption Price in
cash or in shares of Common Stock valued at a discount of 5% from the Market
Price of the Common Stock, or any combination thereof. The Company may pay the
Redemption Price in shares of its Common Stock only if such shares are eligible
for immediate sale in the public market by non-affiliates of the Company absent
a registration statement.

         (ii) The Company will be required to give Notice on a date not less
than 45 Business Days prior to each Redemption Date by providing Notice to all
holders and to beneficial owners as required by applicable law, stating among
other things:

                  (A) whether the Company will pay the Redemption Price of the
         Preferred Stock in cash or Common Stock or any combination thereof,
         specifying the percentages of each;

                  (B) if the Company elects to pay in Common Stock, the method
         of calculating the Market Price of the Common Stock; and

                  (C) the procedures that holders must follow to require the
         Company to redeem their Preferred Stock.





                                       9





<PAGE>


         The Redemption Notice given by each holder electing to require the
Company to redeem their Preferred Stock must state:

                  (X) in the case of shares in certificated form, the
         certificate numbers of the holder's Preferred Shares to be delivered
         for redemption;

                  (Y) that the Preferred Shares are to be redeemed by the
         Company pursuant to the applicable provision of the Preferred Shares
         and this Certificate; and

                  (Z) in the event the Company elects, pursuant to the Notice
         that the Company is required to give, to pay the Redemption Price in
         Common Stock, in whole or in part, but the Redemption Price is
         ultimately to be paid to the holder entirely in cash because any
         condition to payment of the Redemption Price or portion of the
         Redemption Price in Common Stock is not satisfied prior to the close of
         business on the Redemption Date, as described below, whether the holder
         elects: (1) to withdraw the Redemption Notice as to some or all of the
         shares of Preferred Stock to which it relates, or (2) to receive cash
         in respect of the entire Redemption Price for all of the shares of
         Preferred Stock or portions of the shares of Preferred Stock subject to
         such Redemption Notice.

If the holder fails to indicate the holder's choice with respect to the election
described in clause (Z) above, the holder shall be deemed to have elected to
receive cash in respect of the entire Redemption Price for all shares of
Preferred Stock subject to the Redemption Notice in these circumstances.

         (iii) Any Redemption Notice may be withdrawn by the holder by a written
notice of withdrawal delivered to the Transfer Agent prior to the close of
business on the Business Day that is three (3) Business Days prior to the
Redemption Date. The notice of withdrawal shall state:

                  (A) the number of shares of Preferred Stock being withdrawn;

                  (B) in the case of shares in certificated form, the
         certificate numbers of the shares of Preferred Stock being withdrawn;
         and

                  (C) the number of shares of Preferred Stock, if any, that
         remain subject to the Redemption Notice.

         (iv) In lieu of delivering any fractional shares of Common Stock, the
Company will deliver scrip that will entitle the holder to receive a full share
of Common Stock upon surrender of such scrip aggregating a full share.




                                       10






<PAGE>


          (d) In the case of any redemption pursuant to Section 5(a), 5(b) or
5(c) or Section 9, the Company's right to redeem Preferred Stock, in whole or in
part, with shares of Common Stock is subject to the following conditions:

                  (A) such shares shall be duly authorized, validly issued,
         fully paid and nonassessable;

                  (B) the Company shall have listed such shares of Common Stock
         on the principal United States securities exchange on which the Common
         Stock is then listed or, if not so listed, on The Nasdaq National
         Market ("Nasdaq");

                  (C) the Company shall have registered such shares of Common
         Stock under the Securities Act and the Securities Exchange Act, if
         required; and

                  (D) the Company shall have obtained any necessary
         qualification or registration under applicable state securities law or
         an exemption from such qualification and registration shall be
         available.

         Subject to Section 5(c)(ii)(Z), if such conditions are not satisfied
with respect to a holder prior to the close of business on any Redemption Date,
the Company will pay the Redemption Price of such holder's shares of Preferred
Stock entirely in cash unless the Company does not have funds legally available
or the Company's credit facilities or other contractual obligations prohibit it
from paying the Redemption Price in cash. The Company may not change the form or
components or percentages of components of consideration to be paid for the
shares of Preferred Stock once the Company has given any Notice that it is
required to give to holders of the Preferred Stock, except as described in the
first sentence of this paragraph.

         The Company shall provide Notice to the holders of the Preferred Stock
reasonably promptly upon the determination of the actual number of shares of
Common Stock deliverable upon any redemption of the Preferred Stock.

          (e) In the case of any redemption pursuant to Section 5(a), 5(b) or
5(c):

          (i) Payment of the Redemption Price for Preferred Stock is conditioned
upon book-entry transfer of or physical delivery of the certificates
representing the Preferred Stock, together with necessary endorsements, to the
Transfer Agent at any time after delivery of the Redemption Notice. Payment of
the Redemption Price for the Preferred Stock will be made promptly following the
later of the


                                       11





<PAGE>

Redemption Date and the time of book-entry transfer of or physical delivery of
certificates representing the Preferred Stock.

         (ii) If the Transfer Agent holds money or securities sufficient to pay
the Redemption Price of Preferred Stock on the Business Day following the
Redemption Date in accordance with the terms of this Certificate, then,
immediately after the Redemption Date, the Preferred Stock will cease to be
Outstanding, whether or not book-entry transfer is made or certificates
representing the Preferred Stock are delivered to the Transfer Agent. At such
time, all rights of a holder as a holder of Preferred Stock shall terminate,
other than the right to receive the Redemption Price upon delivery of the
certificates representing the Preferred Stock.

         (iii) The Company may pay the Redemption Price or any portion of the
Redemption Price in shares of the Common Stock only if the information necessary
to calculate the Market Price is publicly available.

         (f) If the Redemption Date falls after a Dividend Payment Record Date
and before the related Dividend Payment Date, the holders of the shares of
Preferred Stock at the close of business on that Dividend Payment Record Date
will be entitled to receive the dividend payable on those shares on the
corresponding Dividend Payment Date. However, the aggregate Redemption Price
payable on such Redemption Date will include only the aggregate Accreted
Liquidation Preference of the shares being redeemed and will not include any
amount in respect of accrued but unpaid dividends.

         SECTION 6. Voting Rights. (a) Holders of the Preferred Stock will not
have any voting rights except as set forth below in this Section 6 or as
otherwise from time to time required by law. So long as any shares of the
Preferred Stock remain Outstanding, the Company shall not, without the consent
of the holders of at least two-thirds of the shares of Preferred Stock
Outstanding at the time (i) issue shares of or increase the authorized number of
shares of any class or series of Senior Stock or (ii) amend the Company's
Restated Certificate of Incorporation or the resolutions contained in this
Certificate, whether by merger, consolidation, or otherwise, if the amendment
would alter or change any power, preference or special right of the Outstanding
Preferred Stock so as to materially and adversely affect the holders thereof.
Notwithstanding the foregoing, any increase in the authorized number of shares
of Common Stock or Preferred Stock or the authorization and issuance of other
classes or series of Common Stock, Parity Stock or Junior Stock, or any issuance
of Parity Stock or Junior Stock with voting or redemption rights that are
different from the voting or redemption rights of the Preferred Stock shall not
be deemed to be an amendment that alters or changes



                                       12





<PAGE>

such powers, preferences or special rights so as to materially and adversely
affect the holders of the Preferred Stock.

          (b) Any increase, decrease or change in the par value of any class or
series of Capital Stock, including the Preferred Stock, will not be deemed to be
an amendment that alters or changes the powers, preferences and special rights
of the shares of Preferred Stock so as to materially and adversely affect the
holders of the Preferred Stock.

         SECTION 7. Conversion Rights. (a) Each share of Preferred Stock shall
be convertible at any time from and after the Initial Conversion Date, at the
option of the holder thereof, into fully paid and nonassessable shares of Common
Stock. The Preferred Stock will be convertible into Common Stock at an initial
conversion price of $7.48 per share, adjusted as described below in Section 8.
The number of shares of Common Stock deliverable upon conversion of a share of
Preferred Stock will be equal to the Accreted Liquidation Preference divided by
the conversion price then in effect. The conversion price will not be increased
in connection with an increase in the Accreted Liquidation Preference.

          (b) Conversion of shares of Preferred Stock may be effected by any
holder upon the surrender to the Company, at the principal office of the Company
or at the office of the Transfer Agent, as may be designated by the Board of
Directors, of the certificate or certificates for such shares of Preferred Stock
to be converted accompanied by a written notice stating that such holder elects
to convert all or a specified whole number of such shares in accordance with the
provisions of this Section 7 and specifying the name or names in which such
holder wishes the certificate or certificates for shares of Common Stock to be
issued. In case such notice shall specify a name or names other than that of
such holder, such notice shall be accompanied by payment of all transfer taxes
payable upon the issuance of shares of Common Stock in such name or names. Other
than such taxes, the Company shall pay any documentary, stamp or similar issue
or transfer taxes that may be payable in respect of any issuance or delivery of
shares of Common Stock upon conversion of shares of Preferred Stock pursuant
hereto. As promptly as practicable after the surrender of such certificate or
certificates and the receipt of such notice relating to the conversion and
payment of all required transfer taxes, if any (or the demonstration to the
satisfaction of the Company that such taxes have been paid), the Company shall
deliver or cause to be delivered (i) certificates representing the number of
validly issued, fully paid and nonassessable full shares of Common Stock to
which the holder of shares of Preferred Stock being converted (or such holder's
transferee) shall be entitled, and (ii) if less than the full number of shares
of Preferred Stock evidenced by the surrendered certificate or certificates is
being converted, a new certificate or certificates, of like tenor, for the
number of shares of Preferred Stock evidenced



                                       13





<PAGE>

by such surrendered certificate or certificates less the number of shares
being converted. Such conversion shall be deemed to have been made at the close
of business on the date of giving such notice and of such surrender of the
certificate or certificates representing the shares of Preferred Stock to be
converted so that the rights of the holder thereof as to the shares being
converted shall cease except for the right to receive shares of Common Stock, in
each case, in accordance herewith, and the person entitled to receive the shares
of Common Stock shall be treated for all purposes as having become the record
holder of such shares of Common Stock at such time.

          (c) Shares of Preferred Stock surrendered for conversion during the
period between the close of business on any Dividend Payment Record Date and the
opening of business on the corresponding Dividend Payment Date must be
accompanied by payment of an amount equal to the dividend payable on such shares
on such Dividend Payment Date.

          (d) In case any shares of Preferred Stock are to be redeemed, the
right of conversion shall cease and terminate, as to the shares of Preferred
Stock to be redeemed, at the close of business on the Business Day immediately
preceding the date fixed for redemption, unless the Company shall default in the
payment of the Redemption Price of those shares.

          (e) In connection with the conversion of any shares of Preferred
Stock, no fractions of shares of Common Stock shall be issued. In lieu thereof,
the Company shall deliver scrip that will entitle the holder to receive a full
share of Common Stock upon surrender of such scrip aggregating a full share. If
more than one share of Preferred Stock is surrendered for conversion by the same
holder at the same time, the number of full shares of Common Stock issuable on
conversion thereof shall be computed on the basis of the total number of shares
of Preferred Stock surrendered for conversion.

          (f) The Company shall at all times reserve and keep available, free
from preemptive rights, for issuance upon the conversion of shares of Preferred
Stock a number of its authorized but unissued shares of Common Stock that will
from time to time be sufficient if necessary to permit the conversion of all
Outstanding shares of Preferred Stock. Prior to the delivery of any securities
that the Company shall be obligated to deliver upon conversion of the Preferred
Stock, the Company shall comply with all applicable federal and state laws and
regulations which require action to be taken by the Company. All shares of
Common Stock delivered upon conversion of the Preferred Stock will upon delivery
be duly and validly issued and fully paid and nonassessable, free of all liens
and charges and not subject to any preemptive rights.




                                       14






<PAGE>

         SECTION 8. Adjustments to the Conversion Price. (a) The conversion
price shall be subject to adjustment from time to time as follows:

          (i) Stock Splits and Combinations. In case the Company shall at any
time or from time to time after the issuance date of the shares of Preferred
Stock (A) subdivide or split the outstanding shares of Common Stock, (B) combine
or reclassify the outstanding shares of Common Stock into a smaller number of
shares or (C) issue by reclassification of the shares of Common Stock any shares
of Capital Stock of the Company, then, and in each such case, the conversion
price in effect immediately prior to that event or the record date therefor,
whichever is earlier, shall be adjusted so that the holder of any shares of
Preferred Stock thereafter surrendered for conversion shall be entitled to
receive the number of shares of Common Stock or other securities of the Company
which the holder would have owned or have been entitled to receive after the
occurrence of any of the events described above, had those shares of Preferred
Stock been surrendered for conversion immediately prior to the occurrence of
that event or the record date therefor, whichever is earlier.

         (ii) Stock Dividends in Common Stock. In case the Company, at any time
or from time to time after the issuance date of the shares of Preferred Stock,
pays a dividend or makes a distribution in shares of Common Stock on any class
of Capital Stock of the Company other than dividends or distributions of shares
of Common Stock or other securities with respect to which adjustments are
provided in Section 8(a)(i) above, and the total number of shares constituting
such dividend or distribution exceeds 25% of the total number of shares of
Common Stock outstanding at the close of business on the record date fixed for
determination of stockholders entitled to receive the dividend or distribution,
the conversion price shall be adjusted by multiplying (A) the conversion price
immediately prior to the record date fixed for determination of stockholders
entitled to receive the dividend or distribution, by (B) a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding at
the close of business on that record date and the denominator of which shall be
the sum of that number of shares and the total number of shares issued in that
dividend or distribution.

         In case the total number of shares constituting that dividend or
distribution does not exceed 25% of the total number of shares of Common Stock
outstanding at the close of business on the record date fixed for that dividend
or distribution, the shares of Common Stock shall be considered to be issued as
a dividend or distribution at the time of any such next succeeding dividend or
other distribution in which the number of shares of Common Stock issued,
together with the number of shares issued in all previous such dividends and
distributions for which no adjustment to the conversion price has been made,
exceeds 25% of the total





                                       15





<PAGE>

number of shares of Common Stock outstanding at the close of business on the
record date for such dividend or distribution.

         (iii) Issuance of Rights or Warrants. In case the Company issues to all
holders of Common Stock rights or warrants expiring within 45 days entitling
those holders to subscribe for or purchase Common Stock at a price per share
less than the Current Market Price, the conversion price in effect immediately
prior to the close of business on the record date fixed for determination of
stockholders entitled to receive those rights or warrants shall be decreased by
multiplying (A) the conversion price by (B) a fraction, the numerator of which
is the sum of the number of shares of Common Stock outstanding at the close of
business on that record date and the number of shares of Common Stock that the
aggregate offering price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at the Current Market Price
and the denominator of which is the sum of the number of shares of Common Stock
outstanding at the close of business on that record date and the number of
additional shares of Common Stock so offered for subscription or purchase. For
purposes of this subparagraph (iii), the issuance of rights or warrants to
subscribe for or purchase securities convertible into Common Stock shall be
deemed to be the issuance of rights or warrants to purchase the Common Stock
into which those securities are convertible at an aggregate offering price equal
to the sum of the aggregate offering price of those securities and the minimum
aggregate amount (if any) payable upon conversion of those securities into
Common Stock. Such adjustment will be made successively whenever any such event
occurs.

         (iv) Distribution of Indebtedness, Securities or Assets.  In case the
Company shall distribute to all holders of Common Stock (whether by dividend or
in a merger, amalgamation or consolidation or otherwise) evidences of
indebtedness, shares of Capital Stock of any class or series, other securities,
cash or assets (other than Common Stock, rights or warrants referred to in
subparagraph (iii) above or a dividend payable exclusively in cash, shares of
Capital Stock or similar equity interests in the case of a Spin-Off, referred to
in the succeeding paragraph, and other than as a result of a Fundamental Change
referred to in subparagraph (v) below), the conversion price in effect
immediately prior to the close of business on the record date fixed for
determination of stockholders entitled to receive that distribution shall be
decreased by multiplying (A) the conversion price by (B) a fraction, the
numerator of which is the Current Market Price of the Common Stock and the
denominator of which is the Current Market Price of the Common Stock plus the
Fair Market Value of the portion of those evidences of indebtedness, shares of
Capital Stock, other securities, cash and assets so distributed applicable to
one share of Common Stock. Such adjustment shall be made successively whenever
any such event shall occur.


                                       16






<PAGE>

         In case of a Spin-Off, the conversion price in effect immediately
before the close of business on the record date fixed for determination of
stockholders entitled to receive the relevant dividend or other distribution
will be decreased by multiplying (x) the conversion price by (y) a fraction, the
numerator of which is the Current Market Price of the Common Stock and the
denominator of which is the Current Market Price of the Common Stock plus the
Fair Market Value of the portion of those shares of Capital Stock, other
securities, cash and assets so distributed applicable to one share of Common
Stock.

         The adjustment to the conversion price under the preceding paragraph
will occur at the earlier of (1) the tenth Trading Day from, and including, the
effective date of the Spin-Off and (2) the date of the Initial Public Offering
of the securities being distributed in the Spin-Off, if that Initial Public
Offering is effected simultaneously with the Spin-Off.

          (v) Fundamental Changes. In case any transaction or event (including,
without limitation, any merger, consolidation, combination, recapitalization,
sale of assets, tender or exchange offer, reclassification, compulsory share
exchange or liquidation) shall occur in which all or substantially all
outstanding shares of Common Stock are converted into or exchanged or acquired
for or constitute the right to receive stock, other securities, cash, property
or assets (each, a "Fundamental Change"), the holder of each share of Preferred
Stock Outstanding immediately prior to the occurrence of such Fundamental Change
that remains Outstanding after such Fundamental Change shall have the right upon
any subsequent conversion to receive (but only out of funds legally available,
to the extent required by applicable law) the kind and amount of stock, other
securities, cash, property or assets that such holder would have received if
that share had been converted immediately prior to the Fundamental Change.

         (vi) Special Adjustment for Some Changes of Control. In the event of a
Fundamental Change that constitutes a Change of Control in a transaction or
series of related transactions in which (A) the stockholders of the Company
receive consideration per share of Common Stock that is greater than the
conversion price, without giving effect to the adjustment described below, at
the effective time of the Change of Control, and (B) at least 10%, but less than
75%, of the total consideration paid to the stockholders of the Company consists
of cash, cash equivalents, securities or other assets (other than publicly
traded securities) (collectively, "Non-Public Consideration"), then the
conversion price will be adjusted so that, upon conversion of shares of
Preferred Stock that remain Outstanding after the Change of Control, in addition
to the Common Stock or other securities deliverable upon the conversion of the
Preferred Stock as described in Section 7 and subparagraphs (i) through (v)
above, the holder will



                                       17





<PAGE>

receive, in respect of each share of Preferred Stock, a number of publicly
traded securities of the acquiror determined through the following calculation:

         PV Cash Flows x (Non-Public Consideration/Total Consideration)
         --------------------------------------------------------------
                           Acquiror Stock Price where:

<TABLE>
<S>                          <C>
PV Cash
Flows =                      the present value of the aggregate dividend
                             payments that would have been payable on a share
                             of the Preferred Stock from the date of conversion
                             through August 15, 2006, calculated using a
                             discount rate equal to 2.00% plus the yield to
                             maturity of U.S. Treasury securities having a
                             maturity closest to, but not later than, August 15,
                             2006;

Total
Consideration =              the total value of the consideration payable to the
                             Company's stockholders at the effective time of that
                             Change of Control, with the value of any assets or
                             securities other than cash or publicly traded
                             securities being determined in good faith by the
                             Board of Directors based on an opinion as to that
                             value obtained from an accounting, appraisal or
                             investment banking firm of international standing;
                             and

Acquiror
Stock Price =                the Sale Price of a share of the acquiror's
                             publicly traded common stock or other publically
                             traded securities delivered in connection with the
                             Change of Control transaction at the effective time
                             of such Change of Control;

</TABLE>


provided, however, that if the consideration received by the Company's
stockholders in respect of such Change of Control is greater than the conversion
price at the effective time of the Change of Control and consists of at least
75% Non-Public Consideration or if the acquiror's common stock is not publicly
traded, then upon conversion of shares of Preferred Stock that remain
Outstanding after such Change of Control, in lieu of the foregoing conversion
price adjustment set forth in this subparagraph (vi), each holder shall be
entitled to receive, in





                                       18






<PAGE>

respect of each share of Preferred Stock, an additional amount in cash
calculated as follows:

         PV Cash Flows x (Non-Public Consideration/Total Consideration).

        (vii) Self-Tender. In case the Company or any of its Subsidiaries
engages in a tender or exchange offer for all or any portion of the Common Stock
that shall expire, and such tender or exchange offer (as amended upon the
expiration thereof) shall require the payment to stockholders of consideration
per share of Common Stock having a Fair Market Value that as of the last time
(the "Expiration Time") tenders or exchanges may be made pursuant to such tender
or exchange offer (as it may be amended) exceeds the Sale Price per share of
Common Stock as of the Trading Day next succeeding the Expiration Time, the
conversion price shall be decreased so that it shall equal the rate determined
by (A) multiplying the conversion price in effect immediately prior to the
Expiration Time by (B) a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding (including any tendered or exchanged shares)
at the Expiration Time multiplied by the Sale Price per share of Common Stock as
of the Trading Day next succeeding the Expiration Time and the denominator of
which shall be the sum of (x) the Fair Market Value of the aggregate
consideration payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares of Common
Stock validly tendered or exchanged and not withdrawn as of the Expiration Time
(the shares of Common Stock deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) at the Expiration
Time and the Sale Price per share of Common Stock as of the Trading Day next
succeeding the Expiration Time, such decrease to become effective as of the
opening of business on the Trading Day next succeeding the Expiration Time. In
the event that the Company is obligated to purchase shares of Common Stock
pursuant to any such tender or exchange offer, but the Company is permanently
prevented by applicable law from effecting any such purchases or all such
purchases are rescinded, the conversion price shall again be adjusted to be the
conversion price that would then be in effect if such tender or exchange offer
had not been made.

       (viii) Extraordinary distribution in cash. In case the Company pays a
dividend or makes a distribution in cash on the Common Stock and the amount of
cash constituting the dividend or distribution exceeds 15% of the Current Market
Price of the Common Stock at the close of business on the day that the Common
Stock trades ex-distribution, the conversion price in effect immediately before
the close of business on the day that the Common Stock trades ex-distribution
will be adjusted by multiplying (A) the conversion price by (B) a fraction, the
numerator





                                       19





<PAGE>

of which will be the Current Market Price of the Common Stock and the
denominator of which will be the Current Market Price of the Common Stock plus
the amount per share of such dividend or distribution.

          (b) Anything in paragraph (a) to the contrary notwithstanding, the
Company shall not be required to give effect to any adjustment in the conversion
price unless and until the net effect of one or more adjustments (each of which
shall be carried forward until counted toward adjustment), determined as above
provided, shall have resulted in a change of the conversion price by at least
l%, and when the cumulative net effect of more than one adjustment so determined
shall be to change the conversion price by at least 1%, such change in the
conversion price shall thereupon be given effect. In the event that, at any time
as a result of the provisions of this Section 8, the holders of shares of
Preferred Stock upon subsequent conversion shall become entitled to receive any
shares of Capital Stock of the Company other than Common Stock, the number of
such other shares so receivable upon conversion of shares of Preferred Stock
shall thereafter be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions contained herein.

          (c) There shall be no adjustment of the conversion price in case of
the issuance of any Capital Stock of the Company in a merger, reorganization,
acquisition, reclassification, recapitalization or other similar transaction
except as provided in this Section.

          (d) In any case in which this Section 8 requires that an adjustment as
a result of any event is to become effective from and after a record date, the
Company may elect to defer until after the occurrence of that event (i) issuing
to the holder of any shares of Preferred Stock converted after that record date
and before the occurrence of that event the additional shares of Common Stock
issuable upon that conversion over and above the shares issuable on the basis of
the conversion price in effect immediately prior to adjustment and (ii)
delivering scrip in lieu of a fractional share of Common Stock.

          (e) If the Company takes a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend or other distribution,
and thereafter and before the distribution to stockholders thereof, the Company
legally abandons its plan to pay or deliver such dividend or distribution, then
thereafter no adjustment in the number of shares of Common Stock issuable upon
conversion of shares of Preferred Stock or in the conversion price then in
effect shall be required by reason of the taking of record.

          (f) The Company's obligations under the Certificate are subject to
applicable federal and state securities laws.


                                       20






<PAGE>

          (g) The Board of Directors shall have the power to resolve any
ambiguity or, subject to applicable law, correct any error in this Section 8 and
its action in so doing shall be final and conclusive.

         SECTION 9. Change of Control Put Right. (a) If a Change of Control
occurs, each holder of shares of Preferred Stock that remain Outstanding after
the Change of Control shall have the right to require the Company to redeem all
or any part of such holder's Outstanding shares of Preferred Stock, out of
legally available funds, at the Redemption Price. For shares of Preferred Stock
to be redeemed as provided in this Section, the Company must receive, from the
holder of such shares, at the office or agency of the Company maintained for
that purpose a "Notice of Election of Redemption Upon a Change of Control" in
the form of Exhibit E to this Certificate three Business Days prior to the
Redemption Date, as described in subsection (c) of this Section.

          The Company may, at its option, elect to pay the Redemption Price in
cash or, in shares of the Company's Common Stock valued at a discount of 5% from
the Market Price of the Common Stock, or any combination thereof; provided that
the Company may pay such Redemption Price in shares of its Common Stock only if
such shares are eligible for immediate sale in the public market by
non-affiliates of the Company absent a registration statement. The Company's
right to redeem Preferred Stock, in whole or in part, with shares of Common
Stock is subject to the conditions set forth in Section 5(d).

         (b) Holders of the Preferred Stock will not have the right set forth in
paragraph (a) above if:

          (i) the Sale Price per share of the Common Stock for any five Trading
Days within the period of 10 consecutive Trading Days ending immediately after
the later of the Change of Control or the public announcement thereof (in the
case of a Change of Control under paragraph (a) of the definition of "Change of
Control" in Section 11) or the period of 10 consecutive Trading Days ending
immediately before the Change of Control (in the case of a Change of Control
under paragraph (b), (c) or (d) of the definition of "Change of Control" in
Section 11) shall equal or exceed 105% of the conversion price of the Preferred
Stock immediately after the later of the Change of Control and the public
announcement thereof; or

         (ii) at least 95% of the consideration in the Change of Control
transaction consists of Capital Stock traded on a U.S. national securities
exchange or quoted on the Nasdaq, and as a result of the transaction, the
Preferred Stock becomes convertible solely into this Capital Stock.




                                       21





<PAGE>

          (c) Within 30 days following any Change of Control, the Company shall
mail a notice to each holder with a copy to the Transfer Agent stating:

         (i) that a Change of Control has occurred and a description of the
offer;

         (ii) the purchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and

         (iii) the instructions determined by the Company, consistent with this
Section, that a holder must follow in order to have its Debentures purchased.

          (d) The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations to the extent
those laws and regulations are applicable in connection with the redemption of
Preferred Stock as a result of a Change of Control with respect to the Company.
To the extent that the provisions of any securities laws or regulations conflict
with any of the provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall be deemed not to have
breached its obligations under this Section.

          (e) On the purchase date set forth in the notice mailed to holders
pursuant to subsection (c) of this Section, the Company will, to the extent
lawful, (i) redeem all shares of Preferred Stock properly tendered, (ii) deposit
with the Transfer Agent an amount equal to the Redemption Price of the shares of
Preferred Stock so tendered and (iii) deliver or cause to be delivered to the
Transfer Agent shares of Preferred Stock so accepted together with an officers'
certificate stating the aggregate Accreted Liquidation Preference of the shares
of Preferred Stock being redeemed by the Company. The Transfer Agent shall
promptly mail or deliver to each holder of shares of Preferred Stock so tendered
the applicable payment for those shares of Preferred Stock, and the Transfer
Agent shall promptly countersign and mail or deliver to each holder certificates
representing, or cause to be transferred by book-entry to each holder, new
shares of Preferred Stock equal in aggregate Accreted Liquidation Preference to
any unredeemed portion of the shares of Preferred Stock surrendered, if any. The
Company shall publicly announce the results of its offer on or as soon as
practicable after the Redemption Date for the redemption of shares of Preferred
Stock in connection with a Change of Control.

          (f) The Company shall not be required to redeem any shares of
Preferred Stock upon the occurrence of a Change of Control if a third party
makes an offer to purchase the Preferred Stock in the manner, for the amount, at
the times and



                                       22






<PAGE>

otherwise in compliance with the requirements described in this Section 9 and
purchases all shares of Preferred Stock validly tendered and not withdrawn.

         (g) The right of the holders of shares of Preferred Stock described in
this Section 9 will be subject to the Company's obligation to repay or
repurchase all of its debt obligations or Preferred Stock required to be
repurchased or repaid in connection with a transaction or event that constitutes
a Change of Control and to any contractual restrictions contained in the
Company's indebtedness. When the Company shall have satisfied these obligations
or these obligations are no longer applicable to the Company and, subject to the
legal availability of funds for this purpose, the Company shall then redeem all
shares of Preferred Stock tendered for purchase by the Company upon a Change of
Control pursuant to this Section.

         SECTION 10. Exchange Right. (a) The Company will have the right (the
"Exchange Right"), at any time, if the Company has legally available funds, to
require all holders of Outstanding Preferred Stock to exchange their Preferred
Stock for the Company's convertible subordinated debentures (the "Convertible
Subordinated Debentures") having a principal amount per Convertible Subordinated
Debenture equal to the Accreted Liquidation Preference of the Preferred Stock,
rounded down to the nearest whole dollar amount, and having a conversion price
and interest rate equal to the conversion price and dividend rate for the
Preferred Stock so exchanged (the "Exchange"). The excess, if any, of the
Accreted Liquidation Preference of each share of Preferred Stock, as of the
effective date of the Exchange, over the nearest whole dollar amount to which
that Accreted Liquidation Preference has been rounded-down shall be paid in cash
to the holder. The Convertible Subordinated Debentures will be issued under an
indenture substantially in the form of Exhibit H to this Certificate (the
"Indenture").

         The Company will only be able to exercise the Exchange Right if:

          (i) There are legally available funds for such Exchange;

         (ii) The Company has entered into an Indenture substantially in the
form of Exhibit H to this Certificate with a trustee eligible pursuant to the
Trust Indenture Act to act as such, that is organized and doing business under
the laws of the United States of America or any state thereof or the District of
Columbia and that has a combined capital and surplus of at least $50,000,000 (or
if such person is a member of a bank holding company system, its bank holding
company shall have a combined capital and surplus of at least $50,000,000) and
is otherwise eligible. If such person publishes reports of condition at least
annually, then for the purposes of this Section the combined capital and surplus
of such


                                       23





<PAGE>


Person shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published; and

         (iii) The Company delivers to the trustee a certificate of one of its
executive officers and an opinion of its independent legal counsel, as well as
an opinion of its in-house counsel, each in substantially the forms attached
hereto as Exhibit F and Exhibit G.

         The Company may only exercise the Exchange Right in whole and not in
part.

          (b) If the Company exercises the Exchange Right, the Company will
provide notice to the trustee not less than 30 nor more than 60 days preceding
the date the Company desires the Exchange to be effective (the "Exchange Date").
The exchange notice shall state: (i) the Company's election to exercise the
Exchange Right, (ii) a description of the type and amount of Convertible
Subordinated Debentures to be delivered in respect of the Preferred Stock, the
place or places where certificates for shares of Preferred Stock are to be
surrendered for exchange, including any procedures applicable to an Exchange to
be accomplished through book-entry transfers, (iii) the Exchange Date and (iv)
that dividends on the shares of Preferred Stock to be exchanged shall cease to
accrue on such Exchange Date whether or not certificates for shares of Preferred
Stock are surrendered for exchange on such Exchange Date unless the Company
shall default in the delivery of the Convertible Subordinated Debentures. The
Company will cause the Convertible Subordinated Debentures to be delivered to
the trustee in preparation for the Exchange no later than 5 Business Days prior
to the Exchange Date. The Company will provide notice of such exercise of the
Exchange Right to each holder of record of the Preferred Stock promptly after
providing notice of such exercise to the trustee, provided, however, that no
failure to give such notice nor any deficiency therein shall affect the validity
of the procedure for the exchange of any shares of the Preferred Stock to be
exchanged except as to the holder or holders to whom the Company has failed to
give said notice or except as to the holder or holders whose notice was
defective.

          (c) If the Company exercises the Exchange Right, delivery of the
Convertible Subordinated Debentures to the holders of the Preferred Stock to be
exchanged will be conditioned upon delivery of the certificates representing, or
other indicia of ownership of, or book-entry transfer of such Preferred Stock
(together with any necessary endorsements) to the trustee at any time (whether
prior to, on or after the applicable Exchange Date) after notice of the exercise
of the Exchange Right is given to the trustee. In such event, such Convertible
Subordinated Debentures will be delivered to each holder of record of Preferred
Stock to be exchanged no later than the later of (i) the Exchange Date or (ii)
the



                                       24






<PAGE>

time of delivery or transfer of the certificates representing, or other
indicia of ownership of, Preferred Stock to the trustee.

          (d) If, following any exercise of the Exchange Right, the trustee
holds Convertible Subordinated Debentures in respect of all the Outstanding
Preferred Stock, then at the close of business on such Exchange Date, whether or
not the certificates representing, or other indicia of ownership of, such
Preferred Stock is delivered to the trustee, (i) the Company will become the
owner and record holder of such Preferred Stock, (ii) the holders of such
Preferred Stock shall have no further rights with respect to the Preferred Stock
other than the right to receive the Convertible Subordinated Debentures upon
delivery of the certificates representing, or other indicia of ownership of,
Preferred Stock, (iii) dividends on the Preferred Stock to be exchanged will
cease to accrue on the Exchange Date whether or not certificates for shares of
Preferred Stock are surrendered for exchange on the Exchange Date and (iv) the
Depository or its nominee, as the record holder of the Preferred Stock, will
exchange the global certificate or certificates representing the Preferred Stock
for a global certificate or certificates representing the Convertible
Subordinated Debentures to be delivered upon such exchange. In the event that
delivery of the Convertible Subordinated Debentures due on the Exchange Date is
improperly withheld or is refused and not paid by the trustee or by the Company,
distributions on the Preferred Stock will continue to accrue from the Exchange
Date to the actual date of delivery.

          (e) The aggregate principal amount of the Convertible Subordinated
Debentures will be limited to the aggregate Accreted Liquidation Preference of
the Preferred Stock Outstanding on the effective date of the Exchange.
Notwithstanding anything herein to the contrary, the Convertible Subordinated
Debentures will be issued in denominations equal to integral multiples of the
Accreted Liquidation Preference of one share of Preferred Stock as of the
effective date of the Exchange, rounded down to the nearest whole dollar amount.

