Zero Coupon Convertible Debentures due 2018


                            AMF Bowling, Inc., Issuer



                                    INDENTURE


                            Dated as of May 12, 1998


                          The Bank of New York, Trustee



<PAGE>

                               TABLE OF CONTENTS(1)
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                                                                                                                  PAGE
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               ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE


Section 1.01.     Definitions........................................................................................2
Section 1.02.     Incorporation by Reference of Trust Indenture Act..................................................8
Section 1.03.     Rules of Construction..............................................................................8

                            ARTICLE II THE SECURITIES


Section 2.01.     Form and Dating....................................................................................8
Section 2.02.     Execution and Authentication.......................................................................9
Section 2.03.     Registrar, Paying Agent and Conversion Agent.......................................................9
Section 2.04.     Paying Agent to Hold Money and Securities in Trust................................................10
Section 2.05.     Securityholder Lists..............................................................................10
Section 2.06.     Exchange and Registration of Transfer of Securities; Restrictions on Transfers; Depositary........10
Section 2.07.     Replacement Securities............................................................................13
Section 2.08.     Outstanding Securities; Determinations of Holders' Action.........................................14
Section 2.09.     Temporary Securities..............................................................................15
Section 2.10.     Cancellation......................................................................................15
Section 2.11.     Persons Deemed Owners.............................................................................15
Section 2.12.     CUSIP Numbers.....................................................................................15

                      ARTICLE III REDEMPTION AND PURCHASES


Section 3.01.     Right to Redeem; Notices to Trustee...............................................................16
Section 3.02.     Selection of Securities to be Redeemed............................................................16
Section 3.03.     Notice of Redemption..............................................................................16
Section 3.04.     Effect of Notice of Redemption....................................................................17
Section 3.05.     Deposit of Redemption Price.......................................................................17
Section 3.06.     Securities Redeemed in Part.......................................................................17
Section 3.07.     Conversion Arrangement on Call for Redemption.....................................................18
Section 3.08.     Purchase of Securities at Option of the Holder....................................................18
Section 3.09.     Redemption at the Option of the Holder upon a Change of Control...................................23
Section 3.10.     Effect of Purchase Notice or Repurchase Notice....................................................27
Section 3.11.     Deposit of Purchase Price or Change of Control Redemption Price...................................28
Section 3.12.     Securities Purchased in Part......................................................................28
Section 3.13.     Covenant to Comply with Securities Laws upon Purchase of Securities...............................28
Section 3.14.     Repayment to the Company..........................................................................28
Section 3.15.     No Purchase in Event of Default...................................................................28

                               ARTICLE IV COVENANTS


Section 4.01.     Payment of Securities.............................................................................29
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(1) This Table of Contents shall not, for any purpose, be deemed to be part of
    the Indenture.

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Section 4.02.     Financial Information; SEC Reports................................................................29
Section 4.03.     Compliance Certificate............................................................................30
Section 4.04.     Further Instruments and Acts......................................................................30
Section 4.05.     Maintenance of Office or Agency...................................................................30
Section 4.06.     Existence.........................................................................................31
Section 4.07.     Maintenance of Properties.........................................................................31
Section 4.08.     Payment of Taxes and Other Claims.................................................................31
Section 4.09.     Calculation of Original Issue Discount............................................................31

                         ARTICLE V SUCCESSOR CORPORATION


Section 5.01.     When the Company May Merge or Transfer Assets.....................................................32

                         ARTICLE VI DEFAULTS AND REMEDIES


Section 6.01.     Events of Default.................................................................................32
Section 6.02.     Acceleration......................................................................................33
Section 6.03.     Other Remedies....................................................................................34
Section 6.04.     Waiver of Past Defaults...........................................................................34
Section 6.05.     Control by Majority...............................................................................34
Section 6.06.     Limitation on Suits...............................................................................34
Section 6.07.     Rights of Holders to Receive Payment..............................................................35
Section 6.08.     Collection Suit by Trustee........................................................................35
Section 6.09.     Trustee May File Proofs of Claim..................................................................35
Section 6.10.     Priorities........................................................................................36
Section 6.11.     Undertaking for Costs.............................................................................36
Section 6.12.     Waiver of Stay, Extension or Usury Laws...........................................................36

                               ARTICLE VII TRUSTEE


Section 7.01.     Duties of Trustee.................................................................................36
Section 7.02.     Rights of Trustee.................................................................................37
Section 7.03.     Individual Rights of Trustee......................................................................38
Section 7.04.     Trustee's Disclaimer..............................................................................38
Section 7.05.     Notice of Defaults................................................................................38
Section 7.06.     Reports by Trustee to Holders.....................................................................38
Section 7.07.     Compensation and Indemnity........................................................................38
Section 7.08.     Replacement of Trustee............................................................................39
Section 7.09.     Successor Trustee by Merger.......................................................................40
Section 7.10.     Eligibility; Disqualification.....................................................................40
Section 7.11.     Preferential Collection of Claims Against Company.................................................40
Section 7.12.     Trustee's Application for Instructions from the Company...........................................40

                       ARTICLE VIII DISCHARGE OF INDENTURE


Section 8.01.     Discharge of Liability on Securities..............................................................40
Section 8.02.     Repayment to the Company..........................................................................40
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<TABLE>
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                              ARTICLE IX AMENDMENTS

Section 9.01.     Without Consent of Holders........................................................................41
Section 9.02.     With Consent of Holders...........................................................................41
Section 9.03.     Compliance with Trust Indenture Act...............................................................42
Section 9.04.     Revocation and Effect of Consents, Waivers and Actions............................................42
Section 9.05.     Notation on or Exchange of Securities.............................................................42
Section 9.06.     Trustee to Sign Supplemental Indentures...........................................................42
Section 9.07.     Effect of Supplemental Indentures.................................................................42

                               ARTICLE X CONVERSION


Section 10.01.    Conversion Privilege..............................................................................43
Section 10.02.    Conversion Procedure..............................................................................43
Section 10.03.    Fractional Shares.................................................................................44
Section 10.04.    Taxes on Conversion...............................................................................44
Section 10.05.    Company to Provide Stock..........................................................................44
Section 10.06.    Adjustment of Conversion Rate.....................................................................44
Section 10.07.    When Adjustment May Be Deferred...................................................................47
Section 10.08.    When No Adjustment Required.......................................................................47
Section 10.09.    Notice of Adjustment..............................................................................47
Section 10.10.    Voluntary Increase................................................................................47
Section 10.11.    Notice of Certain Transactions....................................................................48
Section 10.12.    Effect of Reclassification, Consolidation, Merger or Sale.........................................48
Section 10.13.    Company Determination Final.......................................................................48
Section 10.14.    Trustee's Adjustment Disclaimer...................................................................48
Section 10.15.    Simultaneous Adjustments..........................................................................49
Section 10.16.    Successive Adjustments............................................................................49
Section 10.17.    General Considerations............................................................................49

                             ARTICLE XI MISCELLANEOUS


Section 11.01.    Trust Indenture Act...............................................................................49
Section 11.02.    Notices...........................................................................................49
Section 11.03.    Communication by Holders with Other Holders.......................................................50
Section 11.04.    Certificate and Opinion as to Conditions Precedent................................................51
Section 11.05.    Statements Required in Certificate or Opinion.....................................................51
Section 11.06.    Separability Clause...............................................................................51
Section 11.07.    Rules by Trustee, Paying Agent, Conversion Agent and Registrar....................................51
Section 11.08.    Legal Holidays....................................................................................51
Section 11.09.    Governing Law.....................................................................................51
Section 11.10.    No Recourse Against Others........................................................................51
Section 11.11.    Successors........................................................................................52
Section 11.12.    Multiple Originals................................................................................52
Section 11.13.    Liquidated Damages................................................................................52


EXHIBIT A--Form of Security
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                                     -iii-

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                             CROSS REFERENCE TABLE*
<TABLE>
<CAPTION>
TIA                                                                                                          Indenture
Section                                                                                                       Section
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<S>    <C>
310(a)(1).........................................................................................................7.10
     (a)(2).......................................................................................................7.10
     (a)(3).....................................................................................................N.A.**
     (a)(4).......................................................................................................N.A.
     (b)....................................................................................................7.08; 7.10
     (c)..........................................................................................................N.A.
3.11(a)...........................................................................................................7.11
     (b)..........................................................................................................7.11
     (c)..........................................................................................................N.A.
3.12(a)...........................................................................................................2.05
     (b).........................................................................................................11.03
     (c).........................................................................................................11.03
     (d)..........................................................................................................7.06
3.13(a)...........................................................................................................7.06
     (b)(1).......................................................................................................N.A.
     (b)(2).......................................................................................................7.06
     (c).........................................................................................................11.02
     (d)..........................................................................................................7.06
3.14(a)....................................................................................................4.02; 11.02
     (b)..........................................................................................................N.A.
     (c)(1)......................................................................................................11.04
     (c)(2)......................................................................................................11.04
     (c)(3).......................................................................................................N.A.
     (d)..........................................................................................................N.A.
     (e).........................................................................................................11.05
3.15(a)...........................................................................................................7.01
     (b)...................................................................................................7.05; 11.02
     (c)..........................................................................................................7.01
     (d)..........................................................................................................7.01
     (e)..........................................................................................................6.11
3.16(a) (last sentence)...........................................................................................2.08
     (a)(1)(A)....................................................................................................6.05
     (a)(1)(B)....................................................................................................6.04
     (a)(2).......................................................................................................N.A.
     (b)..........................................................................................................6.07
3.17(a)(1)........................................................................................................6.08
     (a)(2).......................................................................................................6.09
     (b)..........................................................................................................2.04
3.18(a)..........................................................................................................11.01
</TABLE>

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

**    Note:    N.A. means Not Applicable


<PAGE>

      INDENTURE, dated as of May 12, 1998, between AMF Bowling, Inc., a Delaware
corporation (the "Company"), and The Bank of New York, a New York banking
corporation (the "Trustee").

      Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders of the Company's Zero Coupon
Convertible Debentures due 2018 (the "Securities"):


                                    ARTICLE I

                   DEFINITIONS AND INCORPORATION BY REFERENCE

      Section I.1. Definitions. Unless the context otherwise requires, the
following terms are used in this Indenture with the meanings specified or
referred to below:

      "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" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with") as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise; provided
that beneficial ownership of 10% or more of the voting securities of a Person
shall be deemed to be "control".

      "Applicable Conversion Price" means, as of any date of determination, the
Applicable Principal Amount per $1,000 Principal Amount of Securities as of such
date of determination divided by the Conversion Rate in effect as of such date
of determination.

      "Applicable Principal Amount" means, as of any date of determination, with
respect to each $1,000 Principal Amount of Securities, the Issue Price of such
Securities plus accrued Original Issue Discount with respect to such Securities
through such date of determination.

      "Bankruptcy Law" has the meaning assigned thereto in Section 6.01 hereof.

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

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

      "Business Day" means each day of the year on which banking institutions
are not required or authorized by law or executive order to close in The City of
New York or the city in which the Corporate Trust Office is located.

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

      "Cash" has the meaning assigned thereto in Section 3.08(b) hereof.

      "Cash Distribution" means the distribution by the Company to all holders
of its Common Stock of Cash, other than any Cash that is distributed upon a
merger or consolidation to which Section 10.12 applies or as part of a
distribution referred to in paragraph (d) of Section 10.06.

      A "Change of Control" shall be deemed to have occurred at the time, after
the Issue Date, of:

<PAGE>


        (A) the acquisition by any Person, other than the Permitted Holders and
      their Related Parties, of beneficial ownership, directly or indirectly,
      through a purchase, merger or other acquisition transaction or series of
      transactions, of shares of capital stock of the Company entitling such
      Person to exercise 50% or more of the total voting power of all shares of
      capital stock of the Company entitled to vote generally in the elections
      of directors other than any such acquisition by the Company, any
      Subsidiary of the Company or any employee benefit plan of the Company, and
      such Person beneficially owns more of such voting stock than the Permitted
      Holders and their Related Parties; or

        (B) any consolidation of the Company with, or merger of the Company
      into, any other Person other than the Permitted Holders and their Related
      Parties, any merger of another Person, other than the Permitted Holders
      and their Related Parties, into the Company, or any sale or transfer of
      all or substantially all of the assets of the Company to another Person
      other than the Permitted Holders and their Related Parties (other than (a)
      any such transaction (x) which does not result in any reclassification,
      conversion, exchange or cancellation of outstanding shares of Common Stock
      and (y) pursuant to which holders of Common Stock immediately prior to
      such transaction have the entitlement to exercise, directly or indirectly,
      50% or more of the total voting power of all shares of capital stock
      entitled to vote generally in the election of directors of the continuing
      or surviving Person immediately after such transaction and (b) any merger
      which is effected solely to change the jurisdiction of incorporation of
      the Company and results in a reclassification, conversion or exchange of
      outstanding shares of Common Stock into solely shares of common stock);

provided, however, that a Change of Control shall not be deemed to have occurred
if either (x) the closing price per share of the Common Stock for any five
Trading Days within the period of 10 consecutive Trading Days ending immediately
after the later of the date of the Change of Control or the date of the public
announcement of the Change of Control (in the case of a Change of Control under
clause (i) above) or ending immediately prior to the date of the Change of
Control (in the case of a Change of Control under clause (ii) above) shall equal
or exceed 105% of the Applicable Conversion Price in effect on each such Trading
Day or (y) all of the consideration (excluding cash payments for fractional
shares) in the transaction or transactions constituting the Change of Control
consists of common stock traded on a national securities exchange or quoted on
the Nasdaq National Market and as a result of such transaction or transactions
the Securities become convertible solely into such common stock. For purposes of
this definition, the term "beneficial owner" shall be determined in accordance
with Rule 13d-3, as in effect on the date of the original execution of this
Indenture, promulgated by the SEC pursuant to the Exchange Act.