         SECTION 11. Certain Definitions. As used in this Certificate, the
following terms shall have the following meanings, unless the context otherwise
requires:

         "Accreted Liquidation Preference" per share of Preferred Stock means,
as of any date, the Initial Liquidation Preference increased by the sum of the
Accretion Amounts, if any, for all prior Dividend Payment Dates, and decreased
by the sum of the Paydown Amounts, if any, for all prior Dividend Payment Dates.

         "Accretion Amount" per share of Preferred Stock for any Dividend
Payment on which dividends are not paid in full, means the product of (i) the





                                       25






<PAGE>

accretion rate of 10.00% per year, calculated on a semi-annual basis, as such
may be adjusted pursuant to Section 3(d) hereof, (ii) the Accreted Liquidation
Preference as of the first day of the relevant Dividend Period and (iii) the
fraction of the dividends for that Dividend Period that were not paid on the
Dividend Payment Date.

         "Additional Dividends" has the meaning set forth in Section 3(d).

         "Agent Members" has the meaning set forth in Section 13(b).

         "Business Day" means any day other than a Saturday, Sunday, or U.S.
Federal holiday or day on which the Transfer Agent is not open for business.

         "Capital Stock" of any person means any and all shares, interests,
participations or other equivalents however designated of corporate stock or
other equity participations, including partnership interests, whether general or
limited, of such person and any rights (other than debt securities convertible
or exchangeable into an equity interest), warrants or options to acquire an
equity interest in such person.

         "Change of Control" means, with respect to the Company, the occurrence
of any of the following:

          (a)  if any "person" or "group" (as such terms are used in Section
               13(d) and Section 14(d) of the Exchange Act or any successor
               provisions to either of the foregoing), including any group
               acting for the purpose of acquiring, holding, voting or disposing
               of securities within the meaning of Rule 13d-5(b)(1) under the
               Exchange Act, becomes the "beneficial owner" (as defined in Rule
               13d-3 under the Exchange Act, except that a person will be deemed
               to have "beneficial ownership" of all shares that any such person
               has the right to acquire, whether such right is exercisable
               immediately or only after the passage of time), directly or
               indirectly, of 50% or more of the total voting power of the
               Voting Stock of the Company; or

          (b)  if the Company consolidates or merges with or into any other
               person, other than a consolidation or merger under a transaction
               in which the outstanding Voting Stock of the Company remains
               outstanding or is changed into or exchanged for cash, securities
               or other property with the effect that the beneficial owners of
               the Company's outstanding Voting Stock immediately before that
               transaction, beneficially own, directly or indirectly, more than
               50% of the Voting Stock, measured





                                       26






<PAGE>

               by voting power rather than number of shares, of the surviving
               corporation immediately following that transaction; or

          (c)  upon the sale, transfer, assignment, lease, conveyance or other
               disposition, directly or indirectly, of all or substantially all
               the assets of the Company and its Subsidiaries considered as a
               whole; or

          (d)  if during any period of two consecutive years, individuals who at
               the beginning of such period constituted the Board of Directors
               (together with any new directors whose election or appointment by
               the Board of Directors or whose nomination for election by the
               Company's stockholders was approved by a vote of a majority of
               the directors then still in office who were either directors at
               the beginning of such period or whose election or nomination for
               election was previously so approved) cease for any reason to
               constitute a majority of the Company's Board of Directors then in
               office.

         "Common Share Legend" has the meaning set forth in Section 14(e).

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

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

         "Conversion Agent" has the meaning set forth in Section 15(a)(ii).

         "Convertible Subordinated Debentures" has the meaning set forth in
Section 10(a).

         "Current Market Price" of the Common Stock means (a) in the case of
Section 8(a)(iii), the average of the Sale Prices of the Common Stock for the
five consecutive Trading Days selected by the Board of Directors beginning not
more than 20 Trading Days before, and ending not later than the date immediately
preceding the record date for the event described in Section 8(a)(iii), (b) in
the case of Section 8(a)(iv), the average of the Sale Prices of the Common Stock
for the first 10 Trading Days from, and including, the first day that the Common
Stock trades ex-distribution and (c) in the case of Section 8(a)(viii), the
average of the Sale Prices of Common Stock for the period of five consecutive
Trading Days after the Common Stock trades ex-distribution; provided, that the
Current Market Price of the Common Stock in connection with a Spin-Off shall
mean the average



                                       27





<PAGE>

of the Sale Prices of the Common Stock over the first 10 Trading Days after
the effective date of the Spin-Off; provided further, that if an Initial Public
Offering of the securities being distributed in any Spin-Off is to be effected
simultaneously with such Spin-Off, the Current Market Price of the Common Stock
shall mean the Sale Price of the Common Stock on the Trading Day on which the
Initial Public Offering price of such securities is determined.

         "Depository" has the meaning set forth in Section 13(a).

         "Dividend Payment Date" has the meaning set forth in Section 3(a).

         "Dividend Payment Record Date" has the meaning set forth in Section
3(a).

         "Dividend Period" for any Dividend Payment Date means the period from
and including the immediately preceding Dividend Payment Date (or if there is no
immediately preceding Dividend Payment Date, from and including August 6, 2001)
to but excluding such Dividend Payment Date.

         "Exchange" has the meaning set forth in Section 10(a). "Exchange Date"
has the meaning set forth in Section 10(b). "Exchange Right" has the meaning set
forth in Section 10(a).

         "Expiration Time" has the meaning set forth in Section 8(a)(vii).

         "Fair Market Value" means (i) in the case of a distribution referred to
in the first paragraph of Section 8(a)(iv) or a tender or exchange offer
referred to in Section 8(a)(vii), the value determined by the Board of
Directors, whose determination in good faith shall be conclusive, (ii) in the
case of securities to be distributed to the holders of the Common Stock in
connection with a Spin-Off that is not effected simultaneously with an Initial
Public Offering of the securities being distributed in the Spin-Off, the average
of the Sale Prices of those securities over the first 10 Trading Days from, and
including, the effective date of the SpinOff and (iii) in the case of securities
being distributed in any Spin-Off that is effected simultaneously with an
Initial Public Offering, the Initial Public Offering price.

         "Fundamental Change" has the meaning set forth in Section 8(a)(v).

         "Global Preferred Share" has the meaning set forth in Section 13(a).




                                       28






<PAGE>




         "Global Shares Legend" has the meaning set forth in Section 13(a).

         "Holder," "Stockholder" or other similar terms mean a person in whose
name a share of Preferred Stock is registered on the Preferred Stock register.

         "Indenture" has the meaning set forth in Section 10(a).

         "Initial Conversion Date" means the earlier of (a) nine months after
the initial issuance of the Preferred Stock and (b) the Business Day immediately
following the date on which the Company completes the share distribution in
connection with its spin-off of Agere Systems Inc. ("Agere").

         "Initial Liquidation Preference" means $1,000 per share of the
Preferred Stock.

         "Initial Public Offering" means, in the event of a Spin-Off, the first
time securities of the same class or type as the securities being distributed in
the SpinOff are bona fide offered to the public for cash.

         "Initial Purchasers" means the purchasers set forth on Schedule A to
the Purchase Agreement.

         "Initial Redemption Date" has the meaning set forth in Section 5(b)(i).

         "Junior Stock" means the Company's Series A Junior Participating
Preferred Stock, the Company's Common Stock and each class or series of the
Company's Capital Stock the terms of which provide that such class or series
will rank junior to the Preferred Stock as to the payment of dividends or
distributions upon liquidation, dissolution or winding up. Junior Stock includes
warrants, rights, calls or options exercisable for or convertible into Junior
Stock.

         "Market Price" means the average of the Sale Prices of the Company's
Common Stock for the twenty Trading Day period ending on the third Business Day
prior to the applicable Redemption Date (if the third Business Day prior to the
applicable Redemption Date is a Trading Day, or if not, then on the last Trading
Day prior to the third Business Day), appropriately adjusted to take into
account the occurrence, during the period commencing on the first of the Trading
Days during the twenty Trading Day period and ending on the Redemption Date, of
any event that would result in an adjustment to the conversion price of the
Preferred Stock.

         "Nasdaq" has the meaning set forth in Section 5(d)(ii).

                                       29





<PAGE>



         " Non-Public Consideration" has the meaning set forth in Section
8(a)(vi).

         "Notice" means, unless otherwise specified or required by applicable
law, publication on Bloomberg or the Company's website or by any other
electronic means of publication reasonably calculated to constitute notice.

         "Officer" means the Chairman of the Board of Directors, the President,
any Vice President, a Treasurer, an Assistant Treasurer, the Secretary, or any
Assistant Secretary.

         "Outstanding" means, when used with respect to Preferred Stock, as of
the date of determination, all shares of Preferred Stock issued pursuant to this
Certificate, except (a) Preferred Stock that has been converted into Common
Stock in accordance with Section 7 and Preferred Stock that has been canceled by
the Registrar or delivered to the Registrar for cancellation upon purchase or
other acquisition thereof by the Company; and (b) Preferred Stock for whose
payment or redemption money in the necessary amount has been deposited with the
Registrar or any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own Paying
Agent) for the holders of such Preferred Stock; provided that, if such Preferred
Stock is to be redeemed, notice of such redemption has been duly given pursuant
to this Certificate or provision therefor satisfactory to the Registrar has been
made; provided, however, that, in determining whether the holders of Preferred
Stock have given any request, demand, authorization, direction, notice, consent
or waiver or taken any other action hereunder, Preferred Stock owned by the
Company shall be deemed not to be Outstanding, except that, in determining
whether the Registrar shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent, waiver or other action, only
Preferred Stock which the Registrar has actual knowledge of being so owned shall
be deemed not to be Outstanding.

         "Parity Stock" means each class or series of the Company's Capital
Stock the terms of which provide that such class or series will rank on a parity
with the Preferred Stock as to the payment of dividends or distributions upon
liquidation, winding up and dissolution. Parity Stock includes warrants, rights,
calls or options exercisable for or convertible into Parity Stock.

         "Paydown Amount" for any Dividend Payment Date has the meaning set
forth in Section 3(c).

         " Paying Agent" has the meaning set forth in Section 15(a)(i).

                                       30





<PAGE>



         "Purchase Agreement" means that certain Purchase Agreement, dated
August 1, 2001 by and among the Company and the Initial Purchasers.

         " Purchased Shares" has the meaning set forth in Section 8(a)(vii).

         "Redemption Date" shall mean (a) in the case of a redemption pursuant
to Section 5(b) and Section 9(c), the date fixed for redemption, (b) in the case
of a redemption pursuant to Section 5(a), August 1, 2031, and (c) in the case of
a redemption pursuant to Section 5(c), August 2, 2004, August 2, 2007, August 2,
2010 and August 2, 2016.

         "Redemption Notice" means, as the context requires, either (a) notice
provided by or on behalf of the Company to the holders or (b) notice provided by
a holder to the Company.

         "Redemption Price" means, per share of Preferred Stock, the Accreted
Liquidation Preference thereof, plus an amount equal to accrued and unpaid
dividends from, and including, the immediately preceding Dividend Payment Date
to, but excluding, the Redemption Date, subject to adjustment as provided in
Section 5(f).

         "Registrable Securities" has the meaning set forth in Section 14(c).

         "Registrar" means The Bank of New York as the Company's initial
registrar and transfer agent, and thereafter, any successor registrar and
transfer agent duly appointed by the Company.

         "Registration Default" has the meaning ascribed to it in the
Registration Rights Agreement.

         "Registration Rights Agreement" means that certain Registration Rights
Agreement to be executed by the Company and the Initial Purchasers in connection
with the sale of the Preferred Stock pursuant to the Purchase Agreement, as such
may be amended from time to time.

         "Regulation S" has the meaning set forth in Section 14(a).

         "Restricted Shares Legend" has the meaning set forth in Section 13(a).

         "Rule 144A" has the meaning set forth in Section 14(a).

         "Sale Price" of the Common Stock on any Trading Day means the closing
sale price per share (or if no closing sale price is reported, the average of
the bid

                                       31





<PAGE>



and ask prices or, if more than one in either case, the average of the average
bid and the average ask prices) on such Trading Day as reported in 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 Nasdaq.

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

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

         "Senior Stock" means each class or series of the Company's Capital
Stock the terms of which provide that such class or series will rank senior to
the Preferred Stock with respect to the payment of dividends or distributions
upon liquidation, winding up or dissolution. Senior Stock includes any Capital
Stock, other than Junior Stock, that pays cumulative dividends and includes
warrants, rights, calls or options exercisable for or convertible into Senior
Stock.

         "Shelf Registration Statement" means the shelf registration statement
required to be filed with the Securities and Exchange Commission pursuant to the
Registration Rights Agreement.

         "Spin-Off" means a dividend or other distribution of shares 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.

         "Subsidiary" means, with respect to any person, (a) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
person or one or more of the other Subsidiaries of that person (or a combination
thereof) and (b) any partnership (i) the sole general partner or the managing
general partner of which is such person or a Subsidiary of such person or (ii)
the only general partners of which are such person or of one or more
Subsidiaries of such person (or any combination thereof).

         "Trading Day" means each day on which the securities exchange or
quotation system which is used to determine the Sale Price is open for trading
or quotation.

                                       32





<PAGE>



         "Transfer Agent" means The Bank of New York, as the Company's transfer
agent, and thereafter, any successor transfer agent duly appointed by the
Company.

         "Voting Stock" of any person means Capital Stock of such person which
ordinarily has voting power for the election of directors, or persons performing
similar functions, of such person, whether at all times or only for so long as
no senior class of securities has such voting power by reason of any
contingency.

         SECTION 12. Currency. All shares of Preferred Stock shall be
denominated in U.S. currency, and all payments and distributions thereon or with
respect thereto shall be made in U.S. currency. All references herein to "$" or
"dollars" refer to U.S. currency.

         SECTION 13. Form. (a) Preferred Stock shall be issued in the form of
one or more permanent global shares of Preferred Stock in definitive, fully
registered form with the global legend (the "Global Shares Legend") and, until
such time as otherwise determined by the Company and the Registrar, the
restricted shares legend (the "Restricted Shares Legend"), in each case, as set
forth on the form of Preferred Stock certificate attached hereto as Exhibit A
and, until such time as otherwise determined by the Company and the Registrar,
the Form of Certificate of Transfer on the reverse side, in the form attached
hereto as Exhibit B (each, a "Global Preferred Share"), which is hereby
incorporated in and expressly made a part of this Certificate. The Global
Preferred Share may have notations, legends or endorsements required by law,
stock exchange rules, agreements to which the Company is subject, if any, or
usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company). The Global Preferred Share shall be deposited on
behalf of the holders of the Preferred Stock represented thereby with the
Registrar, at its New York office, as custodian for The Depository Trust Company
or its nominee and their respective successors (the "Depository"), and
registered in the name of the Depository or a nominee of the Depository, duly
executed by the Company and countersigned and registered by the Registrar as
hereinafter provided. The aggregate number of shares represented by each Global
Preferred Share may from time to time be increased or decreased by adjustments
made on the records of the Registrar and the Depository or its nominee as
hereinafter provided.

          (b) This paragraph shall apply only to a Global Preferred Share
deposited with or on behalf of the Depository. The Company shall execute and the
Registrar shall, in accordance with this Section, countersign and deliver
initially one or more Global Preferred Shares that (i) shall be registered in
the name of Cede & Co. or other nominee of the Depository and (ii) shall be
delivered by the Registrar to Cede & Co. or pursuant to instructions received
from Cede & Co. or

                                       33





<PAGE>



held by the Registrar as custodian for the Depository pursuant to an agreement
between the Depository and the Registrar. Members of, or participants in, the
Depository ("Agent Members") shall have no rights under this Certificate with
respect to any Global Preferred Share held on their behalf by the Depository or
by the Registrar as the custodian of the Depository or under such Global
Preferred Share, and the Depository may be treated by the Company, the Registrar
and any agent of the Company or the Registrar as the absolute owner of such
Global Preferred Share for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Registrar or any agent
of the Company or the Registrar from giving effect to any written certification,
proxy or other authorization furnished by the Depository or impair, as between
the Depository and its Agent Members, the operation of customary practices of
the Depository governing the exercise of the rights of a holder of a beneficial
interest in any Global Preferred Share. Except as provided in Section 13(d),
owners of beneficial interests in a Global Preferred Share will not be entitled
to receive physical delivery of certificated Preferred Stock.

          (c) (i) Two Officers shall sign the Global Preferred Share for the
Company, in accordance with the Company's bylaws and applicable law, by manual
or facsimile signature.

         (ii) If an Officer whose signature is on a Global Preferred Share no
longer holds that office at the time the Transfer Agent countersigns the Global
Preferred Share, the Global Preferred Share shall be valid nevertheless.

         (iii) A Global Preferred Share shall not be valid until an authorized
signatory of the Transfer Agent countersigns such Global Preferred Share. The
signature shall be conclusive evidence that the Global Preferred Share has been
authenticated. Each Global Preferred Share shall be dated the date of its
authentication.

          (d) The Preferred Stock represented by a Global Preferred Share is
exchangeable for certificated Preferred Stock in definitive form of like tenor
as such Preferred Stock if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the global securities and or
if at any time the Depository ceases to be a clearing agency registered under
the Exchange Act and, in each case, a successor depositary is not appointed by
the Company within 120 days after the date of such notice, (ii) the Company, in
its discretion at any time determines not to have all of the Preferred Stock
represented by a Global Preferred Share or (iii) otherwise required by
applicable law. Any Preferred Stock that is exchangeable pursuant to the
preceding sentence is exchangeable for certificated Preferred Stock issuable in
authorized denominations and registered in such names as the Depository shall
direct. Subject to the foregoing and applicable

                                       34





<PAGE>



law, a Global Preferred Share is not exchangeable, except for a Global Preferred
Share of the same aggregate Accreted Liquidation Preferences to be registered in
the name of the Depository or its nominee. In addition, such certificates will
bear the Restricted Share Legend (unless the Company determine otherwise in
accordance with applicable law) subject, with respect to such Preferred Stock,
to the provisions of the Restricted Share Legend.

         SECTION 14. Registration; Transfer. (a) The Preferred Stock, the
Convertible Subordinated Debentures that may be issued in exchange for the
Preferred Stock and the Common Stock issuable upon conversion of the shares of
Preferred Stock or Convertible Subordinated Debentures have not been registered
under the Securities Act and may not be resold, pledged or otherwise transferred
prior to the date when they no longer constitute "restricted securities" for
purposes of Rule 144(k) under the Securities Act other than (i) to the Company,
(ii) to "qualified institutional buyers" pursuant to and in compliance with Rule
144A under the Securities Act ("Rule 144A"), (iii) pursuant to and in compliance
with Rule 903 or 904 of Regulation S under the Securities Act ("Regulation S"),
(iv) pursuant to an exemption from the registration requirements of the
Securities Act provided by Rule 144 under the Securities Act or (v) pursuant to
an effective registration statement under the Securities Act, in each case, in
accordance with any applicable securities laws of any state of the United
States.

          (b) Notwithstanding any provision to the contrary herein, so long as a
Global Preferred Share remains Outstanding and is held by or on behalf of the
Depository, transfers of a Global Preferred Share, in whole or in part, or of
any beneficial interest therein, shall only be made in accordance with this
Section 14; provided, however, that beneficial interests in a Global Preferred
Share may be transferred to persons who take delivery thereof in the form of a
beneficial interest in the same or a different Global Preferred Share in
accordance with the transfer restrictions set forth in the Restricted Shares
Legend.

          (i) Except for transfers or exchanges made in accordance with
subparagraph (ii) of this Section 14(b), transfers of a Global Preferred Share
shall be limited to transfers of such Global Preferred Share in whole, but not
in part, to nominees of the Depository or to a successor of the Depository or
such successor's nominee.

         (ii) If an owner of a beneficial interest in a Global Preferred Share
deposited with the Depository or with the Registrar as custodian for the
Depository wishes at any time to transfer its interest in such Global Preferred
Share to a person who is eligible to take delivery thereof in the form of a
beneficial interest in a Global Preferred Share, such owner may, subject to the
rules and procedures of the Depository, cause the exchange of such interest for
a

                                       35





<PAGE>



new beneficial interest in the applicable Global Preferred Share. Upon receipt
by the Registrar at its office in The City of New York of (A) instructions from
the holder directing the Registrar to transfer its interest in the applicable
Global Preferred Share, such instructions to contain the name of the transferee
and appropriate account information, (B) unless the Shelf Registration Statement
has become effective and such shares are being transferred pursuant to the Shelf
Registration Statement, a certificate in the form of Certificate of Transfer on
the reverse side of the form of Preferred Stock certificate attached hereto as
Exhibit A, given by the transferor, to the effect set forth therein, and (C)
such other certifications, legal opinions and other information as the Company
or the Registrar may reasonably require to confirm that such transfer is being
made pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, then the Registrar shall
instruct the Depository to reduce or cause to be reduced such Global Preferred
Share by the number of shares of the beneficial interest therein to be exchanged
and to debit or cause to be debited from the account of the person making such
transfer the beneficial interest in the Global Preferred Share that is being
transferred, and concurrently with such reduction and debit, the Registrar will
instruct the Depository to increase or cause to be increased the applicable
Global Preferred Share by the aggregate number of shares being exchanged and to
credit or cause to be credited to the account of the transferee the beneficial
interest in the Global Preferred Share that is being transferred.

          (c) Except in connection with a Shelf Registration Statement
contemplated by and in accordance with the terms of the Registration Rights
Agreement relating to the Preferred Stock and shares of Common Stock issuable on
conversion of the Preferred Stock (collectively, the "Registrable Securities,")
if Preferred Stock is issued upon the transfer, exchange or replacement of
Preferred Stock bearing the Restricted Shares Legend, or if a request is made to
remove such Restricted Shares Legend on Preferred Stock, the Preferred Stock so
issued shall bear the Restricted Shares Legend and the Restricted Shares Legend
shall not be removed unless there is delivered to the Company and the Registrar
such satisfactory evidence, which may include an opinion of counsel licensed to
practice law in the State of New York, as may be reasonably required by the
Company or 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 or that such shares of Preferred
Stock are not "restricted securities" within the meaning of Rule 144 under the
Securities Act. Upon provision of such satisfactory evidence, the Registrar, at
the direction of the Company, shall countersign and deliver shares of Preferred
Stock that do not bear the Restricted Shares Legend.

                                       36





<PAGE>



          (d) The Company will refuse to register any transfer of Preferred
Stock, the Convertible Subordinated Debentures that may be issued in exchange
for the Preferred Stock or any Common Stock issuable upon conversion of the
shares of Preferred Stock or Convertible Subordinated Debentures that is not
made in accordance with the provisions of Rule 144A or Regulation S or pursuant
to a registration statement that has been declared effective under the
Securities Act or pursuant to an available exemption from the registration
requirements of the Securities Act; provided that the provisions of this
paragraph (d) shall not be applicable to any Preferred Stock that does not bear
any Restricted Shares Legend or to any Common Stock that does not bear the
Common Share Legend (as defined below in paragraph (e)).

          (e) Common Stock issued upon a conversion of the Preferred Stock prior
to the effectiveness of a Shelf Registration Statement shall be delivered in
certificated form and shall bear the common share legend (the "Common Share
Legend") set forth in Exhibit C hereto and include on its reverse side the Form
of Certificate of Transfer for Common Stock set out in Exhibit D. If (i) shares
of Common Stock issued prior to the effectiveness of a Shelf Registration
Statement are to be registered in a name other than that of the holder of
Preferred Stock or (ii) shares of Common Stock represented by a certificate
bearing the Common Share Legend are transferred subsequently by such holder,
then, unless the Shelf Registration Statement has become effective and such
shares are being transferred pursuant to the Shelf Registration Statement, the
holder must deliver to the Registrar a certificate in substantially the form of
Exhibit D as to compliance with the restrictions on transfer applicable to such
Common Stock and the Registrar shall not be required to register any transfer of
such Common Stock not so accompanied by a properly completed certificate. Such
Common Share Legend may be removed, and new certificates representing the Common
Stock may be issued, upon the presentation of satisfactory evidence that such
Common Share Legend is no longer required as described above in paragraph (c) of
this Section 14 with respect to the Preferred Stock.

         SECTION 15. Paying Agent and Conversion Agent. (a) The Company shall
maintain in the Borough of Manhattan, City of New York, State of New York (i) an
office or agency where payments may be made with respect to the Preferred Stock
(the "Paying Agent") and (ii) an office or agency where Preferred Stock may be
presented for conversion (the "Conversion Agent"). The Company may appoint the
Registrar, the Paying Agent and the Conversion Agent and may appoint one or more
additional paying agents and one or more additional conversion agents in such
other locations as it shall determine. The term "Paying Agent" includes any
additional paying agent and the term "Conversion Agent" includes any additional
conversion agent. The Company may change any Paying Agent or Conversion Agent
without prior notice to any holder. The Company

                                       37





<PAGE>



shall notify the Registrar of the name and address of any Paying Agent or
Conversion Agent appointed by the Company. If the Company fails to appoint or
maintain another entity as Paying Agent or Conversion Agent, the Registrar shall
act as such. The Company or any of its affiliates may act as Paying Agent,
Registrar, coregistrar or Conversion Agent.

          (b) Neither the Company nor the Registrar shall be required (i) to
issue, countersign or register the transfer of or exchange any Preferred Stock
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of Preferred Stock under Section 5 and
ending at the close of business on the day of such mailing or (ii) to register
the transfer of or exchange any Preferred Stock so selected for redemption in
whole or in part, except the unredeemed portion of any Preferred Stock being
redeemed in part.

          (c) Payments made with respect to the Preferred Stock shall be payable
at the office or agency of the Company maintained for such purpose in the City
of New York and at any other office or agency maintained by the Company for such
purpose. Payments shall be payable by United States dollar check drawn on, or
wire transfer (provided, that appropriate wire instructions have been received
by the Registrar at least 15 days prior to the applicable date of payment) to a
U.S. dollar account maintained by the holder with, a bank located in New York
City; provided that at the option of the Company, payment of dividends may be
made by check mailed to the address of the person entitled thereto as such
address shall appear in the Preferred Stock register.

          (d) Any payment, redemption, conversion or exchange with respect to
the Preferred Stock due on any day that is not a Business Day need not be made
on such Business Day, but may be made on the next succeeding Business Day with
the same force and effect as if made on such due date.

         SECTION  16.  Headings.  The headings of the Sections of this
Certificate are for convenience of reference only and shall not define, limit or
affect any of the provisions hereof.

                                       38





<PAGE>



         IN WITNESS WHEREOF, the Company has caused this Certificate of
Designations to be duly executed by _____________, Vice President and Treasurer
of the Company.

                                       LUCENT TECHNOLOGIES INC.


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

                                       39





<PAGE>



                                                                       EXHIBIT A

                                   FACE OF SECURITY

[GLOBAL SHARES LEGEND (include if security is issued as a global certificate):
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS 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 DTC 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 THE PREFERRED
STOCK SCHEDULE REFERRED TO BELOW.

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH REGISTRAR AND
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.]

[RESTRICTED SHARES LEGEND (include if Security is not registered under the
Securities Act of 1933): NONE OF THIS SECURITY, THE CONVERTIBLE SUBORDINATED
DEBENTURES THAT MAY BE ISSUED IN EXCHANGE FOR THIS SECURITY AND THE COMMON STOCK
ISSUABLE UPON CONVERSION OF THIS SECURITY OR THE CONVERTIBLE SUBORDINATED
DEBENTURES HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR
THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED (A) PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF
(OR ANY PREDECESSOR

                                      A-1





<PAGE>



SECURITY HERETO) OR (B) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT
ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER
CASE, OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF
APPLICABLE) UNDER THE SECURITIES ACT (4) IN AN OFFSHORE TRANSACTION COMPLYING
WITH REGULATION S UNDER THE SECURITIES ACT, OR (5) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE
HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE
BENEFIT OF THE COMPANY THAT (I) IT IS EITHER (X) A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A OR (Y) A NON-U.S. PERSON AND (II) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE. HEDGING
TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS CONDUCTED IN
COMPLIANCE WITH THE SECURITIES ACT.]

                                      A-2





<PAGE>



Number:___                                                          _____ Shares

                                                         CUSIP NO.:

                                                         ISIN:

                  8.00% REDEEMABLE CONVERTIBLE PREFERRED STOCK
                                       OF
                            LUCENT TECHNOLOGIES INC.

         LUCENT TECHNOLOGIES INC., a Delaware corporation (the "Company"),
hereby certifies that [HOLDER] (the "Holder") is the registered owner of fully
paid and non-assessable shares of preferred stock of the Company designated as
the 8.00% Redeemable Convertible Preferred Stock, par value $1.00 per share and
initial liquidation preference $1,000.00 per share (the "Preferred Stock"). The
shares of Preferred Stock are transferable on the books and records of the
Registrar, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Preferred Stock represented hereby are issued and shall in all respects be
subject to the provisions of the Certificate of Designations of the Company
dated August 6, 2001, as the same may be amended from time to time in accordance
with its terms (the "Certificate of Designations"). Capitalized terms used
herein but not defined shall have the respective meanings given them in the
Certificate of Designations. The Company will provide a copy of the Certificate
of Designations to a Holder without charge upon written request to the Company
at its principal place of business.

         Reference is hereby made to select provisions of the Preferred Stock
set forth on the reverse hereof, and to the Certificate of Designations, which
select provisions and the Certificate of Designations shall for all purposes
have the same effect as if set forth in this certificate.

         Upon receipt of this certificate, the Holder is bound by the
Certificate of Designations and is entitled to the benefits thereunder. Unless
the Transfer Agent's valid countersignature appears hereon, the shares of
Preferred Stock evidenced hereby shall not be entitled to any benefit under the
Certificate of Designations or be valid or obligatory for any purpose.

                                      A-3





<PAGE>



         IN WITNESS WHEREOF, the Company has executed this Preferred Stock
certificate as of the date set forth below.

                                       LUCENT TECHNOLOGIES INC.

                                       By: ________________________________
                                       Name:
                                       Title:




                                       By: ________________________________
                                       Name:
                                       Title:

                                       Dated: _____________________________

COUNTERSIGNED AND REGISTERED


The Bank of New York
as Transfer Agent,

By: _______________________
    Authorized Signatory

Dated: ____________________

                                      A-4





<PAGE>



                               REVERSE OF SECURITY

                            LUCENT TECHNOLOGIES INC.

                  8.00% Redeemable Convertible Preferred Stock

         Dividends on each share of Preferred Stock shall be payable in cash at
the rate per annum set forth on the face hereof or as provided in the
Certificate of Designations.

         The shares of Preferred Stock shall be redeemable as provided in the
Certificate of Designations. The shares of Preferred Stock shall be convertible
into the Company's common stock in the manner and according to the terms set
forth in the Certificate of Designations. The Company shall furnish to any
holder upon request and without charge, a statement of the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of the Company's stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.

                                      A-5





<PAGE>



                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned assigns and transfers the shares of
Preferred Stock evidenced hereby to:

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

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

(Insert assignee's social security or tax identification number)

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

(Insert address and zip code of assignee)

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

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

and irrevocably appoints:

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

agent to transfer the shares of Preferred Stock evidenced hereby on the books of
the Transfer Agent and Registrar. The agent may substitute another to act for
him or her.

Date:
     ----------------------------------

Signature:
          -----------------------------

(Sign exactly as your name appears on the other side of this Preferred Stock
Certificate)

Signature Guarantee:
                    -------------------

----------
         * Signature must be guaranteed by an "eligible guarantor institution"
(i.e., a bank, stockbroker, savings and loan association or credit union)
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.

                                      A-6





<PAGE>



                              NOTICE OF CONVERSION

                    (To be Executed by the Registered Holder
                    in order to Convert the Preferred Stock)

The undersigned hereby irrevocably elects to convert (the "Conversion") _______
shares of 8.00% Redeemable Convertible Preferred Stock (the "Preferred Stock")
into shares of common stock, par value $0.01 per share ("Common Stock"), of
Lucent Technologies Inc. (the "Company") according to the conditions of the
Certificate of Designations establishing the terms of the Preferred Stock (the
"Certificate of Designations"), as of the date written below. If shares are to
be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates. No fee will be charged to the holder for any
conversion, except for transfer taxes, if any. A copy of each stock certificate
representing the shares to be converted is attached hereto (or evidence of loss,
theft or destruction thereof).*

The undersigned represents and warrants that all offers and sales by the
undersigned of the shares of Common Stock issuable to the undersigned upon
conversion of the Preferred Stock shall be made pursuant to registration of the
Common Stock under the Securities Act of 1933 (the "Act") or pursuant to any
exemption from registration under the Act.

Any holder, upon the exercise of its conversion rights in accordance with the
terms of the Certificate of Designations and the Preferred Stock, agrees to be
bound by the terms of the Registration Rights Agreement.

Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in or pursuant to the Certificate of Designations.

         Date of Conversion:___________________________________________________
         Applicable Conversion Price:__________________________________________
         Number of shares of___________________________________________________
         Preferred Stock to be Converted:______________________________________
         Number of shares of___________________________________________________
         Common Stock to be Issued:____________________________________________
         Signature:____________________________________________________________
         Name:_________________________________________________________________
         Address:**____________________________________________________________
         Fax No.:______________________________________________________________

----------
         * The Company is not required to issue shares of Common Stock to a
person holding Preferred Stock until the original stock certificates
representing such Preferred Stock (or evidence of loss, theft or destruction
thereof) to be converted are received by the Company or its Transfer Agent. The
Company shall issue and deliver shares of Common Stock to an overnight courier
not later than three Business Days following receipt of the original stock
certificates representing such Preferred Stock to be converted.

         ** Address where shares of Common Stock and any other payments or
certificates shall be sent by the Company.

                                      A-7





<PAGE>



Global Share Schedule: (include if Security is issued as a global certificate)]

                                                                      SCHEDULE A

                    SCHEDULE OF EXCHANGES FOR GLOBAL SECURITY

         The initial number of shares of Preferred Stock represented by this
Global Preferred Share shall be __________. The following exchanges of a part of
this Global Preferred Share have been made:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                    Amount of              Amount of increase     Number of shares
                    decrease in            in                     represented by this
                    number of shares       number of shares       Global Preferred
Date                represented by this    represented by this    Share following        Signature of
of                  Global Preferred       Global Preferred       such decrease or       authorized officer
Exchange            Share                  Share                  increase               of Registrar
<S>                 <C>                    <C>                    <C>                    <C>
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
</TABLE>


                                      A-8




<PAGE>


                                                                       EXHIBIT B

                         FORM OF CERTIFICATE OF TRANSFER

                    (Transfers pursuant to Section 14(b)(ii)
                      of the Certificate of Designations)

Bank of New York, as Transfer Agent
101 Barclay
New York, NY 10286
Attn:

Re: Lucent Technologies Inc.
    8.00% Redeemable Convertible Preferred Stock
    (the "Preferred Stock")

         Reference is hereby made to the Certificate of Designations relating to
the Preferred Stock dated August 6, 2001, as such may be amended from time to
time (the "Certificate of Designations"). Capitalized terms used but not defined
herein shall have the respective meanings given them in the Certificate of
Designations.

         This Letter relates to _____ shares of Preferred Stock (the
"Securities") which are held in the form of a Global Preferred Share (CUSIP
NO.    ) with the Depository in the name of [name of transferor] (the
"Transferor") to effect the transfer of the Securities.

         In connection with such request, and in respect of the Preferred Stock,
the Transferor does hereby certify that shares of the Preferred Stock are being
transferred (i) in accordance with applicable securities laws of any state of
the United States or any other jurisdiction and (ii) in accordance with their
terms:

CHECK ONE BOX BELOW:

         (1) [ ] to a transferee that the Transferor reasonably believes is a
         qualified institutional buyer within the meaning of Rule 144A under the
         Securities Act purchasing for its own account or for the account of a
         qualified institutional buyer in a transaction meeting the requirements
         of Rule 144A;

         (2) [ ] pursuant to an exemption from registration under the Securities
         Act provided by Rule 144 thereunder (if available); or

         (3) [ ] outside the United States in a transaction complying with
         Regulation S under the Securities Act; or

                                      B-1





<PAGE>



         (4) [ ] in accordance with another exemption from the registration
         requirements of the Securities Act (based upon an opinion of counsel if
         the Company so requests).

         Unless one of the boxes is checked, the Transfer Agent will refuse to
register any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however, that if box
(2) or (3) is checked, the Transfer Agent shall be entitled to require, prior to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Company has reasonably requested to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
of 1933, such as the exemption provided by Rule 144 or Regulation S under such
Act.

                                       [Name of Transferor]


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

Dated:

cc: Lucent Technologies Inc.
    600 Mountain Avenue
    Murray Hill, NJ 07974
    Attn: Corporate Secretary

                                      B-2





<PAGE>



                                                                       EXHIBIT C

                           Form of Common Share Legend


         "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (A) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (B) BY ANY HOLDER
THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS
PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE, OTHER THAN (1) TO THE
COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THIS SECURITY), (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER
THE SECURITIES ACT, (4) IN AN OFFSHORE TRANSACTION COMPLYING WITH REGULATION S
UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON
THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), OR (5) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE LAWS OF ANY STATE OF THE UNITED STATES. PRIOR TO
A TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (5)
ABOVE), THE HOLDER OF THIS SECURITY MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
COMPANY AND THE TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS THEY
MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF THIS SECURITY
COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT (I) IT IS
EITHER (X) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR
(Y) A NON-U.S. PERSON AND (II) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO ABOVE. HEDGING TRANSACTIONS WITH REGARD TO THIS
SECURITY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT."

                                      C-1





<PAGE>



                                                                       EXHIBIT D

                         FORM OF CERTIFICATE OF TRANSFER
                                FOR COMMON STOCK

                   (Transfers pursuant to Section 14(e) of the
                          Certificate of Designations)

[Transfer Agent]


Attn:

Re:      Lucent Technologies Inc.
         8.00% Redeemable Convertible Preferred Stock
         (the "Preferred Stock")

         Reference is hereby made to the Certificate of Designations relating to
the Preferred Stock dated August 6, 2001, as such may be amended from time to
time (the "Certificate of Designations"). Capitalized terms used but not defined
herein shall have the respective meanings given them in the Certificate of
Designations.

         This letter relates to ____ shares of Common Stock represented by the
accompanying certificate(s) that were issued upon conversion of the Preferred
Stock and which are held in the name of [name of transferor] (the "Transferor")
to effect the transfer of such Common Stock.

         In connection with such request and in respect of the shares of Common
Stock, the Transferor does hereby certify that the shares of Common Stock are
being transferred (i) in accordance with applicable securities laws of any state
of the United States or any other jurisdiction and (ii) in accordance with their
terms:

CHECK ONE BOX BELOW

         (1) [ ] pursuant to an exemption from registration under the Securities
         Act provided by Rule 144 thereunder (if available);

         (2) [ ] outside the United States in a transaction complying with
         Regulation S under the Securities Act; or

         (3) [ ] in accordance with another exemption from the registration
         requirements of the Securities Act (based upon an opinion of counsel if
         the Company so requests).

                                      D-1





<PAGE>



                  Unless one of the boxes is checked, the Transfer Agent will
refuse to register any of the Securities evidenced by this certificate in the
name of any person other than the registered holder thereof; provided, however,
that if box (1) or (2) is checked, the Transfer Agent shall be entitled to
require, prior to registering any such transfer of the Securities, such legal
opinions, certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, such as the exemption provided by Rule 144 or Regulation
S under such Act.

                                       [Name of Transferor]

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

Dated:
cc: Lucent Technologies Inc.
    600 Mountain Avenue
    Murray Hill, NJ 07974
    Attn: Corporate Secretary

                                      D-2





<PAGE>



                                                                       EXHIBIT E

                    FORM OF NOTICE OF ELECTION OF REDEMPTION
                            UPON A CHANGE OF CONTROL

TO: LUCENT TECHNOLOGIES INC.

         The undersigned hereby irrevocably acknowledges receipt of a notice
from Lucent Technologies Inc. (the "Company") as to the occurrence of a Change
of Control with respect to the Company and requests and instructs the Company to
redeem _____ shares of Preferred Stock in accordance with the terms of the
Certificate at the Redemption Price.

         Capitalized terms used but not defined herein shall have the meanings
ascribed thereto pursuant to the Certificate of Designations.

Dated: _____________

____________________

____________________
Signature(s)

                                        NOTICE: The above signatures of the
                                        holder(s) hereof must correspond with
                                        the name as written upon the face of the
                                        Security in every particular without
                                        alteration or enlargement or any change
                                        whatever.

                                        Aggregate Accreted Liquidation
                                        Preference to be redeemed (if less than
                                        all):

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

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

                                        Social Security or Other Taxpayer
                                        Identification Number

                                      E-1





<PAGE>



                                                                       EXHIBIT F

                      [Form of Independent Counsel Opinion]

Ladies and Gentlemen:

                  We have acted as counsel for Lucent Technologies Inc., a
Delaware corporation (the "Company"), in connection with [ ]. Capitalized terms
used herein and not otherwise defined herein have the meanings assigned thereto
in the Purchase Agreement, except that the term "Securities" has the meaning
assigned to it in the Registration Rights Agreement.

                  In that connection, we have examined originals, or copies
certified or otherwise identified to our satisfaction of such documents,
corporate records and other instruments as we have deemed necessary or
appropriate for the purposes of this opinion, including: [ ].

                  Based on the foregoing, we are of opinion as follows:

                  1. The Indenture has been duly authorized, executed and
delivered by the Company and constitutes a legal, valid and binding obligation
of the Company enforceable against the Company in accordance with its terms
(subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws affecting creditors' rights generally
from time to time in effect and to general principles of equity, including
concepts of materiality, reasonableness, good faith and fair dealing, regardless
of whether considered in a proceeding in equity or at law); and the Convertible
Subordinated Debentures have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
by the Company upon exchange for the Preferred Stock in accordance with the
terms of the Certificate of Designations and the Indenture, the Convertible
Subordinated Debentures will constitute legal, valid and binding obligations of
the Company entitled to the benefits of the Indenture and enforceable against
the Company in accordance with their terms (subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and other similar
laws affecting creditors' rights generally from time to time in effect and to
general principles of equity, including concepts of materiality, reasonableness,
good faith and fair dealing, regardless of whether in a proceeding in equity or
at law).

                  2. No authorization, approval or other action by, and no
notice to, consent of, order of, or filing with, any United States Federal, New
York or, to the extent required under the General Corporation Law of the State
of Delaware, Delaware governmental authority or regulatory body is required for
the consummation of the

                                      F-1





<PAGE>



exchange of the Convertible Subordinated Debentures for the Preferred Stock in
accordance with the terms of the Certificate of Designations and the Indenture,
except (i) such as may have been obtained or made on or prior to the date
hereof, (ii) such as may be required in connection with the registration under
the Securities Act or the Trust Indenture Act, (iii) such as may be required
under the blue sky laws of any jurisdiction, and (iv) such as may be required in
connection with the conversion of Convertible Subordinated Debentures into
Common Stock of the Company.

                  3. None of the issue and sale of the Preferred Stock, the
consummation of any other transactions contemplated by the Indenture and the
Convertible Subordinated Debentures (i) will conflict with, result in a breach
of, or constitute a default under (A)the Restated Certificate of Incorporation
or By-laws of the Company, or (B) [credit agreements] or (ii) will contravene
any law, rule or regulation of the United States or the State of New York or the
General Corporation Law of the State of Delaware.

                  Regarding the foregoing opinions, we express no opinion with
respect to the enforcement of any provision of any agreement providing for
indemnification or contribution to the extent contrary to or inconsistent with
public policy.

                  We are admitted to practice in the State of [ ], and we
express no opinion as to matters governed by any laws other than the laws of the
State of New York, the General Corporation Law of the State of Delaware and the
Federal laws of the United States of America.

                  We are furnishing this opinion to you, as Trustee, solely for
your benefit. This opinion may not be relied upon by any other person or for any
other purpose or used, circulated, quoted or otherwise referred to for any other
purpose.


                                                     Very truly yours,

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

                                      F-2





<PAGE>



                                                                       EXHIBIT G

                       [Form of In-house Counsel Opinion]

Ladies and Gentlemen:

                  I am the [ ] of Lucent Technologies Inc., a Delaware
corporation (the "Company"), and have acted in such capacity in connection with
[ ].

                  In that connection, I have examined originals, or copies
certified or otherwise identified to my satisfaction of such documents,
corporate records and other instruments as I have deemed necessary or
appropriate for the purposes of this opinion, including: [ ].

                  Based on the foregoing, I am of opinion as follows:

                  None of the performance of the terms of the Convertible
Subordinated Debentures or the Indenture, will conflict with, result in a breach
of, or constitute a default under, the terms of any material agreement or other
material instrument to which the Company or any of its subsidiaries is a party
or bound or will contravene any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any subsidiary,
other than those which could not be expected to have a material adverse effect
on the condition (financial or otherwise), earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business (a "Material Adverse Effect").

                  With respect to my opinion, in determining whether any of the
matters referred to would have a Material Adverse Effect, I have relied on
statements from officers and directors of the Company as to the anticipated
consequences of those matters and have not independently attempted to verify
such consequences.

                  I am admitted to practice in the State of [ ], and I express
no opinion as to matters governed by any laws other than the laws of the State
of [ ] and the Federal laws of the United States of America.

                  I am furnishing this opinion to you, as Trustee, solely for
your benefit. This opinion may not be relied upon by any other person or for any
other purpose or used, circulated, quoted or otherwise referred to for any other
purpose.

                                       Very truly yours,

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

                                      G-1







<PAGE>

                                                                       EXHIBIT H

                            LUCENT TECHNOLOGIES INC.



                                       and


                        [THE BANK OF NEW YORK] as Trustee



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

                                FORM OF INDENTURE


                                   Dated as of

                                   -----------

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

               8.00% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2031

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







<PAGE>

                               Table of Contents

<TABLE>
<CAPTION>

                                                                                                   Page
                                                                                                   ----

<S>                                                                                               <C>
                                   ARTICLE 1
                                  DEFINITIONS

Section 1.01. Definitions ........................................................................  2

                                   ARTICLE 2
          ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF
                                   DEBENTURES

Section 2.01. Designation, Amount and Issue of Debentures ........................................  11
Section 2.02. Form of Debentures .................................................................  11
Section 2.03. Date and Denomination of Debentures; Payments of Interest ..........................  12
Section 2.04. Execution of Debentures ............................................................  13
Section 2.05. Exchange and Registration of Transfer of Debentures; Restrictions
        on Transfer; Depositary ..................................................................  14
Section 2.06. Mutilated, Destroyed, Lost or Stolen Debentures ....................................  21
Section 2.07. Temporary Debentures ...............................................................  22
Section 2.08. Cancellation of Debentures Paid, etc ...............................................  23
Section 2.09. CUSIP Number .......................................................................  23

                                   ARTICLE 3
                            REDEMPTION OF DEBENTURES

Section 3.01. Redemption At The Company's Option .................................................  23
Section 3.02. Conversion Arrangement On Call For Redemption ......................................  26
Section 3.03. Redemption at the Option of the Holder .............................................  26
Section 3.04. General Provisions Relating to Redemption ..........................................  29

                                   ARTICLE 4
                          SUBORDINATION OF DEBENTURES

Section 4.01. Agreement of Subordination .........................................................  31
Section 4.02. Payments to Debentureholders .......................................................  31
Section 4.03. Subrogation of Debentures ..........................................................  34
Section 4.04. Authorization to Effect Subordination ..............................................  35
Section 4.05. Notice to Trustee ..................................................................  35
Section 4.06. Trustee's Relation to Senior Indebtedness ..........................................  36
Section 4.07. No Impairment of Subordination .....................................................  36
Section 4.08. Certain Conversions Not Deemed Payment .............................................  37
Section 4.09. Article Applicable to Paying Agents ................................................  37
Section 4.10. Senior Indebtedness Entitled to Rely ...............................................  37
Section 4.11. Reliance on Judicial Order or Certificate of Liquidating Agent .....................  37
</TABLE>







<PAGE>

<TABLE>
<S>                                                                                               <C>
                                   ARTICLE 5
                      PARTICULAR COVENANTS OF THE COMPANY

Section 5.01. Payment of Debentures ..............................................................  38
Section 5.02. Maintenance of Office or Agency ....................................................  38
Section 5.03. [Intentionally Omitted] ............................................................  39
Section 5.04. Provisions as to Paying Agent ......................................................  39
Section 5.05. Rule 144A Information Requirement ..................................................  40
Section 5.06. Stay, Extension and Usury Laws .....................................................  40
Section 5.07. Notice of Default ..................................................................  41
Section 5.08. Additional Interest ................................................................  41
Section 5.09. Additional Interest Notice .........................................................  42

                                   ARTICLE 6
       DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

Section 6.01. Debentureholders' Lists ............................................................  42
Section 6.02. Preservation and Disclosure of Lists ...............................................  43
Section 6.03. Reports by Trustee. ................................................................  43
Section 6.04. Reports by Company .................................................................  43

                                   ARTICLE 7
          REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON AN EVENT OF
                                    DEFAULT

Section 7.01. Events of Default; Acceleration of Maturity; Waiver of Default......................  44
Section 7.02. Collection Of Indebtedness By Trustee; Trustee May Prove Debt46
Section 7.03. Application Of Proceeds ............................................................  48
Section 7.04. Limitation On Suits By Debentureholders ............................................  49
Section 7.05. Powers And Remedies Cumulative; Delay Or Omission Not
        Waiver Of Default ........................................................................  50
Section 7.06. Control By Debentureholders; Waiver Of Defaults ....................................  50
Section 7.07. Right Of Court To Require Filing Of Undertaking To Pay Costs.51

                                   ARTICLE 8
                                  THE TRUSTEE

Section 8.01. Duties and Responsibilities of Trustee .............................................  51
Section 8.02. Reliance on Documents, Opinions, etc ...............................................  52
Section 8.03. Notice Of Default ..................................................................  53
Section 8.04. No Responsibility for Recitals, etc ................................................  54
Section 8.05. Trustee, Paying Agents, Conversion Agents or Registrar May Own
        Debentures ...............................................................................  54
Section 8.06. Monies to Be Held in Trust .........................................................  54
Section 8.07. Compensation And Indemnity. ........................................................  54
Section 8.08. Officers' Certificate as Evidence ..................................................  55
Section 8.09. Conflicting Interests of Trustee ...................................................  55
Section 8.10. Eligibility of Trustee .............................................................  55
</TABLE>



                                       ii





<PAGE>

<TABLE>
<S>                                                                                               <C>

Section 8.11. Resignation or Removal of Trustee ..................................................  56
Section 8.12. Acceptance by Successor Trustee ....................................................  57
Section 8.13. Succession by Merger, etc ..........................................................  58
Section 8.14. Preferential Collection of Claims ..................................................  58

                                   ARTICLE 9
                              THE DEBENTUREHOLDERS

Section 9.01. Action by Debentureholders .........................................................  59
Section 9.02. Proof of Execution by Debentureholders .............................................  59
Section 9.03. Who Are Deemed Absolute Owners .....................................................  59
Section 9.04. Company-Owned Debentures Disregarded ...............................................  60
Section 9.05. Revocation of Actions; Future Holders Bound ........................................  60

                                   ARTICLE 10
                          MEETINGS OF DEBENTUREHOLDERS

Section 10.01. Purpose of Meetings ................................................................ 60
Section 10.02. Call of Meetings by Trustee ........................................................ 61
Section 10.03. Call of Meetings by Company or Debentureholders .................................... 61
Section 10.04. Qualifications for Voting .......................................................... 61
Section 10.05. Regulations ........................................................................ 62
Section 10.06. Voting ............................................................................. 62
Section 10.07. No Delay of Rights by Meeting ...................................................... 63

                                   ARTICLE 11
                            SUPPLEMENTAL INDENTURES

Section 11.01. Supplemental Indentures Without Consent Of Debentureholders63
Section 11.02. Supplemental Indenture with Consent of Debentureholders ...........................  65
Section 11.03. Effect of Supplemental Indenture ..................................................  66
Section 11.04. Notation on Debentures ............................................................  66
Section 11.05. Evidence of Compliance of Supplemental Indenture to Be
        Furnished to Trustee .....................................................................  66

                                   ARTICLE 12
                             SUCCESSOR CORPORATION

Section 12.01. Consolidation, Merger, Sale Or Conveyance .........................................  66
Section 12.02. Assumption And Substitution .......................................................  67
Section 12.03. Opinion Of Counsel ................................................................  68

                                   ARTICLE 13
                    SATISFACTION AND DISCHARGE OF INDENTURE

Section 13.01. Discharge of Indenture ............................................................  68
Section 13.02. Deposited Monies to Be Held in Trust by Trustee ...................................  69
Section 13.03. Paying Agent to Repay Monies Held .................................................  69
</TABLE>



                                      iii





<PAGE>

<TABLE>
<S>                                                                                               <C>
Section 13.04. Return of Unclaimed Monies ........................................................  69
Section 13.05. Reinstatement .....................................................................  69

                                   ARTICLE 14
        IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

Section 14.01. Indenture and Debentures Solely Corporate Obligations .............................  70

                                   ARTICLE 15
                            CONVERSION OF DEBENTURES

Section 15.01. Right to Convert ..................................................................  70
Section 15.02. Exercise of Conversion Privilege; Issuance of Common Stock on
        Conversion; No Adjustment for Interest or Dividends ......................................  71
Section 15.03. Scrip in Lieu of Fractional Shares ................................................  72
Section 15.04. Conversion Price ..................................................................  73
Section 15.05. Adjustment of Conversion Price ....................................................  73
Section 15.06. Taxes on Shares Issued ............................................................  80
Section 15.07. Reservation of Shares; Shares to Be Fully Paid; Compliance with
        Governmental Requirements; Listing of Common Stock .......................................  80
Section 15.08. Responsibility of Trustee .........................................................  81
Section 15.09. Notice to Holders Prior to Certain Actions ........................................  82

                                   ARTICLE 16
                               CHANGE OF CONTROL

Section 16.01. Change Of Control Put Right .......................................................  82

                                   ARTICLE 17
                            MISCELLANEOUS PROVISIONS

Section 17.01. Provisions Binding on Company's Successors ........................................  85
Section 17.02. Official Acts by Successor Corporation ............................................  85
Section 17.03. Addresses for Notices, etc ........................................................  85
Section 17.04. Governing Law .....................................................................  86
Section 17.05. Evidence of Compliance with Conditions Precedent; Certificates
        To Trustee ...............................................................................  86
Section 17.06. Legal Holidays ....................................................................  86
Section 17.07. Trust Indenture Act ...............................................................  86
Section 17.08. No Security Interest Created ......................................................  87
Section 17.09. Benefits of Indenture .............................................................  87
Section 17.10. Table of Contents, Headings, etc ..................................................  87
Section 17.11. Authenticating Agent ..............................................................  87
Section 17.12. Execution in Counterparts .........................................................  88
Section 17.13. Severability ......................................................................  88
Section 17.14. No Adverse Interpretation Of Other Agreements .....................................  88

</TABLE>


                                       iv






<PAGE>

Reconciliation and Tie Between the Trust Indenture Act of 1939 and Indenture,
dated as of [______, ___], between Lucent Technologies Inc. and [The Bank of New
York], as Trustee.

<TABLE>
<CAPTION>
TRUST INDENTURE ACT SECTION                             INDENTURE SECTION
<S>                                                     <C>
Section 310(a)(1) ........................................................8.09
          (a)(2) .........................................................8.09
          (a)(3) .........................................................N.A.
          (a)(4) .........................................................N.A.
          (a)(5) .........................................................8.09
          (b) ..........................................8.09; 8.09; 8.11; 8.12
Section 311(a) ...........................................................8.14
          (b) ............................................................8.14
          (b)(2) .........................................................8.14
Section 312(a) ..................................................6.01; 6.02(a)
          (b) .........................................................6.02(b)
          (c) .........................................................6.02(c)
Section 313(a) ........................................................6.03(a)
          (b) .........................................................6.03(a)
          (c) .........................................................6.03(a)
          (d) .........................................................6.03(b)
Section 314(a) ...........................................................6.04
          (b) ............................................................N.A.
          (c)(1) ........................................................17.05
          (c)(2) ........................................................17.05
          (c)(3) .........................................................N.A.
          (d) ............................................................N.A.
          (e) ...........................................................17.05
Section 315(a) ...........................................................8.01
          (b) ............................................................8.04
          (c) ............................................................8.01
          (d) ............................................................8.01
          (d)(1) ......................................................8.01(a)
          (d)(2) ......................................................8.01(b)
          (d)(3) ......................................................8.01(c)
          (e) ............................................................7.07
Section 316(a) ...........................................................7.06
          (a)(1)(A) ......................................................7.06
          (a)(1)(B) ......................................................7.06
          (a)(2) .........................................................N.A.
          (b) ............................................................7.04
Section 317(a)(1) ........................................................7.02
          (a)(2) .........................................................7.02
          (b) ............................................................5.04
Section 318(a) ..........................................................17.07
</TABLE>






<PAGE>


----------

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

** Note: N.A. means Not Applicable.







<PAGE>

                                    INDENTURE

         INDENTURE, dated as of _______ __, ______, between Lucent
Technologies Inc., a Delaware corporation (hereinafter called the "Company"),
having its principal office at 600 Mountain Avenue, Murray Hill, New Jersey
07974, and [The Bank of New York], a New York banking corporation, as trustee
hereunder (hereinafter called the "Trustee"), having its principal corporate
office at                            , New York, New York .

                              W I T N E S S E T H:

         WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 8.00% Convertible Subordinated Debentures due 2031
(hereinafter called the "Debentures"), in an aggregate principal amount not to
exceed the aggregate accreted liquidation preference of the Preferred Stock and,
to provide the terms and conditions upon which the Debentures are to be
authenticated, issued and delivered, the Company has duly authorized the
execution and delivery of this Indenture; and

         WHEREAS, the Debentures are to be issued in exchange for the Preferred
Stock pursuant to the Certificate of Designations which governs the Preferred
Stock; and

         WHEREAS, the Debentures, the certificate of authentication to be borne
by the Debentures, a form of assignment, a form of option to elect redemption
upon a Change of Control, a form of option to elect redemption on a specified
Redemption Date and a form of conversion notice to be borne by the Debentures
are to be substantially in the forms hereinafter provided for; and

         WHEREAS, all acts and things necessary to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute this Indenture a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Debentures have in
all respects been duly authorized.

         NOW, THEREFORE, THIS INDENTURE WITNESSETH:

         That in order to declare the terms and conditions upon which the
Debentures are, and are to be, authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of the
Debentures by the holders thereof, the Company covenants and agrees with the
Trustee for the equal and proportionate benefit of the respective holders from
time to time of the Debentures (except as otherwise provided below), as follows:






<PAGE>

                                    ARTICLE 1
                                   DEFINITIONS

         Section 1.01. Definitions. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. All
other terms used in this Indenture that are defined in the Trust Indenture Act
or which are by reference therein defined in the Securities Act (except as
herein otherwise expressly provided or unless the context otherwise requires)
shall have the meanings assigned to such terms in said Trust Indenture Act and
in said Securities Act as in force at the date of the execution of this
Indenture. The words "herein", "hereof", "hereunder", and words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other Subdivision. The terms defined in this Article include the
plural as well as the singular.

         "Additional Interest" has the meaning specified in Section 5.08.

         "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.

         "Board of Directors" means the Board of Directors of the Company or a
committee of such Board duly authorized to act for it hereunder.

          "Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which the banking institutions in The City of New
York or the city in which the Corporate Trust Office is located are authorized
or obligated by law or executive order to close or be closed.

         "Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents however designated of corporate stock or
other entity participations, including partnership interests, whether general or
limited, of such Person and any rights (other than debt securities convertible
or exchangeable into an equity interest), warrants or options to acquire an
equity interest in such Person.

         "Certificate of Designations" means the Certificate of Designations
governing the Preferred Stock filed with the Secretary of State of the state of
Delaware on August 6, 2001.

         "Certificated Debenture" has the meaning specified in Section 2.05(c).



                                       2






<PAGE>


         "Change of Control" means, with respect to the Company, the occurrence
of any of the following:

         (a) if any "person" or "group" (as such terms are used in Section 13(d)
and Section 14(d) of the Exchange Act or any successor provisions to either of
the foregoing), including any group acting for the purpose of acquiring,
holding, voting or disposing of securities within the meaning of Rule
13d-5(b)(1) under the Exchange Act, becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act, except that a person will be deemed to
have "beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of 50% or more of the total voting power of
the Voting Stock of the Company; or

         (b) if the Company consolidates or merges with or into any other
Person, other than a consolidation or merger under a transaction in which the
outstanding Voting Stock of the Company remains outstanding or is changed into
or exchanged for cash, securities or other property with the effect that the
beneficial owners of the Company's outstanding Voting Stock immediately before
that transaction, beneficially own, directly or indirectly, more than 50% of the
Voting Stock, measured by voting power rather than number of shares, of the
surviving corporation immediately following that transaction; or

         (c) upon the sale, transfer, assignment, lease, conveyance or other
disposition, directly or indirectly, of all or substantially all the assets of
the Company and its Subsidiaries considered as a whole; or

         (d) if during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors (together with
any new directors whose election or appointment by the Board of Directors or
whose nomination for election by the Company's stockholders was approved by a
vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Company's Board of Directors then in office.

         "Common Stock" means the shares of common stock, par value $0.01 per
share, of the Company.

         "Company" means the corporation named as the "Company" in the first
paragraph of this Indenture, and, subject to the provisions of Article 12, shall
include its successors and assigns.

         "Conversion Price" has the meaning specified in Section 15.04.

         "Corporate Trust Office" or other similar term, means the designated
office of the Trustee at which at any particular time its corporate trust
business





                                       3






<PAGE>

shall be administered, which office is, at the date as of which this Indenture
is dated, located at              , New York, New York      , Attention:       .

         "Current Market Price" of the Common Stock means (a) in the case of
Section 15.05(a)(iii), the average of the Sale Prices of the Common Stock for
the five consecutive Trading Days selected by the Board of Directors beginning
not more than 20 Trading Days before, and ending not later than the date
immediately preceding the record date for the event described in Section
15.05(a)(iii), (b) in the case of Section 15.05(a)(iv), the average of the Sale
Prices of the Common Stock for the first 10 Trading Days from, and including,
the first day that the Common Stock trades ex-distribution and (c) in the case
of Section 15.05(a)(viii), the average of the Sale Prices of Common Stock for
the period of five consecutive Trading Days after the Common Stock trades
ex-distribution; provided, that the Current Market Price of the Common Stock in
connection with a Spin-Off shall mean the average of the Sale Prices of the
Common Stock over the first 10 Trading Days after the effective date of the
Spin-Off; provided further, that if an Initial Public Offering of the securities
being distributed in any Spin-Off is to be effected simultaneously with such
Spin-Off, the Current Market Price of the Common Stock shall mean the Sale Price
of the Common Stock on the Trading Day on which the Initial Public Offering
price of such securities is determined.

         "Custodian" means [The Bank of New York], as custodian with respect to
the Debentures in global form, or any successor entity thereto.

         "Debenture" or "Debentures" means any Debenture or Debentures, as the
case may be, authenticated and delivered under this Indenture, including any
Global Debenture.

         "Debenture Principal Amount" means the Accreted Liquidation Preference
of one share of Preferred Stock as of the effective date of the Exchange,
rounded down to the nearest whole dollar amount.

         "Debenture Register" has the meaning specified in Section 2.05.

         "Debenture Registrar" has the meaning specified in Section 2.05.

         "Debentureholder" or "holder" as applied to any Debenture, or other
similar terms (but excluding the term "beneficial holder"), means any Person in
whose name at the time a particular Debenture is registered on the Debenture
Registrar's books.

         "Defaulted Interest" has the meaning specified in Section 2.03.

         "Depositary" means, with respect to the Debentures issuable or issued
in whole or in part in global form, the Person specified in Section 2.05(c) as
the Depositary with respect to such Debentures, until a successor shall have
been





                                       4






<PAGE>

appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, "Depositary" shall mean or include such successor.

         "Designated Senior Indebtedness" means the Company's obligations under
the Existing Debt and any other Senior Indebtedness in which the instrument
creating or evidencing the same or the assumption or guarantee thereof (or
related agreements or documents to which the Company is a party) expressly
provides that such Senior Indebtedness shall be "Designated Senior Indebtedness"
for purposes of this Indenture (provided that such instrument, agreement or
other document may place limitations and conditions on the right of such Senior
Indebtedness to exercise the rights of Designated Senior Indebtedness). If any
payment made to any holder of any Designated Senior Indebtedness or its
Representative with respect to such Designated Senior Indebtedness is rescinded
or must otherwise be returned by such holder or Representative upon the
insolvency, bankruptcy or reorganization of the Company or otherwise, the
reinstated indebtedness of the Company arising as a result of such rescission or
return shall constitute Designated Senior Indebtedness effective as of the date
of such rescission or return.

         "Event of Default" means any event specified in Section 7.01.

         "Exchange" has the meaning specified in Section 10 of the Certificate
of Designations which governs the Preferred Stock.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as in effect from time to
time.

         "Existing Debt" means the Company's [describe credit facilities at the
time the Indenture is executed].

         "Expiration Time" has the meaning set forth in Section 15.05(a)(vii).

         "Fair Market Value" means (i) in the case of a distribution referred to
in the first paragraph of Section 15.05(a)(iv)or a tender or exchange offer
referred to in Section 15.05(a)(vii), the value determined by the Board of
Directors, whose determination in good faith shall be conclusive, (ii) in the
case of securities to be distributed to the holders of the Common Stock in
connection with a Spin-Off that is not effected simultaneously with an Initial
Public Offering of the securities being distributed in the Spin-Off, the average
of the Sale Prices of those securities over the first 10 Trading Days from, and
including, the effective date of the SpinOff and (iii) in the case of securities
being distributed in any Spin-Off that is effected simultaneously with an
Initial Public Offering, the Initial Public Offering price.

         "Fundamental Change" has the meaning specified in Section 15.05(a)(v).


                                       5





<PAGE>


         "Global Debenture" has the meaning set forth in Section 2.05(b).

         "Indenture" means this instrument as originally executed or, if amended
or supplemented as herein provided, as so amended or supplemented.

         "Initial Public Offering" means, in the event of a Spin-Off, the first
time securities of the same class or type as the securities being distributed in
the SpinOff are bona fide offered to the public for cash.

         "Initial Purchasers" means the purchasers set forth on Schedule I to
the Purchase Agreement.

         "Initial Redemption Date" has the meaning specified in Section
3.01(a).

         "Interest" means an annual rate of 8.00% of the principal amount of the
Debentures, plus Additional Interest, if any.

         "Market Price" means the average of the Sale Prices of the Company's
Common Stock for the twenty Trading Day period ending on the third Business Day
prior to the applicable Redemption Date (if the third Business Day prior to the
applicable Redemption Date is a Trading Day, or if not, then on the last Trading
Day prior to the third Business Day), appropriately adjusted to take into
account the occurrence, during the period commencing on the first of the Trading
Days during the twenty Trading Day period and ending on the Redemption Date, of
any event that would result in an adjustment to the conversion price of the
Debentures.

         "Nasdaq" has the meaning specified in Section 3.04(a)(ii).

         "Non-Payment Default" has the meaning specified in Section 4.02(ii).

         "Notice" means, unless otherwise specified or required by applicable
law, publication on Bloomberg or the Company's website or by any other
electronic means of publication reasonably calculated to constitute notice.

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

         "Officers' Certificate" means a certificate signed by two officers.

         "Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company.

         "Outstanding", when used with reference to Debentures and subject to
the provisions of Section 9.04, means, as of any particular time, all Debentures
authenticated and delivered by the Trustee under this Indenture, except:



                                       6





<PAGE>

         (a) Debentures theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;

         (b) Debentures, or portions thereof, (i) for the redemption of which
monies in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or (ii) which shall
have been otherwise discharged in accordance with Article 13;

         (c) Debentures in lieu of which, or in substitution for which, other
Debentures shall have been authenticated and delivered pursuant to the terms of
Section 2.06, and

         (d) Debentures converted into Common Stock pursuant to Article 15 and
Debentures deemed not outstanding pursuant to Article 3.

         "Payment Blockage Notice" has the meaning specified in Section
4.02(ii).

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

         "Portal Market" means the PORTAL Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.

         "Predecessor Debenture" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture, and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.06 in lieu
of a mutilated, lost, destroyed or stolen Debenture shall be deemed to evidence
the same debt as the lost, destroyed or stolen Debenture that it replaces.

         "Preferred Stock" means the Company's 8.00% Redeemable Convertible
Preferred Stock.

         "Purchase Agreement" means that certain Purchase Agreement, dated as of
August 1, 2001, by and among the Company and Salomon Smith Barney Inc. and
Morgan Stanley & Co., Incorporated, as representatives of the Initial
Purchasers.

         "Purchased Shares" has the meaning set forth in Section 15.05(a)(vii).

         "QIB" means a "qualified institutional buyer" as defined in Rule 144A.