      "Change of Control Company Notice" has the meaning assigned thereto in
Section 3.09(b)(i) hereof.

      "Change of Control Redemption Price" has the meaning assigned thereto in
Section 3.09(a) hereof.

      "Common Stock" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject to the provisions
of Section 10.12, however, shares of Common Stock issuable upon conversion,
redemption or repurchase of the Securities shall include only shares of Common
Stock, par value of $0.01 per share, of the Company as it exists on the date of
this Indenture or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and which are
not subject to redemption by the Company; provided that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.

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

      "Company Notice" has the meaning assigned thereto in Section 3.08(e)
hereof.

                                      -2-
<PAGE>

      "Company Notice Date" has the meaning assigned thereto in Section 3.08(c)
hereof.

      "Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board of Directors, any
Vice Chairman of the Board of Directors, its Chief Executive Officer, its
President, its Chief Operating Officer, its Chief Financial Officer or any Vice
President, and by its Treasurer, any Assistant Treasurer, its Controller, its
Secretary or any Assistant Secretary, and delivered to the Trustee.

      "Conversion Agent" has the meaning assigned thereto in Section 2.03
hereof.

      "Conversion Date" has the meaning assigned thereto in Section 10.02
hereof.

      "Conversion Rate" has the meaning assigned thereto in Section 10.01
hereof.

      "Corporate Trust Office" or other similar term, shall mean the principal
office of the Trustee at which at any particular time its corporate trust
business shall be principally administered, which office is, at the date as of
which this Indenture is dated, located at 101 Barclay Street, Floor 21 West, New
York, New York 10286, Attention: Corporate Trust Administration.

      "Current Market Price" means the Sale Price per share of Common Stock on
the Trading Day next succeeding the date on which a payment in respect of such
Common Stock is made.

      "Custodian" shall mean The Bank of New York, as custodian for the
Depositary with respect to the Securities in global form, or any successor
entity thereto.

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

      "Depositary" means, with respect to the Securities issuable or issued in
whole or in part in global form, the Person specified in Section 2.06 as the
Depositary with respect to the Securities, until a successor Person replaces it
pursuant to the applicable provisions of this Indenture, and thereafter,
"Depositary" shall mean or include such successor. The foregoing sentence shall
likewise apply to any subsequent such successor or successors.

      "Determination Date" means, in the case of a dividend or other
distribution, including the issuance of rights, options or warrants, to
shareholders, the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution and, in the case of a tender offer,
the last time that tenders could have been made pursuant to such tender offer.

      "Event of Default" has the meaning assigned thereto in Section 6.01
hereof.

      "Exchange Act" means the United States Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.

      "Excess Purchase Payment" means the excess, if any, of (i) the amount of
cash plus the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and set forth in a Board Resolution) of any
non-cash consideration required to be paid with respect to one share of Common
Stock acquired or to be acquired in a tender offer made by the Company or any of
its Subsidiaries for all or any portion of the Common Stock over (ii) the
Current Market Price.

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

                                      -3-

<PAGE>

      "Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.

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

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

      "Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing any Hedging Obligations, except
any such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, as well as all indebtedness of others
secured by a Lien on any asset of such Person (whether or not such indebtedness
is assumed by such Person) and, to the extent not otherwise included, the
Guarantee by such Person of any Indebtedness of any other Person.

      "Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof, including, for all purposes of this
instrument and any such supplemental indenture, the provisions of the TIA that
are deemed to be a part of and govern this instrument and any such supplemental
indenture, respectively.

      "Initial Purchasers" means Goldman, Sachs & Co., Cowen & Company, Morgan
Stanley & Co. Incorporated and Schroder & Co. Inc.

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

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

      "Legal Holiday" has the meaning assigned thereto in Section 11.08 hereof.

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

      "Liquidated Damages" shall have the meaning specified in the Registration
Rights Agreement.

      "Market Capitalization" means, with respect to a specified date, the
product of (i) the current market price per share (determined as provided in
paragraph (h) of Section 10.06) of the Common Stock as of such date times (ii)
the number of shares of Common Stock outstanding on such date.

      "Market Price" has the meaning assigned thereto in Section 3.08(d) hereof.

      "Nasdaq National Market" means the electronic inter-dealer quotation
system operated by The Nasdaq Stock Market, Inc., a subsidiary of the National
Association of Securities Dealers, Inc.

      "Notice of Default" has the meaning assigned thereto in Section 6.01
hereof.

                                      -4-

<PAGE>

      "NYSE" means The New York Stock Exchange, Inc.

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

      "Officers' Certificate" means a written certificate containing the
information specified in Sections 11.04 and 11.05, signed in the name of the
Company by its Chairman of the Board, any Vice Chairman, its Chief Executive
Officer, its President, its Chief Operating Officer, its Chief Financial Officer
or any Vice President, and by its Treasurer, any Assistant Treasurer, its
Controller, its Secretary or any Assistant Secretary, and delivered to the
Trustee.

      "Opinion of Counsel" means a written opinion containing the information
specified in Sections 11.04 and 11.05, from legal counsel who may be counsel to,
or any officer or employee of, the Company.

      "Original Issue Discount" of any Security means the difference between the
Issue Price and the Principal Amount of the Security as set forth on the face of
the Security. For purposes of this Indenture and the Securities, accrual of
Original Issue Discount shall be calculated on the basis of a 360-day year of
twelve 30-day months, beginning on May 12, 1998.

      "outstanding", when used with respect to Securities, shall be determined
in accordance with and as defined in Section 2.08 hereof.

      "Over-allotment Option" has the meaning assigned thereto in Section 2.02
hereof.

      "Paying Agent" has the meaning assigned thereto in Section 2.03 hereof.

      "Permitted Holders" means Goldman, Sachs & Co. and any of its Affiliates.

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

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

      "Principal Amount" of a Security means the principal amount at maturity
set forth under the caption "Principal Amount" on the face of the Security.

      "Purchase Agreement" means the Purchase Agreement, dated May 6, 1998,
relating to the Securities, among the Company, the Designated Subsidiaries named
therein and the Initial Purchasers.

      "Purchase Date" has the meaning assigned thereto in Section 3.08(a)
hereof.

      "Purchase Notice" has the meaning assigned thereto in Section 3.08(a)
hereof.

      "Purchase Price" has the meaning assigned thereto in Section 3.08(a)
hereof.

      "Redemption Date" means a date specified for redemption of the Securities
(other than redemption upon a Change of Control at the option of the
Securityholder) in accordance with the terms of the Securities and Section 3.01
of this Indenture.

      "Redemption Price" has the meaning assigned thereto in paragraph 5 of the
Securities.

      "Registrar" has the meaning assigned thereto in Section 2.03 hereof.

                                      -5-

<PAGE>

      "Registration Rights Agreement" means that certain Registration Rights
Agreement, dated as of May 12, 1998, among the Company, the Designated
Subsidiaries named therein and the Initial Purchasers, as the same may be
amended from time to time.

      "Related Parties" means any Person controlled by the Permitted Holders,
including any partnership of which any of the Permitted Holders or their
Affiliates is a general partner.

      "Repurchase Date" has the meaning assigned thereto in Section 3.09(a)
hereof.

      "Repurchase Notice" has the meaning assigned thereto in Section
3.09(b)(ii) hereof.

      "Restricted Securities" has the meaning assigned thereto in Section
2.06(d) hereof.

      "Rule 144A" means Rule 144A as promulgated under the Securities Act, or
any successor rule.

      "Rule 144(k)" means Rule 144(k) as promulgated under the Securities Act,
or any successor rule.

      "Sale Price" has the meaning assigned thereto in Section 3.08(d) hereof.

      "SEC" means the United States 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 instrument such commission is not existing and
performing the duties now assigned to it under the TIA, then the body performing
such duties at such time.

      "Securities" shall have the meaning set forth in the second paragraph of
this Indenture.

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

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

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

      "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 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).

      "TIA" means the Trust Indenture Act of 1939, as amended, as in effect on
the date of this Indenture, except as provided in Section 9.03.

      "Trading Day" means, in respect of any securities exchange or securities
market, each Monday, Tuesday, Wednesday, Thursday and Friday, other than any day
on which securities are not traded on the applicable securities exchange or in
the applicable securities market.

      "Trigger Event" has the meaning assigned thereto in Section 10.06(g)
hereof.

      "Trust Officer" means when used with respect to the Trustee, any officer
within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.

                                      -6-

<PAGE>

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

      Section I.2. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:

      "Commission" means the SEC.

      "Indenture Securities" means the Securities.

      "Indenture Security Holder" means a Securityholder.

      "Indenture to be Qualified" means this Indenture.

      "Indenture Trustee" or "Institutional Trustee" means the Trustee.

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

      Section I.3. Rules of Construction. Unless the context otherwise requires:

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

      (b)  "or" is not exclusive;

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

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


                                   ARTICLE II

                                 THE SECURITIES

        Section II.1. Form and Dating. The Securities and the Trustee's
certificate of authentication for the Securities shall be substantially in the
form of Exhibit A, which is a part of this Indenture. The Securities may have
any notations, legends or endorsements required by law, stock exchange rule or
usage (provided that any such notation, legend or endorsement required by usage
is in a form acceptable to the Company). The Company shall provide any such
notations, legends or endorsements to the Trustee in writing. Each Security
shall be dated the date of its authentication. The Securities are issuable only
in registered form without coupons in denominations of $1,000 or any integral
multiple thereof.

      Any Security in global form shall represent such of the outstanding
Securities as shall be specified therein and shall provide that it shall
represent the aggregate amount of outstanding Securities from time to time
endorsed thereon and that the aggregate amount of outstanding Securities
represented thereby may from time to time be reduced to reflect transfers and
conversions, redemptions or repurchases permitted hereby. Any endorsement of a
Security in global form to reflect the amount of any decrease in the amount of
outstanding Securities 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 Security in accordance with this Indenture. Payment
of the Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, Redemption Price, Purchase Price, Change of Control
Redemption Price or interest, if any, on any Security in global form shall be
made to the Holder of such Security.

                                      -7-

<PAGE>

      Section II.2. Execution and Authentication. The Securities shall be
executed on behalf of the Company by its Chairman of the Board, its President,
its Chief Executive Officer, its Chief Financial Officer or any Vice President
and attested by its Treasurer, any Assistant Treasurer, its Controller, its
Secretary or any Assistant Secretary. The signature of any of these officers on
the Securities may be manual or facsimile.

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

      No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.

      The Trustee shall authenticate and deliver Securities for original issue
in an aggregate Principal Amount of $900,000,000 upon a Company Order without
any further action by the Company; provided, however, that if the Company sells
any Securities pursuant to the Initial Purchasers' overallotment option (the
"Over-allotment Option") granted pursuant to the Purchase Agreement, then the
Trustee shall also authenticate and deliver additional Securities for original
issue in an aggregate Principal Amount of up to $225,000,000 pursuant to the
Over-Allotment Option upon a Company Order without any further action by the
Company. The aggregate Principal Amount of Securities outstanding at any time
may not exceed the amount set forth in the foregoing sentence, except as
provided in Section 2.07.

      Section II.3. Registrar, Paying Agent and Conversion Agent. The Company
shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange (the "Registrar"), an office or agency
where Securities may be presented for purchase or payment (the "Paying Agent")
and an office or agency where Securities may be presented for conversion into
Common Stock (the "Conversion Agent"). The Registrar shall keep a register of
the Securities and of their transfer , conversion, redemption, repurchase and
exchange. The Company may have one or more co-registrars, one or more additional
paying agents and one or more additional conversion agents. The term Paying
Agent includes any additional paying agent. The term Conversion Agent includes
any additional conversion agent, including any named pursuant to Section 4.05.

      The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (if not the Trustee or
an Affiliate of the Trustee). The agreement shall implement the provisions of
this Indenture that relate to such agent and the Securities. The Company shall
promptly notify the Trustee of the name and address of any such agent. If the
Company fails to maintain a Registrar, Paying Agent or Conversion Agent, the
Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.07. The Company or an Affiliate of the Company
may act as Paying Agent, Registrar, Conversion Agent or co-registrar.

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

      Section II.4. Paying Agent to Hold Money and Securities in Trust. Except
as otherwise provided herein, prior to or on each due date of payments in
respect of any Security, the Company shall deposit with the Paying Agent a sum
of money or shares of Common Stock, if payment in securities is permitted,
sufficient to make such payments when such payments are due. The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that the
Paying Agent shall hold in trust for the benefit of Holders or the Trustee all
money and shares of Common Stock held by the Paying Agent for the making of
payments in respect of the Securities and shall notify the Trustee of any
default by the Company in making any such payment. At any time during the
continuance of any such default, the Paying Agent shall, upon the written
request of the Trustee, forthwith pay to the Trustee all money and shares of
Common Stock so held in trust. If the Company or an Affiliate of the Company
acts as Paying Agent, it shall segregate the money and shares of Common Stock
held by it as Paying Agent and hold it as a separate trust fund. The Company at
any time may require a Paying Agent to pay or deliver all money and shares of
Common Stock held by it to the Trustee and to account for any funds and shares
of Common Stock disbursed by it. Upon doing so, the Paying Agent shall have no
further liability for the money or shares of Common Stock.