         "Redemption Date" shall mean (a) in the case of a redemption pursuant
to Section 3.01 and Section 16.01(c), the date fixed for redemption, and (b) in
the





                                       7





<PAGE>

case of a redemption pursuant to Section 3.03, August 2, 2004, August 2, 2007,
August 2, 2010 and August 2, 2016.

         "Redemption Notice" means, as the context requires, either (a) notice
of redemption provided by or on behalf of the Company to the holders or (b)
notice of redemption provided by a holder to the Company pursuant to Article 3.

         "Redemption Price" means 100% of the principal amount of the Debentures
to be redeemed plus an amount equal to accrued and unpaid interest to, but
excluding, the Redemption Date.

         "Registration Default" has the meaning set forth in the Registration
Rights Agreement.

         "Registration Rights Agreement" means that certain Registration Rights
Agreement, dated as of August 6, 2001, by and among the Company and Salomon
Smith Barney Inc. and Morgan Stanley & Co., Incorporated, as representatives of
the Initial Purchasers, as amended from time to time in accordance with its
terms.

         "Regulation S" means Regulation S under the Securities Act.

         "Representative" means (a) the indenture trustee or other trustee,
agent or representative for holders of Senior Indebtedness or (b) with respect
to any Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued pursuant to
an agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.

         "Responsible Officer", when used with respect to the Trustee, means an
officer of the Trustee in the Corporate Trust Office assigned and duly
authorized by the Trustee to administer this Indenture.

         "Restricted Securities" has the meaning specified in Section 2.05(c).

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

         "Sale Price" of the Common Stock on any Trading Day means the closing
sale price per share (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 asked prices) on such Trading Day as reported in
composite transactions for the principal U.S. securities exchange on which the
Common Stock is traded or, if the Common Stock is not listed on a U.S. national
or regional securities exchange, as reported by Nasdaq.


                                       8





<PAGE>

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

         "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.

         "Senior Indebtedness" means (a) the principal of, premium, if any, and
accrued and unpaid interest on the Company's indebtedness for money borrowed,
whether outstanding on the date of execution of this Indenture or thereafter
created, incurred or assumed, guarantees by the Company of indebtedness for
money borrowed by any other person, whether outstanding on the date of execution
of this Indenture or thereafter created, incurred or assumed, indebtedness
evidenced by notes, debentures, bonds or other instruments of indebtedness for
the payment of which the Company is responsible or liable, by guarantees or
otherwise, whether outstanding on the date of execution of this Indenture or
thereafter created, incurred or assumed, and obligations of the Company's under
any agreement to lease, or lease of, any real personal property, whether
outstanding on the date of execution of this Indenture or thereafter created,
incurred or assumed, (b) any other indebtedness, liability or obligation,
contingent or otherwise, of the Company's and any guarantee, endorsement or
other contingent obligation in respect thereof, whether outstanding on the date
of execution of this Indenture or thereafter created, incurred or assumed; and
(c) modifications, renewals, extensions and refundings of any such indebtedness,
liabilities or obligations; unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
indebtedness, liabilities or obligations, or such modification, renewal,
extension or refunding thereof, or the Company's obligations pursuant to such a
guarantee, are not senior in right of payment to the Debentures or expressly
provides that such indebtedness is "pari passu" or "junior" to the Debentures.
Notwithstanding the foregoing, the term Senior Indebtedness shall not include
any indebtedness of the Company to any Subsidiary of the Company. If any payment
made to any holder of any Senior Indebtedness or its Representative with respect
to such Senior Indebtedness is rescinded or must otherwise be returned by such
holder or Representative upon the insolvency, bankruptcy or reorganization of
the Company or otherwise, the reinstated indebtedness of the Company arising as
a result of such rescission or return shall constitute Senior Indebtedness
effective as of the date of such rescission or return.

         "Significant Subsidiary" means, as of any date of determination, a
Subsidiary of the Company, if as of such date of determination that Subsidiary
would be a "Significant Subsidiary" of the Company within the meaning of Rule
1-02 under Regulation S-X under the Exchange Act.


                                       9





<PAGE>


         "Spin-Off" means a dividend or other distribution of shares 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.

         "Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).

         "Trading Day" means each day on which the securities exchange or
quotation system which is used to determine the Sale Price is open for trading
or quotation.

         "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as it was in force at the date of this Indenture, except as provided in
Section 11.03; provided, however, that, in the event the Trust Indenture Act of
1939 is amended after the date hereof, the term "Trust Indenture Act" shall
mean, to the extent required by such amendment, the Trust Indenture Act of 1939
as so amended.

         "Trustee" means [The Bank of New York] and its successors and any
corporation resulting from or surviving any consolidation or merger to which it
or its successors may be a party and any successor trustee at the time serving
as successor trustee hereunder.

         "Vice President" has the meaning specified in Section 2.01.

         "Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors, or persons performing
similar functions, of such Person, whether at all times or only for so long as
no senior class of securities has such voting power by reason of any
contingency.

         The definitions of certain other terms are as specified in Section 2.05
and 3.03 and Article 15.


                                       10






<PAGE>


                                    ARTICLE 2
           ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF
                                   DEBENTURES

         Section 2.01. Designation, Amount and Issue of Debentures. The
Debentures shall be designated as "8.00% Convertible Subordinated Debentures due
2031." Except pursuant to Section 2.05, Section 2.06, Section 2.07 Section
3.01(c), Section 3.03(d), Section 11.04 and Section 15.02, hereof, Debentures
not to exceed the aggregate principal amount equal to the aggregate accreted
liquidation preference of the Preferred Stock outstanding upon the effective
date of the Exchange, may be executed by the Company and delivered to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Debentures to or upon the written order of the Company, signed by
(a) its Chairman of the Board of Directors, any Vice-Chairman of the Board of
Directors, Chief Executive Officer, President or any Vice President (whether or
not designated by a number or numbers or word or words added before or after the
title "Vice President", such Person a "Vice President") and (b) its Treasurer or
any Assistant Treasurer, its Controller or any Assistant Controller or its
Secretary or any Assistant Secretary, without any further action by the Company
hereunder.

         Section 2.02. Form of Debentures. The Debentures and the Trustee's
certificate of authentication to be borne by such Debentures shall be
substantially in the form set forth in Exhibit A, which is incorporated in and
made a part of this Indenture.

         Any of the Debentures may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Debentures may be
listed, or to conform to usage.

         Any Global Debenture shall represent such of the Outstanding Debentures
as shall be specified therein and shall provide that it shall represent the
aggregate amount of Outstanding Debentures from time to time endorsed thereon
and that the aggregate amount of Outstanding Debentures represented thereby may
from time to time be increased or reduced to reflect transfers or exchanges
permitted hereby. Any endorsement of a Global Debenture to reflect the amount of
any increase or decrease in the amount of Outstanding Debentures represented
thereby shall be made by the Trustee or the Custodian, at the direction of the
Trustee, in such manner and upon instructions given by the holder of such
Debentures in accordance with this Indenture. Payment of principal of and
interest and premium, if any, on any Global Debenture shall be made to the
holder of such Debenture.


                                       11





<PAGE>


         The terms and provisions contained in the form of Debenture attached as
Exhibit A hereto shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.

         Section 2.03. Date and Denomination of Debentures; Payments of
Interest. The Debentures shall be issuable in registered form without coupons in
denominations equal to integral multiples of the accreted liquidation preference
of one share of Preferred Stock as of the effective date of the Exchange,
rounded down to the nearest whole dollar amount. Every Debenture shall be dated
the date of its authentication and shall bear interest from the applicable date
in each case as specified on the face of the form of Debenture attached as
Exhibit A hereto. Interest on the Debentures shall be computed on the basis of a
360-day year comprised of twelve (12) 30-day months.

         The Person in whose name any Debenture (or its Predecessor Debenture)
is registered on the Debenture Register at the close of business on any record
date with respect to any interest payment date shall be entitled to receive the
interest payable on such interest payment date. In the case of any Debenture (or
portion thereof) that is converted into Common Stock during the period from (but
excluding) a record date to (but excluding) the next succeeding interest payment
date, such Debenture (or portion thereof) that is submitted for conversion
during such period shall be accompanied by funds equal to the interest payable
on such succeeding interest payment date on the principal amount so converted,
as provided in the penultimate paragraph of Section 15.02 hereof. Interest shall
be payable at the office or agency of the Company maintained by the Company for
such purposes in the Borough of Manhattan, City of New York, which shall
initially be an office or agency of the Trustee and may, as the Company shall
specify to the paying agent in writing by each record date, be paid either (i)
by check mailed to the address of the Person entitled thereto as it appears in
the Debenture Register (provided that the holder of Debentures with an aggregate
principal amount in excess of $2,000,000 shall, at the written election of such
holder, be paid by wire transfer in immediately available funds) or (ii) by wire
transfer to an account maintained by such Person located in the United States;
provided, however, that payments to the Depositary will be made by wire transfer
of immediately available funds to the account of the Depositary or its nominee.
The term "record date" with respect to any interest payment date shall mean the
January 1 or July 1 preceding the relevant February 1 or August 1 stipulated in
the Debenture, respectively.

         Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on the date stipulated in the Debenture (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
Debentureholder on the relevant record date by virtue of his having been such
Debentureholder, and such Defaulted Interest shall be paid by the Company, at
its election in each case, as provided in clause (i) or (ii) below:


                                       12






<PAGE>


                    (i) The Company may elect to make payment of any Defaulted
         Interest to the Persons in whose names the Debentures (or their
         respective Predecessor Debentures) 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
         to be paid on each Debenture and the date of the payment (which shall
         be not less than twenty-five (25) days after the receipt by the Trustee
         of such notice, unless the Trustee shall consent to an earlier date),
         and at the same time the Company shall deposit with the Trustee an
         amount of money equal to the aggregate amount to be paid in respect of
         such Defaulted Interest or shall make arrangements satisfactory to the
         Trustee for such deposit prior to the date of the proposed payment,
         such money when deposited to be held in trust for the benefit of the
         Person 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 fifteen (15)
         days and not less than ten (10) days prior to the date of the proposed
         payment, and not less than ten (10) days after the receipt by the
         Trustee of the notice of the proposed payment, the Trustee shall
         promptly notify the Company of such special record date and, in the
         name and at the expense of the Company, shall cause notice of the
         proposed payment of such Defaulted Interest and the special record date
         therefor to be mailed, first-class postage prepaid, to each
         Debentureholder at his address as it appears in the Debenture Register,
         not less than ten (10) days prior to such special record date. Notice
         of the proposed payment of such Defaulted Interest and the special
         record date therefor having been so mailed, such Defaulted Interest
         shall be paid to the Persons in whose names the Debentures (or their
         respective Predecessor Debentures) were registered at the close of
         business on such special record date and shall no longer be payable
         pursuant to the following clause (ii) of this Section 2.03.

                   (ii) The Company may make payment of any Defaulted Interest
         in any other lawful manner not inconsistent with the requirements of
         any securities exchange or automated quotation system on which the
         Debentures may be listed or designated for issuance, and upon such
         notice as may be required by such exchange or automated quotation
         system, 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 2.04. Execution of Debentures. The Debentures shall be signed
in the name and on behalf of the Company by the manual or facsimile signature of
its Chairman of the Board of Directors, any Vice-Chairman of the Board of
Directors, Chief Executive Officer, President, any Vice President, Treasurer or
any Assistant Treasurer, and may but need not have its corporate seal reproduced
thereon which may but need not be attested by the manual or facsimile signature



                                       13





<PAGE>

of its Secretary or any of its Assistant Secretaries (which may be printed,
engraved or otherwise reproduced thereon, by facsimile or otherwise). Only such
Debentures as shall bear thereon a certificate of authentication substantially
in the form set forth on the form of Debenture attached as Exhibit A hereto,
manually executed by the Trustee (or an authenticating agent appointed by the
Trustee as provided by Section 17.11), shall be entitled to the benefits of this
Indenture or be valid or obligatory for any purpose. Such certificate by the
Trustee (or such an authenticating agent) upon any Debenture executed by the
Company shall be conclusive evidence that the Debenture so authenticated has
been duly authenticated and delivered hereunder and that the holder is entitled
to the benefits of this Indenture.

         In case any officer of the Company who shall have signed any of the
Debentures shall cease to be such officer before the Debentures so signed shall
have been authenticated and delivered by the Trustee, or disposed of by the
Company, such Debentures nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Debentures had not ceased to be
such officer of the Company, and any Debenture may be signed on behalf of the
Company by such persons as, at the actual date of the execution of such
Debenture, shall be the proper officers of the Company, although at the date of
execution of this Indenture any such person was not such an officer.

         Section 2.05. Exchange and Registration of Transfer of Debentures;
Restrictions on Transfer; Depositary.

         (a) The Company shall cause to be kept at the Corporate Trust Office a
register (the register maintained in such office and in any other office or
agency the Company designated pursuant to Section 5.02 being herein sometimes
collectively referred to as the "Debenture Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Debentures and of transfers of Debentures. The Debenture
Register shall be in written form or in any form capable of being converted into
written form within a reasonably prompt period of time. The Trustee is hereby
appointed "Debenture Registrar" for the purpose of registering Debentures and
transfers of Debentures as herein provided. The Company may appoint one or more
co-registrars in accordance with Section 5.02.

         Upon surrender for registration of transfer of any Debenture to the
Debenture Registrar or any co-registrar, and satisfaction of the requirements
for such transfer set forth in this Section 2.05, the Company shall execute, and
the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Debentures of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.

         Debentures may be exchanged for other Debentures of any authorized
denominations and of a like aggregate principal amount, upon surrender of the


                                       14





<PAGE>


Debentures to be exchanged at any such office or agency maintained by the
Company pursuant to Section 5.02. Whenever any Debentures are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Debentures which the Debentureholder making the exchange is
entitled to receive bearing registration numbers not contemporaneously
outstanding.

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

         All Debentures presented or surrendered for registration of transfer or
for exchange, redemption or conversion shall (if so required by the Company or
the Debenture Registrar) be duly endorsed, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company, and
the Debentures shall be duly executed by the Debentureholder thereof or his
attorney duly authorized in writing.

         No service charge shall be made to any holder for any registration of
transfer or exchange of Debentures, but the Company may require payment by the
holder of a sum sufficient to cover any tax, assessment or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Debentures.

         Neither the Company nor the Trustee nor any Debenture Registrar shall
be required to exchange or register a transfer of (a) any Debentures for a
period of fifteen (15) days next preceding any selection of Debentures to be
redeemed, (b) any Debentures or portions thereof called for redemption pursuant
to Section 3.01(b), (c) any Debentures or portions thereof surrendered for
conversion pursuant to Article 15 or (d) any Debentures or portions thereof
tendered for redemption (and not withdrawn) pursuant to Section 3.03.

        (b) So long as the Debentures are eligible for book-entry settlement
with the Depositary, or unless otherwise required by law, all Debentures will be
represented by one or more Debentures in permanent global definitive fully
registered form registered in the name of the Depositary or the nominee of the
Depositary (such a Debenture, a "Global Debenture"), except as otherwise
specified below. The transfer and exchange of beneficial interests in any such
Global Debenture shall be effected through the Depositary in accordance with
this Indenture (including any applicable restrictions on transfer herein) and
the procedures of the Depositary therefore. A transferor of a beneficial
interest in a Global Debenture shall deliver to the Debenture Registrar a
written order given in accordance with the Depositary's procedures containing
information regarding the participant account of the Depositary to be credited
with a beneficial interest in the Global Debenture . The Registrar shall, in
accordance with such instructions instruct the Depositary to credit to the
account of the Person specified in such



                                       15





<PAGE>

instructions a beneficial interest in the Global Debenture and to debit the
account of the Person making the transfer the beneficial interest in the Global
Debenture being transferred. The Trustee shall make appropriate endorsements to
reflect increases or decreases in the principal amounts of any such Global
Debenture as set forth on the face of the Debenture ("Principal Amount") to
reflect any such transfers. Except as provided below, beneficial owners of a
Global Debenture shall not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form ("Certificated Debentures") and will not be
considered holders of any such Global Debenture.

         Any Global Debenture may be endorsed with or have incorporated in the
text thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Custodian, the Depositary
or by the National Association of Securities Dealers, Inc. in order for the
Debentures to be tradeable on the Portal Market or as may be required for the
Debentures to be tradeable on any other market developed for trading of
securities pursuant to Rule 144A or required to comply with any applicable law
or any regulation thereunder or with the rules and regulations of any securities
exchange or automated quotation system upon which the Debentures may be listed
or traded or to conform with any usage with respect thereto, or to indicate any
special limitations or restrictions to which any particular Debentures are
subject.

         (c) Every Global Debenture or Certificated Debenture that bears or is
required under this Section 2.05(c) to bear the legend set forth in this Section
2.05(c) (together with any Common Stock issued upon conversion of the Debentures
and required to bear the legend set forth in Section 2.05(d), collectively, the
"Restricted Securities") shall be subject to the restrictions on transfer set
forth in this Section 2.05 (including those set forth in the legend set forth
below) unless such restrictions on transfer shall be waived by written consent
of the Company, and the holder of, or of an interest in, each such Restricted
Security, by such Debentureholder's acceptance thereof, agrees to be bound by
all such restrictions on transfer. As used in this Section 2.05(c), the term
"transfer" encompasses any sale, pledge, loan, transfer or other disposition
whatsoever of any Restricted Security.

         Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Debenture (and all securities issued in exchange
therefore or substitution thereof, other than Common Stock, if any, issued upon
conversion thereof, which shall bear the legend set forth in Section 2.05(d), if
applicable) shall bear a legend in substantially the following form, unless such
Debenture has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer), or unless otherwise agreed by the Company in
writing, with written notice thereof to the Trustee:


                                       16






<PAGE>

                  THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER
                  THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
                  THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE
                  BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD,
                  PLEDGED OR OTHERWISE TRANSFERRED (A) PRIOR TO THE SECOND
                  ANNIVERSARY OF THE ISSUANCE HEREOF (OR ANY PREDECESSOR
                  SECURITY HERETO) OR (B) BY ANY HOLDER THAT WAS AN AFFILIATE OF
                  THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE
                  DATE OF SUCH TRANSFER, IN EITHER CASE, OTHER THAN (1) TO THE
                  COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
                  PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"),
                  TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
                  INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE,
                  PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE
                  144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
                  CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3)
                  PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
                  SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE
                  SECURITIES ACT (4) IN AN OFFSHORE TRANSACTION COMPLYING WITH
                  REGULATION S UNDER THE SECURITIES ACT, OR (5) PURSUANT TO AN
                  EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
                  EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
                  OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY
                  PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE
                  BENEFIT OF THE COMPANY THAT (I) IT IS EITHER (X) A QUALIFIED
                  INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (Y) A
                  NON-U.S. PERSON AND (II) THE HOLDER WILL, AND EACH SUBSEQUENT
                  HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS DEBENTURE
                  FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE. HEDGING
                  TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED
                  UNLESS CONDUCTED IN COMPLIANCE WITH THE SECURITIES ACT.

         Any Debenture (or security issued in exchange or substitution therefor)
as to which such restrictions on transfer shall have expired in accordance with
their



                                       17





<PAGE>


terms or as to conditions for removal of the foregoing legend set forth
therein have been satisfied (including, without limitation, after a transfer
pursuant to and during the period of the effectiveness of a shelf registration
statement) may, upon surrender of such Debenture for exchange to the Debenture
Registrar in accordance with the provisions of this Section 2.05, be exchanged
for a new Debenture or Debentures, of like tenor and aggregate principal amount,
which shall not bear the restrictive legend required by this Section 2.05(c).

         Notwithstanding any other provisions of this Section 2.05, unless and
until it is exchanged for Certificated Debentures in accordance with the
provisions of this Section 2.05, a Global Debenture may not be transferred as a
whole or in part except by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the Depositary
or by the Depositary or any such nominee to a successor Depositary or a nominee
of such successor Depositary.

         The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Debentures in global form. Initially, the Global
Debentures shall be issued to the Depositary, registered in the name of Cede &
Co., as the nominee of the Depositary, and deposited with the Custodian for Cede
& Co.

         If at any time the Depositary for a Global Debenture notifies the
Company that it is unwilling or unable to continue as Depositary for such
Debenture, the Company may appoint a successor Depositary with respect to such
Debenture. If a successor Depositary is not appointed by the Company within 120
days after the Company receives such notice, the Company will execute, and the
Trustee, upon receipt of an Officers' Certificate for the authentication and
delivery of Debentures, will authenticate and deliver, Certificated Debentures,
in aggregate principal amount equal to the Principal Amount of such Global
Debenture, in exchange for such Global Debenture.

         The Company may at any time and in its sole discretion determine that
the Debentures shall no longer be represented by one or more Global Debentures
or Securities. In such event the Company will execute, and the Trustee, upon
receipt of an Officer's Certificate for the authentication and delivery of
Debentures, will authenticate and deliver, Certificated Debentures, in any
authorized denominations, in aggregate principal amount equal to the Principal
Amount of such Global Debentures, in exchange for such Global Debentures.

         If a Certificated Debenture is issued in exchange for any portion of a
Global Debenture after the close of business at the office or agency where such
exchange occurs on any record date and before the opening of business at such
office or agency on the next succeeding interest payment date, interest will not
be payable on such interest payment date in respect of such Certificated
Debenture, but will be payable on such interest payment date, subject to the
provisions of


                                       18





<PAGE>


Section 2.03, only to the Person to whom interest in respect of such portion of
such Global Debenture is payable in accordance with the provisions of this
Indenture.

         Certificated Debentures issued in exchange for all or a part of a
Global Debenture pursuant to this Section 2.05 shall be registered in such names
and in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. Upon execution and authentication, the Trustee shall deliver such
Certificated Debentures to the Persons in whose names such Certificated
Debentures are so registered.

         In the event that a Global Debenture that is a Restricted Security is
exchanged for Certificated Debentures, prior to the effectiveness of the Shelf
Registration Statement, such Certificated Debentures may be exchanged only in
accordance with such procedures as are substantially consistent with the
provisions of this Section 2.05 (including the certification requirements set
forth on the reverse of the form of Debenture set forth in Exhibit A intended to
ensure that such transfers comply with Rule 144A or Regulation S, as the case
may be) and such other procedures as may from time to time be adopted by the
Company.

         At such time as all interests in a Global Debenture have been redeemed,
converted, canceled, exchanged for Certificated Debentures, such Global
Debenture shall, upon receipt thereof, be canceled by the Trustee in accordance
with standing procedures and instructions existing between the Depositary and
the Custodian. At any time prior to such cancellation, if any interest in a
Global Debenture is exchanged for Certificated Debentures, redeemed, converted,
repurchased or canceled, the principal amount of such Global Debenture shall, in
accordance with the standing procedures and instructions existing between the
Depositary and the Custodian, be appropriately reduced and an endorsement shall
be made on such Global Debenture, by the Trustee or the Custodian, at the
direction of the Trustee, to reflect such reduction or increase.

        (d) Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any stock certificate representing Common Stock issued upon conversion of any
Debenture shall bear a legend in substantially the following form, unless such
Common Stock has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer) or such Common Stock has been issued upon
conversion of Debentures pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such conversion), or unless otherwise agreed by the Company in
writing with written notice thereof to the transfer agent:

                  THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED
                  UNDER THE SECURITIES ACT OF




                                       19





<PAGE>

                  1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY
                  PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE
                  COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR
                  OTHERWISE TRANSFERRED (A) PRIOR TO THE SECOND ANNIVERSARY OF
                  THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR
                  (B) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY
                  TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH
                  TRANSFER, IN EITHER CASE, OTHER THAN (1) TO THE COMPANY, (2)
                  SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
                  RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
                  WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
                  INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE,
                  PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE
                  144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
                  CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (3)
                  PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
                  SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE
                  SECURITIES ACT (4) IN AN OFFSHORE TRANSACTION COMPLYING WITH
                  REGULATION S UNDER THE SECURITIES ACT, OR (5) PURSUANT TO AN
                  EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
                  EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
                  OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY
                  PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE
                  BENEFIT OF THE COMPANY THAT IT IS EITHER (X) A QUALIFIED
                  INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A OR (Y) A
                  NON-U.S. PERSON AND (II) THE HOLDER WILL, AND EACH SUBSEQUENT
                  HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS DEBENTURE
                  FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE. HEDGING
                  TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED
                  UNLESS CONDUCTED IN COMPLIANCE WITH THE SECURITIES ACT.

         Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied
(including, without limitation, after a transfer pursuant to and during the
effectiveness of a



                                       20





<PAGE>

shelf registration statement) may, upon surrender of the certificates
representing such shares of Common Stock for exchange in accordance with the
procedures of the transfer agent for the Common Stock, be exchanged for a new
certificate or certificates for a like number of shares of Common Stock, which
shall not bear the restrictive legend required by this Section 2.05(d).

         (e) Any Debenture or Common Stock issued upon the conversion or
exchange of a Debenture that, prior to the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the Securities Act (or any
successor provision), is purchased or owned by the Company or any Affiliate
thereof may not be resold by the Company or such Affiliate unless registered
under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
in such Debentures or Common Stock, as the case may be, no longer being
"restricted securities" (as defined under Rule 144).

         (f) The Trustee 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 Debenture (including any transfers between or among Depository
participants, members or beneficial owners in any Global Debenture) other than
to require delivery of such certificates and other documentation or evidence as
are 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 2.06. Mutilated, Destroyed, Lost or Stolen Debentures. In case
any Debenture shall become mutilated or be destroyed, lost or stolen, the
Company in its discretion may execute, and upon its written request the Trustee
or an authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Debenture, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Debenture, or in
lieu of and in substitution for the Debenture so destroyed, lost or stolen. In
every case the applicant for a substituted Debenture shall furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of them harmless
for any loss, liability, cost or expense caused by or connected with such
substitution, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent evidence to their satisfaction of the destruction, loss or
theft of such Debenture and of the ownership thereof.

         Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described in
the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Debenture and make available for delivery such
Debenture. Upon the issuance of any substituted Debenture, the Company may
require the payment by the holder of a sum sufficient to cover any tax,
assessment or other



                                       21





<PAGE>

governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. In case any Debenture which has matured or is
about to mature or has been called for redemption or has been tendered for
redemption (and not withdrawn) or is to be converted into Common Stock shall
become mutilated or be destroyed, lost or stolen, the Company may, instead of
issuing a substitute Debenture, pay or authorize the payment of or convert or
authorize the conversion of the same (without surrender thereof except in the
case of a mutilated Debenture), as the case may be, if the applicant for such
payment or conversion shall furnish to the Company, to the Trustee and, if
applicable, to such authenticating agent such security or indemnity as may be
required by them to save each of them harmless for any loss, liability, cost or
expense caused by or connected with such substitution, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company, the
Trustee and, if applicable, any paying agent or conversion agent evidence to
their satisfaction of the destruction, loss or theft of such Debenture and of
the ownership thereof.

         Every substitute Debenture issued pursuant to the provisions of this
Section 2.06 by virtue of the fact that any Debenture is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debenture shall be found at any
time, and shall be entitled to all the benefits of (but shall be subject to all
the limitations set forth in) this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder. To the extent permitted by
law, all Debentures shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement or payment or
conversion of mutilated, destroyed, lost or stolen Debentures and shall preclude
any and all other rights or remedies notwithstanding any law or statute existing
or hereafter enacted to the contrary with respect to the replacement or payment
or conversion of negotiable instruments or other securities without their
surrender.

         Section 2.07. Temporary Debentures. In the event that Certificated
Debentures are to be issued under the terms of this Indenture, until such
Certificated Debentures are ready for delivery, the Company may execute and the
Trustee or an authenticating agent appointed by the Trustee shall, upon the
written request of the Company, authenticate and deliver temporary Debentures
(printed or lithographed). Temporary Debentures shall be issuable in any
authorized denomination, and substantially in the form of the Certificated
Debentures, but with such omissions, insertions and variations as may be
appropriate for temporary Debentures, all as may be determined by the Company.
Every such temporary Debenture shall be executed by the Company and
authenticated by the Trustee or such authenticating agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the Certificated Debentures. Without unreasonable delay the Company will execute
and deliver to the Trustee or such authenticating agent Certificated Debentures
(other than in the case of Debentures in global form) and thereupon any or all
temporary Debentures (other than any such Global Debenture) may be surrendered
in exchange therefor, at



                                       22





<PAGE>

each office or agency maintained by the Company pursuant to Section 5.02 and
the Trustee or such authenticating agent shall authenticate and make available
for delivery in exchange for such temporary Debentures an equal aggregate
principal amount of Certificated Debentures. Such exchange shall be made by the
Company at its own expense and without any charge therefor. Until so exchanged,
the temporary Debentures shall in all respects be entitled to the same benefits
and subject to the same limitations under this Indenture as Certificated
Debentures authenticated and delivered hereunder.

         Section 2.08. Cancellation of Debentures Paid, etc. All Debentures
surrendered for the purpose of payment, redemption, conversion, exchange or
registration of transfer shall, if surrendered to the Company or any paying
agent or any Debenture Registrar or any conversion agent, be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Debentures shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Trustee shall dispose of such canceled Debentures in accordance with its
customary procedures. If the Company shall acquire any of the Debentures, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Debentures unless and until the Company elects
to surrender such Debentures to the Trustee for cancellation in which case they
shall be promptly cancelled by the Trustee and no Debentures shall be issued in
lieu thereof, except as expressly permitted by any of the provisions of this
Indenture.

         Section 2.09. CUSIP Number. The Company in issuing the Debentures may
use a "CUSIP" number (if then generally in use), and, if so, the Trustee shall
use a "CUSIP" number in notices of redemption as a convenience to
Debentureholders; provided, however, that any such notice may state that no
representation is made as to the correctness of such number either as printed on
the Debentures or as contained in any notice of a redemption and that reliance
may be placed only on the other identification numbers printed on the
Debentures, and any such redemption shall not be affected by any defect in or
omission of such number. The Company will promptly notify the Trustee of any
change in the "CUSIP" number.


                                    ARTICLE 3
                            REDEMPTION OF DEBENTURES

         Section 3.01.  Redemption At The Company's Option

         (a) The Debentures may be redeemed by the Company for cash, in whole or
in part, at any time on or after August 15, 2006, (the "Initial Redemption
Date"), upon notice as set forth in Section 3.01(b), at the Redemption Price if
the Company shall have funds legally available for such redemption.


                                       23





<PAGE>

        (b) Notice of Redemptions; Selection of Debentures. In case the Company
shall desire to exercise the right to redeem all or, as the case may be, any
part of the Debentures, it shall fix a date for redemption and it or, at its
written request received by the Trustee not fewer than forty-five (45) days
prior (or such shorter period of time as may be acceptable to the Trustee) to
the date fixed for redemption, the Trustee, in the name of and at the expense of
the Company, shall provide Notice, not fewer than thirty (30) nor more than
sixty (60) days prior to the Redemption Date to the holders of Debentures so to
be redeemed as a whole or in part and provided that if the Company shall give
such Redemption Notice, it shall also give written notice of the Debentures to
be redeemed to the Trustee. Such mailing to the Trustee shall be by first class
mail. The Redemption Notice if provided in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the holder
receives such Redemption Notice. In any case, failure to give such Redemption
Notice or any defect in the Redemption Notice to the holder of any Debenture
designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of any other Debenture.

         Each such Redemption Notice shall specify the aggregate principal
amount of Debentures to be redeemed, the CUSIP number of the Debentures being
redeemed, the Redemption Date (which shall be a Business Day), the Redemption
Price, the place or places of payment, that payment will be made upon
presentation and surrender of such Debentures, that on the Redemption Date, the
Redemption Price will be paid as specified in said Redemption Notice, and that
on and after said date interest thereon or on the portion thereof to be redeemed
will cease to accrue. Such Redemption Notice shall also state the current
Conversion Price and the date on which the right to convert such Debentures or
portions thereof into Common Stock will terminate. If fewer than all the
Debentures are to be redeemed, the Redemption Notice shall identify the
Debentures to be redeemed (including the CUSIP number, if any). In case any
Debenture is to be redeemed in part only, the Redemption Notice shall state the
portion of the principal amount thereof to be redeemed and shall state that, on
and after the Redemption Date, upon surrender of such Debenture, a new Debenture
or Debentures in principal amount equal to the unredeemed portion thereof will
be issued.

         On or prior to the Redemption Date specified in the Redemption Notice
given as provided in this Section, the Company will deposit with the Trustee or
with one or more paying agents (or, if the Company, in lieu of a paying agent,
is itself performing the functions performable by a paying agent, set aside,
segregate and hold in trust as provided in Section 5.04) an amount of money in
immediately available funds sufficient to redeem on the Redemption Date all the
Debentures (or portions thereof) so called for redemption (other than those
theretofore surrendered for conversion into Common Stock) at the appropriate
Redemption Price. The Company shall be entitled to retain any interest, yield or
gain on amounts deposited with the Trustee or any paying agent pursuant to this
Section



                                       24





<PAGE>

in excess of amounts required hereunder to pay the Redemption Price. If any
Debenture called for redemption is converted pursuant hereto prior to such
redemption, any money deposited with the Trustee or any paying agent or so
segregated and held in trust for the redemption of such Debenture shall be paid
to the Company upon its written request, or, if then held by the Company, shall
be discharged from such trust. Whenever any Debentures are to be redeemed, the
Company will give the Trustee written notice in the form of an Officers'
Certificate not fewer than forty-five (45) days (or such shorter period of time
as may be acceptable to the Trustee) prior to the Redemption Date as to the
aggregate principal amount of Debentures to be redeemed.

         If less than all of the Outstanding Debentures are to be redeemed, the
Trustee shall select the Debentures or portions thereof of the Global Debenture
or the Certificated Debentures to be redeemed in such manner as the Trustee
deems fair and appropriate. If any Debenture selected for partial redemption is
submitted for conversion in part after such selection, the portion of such
Debenture submitted for conversion shall be deemed not to be the portion
selected for redemption. The Debentures (or portions thereof) so selected shall
be deemed duly selected for redemption for all purposes hereof, notwithstanding
that any such Debenture is submitted for conversion in part before the
Redemption Notice.

         Upon any redemption of less than all of the Outstanding Debentures, the
Company and the Trustee may (but need not), solely for purposes of determining
the pro rata allocation among such Debentures as are unconverted and Outstanding
at the time of redemption, treat as Outstanding any Debentures surrendered for
conversion during the period of fifteen (15) days preceding the Redemption
Notice and may (but need not) treat as Outstanding any Debenture authenticated
and delivered during such period in exchange for the unconverted portion of any
Debenture converted in part during such period.