                                      -8-

<PAGE>

      Section II.5. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Holders. If the Trustee is not the Registrar, the
Company shall cause to be furnished to the Trustee at least semiannually on May
12 and November 12 a listing of Holders dated within 10 days of the date on
which the list is furnished and at such other times as the Trustee may request
in writing a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Holders.

      Section II.6.   Exchange and Registration of Transfer of Securities;
Restrictions on Transfers; Depositary

      (a) Upon surrender for registration of transfer of any Security at any
office or agency of the Company designated as Registrar or co-registrar pursuant
to Section 2.03 and satisfaction of the requirements for such transfer set forth
in this Section 2.06, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denominations and of a
like aggregate Principal Amount and bearing such restrictive legends as may be
required by this Indenture.

      Securities may be exchanged for a like aggregate Principal Amount of
Securities of other authorized denominations. Securities to be exchanged shall
be surrendered at the office or agency of any Registrar or co-registrar and the
Company shall execute, and the Trustee shall authenticate and deliver in
exchange therefor, the Security or Securities which the Securityholder making
the exchange shall be entitled to receive, bearing registration numbers not
contemporaneously outstanding.

      All Securities presented for registration of transfer or for exchange into
like Securities, for conversion, redemption or repurchase or for payment shall
(if so required by the Company, the Trustee, the Registrar or any co-registrar)
be duly endorsed by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to the Company and the Trustee, duly executed by
the Holder or such Holder's attorney duly authorized in writing.

      No service charge shall be charged to the Securityholder for any exchange
for like Securities or registration of transfer of Securities, but the Company,
as a condition to any exchange or transfer, may require payment of a sum
sufficient to cover any tax, assessments or other governmental charges that may
be imposed in connection therewith.

      None of the Company, the Trustee, the Registrar or any co-registrar shall
be required to exchange for like Securities or register a transfer of (i) any
Securities for a period of 15 days next preceding any selection of Securities to
be redeemed, or (ii) any Securities or portions thereof selected or called for
redemption, or (iii) any Securities or portion thereof surrendered for
conversion into Common Stock, or (iv) any Securities or portion thereof
surrendered for repurchase or redemption (and not withdrawn) pursuant to Section
3.08 or 3.09, respectively.

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

      (b) So long as the Securities are eligible for book-entry settlement with
the Depositary (as defined below), or unless otherwise required by law, all of
the Securities shall be represented by one or more Securities in global form
registered in the name of the Depositary or the nominee of the Depositary,
except as otherwise specified below. The transfer and exchange of beneficial
interests in such Security in global form shall be effected through the
Depositary in accordance with this Indenture and the procedures of the
Depositary therefor.

      Except as provided below, beneficial owners of a Security in global form
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 and will not be considered Holders of such Securities in global
form.

                                      -9-

<PAGE>

      (c) Any Security in global form 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 the National Association of Securities Dealers, Inc. in order for
the Securities to be tradeable on the Portal Market or as may be required for
the Securities 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 upon which the Securities 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 Securities are subject.

      (d) Every Security that bears or is required under this Section 2.06(d) to
bear the legend set forth in this Section 2.06(d) (together with any Common
Stock issued upon conversion, redemption or repurchase of the Securities and
required to bear the legend required under Section 2.06(e), collectively, the
"Restricted Securities") shall be subject to the restrictions on transfer set
forth in this Section 2.06(d) (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 each such Restricted Security, by such
Securityholder's acceptance thereof, agrees to be bound by all such restrictions
on transfer. As used in Sections 2.06(d) and 2.06(e), the term "transfer"
encompasses any sale, pledge, transfer or other disposition whatsoever of any
Restricted Security.

      Any certificate evidencing such Security (and all securities issued in
exchange therefor or substitution thereof, other than Common Stock, if any,
issued upon conversion, redemption or repurchase thereof, which shall bear the
legend required under Section 2.06(e), if applicable) shall bear a legend in
substantially the following form, unless such Security 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
Security is fully transferable by a non-affiliate pursuant to Rule 144(k) under
the Securities Act (or any successor provision), or unless otherwise agreed by
the Company in writing, with written notice thereof to the Trustee:

      THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION,
REDEMPTION OR REPURCHASE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.

      THIS SECURITY AND ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION,
REDEMPTION OR REPURCHASE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER ACQUIRING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (II) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 904 OF REGULATION
S UNDER THE SECURITIES ACT, (III) TO AN INSTITUTION THAT IS AN ACCREDITED
INVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) or (7) UNDER THE
SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, (IV) PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (V) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND IN EACH OF
CASES (I) THROUGH (V) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES AND OTHER JURISDICTIONS OF THE UNITED STATES. NO REPRESENTATION CAN BE
MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALES OF
THE SECURITIES OR ANY SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION,
REDEMPTION OR REPURCHASE THEREOF.

                                      -10-

<PAGE>

      THIS SECURITY, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION,
REDEMPTION OR REPURCHASE AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER
TRANSFERS OF THIS SECURITY AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN
APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES
RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE
HOLDER OF THIS SECURITY AND ANY SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF
THIS SECURITY OR ANY SUCH SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR
SUPPLEMENT.

      Any Security (or security issued in exchange or substitution therefor) 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 herein have been satisfied may, upon surrender of such Securities for
exchange to the Registrar in accordance with the provisions of this Section
2.06, be exchanged for a new Security or Securities, of like tenor and aggregate
Principal Amount, which shall not bear the restrictive legend required by this
Section 2.06(d).

      Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in this Section 2.06(d)), a Security in global form 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 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 Securities in global form. Initially, the
Securities in global form 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 Security in global form notifies the
Company that it is unwilling, unable or ineligible to continue as Depositary for
such Security, the Company may appoint a successor Depositary with respect to
such Security. If (i) a successor Depositary for the Security is not appointed
by the Company within 90 days after the Company receives such notice or (ii) the
Company, at any time in its sole discretion, determines not to have any
Securities in global form, the Company will execute, and the Trustee, upon
receipt of an Officers' Certificate for authentication and delivery of
Securities, will authenticate and deliver, Securities in certificated form, in
an aggregate Principal Amount equal to the Principal Amount of the Securities in
global form, in exchange for such Securities in global form.

      Securities in certificated form issued in exchange for a Security in
global form pursuant to this Section 2.06 shall be registered in such names and
in such authorized denominations as the Depositary shall instruct the Trustee.
Upon execution and authentication, the Trustee shall deliver such Securities in
certificated form to the Persons in whose names such Securities in certificated
form are so registered.

      At such time as all interests in a Security in global form have been
converted, redeemed, repurchased or canceled for Securities in certificated
form, or transferred to a transferee who receives Securities in certificated
form, such Security in global form shall be, upon receipt thereof, canceled by
the Trustee in accordance with standing procedures and instructions existing
between the Custodian and Depositary. At any time prior to such cancellation, if
any interest in a Security in global form is converted, redeemed or repurchased
by the Company pursuant to Article III or canceled, the Principal Amount of such
Security in global form shall, in accordance with the standing procedures and
instructions existing between the Custodian and the Depositary, be reduced and
an endorsement shall be made on such Security in global form, by the Trustee or
the Custodian, at the direction of the Trustee, to reflect such reduction.

      (e) Any stock certificate representing Common Stock issued upon
conversion, redemption or repurchase of a Security shall bear a legend in
substantially the same form as set forth in the preceding paragraph (d), 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), such Common Stock has been issued upon
conversion, redemption or repurchase of Securities that have been transferred
pursuant to a registration statement that has been declared effective under the
Securities Act or such Common Stock is fully transferable by a non-affiliate
pursuant to Rule 144(k) under the Securities Act (or any successor provision),
or unless otherwise agreed by the Company in writing with written notice thereof
to the transfer agent for the Common Stock.

                                      -11-

<PAGE>

      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 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 2.06(e).

      Section II.7. Replacement Securities. If (a) any mutilated Security is
surrendered to the Trustee, or (b) the Company and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Security, and
there is delivered to the Company and the Trustee such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and, upon its written request,
the Trustee shall authenticate and deliver, in exchange for any such mutilated
Security or in lieu of any such destroyed, lost or stolen Security, a new
Security of like tenor and Principal Amount, bearing a registration number not
contemporaneously outstanding.

      In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be converted, redeemed or
repurchased by the Company pursuant to Article 3 hereof, the Company in its
discretion may, instead of issuing a new Security, pay, convert, redeem or
repurchase such Security, as the case may be.

      Upon the issuance of any new Securities under this Section 2.07, the
Company may, as a condition to such issuance, require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith.

      Every new Security issued pursuant to this Section 2.07 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.

      The provisions of this Section 2.07 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.

      Section II.8. Outstanding Securities; Determinations of Holders' Action.
Securities outstanding at any time are all the Securities authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation
and those described in this Section 2.08 as not outstanding. A Security does not
cease to be outstanding because the Company or an Affiliate thereof holds the
Security; provided, however, that in determining whether the Holders of the
requisite Principal Amount of Securities have given or concurred in any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Securities owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which a
Trust Officer of the Trustee actually knows to be so owned shall be so
disregarded. Subject to the foregoing, only Securities outstanding at the time
of such determination shall be considered in any such determination (including,
without limitation, determinations pursuant to Articles VI and IX).

      If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.

      If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Purchase Date or a
Repurchase Date, or on Stated Maturity, money or shares of Common Stock, if
permitted hereunder, sufficient to pay Securities payable on that date, then on
and after that date such Securities shall cease to be outstanding and Original
Issue Discount and interest, if any, on such Securities shall cease to accrue,
whether or not book-entry transfer of such Securities is made or such Securities
are delivered to the Paying Agent, and the Holders thereof shall have no other
rights as such (other than the right to receive such payment); provided that if
such Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made.

                                      -12-

<PAGE>
      If a Security is converted in accordance with Article X, then from and
after such conversion such Security shall cease to be outstanding and Original
Issue Discount and interest, if any, shall cease to accrue on such Security.

      Section II.9. Temporary Securities. Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities.

      If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.03,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities the Company shall execute, and the Trustee shall
authenticate and deliver in exchange therefor, a like Principal Amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.

     Section II.10. Cancellation. All Securities surrendered for payment,
purchase by the Company pursuant to Article 3, conversion, redemption or
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly canceled by
it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly canceled by the Trustee. The Company may not issue new
Securities to replace Securities it has repurchased pursuant to Article III
hereof or delivered to the Trustee for cancellation or that any Holder has
converted pursuant to Article X. No Securities shall be authenticated in lieu of
or in exchange for any Securities canceled as provided in this Section 2.10,
except as expressly permitted by this Indenture. All canceled Securities held by
the Trustee shall be returned to the Company.

      Section II.11. Persons Deemed Owners. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
the Principal Amount, the Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, the Redemption Price, the Purchase Price, the Change
of Control Redemption Price and interest, if any, in respect thereof, for the
purpose of conversion and for all other purposes whatsoever, whether or not such
Security be overdue, and none of the Company, the Trustee or any agent of the
Company or the Trustee shall be affected by notice to the contrary.

      Section II.12. CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" numbers.


                                   ARTICLE III

                            REDEMPTION AND PURCHASES

                                      -13-

<PAGE>

      Section III.1. Right to Redeem; Notices to Trustee. The Company, at its
option, may redeem the Securities in accordance with the provisions of
paragraphs 5 and 7 of the Securities. If the Company elects to redeem Securities
pursuant to paragraphs 5 and 7 of the Securities, it shall notify the Trustee in
writing of the Redemption Date, the Principal Amount of Securities to be
redeemed and the Redemption Price.

      The Company shall give the notice to the Trustee provided for in this
Section 3.01 (a) in the case of any redemption of fewer than all of the
Securities, at least 40 days before the Redemption Date and (b) in the case of a
redemption of all of the Securities, no later than the date that the Company is
required to give notice to the Holders pursuant to Section 3.03, in each case
unless a shorter notice shall be satisfactory to the Trustee.

      Section III.2. Selection of Securities to be Redeemed. If less than all
the Securities held in definitive form are to be redeemed, the Trustee shall
select the definitive Securities to be redeemed pro rata or by lot or by a
method the Trustee considers fair and appropriate (as long as such method is not
prohibited by the rules of any stock exchange on which the Securities are then
listed). The Trustee shall make the selection at least 35 days, but not more
than 60 days, before the Redemption Date from outstanding definitive Securities
not previously called for redemption. The Trustee may select for redemption
portions of the Principal Amount of Securities that have denominations larger
than $1,000. Securities and portions of them the Trustee selects shall be in
Principal Amounts of $1,000 or an integral multiple of $1,000. Provisions of
this Indenture that apply to definitive Securities called for redemption also
apply to portions of definitive Securities called for redemption. The Trustee
shall notify the Company promptly of the definitive Securities or portions of
definitive Securities to be redeemed.

      Any interest in a Security held in global form by and registered in the
name of the Depositary or its nominee to be redeemed in whole or in part will be
redeemed in accordance with the procedures of the Depositary.

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

      Section III.3. Notice of Redemption. At least 30 days but not more than 60
days before a Redemption Date, the Company shall mail a notice of redemption by
first-class mail, postage prepaid, to each Holder of Securities to be redeemed.

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

      (a)  the Redemption Date;

      (b)  the Redemption Price;

      (c)  the Conversion Rate;

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

      (e) that Securities called for redemption may be converted at any time
before the close of business on the applicable Redemption Date;

      (f) that Holders who want to convert Securities must satisfy the
requirements set forth in paragraph 8 of the Securities;

      (g) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;

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

      (i) that Original Issue Discount and interest, if any, on Securities
called for redemption will cease to accrue on and after the Redemption Date; and

                                      -14-

<PAGE>

      (j) the CUSIP number or numbers for the Securities.

      The notice if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, failure to give such notice by mail or any defect in the
notice to the Holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security.

      At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense.

      Section III.4. Effect of Notice of Redemption. Once notice of redemption
is given, Securities called for redemption become due and payable on the
Redemption Date and at the Redemption Price stated in the notice except for
Securities which are converted in accordance with the terms of this Indenture.

      Upon the later of the Redemption Date or the date such Securities are
surrendered to the Paying Agent, such Securities shall be paid at the Redemption
Price stated in the notice.

      Section III.5. Deposit of Redemption Price. Prior to or by 10:00 a.m. on
the Redemption Date, the Company shall deposit with the Paying Agent (or if the
Company or an Affiliate of the Company is the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the Redemption Price of all Securities to
be redeemed on that date other than Securities or portions of Securities called
for redemption which prior thereto have been delivered by the Company to the
Trustee for cancellation or have been converted for Common Stock, and on or
after the Redemption Date (unless the Company shall default in the payment of
the Securities at the Redemption Price) Original Issue Discount on the
Securities or portion of Securities called for redemption shall cease to accrue
and such Securities shall cease after the close of business on the Redemption
Date to be convertible into Common Stock and, except as provided in this Section
3.05 and Section 8.02, to be entitled to any benefit or security under this
Indenture, and the Holders thereof shall have no right in respect of such
Securities except the right to receive the Redemption Price thereof and unpaid
interest, if any, and Liquidated Damages, if any, to (but excluding) the
Redemption Date. The Paying Agent shall as promptly as practicable return to the
Company any money (with interest, if any, thereon), not required for that
purpose because of conversion of Securities. If such money is then held by the
Company in trust and is not required for such purpose it shall be discharged
from such trust.

      Section III.6. Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder a new Security in an authorized
denomination equal in Principal Amount to the unredeemed portion of the Security
surrendered.

      Section III.7. Conversion Arrangement on Call for Redemption. In
connection with any redemption of Securities, the Company may arrange for the
purchase and conversion for Common Stock of any Securities called for redemption
by an agreement with one or more investment bankers or other purchasers to
purchase such Securities by paying to the Paying Agent in trust for the Holders,
on or before the close of business on the Redemption Date, an amount that,
together with any amounts deposited with the Paying Agent by or on behalf of the
Company for the redemption of the Securities, is not less than the Redemption
Price, including interest, if any, to the Redemption Date, of such Securities.
Notwithstanding anything to the contrary contained in this Article III, the
obligation of the Company to pay the Redemption Price of such Securities,
including all accrued Original Issue Discount, shall be deemed to be satisfied
and discharged to the extent such amount is so paid by such purchasers. If such
an agreement is entered into, any Securities not duly surrendered for conversion
by the Holders thereof may, at the option of the Company, be deemed, to the
fullest extent permitted by law, acquired by such purchasers from such Holders
and (notwithstanding anything to the contrary contained in Article X)
surrendered by such purchasers for conversion, all immediately prior to the
close of business on the Redemption Date, subject to payment of the above amount
as aforesaid. The Paying Agent shall hold and pay to the Holders whose
Securities are selected for redemption any such amount paid to it in the same
manner as it would money deposited with it by the Company for the redemption of
Securities. Without the Paying Agent's prior written consent, no arrangement

                                      -15-

<PAGE>

between the Company and such purchasers for the purchase and conversion of any
Securities shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Paying Agent as set forth in this
Indenture, and the Company agrees to indemnify the Paying Agent from, and hold
it harmless against, any and all losses, liabilities, claims, damages or
expenses arising out of or in connection with any such arrangement for the
purchase and conversion of any Securities between the Company and such
purchasers, including the costs and expenses incurred by the Paying Agent in the
defense of any claim or liability arising out of or in connection with the
exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture.

        Section III.8.  Purchase of Securities at Option of the Holder

      (a) General. Securities shall be purchased by the Company pursuant to
paragraph 6(a) of the Securities as of May 12, 2003, May 12, 2008 and May 12,
2013 (each, a "Purchase Date"), at the purchase price specified therein (each, a
"Purchase Price") at the option of the Holder thereof, upon:

      (i) delivery to the Paying Agent by the Holder of a written notice of
purchase (a "Purchase Notice") at any time from the opening of business on the
date that is 20 Business Days prior to such Purchase Date until the close of
business on such Purchase Date, which Purchase Notice has not been withdrawn,
stating:

           (A) the certificate number of the Security delivered by such Holder
      to be purchased;

           (B) the portion of the Principal Amount of such Security delivered by
      such Holder to be purchased, which portion must be $1,000 in Principal
      Amount or an integral multiple thereof;

           (C) that such Security shall be purchased as of the Purchase Date
      pursuant to the terms and conditions specified in paragraph 6(a) of the
      Securities and in this Indenture; and

           (D) if the Company elects, pursuant to a Company Notice, to pay the
      Purchase Price to be paid as of such Purchase Date, in whole or in part,
      in Common Stock but such Purchase Price shall ultimately be payable to
      such Holder entirely in Cash because any of the conditions to the payment
      of the Purchase Price (or such portion) in Common Stock is not satisfied
      prior to or on the Purchase Date, as set forth in Section 3.08(d), whether
      such Holder elects (1) to withdraw such Purchase Notice as to some or all
      of the Securities to which such Purchase Notice relates (stating the
      Principal Amount and certificate numbers of the Securities as to which
      such withdrawal shall relate), or (2) to receive Cash in respect of the
      entire Purchase Price for all Securities (or portions thereof) to which
      such Purchase Notice relates; and

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

      If a Holder, in such Holder's Purchase Notice (and in any written notice
of withdrawal of a portion of a Holder's Securities previously submitted for
purchase pursuant to a Purchase Notice, in respect of the portion that remains
subject to the Purchase Notice), fails to indicate such Holder's choice with
respect to the election set forth in clause (D) of Section 3.08(a)(i), such
Holder shall be deemed to have elected to receive Cash in respect of the entire
Purchase Price for all Securities subject to such Purchase Notice in the
circumstances set forth in such clause (D).

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

                                      -16-

<PAGE>

      Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.08 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Purchase Date and
the time of book-entry transfer or delivery of the Security.

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

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

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

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

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

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

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

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

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

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

                                      -17-

<PAGE>

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

      If the Company elects to purchase the Securities by the issuance of shares
of Common Stock, a Company Notice as provided in Section 3.08(e) shall be sent
to the Holders in the manner provided in Section 11.02 (and to beneficial owners
as required by applicable law) not later than the Company Notice Date.

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

           (i) the Company having given timely Company Notice of election to
purchase all or a specified percentage of the Securities with Common Stock as
provided herein;

          (ii) the registration of the shares of Common Stock to be issued in
respect of the payment of the specified percentage of the Purchase Price under
the Securities Act, unless the shares of Common Stock so issued can be resold by
the Securityholder receiving such shares without registration under the
Securities Act pursuant to Rule 144 under the Securities Act or otherwise
(unless such Securityholder is the Company or an Affiliate of the Company);

         (iii) compliance with all other applicable federal and state securities
laws, if any, including any necessary qualification or registration under other
applicable federal and state securities laws or the availability of an exemption
from such qualification and registration;

          (iv) the fact that the information necessary to calculate the Market
Price of the Common Stock is reported in a daily newspaper of national
circulation; and

           (v) the receipt by the Trustee of an Officers' Certificate and an
Opinion of Counsel each stating that (A) the terms of the issuance of the Common
Stock are in conformity with this Indenture and (B) the shares of Common Stock
to be issued by the Company in payment of the specified percentage of the
Purchase Price in respect of Securities have been duly authorized and, when
issued and delivered pursuant to the terms of this Indenture in payment of the
specified percentage of the Purchase Price in respect of Securities, will be
validly issued, fully paid and nonassessable, and, in the case of such Officers'
Certificate, stating that conditions (i), (ii), (iii) and (iv) above have been
satisfied and, in the case of such Opinion of Counsel, stating that conditions
(ii) and (iii) above have been satisfied. Such Officers' Certificate shall also
set forth the number of shares of Common Stock to be issued for each $1,000
Principal Amount of Securities and the Sale Price of a share of Common Stock on
each Trading Day during the period during which the Market Price is calculated
and ending on the Purchase Date.

      If such conditions are not satisfied with respect to a Holder or Holders
prior to or on the Purchase Date and the Company elected to purchase the
Securities to be purchased as of such Purchase Date pursuant to this Section
3.08 through the issuance of shares of Common Stock, the Company shall pay the
entire Purchase Price in respect of such Securities of such Holder or Holders in
Cash.

      The "Market Price" means the average of the Sale Prices of the Common
Stock for the five Trading Day period ending on the third Business Day prior to
the applicable Purchase Date if the third Business Day prior to the applicable
Purchase Date is a Trading Day, or if it is not a Trading Day, then on the last
Trading Day prior to such third Business Day, appropriately adjusted to take
into account the occurrence, during the period commencing on the first of such
Trading Days during such five Trading Day period and ending on such Purchase
Date, of any event described in Section 10.06; subject, however, to the
conditions set forth in Sections 10.07 and 10.08. The "Sale Price" of the Common
Stock on any date means the closing per share sale price (or if no closing sale
price is reported the average of the bid and ask prices or, if more than one in
either case, the average of the average bid and average ask prices) on such date
as reported in the composite transactions for the principal United States
securities exchange on which the Common Stock is traded or, if the Common Stock
is not listed on a United States national or regional stock exchange, as
reported by the Nasdaq National Market.

                                      -18-

<PAGE>

      Upon determination of the actual number of shares of Common Stock in
accordance with the foregoing provisions, the Company will publish such
determination in a daily newspaper of national circulation.

      (e) Notice of Election. The Company's notices of election to purchase with
Cash or Common Stock, or any combination thereof, shall be sent to the Holders
(and to beneficial owners as required by applicable law) in the manner provided
in Section 11.02 at the time specified in Section 3.08(c) or (d), as applicable
(each, a "Company Notice"). Such Company Notices shall state the manner of
payment elected and shall contain the following information:

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

           (i) state that each Holder whose securities are to be repurchased
will receive Common Stock with a Market Price determined as of a specified date
prior to the Purchase Date equal to such specified percentage of the Purchase
Price of the Securities delivered by such Holder (except any Cash amount to be
paid in lieu of fractional share); and

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

      In any case, each Company Notice shall state:

                (A)   the Purchase Price and Conversion Rate;

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

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

                (D) that Securities must be surrendered to the Paying Agent to
      collect payment;

                (E) that the Purchase Price for any Security as to which a
      Purchase Notice has been given and not withdrawn will be paid promptly
      following the later of the Purchase Date and the time of surrender of such
      Security as described in (D);

                (F) the procedures the Holder must follow under this Section
      3.08;

                (G) briefly, the conversion rights of the Securities; and

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

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

      (f) Covenants of the Company. All shares of Common Stock delivered upon
conversion or purchase of the Securities shall be duly and validly issued and
fully paid and non-assessable and shall be free from preemptive rights and free
of any lien or adverse claim.

                                      -19-

<PAGE>

      The Company will endeavor promptly to comply with all Federal and state
securities laws regulating the issuance and delivery of shares of Common Stock
upon repurchase of Securities, if any, and will use its best efforts to list or
cause to have quoted all such shares of Common Stock on each United States
national securities exchange or over-the-counter or other domestic market on
which the Common Stock is then listed or quoted.

      (g) Procedure upon Purchase. On the Business Day following the Purchase
Date, the Company shall deposit with the Trustee or with the Paying Agent Cash
(in respect of a Cash purchase under Section 3.08(c) or for fractional
interests, as applicable), or shares of Common Stock, or a combination thereof,
as applicable, sufficient to pay the aggregate Purchase Price of the Securities
to be purchased pursuant to this Section 3.08. As soon as practicable after the
Purchase Date, the Company shall deliver to each Holder entitled to receive
Common Stock, through the Paying Agent, a certificate for the number of full
shares of Common Stock, as applicable, issuable in payment of such Purchase
Price and Cash in lieu of any fractional interests. Any issuance of Common Stock
in respect of the Purchase Price shall be deemed to have been effected
immediately prior to the close of business on the applicable Purchase Date and
the Person or Persons in whose name or names any certificate or certificates for
Common Stock shall be issuable upon such repurchase shall be deemed to have
become on such Purchase Date the holder or holders of record of the shares
represented thereby; provided, however, that any surrender for repurchase on a
date when the stock transfer books of the Company shall be closed shall
constitute the Person or Persons in whose name or names the certificate or
certificates for such shares are to be issued as the recordholder or holders
thereof for all purposes at the opening of business on the next succeeding day
on which such stock transfer books are open. Subject to Section 3.08(d), no
payment or adjustment will be made for dividends on the Common Stock the record
date for which occurred on or prior to the Purchase Date.

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

      Section III.9.  Redemption at the Option of the Holder upon a Change of
Control

      (a) Right to Require Repurchase. If a Change of Control shall occur, then
each Holder shall have the right, at the Holder's option, to require the Company
to repurchase, and upon the exercise of such right the Company shall repurchase,
all of such Holder's Securities, or any portion of the Principal Amount thereof
that is equal to U.S. $1,000 or any integral multiple of U.S. $1,000 in excess
thereof, on the date (the "Repurchase Date") that is 45 days after the date of
the Change of Control Company Notice at a purchase price (the "Change of Control
Redemption Price") equal to the Issue Price plus accrued Original Issue Discount
and interest, if any, and Liquidated Damages, if any, to the Repurchase Date.
Such right to require the repurchase of the Securities shall not continue after
a discharge of the Company from its obligations with respect to the Securities
in accordance with Article VIII, unless a Change of Control shall have occurred
prior to such discharge. At the option of the Company, the Change of Control
Redemption Price, or a portion thereof, may be paid in Cash or, subject to the
conditions specified in Section 3.09(c), in Common Stock.