         (c) Payment of Debentures Called for Redemption. If a Redemption Notice
has been given as above provided, the Debentures or portion of Debentures with
respect to which such notice has been given shall, unless converted into Common
Stock pursuant to the terms hereof, become due and payable on the Redemption
Date and at the place or places stated in such notice at the applicable
Redemption Price, and on and after said date (unless the Company shall default
in the payment of such Debentures at the Redemption Price) interest on the
Debentures or portion of Debentures so called for redemption shall cease to
accrue and, after the close of business on the Business Day next preceding the
date fixed for redemption, such Debentures shall cease to be convertible into
Common Stock and, except as provided in Section 8.06 and Section 13.04, to be
entitled to any benefit or security under this Indenture, and the holders
thereof shall have no right in respect of such Debentures except the right to
receive the Redemption Price thereof. On presentation and surrender of such
Debentures at a place of payment specified in the Redemption Notice, the said
Debentures or the



                                       25





<PAGE>

specified portions thereof shall be paid and redeemed by the Company at the
applicable Redemption Price, subject to the provisions of Section 3.04.

         Upon presentation of any Debenture redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for delivery
to the holder thereof, at the expense of the Company, a new Debenture or
Debentures, of authorized denominations, in principal amount equal to the
unredeemed portion of the Debentures so presented.

         Notwithstanding the foregoing, the Trustee shall not redeem any
Debentures or provide any Redemption Notice during the continuance of a default
in payment of interest or premium, if any, on the Debentures. If any Debenture
called for redemption shall not be so paid upon surrender thereof for
redemption, the principal and premium, if any, shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate borne
by the Debenture and such Debenture shall remain convertible into Common Stock
until the principal and premium, if any, and interest shall have been paid or
duly provided for.

         Section 3.02. Conversion Arrangement On Call For Redemption. In
connection with any call for redemption of Debentures, the Company may arrange
for the purchase and conversion of any Debentures by an agreement with one or
more investment bankers or other purchasers to purchase such Debentures by
paying to the Trustee in trust for the Debentureholders, on or before the
Redemption Date, an amount not less than the applicable Redemption Price of such
Debentures. Notwithstanding anything to the contrary contained in this Article
3, the obligation of the Company to pay the Redemption Price of such Debentures,
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, a copy of which
will be filed with the Trustee prior to the Redemption Date, any Debentures 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 upon payment to such holders of the applicable
Redemption Price and (notwithstanding anything to the contrary contained in
Article 15) surrendered by such purchasers for conversion, all as of immediately
prior to the close of business on the Redemption Date (and the right to convert
any such Debentures shall be extended through such time), subject to payment of
the above amount as aforesaid. At the direction of the Company, the Trustee
shall hold and dispose of any such amount paid to it in the same manner as it
would monies deposited with it by the Company for the redemption of Debentures.
Without the Trustee's prior written consent, no arrangement between the Company
and such purchasers for the purchase and conversion of any Debentures shall
increase or otherwise affect any of the powers, duties, responsibilities or
obligations of the Trustee as set forth in this Indenture.

         Section 3.03. Redemption at the Option of the Holder.




                                       26





<PAGE>

         (a) On the Redemption Dates applicable to this Section, the Company
shall, at the option of the holder, be required, subject to having funds legally
available therefor, to redeem at the Redemption Price any Outstanding Debentures
for which a written Redemption Notice has been properly delivered by the holder
to the Trustee and not withdrawn. Holders may submit their Debentures for
redemption to the Trustee at any time from the opening of business on the date
that is 45 Business Days prior to such Redemption Date until the close of
business on the Business Day that is three (3) Business Days prior to such
Redemption Date.

         The Company may, at its option, elect to pay the Redemption Price in
cash or in shares of Common Stock valued at a discount of 5% from the Market
Price of the Common Stock, or any combination thereof. The Company may pay such
Redemption Price in shares of its Common Stock only if such shares are eligible
for immediate sale in the public market by non-affiliates of the Company absent
a registration statement.

        (b) (i) The Company or at its written request (which must be received by
the Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree in
writing to a shorter period), the Trustee in the name and at the expense of the
Company, will be required to give Notice on a date not less than 45 Business
Days prior to each Redemption Date by providing Notice to all holders and to
beneficial owners as required by applicable law, stating among other things:

                             (A) whether the Company will pay the Redemption
                   Price of the Debentures in cash or Common Stock or any
                   combination thereof, specifying the percentages of each;

                             (B) if the Company elects to pay in Common Stock,
                   the method of calculating the Market Price of the Common
                   Stock; and

                             (C) the procedures that holders must follow to
                   require the Company to redeem their Debentures.

                   (ii) A Redemption Notice must be given by each holder
         electing to require the Company to redeem their Debentures, in the form
         of the "Notice of Election of Redemption on a Specified Redemption
         Date" on the reverse thereof, stating:

                             (A)  the case of Certificated Debentures, the
                   certificate numbers of the holder's Debentures to be
                   delivered for redemption;




                                       27





<PAGE>

                             (B) that the Debentures are to be redeemed by the
                   Company pursuant to the applicable provision of the
                   Debentures and this Indenture; and

                             (C) in the event the Company elects, pursuant to
                   the Notice that the Company is required to give, to pay the
                   Redemption Price in Common Stock, in whole or in part, but
                   the Redemption Price is ultimately to be paid to the holder
                   entirely in cash because any condition to payment of the
                   Redemption Price or portion of the Redemption Price in Common
                   Stock is not satisfied prior to the close of business on the
                   Redemption Date, as described below, whether the holder
                   elects: (1) to withdraw the Redemption Notice as to some or
                   all of the Debentures to which it relates, or (2) to receive
                   cash in respect of the entire Redemption Price for all of the
                   Debentures or portions of the Debentures subject to such
                   Redemption Notice.

If the holder fails to indicate the holder's choice with respect to the election
described in clause (ii) (c) above, the holder shall be deemed to have elected
to receive cash in respect of the entire Redemption Price for all Debentures
subject to the Redemption Notice in these circumstances.

         (c) Any Redemption Notice may be withdrawn by the holder by a written
notice of withdrawal delivered to the Trustee prior to the close of business on
the day that is three Business Days prior to the Redemption Date. The notice of
withdrawal shall state:

                   (i) the aggregate principal amount of Debentures being
         withdrawn;

                   (ii) in the case of Certificated Debentures, the certificate
         numbers of the Debentures being withdrawn; and

                  (iii) the aggregate principal amount of Debentures, if any,
         that remain subject to the Redemption Notice.

        (d) In lieu of delivering any fractional shares of Common Stock, the
Company will deliver scrip that will entitle the holder to receive a full share
of Common Stock upon surrender of such scrip aggregating a full share.

         Upon presentation of any Debenture redeemed in part only, the Company
shall execute and, upon the Company's written direction to the Trustee, the
Trustee shall authenticate and deliver to the holder thereof, at the expense of
the Company, a new Debenture or Debentures, of authorized denominations, in
principal amount equal to the unredeemed portion of the Debentures so presented.


                                       28




<PAGE>


         No failure of the Company to give the foregoing notices and no defect
therein shall limit the Debentureholders' redemption rights or affect the
validity of the proceedings for the redemption of the Debentures pursuant to
this Section.

         (e) On or prior to the first Business Day after the Redemption Date,
the Company will deposit with the Trustee or with one or more paying agents (or,
if the Company, in lieu of a paying agent, is itself performing the functions
performable by a paying agent, set aside, segregate and hold in trust as
provided in Section 5.04) an amount of money and / or shares of Common Stock
sufficient to redeem all the Debentures to be redeemed on the Redemption Date at
the appropriate Redemption Price; provided, however, that the payment must be
received by the Trustee or paying agent, as the case may be, by 10:00 a.m. New
York City time, on the first Business Day after the Redemption Date. Payment for
Debentures surrendered for redemption (and not withdrawn) will be made promptly
(but in no event more than five (5) Business Days) following the Redemption Date
by mailing checks for the amount payable or Common Stock or any combination
thereof to the holders of such Debentures entitled thereto as they shall appear
on the registry books of the Company.

         Section 3.04.  General Provisions Relating to Redemption.

         (a) In the case of any redemption pursuant to Sections 3.01, 3.03 or
16.01, the Company's right to redeem Debentures, in whole or in part, with
shares of Common Stock is subject to the following conditions:

                    (i) such shares shall be duly authorized, validly issued,
         fully paid and nonassessable;

                   (ii) the Company shall have listed such shares of Common
         Stock on the principal United States securities exchange on which the
         Common Stock is then listed or, if not so listed, on The Nasdaq
         National Market ("Nasdaq");

                  (iii) the Company shall have registered such shares of Common
         Stock under the Securities Act and the Securities Exchange Act, if
         required;

                  (iv) the Company shall have obtained any necessary
         qualification or registration under applicable state securities law or
         an exemption from such qualification and registration shall be
         available; and

                   (v) the information necessary to calculate the Market Price
         is publicly available.

         Subject to Section 3.03(b)(ii)(C), if such conditions are not satisfied
with respect to a holder prior to the close of business on any Redemption Date,
the Company will pay the Redemption Price of such holder's Debentures entirely
in





                                       29





<PAGE>

cash unless the Company does not have funds legally available or the
Company's credit facilities or other contractual obligations prohibit it from
paying the Redemption Price in cash. The Company may not change the form or
components or percentages of components of consideration to be paid for the
Debentures once the Company has given any Notice that it is required to give to
holders of the Debentures, except as described in the first sentence of this
paragraph.

         The Company shall provide Notice to the holders of the Debentures
promptly upon the determination of the actual number of shares of Common Stock
deliverable upon any redemption of the Debentures.

        (b) In the case of any redemption pursuant to Section 3.01 or 3.03:

                    (i) Payment of the Redemption Price for Debentures is
         conditioned upon book-entry transfer or delivery of the Debentures,
         together with necessary endorsements, to the Trustee at any time after
         delivery of the Redemption Notice. Payment of the Redemption Price for
         the Debentures will be made promptly following the later of the
         Redemption Date and the time of book-entry transfer or physical
         delivery of the Debentures.

                   (ii) If the Trustee holds money or securities sufficient to
         pay the Redemption Price of Debentures on the Business Day following
         the Redemption Date in accordance with the terms of this Indenture,
         then, immediately after the Redemption Date, the Debentures will cease
         to be Outstanding, whether or not book-entry transfer is made or the
         Debentures are delivered to the Transfer Agent. Thereafter, all other
         rights of the holder shall terminate, other than the right to receive
         the Redemption Price upon delivery of the Debentures.

         (c) In the case of any redemption pursuant to Sections 3.03 or 16.01,
the Company may pay the Redemption Price or any portion of the Redemption Price
in shares of the Common Stock only if the information necessary to calculate the
Market Price is publicly available.

        (d) If the Redemption Date falls after an interest payment record date
and before the related interest payment date, the holders of Debentures at the
close of business on that interest payment record date will be entitled to
receive the interest payable on those Debentures on the corresponding interest
payment date. However, the Redemption Price payable on such Redemption Date will
include only the principal amount of the Debentures being redeemed and will not
include any amount in respect of the accrued but unpaid interest.





                                       30





<PAGE>

                                    ARTICLE 4
                           SUBORDINATION OF DEBENTURES

         Section 4.01. Agreement of Subordination. The Company covenants and
agrees, and each holder of Debentures by its acceptance thereof likewise
covenants and agrees, that all Debentures shall be issued subject to the
provisions of this Article 4, and each Person holding any Debenture, whether
upon original issue or upon registration of transfer, assignment, substitution
or exchange thereof, accepts and agrees to be bound by such provisions.

         The indebtedness evidenced by the Debentures shall, to the extent and
in the manner hereinafter set forth, be subordinated and subject in right of
payment to the extent and in the manner provided in this Article 4, to the prior
payment in full of all Senior Indebtedness, whether outstanding at the date of
this Indenture or thereafter incurred.

         No provision of this Article 4 shall prevent the occurrence of any
default or Event of Default hereunder.

         Section 4.02. Payments to Debentureholders. No payment or distributions
shall be made with respect to indebtedness evidenced by the Debentures nor shall
the Company acquire any Debentures for cash, property or securities, except
payments and distributions made by the Trustee as permitted by the first or
second paragraph of Section 4.05 or 4.08, if:

                    (i) a default in the payment of principal, premium, if any,
         interest, rent or other obligations in respect of Senior Indebtedness
         occurs and is continuing (or, in the case of Senior Indebtedness for
         which there is a period of grace, in the event of such a default that
         continues beyond the period of grace, if any, specified in the
         instrument or lease evidencing such Senior Indebtedness) (a "Payment
         Default"); or

                   (ii) a default, other than a Payment Default, on any
         Designated Senior Indebtedness occurs and is continuing that then
         permits holders of such Designated Senior Indebtedness to accelerate
         its maturity (or in the case of any lease that is a Designated Senior
         Indebtedness, a default occurs and is continuing that permits the
         lessor to either terminate the lease or require the Company to make an
         irrevocable offer to terminate the lease following an event of default
         thereunder) (a "Non-Payment Default") and the Trustee receives a notice
         of the default (a "Payment Blockage Notice") from a holder of
         Designated Senior Indebtedness or a Representative of Designated Senior
         Indebtedness.

         If the Trustee receives any Payment Blockage Notice pursuant to clause
(ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section unless and until at least 360 days shall have elapsed
since the initial effectiveness of the immediately prior Payment Blockage
Notice. No




                                       31





<PAGE>

Non-Payment Default that existed or was continuing on the date of delivery of
any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice unless such default shall have been cured or
waived for a period of not less than 90 consecutive days.

         The Company may and shall resume payments on and distributions in
respect to the indebtedness evidenced by the Debentures (including, but not
limited to, the redemption price and Additional Interest, if any, with respect
to the Debentures to be called for redemption) and may resume acquisition of
Debentures for cash, property or securities upon the earlier of:

                                         (1) in the case of a Payment Default,
                             the date upon which any such Payment Default is
                             cured or waived or ceases to exist, or

                                         (2) in the case of a Non-Payment
                             Default, the earlier of (a) the date upon which
                             such default is cured or waived or ceases to exist
                             or (b) 179 days after the applicable Payment
                             Blockage Notice is received by the Trustee if the
                             maturity of such Designated Senior Indebtedness has
                             not been accelerated (or in the case of any lease,
                             179 days after notice is received if the Company
                             has not received notice that the lessor under such
                             lease has exercised its right to terminate the
                             lease or require the Company to make an irrevocable
                             offer to terminate the lease following an event of
                             default thereunder).

unless this Article 4 otherwise prohibits the payment or distribution at the
time of such payment or distribution.

         Upon any payment or distribution of the assets of the Company, to
creditors upon any dissolution or winding up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings relating to the Company or its property, all
amounts due or to become due upon all Senior Indebtedness shall first be paid in
full in cash or other payment satisfactory to the holders of such Senior
Indebtedness before any payment or distribution is made with respect to
indebtedness evidenced by the Debentures (except payments made pursuant to
Section 13.02 from monies deposited with the Trustee pursuant thereto prior to
commencement of proceedings for such dissolution, winding up, liquidation or
reorganization), and upon any such dissolution or winding up or liquidation or
reorganization of the Company or bankruptcy, insolvency, receivership or other
similar proceeding, any payment by the Company, or distribution of the assets of
the Company to which the holders of the Debentures or the Trustee would be
entitled, in respect to indebtedness evidenced by these Debentures except for
the provisions of this Article 4, shall (except as aforesaid) be paid by the
Company or



                                       32





<PAGE>

by any receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making such payment or distribution, or by the holders of the Debentures
or by the Trustee under this Indenture if received by them or it, directly to
the holders of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, or as otherwise
required by law or a court order) or their Representative or Representatives, as
their respective interests may appear, to the extent necessary to pay all Senior
Indebtedness in full, in cash or other payment satisfactory to the holders of
such Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness, before any payment or
distribution is made to the holders of the Debentures or to the Trustee.

         For purposes of this Article 4, a "distribution" may consist of cash,
securities or other property and may be by set-off or otherwise.

         For purposes of this Article 4, the words, "cash, securities or other
property" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article 4 with respect
to indebtedness evidenced by the Debentures to the payment of all Senior
Indebtedness which may at the time be outstanding; provided that (i) the Senior
Indebtedness is assumed by the new corporation, if any, resulting from any
reorganization or readjustment, and (ii) the rights of the holders of Senior
Indebtedness (other than leases which are not assumed by the Company or the new
corporation, as the case may be) are not, without the consent of such holders,
altered by such reorganization or readjustment. The consolidation of the Company
with, or the merger of the Company into, another corporation or the liquidation
or dissolution of the Company following the conveyance or transfer of its
property as an entirety, or substantially as an entirety, to another Person upon
the terms and conditions provided for in Article 12 shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 4.02 if such other Person shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article 12.

         In the event of the acceleration of the Debentures because of an Event
of Default, no payment or distribution shall be made to the Trustee or any
holder of Debentures in respect of indebtedness evidenced by the Debentures,
except payments and distributions made by the Trustee as permitted by the first
or second paragraph of Section 4.05, until all Senior Indebtedness has been paid
in full in cash or other payment satisfactory to the holders of Senior
Indebtedness or such acceleration is rescinded in accordance with the terms of
this Indenture. If payment of the Debentures is accelerated because of an Event
of Default, the Company or, at the Company's request and expense, the Trustee
shall promptly notify holders of Senior Indebtedness of the acceleration.




                                       33




<PAGE>

         In the event that, notwithstanding the foregoing provisions, any
payment or distribution of the assets of the Company, prohibited by the
foregoing provisions in this Section 4.02, shall be received by the Trustee or
the holders of the Debentures before all Senior Indebtedness is paid in full in
cash or other payment satisfactory to the holders of such Senior Indebtedness,
or provision is made for such payment thereof in accordance with its terms in
cash or other payment satisfactory to the holders of such Senior Indebtedness,
such payment or distribution shall be held in trust for the benefit of and shall
be paid over or delivered to the holders of Senior Indebtedness or their
Representative or Representatives, as their respective interests may appear, as
calculated by the Company, for application to the payment of any Senior
Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in cash or other payment satisfactory to the holders of
such Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.

         Nothing in this Section 4.02 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 8.07. This Section 4.02 shall be
subject to the further provisions of Section 4.05.

         Section 4.03. Subrogation of Debentures. Subject to the payment in full
of all Senior Indebtedness, the rights of the holders of the Debentures shall be
subrogated to the extent of the payments or distributions made to the holders of
such Senior Indebtedness pursuant to the provisions of this Article 4 (equally
and ratably with the holders of all indebtedness of the Company which by its
express terms is subordinated to other indebtedness of the Company to
substantially the same extent as the Debentures are subordinated and is entitled
to like rights of subrogation) to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior Indebtedness until the
indebtedness evidenced by the Debentures shall be paid in full, and, for the
purposes of such subrogation, no payments or distributions to the holders of the
Senior Indebtedness to which the holders of the Debentures or the Trustee would
be entitled except for the provisions of this Article 4, and no payment pursuant
to the provisions of this Article 4, to or for the benefit of the holders of
Senior Indebtedness by holders of the Debentures or the Trustee, shall, as among
the Company, its creditors other than holders of Senior Indebtedness, and the
holders of the Debentures, be deemed to be a payment by the Company to or on
account of the Senior Indebtedness, and no payments or distributions of cash,
property or securities to or for the benefit of the holders of the Debentures
pursuant to the subrogation provisions of this Article 4, which would otherwise
have been paid to the holders of Senior Indebtedness, shall be deemed to be a
payment by the Company to or for the account of the Debentures. It is understood
that the provisions of this Article 4 are intended solely for the purposes of
defining the relative rights of the holders of the Debentures, on the one hand,
and the holders of the Senior Indebtedness, on the other hand.

                                       34








<PAGE>


         Nothing contained in this Article 4 or elsewhere in this Indenture or
in the Debentures is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of the Debentures the principal of, premium, if any, and
interest on the Debentures as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the holders of the Debentures and creditors of the Company other than
the holders of the Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or, subject to Section 7.03, the holder of any Debenture
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article 4 of the
holders of Senior Indebtedness in respect of cash, property or securities of the
Company received upon the exercise of any such remedy.

         Section 4.04.  Authorization to Effect Subordination.  Each holder of a
Debenture by the holder's acceptance thereof authorizes and directs the Trustee
on the holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 4 and appoints the
Trustee to act as the holder's attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in the third paragraph of Section
7.02 hereof at least thirty (30) days before the expiration of the time to file
such claim, the holders of any Senior Indebtedness or their Representatives are
hereby authorized to file an appropriate claim for and on behalf of the holders
of the Debentures.

         Section 4.05. Notice to Trustee. The Company shall give prompt written
notice in the form of an Officers' Certificate to a Responsible Officer of the
Trustee of any fact known to the Company that would prohibit the making of any
payment of monies to or by the Trustee or any paying agent in respect of the
Debentures pursuant to the provisions of this Article 4. Notwithstanding the
provisions of this Article 4 or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment of monies to or by the Trustee in
respect of the Debentures pursuant to the provisions of this Article 4, unless
and until a Responsible Officer of the Trustee shall have received written
notice thereof at the Corporate Trust Office from the Company (in the form of an
Officers' Certificate) or a Representative or a holder or holders of Senior
Indebtedness, and before the receipt of any such written notice, the Trustee,
subject to the provisions of Section 8.01, shall be entitled in all respects to
assume that no such facts exist; provided, however, that if on a date not less
than one Business Day prior to the date upon which by the terms hereof any such
monies may become payable for any purpose (including, without limitation, the
payment of the principal of, or premium, if any, or interest on any Debenture)
the Trustee shall not have received, with respect to such monies, the notice
provided for in this Section 4.05, then, anything herein contained to the
contrary notwithstanding, the Trustee shall


                                       35




<PAGE>


have full power and authority to apply monies  received to the purpose for which
they were received, and shall not be affected by any notice to the contrary that
may be received by it on or after such prior date.

         Notwithstanding anything in this Article 4 to the contrary, nothing
shall prevent any payment by the Trustee to the Debentureholders of monies
deposited with it pursuant to Section 13.01, if a Responsible Officer of the
Trustee shall not have received written notice at the Corporate Trust Office on
or before one Business Day prior to the date such payment is due that such
payment is not permitted under Section 4.01 or 4.02.

         The Trustee, subject to the provisions of Section 8.01, shall be
entitled to rely on the delivery to it of a written notice by a Representative
or a person representing himself to be a holder of Senior Indebtedness (or a
trustee on behalf of such holder) to establish that such notice has been given
by a Representative or a holder of Senior Indebtedness or a trustee on behalf of
any such holder or holders. The Trustee shall not be required to make any
payment or distribution to or on behalf of a holder of Senior Indebtedness
pursuant to this Article 4 unless it has received satisfactory evidence as to
the amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article 4.

         Section 4.06. Trustee's Relation to Senior Indebtedness. The Trustee,
in its individual capacity, shall be entitled to all the rights set forth in
this Article 4 in respect of any Senior Indebtedness at any time held by it, to
the same extent as any other holder of Senior Indebtedness, and nothing in
Section 8.14 or elsewhere in this Indenture shall deprive the Trustee of any of
its rights as such holder.

         With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 4, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 8.01, the Trustee shall not be liable to any holder of
Senior Indebtedness (i) for any failure to make any payments or distributions to
such holder or (ii) if it shall pay over or deliver money to holders of
Debentures, the Company or any other Person in compliance with this Article 4.

         Section 4.07. No Impairment of Subordination. No right of any present
or future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any such Debentureholder, or by
any noncompliance by the Company or any Debentureholder with the terms,
provisions and covenants of this Indenture.

                                       36




<PAGE>



         Section 4.08. Certain Conversions Not Deemed Payment. For the purposes
of this Article 4 only, (1) the issuance and delivery of junior securities upon
conversion of Debentures in accordance with Article 15 and (2) the payment,
issuance or delivery of cash, property or securities upon conversion of a
Debenture as a result of any Fundamental Change shall not be deemed to
constitute a payment or distribution on account of the principal of, premium, if
any, or interest on Debentures or on account of the purchase or other
acquisition of Debentures. For the purposes of this Section 4.08, the term
"junior securities" means (a) shares of any stock of any class of the Company or
(b) securities of the Company that are subordinated in right of payment to all
Senior Indebtedness that may be outstanding at the time of issuance or delivery
of such securities to substantially the same extent as, or to a greater extent
than, the Debentures are so subordinated as provided in this Article 4. Nothing
contained in this Article 4 or elsewhere in this Indenture or in the Debentures
is intended to or shall impair, as among the Company, its creditors (other than
holders of Senior Indebtedness) and the Debentureholders, the right, which is
absolute and unconditional, of the holder of any Debenture to convert such
Debenture in accordance with Article 15.

         Section 4.09. Article Applicable to Paying Agents. If at any time any
paying agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article 4 shall
(unless the context otherwise requires) be construed as extending to and
including such paying agent within its meaning as fully for all intents and
purposes as if such paying agent were named in this Article 4 in addition to or
in place of the Trustee; provided, however, that the first paragraph of Section
4.05 shall not apply to the Company or any Affiliate of the Company if it or
such Affiliate acts as paying agent.

         The Trustee shall not be responsible for the actions or inactions of
any other paying agents (including the Company if acting as its own paying
agent) and shall have no control of any funds held by such other paying agents.

         Section 4.10. Senior Indebtedness Entitled to Rely. The holders of
Senior Indebtedness (including, without limitation, Designated Senior
Indebtedness) shall have the right to rely upon this Article 4, and no amendment
or modification of the provisions contained herein shall diminish the rights of
such holders unless such holders shall have agreed in writing thereto. This
subordination is for the benefit of and enforceable by the holders of such
Senior Indebtedness.

         Section 4.11. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article 4, the Trustee and the Debentureholders shall be entitled to rely
upon any order or decree entered by any court of competent jurisdiction in which
such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to


                                       37




<PAGE>


the  Trustee or to the  Debentureholders, for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
Senior Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 4.


                                    ARTICLE 5
                       PARTICULAR COVENANTS OF THE COMPANY

         Section 5.01. Payment of Debentures. The Company shall pay the
principal of and interest on the Debentures on the dates and in the manner
provided herein and in the Debentures. An installment of principal or interest
shall be considered paid on the date it is due if the Trustee or paying agent
holds on that date money designated for and sufficient to pay the installment.

         Section 5.02. Maintenance of Office or Agency. The Company will
maintain an office or agency in the Borough of Manhattan, the City of New York,
where the Debentures may be surrendered for registration of transfer or exchange
or for conversion or redemption and from where payments may be made with respect
to the Debentures. The Company will give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency not
designated or appointed by 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 Corporate Trust Office or the office of agency of
the Trustee in The Borough of Manhattan The City of New York (which shall
initially be located at [The Bank of New York],                , New York, New
York, Attention:                         .

         The Company may also from time to time designate co-registrars and one
or more offices or agencies where the Debentures may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations. The Company will give prompt written notice of any such
designation or rescission and of any change in the location of any such other
office or agency.

         The Company hereby initially designates the Trustee as paying agent,
Debenture Registrar, Custodian and conversion agent and each of the Corporate
Trust Office and the office of agency of the Trustee in The Borough of
Manhattan, The City of New York (which shall initially be located at [The Bank
of New York],         , New York, New York         , Attention:         ), shall
be considered as one such office or agency of the Company for each of the
aforesaid purposes.

         So long as the Trustee is the Debenture Registrar, the Trustee agrees
to mail, or cause to be mailed, the notices set forth in Section 8.11(a) and the
third


                                       38




<PAGE>



paragraph of Section 8.12. If co-registrars have been appointed in accordance
with this Section, the Trustee shall mail such notices only to the Company and
the holders of Debentures it can identify from its records.

         Section 5.03.  [Intentionally Omitted]

         Section 5.04.  Provisions as to Paying Agent.

         (a) If the Company shall appoint a paying agent other than the Trustee,
or if the Trustee shall appoint such a paying agent, the party who appoints the
paying agent will cause such paying agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section 5.04:

                    (i) that it will hold all sums held by it as such agent for
         the payment of the principal of and premium, if any, or interest on the
         Debentures (whether such sums have been paid to it by the Company or by
         any other obligor on the Debentures) in trust for the benefit of the
         holders of the Debentures;

                   (ii) that it will give the Trustee notice of any failure by
         the Company (or by any other obligor on the Debentures) to make any
         payment of the principal of and premium, if any, or interest on the
         Debentures when the same shall be due and payable; and

                  (iii) that at any time during the continuance of an Event of
         Default, upon request of the Trustee, it will forthwith pay to the
         Trustee all sums so held in trust.

         The Company shall, on or before each due date of the principal of,
premium, if any, or interest on the Debentures, deposit with the paying agent a
sum (in funds which are immediately available on the due date for such payment)
sufficient to pay such principal, premium, if any, or interest, and (unless such
paying agent is the Trustee) the Company will promptly notify the Trustee of any
failure to take such action; provided, however, that if such deposit is made on
the due date, such deposit shall be received by the paying agent by 10:00 a.m.
New York City time, on such date.

        (b) If the Company in lieu of a paying agent performs itself the
functions performable by a paying agent, it will, on or before each due date of
the principal of, premium, if any, or interest on the Debentures, set aside,
segregate and hold in trust for the benefit of the holders of the Debentures a
sum sufficient to pay such principal, premium, if any, or interest so becoming
due and will promptly notify the Trustee of any failure to take such action and
of any failure by the Company (or any other obligor under the Debentures) to
make any payment of the principal of, premium, if any, or interest on the
Debentures when the same shall become due and payable.



                                       39




<PAGE>



         (c) Anything in this Section 5.04 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any paying agent hereunder
as required by this Section 5.04, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any paying agent
to the Trustee, the Company or such paying agent shall be released from all
further liability with respect to such sums.

        (d) Anything in this Section 5.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 5.04 is subject to
Section 13.03 and 13.04.

         The Trustee shall not be responsible for the actions of any other
paying agents (including the Company, if in lieu of a paying agent it performs
itself the functions performable by a paying agent) and shall have no control of
any funds held by such other paying agents.

         Section 5.05. Rule 144A Information Requirement. Within the period
prior to the expiration of the holding period applicable to sales thereof under
Rule 144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Debentures or any Common Stock issued upon conversion
thereof which continue to be Restricted Securities in connection with any sale
thereof and any prospective purchaser of Debentures or such Common Stock
designated by such holder or beneficial holder, the information required
pursuant to Rule 144A(d)(4) under the Securities Act upon the request of any
holder or beneficial holder of the Debentures or such Common Stock and it will
take such further action as any holder or beneficial holder of such Debentures
or such Common Stock may reasonably request, all to the extent required from
time to time to enable such holder or beneficial holder to sell its Debentures
or Common Stock without registration under the Securities Act within the
limitation of the exemption provided by Rule 144A, as such Rule may be amended
from time to time. Upon the request of any holder or any beneficial holder of
the Debentures or such Common Stock, the Company will deliver to such holder a
written statement as to whether it has complied with such requirements.

         Section 5.06. Stay, Extension and Usury Laws. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of, premium,
if any, or interest on the Debentures as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture and the Company (to the extent it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it



                                       40




<PAGE>



will not, by resort to any such law, 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.

         Section 5.07. Notice of Default. The Company will deliver to the
Trustee, forthwith upon becoming aware of (i) any default in the performance or
observance of any covenant, agreement or condition contained in this Indenture,
or (ii) any Event of Default, an Officers' Certificate specifying with
particularity such default or Event of Default and further stating what action
the Company has taken, is taking or proposes to take with respect thereto.

         Any notice required to be given under this Section 5.07 or Section 4.05
shall be delivered to a Responsible Officer of the Trustee at its Corporate
Trust Office. In the event that the payment of the Debentures is accelerated
because of an Event of Default, the Company shall promptly provide written
notice to the Trustee specifying the names and addresses of the holders of
Senior Indebtedness if the Trustee (and not the Company) is to provide holders
of Senior Indebtedness notice of such acceleration under Section 4.05 of the
Indenture.

         Section 5.08. Additional Interest. [(a) Upon the occurrence of a
Registration Default, the Company shall pay to each holder of Debentures
registrable under the Registration Rights Agreement, with respect to the first
90-day period immediately following the occurrence of a Registration Default,
Additional Interest on the Debentures computed by increasing the applicable
interest rate for the relevant period by 0.25% per year from and including the
date of the Registration Default. The applicable interest rate will increase by
an additional 0.25% per year with respect to any subsequent 90-day period, but
in no event will the additional interest rate exceed 1.00% per year in the
aggregate regardless of the number of Registration Defaults, until all
Registration Defaults have been cured. Following the cure of all Registration
Defaults, the accrual of Additional Interest with respect to the Debentures
shall cease in accordance with the Registration Rights Agreement.

         (b) If, after the cure of all Registration Defaults then in effect,
there is a subsequent Registration Default, the additional interest rate for
such subsequent Registration Default shall initially be 0.25%, regardless of the
additional interest rate in effect with respect to any prior Registration
Default at the time of the cure of that Registration Default.

         (c) The Company shall notify the Transfer Agent within five Business
Days after each and every date on which a Registration Default occurs.
Additional Interest shall be payable by the Company to the record holders of
Debentures on


                                       41




<PAGE>


each interest payment date in the manner provided for the payment of regular
interest.]*

         Section 5.09. Additional Interest Notice. [In the event that the
Company is required to pay Additional Interest to holders of Debentures pursuant
to the Registration Rights Agreement, the Company will provide written notice
("Additional Interest Notice") to the Trustee of its obligation to pay
Additional Interest no later than fifteen days prior to the proposed payment
date for the Additional Interest, and the Additional Interest Notice shall set
forth the amount of Additional Interest to be paid by the Company on such
payment date. The Trustee shall not at any time be under any duty or
responsibility to any holder of Debentures to determine the Additional Interest,
or with respect to the nature, extent or calculation of the amount of Additional
Interest when made, or with respect to the method employed in such calculation
of the Additional Interest. Unless the Trustee receives a Additional Interest
Notice within the time period specified above, the Trustee is entitled to assume
that no Additional Interest is due and payable.]*


                                    ARTICLE 6
       DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

         Section 6.01. Debentureholders' Lists. The Company covenants and agrees
that it will furnish or cause to be furnished to the Trustee, semiannually, not
more than fifteen (15) days after each January 1 and July 1 in each year
beginning with           , and at such other times as the Trustee may reasonably
request in writing, within thirty (30) days after receipt by the Company of any
such request (or such lesser time as the Trustee may reasonably request in order
to enable it to timely provide any notice to be provided by it hereunder), a
list in such form as the Trustee may reasonably require, containing all the
information in the possession or control of the Debenture Register, the Company
or paying agents (other than the Trustee) as to the names and addresses of the
holders of Debentures, except that no such list need be furnished by the Company
to the Trustee so long as the Trustee is acting as the sole Debenture Registrar.

----------
         * To be included unless the Indenture is entered into after the
applicable period in which a Registration Default could occur, pursuant to the
terms of the Registration Rights Agreement, has expired.