      (b) Notices; Method of Exercising Repurchase Right, Etc. (i) Unless the
Company shall have theretofore called for redemption all of the outstanding
Securities, on or before the 30th day after the occurrence of a Change of
Control, the Company shall give to all Holders of Securities, in the manner
provided in Section 11.02, notice (the "Change of Control Company Notice") of
the occurrence of the Change of Control and of the repurchase right set forth
herein arising as a result thereof. The Company shall also deliver a copy of
such notice of a repurchase right to the Trustee.

      Each Change of Control Company Notice shall state:

                                      -20-

<PAGE>

        (A)     the Repurchase Date,

        (B)     the date by which the repurchase right must be exercised,

        (C)     the Change of Control Redemption Price,

        (D)     a description of the procedure which a Holder must follow to
                exercise a repurchase right, and the place or places where such
                Securities are to be surrendered for payment of the Change of
                Control Redemption Price,

        (E)     that on the Repurchase Date the Change of Control Redemption
                Price will become due and payable upon each such Security
                designated by the Holder to be repurchased, and that interest,
                if any, and Original Issue Discount shall cease to accrue on and
                after said date,

        (F)     the Conversion Rate then in effect, the date on which the right
                to convert the Principal Amount of the Securities to be
                repurchased will terminate and the place or places where such
                Securities may be surrendered for conversion, and

        (G)     the place or places that the certificate required by the
                Securities to elect repurchase upon a Change of Control shall be
                delivered, and the form of such certificate.

           In addition, at least two Business Days preceding the Repurchase
      Date, the Company shall give to all Holders of the Securities, in the
      manner provided in Section 11.02, notice specifying whether the Change of
      Control Redemption Price will be payable in cash or Common Stock or a
      combination of Cash and Common Stock (specifying the percentage of each)
      and shall deliver a copy of such notice to the Trustee.

           At the Company's request, the Trustee shall give the Change of
      Control Company Notice or such notice with respect to the payment of the
      purchase price in the Company's name and at the Company's expense;
      provided, however, that, in all cases, the text of either such notice
      shall be prepared by the Company.

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

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

           (ii) To exercise a repurchase right, a Holder shall deliver to the
      Trustee on or before the 30th day after the date of the Change of Control
      Company Notice (A) written notice (a "Repurchase Notice") of the Holder's
      exercise of such right, which notice shall set forth (w) the certificate
      number of the Security which the Holder will deliver to be purchased; (x)
      the portion of the Principal Amount of such Security to be purchased,
      which portion must be $1,000 in Principal Amount or an integral multiple
      thereof; (y) that such Security shall be purchased as of the Repurchase
      Date pursuant to the terms and conditions specified in paragraph 6(b) of
      the Securities and in this Indenture; and (z) if the Company elects to pay
      the Change of Control Redemption Price to be paid as of such Repurchase
      Date, in whole or in part, in Common Stock but such portion of the Change
      of Control Redemption Price shall ultimately be payable to such Holder in
      Cash because any of the conditions to the payment of the Change of Control
      Redemption in Common Stock are not satisfied prior to or on the Repurchase
      Date, as set forth in Section 3.09(d) or (e), whether such Holder elects
      (1) to withdraw such Purchase Notice as to some or all of the Securities
      to which such Repurchase Notice relates (stating the Principal Amount and
      certificate numbers of the Securities as to which such withdrawal shall
      relate), or (2) to receive Cash in respect of the entire Change of Control
      Redemption Price for all Securities (or portions thereof) to which such
      Repurchase Notice relates; and (B) via book-entry transfer or delivery,
      such Security to the Paying Agent at any time (whether prior to, on or
      after the Repurchase Date) after delivery of such Repurchase Notice
      (together with all necessary endorsements) at the offices of the Paying
      Agent, such delivery being a condition to receipt by the Holder of the
      Change of Control Redemption Price therefor; provided, however, that such
      Purchase Price shall be so paid pursuant to this Section 3.09 only if the
      Security so delivered to the Paying Agent shall conform in all respects to
      the description thereof in such Repurchase Notice. If a Holder, in such
      Holder's Repurchase Notice pursuant to this section 3.09 (and in any
      withdrawal notice with respect to a portion of a Holder's Securities
      previously submitted for purchase pursuant to a Repurchase Notice, the
      portion that remains subject to such Repurchase Notice), fails to indicate
      such Holder's choice with respect to the election set forth in clause (z)
      of this paragraph, such Holder shall be deemed to have elected to receive
      Cash in respect of the entire Change of Control Redemption Price for all
      Securities subject to such Repurchase Notice in the circumstances set
      forth in such clause (z).

                                      -21-

<PAGE>

      Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.09 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Repurchase Date
and the time of book-entry transfer or delivery of the Security.

      Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Repurchase Notice contemplated by this Section 3.09 shall
have the right to withdraw such notice by delivery at any time prior to the
close of business on the Repurchase Date of a withdrawal notice to the Paying
Agent in accordance with Section 3.10.

      The Paying Agent shall promptly notify the Company of the receipt by it of
any Repurchase Notice of a Holder pursuant to this Section 3.09.

      (c) Company's Right to Elect Manner of Payment of Change of Control
Redemption Price. The Company may elect with respect to any Repurchase Date to
pay the Change of Control Redemption Price in respect of the Securities to be
purchased pursuant to Section 3.08(a) as of such Repurchase Date, in Cash or
Common Stock, or in any combination of Cash and Common Stock, subject to the
conditions set forth in Sections 3.09(d) and (e); provided that the Company will
pay Cash for fractional interests in Common Stock. For purposes of determining
the existence of potential fractional interests, all Securities subject to
purchase by the Company held by a Holder shall be considered together (no matter
how many separate certificates are to be presented). Each Holder whose
Securities are purchased pursuant to this Section 3.09 shall receive the same
percentage of Cash and/or Common Stock in payment of the Change of Control
Redemption Price for such Securities, except (i) as provided in this Section
3.09(c) with regard to the payment of Cash in lieu of fractional interests in
Common Stock and (ii) in the event that the Company is unable to purchase the
Securities of a Holder or Holders for Common Stock because any necessary
qualifications or registrations of the Common Stock under applicable federal or
state securities laws cannot be obtained, in which case the Company may purchase
the Securities of such Holder or Holders for Cash. Once the Company has given
its Change of Control Company Notice to Holders the Company may not change its
election with respect to the consideration (or components or percentages of
components thereof) to be paid except pursuant to this Section 3.09(c) or
Section 3.09(d).

      (d) Payment by Issuance of Common Stock. At the option of the Company, the
Change of Control Redemption Price of Securities in respect of which a
Repurchase Notice of a Holder pursuant to Section 3.09(b) has been given, or a
specified percentage thereof, may be paid by the Company by the issuance of a
number of shares of Common Stock equal to the quotient obtained by dividing (i)
the amount of Cash to which the Holders would have been entitled had the Company
elected to pay all or such specified percentage, as the case may be, of the
Change of Control Redemption Price of such Securities in Cash by (ii) 95% of the
Market Price of a share of Common Stock, subject to the next succeeding
paragraph.

      The Company will not issue a fractional share of Common Stock in payment
of the Change of Control Redemption Price. Instead the Company will pay Cash for
the current market value of the fractional share. The current market value of a
fraction of a share shall be determined by multiplying the Market Price by such
fraction and rounding the product to the nearest whole cent. If a Holder elects
to have more than one Security purchased, the amount of Cash payable in respect
of fractional shares of Common Stock shall be based on the aggregate amount of
Securities to be purchased.

                                      -22-

<PAGE>

      The Company's right to exercise its election to pay the Change of Control
Redemption Price, in whole or in part, through the issuance of shares of Common
Stock shall be conditioned upon:

           (i) the Company having given timely the notice required pursuant to
      Section 3.09(a) of its election to purchase all or a specified percentage
      of the Securities with Common Stock as provided herein;

           (ii) the registration of the shares of Common Stock to be issued in
      respect of the payment of the specified percentage of the Change of
      Control Redemption Price under the Securities Act, unless the shares of
      Common Stock so issued can be resold by the Securityholder receiving such
      shares without registration under the Securities Act pursuant to Rule 144
      under the Securities Act or otherwise (unless such Securityholder is the
      Company or an Affiliate of the Company);

           (iii)compliance with all other applicable federal and state
      securities laws, if any, including any necessary qualification or
      registration under other applicable federal and state securities laws or
      the availability of an exemption from such qualification and registration;
      and

           (iv) the fact that the information necessary to calculate the Market
      Price of the Common Stock is reported in a daily newspaper of national
      circulation; and

           (v) the receipt by the Trustee of an Officers' Certificate and an
      Opinion of Counsel each stating that (A) the terms of the issuance of the
      Common Stock are in conformity with this Indenture and (B) the shares of
      Common Stock to be issued by the Company in payment of the specified
      percentage of the Change of Control Redemption Price in respect of
      Securities have been duly authorized and, when issued and delivered
      pursuant to the terms of this Indenture in payment of the specified
      percentage of the Change of Control Redemption Price in respect of
      Securities, will be validly issued, fully paid and nonassessable, and, in
      the case of such Officers' Certificate, stating that conditions (i), (ii)
      and (iii) above have been satisfied and, in the case of such Opinion of
      Counsel, stating that conditions (ii) and (iii) above have been satisfied.
      Such Officers' Certificate shall also set forth the number of shares of
      Common Stock to be issued for each $1,000 Principal Amount of Securities
      and the Sale Price of a share of Common Stock on each Trading Day during
      the period during which the Market Price is calculated and ending on the
      Repurchase Date.

       If such conditions are not satisfied with respect to a Holder or Holders
prior to or on the Repurchase Date and the Company elected to purchase the
Securities to be purchased as of such Repurchase Date pursuant to this Section
3.08 through the issuance of shares of Common Stock, the Company shall pay the
entire Change of Control Redemption Price in respect of such Securities of such
Holder or Holders in Cash.

      Upon determination of the actual number of shares of Common Stock in
accordance with the foregoing provisions, the Company will publish such
determination in a daily newspaper of national circulation.

      (e) Procedure upon Purchase. The provisions of 3.08(f), (g) and (h) shall
apply, mutatis mutandis, to the delivery of Cash and shares of Common Stock in
satisfaction of the Change of Control Redemption Price pursuant to this Section
3.09.

      Section 11.10. Effect of Purchase Notice or Repurchase Notice. Upon
receipt by the Company of the Purchase Notice or Repurchase Notice specified in
Section 3.08(a) or Section 3.09(b), as applicable, the Holder of the Security in
respect of which such Purchase Notice or Repurchase Notice, as the case may be,
was given shall (unless such Purchase Notice or Repurchase Notice is withdrawn
as specified in the following two paragraphs) thereafter be entitled to receive
solely the Purchase Price or Change of Control Redemption Price, as the case may
be, with respect to such Security. Such Purchase Price or Change of Control
Redemption Price shall be paid to such Holder promptly following the later of
(x) the Purchase Date or the Repurchase Date, as the case may be, with respect
to such Security (provided the conditions in Section 3.08(a) or Section 3.09(b),
as applicable, have been satisfied) and (y) the time of delivery of such
Security to the Paying Agent by the Holder thereof in the manner required by
Section 3.08(a) or Section 3.09(b), as applicable. Securities in respect of
which a Purchase Notice or Repurchase Notice, as the case may be, has been given
by the Holder thereof may not be converted for shares of Common Stock on or
after the date of the delivery of such Purchase Notice or Repurchase Notice, as
the case may be, unless such Purchase Notice or Repurchase Notice, as the case
may be, has first been validly withdrawn as specified in the following two
paragraphs.

                                      -23-

<PAGE>

      A Purchase Notice or Repurchase Notice, as the case may be, may be
withdrawn by means of a written notice of withdrawal delivered to the office of
the Paying Agent at any time prior to the close of business on the Purchase Date
or the Repurchase Date, as the case may be, to which it relates specifying:

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

      (b) the Principal Amount of the Security with respect to which such notice
of withdrawal is being submitted; and

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

      A written notice of withdrawal of a Purchase Notice or Repurchase Notice,
as the case may be, may be in the form of (i) a conditional withdrawal contained
in a Purchase Notice pursuant to the terms of Section 3.08(a)(i)(D) or
3.09(b)(ii)(1), as the case may be, or (ii) a conditional withdrawal containing
the information set forth in Section 3.08(a)(i)(D) or 3.09(b)(ii)(1), as the
case may be, and the preceding paragraph and contained in a written notice of
withdrawal delivered to the Paying Agent as set forth in the preceding
paragraph.

      Section III.11. Deposit of Purchase Price or Change of Control Redemption
Price. On or before the Business Day following a Purchase Date or a Repurchase
Date, as the case may be, the Company shall deposit with the Trustee or with the
Paying Agent (or, if the Company or an Affiliate of the Company is acting as the
Paying Agent, shall segregate and hold in trust as provided in Section 2.04) an
amount of Cash and/or shares of Common Stock, if permitted hereunder, sufficient
to pay the aggregate Purchase Price or Change of Control Redemption Price, as
the case may be, of all the Securities or portions thereof which are to be
purchased as of such Purchase Date or Repurchase Date, as the case may be.

      Section III.12. Securities Purchased in Part. Any Security that is to be
purchased pursuant to Section 3.08 or Section 3.09 only in part shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security, without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder in aggregate Principal
Amount equal to, and in exchange for, the portion of the Principal Amount of the
Security so surrendered which is not purchased or redeemed.

      Section III.13. Covenant to Comply with Securities Laws upon Purchase of
Securities. In connection with any offer to purchase of Securities under Section
3.08 or 3.09 hereof, the Company shall (a) comply with Rule 13e-4 (which term,
as used herein, includes any successor provision thereto) under the Exchange
Act, if applicable, (b) file the related Schedule 13E-4 (or any successor
schedule, form or report) under the Exchange Act, if applicable, and (c)
otherwise comply with all Federal and state securities laws so as to permit the
rights and obligations under Section 3.08 and 3.09 to be exercised in the time
and in the manner specified in Section 3.08 and 3.09.

      Section III.14. Repayment to the Company. Subject to Section 8.02 hereof,
the Trustee and the Paying Agent shall return to the Company any Cash or shares
of Common Stock or other property that remain unclaimed as provided in paragraph
13 of the Securities, together with interest or dividends, if any, thereon, held
by them for the payment of a Purchase Price or Change of Control Redemption
Price, as the case may be; provided, however, that to the extent that the
aggregate amount of Cash or shares of Common Stock deposited by the Company
pursuant to Section 3.11 exceeds the aggregate Purchase Price or Change of
Control Redemption Price, as the case may be, of the Securities or portions
thereof which the Company is obligated to purchase as of the Purchase Date or
Repurchase Date, as the case may be, then promptly after the Business Day
following the Purchase Date or Repurchase Date, as the case may be, the Trustee
and the Paying Agent shall return any such excess to the Company together with
interest or dividends, if any, thereon.

                                      -24-

<PAGE>

      Section III.15. No Purchase in Event of Default. There shall be no
purchase of any Securities pursuant to Section 3.08 or repurchase pursuant to
Section 3.09 (other than through the issuance of Common Stock in payment of the
Purchase Price or Change of Control Redemption Price, including Cash in lieu of
any fractional shares) if there has occurred (prior to, on or after, as the case
may be, the giving, by the Holders of such Securities, of the required Purchase
Notice or Repurchase Notice, as the case may be) and is continuing an Event of
Default (other than a default in the payment of the Purchase Price or Change of
Control Redemption Price, as the case may be, with respect to such Securities).


                                   ARTICLE IV

                                    COVENANTS

      Section IV.1. Payment of Securities. The Company shall promptly make all
payments in respect of the Securities on the dates and in the manner provided in
the Securities or pursuant to this Indenture. The Principal Amount, Issue Price,
accrued Original Issue Discount, accrued Liquidated Damages, if any, Redemption
Price, Purchase Price, Change of Control Redemption Price and interest, if any,
shall be considered paid on the applicable date due or, in the case of a
Purchase Price or Change of Control Redemption Price, on the Business Day
following the applicable Purchase Date or Repurchase Date, as the case may be,
if on such date the Trustee or the Paying Agent holds, in accordance with this
Indenture, money or securities, if permitted hereunder, sufficient to pay all
such amounts then due.

      The Company shall pay interest on overdue amounts at the rate set forth in
paragraph 1 of the Securities and it shall pay interest on overdue interest at
the same rate compounded semiannually (to the extent that the payment of such
interest shall be legally enforceable), which interest on overdue interest shall
accrue from the date such amounts became overdue and, in the case of any late
payment of the Principal Amount, Purchase Price or Change of Control Redemption
Price, shall be in lieu of, and not in addition to, the continued accrual of
Original Issue Discount. Such interest shall be payable on demand.

      Section IV.2. Financial Information; SEC Reports. The Company will deliver
to the Trustee (a) as soon as available (and in any event no later than the time
within which the Company is required to file its Form 10-K with the SEC) after
the end of each fiscal year of the Company (i) a consolidated balance sheet of
the Company and its Subsidiaries as of the end of such fiscal year and the
related consolidated statements of operations, stockholders' equity and cash
flows for such fiscal year, all reported on by an independent public accountant
of nationally recognized standing and (ii) a report containing a management's
discussion and analysis of the financial condition and results of operations and
a description of the business and properties of the Company, and (b) as soon as
available (and in any event no later than the time within which the Company is
required to file its Forms 10-Q with the SEC) after the end of each of the first
three quarters of each fiscal year of the Company (i) an unaudited consolidated
financial report for such quarter and (ii) a report containing a management's
discussion and analysis of the financial condition and results of operations of
the Company; provided that the foregoing shall not be required for any fiscal
year or quarter, as the case may be, with respect to which the Company files or
expects to file with the Trustee an annual report or quarterly report, as the
case may be, pursuant to the third paragraph of this Section 4.02.

      So long as the Securities or the Common Stock issued upon conversion of
the Securities are Restricted Securities, if the Company is not subject to
either Section 13 or 15(d) of the Exchange Act, the Company shall at the request
of any Holder of Securities (or holders of Common Stock issued upon conversion
of the Securities) provide to such Holder of Securities (or holders of such
Common Stock) and any prospective purchaser designated by such Holders (or
holders of such Common Stock), as the case may be, such information, if any,
required by Rule 144A(d)(4) under the Securities Act.

      The Company shall file with the Trustee, within 15 days after it files
such annual and quarterly reports, information, documents and other reports with
the SEC, copies of its annual report and of the information, documents and other

                                      -25-

<PAGE>

reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) which the Company is required to file with the
SEC pursuant to Section 13 or 15(d) of the Exchange Act

      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).

      Section IV.3. Compliance Certificate. The Company shall deliver to the
Trustee, within 120 days after the end of each fiscal year of the Company, an
Officers' Certificate in which one of the two Officers signing such certificate
is either the principal executive officer, principal financial officer or
principal accounting officer of the Company, stating whether or not to the best
knowledge of the signers thereof the Company is in Default in the performance
and observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder) and, if the Company shall be in Default, specifying all such Defaults
and the nature and status thereof of which the signers may have knowledge.

      The Company will deliver to a Trust Officer of the Trustee, forthwith upon
becoming aware of any Default in the performance or observance of any covenant,
agreement or condition contained in this Indenture, or 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 4.03 shall be delivered
to a Trust Officer of the Trustee at its Corporate Trust Office.

      Section IV.4. Further Instruments and Acts. Upon request of the Trustee,
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.

      Section IV.5. Maintenance of Office or Agency. The Company will maintain
in the Borough of Manhattan, The City of New York, an office or agency where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer, exchange, purchase, redemption or
conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The office or agency of The
Bank of New York located at 101 Barclay Street, Floor 21 West, New York, New
York 10286 (Attention: Corporate Trust Administration) shall be such office or
agency for all of the aforesaid purposes unless the Company shall maintain some
other office or agency for such purposes and shall give prompt written notice to
the Trustee of the location, and any change in the location, of such other
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office.

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

      Section IV.6. Existence. Subject to Article V, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided, however, that
the Company shall not be required to preserve any such right if the Board of
Directors, in its sole discretion, shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company and that
the loss thereof is not disadvantageous in any material respect to the Holders.

      Section IV.7. Maintenance of Properties. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order

                                      -26-

<PAGE>

and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section 4.07 shall prevent
the Company from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Holders.

      Section IV.8. Payment of Taxes and Other Claims. The Company will pay or
discharge, or cause to be paid or discharged, before the same may become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary, or upon the income, profits or
property of the Company or any Subsidiary, (b) all claims for labor, materials
and supplies which, if unpaid, might by law become a lien or charge upon the
property of the Company or any Subsidiary, and (c) all stamp and other duties,
if any, which may be imposed by the United States or any political subdivision
thereof or therein in connection with the issuance, transfer, exchange or
conversion of any Securities or with respect to this Indenture; provided,
however, that, in the case of clauses (a) and (b), the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim (i) if the failure to do so will not, in the
aggregate, have a material adverse impact on the Company, or (ii) if the amount,
applicability or validity is being contested in good faith by appropriate
proceedings.

      Section IV.9. Calculation of Original Issue Discount. The Company shall
file with the Trustee promptly at the end of each calendar year (i) a written
notice specifying the amount of Original Issue Discount (including daily rates
and accrual periods) accrued on outstanding Securities as of the end of such
year and (ii) such other specific information relating to such Original Issue
Discount as may then be relevant under the Internal Revenue Code of 1986, as
amended from time to time.

                                      -27-
<PAGE>

                                    ARTICLE V

                              SUCCESSOR CORPORATION

      Section V.1. When the Company May Merge or Transfer Assets. The Company
shall not consolidate with or merge into any other Person or convey, transfer or
lease its properties and assets substantially as an entirety to another Person,
unless:

           (a) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which acquires
by conveyance, transfer or lease the properties and assets of the Company
substantially as an entirety shall be a corporation, limited liability company,
partnership or trust organized and validly existing under the laws of the United
States or any State thereof or the District of Columbia, and shall expressly
assume by an indenture supplemental hereto, executed and delivered to the
Trustee in form satisfactory to the Trustee, the due and punctual payment of the
Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, Redemption Price, Purchase Price, Change of Control
Redemption Price or interest, if any, on the Securities, according to their
tenor, and the due and punctual performance of all of the covenants and
obligations of the Company under the Securities and this Indenture, and shall
have provided for conversion rights in accordance with the Indenture;

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

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

      The successor Person formed by such consolidation or into which the
Company is merged or the successor Person to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor had been named as the Company herein; and thereafter, except in
the case of a lease, the Company shall be discharged from all obligations and
covenants under this Indenture and the Securities.


                                   ARTICLE VI

                              DEFAULTS AND REMEDIES

      Section VI.1. Events of Default.  An "Event of Default" occurs if:

           (a) the Company defaults in the payment of the Principal Amount,
Issue Price, accrued Original Issue Discount, accrued Liquidated Damages, if
any, interest, if any, Redemption Price, Purchase Price or Change of Control
Redemption Price on any Security when the same becomes due and payable at its
Stated Maturity, upon redemption, upon declaration, when due for purchase by the
Company or otherwise, as applicable, provided that, in the case of a default in
the payment of Liquidated Damages, such default in payment of Liquidated Damages
continues for a period of 30 days;

           (b) the Company fails to comply with any of its agreements or
covenants in the Securities or this Indenture (other than those referred to in
clause (a) above) and such failure continues for 60 days after receipt by the
Company of a Notice of Default (plus an additional 60 days in the case of
defaults subject to cure, provided the Company commences such cure within the
initial 60 days and is diligently pursuing such cure);

           (c) any default which results in the acceleration of any Indebtedness
of the Company or any of its Subsidiaries in an aggregate principal amount of
$25 million or more;

                                      -28-

<PAGE>

           (d) a decree or order by a court having jurisdiction in the premises
shall have been entered adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization of the Company
under any Bankruptcy Law, and such decree or order shall have continued
undischarged and unstayed for a period of 60 consecutive days; or a decree or
order of a court having jurisdiction in the premises of the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or insolvency of the
Company or of its property, or for the winding-up or liquidation of its affairs,
shall have been entered, and such decree or order shall have remained in force
undischarged and unstayed of a period of 60 consecutive days; or

           (e) the Company shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent seeking reorganization
under any Bankruptcy Law, or shall consent to the filing of any such petition,
or shall consent to the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of it or of its property or shall make an
assignment for the benefit of creditors, or shall admit in writing its inability
to pay its debts generally as they become due.

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

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

      Section VI.2. Acceleration. If an Event of Default (other than an Event of
Default specified in Section 6.01(d) or (e)) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Securities at the time outstanding by notice to the
Company and the Trustee, may declare the Issue Price and accrued Original Issue
Discount and interest, if any, and any Liquidated Damages to the date of
declaration on all the Securities to be immediately due and payable. Upon such a
declaration, such Issue Price and accrued Original Issue Discount and interest,
if any, and any such Liquidated Damages shall be due and payable immediately. If
an Event of Default specified in Section 6.01(d) or (e) occurs and is
continuing, the Issue Price and accrued Original Issue Discount and interest, if
any, and any Liquidated Damages on all Securities shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders. The Holders of a majority in aggregate Principal
Amount of the Securities at the time outstanding, by notice to the Company and
the Trustee (and without notice to any other Securityholder), may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of the Issue Price and accrued Original Issue Discount
and interest, if any, and any Liquidated Damages that have become due solely as
a result of acceleration. No such rescission shall affect any subsequent Default
or impair any right consequent thereto.

      Section VI.3. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of the Issue Price and accrued Original Issue Discount, interest, if any,
Liquidated Damages, if any, and any other amounts payable in respect of the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.

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

      Section VI.4. Waiver of Past Defaults. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding, by notice
to the Company and the Trustee (and without notice to any other Securityholder),
may waive an existing Default and its consequences except (a) an Event of

                                      -29-

<PAGE>

Default described in Section 6.01(a), (b) a Default in respect of a provision
that under Section 9.02 cannot be amended without the consent of each
Securityholder affected, or (c) a Default with respect to the right of the
Holder to convert any Security in accordance with the terms of Article X. When a
Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.

      Section VI.5. Control by Majority. The Holders of a majority in aggregate
Principal Amount of the Securities at the time outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture or that the Trustee determines in good faith is unduly prejudicial to
the rights of other Holders or would involve the Trustee in personal liability
unless the Trustee is offered indemnity satisfactory to it.

      Section VI.6. Limitation on Suits.  A Securityholder may not pursue any
remedy with respect to this Indenture or the Securities unless:

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

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

           (c) such Holder or Holders offer to the Trustee security or indemnity
      reasonably satisfactory to it against any cost, liability or expense
      satisfactory to the Trustee;

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

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

      No Securityholder may use this Indenture to prejudice the rights of any
other Securityholder or to obtain a preference or priority over any other
Securityholder.