         * To be included unless the Indenture is entered into after the
applicable period in which a Registration Default could occur, pursuant to the
terms of the Registration Rights Agreement, has expired.


                                       42




<PAGE>


         Section 6.02.  Preservation and Disclosure of Lists.

         (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Debentures contained in the most recent list furnished to it as provided in
Section 6.01 or maintained by the Trustee in its capacity as Debenture Registrar
or co-registrar in respect of the Debentures, if so acting. The Trustee may
destroy any list furnished to it as provided in Section 6.01 upon receipt of a
new list so furnished.

        (b) The rights of Debentureholders to communicate with other holders of
Debentures with respect to their rights under this Indenture or under the
Debentures, and the corresponding rights and duties of the Trustee, shall be as
provided by the Trust Indenture Act.

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

         Section 6.03.  Reports by Trustee.

         (a) Within sixty (60) days after May 15 of each year commencing with
the May 15 following the date of this Indenture, the Trustee shall transmit to
holders of Debentures a report dated as of May 15 of the year in which such
report is made concerning the Trustee and its actions under this Indenture as
may be required pursuant to the Trust Indenture Act and shall transmit such
other reports concerning the Trustee and its actions under this Indenture as may
be required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto.

        (b) A copy of such report shall, at the time of such transmission to
holders of Debentures, be filed by the Trustee with the SEC and each stock
exchange and automated quotation system upon which the Debentures are listed, if
any, and with the Company. The Company will promptly notify the Trustee in
writing when the Debentures are listed on any stock exchange or automated
quotation system or delisted therefrom.

         Section 6.04.  Reports by Company. The Company covenants:

         (a) to file with the Trustee, within 15 days after the Company is
required to file the same with the SEC, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may from time to time by rules and regulations
prescribe) which the Company may be required to file with the SEC pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not
required to file


                                       43




<PAGE>


information, documents or reports pursuant to either of such sections, then to
file with the Trustee and the SEC, in accordance with rules and regulations
prescribed from time to time by the SEC, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Exchange Act, as amended, in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in such
rules and regulations;

        (b) to file with the Trustee and the SEC, in accordance with the rules
and regulations prescribed from time to time by the SEC, such additional
information, documents, and reports with respect to compliance by the Company
with the conditions and covenants provided for in this Indenture as may be
required from time to time by such rules and regulations; and

         (c) to transmit by mail to all holders of Debentures, as the names and
addresses of such holders appear on the Debenture Register, within 30 days after
the filing thereof with the Trustee, and to all holders whose names appear on
the list furnished or caused to be furnished to the Trustee by the Company under
Section 6.01, such summaries of any information, documents and reports required
to be filed by the Company pursuant to subsections (a) and (b) of this Section
6.04 as may be required by rules and regulations prescribed from time to time by
the SEC.

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


                                    ARTICLE 7
           REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON AN EVENT OF
                                     DEFAULT

         Section 7.01. Events of Default; Acceleration of Maturity; Waiver of
Default. Each of the following Events of Default shall constitute an event of
default with respect to the Debentures ("Events of Default"): (a) default in the
payment of any installment of interest upon any of the Debentures as and when
the same shall become due and payable, and continuance of such default for a
period of 30 days; or (b) default in the payment of the principal of (or
premium, if any, on) any of the Debentures as and when the same shall become due
and payable either at maturity, upon redemption, by declaration or otherwise; or
(c) failure to deliver shares of Common Stock, together with cash in lieu of any
fractional shares, when such Common Stock and cash is required to be delivered
upon conversion of the Debentures and continuance of such default for ten
Business Days; or (d) failure on the part of the Company duly to observe or


                                       44




<PAGE>


perform any other of the covenants or agreements on the part of the Company in
the Debentures, in this Indenture contained or in any supplemental indenture
under which the Debentures have been issued, excluding any failure which
resulted from a change in generally accepted accounting principles, for a period
of 60 days after the date on which written notice of such failure (specified as
a "Notice of Default"), requiring the Company to remedy the same, shall have
been given to the Company by the Trustee or to the Company and the Trustee by
holders of at least twenty-five percent in aggregate principal amount of the
Debentures then outstanding; or (e) a court or governmental agency having
jurisdiction in the premises shall enter a decree or order for relief in respect
of the Company in an involuntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of the Company or for any substantial part of its property
or ordering the winding up or liquidation of its affairs, and such decree or
order shall remain unstayed and in effect for a period of 60 consecutive days;
or (f) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under any
such law, or consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Company or for any substantial part of its property or make any general
assignment for the benefit of creditors; or (g) the Company shall admit in
writing its inability to pay its debts generally as they become due, or
corporate action shall be taken by the Company in furtherance of any of the
aforesaid purposes, then and in each and every such case, unless the principal
of all the Debentures shall have already become due and payable, either the
Trustee or the holders of not less than twenty-five percent in aggregate
principal amount of the Debentures then outstanding hereunder, by notice in
writing to the Company (and to the Trustee if given by holders of the
Debentures), may declare the principal of all the Debentures to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, anything in this Indenture, in any
supplemental indenture under which the Debentures have been issued or in the
Debentures contained to the contrary notwithstanding. This provision, however,
is subject to the condition that if, at any time after the principal of the
Debentures shall have been so declared and payable, and before any judgment or
decree for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Company shall pay, or shall deposit with the Trustee a
sum sufficient to pay, all matured installments of interest upon all the
Debentures and the principal of (and premium, if any, on) any and all Debentures
which shall have become due otherwise than by declaration, with interest upon
such principal (and premium, if any) and (to the extent that payment of such
interest is enforceable under applicable law) upon any overdue installments of
interest at the same rate of interest specified in the Debentures, to the date
of such payment or deposit, and such amount as shall be sufficient to cover
reasonable compensation to the Trustee, its agents and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Trustee


                                       45




<PAGE>


except as a result of its negligence or bad faith, and if any and all existing
Events of Default, other than the nonpayment of the principal of the Debentures
which shall have become due by declaration, shall have been remedied, then and
in every such case the holders of a majority in aggregate principal amount of
the Debentures then Outstanding by written notice to the Company and to the
Trustee may waive all defaults and rescind and annul such declaration and its
consequences; but no such waiver or rescission or annulment shall extend to or
shall affect any subsequent default or shall impair any right consequent
thereon. In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the Trustee and the holders of the Debentures shall be restored
respectively to their former positions and rights hereunder, and all rights,
remedies and powers the Company, the Trustee and the holders of the Debentures
shall continue as though no such proceedings had been taken.

         Section 7.02. Collection Of Indebtedness By Trustee; Trustee May Prove
Debt. The Company covenants that (1) in case default shall be made in the
payment of any installment of interest on any of the Debentures, as and when the
same shall become due and payable, and such default shall have continued for a
period of 30 days, or (2) in case default shall be made in the payment of the
principal of (or premium, if any, on) any of the Debentures when the same shall
have become due and payable, whether upon maturity or upon redemption or upon
declaration or otherwise, then, upon demand of the Trustee, the Company will pay
to the Trustee, for the benefit of the holders of the Debentures, the whole
amount that then shall have become due and payable on all Debentures for
principal (and premium, if any) and interest, with interest upon any overdue
principal (and premium, if any) and (to the extent that payment of such interest
is enforceable under applicable law) upon any overdue installments of interest
at same rate as the rate of interest specified in the Debentures, and, in
addition thereto, such further amount as shall be sufficient to cover reasonable
compensation to the Trustee, its agents and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee except as a result
of its negligence or bad faith.

         In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree and may enforce any such
judgment or final decree against the Company or other obligor upon such
Debentures and collect in the manner provided by law out of the property of the
Company or other obligor upon such Debentures wherever situated the moneys
adjudged or decreed to be payable.


                                       46




<PAGE>


         In case there shall be pending proceedings relative to the Company or
any other obligor upon the Debentures under Title 11 of the United States Code
or any other applicable Federal or State bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Company or its property or such other obligor, or in
case of any other judicial proceedings relative to the Company or other obligor
upon the Debentures, or to the creditors or property of the Company or such
other obligor, the Trustee, irrespective of whether the principal of any
Debentures shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise, (a) to file and prove a claim or
claims for the whole amount of principal, premium, if any, and interest owing
and unpaid in respect of the Debentures and to file such other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for reasonable compensation to the Trustee, its
agents and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Trustee except as a result of its
negligence or bad faith) and of the Debentureholders allowed in any judicial
proceedings relative to the Company or other obligor upon the Debentures, or to
the creditors or property of the Company or such other obligor, (b) unless
prohibited by applicable law and regulations, to vote on behalf of the holders
of the Debentures in any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable proceedings,
and (c) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Debentureholders and of the Trustee on their behalf
and any receiver, assignee, liquidator, custodian, trustee or other similar
official is hereby authorized by each of the Debentureholders to make payments
to the Trustee and, in the event that the Trustee shall consent to the making of
payments directly to the Debentureholders, to pay the Trustee such amount as
shall be sufficient to cover reasonable compensation to the Trustee, its agents
and counsel, and all other expenses and liabilities incurred, and all advances
made, by the Trustee except as a result of its negligence or bad faith.

         Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Debentureholder any plan of reorganization, arrangement, adjustment or
composition affecting the Debentures or the rights of any holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Debentureholder in
any such proceeding except, as aforesaid, to vote for the election of a trustee
in bankruptcy or similar person.

         All rights of action and to assert claims under this Indenture, or
under any of the Debentures may be enforced by the Trustee without the
possession of any



                                       47




<PAGE>


of the Debentures or the production thereof on any trial or other proceedings
relative thereto, and any such action or proceedings instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall be for the ratable benefit of the holders of the
Debentures in respect of which such action was taken.

         In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Debentures in respect to which such action was taken, and it shall not be
necessary to make any holders of such Debentures parties to any such
proceedings.

         In the case of a default hereunder the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture, or in aid of the exercise of any power
granted in this Indenture, or otherwise, and the Trustee may enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.

         Section 7.03. Application Of Proceeds. Any moneys collected by the
Trustee pursuant to Section 7.02 in respect of any Debentures shall be applied
in the order following, at the date or dates fixed by the Trustee and, in case
of the distribution of such moneys on account of principal (or premium, if any)
or interest, upon presentation of the several Debentures in respect of which
moneys have been collected and making a notation thereon the payment if only
partially paid, and upon surrender thereof if fully paid:

         First: To the payment of costs and expenses of collection, reasonable
compensation to the Trustee, its agents and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee except as a result
of its negligence or bad faith;

         Second: In case the principal of the Debentures in respect of which
moneys have been collected shall not have become due, to the payment of interest
on the Debentures in default, in the order of the maturity of the installments
of such interest, with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue installments of interest, at the same
rate as the rate of interest specified in the Debentures, such payments to be
made ratably to the persons entitled thereto;

         Third: In case the principal of the Debentures in respect of which
moneys have been collected shall have become due by declaration or otherwise, to
the payment of the whole amount then owing and unpaid upon all of the Debentures
for principal (and premium, if any) and interest, with interest on the overdue



                                       48




<PAGE>



principal (and premium, if any), and (to the extent that such interest has
been collected by the Trustee) upon overdue installments of interest, at the
same rate as the rate of interest specified in the Debentures, and in case such
moneys shall be insufficient to pay in full the whole amount so due and unpaid
upon the Debentures, then to the payment of such principal (and premium, if any)
and interest without preference or priority of principal (and premium if any)
over interest, or of interest over principal (and premium, if any), or of any
installment of interest over any other installment of interest, or of any
Debentures over any other Debentures, ratably to the aggregate of such principal
(and premium, if any) and interest; and

         Fourth: To the Company.

         Section 7.04. Limitation On Suits By Debentureholders. No holder of any
Debentures shall have any right by virtue or by availing of any provision of
this Indenture to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to this Indenture, or for
the appointment of a receiver, trustee, liquidator, custodian or other similar
official or for any other remedy hereunder, unless such holder previously shall
have given to the Trustee written notice of an Event of Default and unless also
the holders of not less than twenty-five percent in aggregate principal amount
of the Debentures then Outstanding shall have made written request upon the
Trustee to institute such action or proceedings in its own name as trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity, shall have failed to institute any such action
or proceedings and no direction inconsistent with such written request shall
have been given to the Trustee pursuant to Section 7.06; it being understood and
intended and being expressly covenanted by the taker and holder of every
Debenture with every other taker and holder and the Trustee that no one or more
holders of Debentures shall have any right in any manner whatever by virtue or
by availing of any provision of this Indenture to affect, disturb or prejudice
the rights of any other holder of Debentures, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right
under this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all holders of Debentures. For the protection and
enforcement of the provisions of this Section, each and every Debentureholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

         Notwithstanding any other provision in this Indenture or any provision
of any Debenture, the right of any holder of any Debenture to receive payment of
the principal of, premium, if any and interest on such Debenture, on or after
the respective due dates expressed in such Debenture, or any Redemption Date, or
to receive Common Stock on or after the dates such stock should be delivered
upon exercise of such holder's conversion rights under Article 15 hereof or to
institute



                                       49




<PAGE>


suit for the enforcement of any such payment or delivery on or after such
respective dates, shall not be impaired or affected without the consent of such
holder.

         Section 7.05. Powers And Remedies Cumulative; Delay Or Omission Not
Waiver Of Default. All powers and remedies given by this Article Seven to the
Trustee or to the Debentureholders, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the Debentureholders , by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any holder of the Debentures in exercising any right or power accruing
upon any default occurring and continuing as aforesaid shall impair any such
right or power or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of Section 7.04, every
power and remedy given by this Article Seven or by law to the Trustee or to the
Debentureholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Debentureholders.

         Section 7.06. Control By Debentureholders; Waiver Of Defaults. The
holders of a majority in aggregate principal amount of the Debentures at the
time Outstanding shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee with respect to the Debentures by
this Indenture; provided that such direction shall not be otherwise than in
accordance with law and the provisions of this Indenture and provided further
that (subject to the provisions of Section 8.01) the Trustee shall have the
right to decline to follow any such direction if the Trustee, being advised by
counsel, shall determine that the action or proceeding so directed may not
lawfully be taken or if the Trustee in good faith by its board of directors, the
executive committee, or a trust committee of directors or Responsible Officers
of the Trustee shall determine that the action or proceedings so directed would
involve the Trustee in personal liability or if the Trustee in good faith shall
so determine that the actions or forebearances specified in or pursuant to such
direction would be unduly prejudicial to the interests of holders of the
Debentures not joining in the giving of said direction, it being understood that
(subject to Section 8.01) the Trustee shall have no duty to ascertain whether or
not such actions or forebearances are unduly prejudicial to such holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Debentureholders. Prior to the
declaration of the maturity of the Debentures as provided in Section 7.01, the
holders of a majority in aggregate principal amount of the Debentures at the
time Outstanding may on behalf of the holders of all the Debentures waive any
past default hereunder and its consequences, except a default in the payment of
the principal of (or premium, if any) or interest on any of the Debentures. In
the case of any such waiver, the Company, the Trustee and the holders of the
Debentures


                                       50




<PAGE>


shall be restored to their former positions and rights hereunder, respectively;
but no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.

         Section 7.07. Right Of Court To Require Filing Of Undertaking To Pay
Costs. All parties to this Indenture agree, and each holder of any Debenture ,
by such holder's acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees and expenses, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 7.07 shall not apply to any suit instituted
by the Trustee, to any suit instituted by any Debentureholder, or group of
Debentureholders, holding in the aggregate more than ten percent in principal
amount of the Debentures Outstanding, or to any suit instituted by any
Debentureholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Debenture on or after the due date expressed
in such Debenture.


                                    ARTICLE 8
                                   THE TRUSTEE

         Section 8.01. Duties and Responsibilities of Trustee. The Trustee,
prior to the occurrence of an Event of Default and after the curing of all
Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived), the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his own affairs.

         No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:

         (a) prior to the occurrence of an Event of Default and after the curing
or waiving of all Events of Default which may have occurred:

                    (i) the duties and obligations of the Trustee shall be
         determined solely by the express provisions of this Indenture and the
         Trust Indenture Act, and the Trustee shall not be liable except for the
         performance of such duties and obligations as are specifically set
         forth in this Indenture and no implied covenants or obligations shall
         be read into this Indenture and the Trust Indenture Act against the
         Trustee; and


                                       51




<PAGE>



                   (ii) in the absence of bad faith and willful misconduct on
         the part of the Trustee, the Trustee may conclusively rely as to the
         truth of the statements and the correctness of the opinions expressed
         therein, upon any certificates or opinions furnished to the Trustee and
         conforming to the requirements of this Indenture; but, in the case of
         any such certificates or opinions which by any provisions hereof are
         specifically required to be furnished to the Trustee, the Trustee shall
         be under a duty to examine the same to determine whether or not they
         substantially conform to the requirements of this Indenture;

        (b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless the
Trustee was negligent in ascertaining the pertinent facts and the Trustee shall
not be liable for any action taken, suffered, or omitted to be taken by it in
good faith and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;

         (c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the written direction
of the holders of not less than a majority in principal amount of the Debentures
at the time Outstanding determined as provided in Section 9.04 relating to the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee, under
this Indenture;

        (d) whether or not therein provided, every provision of this Indenture
that in any way relates to the Trustee shall be subject to the provisions of
this Section;

         (e) the Trustee shall not be liable in respect of any payment (as to
the correctness of amount, entitlement to receive or any other matters relating
to payment) or notice effected by the Company or any paying agent or any records
maintained by any co-registrar with respect to the Debentures; and

         (f) if any party fails to deliver a notice relating to an event the
fact of which, pursuant to this Indenture, requires notice to be sent to the
Trustee, the Trustee may conclusively rely on its failure to receive such notice
as reason to act as if no such event occurred.

         None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers.

         Section 8.02. Reliance on Documents, Opinions, etc. Except as otherwise
provided in Section 8.01:



                                       52




<PAGE>


         (a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture,
Debenture or other paper or document (whether in its original or facsimile form)
believed by it in good faith to be genuine and to have been signed or presented
by the proper party or parties;

        (b) any request, direction, order, demand or other communication of the
Company mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein specifically
prescribed); and any resolution of the Board of Directors may be evidenced to
the Trustee by a copy thereof certified by the Secretary or an Assistant
Secretary of the Company;

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

        (d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity satisfactory to it against the costs, expenses
and liabilities which may be incurred therein or thereby;

         (e) 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 by it with due care
hereunder; and

         (f) 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 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 Debentures and this Indenture; and

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

         Section 8.03. Notice Of Default. If a default occurs and is continuing
with respect to the Debentures and if it is known to the Trustee, the Trustee
shall mail to each Holder of a Debenture entitled to receive reports pursuant to
Section 6.04(c) notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of the principal or of or interest on the
Debentures, the



                                       53




<PAGE>


Trustee may withhold the notice if and so long as its Board of Directors, the
executive Committee, or a Trust Committee of directors or Responsible Officers
in good faith determines that withholding such notice is in the interests of the
Debentureholders.

         Section 8.04. No Responsibility for Recitals, etc. The recitals
contained herein and in the Debentures (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Debentures. The Trustee shall not be accountable for the use or application by
the Company of any Debentures or the proceeds of any Debentures authenticated
and delivered by the Trustee in conformity with the provisions of this
Indenture.

         Section 8.05. Trustee, Paying Agents, Conversion Agents or Registrar
May Own Debentures. The Trustee, any paying agent, any conversion agent or
Debenture Registrar, in its individual or any other capacity, may become the
owner or pledgee of Debentures with the same rights it would have if it were not
Trustee, paying agent, conversion agent or Debenture Registrar. However, the
Trustee is subject to Section 8.09, Section 8.10, Section 8.13 and Section 8.14
of this Indenture.

         Section 8.06. Monies to Be Held in Trust. Subject to the provisions of
Section 13.04 and Section 4.02, all monies and properties received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as may be agreed in writing from time to time by
the Company and the Trustee.

         Section 8.07.  Compensation And Indemnity.

         (a) The Company shall pay to the Trustee from time to time such
compensation for its services as is agreed upon in writing between the Company
and the Trustee. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred by it in
connection with the performance of its duties under this Indenture. Such
expenses shall include the reasonable compensation and expenses of the Trustee's
agents and counsel.

         (b) The Company shall indemnify the Trustee against any and all loss,
claim, damage, expense or liability incurred by it arising out of or in
connection with its acceptance or administration of the trust or trusts
hereunder. The Trustee shall notify the Company promptly of any claim of which a
Responsible Officer has received written notice and for which it may seek
indemnity. The Company



                                       54




<PAGE>


shall defend the claim and the Trustee shall reasonably cooperate in the
defense. The Trustee may have separate counsel provided that the Company shall
pay the reasonable fees and expenses of such counsel. The Company need not pay
for any settlement made without its consent, which consent shall not be
unreasonably withheld.

         (c) The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee's own negligence or willful
misconduct.

        (d) To secure the payment obligations of the Company pursuant to this
Section, the Trustee shall have a lien prior to the Debentures on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on the Debentures.

         (e) If the Trustee incurs expenses or renders services after an Event
of Default specified in Section 7.01(d) or Section 7.01(e) occurs, such expenses
and the compensation for such services are intended to constitute expenses of
administration under any Federal bankruptcy, insolvency or related law.

         Section 8.08. Officers' Certificate as Evidence. Except as otherwise
provided in Section 8.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, the
Trustee may request the delivery of an Officers' Certificate and such matter
(unless other evidence in respect thereof be herein specifically prescribed)
may, in the absence of negligence or willful misconduct on the part of the
Trustee, be deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee.

         Section 8.09. Conflicting Interests of Trustee. The Trustee shall
comply with Section 310(b) of the Trust Indenture Act, subject to its right to
apply for a stay of its duty to resign under the penultimate paragraph of
Section 310(b) of the Trust Indenture Act; provided, however, that there shall
be excluded from the operation of Section 310(b)(1) of the Trust Indenture Act
any indenture or indentures under which other securities or certificates of
interest or participation in other securities of the Company are outstanding if
the requirements for such exclusion set forth in Section 301(b)(1) of the Trust
Indenture Act are met.

         Section 8.10. Eligibility of Trustee. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section 8.10 the combined capital and
surplus of



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<PAGE>


such Person shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 8.10, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.

         Section 8.11.  Resignation or Removal of Trustee.

         (a) The Trustee may at any time resign by giving written notice of such
resignation to the Company and to the holders of Debentures. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee
who, at the time of such appointment, meets the requirements of Section 8.10 and
would not then be subject to a duty to resign under Section 8.10, by written
instrument, in duplicate, executed by order of the Board of Directors, one copy
of which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so appointed and
have accepted appointment thirty (30) days after the mailing of such notice of
resignation to the Debentureholders, the resigning Trustee may, upon ten (10)
business days' notice to the Company and the Debentureholders, appoint a
successor identified in such notice or may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
trustee, or, if any Debentureholder who has been a bona fide holder of a
Debenture or Debentures for at least six (6) months may, subject to the
provisions of Section 7.07, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.

        (b) In case at any time any of the following shall occur:

                    (i) the Trustee shall fail to comply with Section 8.09 after
         written request therefor by the Company or by any Debentureholder who
         has been a bona fide holder of a Debenture or Debentures for at least
         six (6) months; or

                   (ii) the Trustee shall cease to be eligible in accordance
         with the provisions of Section 8.09 and shall fail to resign after
         written request therefor by the Company or by any such Debentureholder;
         or

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

then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the



                                       56




<PAGE>


Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.07, any Debentureholder who has been a bona fide holder
of a Debenture or Debentures for at least six (6) months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee; provided, however, that if no successor Trustee shall have been
appointed and have accepted appointment sixty (60) days after either the Company
or the Debentureholders has removed the Trustee, the Trustee so removed may
petition at the expense of the Company any court of competent jurisdiction for
an appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.

         (c) The holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless, within ten (10) days after notice to the Company of such
nomination, the Company objects thereto, in which case the Trustee so removed or
any Debentureholder, or if such Trustee so removed or any Debentureholder fails
to act, the Company, upon the terms and conditions and otherwise as in Section
8.11(a) provided, may petition any court of competent jurisdiction for an
appointment of a successor trustee.

        (d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.11 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.12.

         Section 8.12. Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 8.11 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amount then due it pursuant to the provisions of Section
8.07, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property and funds held or collected by
such trustee as such, except for funds held in trust for the benefit of holders
of particular Debentures, to secure any amounts then due it pursuant to the
provisions of Section 8.07.



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<PAGE>


         No successor trustee can accept appointment as provided in this Section
8.12 unless, at the time of such acceptance, such successor trustee shall meet
the requirements of Section 8.10 and not then be subject to a duty to resign
under Section 8.09.

         Upon acceptance of appointment by a successor trustee as provided in
this Section 8.12, the Company (or the former trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such trustee hereunder to the holders of Debentures at their addresses as they
shall appear on the Debenture Register. If the Company fails to mail such notice
within ten (10) days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Company.

         Section 8.13. Succession by Merger, etc. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee, such
corporation shall be qualified under the provisions of Section 8.09 and eligible
under the provisions of Section 8.09.

         In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Debentures shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee or authenticating agent
appointed by such predecessor trustee, and deliver such Debentures so
authenticated; and in case at that time any of the Debentures shall not have
been authenticated, any successor to the Trustee or any authenticating agent
appointed by such successor trustee may authenticate such Debentures in the name
of the successor trustee; and in all such cases such certificates shall have the
full force that is provided in the Debentures or in this Indenture; provided,
however, that the right to adopt the certificate of authentication of any
predecessor Trustee or authenticate Debentures in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.

         Section 8.14. Preferential Collection of Claims. The Trustee shall
comply with Section 311(a) of the Trust Indenture Act, excluding any creditor
relationship listed in Section 311(b) of the Trust Indenture Act. A Trustee who
has resigned or been removed shall be subject to Section 311(a) of the Trust
Indenture Act to the extent indicated.



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<PAGE>


                                    ARTICLE 9
                              THE DEBENTUREHOLDERS

         Section 9.01. Action by Debentureholders. Whenever in this Indenture it
is provided that all holders or the holders of a specified percentage in
aggregate principal amount of the Debentures may take any action (including the
making of any demand or request, the giving of any notice, consent, rescission,
annulment or waiver or the taking of any other action), the fact that at the
time of taking any such action, the holders of such specified percentage have
joined therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by Debentureholders in person or by agent
or proxy appointed in writing, or (b) by the record of the holders of Debentures
voting in favor thereof at any meeting of Debentureholders duly called and held
in accordance with the provisions of Article 10, or (c) by a combination of such
instrument or instruments and any such record of such a meeting of
Debentureholders. Whenever the Company or the Trustee solicits the taking of any
action by the holders of the Debentures, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall be not more than fifteen
(15) days prior to the date of commencement of solicitation of such action.

         Section 9.02. Proof of Execution by Debentureholders. Subject to the
provisions of Section 8.01, 8.02 and 10.05, proof of the execution of any
instrument by a Debentureholder or its agent or proxy shall be sufficient if
made in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee. The holding of Debentures shall be proved by the Debenture Register or
by a certificate of the Debenture Registrar.

         The record of any Debentureholders' meeting shall be proved in the
manner provided in Section 10.06.

         Section 9.03. Who Are Deemed Absolute Owners. The Company, the Trustee,
any paying agent, any conversion agent and any Debenture Registrar may deem the
Person in whose name such Debenture shall be registered upon the Debenture
Register to be, and may treat it as, the absolute owner of such Debenture
(whether or not such Debenture shall be overdue and notwithstanding any notation
of ownership or other writing thereon made by any Person other than the Company
or any Debenture Registrar) for the purpose of receiving payment of or on
account of the principal of, premium, if any, and interest on such Debenture,
for conversion of such Debenture and for all other purposes; and neither the
Company nor the Trustee nor any paying agent nor any conversion agent nor any
Debenture Registrar shall be affected by any notice to the contrary. All such
payments so made to any holder for the time being, or upon his order, shall be
valid, and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for monies payable upon any such Debenture.


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<PAGE>

         Section 9.04. Company-Owned Debentures Disregarded. In determining
whether the holders of the requisite aggregate principal amount of Debentures
have concurred in any direction, consent, waiver or other action under this
Indenture, Debentures which are owned by the Company, any Affiliate of the
Company or any other obligor on the Debentures shall be disregarded and deemed
not to be Outstanding for the purpose of any such determination; provided,
however, that, for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, consent, waiver or other action,
only Debentures which a Responsible Officer of the Trustee knows are so owned
shall be so disregarded. Debentures so owned which have been pledged in good
faith may be regarded as Outstanding for the purposes of this Section 9.04 if
the pledgee shall establish to the satisfaction of the Trustee the pledgee's
right to vote such Debentures and that the pledgee is not the Company, any
Affiliate of the Company or any such other obligor on the Debentures. In the
case of a dispute as to such right, any decision by the Trustee taken upon the
advice of counsel shall be full protection to the Trustee. Upon request of the
Trustee, the Company shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Debentures, if any, known by the Company
to be owned or held by or for the account of any of the above described Persons,
and, subject to Section 8.01, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Debentures not listed therein are Outstanding for the
purpose of any such determination.

         Section 9.05. Revocation of Actions; Future Holders Bound. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
9.01, of the taking of any action by all holders or the holders of the
percentage in aggregate principal amount of the Debentures specified in this
Indenture, any holder of a Debenture who has joined in such action may, by
filing written notice with the Trustee at its Corporate Trust Office and upon
proof of holding as provided in Section 9.02, revoke such action so far as
concerns such Debenture. Except as aforesaid, any such action taken by the
holder of any Debenture shall be conclusive and binding upon such holder and
upon all future holders and owners of such Debenture and of any Debentures
issued in exchange or substitution therefor, irrespective of whether any
notation in regard thereto is made upon such Debenture or any Debenture issued
in exchange or substitution therefor.


                                   ARTICLE 10
                          MEETINGS OF DEBENTUREHOLDERS

         Section 10.01. Purpose of Meetings. A meeting of Debentureholders may
be called at any time and from time to time pursuant to the provisions of this
Article 10 for any of the following purposes:

                    (i) to give any notice to the Company or to the Trustee or
         to give any directions to the Trustee permitted under this Indenture,
         or to

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<PAGE>


         consent to the waiving of any default or Event of Default hereunder and
         its consequences, or to take any other action authorized to be taken by
         Debentureholders pursuant to any of the provisions of Article 7;

                    (ii) to remove the Trustee and nominate a successor trustee
         pursuant to the provisions of Article 8;

                    (iii) to consent to the execution of an indenture or
         indentures supplemental hereto pursuant to the provisions of Section
         11.02; or

                  (iv) to take any other action authorized to be taken by or on
         behalf of the holders of any specified aggregate principal amount of
         the Debentures under any other provision of this Indenture or under
         applicable law.

         Section 10.02. Call of Meetings by Trustee. The Trustee may at any time
call a meeting of Debentureholders to take any action specified in Section
10.01, to be held at such time and at such place as the Trustee shall determine.
Notice of every meeting of the Debentureholders, setting forth the time and the
place of such meeting and in general terms the action proposed to be taken at
such meeting and the establishment of any record date pursuant to Section 9.01,
shall be mailed to holders of Debentures at their addresses as they shall appear
on the Debenture Register. Such notice shall also be mailed to the Company. Such
notices shall be mailed not less than twenty (20) nor more than ninety (90) days
prior to the date fixed for the meeting.

         Any meeting of Debentureholders shall be valid without notice if the
holders of all Debentures then Outstanding are present in person or by proxy or
if notice is waived before or after the meeting by the holders of all Debentures
Outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.

         Section 10.03. Call of Meetings by Company or Debentureholders. In case
at any time the Company, pursuant to a resolution of its Board of Directors, or
the holders of at least ten percent (10%) in aggregate principal amount of the
Debentures then Outstanding, shall have requested the Trustee to call a meeting
of Debentureholders, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within twenty (20) days after receipt of such
request, then the Company or such Debentureholders may determine the time and
the place for such meeting and may call such meeting to take any action
authorized in Section 10.01, by mailing notice thereof as provided in Section
10.02.

         Section 10.04. Qualifications for Voting. To be entitled to vote at any
meeting of Debentureholders a person shall (a) be a holder of one or more
Debentures on the record date pertaining to such meeting or (b) be a person
appointed by an instrument in writing as proxy by a holder of one or more

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<PAGE>

Debentures on the record date pertaining to such meeting. The only persons who
shall be entitled to be present or to speak at any meeting of Debentureholders
shall be the persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.

         Section 10.05. Regulations. Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Debentureholders, in regard to proof of the holding
of Debentures and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.

         The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Debentureholders as provided in Section 10.03, in which case the
Company or the Debentureholders calling the meeting, as the case may be, shall
in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the holders of a
majority in principal amount of the Debentures represented at the meeting and
entitled to vote at the meeting.

         Subject to the provisions of Section 9.04, at any meeting each
Debentureholder or proxyholder shall be entitled to one vote for each Debenture
Principal Amount of Debentures held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any Debenture
challenged as not Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Debentures held by him or instruments in writing as aforesaid duly
designating him as the proxy to vote on behalf of other Debentureholders. Any
meeting of Debentureholders duly called pursuant to the provisions of Section
10.02 or 10.03 may be adjourned from time to time by the holders of a majority
of the aggregate principal amount of Debentures represented at the meeting,
whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.

         Section 10.06. Voting. The vote upon any resolution submitted to any
meeting of Debentureholders shall be by written ballot on which shall be
subscribed the signatures of the holders of Debentures or of their
representatives by proxy and the outstanding principal amount of the Debentures
held or represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of
Debentureholders shall be prepared by the secretary of the meeting and there
shall be attached to said record

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<PAGE>

the original reports of the inspectors of votes on any vote by ballot taken
thereat and affidavits by one or more persons having knowledge of the facts
setting forth a copy of the notice of the meeting and showing that said notice
was mailed as provided in Section 10.02. The record shall show the principal
amount of the Debentures voting in favor of or against any resolution. The
record shall be signed and verified by the affidavits of the permanent chairman
and secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting.

         Any record so signed and verified shall be conclusive evidence of the
matters therein stated.

         Section 10.07. No Delay of Rights by Meeting. Nothing contained in this
Article 10 shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Debentureholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
Debentureholders under any of the provisions of this Indenture or of the
Debentures.