      Section VI.7. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
the Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Liquidated Damages, if any, Redemption Price, Purchase Price, Change of Control
Redemption Price or interest, if any, in respect of a default in the payment of
any such amounts on a Security held by such Holder, on or after the respective
due dates expressed in such Security and to convert the Securities in accordance
with Article X, or to bring suit for the enforcement of any such payment on or
after such respective dates or the right to convert, shall not be impaired or
adversely affected without the consent of each such Holder.

      Section VI.8. Collection Suit by Trustee. If an Event of Default described
in Section 6.01(a) occurs and is continuing, the Trustee may recover judgment in
its own name and as trustee of an express trust against the Company for the
whole amount owing with respect to the Securities and the amounts provided for
in Section 7.07.

      Section VI.9. Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the Principal Amount, Issue Price, accrued Original Issue Discount,
accrued Liquidated Damages, if any, Redemption Price, Purchase Price, Change of
Control Redemption Price or interest, if any, in respect of the Securities shall
then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of any such amount) shall be entitled and empowered, by
intervention in such proceeding or otherwise,

                                      -30-

<PAGE>

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

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07.

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

      Section VI.10. Priorities.  If the Trustee collects any money pursuant to
this Article VI, it shall pay out the money in the following order:

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

           Second: to Holders for amounts due and unpaid on the Securities for
      the Principal Amount, Issue Price, accrued Original Issue Discount,
      accrued Liquidated Damages, if any, Redemption Price, Purchase Price,
      Change of Control Redemption Price or interest, if any, as the case may
      be, ratably, without preference or priority of any kind, according to such
      amounts due and payable on the Securities; and

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

      The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10. At least 15 days before such record date,
the Trustee shall mail to each Securityholder a notice that states the record
date, the payment date and amount to be paid.

      Section VI.11. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant (other than the Trustee) in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit
by Holders of more than 10% in aggregate Principal Amount of the Securities at
the time outstanding.

      Section VI.12. Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury or other law
wherever enacted, now or at any time hereafter in force, which would prohibit or
forgive the Company from paying all or any portion of the Principal Amount,
Issue Price, accrued Original Issue Discount, accrued Liquidated Damages, if
any, Redemption Price, Purchase Price or Change of Control Redemption Price in
respect of Securities, or any interest on any such amounts, as contemplated
herein, or which may affect the covenants or the performance of this Indenture;
and the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such laws and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the

                                      -31-

<PAGE>

Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.


                                   ARTICLE VII

                                     TRUSTEE

      Section VII.1.  Duties of Trustee

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

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

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

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

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

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

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

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

              (iii) the Trustee shall not be liable with respect to any action
      it takes or omits to take in good faith in accordance with a direction
      received by it pursuant to Section 6.05. Subparagraphs (c)(i), (ii) and
      (iii) shall be in lieu of Sections 315(d)(1), 315(d)(2) and 315(d)(3) of
      the TIA and such Sections 315(d)(1), 315(d)(2) and 315(d)(3) are hereby
      expressly excluded from this Indenture, as permitted by the TIA.

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

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

           (f) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law.

      Section VII.2.  Rights of Trustee

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

                                      -32-

<PAGE>

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

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

           (d) Subject to the provisions of Section 7.01(c), the Trustee shall
not be liable for any action it takes or omits to take in good faith which it
believes to be authorized or within its rights or powers.

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

           (f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture, unless the Holders shall have
offered to the Trustee security or indemnity reasonably satisfactory to it
against the costs, expenses and liabilities which may be incurred therein or
thereby.

      Section VII.3. Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, Conversion Agent or
co- registrar may do the same with the like rights. However, the Trustee must
comply with Section 7.10 and 7.11.

      Section VII.4. Trustee's Disclaimer. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Securities, and it shall
not be accountable for Company's use of the proceeds from the Securities, it
shall not be responsible for any statement in the offering memorandum for the
Securities or in the Indenture or the Securities (other than its certificate of
authentication), the acts of a prior Trustee hereunder, or the determination as
to which beneficial owners are entitled to receive any notices hereunder.

      Section VII.5. Notice of Defaults. If a Default occurs and is continuing
and if it is actually known to a Trust Officer of the Trustee, the Trustee shall
give to each Securityholder notice of the Default within 90 days after it
occurs. Except in the case of a Default described in Section 6.01(a), the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of Holders. The second sentence of this Section 7.05 shall be in lieu
of the proviso to Section 315(b) of the TIA and such provision is hereby
expressly excluded from this Indenture, as permitted by the TIA. The Trustee
shall not give notice of a Default pursuant to Section 6.01(b) until at least
sixty days have passed since its occurrence.

      Section VII.6. Reports by Trustee to Holders. Within 60 days after each
May 1, beginning with the May 1 following the date of this Indenture, the
Trustee shall mail to each Holder a brief report dated as of such May 1 that
complies with TIA Section 313(a), if required by such Section 313(a). The
Trustee also shall comply with TIA Section 313(b).

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

      Section VII.7. Compensation and Indemnity.  The Company agrees:


      (a) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust);

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

                                      -33-

<PAGE>

      (c) to indemnify the Trustee for, and to hold it harmless against, any
cost, liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
trust, including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.

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

      The Company's payment obligations pursuant to this Section 7.07 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(d) or (e), the expenses
are intended to constitute expenses of administration under any Bankruptcy Law.

      Section VII.8. Replacement of Trustee. The Trustee may resign by so
notifying the Company; provided, however, that no such resignation shall be
effective until a successor Trustee has accepted its appointment pursuant to
this Section 7.08. The Holders of a majority in aggregate Principal Amount of
the Securities at the time outstanding may remove the Trustee by so notifying
the Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:

           (a) the Trustee fails to comply with, or ceases to be eligible under,
Section 7.10;

           (b)  the Trustee is adjudged bankrupt or insolvent;

           (c) a receiver, conservator or public officer takes charge of the
Trustee or its property; or

           (d) the Trustee otherwise becomes incapable of acting.

      If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason and, in the case of removal by the Holders (as set
forth above), the Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding have not appointed a successor Trustee within
30 days of such removal, the Company shall promptly appoint, by Board
Resolution, a successor Trustee.

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

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

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

      Section VII.9. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trustee business (including the trust created by this Indenture) or
assets to, another corporation, the resulting, surviving or transferee
corporation without any further act shall be the successor Trustee.

      Section VII.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The Trustee

                                      -34-

<PAGE>

shall have a combined capital and surplus of at least $50,000,000 (or if the
Trustee is a member of a bank holding company system, its bank holding company
shall have a combined capital and surplus of $50,000,000) as set forth in its
most recent published annual report of conditions. Nothing herein contained
shall prevent the Trustee from filing with the SEC the application referred to
in the penultimate paragraph of TIA Section 310(b). If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
7.10, it shall resign immediately in the manner and with the effect specified in
this Article VII.

      Section VII.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.

      Section 7.12. Trustee's Application for Instructions from the Company. Any
application by the Trustee for written instructions from the Company may, at the
option of the Trustee, set forth in writing any action proposed to be taken or
omitted by the Trustee under this Indenture and the date on and/or after which
such action shall be taken or such omission shall be effective. The Trustee
shall not be liable for any action taken by, or omission of, the Trustee in
accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than three Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.


                                  ARTICLE VIII

                             DISCHARGE OF INDENTURE

      Section VIII.1. Discharge of Liability on Securities. When (a) the Company
delivers to the Trustee all outstanding Securities (other than Securities
replaced pursuant to Section 2.07) for cancellation or (b) all outstanding
Securities have become due and payable and the Company deposits with the Trustee
Cash and/or securities, as permitted by the terms hereof, sufficient to pay at
Stated Maturity the Principal Amount of all outstanding Securities (other than
Securities replaced pursuant to Section 2.07), and if in either case the Company
pays all other sums due and payable hereunder by the Company, then this
Indenture shall, subject to Section 7.07, cease to be of further effect. The
Trustee shall join in the execution of a document prepared by the Company
acknowledging satisfaction and discharge of this Indenture on demand of the
Company accompanied by an Officers' Certificate and Opinion of Counsel and at
the cost and expense of the Company.

      Section VIII.2. Repayment to the Company. The Trustee and the Paying Agent
shall return to the Company upon written request any Cash, securities or other
property held by them for the payment of any amount with respect to the
Securities that remains unclaimed for two years, provided, however, that the
Trustee or such Paying Agent, before being required to make any such return, may
at the expense of the Company cause to be published once in a newspaper of
general circulation in The City of New York, or mail to each such Holder, notice
that such money or securities remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication
or mailing, any unclaimed money or securities then remaining will be returned to
the Company.


                                   ARTICLE IX

                                   AMENDMENTS

      Section IX.1. Without Consent of Holders.  The Company and the Trustee may
amend this Indenture and the Securities without the consent of any
Securityholder:

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

                                      -35-

<PAGE>

           (b) to comply with Article V or Section 10.12 hereof;

           (c) to provide for uncertificated Securities in addition to
certificated Securities so long as such uncertificated Securities are in
registered form for purposes of the Internal Revenue Code of 1986, as amended;
           (d) to make any change that does not adversely affect the right of
any Securityholder; or

           (e) to make any change to comply with the TIA, or any amendment
thereto, or to comply with any requirement of the SEC in connection with the
qualification, if any, of the Indenture under the TIA.

      Section IX.2. With Consent of Holders. The Company and the Trustee, with
the written consent of the Holders of at least a majority in aggregate Principal
Amount of the Securities at the time outstanding, may amend this Indenture or
the Securities or the Registration Rights Agreement. However, without the
consent of each Securityholder affected, an amendment or supplement to this
Indenture or the Securities (or, in the case of clause (b) below, the
Registration Rights Agreement) may not:

           (a) make any change to the Principal Amount of Securities whose
Holders must consent to an amendment;

           (b) make any change to the manner or rate of accrual of Original
Issue Discount, Liquidated Damages, if any, or interest, if any, reduce the rate
of interest referred to in paragraph 1 of the Securities, extend the time for
payment of or impair or adversely affect the right of any Holder to receive
Original Issue Discount, Liquidated Damages, if any, or interest, if any, on any
Security;

           (c) reduce or impair or adversely affect the right of any Holder to
receive the Principal Amount or the Issue Price of or extend the Stated Maturity
of any Security;

           (d) reduce or impair or adversely affect the right of any Holder to
receive the Redemption Price, Purchase Price or Change of Control Redemption
Price of any Security;

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

           (f) impair or adversely affect the right of a Holder to institute
suit for the enforcement of any payment with respect to, or conversion of, the
Securities,

           (g) make any change in Section 6.04, Section 6.07 or this Section
9.02, except to increase any percentage of Securities the Holders of which must
consent to any matter;

           (h) make any change that impairs or adversely affects the right to
convert any Security into Common Stock; or

           (i) make any change that adversely affects the right to require the
Company to repurchase the Securities pursuant to Section 3.08, or the right to
require the Company to repurchase the Securities upon a Change of Control
pursuant to Section 3.09, in accordance with the terms thereof and this
Indenture.

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

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

      Section IX.3. Compliance with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article IX shall comply with the TIA as then
in effect, if then required to so comply.

      Section IX.4. Revocation and Effect of Consents, Waivers and Actions.
Until an amendment, waiver or other action becomes effective, a consent to it or

                                      -36-

<PAGE>

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

        Section IX.5. Notation on or Exchange of Securities. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.

      Section IX.6. Trustee to Sign Supplemental Indentures. The Trustee shall
sign any supplemental indenture authorized pursuant to this Article IX if the
amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign such
supplemental indenture. In signing such amendment the Trustee shall receive, and
(subject to the provisions of Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.

      Section IX.7. Effect of Supplemental Indentures. Upon the effectiveness of
any supplemental indenture under this Article IX, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.


                                    ARTICLE X

                                   CONVERSION

      Section X.1. Conversion Privilege. A Holder of a Security may convert such
Security for Common Stock at any time during the period stated in paragraph 8 of
the Securities. The number of shares of Common Stock issuable upon conversion of
a Security per $1,000 of Principal Amount thereof (the "Conversion Rate") shall
be that set forth in paragraph 8 of the Securities, subject to adjustment as
herein set forth.

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

      Section X.2. Conversion Procedure. To convert a Security a Holder must
satisfy the requirements in paragraph 8 of the Securities. The date on which the
Holder of Securities satisfies all those requirements is the conversion date
(the "Conversion Date"). As soon as practicable after the Conversion Date, the
Company shall deliver to the Holder, through the Conversion Agent, a certificate
for the number of full shares of Common Stock issuable upon the conversion and
Cash in lieu of any fractional share determined pursuant to Section 10.03. Any
issuance of Common Stock pursuant to Section 10.01 shall be deemed to have been
effected immediately prior to the close of business on the applicable Conversion
Date and the Person or Persons in whose name or names any certificate or
certificates for Common Stock shall be issuable upon such repurchase shall be
deemed to have become on such Conversion Date the holder or holders of record of
the shares represented thereby; provided, however, that any surrender for
repurchase on a date when the stock transfer books of the Company shall be
closed shall constitute the Person or Persons in whose name or names the
certificate or certificates for such shares are to be issued as the recordholder
or holders thereof for all purposes at the opening of business on the next
succeeding day on which such stock transfer books are open. Upon conversion of a
Security, such Person shall no longer be a Holder of such Security.