                                   ARTICLE 11
                             SUPPLEMENTAL INDENTURES

         Section 11.01. Supplemental Indentures Without Consent Of
Debentureholders. The Company, when authorized by the resolutions of the Board
of Directors, and the Trustee may, from time to time, and at any time enter into
an indenture or indentures supplemental hereto for one or more of the following
purposes:

         (a) make provision with respect to the conversion rights of the holders
of Debentures pursuant to the requirements of Section 15.05(a)(v) and the
redemption obligations of the Company pursuant to the requirements of Article
12;

         (b) subject to Article 4, to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Debentures, any property or assets;

         (c) to evidence the succession of another Person to the Company, or
successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Company pursuant to Article 12;

        (d) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Debentures, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants,

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<PAGE>


restrictions or conditions a default or an Event of Default permitting the
enforcement of all or any of the several remedies provided in this Indenture as
herein set forth; provided, however, that in respect of any such additional
covenant, restriction or condition, such supplemental indenture may provide for
a particular period of grace after default (which period may be shorter or
longer than that allowed in the case of other defaults) or may provide for an
immediate enforcement upon such default or may limit the remedies available to
the Trustee upon such default;

         (e) to provide for the issuance under this Indenture of Debentures in
coupon form (including Debentures registrable as to principal only) and to
provide for exchangeability of such Debentures with the Debentures issued
hereunder in fully registered form and to make all appropriate changes for such
purpose;

         (f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture that may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture that shall not materially adversely affect the
interests of the holders of the Debentures;

         (g) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Debentures;

        (h) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualifications of this Indenture
under the Trust Indenture Act, or under any similar federal statute hereafter
enacted; or

         (i) to provide for uncertificated Debentures in addition to or in place
of Certificated Debentures.

         Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.

         Any supplemental indenture authorized by the provisions of this Section
11.01 may be executed by the Company and the Trustee without the consent of the
holders of any of the Debentures at the time Outstanding, notwithstanding any of
the provisions of Section 11.02.

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         Notwithstanding any other provision of the Indenture or the Debentures,
the Registration Rights Agreement and the obligation to pay Additional Interest
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.

         Section 11.02.  Supplemental Indenture with Consent of
Debentureholders. With the consent (evidenced as provided in Article 9) of the
holders of not less than a majority in aggregate principal amount of the
Debentures at the time Outstanding, the Company, when authorized by the
resolutions of the Board of Directors, and the Trustee may, from time to time
and at any time, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or any supplemental indenture or of
modifying in any manner the rights of the holders of the Debentures; provided,
however, that no such supplemental indenture shall (i) extend the fixed maturity
of any Debenture, or reduce the rate or extend the time of payment of interest
thereon, or reduce the principal amount thereof or premium, if any, thereon, or
reduce any amount payable on redemption thereof, or impair the right of any
Debentureholder to institute suit for the payment thereof, or make the principal
thereof or interest or premium, if any, thereon payable in any coin or currency
other than that provided in the Debentures, or change any obligation of the
Company to redeem any Debenture upon the happening of a Change of Control or
otherwise in a manner adverse to the holder of Debentures, or impair the right
to convert the Debentures pursuant to the terms set forth herein, without the
consent of the holder of each Debenture so affected, or (ii) reduce the
aforesaid percentage of Debentures, the holders of which are required to consent
to any such supplemental indenture, without the consent of the holders of all
Debentures then Outstanding.

         In addition, any amendment to, or waiver of, the provisions of this
Indenture relating to subordination of the Indenture that adversely affects the
rights of the Debentureholders will require the consent of the holders of at
least 75% in aggregate principal amount of the Debentures then outstanding.

         Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Debentureholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.

         It shall not be necessary for the consent of the Debentureholders under
this Section 11.02 to approve the particular form of any proposed supplemental

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indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

         Section 11.03. Effect of Supplemental Indenture. Any supplemental
indenture executed pursuant to the provisions of this Article 11 shall comply
with the Trust Indenture Act, as then in effect, provided that this Section
11.03 shall not require such supplemental indenture or the Trustee to be
qualified under the Trust Indenture Act prior to the time such qualification is
in fact required under the terms of the Trust Indenture Act or the Indenture has
been qualified under the Trust Indenture Act, nor shall it constitute any
admission or acknowledgment by any party to such supplemental indenture that any
such qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article 11, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Debentures
shall thereafter be determined, exercised and enforced hereunder, subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.

         Section 11.04. Notation on Debentures. Debentures authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article 11 may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Debentures so modified as to
conform, in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may,
at the Company's expense, be prepared and executed by the Company, authenticated
by the Trustee and delivered in exchange for the Debentures then Outstanding,
upon surrender of such Debentures then Outstanding.

         Section 11.05. Evidence of Compliance of Supplemental Indenture to Be
Furnished to Trustee. Prior to entering into any supplemental indenture, the
Trustee may request an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article 11.


                                   ARTICLE 12
                              SUCCESSOR CORPORATION

         Section 12.01. Consolidation, Merger, Sale Or Conveyance. Nothing
contained in this Indenture or in any of the Debentures shall prevent any
consolidation of the Company with, or merger of the Company into, any other

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corporation or corporations (whether or not affiliated with the Company), or
successive consolidations or mergers to which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale or conveyance
of the property of the Company (including stock of subsidiaries) as an entirety
or substantially as an entirety to any other corporation (whether or not
affiliated with the Company) authorized to acquire and own or operate the same;
provided, however, and the Company hereby covenants and agrees, that upon any
such consolidation, merger, sale or conveyance, (i) the due and punctual payment
of the principal of and premium, if any, and interest on all of the Debentures,
according to their tenor, and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed or
observed by the Company, shall be expressly assumed, by supplemental indenture,
satisfactory in form to the Trustee, executed and delivered to the Trustee by
the corporation formed by such consolidation, or into which the Company shall
have been merged, or which shall have acquired such property and (ii)
immediately after such consolidation, merger, sale or conveyance, the
corporation formed by such consolidation, or into which the Company shall have
been merged, will not be in default in the performance of the covenants and
conditions of this Indenture.

         Section 12.02. Assumption And Substitution. In case of any such
consolidation, merger, sale or conveyance, and following such an assumption by
the successor corporation, such successor corporation shall succeed to and be
substituted for the Company, with the same effect as if it had been named
herein.

         Such successor corporation may cause to be signed, and may issue either
in its own name or in the name of Lucent Technologies Inc., any or all of the
Debentures issuable pursuant to the provisions of Section 2.01 which theretofore
shall not have been signed by the Company and delivered to the Trustee; and,
upon the order of such successor corporation instead of the Company and subject
to all the terms, conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver any Debentures which previously
shall have been signed and delivered by the officers of the Company to the
Trustee for authentication pursuant to such provisions and any Debentures which
such successor corporation thereafter shall cause to be signed and delivered to
the Trustee on its behalf for that purpose pursuant to such provisions. All the
Debentures so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Debentures theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Debentures had
been issued at the date of the execution hereof.

         In case of any such consolidation, merger, sale or conveyance, such
changes in phraseology and form may be made in the Debentures thereafter to be
issued as may be appropriate.

         Nothing contained in this Indenture or in any of the Debentures shall
prevent the Company from merging into itself any other corporation or entity
(whether or not affiliated with the Company) or acquiring by purchase or

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<PAGE>

otherwise all or any part of the property of any other corporation or entity
(whether or not affiliated with the Company).

         Section 12.03. Opinion Of Counsel. The Trustee, subject to the
provisions of Section 8.01, may receive an Opinion of Counsel as conclusive
evidence that any consolidation, merger, sale or conveyance and any such
assumption complies with the provisions of this Article 12.


                                   ARTICLE 13
                     SATISFACTION AND DISCHARGE OF INDENTURE

         Section 13.01. Discharge of Indenture. When (a) the Company shall
deliver to the Trustee for cancellation all Debentures theretofore authenticated
(other than any Debentures that have been mutilated and in exchange and
substitution for which other Debentures shall have been authenticated and made
available for delivery destroyed, lost or stolen and in lieu of and in
substitution for which other Debentures shall have been authenticated and made
available for delivery) and not theretofore canceled, or (b) all the Debentures
not theretofore canceled or delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of a Redemption Notice and the
Company shall deposit with the Trustee, in trust, funds sufficient to pay at
maturity or upon redemption of all of the Debentures (other than any Debentures
that have been mutilated and in exchange and substitution for which other
Debentures shall have been authenticated and made available for delivery
destroyed, lost or stolen and in lieu of and in substitution for which other
Debentures shall have been authenticated and made available for delivery) not
theretofore canceled or delivered to the Trustee for cancellation, including
principal and premium, if any, and interest due or to become due to such date of
maturity or Redemption Date, as the case may be, but excluding, however, the
amount of any moneys for the payment of principal of and premium, if any, or
interest on the Debentures (1) theretofore deposited with the Trustee and repaid
by the Trustee to the Company in accordance with the provisions of Section
13.04, or (2) paid to any State or to the District of Columbia pursuant to its
unclaimed property or similar laws, and if the Company shall also pay or cause
to be paid all other sums payable hereunder by the Company, then this Indenture
shall cease to be of further effect (except as to (i) rights of registration of
transfer, substitution and exchange and conversion of Debentures, (ii) rights
hereunder of Debentureholders to receive payments of principal of and premium,
if any, and interest on, the Debentures and the other rights, duties and
obligations of Debentureholders, as beneficiaries hereof with respect to the
amounts, if any, so deposited with the Trustee and (iii) the rights, obligations
and immunities of the Trustee hereunder), and the Trustee, on written demand of
the Company accompanied by an Officers' Certificate and an Opinion of Counsel as
required by Section 17.05 and at the cost and expense of the

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<PAGE>

Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture; the Company, however, hereby agrees to reimburse the
Trustee for any costs or expenses thereafter reasonably and properly incurred by
the Trustee and to compensate the Trustee for any services thereafter reasonably
and properly rendered by the Trustee in connection with this Indenture or the
Debentures.

         Section 13.02. Deposited Monies to Be Held in Trust by Trustee. Subject
to Section 13.04, all monies deposited with the Trustee pursuant to Section
13.01, provided that such deposit was not in violation of Article 4, shall be
held in trust for the sole benefit of the Debentureholders and not to be subject
to the subordination provisions of Article 4, and such monies shall be applied
by the Trustee to the payment, either directly or through any paying agent
(other than the Company), to the holders of the particular Debentures for the
payment or redemption of which such monies have been deposited with the Trustee,
of all sums due and to become due thereon for principal and interest and
premium, if any.

         Section 13.03. Paying Agent to Repay Monies Held. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent of the
Debentures (other than the Trustee) shall, upon written request of the Company,
be repaid to it or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.

         Section 13.04. Return of Unclaimed Monies. Subject to the requirements
of applicable law, any monies deposited with or paid to the Trustee for payment
of the principal of, premium, if any, or interest on Debentures and not applied
but remaining unclaimed by the holders of Debentures for two years after the
date upon which the principal of, premium, if any, or interest on such
Debentures, as the case may be, shall have become due and payable, shall be
repaid to the Company by the Trustee on demand and all liability of the Trustee
shall thereupon cease with respect to such monies; and the holder of any of the
Debentures shall thereafter look only to the Company for any payment that such
holder may be entitled to collect unless an applicable abandoned property law
designates another Person.

         Section 13.05. Reinstatement. If the Trustee or the paying agent is
unable to apply any money in accordance with Section 13.02 by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, the Company's obligations under this
Indenture and the Debentures shall be revived and reinstated as though no
deposit had occurred pursuant to Section 13.01 until such time as the Trustee or
the paying agent is permitted to apply all such money in accordance with Section
13.02; provided, however, that if the Company makes any payment of interest on
or principal of any Debenture following the reinstatement of its obligations,
the Company shall be subrogated to the rights of the holders of such Debentures
to receive such payment from the money held by the Trustee or paying agent.

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                                   ARTICLE 14
         IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

         Section 14.01.  Indenture and Debentures Solely Corporate Obligations.
To the extent permitted by law, no recourse for the payment of the principal of
or premium, if any, or interest on any Debenture, or for any claim based thereon
or otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in this Indenture or in any supplemental
indenture or in any Debenture, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
employee, agent, officer, director or subsidiary, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issue of the Debentures. Each
Debentureholder by accepting a Debenture waives and release all such liability.


                                   ARTICLE 15
                            CONVERSION OF DEBENTURES

         Section 15.01. Right to Convert. Subject to and upon compliance with
the provisions of this Indenture, including, without limitation, Article 4, the
holder of any Debenture shall have the right, at its option, at any time after
the earlier of (i) May 6, 2002, and (ii) the day immediately following the date
of the share distribution in connection with the Company's spin-off of Agere
Systems, Inc., through the close of business on the final maturity date of the
Debentures (except that, with respect to any Debenture or portion of a Debenture
that shall be called for redemption, such right shall terminate, except as
provided in Section 15.02 or Section 3.02, at the close of business on the
Business Day next preceding the applicable Redemption Date for such Debenture or
portion of a Debenture unless the Company shall default in payment due upon
redemption thereof) to convert the principal amount of any such Debenture, or
any portion of such principal amount which is equal to the Debenture Principal
Amount or an integral multiple thereof, into that number of fully paid and
non-assessable shares of Common Stock (as such shares shall then be constituted)
obtained by dividing the principal amount of the Debenture or portion thereof
surrendered for conversion by the Conversion Price in effect at such time, by
surrender of the Debenture so to be converted in whole or in part in the manner
provided, together with any required funds, as provided in Section 15.02. A
Debenture in respect of which a holder is exercising its option to require
redemption upon a Change of Control pursuant to Section 16.01 may be converted
only if such holder withdraws its election to exercise in accordance with
Section 3.03(c). A holder of Debentures is not entitled to any rights of a
holder of Common Stock until such holder has

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<PAGE>


converted his Debentures to Common Stock, and only to the extent such
Debentures are deemed to have been converted to Common Stock under this Article
15.

         Section 15.02. Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or Dividends. In order to
exercise the conversion privilege with respect to any Certificated Debenture,
the holder of any such Debenture to be converted in whole or in part shall
surrender such Debenture, duly endorsed, at an office or agency maintained by
the Company pursuant to Section 5.02, accompanied by the funds, if any, required
by the penultimate paragraph of this Section 15.02, and shall give written
notice of conversion in the form entitled "Conversion Notice" provided on the
Debentures (or such other notice which is acceptable to the Company) to the
office or agency that the holder elects to convert such Debenture or the portion
thereof specified in said notice. Such notice shall also state the name or names
(with address or addresses) in which the certificate or certificates for shares
of Common Stock which shall be issuable on such conversion shall be issued, and
shall be accompanied by transfer taxes, if required pursuant to Section 15.06.
Each such Debenture surrendered for conversion shall, unless the shares issuable
on conversion are to be issued in the same name as the registration of such
Debenture, be duly endorsed by, or be accompanied by instruments of transfer in
form satisfactory to the Company duly executed by, the holder or his duly
authorized attorney.

         In order to exercise the conversion privilege with respect to any
beneficial interest in a Global Debenture, the beneficial holder must complete,
or cause to be completed, the appropriate instruction form for conversion
pursuant to the Depositary's book-entry conversion program, deliver, or cause to
be delivered, by book-entry delivery the beneficial interest in such Global
Debenture, furnish appropriate endorsements and transfer documents if required
by the Company or the Trustee or conversion agent, and pay the funds, if any,
required by this Section 15.02 and any transfer taxes if required pursuant to
Section 15.06.

         As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Debentureholder (as if such transfer were a transfer of the
Debenture or Debentures (or portion thereof) so converted), the Company shall
issue and shall deliver to such Debentureholder at the office or agency
maintained by the Company for such purpose pursuant to Section 5.02, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such Debenture or portion thereof as determined
by the Company in accordance with the provisions of this Article 15 and scrip in
respect of any fractional interest in respect of a share of Common Stock arising
upon such conversion, calculated by the Company as provided in Section 15.03. In
case any Debenture of a denomination greater than the Debenture Principal Amount
shall be surrendered for partial conversion, and subject to Section 2.03, the
Company shall execute and

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<PAGE>

the Trustee shall authenticate and deliver to the holder of the Debenture so
surrendered, without charge to him, a new Debenture or Debentures in authorized
denominations in an aggregate principal amount equal to the unconverted portion
of the surrendered Debenture.

         Each conversion shall be deemed to have been effected as to any such
Debenture (or portion thereof) on the date on which the requirements set forth
above in this Section 15.02 have been satisfied as to such Debenture (or portion
thereof), and the Person in whose name any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become on said date the holder of record of the shares represented thereby;
provided, however, that any such surrender on any date when the stock transfer
books of the Company shall be closed shall consider the Person in whose name the
certificates are to be issued as the record holder thereof for all purposes on
the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
conversion shall be deemed to have been effected.

         No adjustment in respect of interest on any Debenture converted or
dividends on any shares issued upon conversion of such Debenture will be made
upon any conversion except as set forth in the next sentence. If a Debenture (or
portion hereof) is surrendered for conversion during the period from the close
of business on any record date for the payment of interest to the close of
business on the Business Day preceding the following interest payment date, such
Debenture (or portion hereof being converted) must be accompanied by an amount,
in immediately available same day funds or other funds acceptable to the
Company, equal to the interest payable on such interest payment date on the
principal amount being converted; provided, however, that no such payment shall
be required if there shall exist at the time of conversion an announced default
in the payment of interest on the Debentures.

         Upon the conversion of an interest in a Global Debenture, the Trustee
(or other conversion agent appointed by the Company), or the Custodian at the
direction of the Trustee (or other conversion agent appointed by the Company),
shall make a notation on such Global Debenture as to the reduction in the
principal amount represented thereby. The Company shall notify the Trustee in
writing of any conversions of Debentures effected through any conversion agent
other than the Trustee.

         Section 15.03. Scrip in Lieu of Fractional Shares. No fractional shares
of Common Stock shall be issued upon conversion of Debentures. In lieu thereof,
the Company shall deliver scrip that will entitle the holder to receive a full
share of Common Stock upon surrender of such scrip aggregating a full share. If
more than one Debenture shall be surrendered for conversion at one time by the
same holder, the number of full shares that shall be issuable upon conversion
shall be computed on the basis of the aggregate principal amount of the
Debentures (or specified portions thereof to the extent permitted hereby) so
surrendered.

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         Section 15.04. Conversion Price. The conversion price shall be as
specified in the form of Debenture (herein called the "Conversion Price")
attached as Exhibit A hereto, subject to adjustment as provided in this Article
15.

         Section 15.05.  Adjustment of Conversion Price.

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

                    (i) Stock Splits and Combinations. In case the Company, at
         any time or from time to time (A) subdivides or splits the outstanding
         shares of Common Stock, (B) combines or reclassifies the outstanding
         shares of Common Stock into a smaller number of shares or (C) issues by
         reclassification of the shares of Common Stock any shares of Capital
         Stock of the Company, then, and in each such case, the Conversion Price
         in effect immediately prior to that event or the record date therefor,
         whichever is earlier, will be adjusted so that the holder of any
         Debentures thereafter surrendered for conversion shall be entitled to
         receive the number of shares of Common Stock or other securities of the
         Company which the holder would have owned or have been entitled to
         receive after the occurrence of any of the events described above, had
         those Debentures been surrendered for conversion immediately prior to
         the occurrence of that event or the record date therefor, whichever is
         earlier.

                   (ii) Stock Dividends in Common Stock. In case the Company, at
         any time or from time to time pays a dividend or makes a distribution
         in shares of Common Stock on any class of Capital Stock of the Company
         other than dividends or distributions of shares of Common Stock or
         other securities with respect to which adjustments are provided in
         Section 15.05(a)(i) above, and the total number of shares constituting
         such dividend or distribution exceeds 25% of the total number of shares
         of Common Stock outstanding at the close of business on the record date
         fixed for determination of stockholders entitled to receive the
         dividend or distribution, the Conversion Price will be adjusted by
         multiplying (A) the Conversion Price immediately prior to the record
         date fixed for determination of stockholders entitled to receive the
         dividend or distribution, by (B) a fraction, the numerator of which
         will be the number of shares of Common Stock outstanding at the close
         of business on that record date and the denominator of which will be
         the sum of that number of shares and the total number of shares issued
         in that dividend or distribution.

                In case the total number of shares constituting that dividend or
       distribution does not exceed 25% of the total number of shares of Common
       Stock outstanding at the close of business on the record date fixed for
       that dividend or distribution, the shares of Common Stock will be
       considered to be issued as a dividend or distribution at the time of any
       such next

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<PAGE>

   succeeding dividend or other distribution in which the number of shares of
   Common Stock issued, together with the number of shares issued in all
   previous such dividends and distributions for which no adjustment to the
   conversion price has been made, exceeds 25% of the total number of shares of
   Common Stock outstanding at the close of business on the record date for such
   dividend or distribution.

           (iii) Issuance of Rights or Warrants. In case the Company issues to
   all holders of Common Stock rights or warrants expiring within 45 days
   entitling those holders to subscribe for or purchase Common Stock at a price
   per share less than the Current Market Price, the Conversion Price in effect
   immediately prior to the close of business on the record date fixed for
   determination of stockholders entitled to receive those rights or warrants
   will be decreased by multiplying (A) the Conversion Price by (B) a fraction,
   the numerator of which is the sum of the number of shares of Common Stock
   outstanding at the close of business on that record date and the number of
   shares of Common Stock that the aggregate offering price of the total number
   of shares of Common Stock so offered for subscription or purchase would
   purchase at the Current Market Price and the denominator of which is the sum
   of the number of shares of Common Stock outstanding at the close of business
   on that record date and the number of additional shares of Common Stock so
   offered for subscription or purchase. For purposes of this subparagraph
   (iii), the issuance of rights or warrants to subscribe for or purchase
   securities convertible into Common Stock will be deemed to be the issuance of
   rights or warrants to purchase the Common Stock into which those securities
   are convertible at an aggregate offering price equal to the sum of the
   aggregate offering price of those securities and the minimum aggregate amount
   (if any) payable upon conversion of such securities into Common Stock. Such
   adjustment will be made successively whenever any such event shall occurs.

            (iv) Distribution of Indebtedness, Securities or Assets. In case the
   Company distributes to all holders of Common Stock (whether by dividend or in
   a merger, amalgamation or consolidation or otherwise) evidences of
   indebtedness, shares of Capital Stock of any class or series, other
   securities, cash or assets (other than Common Stock, rights or warrants
   referred to in subparagraph (iii) above or a dividend payable exclusively in
   cash, shares of Capital Stock or similar equity interests in the case of a
   Spin-Off, referred to in the succeeding paragraph, and other than as a result
   of a Fundamental Change referred to in paragraph (v) below), the Conversion
   Price in effect immediately prior to the close of business on the record date
   fixed for determination of stockholders entitled to receive that distribution
   will be decreased by multiplying (A) the Conversion Price by (B) a fraction,
   the numerator of which is the Current Market Price of the Common Stock and
   the denominator of which is the

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   Current Market Price of the Common Stock plus the Fair Market Value of the
   portion of those evidences of indebtedness, shares of Capital Stock, other
   securities, cash and assets so distributed applicable to one share of Common
   Stock. Such adjustment shall be made successively whenever any such event
   shall occur.

         In case of a Spin-Off, the Conversion Price in effect immediately
before the close of business on the record date fixed for determination of
stockholders entitled to receive the relevant dividend or other distribution
will be decreased by multiplying (x) the Conversion Price by (y) a fraction, the
numerator of which is the Current Market Price of the Common Stock and the
denominator of which is the Current Market Price of the Common Stock plus the
Fair Market Value of the portion of those shares of Capital Stock, other
securities, cash and assets so distributed applicable to one share of Common
Stock.

         The adjustment to the Conversion Price under the preceding paragraph
will occur at the earlier of (1) the tenth Trading Day from, and including, the
effective date of the Spin-Off and (2) the date of the Initial Public Offering
of the securities being distributed in the Spin-Off, if that Initial Public
Offering is effected simultaneously with the Spin-Off.

            (v) Fundamental Changes. In case any transaction or event
   (including, without limitation, any merger, consolidation, combination,
   recapitalization, sale of assets, tender or exchange offer, reclassification,
   compulsory share exchange or liquidation) occurs in which all or
   substantially all outstanding shares of Common Stock are converted into or
   exchanged or acquired for or constitute the right to receive stock, other
   securities, cash, property or assets (each, a "Fundamental Change"), the
   holder of each Debenture Outstanding immediately prior to the occurrence of a
   Fundamental Change which remains Outstanding after that Fundamental Change
   has the right upon any subsequent conversion to receive (but only out of
   funds legally available, to the extent required by applicable law) the kind
   and amount of stock, other securities, cash, property or assets that the
   holder would have received if that Debenture had been converted immediately
   prior to the Fundamental Change.

         In case of a Fundamental Change, the Company or the successor or
purchasing Person, as the case may be, shall execute with the Trustee a
supplemental indenture (which shall comply with the Trust Indenture Act as in
force at the date of execution of such supplemental indenture) providing that
such Debenture shall be convertible into the kind and amount of shares of stock,
other securities, cash or other property or assets receivable upon such
Fundamental Change by a holder of a number of shares of Common Stock issuable
upon conversion of such Debentures (assuming, for such purposes, a sufficient
number of authorized shares of Common Stock are available to convert all such
Debentures) immediately prior to such

                                       75




<PAGE>

Fundamental Change assuming such holder of Common Stock did not exercise his
rights of election, if any, as to the kind or amount of stock, other securities,
cash or other property or assets receivable upon such Fundamental Change
(provided that, if the kind or amount of stock, other securities, cash or other
property or assets receivable upon such Fundamental Change is not the same for
each share of Common Stock in respect of which such rights of election shall not
have been exercised ("non-electing share"), then for the purposes of this
Section 15.05 the kind and amount of stock, other securities, cash or other
property or assets receivable upon such Fundamental Change for each non-electing
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). Such supplemental indenture shall provide
for adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 15.

         The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Debentures, at its address appearing on
the Debenture Register provided for in Section 2.05 of this Indenture, within
twenty (20) days after execution thereof. Failure to deliver such notice shall
not affect the legality or validity of such supplemental indenture.

         The above provisions of this Section shall similarly apply to
successive Fundamental Changes.

            (vi) Special Adjustment for Some Changes of Control. In the event of
   a Fundamental Change that constitutes a Change of Control in a transaction or
   series of related transactions in which (A) the stockholders of the Company
   receive consideration per share of Common Stock that is greater than the
   Conversion Price, without giving effect to the adjustment described below, at
   the effective time of the Change of Control, and (B) at least 10%, but less
   than 75%, of the total consideration paid to the stockholders of the Company
   consists of cash, cash equivalents, securities or other assets (other than
   publicly traded securities) (collectively, "Non-Public Consideration"), then
   the Conversion Price will be adjusted so that, upon conversion of Debentures
   Outstanding after the Change of Control, in addition to the Common Stock or
   other securities deliverable upon the conversion of the Debentures as
   described in Section 15.01 and 15.02 and subparagraphs (i) through (v) above,
   the holder will receive, in respect of each Debenture, a number of publicly
   traded securities of the acquiror determined through the following
   calculation:

         PV Cash Flows x (Non-Public Consideration/Total Consideration)
         --------------------------------------------------------------
                              Acquiror Stock Price

where:

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<PAGE>

<TABLE>
<S>                           <C>
PV Cash
Flows =                       the present value of the aggregate interest payments
                              that would have been payable on a Debenture from
                              the date of conversion through August 15, 2006,
                              calculated using a discount rate equal to 2.00% plus
                              the yield to maturity of U.S. Treasury securities
                              having a maturity closest to, but not later than,
                              August 15, 2006;

Total
Consideration =               the total value of the consideration payable to the
                              Company's stockholders at the effective time of
                              such Change of Control, with the value of any assets
                              or securities other than cash or publicly traded
                              securities being determined in good faith by the
                              Board of Directors based on an opinion as to such
                              value obtained from an accounting, appraisal or
                              investment banking firm of international standing;
                              and

Acquiror Stock
Price =                       the Sale Price of a share of the acquiror's
                              publicly traded common stock or other publicly
                              traded securities delivered in connection with the
                              Change of Control transaction at the effective
                              time of such Change of Control;

</TABLE>

         provided, however, that if the consideration received by the Company's
         stockholders in respect of such Change of Control is greater than the
         Conversion Price at the effective time of the Change of Control and
         consists of at least 75% Non-Public Consideration or if the acquiror's
         common stock is not publicly traded, then upon conversion of Debentures
         Outstanding after such Change of Control, in lieu of the foregoing
         Conversion Price adjustment set forth in this subparagraph (vi), each
         holder shall be entitled to receive, in respect of each Debenture, an
         additional amount in cash calculated as follows:

         PV Cash Flows x (Non-Public Consideration/Total Consideration).

                  (vii) Self-Tender. In case the Company or any of its
         Subsidiaries engages in a tender or exchange offer for all or any
         portion of the Common Stock that shall expire, and such tender or
         exchange offer (as amended upon the expiration thereof) shall require
         the payment to stockholders of consideration per share of Common Stock
         having a Fair Market Value that as of the last time (the "Expiration
         Time") tenders or

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<PAGE>

         exchanges may be made pursuant to such tender or exchange offer (as it
         may be amended) exceeds the Sale Price per share of Common Stock as of
         the Trading Day next succeeding the Expiration Time, the Conversion
         Price shall be decreased so that it shall equal the rate determined by
         (A) multiplying the Conversion Price in effect immediately prior to the
         Expiration Time by (B) a fraction, the numerator of which shall be the
         number of shares of Common Stock outstanding (including any tendered or
         exchanged shares) at the Expiration Time multiplied by the Sale Price
         per share of Common Stock as of the Trading Day next succeeding the
         Expiration Time and the denominator of which shall be the sum of (x)
         the Fair Market Value of the aggregate consideration payable to
         stockholders based on the acceptance (up to any maximum specified in
         the terms of the tender or exchange offer) of all shares of Common
         Stock validly tendered or exchanged and not withdrawn as of the
         Expiration Time (the shares of Common Stock deemed so accepted, up to
         any such maximum, being referred to as the "Purchased Shares") and (y)
         the product of the number of shares of Common Stock outstanding (less
         any Purchased Shares) at the Expiration Time and the Sale Price per
         share of Common Stock as of the Trading Day next succeeding the
         Expiration Time, such decrease to become effective as of the opening of
         business on the Trading Day next succeeding the Expiration Time. In the
         event that the Company is obligated to purchase shares of Common Stock
         pursuant to any such tender or exchange offer, but the Company is
         permanently prevented by applicable law from effecting any such
         purchases or all such purchases are rescinded, the Conversion Price
         shall again be adjusted to be the Conversion Price that would then be
         in effect if such tender or exchange offer had not been made.

                 (viii) Extraordinary distribution in cash. In case the Company
         pays a dividend or makes a distribution in cash on the Common Stock and
         the amount of cash constituting the dividend or distribution exceeds
         15% of the Current Market Price of the Common Stock at the close of
         business on the day that the Common Stock trades ex-distribution, the
         Conversion Price in effect immediately before the close of business on
         the day that the Common Stock trades ex-distribution will be adjusted
         by multiplying (A) the Conversion Price by (B) a fraction, the
         numerator of which will be the Current Market Price of the Common Stock
         and the denominator of which will be the Current Market Price of the
         Common Stock plus the amount per share of such dividend or
         distribution.

        (b) Anything in paragraph (a) to the contrary notwithstanding, the
Company shall not be required to give effect to any adjustment in the Conversion
Price unless and until the net effect of one or more adjustments (each of which
shall be carried forward until counted toward adjustment), determined as above
provided, shall have resulted in a change of the Conversion Price by at least
l%, and when the cumulative net effect of more than one adjustment so determined

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<PAGE>

shall be to change the Conversion Price by at least 1%, such change in the
Conversion Price shall thereupon be given effect. In the event that, at any time
as a result of the provisions of this Article 15, the holders of Debentures upon
subsequent conversion shall become entitled to receive any shares of Capital
Stock of the Company other than Common Stock, the number of such other shares so
receivable upon conversion of Debentures shall thereafter be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions contained herein.

         (c) There shall be no adjustment of the Conversion Price in case of the
issuance of any Capital Stock of the Company in a merger, reorganization,
acquisition, reclassification, recapitalization or other similar transaction
except as provided in this Section.

        (d) In any case in which Article 15 requires that an adjustment as a
result of any event is to become effective from and after a record date, the
Company may elect to defer until after the occurrence of that event (i) issuing
to the holder of any Debentures converted after that record date and before the
occurrence of that event the additional shares of Common Stock issuable upon
that conversion over and above the shares issuable on the basis of the
Conversion Price in effect immediately prior to adjustment and (ii) paying to
such holder any amount by delivering scrip in lieu of a fractional share of
Common Stock.

         (e) If the Company takes a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend or other distribution,
and shall thereafter and before the distribution to stockholders thereof, the
Company legally abandons its plan to pay or deliver the dividend or
distribution, then thereafter no adjustment in the number of shares of Common
Stock issuable upon conversion of Debentures or in the Conversion Price then in
effect shall be required by reason of the taking of the record.

         (f) The Board of Directors shall have the power to resolve any
ambiguity or, subject to applicable law, correct any error in this Article 15
and its action in so doing shall be final and conclusive.

        (g) The Company may make such reductions in the Conversion Price, in
addition to those required by Section 15.05(a) as the Board of Directors
considers to be advisable to avoid or diminish any income tax to holders of
Common Stock or rights to purchase Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes.

         To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time if the
period is at least twenty (20) days, the reduction is irrevocable during the
period and the Board of Directors shall have made a determination that such
reduction would be in the best interests of the Company, which determination
shall be

                                       79






<PAGE>

conclusive. Whenever the Conversion Price is reduced pursuant to the preceding
sentence, the Company shall provide Notice to holders of Debentures of the
reduction at least fifteen (15) days prior to the date the reduced Conversion
Price takes effect, and the Notice shall state the reduced Conversion Price and
the period during which it will be in effect.

        (h) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee and any conversion agent other than
the Trustee an Officers' Certificate setting forth the Conversion Price after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment. Unless and until a Responsible Officer of the Trustee shall have
received such Officers' Certificate, the Trustee shall not be deemed to have
knowledge of any adjustment of the Conversion Price and may assume that the last
Conversion Price of which it has knowledge is still in effect. Promptly after
delivery of such certificate, the Company shall provide Notice of such
adjustment of the Conversion Price setting forth the adjusted Conversion Price
and the date on which each adjustment becomes effective to the holders of
Debentures. Failure to deliver the Notice shall not affect the legality or
validity of any such adjustment.

         (i) For purposes of this Section 15.05, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company. The Company will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company.

         Section 15.06. Taxes on Shares Issued. The issue of stock certificates
on conversions of Debentures shall be made without charge to the converting
Debentureholder for any tax in respect of the issue thereof. The Company shall
not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of stock in any name other than that
of the holder of any Debenture converted, and the Company shall not be required
to issue or deliver any such stock certificate unless and until the Person or
Persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.

         Section 15.07.  Reservation of Shares; Shares to Be Fully Paid;
Compliance with Governmental Requirements; Listing of Common Stock. The Company
shall at all times reserve and keep available, free from preemptive rights, out
of its authorized but unissued shares or shares held in treasury, sufficient
shares of Common Stock to permit the conversion of all the Outstanding
Debentures as such Debentures are presented for conversion from time to time.

         Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Debentures, the Company will take all corporate

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<PAGE>

action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.

         Subject to Section 15.06, the Company covenants that all shares of
Common Stock which may be issued upon conversion of Debentures will upon
delivery be fully paid and nonassessable, free from all taxes, liens and charges
and not subject to any preemptive rights.

         The Company further covenants that, if at any time the Common Stock
shall be listed on The Nasdaq National Market or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Debentures;
provided, however, that, if the rules of such exchange or automated quotation
system permit the Company to defer the listing of such Common Stock until the
first conversion of the Debentures into Common Stock in accordance with the
provisions of this Indenture, the Company covenants to list such Common Stock
issuable upon conversion of the Debentures in accordance with the requirements
of such exchange or automated quotation system at such time.

         Section 15.08. Responsibility of Trustee. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Debentures to determine the Conversion Price or whether any facts
exist which may require any adjustment of the Conversion Price, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Debenture; and the Trustee and any other conversion agent make no
representations with respect thereto. Neither the Trustee nor any conversion
agent shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Debenture for the purpose of
conversion or to comply with any of the duties, responsibilities or covenants of
the Company contained in this Article 15. Without limiting the generality of the
foregoing, neither the Trustee nor any conversion agent shall be under any
responsibility to determine the correctness of any provisions contained in any
supplemental indenture entered into pursuant to Section 15.05 relating either to
the kind or amount of shares of stock or securities or property (including cash)
receivable by Debentureholders upon the conversion of their Debentures after any
event referred to in such Section 15.05 or to any adjustment to be made with
respect thereto, but, subject to the provisions of Section 8.01, may accept as
conclusive evidence of the correctness of any such provisions, and shall be
protected in relying upon, the Officers' Certificate (which

                                       81




<PAGE>

the Company shall be obligated to file with the Trustee prior to the execution
of any such supplemental indenture) with respect thereto.

         Section 15.09.  Notice to Holders Prior to Certain Actions.  In case:

         (a) the Company shall declare a dividend (or any other distribution) on
its Common Stock that would require an adjustment in the Conversion Price
pursuant to Section 15.05; or

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

         (c) of any reclassification or reorganization of the Common Stock of
the Company (other than a subdivision or combination of its outstanding Common
Stock, or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation or merger to which the Company
is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company and its consolidated Subsidiaries, taken as a whole; or

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

the Company shall cause to be filed with the Trustee and provide to each holder
of Debentures at least ten (10) days prior to the applicable date hereinafter
specified, Notice stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution or rights or warrants, or, if a record is
not to be taken, the date as of which the holders of Common Stock of record to
be entitled to such dividend, distribution or rights are to be determined, or
(y), if known, the date on which such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up is expected to become
effective or occur, and, if known, the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.


                                   ARTICLE 16
                                CHANGE OF CONTROL

         Section 16.01.  Change Of Control Put Right.

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<PAGE>

         (a) If a Change of Control occurs, each holder of Debentures that
remain Outstanding after the Change of Control will have the right to require
the Company to redeem all or any part of such holder's Outstanding Debentures,
out of legally available funds, at the Redemption Price. The Company may, at its
option, elect to pay the Redemption Price in cash or, in shares of the Company's
Common Stock valued at a discount of 5% from the Market Price of the Common
Stock, or any combination thereof; provided that the Company may pay such
Redemption Price in shares of its Common Stock only if such shares are eligible
for immediate sale in the public market by non-affiliates of the Company absent
a registration statement. The Company's right to redeem Debentures, in whole or
in part, with shares of Common Stock is subject to the conditions set forth in
Section 3.04.

         (b) Holders of the Debentures will not have the right set forth in
paragraph (a) above if:

                    (i) the Sale Price per share of the Common Stock for any
         five Trading Days within the period of 10 consecutive Trading Days
         ending immediately after the later of the Change of Control or the
         public announcement thereof (in the case of a Change of Control under
         paragraph (a) of the definition of "Change of Control" in Section 1.01)
         or the period of 10 consecutive Trading Days ending immediately before
         the Change of Control (in the case of a Change of Control under
         paragraph (b), (c) or (d) of the definition of "Change of Control" in
         Section 1.01) shall equal or exceed 105% of the Conversion Price of the
         Debentures immediately after the later of the Change of Control and the
         public announcement thereof; or

                   (ii) at least 95% of the consideration in the Change of
         Control transaction consists of Capital Stock traded on a U.S. national
         securities exchange or quoted on the Nasdaq, and as a result of the
         transaction, the Debentures become convertible solely into this Capital
         Stock.

         (c) Within 30 days following any Change of Control, the Company shall
mail a notice to each holder with a copy to the Trustee stating:

                  (i) that a Change of Control has occurred and a description of
         the offer;

                  (ii) the purchase date (which shall be no earlier than 30 days
         nor later than 60 days from the date such notice is mailed); and

                  (iii) the instructions determined by the Company, consistent
         with this Section, that a holder must follow in order to have its
         Debentures redeemed.

        (d) The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations to the

                                       83





<PAGE>

extent those laws and regulations are applicable in connection with the
redemption of Debentures as a result of a Change of Control with respect to the
Company. To the extent that the provisions of any securities laws or regulations
conflict with any of the provisions of this Section, the Company will comply
with the applicable securities laws and regulations and will be deemed not to
have breached its obligations under this Section.

         (e) For a Debenture to be redeemed as provided in this Section, the
Company must receive at the office or agency of the Company maintained for that
purpose a "Notice of Election of Redemption Upon A Change of Control" on the
reverse thereof duly completed, together with such Debentures duly endorsed for
transfer three Business Days prior to the purchase date. All questions as to the
validity, eligibility (including time of receipt) and acceptance of any
Debenture for redemption shall be determined by the Company, whose determination
shall be final and binding absent manifest error.

         On the purchase date set forth in the notice mailed to holders pursuant
to subsection (c) above, the Company will, to the extent lawful, (i) redeem all
Debentures properly tendered, (ii) deposit with the Trustee an amount equal to
the Redemption Price of the Debentures so tendered and (iii) deliver or cause to
be delivered to the Trustee Debentures so accepted together with an Officers'
Certificate stating the aggregate principal amount of the Debentures being
redeemed by the Company. The Trustee will promptly mail or deliver to each
holder of Debentures so tendered the applicable payment for those Debentures,
and, for Debentures redeemed in part only, the Company shall execute and the
Trustee shall authenticate and make delivery to the Holder thereof, at the
expense of the Company, a new Debenture or Debentures, of authorized
denominations, in principal amount equal to the unredeemed portion of the
Debentures so presented. The Company shall publicly announce the results of its
offer on or as soon as practicable after the Redemption Date for the redemption
of Debentures in connection with a Change of Control.

         (f) The Company will not be required to make an offer to redeem any
Debentures upon the occurrence of a Change of Control if a third party makes an
offer to purchase the Debentures in the manner, at the times and otherwise in
compliance with the requirements described in this Section and purchases all
Debentures validly tendered and not withdrawn.

        (g) The right of the holders of Debentures described in this Section
will be subject to the Company's obligation to repay or repurchase all of its
debt obligations required to be repurchased or repaid in connection with a
transaction or event that constitutes a Change of Control and to any contractual
restrictions then contained in the Company's indebtedness.

         When the Company shall have satisfied these obligations or these
obligations are not applicable to the Company, and, subject to the legal
availability of funds for this purpose, the Company shall then redeem all

                                       84




<PAGE>

Debentures tendered for purchase by the Company upon a Change of Control
pursuant to this Section.


                                   ARTICLE 17
                            MISCELLANEOUS PROVISIONS

         Section 17.01. Provisions Binding on Company's Successors. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.

         Section 17.02. Official Acts by Successor Corporation. Any act or
proceeding under any provision of this Indenture authorized or required to be
done or performed by any board, committee or officer of the Company shall and
may be done and performed with like force and effect by the like board,
committee or officer of any Person that shall at the time be the lawful sole
successor of the Company.

         Section 17.03. Addresses for Notices, etc. Any notice or demand which
by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Debentures on the Company shall be
deemed to have been sufficiently given or made, for all purposes, if it is in
writing given or served by being deposited postage prepaid by registered or
certified mail in a post office letter box or sent by facsimile transmission
(confirmed by hard copy) addressed (until another address is filed by the
Company with the Trustee) to Lucent Technologies Inc., 600 Mountain Avenue,
Murray Hill, New Jersey, 07974, Attention: Facsimile No. ( )_________. Any
notice, direction, request or demand hereunder to or upon the Trustee shall be
given or served by being deposited, postage prepaid, by registered or certified
mail in a post office letter box or sent by facsimile transmission (confirmed by
hard copy) addressed to the Corporate Trust Office, which office is, at the date
as of which this Indenture is dated, located at [The Bank of New York], [114
West 47th Street, 25th Floor, New York, New York 10036], Attention: Corporate
Business Unit, Facsimile No. (212)_________.

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

         Any notice or communication mailed to a Debentureholder shall be mailed
to him by first class mail, postage prepaid, at his address as it appears on the
Debenture Register and shall be sufficiently given to him if so mailed within
the time prescribed.

         Failure to mail or deliver a notice, Notice or communication to a
Debentureholder or any defect in it shall not affect its sufficiency with
respect to other Debentureholders. If a notice or communication is mailed in the
manner provided above, it is duly given, whether or not the addressee receives
it;

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<PAGE>

provided, however, that any notice or communication to the Trustee shall be
deemed given only upon receipt.

         In case, by reason of the suspension of regular mail service, or by
reason of any other cause, it shall be impossible to mail any notice as required
by this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.

         Section 17.04. Governing Law. This Indenture and each Debenture shall
be deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of the State of New
York, without regard to the conflict of laws provisions thereof.

         Section 17.05. Evidence of Compliance with Conditions Precedent;
Certificates To Trustee. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that, 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 an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.

         Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include: (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.

         Section 17.06. Legal Holidays. In any case in which the date of
maturity of interest on or principal of the Debentures or the date fixed for
redemption of any Debenture will not be a Business Day, then payment of such
interest on or principal of the Debentures need not be made on such date, but
may be made on the next succeeding Business Day with the same force and effect
as if made on the date of maturity or the date fixed for redemption, and no
interest on such payment shall accrue for the period from and after such date.

         Section 17.07. Trust Indenture Act. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act; provided, however, that this Section 17.07 shall not require this
Indenture or the Trustee to be qualified under the Trust Indenture Act prior to
the time such

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<PAGE>

qualification is in fact required under the terms of the Trust Indenture Act,
nor shall it constitute any admission or acknowledgment by any party to the
Indenture that any such qualification is required prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act. If
any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in an indenture qualified under the
Trust Indenture Act, such required provision shall control.

         Section 17.08. No Security Interest Created. Nothing in this Indenture
or the Debentures, expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect, in any jurisdiction in which property of
the Company and its Subsidiaries is located, other than the security interest
granted to the Trustee in Section 8.07.

         Section 17.09. Benefits of Indenture. Nothing in this Indenture or in
the Debentures, express or implied, shall give to any Person, other than the
parties hereto, any paying agent, any authenticating agent, any Debenture
Registrar and their successors hereunder, the holders of Debentures and the
holders of Senior Indebtedness, any benefit or any legal or equitable right,
remedy or claim under this Indenture.

         Section 17.10. Table of Contents, Headings, etc. The table of contents
and the titles and headings of the articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.

         Section 17.11. Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Debentures in connection
with the original issuance thereof and transfers, exchanges and substitutions of
Debentures hereunder, including under Section 2.04, 2.05, 2.06, 2.07, 3.01(c) ,
3.03, Section 11.04 and Section 15.02 as fully to all intents and purposes as
though the authenticating agent had been expressly authorized by this Indenture
and those Sections to authenticate and deliver Debentures. For all purposes of
this Indenture, the authentication and delivery of Debentures by the
authenticating agent shall be deemed to be authentication and delivery of such
Debentures "by the Trustee" and a certificate of authentication executed on
behalf of the Trustee by an authenticating agent shall be deemed to satisfy any
requirement hereunder or in the Debentures for the Trustee's certificate of
authentication. Such authenticating agent shall at all times be a Person
eligible to serve as trustee hereunder pursuant to Section 8.09.

         Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any

                                       87





<PAGE>

authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 17.11, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.

         Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any authenticating agent by giving written notice
of termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the duties and obligations of the former authenticating agent under this
Indenture and, upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Debentures as the names and
addresses of such holders appear on the Debenture Register.

         The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in writing
between the Company and the authenticating agent.

         The provisions of Section 8.02, 8.04, 8.05, 9.03 and this Section 17.11
shall be applicable to any authenticating agent.

         Section 17.12. Execution in Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.

         Section 17.13. Severability. In case any provision in this Indenture or
in the Debentures shall be invalid, illegal or unenforceable, then (to the
extent permitted by law) the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

         Section 17.14. No Adverse Interpretation Of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or an Affiliate. No such indenture, loan or debt agreement may be
used to interpret this Indenture.

         [The Bank of New York] hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions herein above set forth.




                                       88








<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.

                                        LUCENT TECHNOLOGIES INC.


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


                                        [THE BANK OF NEW YORK], as Trustee



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






<PAGE>

                                                                       EXHIBIT A

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

         THE DEBENTURE EVIDENCED HEREBY AND THE COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS DEBENTURE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING
THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (A) PRIOR TO THE SECOND ANNIVERSARY
OF THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (B) BY ANY HOLDER
THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS
PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE, OTHER THAN (1) TO THE
COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THIS SECURITY), (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER
THE SECURITIES ACT (4) IN AN OFFSHORE TRANSACTION COMPLYING WITH REGULATION S
UNDER THE SECURITIES ACT, OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE

                                       A-1







<PAGE>

BENEFIT OF THE COMPANY THAT (I) IT IS EITHER (X) A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A OR (Y) A NON-U.S. PERSON AND (II) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
DEBENTURE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE. HEDGING
TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS CONDUCTED IN
COMPLIANCE WITH THE SECURITIES ACT.

                            LUCENT TECHNOLOGIES INC.

              8.00% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2031

                                                            CUSIP: _____________
                                                             ISIN: _____________

No.                                                              $______________

         Lucent Technologies Inc., a corporation duly organized and validly
existing under the laws of the State of Delaware (herein called the "Company",
which term includes any successor corporation under the Indenture referred to on
the reverse hereof), for value received hereby promises to pay to
__________________ or its registered assigns, the principal sum of
_________________ dollars ($___________) on August 1, 2031, at the office or
agency of the Company maintained for that purpose in accordance with the terms
of the Indenture, in such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and private
debts, and to pay interest, semi-annually on February 1 and August 1 of each
year, commencing February 1, 2002, on said principal sum at said office or
agency, in like coin or currency, at the rate per annum of 8.00%, from the
February 1 or August 1, as the case may be, next preceding the date of this
Debenture to which interest has been paid or duly provided for, unless the date
hereof is a date to which interest has been paid or duly provided for, in which
case from the date of this Debenture, or unless no interest has been paid or
duly provided for on the Debentures, in which case from [____________, _____],
until payment of said principal sum has been made or duly provided for;
provided, however, that if the Company shall default in the payment of interest
due on such February 1 or August 1, then this Debenture shall bear interest from
the next preceding February 1 or August 1 to which interest has been paid or
duly provided for or, if no interest has been paid or duly provided for on such
Debenture, from ____, ____. [The Company further hereby promises to pay, at said
office or agency, in like coin or currency, any Additional Interest that it may
from time to time be required to pay pursuant to Section 2(d) of the
Registration Rights Agreement at the same

                                      A-2





<PAGE>

time and in the same manner as payments of interest as specified above.]*
Except as otherwise provided in the Indenture, the interest and Additional
Interest payable on this Debenture pursuant to the Indenture on any February 1
or August 1 will be paid to the Person entitled thereto as it appears in the
Debenture Register at the close of business on the record date, which shall be
the January 1 or July 1 (whether or not a Business Day) next preceding such
February 1 or August 1, as provided in the Indenture; provided, however, that
any such interest not punctually paid or duly provided for shall be payable as
provided in the Indenture.

         Reference is made to the further provisions of this Debenture set forth
on the reverse hereof, including, without limitation, provisions subordinating
the payment of principal of and premium, if any, and interest on the Debentures
to the prior payment in full of all Senior Indebtedness, and provisions giving
the holder of this Debenture the right to convert this Debenture into Common
Stock of the Company on the terms and subject to the limitations referred to on
the reverse hereof and as more fully specified in the Indenture. Such further
provisions shall for all purposes have the same effect as though fully set forth
at this place.

         This Debenture shall be deemed to be a contract made under the laws of
the State of New York, and for all purposes shall be construed in accordance
with and governed by the laws of the State of New York, without regard to
principles of conflicts of laws.

         This Debenture shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee or a duly authorized authenticating agent under the Indenture.
















----------
         * To be included unless the Indenture is entered into after the
applicable period in which a Registration Default could occur, pursuant to the
terms of the Registration Rights Agreement, has expired.

                                      A-3





<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Debenture to be duly
executed.

                                        LUCENT TECHNOLOGIES INC.


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


Attest: __________________
        Name:
        Title:
        Dated:





                                      A-4





<PAGE>

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Debentures described in the within-named Indenture.

[[THE BANK OF NEW YORK], as Trustee]

[[AUTHENTICATING AGENT], as Authenticating Agent]


By: _____________________
    Name:
    Title:
    Dated:




                                      A-5





<PAGE>

                              REVERSE OF DEBENTURE

                            LUCENT TECHNOLOGIES INC.

               8.00% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2031

         This Debenture is one of a duly authorized issue of Debentures of the
Company, designated as its 8.00% Convertible Subordinated Debentures due 2031
(herein called the "Debentures"), limited to the aggregate principal amount of
$[           ] all issued or to be issued under and pursuant to an Indenture
dated as of _________ __, ____ (herein called the "Indenture"), between the
Company and [The Bank of New York], as trustee (herein called the "Trustee"),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and the holders
of the Debentures.

         In case an Event of Default shall have occurred and be continuing, the
principal of, premium, if any, and accrued interest on all Debentures may be
declared by either the Trustee or the holders of not less than 25% in aggregate
principal amount of the Debentures then Outstanding, and upon said declaration
shall become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.

         The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debentures at the time Outstanding, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the
Debentures; provided, however, that no such supplemental indenture shall (i)
extend the fixed maturity of any Debenture, or reduce the rate or extend the
time of payment of interest thereon, or reduce the principal amount thereof or
premium, if any, thereon, or reduce any amount payable upon redemption thereof,
or impair the right of any Debentureholder to institute suit for the payment
thereof, or make the principal thereof or interest or premium, if any, thereon
payable in any coin or currency other than that provided in the Debentures, or
change any obligation of the Company to redeem any Debenture upon the happening
of a Change of Control or otherwise in a manner adverse to the holder of the
Debentures, or impair the right to convert the Debentures pursuant to the terms
set forth in the Indenture without the consent of the holder of each Debenture
so affected or (ii) reduce the aforesaid percentage of Debentures, the holders
of which are required to consent to any such supplemental indenture, without the
consent of the holders of all Debentures then Outstanding. In addition, any
amendment to, or waiver of, the provisions of the Indenture relating to
subordination of the Indenture that adversely affects the rights of the holders
of the Debentures will require the consent of the holders of at least 75% in
aggregate principal amount of the

                                      A-6






<PAGE>

Debentures then Outstanding. Subject to the provisions of the Indenture, the
holders of a majority in aggregate principal amount of the Debentures at the
time Outstanding may on behalf of the holders of all of the Debentures waive any
past default under the Indenture and its consequences except a default in the
payment of interest or any premium on, or the principal of, any of the
Debentures, or a failure by the Company to convert any Debentures pursuant to
Article 15 of the Indenture, or a default in the payment of the Redemption Price
on any Redemption Date, or a default in respect of a covenant or provisions of
the Indenture which under Article 11 of the Indenture cannot be modified without
the consent of the holders of each or all Debentures then Outstanding or
affected thereby. Any such consent or waiver by the holder of this Debenture
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such holder and upon all future holders and owners of this Debenture and
any Debentures which may be issued in exchange or substitution hereof,
irrespective of whether or not any notation thereof is made upon this Debenture
or such other Debentures.

         The indebtedness evidenced by the Debentures is, to the extent and in
the manner provided in the Indenture, expressly subordinated and subject in
right of payment, to the extent and in the manner provided in Article 4 of the
Indenture, to the prior payment in full of all Senior Indebtedness of the
Company, whether outstanding at the date of the Indenture or thereafter
incurred, and this Debenture is issued subject to the provisions of the
Indenture with respect to such subordination. Each holder of this Debenture, by
accepting the same, agrees to and shall be bound by such provisions and
authorizes the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
his attorney-in-fact for such purpose.

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

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

         The Debentures are issuable in fully registered form, without coupons,
in denominations equal to the Debenture Principal Amount and any integral
multiple thereof. At the office or agency of the Company referred to on the face
hereof, and in the manner and subject to the limitations provided in the
Indenture, without payment of any service charge but with payment of a sum
sufficient to cover any tax, assessment or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Debentures, Debentures may be exchanged for a like aggregate principal amount of
Debentures of any other authorized denominations.

                                      A-7




<PAGE>

         The Debentures may be redeemed by the Company for cash, in whole or in
part, at any time on or after August 15, 2006, upon notice as set forth in
Section 3.01(b) of the Indenture, at the Redemption Price, if the Company shall
have funds legally available for such redemption.

         The Company may not give notice of and the Trustee shall not redeem any
Debentures or provide any Redemption Notice, if a default in the payment of
interest or premium, if any, on the Debentures has occurred and is continuing.

         On the Redemption Dates of August 2, 2004, August 2, 2007, August 2,
2010 and August 2, 2016, the Company shall, at the option of the holder, be
required, subject to having funds legally available therefor, to redeem at the
Redemption Price any Outstanding Debentures for which a written Redemption
Notice has been properly delivered by the holder to the Trustee and not
withdrawn. Holders may submit their Debentures for redemption to the Trustee at
any time from the opening of business on the date that is 45 Business Days prior
to such Redemption Date until the close of business on the Business Day that is
three (3) Business Days prior to such Redemption Date. The Company may, at its
option, elect to pay the Redemption Price in cash or in shares of Common Stock
valued at a discount of 5% from the Market Price of the Common Stock, or any
combination thereof. The Company may pay such Redemption Price in shares of its
Common Stock only if such shares are eligible for immediate sale in the public
market by non-affiliates of the Company absent a registration statement.

         If a Change of Control occurs, each holder of Debentures that remain
Outstanding after the Change of Control shall have the right to require the
Company to redeem all or any part of such holder's Outstanding Debentures, out
of legally available funds, at the Redemption Price. This right of holders will
be subject to the Company's obligation to repay or repurchase any indebtedness
required in connection with a Change of Control and to any contractual
restrictions then contained in the Company's indebtedness. The Company may, at
its option, elect to pay the Redemption Price in cash or, in shares of the
Company's Common Stock valued at a discount of 5% from the Market Price of the
Common Stock, or any combination thereof; provided that the Company may pay such
Redemption Price in shares of its Common Stock only if such shares are eligible
for immediate resale in the public market by non-affiliates of the Company
absent a registration statement. The Company's right to redeem Debentures, in
whole or in part, with shares of Common Stock is subject to the conditions and
procedures set forth in the Indenture.

         Subject to and upon compliance with the provisions of the Indenture,
the holder hereof has the right, at its option, at any time after the earlier of
(i) May 6, 2002, and (ii) the day immediately following the date of the share
distribution in connection with the Company's spin-off of Agere Systems, Inc.,
through the close of business on the final maturity date of the Debentures, to
convert the principal hereof or any portion of such principal which is equal to
the Debenture Principal Amount or an integral multiple thereof into that number
of

                                      A-8





<PAGE>

fully paid and non-assessable shares of Common Stock (as such shares shall then
be constituted) obtained by dividing the principal amount of this Debenture or
portion thereof to be converted by the Conversion Price of $____, as may
adjusted from time to time as provided in the Indenture, upon surrender of this
Debenture and the completion of other procedures set forth in the Indenture
including submission of a conversion notice in the form entitled "Conversion
Notice" on the reverse hereof and, if this Debenture (or portion hereof) is
surrendered for conversion during the period from the close of business on any
record date for the payment of interest to the close of business on the Business
Day preceding the following interest payment date, this Debenture (or portion
hereof being converted) must be accompanied by an amount, in immediately
available same day funds or other funds acceptable to the Company, equal to the
interest payable on such interest payment date on the principal amount being
converted; provided, however, that no such payment shall be required if there
shall exist at the time of conversion an announced default in the payment of
interest on the Debentures. No fractional shares of Common Stock will be issued
upon any conversion. In lieu thereof, the Company shall deliver scrip that will
entitle the holder to receive a full share of Common Stock upon surrender of
such scrip aggregating a full share. A Debenture in respect of which a holder is
exercising its right to require redemption upon a Change of Control may be
converted only if such holder withdraws its election to exercise such right in
accordance with the terms of the Indenture. Any Debentures called for
redemption, unless surrendered for conversion by the holders thereof on or
before the close of business on the Business Day preceding the date fixed for
redemption, may be deemed to be purchased from the holders of such Debentures
for an amount equal to the applicable Redemption Price by one or more investment
banks or other purchasers who may agree with the Company (i) to purchase such
Debentures from the holders thereof and convert them into shares of the
Company's Common Stock and (ii) to make payment for such Debentures as aforesaid
to the Trustee in trust for the holders.

         Upon due presentment for registration of transfer of this Debenture at
the office or agency of the Company maintained for that purpose in accordance
with the terms of the Indenture, a new Debenture or Debentures of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange thereof; subject to the limitations provided in the
Indenture, without charge except for any tax, assessment or other governmental
charge imposed in connection therewith.

         The Company, the Trustee, any paying agent, any conversion agent and
any Debenture Registrar may deem and treat the registered holder hereof as the
absolute owner of this Debenture (whether or not this Debenture shall be overdue
and notwithstanding any notation of ownership or other writing hereon made by
anyone other than the Company or any Debenture Registrar) for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any paying
agent

                                      A-9





<PAGE>

nor any conversion agent nor any Debenture Registrar shall be affected by
any notice to the contrary. All payments made to or upon the order of such
registered holder shall be valid, and, to the extent of the sum or sums paid,
satisfy and discharge liability for monies payable on this Debenture.

         To the extent permitted by law, no recourse for the payment of the
principal of, or premium, if any, or interest on this Debenture, or for any
claim based hereon or otherwise in respect hereof, and no recourse under or upon
any obligation, covenant or agreement of the Company in the Indenture or any
supplemental indenture or in any Debenture, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, employee, agent, officer, director or subsidiary, as such, past,
present or future, of the Company or of any successor corporation, either
directly or through the Company or any successor corporation, whether by virtue
of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.

         Terms used in this Debenture and defined in the Indenture are used
herein as therein defined.






                                      A-10






<PAGE>

                                  ABBREVIATIONS

         The following abbreviations, when used in the inscription of the face
of this Debenture, shall be construed as though they were written out in full
according to applicable laws or regulations.

          TEN COM = tenants in common

          UNIF GIFT MIN ACT = Uniform Gift to Minors Act

          TEN ENJ = tenants by the entireties CUST = custodian

          JT TEN = joint tenants with right of survivorship and not as
                   tenants in common

Additional abbreviations may also be used though not in the above list.


                                      A-11





<PAGE>


                                CONVERSION NOTICE

TO: [LUCENT TECHNOLOGIES INC.] [conversion agent]


         The undersigned registered owner of this Debenture hereby irrevocably
exercises the option to convert this Debenture, or the portion thereof (which is
equal to the Debenture Principal Amount or an integral multiple thereof) below
designated, into shares of Common Stock of Lucent Technologies Inc. in
accordance with the terms of the Indenture referred to in this Debenture, and
directs that the shares issuable and deliverable upon such conversion, together
with any scrip representing fractional shares and any Debentures representing
any unconverted principal amount hereof, be issued and delivered to the
registered holder hereof unless a different name has been indicated below. If
shares or any portion of this Debenture not converted are to be issued in the
name of a person other than the undersigned, the undersigned will provide the
appropriate information below and pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Debenture.

Dated: _______________

_____________________

_____________________

Signature(s)


                                  NOTICE: The above signatures of the
                                  holder(s) hereof must correspond with the
                                  name as written upon the face of the Debenture
                                  in every particular without alteration or
                                  enlargement or any change whatever.

     Signature(s) must be guaranteed by an "eligible guarantor institution"
     meeting the requirements of Lucent Technologies Inc. or its conversion
     agent, which requirements include membership or participation in the
     Security Transfer Agent Medallion Program ("STAMP") or such other
     "signature guarantee program" as may be determined by the Lucent
     Technologies Inc. or its conversion agent in addition to, or in
     substitution for, STAMP, all in accordance with the Securities
     Exchange Act of 1934, as amended.

     ________________________
     Signature Guarantee




                                      A-12





<PAGE>

         Fill in the registration of shares of Common Stock if to be issued, and
Debentures if to be delivered, other than to and in the name of the registered
holder:

____________________________
(Name)

____________________________
(Street Address)

____________________________
(City, State and Zip Code)

____________________________
Please print name and address

Principal amount to be converted
(if less than all):

____________________________

Social Security or Other Taxpayer
Identification Number:

____________________________




                                      A-13





<PAGE>

                        NOTICE OF ELECTION OF REDEMPTION
                            UPON A CHANGE OF CONTROL

TO: [LUCENT TECHNOLOGIES INC.] [conversion agent]


         The undersigned registered owner of this Debenture hereby irrevocably
acknowledges receipt of a notice from Lucent Technologies Inc. (the "Company")
as to the occurrence of a Change of Control with respect to the Company and
requests and instructs the Company to redeem the entire principal amount of this
Debenture, or the portion thereof (which is equal to the Debenture Principal
Amount or an integral multiple thereof) below designated, in accordance with the
terms of the Indenture referred to in this Debenture at the price of 100% of
such entire principal amount or portion thereof, together with accrued interest
to, but excluding, such repayment date, to the registered holder hereof.

Dated: _____________

___________________

___________________
Signature(s)

                               NOTICE: The above signatures of the
                               holder(s) hereof must correspond with the
                               name as written upon the face of the Debenture
                               in every particular without alteration or
                               enlargement or any change whatever.

                               Principal amount to be repaid (if less than all):

                               ______________________________________


                               ______________________________________
                               Social Security or Other Taxpayer
                               Identification Number




                                      A-14






<PAGE>


                 NOTICE OF ELECTION OF REDEMPTION ON A SPECIFIED
                                REDEMPTION DATE

TO: LUCENT TECHNOLOGIES INC.
    [TRUSTEE]

    The undersigned registered owner of this Debenture hereby irrevocably
acknowledges receipt of notice from Lucent Technologies Inc. (the "Company") as
to a Redemption Date pursuant to Section 3.03(b) of the Indenture with respect
to this Debenture and requests and instructs the Company to redeem the entire
principal amount of this Debenture, or the portion thereof (which is an integral
multiple thereof) below designated, in accordance with the terms of the
Indenture referred to in this Debenture at the price of 100% of such entire
principal amount or portion thereof, together with accrued interest to, but
excluding, such repayment date, to the registered holder hereof.

Certificate No.:

    In the event that the Company elects to pay the Redemption Price in
Common Stock, in whole or in part, but the Redemption Price is ultimately to be
paid entirely in cash, the undersigned hereby elects to:

    [ ] withdraw this Redemption Notice as to __________ or all of the
        Debentures to which it relates; or

    [ ] to receive cash in respect of the entire Redemption Price for all
        of the Debentures to which this Redemption Notice relates.

Dated: _____________

___________________

___________________
Signature(s)

                               NOTICE: The above signatures of the
                               holder(s) hereof must correspond with the
                               name as written upon the face of the Debenture
                               in every particular without
                               alteration or enlargement or
                               any change whatever.

                               Principal amount to be repaid (if less than all):

                               ____________________________________________

                               ____________________________________________
                               Social Security or Other Taxpayer
                               Identification Number



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<PAGE>

                                   ASSIGNMENT

         For value received __________________________________________ hereby
sell(s) assign(s) and transfer(s) unto ______________________________ (Please
insert social security or other Taxpayer Identification Number of assignee) the
within Debenture, and hereby irrevocably constitutes and appoints
____________________________________ attorney to transfer said Debenture on the
books of the Company, with full power of substitution in the premises.

         In connection with any transfer of the Debenture prior to the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision) (other than any transfer
pursuant to a registration statement that has been declared effective under the
Securities Act), the undersigned confirms that such Debenture is being
transferred:

1.           [ ]      To Lucent Technologies Inc.; or

2.           [ ]      So long as this Debenture is eligible for resale pursuant
                      to Rule 144A, to a person whom the undersigned reasonably
                      believes is a qualified institutional buyer to whom notice
                      is given that the resale, pledge or other transfer is
                      being made in reliance on, pursuant to and in compliance
                      with Rule 144A under the Securities Act of 1933, as
                      amended; or

3.           [ ]      Pursuant to an exemption from registration under the
                      Securities Act of 1933, as amended, provided by Rule 144;
                      or

4.           [ ]      Outside the United States in an offshore transaction
                      complying with Regulation S under the Securities Act of
                      1933, as amended; or

5.           [ ]      Pursuant to an effective registration statement under the
                      Securities Act, as amended.

         Unless one of the boxes is checked, the Trustee will refuse to register
any of the Debentures evidenced by this certificate in the name of any person
other than the registered holder thereof; provided, however, that if box (3) or
(4) is checked, the Trustee shall be entitled to require, prior to registering
any such transfer of the Debentures, such legal opinions, certifications and
other information as the Company has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933, such as
the exemption provided by Rule 144 or Regulation S under such Act.

Dated: _________________
                                       _____________________________

                                       _____________________________
                                       Signature(s)




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<PAGE>

                                  NOTICE: The above signatures of the
                                  holder(s) hereof must correspond with the
                                  name as written upon the face of the Debenture
                                  in every particular without alteration or
                                  enlargement or any change whatever.

                               Signature(s) must be guaranteed by an "eligible
                               guarantor institution" meeting the requirements
                               of the Debenture Registrar, which requirements
                               include membership or participation in the
                               Security Transfer Agent Medallion Program
                               ("STAMP") or such other "signature guarantee
                               program" as may be determined by the Debenture
                               Registrar in addition to, or in substitution for,
                               STAMP, all in accordance with the Securities
                               Exchange Act of 1934, as amended.

                               __________________________
                               Signature Guarantee





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