      Except as provided in this Article X, no payment or adjustment will be
made for (a) the issuance of Common Stock or any securities convertible into or

                                      -37-

<PAGE>

exchangeable for Common Stock or carrying the right to purchase any of the
foregoing, (b) dividends on or other distribution with respect to any Common
Stock or (c) accrued Original Issue Discount. On conversion of a Security, that
portion of accrued Original Issue Discount attributable to the period from the
Issue Date of the Security to the Conversion Date with respect to the converted
Security shall not be canceled, extinguished or forfeited, but rather shall be
deemed to be paid in full to the Holder thereof through delivery of the Common
Stock (together with the Cash payment, if any, in lieu of fractional shares) in
exchange for the Security being converted pursuant to the provisions hereof.

      If more than one Security shall be delivered for conversion by the same
Holder, the number of full shares of Common Stock which shall be issuable upon
such conversion shall be computed on the basis of the aggregate Principal Amount
of all the Securities so delivered.

      Any Security that is to be converted only in part shall be surrendered at
the office of the Paying Agent (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or such
Holder's attorney duly authorized in writing) and the Company shall execute and
the Trustee shall authenticate and deliver to the Holder of such Security,
without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate Principal Amount equal to,
and in exchange for, the portion of the Principal Amount of the Security so
surrendered which is not converted.

      Section X.3. Fractional Shares. The Company will not issue a fractional
share of Common Stock upon conversion of a Security. Instead the Company will
pay Cash for the current market value of the fractional share. The current
market value of a fraction of a share shall be determined by multiplying the
Market Price by such fraction and rounding the product to the nearest whole
cent. If a Holder elects to have more than one Security purchased, the amount of
Cash payable in respect of fractional shares of Common Stock shall be based on
the aggregate amount of Securities to be purchased.

      Section X.4. Taxes on Conversion. If a Holder converts a Security, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on
the issue of shares of Common Stock upon the conversion. However, the Holder
shall pay any such tax which is due because the Holder requests the shares to be
issued in a name other than the Holder's name. The Conversion Agent may refuse
to deliver the certificates representing the Common Stock being issued in a name
other than the Holder's name until the Conversion Agent receives a sum
sufficient to pay any tax which will be due because the shares are to be issued
in a name other than the Holder's name. Nothing herein shall preclude any tax
withholding required by law or regulations.

      Section X.5. Company to Provide Stock. The Company shall, prior to
issuance of any Securities hereunder, and from time to time as may be necessary,
reserve out of its authorized but unissued Common Stock a sufficient number of
shares of Common Stock to permit the conversion of the Securities.

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

      The Company will endeavor promptly to comply with all Federal and state
securities laws regulating the issuance and delivery of shares of Common Stock
upon conversion of Securities, if any, and will use its best efforts to list or
cause to have quoted all such shares of Common Stock on each United States
national securities exchange or over-the-counter or other domestic market on
which the Common Stock is then listed or quoted.

      Section X.6. Adjustment of Conversion Rate.  The Conversion Rate shall be
subject to adjustments from time to time as follows:

      (a) If the Company shall pay or make a dividend or other distribution on
any class of capital stock of the Company payable in shares of Common Stock, the
Conversion Rate in effect at the opening of business on the day following the
Determination Date for such dividend or other distribution shall be increased by
dividing such Conversion Rate by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business on such

                                      -38-

<PAGE>

Determination Date and the denominator shall be the sum of such number of shares
and the total number of shares constituting such dividend or other distribution,
such increase to become effective immediately after the opening of business on
the day following such Determination Date. For the purposes of this paragraph
(a), the number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions of shares
of Common Stock. The Company will not pay any dividend or make any distribution
on shares of Common Stock held in the treasury of the Company.

      (b) Subject to the last sentence of paragraph (g) of this Section 10.06,
if the Company shall issue rights, options or warrants to all holders of its
Common Stock entitling them to subscribe for or purchase shares of Common Stock
at a price per share less than the current market price per share (determined as
provided in paragraph (h) of this Section 10.06) of the Common Stock on the
Determination Date for such distribution, the Conversion Rate in effect at the
opening of business on the day following such Determination Date shall be
increased by dividing such Conversion Rate by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on such Determination Date plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator shall be the number of shares of Common
Stock outstanding at the close of business on such Determination Date plus the
number of shares of Common Stock so offered for subscription or purchase, such
increase to become effective immediately after the opening of business on the
day following such Determination Date. For the purposes of this paragraph (b),
the number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of Common
Stock. The Company will not issue any rights, options or warrants in respect of
shares of Common Stock held in the treasury of the Company. If any right, option
or warrant terminates or expires without being exercised, the Conversion Rate
shall, upon such termination or expiration, be changed to the Conversion Rate
that would have been in effect at the time of such termination or expiration had
such right, option or warrant, to the extent outstanding immediately prior to
such expiration or termination, never been issued.

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

      (d) Subject to the last sentence of paragraph (g) of this Section 10.06,
if the Company shall, by dividend or otherwise, distribute to all holders of its
Common Stock evidences of its indebtedness, shares of any class of capital
stock, or other property (including securities, but excluding (i) any rights,
options or warrants referred to in paragraph (b) of this Section, (ii) any
dividend or distribution paid exclusively in cash, (iii) any dividend or
distribution referred to in paragraph (a) of this Section and (iv) any merger or
consolidation to which Section 10.12 applies), the Conversion Rate shall be
adjusted by dividing the Conversion Rate in effect immediately prior to the
close of business on the Determination Date for such distribution by a fraction
of which the numerator shall be the current market price per share (determined
as provided in paragraph (h) of this Section 10.06) of the Common Stock on such
Determination Date less the then fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and described in a Board
Resolution filed with the Trustee) of the portion of the assets, shares or
evidences of indebtedness so distributed applicable to one share of Common Stock
and the denominator shall be such current market price per share of the Common
Stock, such adjustment to become effective immediately prior to the opening of
business on the day following such Determination Date. If the Board of Directors
determines the fair market value of any distribution for purposes of this
paragraph (d) by reference to the actual or when issued trading market for any
securities comprising such distribution, it must in doing so consider the prices
in such market over the same period used in computing the current market price
per share pursuant to paragraph (h) of this Section 10.06.

                                      -39-

<PAGE>

      (e) If the Company shall, by dividend or otherwise, make a Cash
Distribution in an aggregate amount that, together with (i) the aggregate amount
of any other Cash Distributions made within the 12 months preceding the date of
payment of such distribution in respect of which no adjustment pursuant to this
paragraph (e) or paragraph (f) of this Section 10.06 has been made and (ii) any
Excess Purchase Payment made within the 12 months preceding the date of such
distribution and in respect of which no adjustment pursuant to this paragraph
(e) or paragraph (f) of this Section 10.06 has been made, exceeds 12.5% of the
Company's Market Capitalization on the Determination Date for such Cash
Distribution, then, and in each such case, immediately after the close of
business on the Determination Date for such Cash Distribution, the Conversion
Rate shall be adjusted by dividing the Conversion Rate in effect immediately
prior to the close of business on such Determination Date by a fraction (x) the
numerator of which shall be equal to the current market price per share
(determined as provided in paragraph (h) of this Section 10.06) of the Common
Stock on such Determination Date less an amount equal to the quotient of (1) the
amount of such excess divided by (2) the number of shares of Common Stock
outstanding on such Determination Date and (y) the denominator of which shall be
equal to the current market price per share (determined as provided in paragraph
(h) of this Section 10.06) of the Common Stock on such Determination Date.

      (f) If the Company or any its Subsidiaries shall make Excess Purchase
Payments in an aggregate amount that, together with (i) the aggregate amount of
any other Excess Purchase Payments made by the Company or any Subsidiary within
the 12 months preceding such Excess Purchase Payment in respect of which no
adjustment pursuant to this paragraph (f) or paragraph (e) of this Section 10.06
has been made and (ii) the aggregate amount of any Cash Distributions made
within the 12 months preceding such Excess Purchase Payment in respect of which
no adjustment pursuant to this paragraph (f) and paragraph (e) of this Section
10.06 has been made, exceeds 12.5% of the Company's Market Capitalization as of
the Determination Date for such Excess Purchase Payment, then, and in each such
case, immediately prior to the opening of business on the day after the tender
offer in respect of which such Excess Purchase Payment is to be made expires,
the Conversion Rate shall be adjusted by dividing the Conversion Rate in effect
immediately prior to the close of business on the Determination Date for such
tender offer by a fraction (x) the numerator of which shall be equal to the
current market price per share (determined as provided in paragraph (h) of this
Section 10.06) of the Common Stock on such Determination Date less an amount
equal to the quotient of (1) the amount of such excess divided by (2) the number
of shares of Common Stock outstanding on such Determination Date (excluding any
shares purchased in such tender offer) and (y) the denominator of which shall be
equal to the current market price per share (determined as provided in paragraph
(h) of this Section 10.06) of the Common Stock on such Determination Date.

      (g) The reclassification of Common Stock into securities other than Common
Stock (other than any reclassification to which Section 10.12 applies) shall be
deemed to involve (i) a distribution of such securities other than Common Stock
to all holders of Common Stock (and the effective date of such reclassification
shall be deemed to be the Determination Date), and (ii) a subdivision or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of shares
of Common Stock outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be "the day upon which such subdivision
becomes effective" or "the day upon which such combination becomes effective",
as the case may be, and "the day upon which such subdivision or combination
becomes effective" within the meaning of paragraph (c) of this Section 10.06).
Rights or warrants issued by the Company to all holders of its Common Stock
entitling the holders thereof to subscribe for or purchase shares of Common
Stock, which rights or warrants (i) are deemed to be transferred with such
shares of Common Stock, (ii) are not exercisable and (iii) are also issued in
respect of future issuances of Common Stock, in each case in clauses (i) through
(iii) until the occurrence of a specified event or events ("Trigger Event"),
shall for purposes of this Section 10.06 not be deemed issued until the
occurrence of the earliest Trigger Event.

      (h) For the purpose of any computation under paragraphs (b), (d), (e) or
(f) of this Section 10.06, the current market price per share of Common Stock on
any date shall be calculated by the Company and be deemed to be the average of
the daily Sale Prices for the five consecutive Trading Days selected by the
Company commencing not more than 10 Trading Days before, and ending not later
than, the earlier of the day in question and the day before the "ex" date with
respect to the issuance or distribution requiring such computation. For purposes
of this paragraph, the term "ex date", when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades regular way
in the applicable securities market or on the applicable securities exchange
without the right to receive such issuance or distribution.

                                      -40-

<PAGE>

      Section X.7. When Adjustment May Be Deferred. No adjustment in the
Conversion Rate need be made unless the adjustment would require an increase or
decrease of at least 1% in the Conversion Rate. Any adjustments that are not
made shall be carried forward and taken into account any subsequent adjustment.

      All calculations under this Article X shall be made to the nearest cent or
to the nearest 1/100th of a share, as the case may be.

      Section X.8. When No Adjustment Required. No adjustment need be made for
rights to purchase Common Stock pursuant to a Company plan for reinvestment of
dividends or interest.

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

      To the extent the Securities become convertible into Cash, assets,
property or securities (other than capital stock of the Company), no adjustment
need be made thereafter as to the Cash, assets, property or such securities.
Interest will not accrue on the Cash.

      Section X.9. Notice of Adjustment. Whenever the Conversion Rate is
adjusted, the Company shall promptly mail to Holders a notice of the adjustment.
The Company shall file with the Trustee and the Conversion Agent such notice.
The certificate shall, absent manifest error, be conclusive evidence that the
adjustment is correct. Neither the Trustee nor any Conversion Agent shall be
under any duty or responsibility with respect to any such certificate except to
exhibit the same to any Holder desiring inspection thereof.

      Section X.10. Voluntary Increase. The Company may, at its option, make
such increases in the Conversion Rate, in addition to those required by Section
10.06, 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 may from time to time increase the
Conversion Rate by any amount for any period of time if the period is at least
20 days, the increase is irrevocable during the period and the Board of
Directors shall have made a determination, in its sole discretion, that such
increase would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Rate is so increased, the Company
shall mail to Holders and file with the Trustee and the Conversion Agent a
notice of such increase. The Company shall mail such notice at least 15 days
before the date the increased Conversion Rate takes effect. The notice shall
state the increased Conversion Rate and the period it will be in effect.

      Section X.11. Notice of Certain Transactions. If:

           (a) the Company makes any distribution or dividend that would require
an adjustment in the Conversion Rate pursuant to Section 10.06; or

           (b) the Company takes any action that would require a supplemental
indenture pursuant to Section 10.12; or

           (c)  there is a liquidation, dissolution or winding-up of the
Company; then the Company shall mail to Holders and file with the Trustee and
the Conversion Agent a notice stating the proposed record date for a dividend or
distribution or the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up. The Company shall file and mail the notice at least
15 days before such date; provided that failure to file or mail the notice or
any defect in it shall not affect the validity of the transaction.

      Section X.12. Effect of Reclassification, Consolidation, Merger or Sale.
If any of the following events occur, namely (a) any reclassification of Common
Stock (other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or combination),

                                      -41-

<PAGE>

(b) any consolidation, combination or merger of the Company with another
corporation as a result of which holders of Common Stock shall be entitled to
receive stock, securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock, or (c) any sale or conveyance
of the properties and assets of the Company as, or substantially as, an entirety
to any other corporation as a result of which holders of Common Stock shall be
entitled to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Common Stock, then the Company or
the successor or purchasing corporation, as the case may be, shall execute with
the Trustee a supplemental indenture, providing that each Security shall be
convertible into the kind and amount of shares of stock and other securities or
property or assets (including cash) receivable upon such reclassification,
consolidation, merger, combination, sale or conveyance by a holder of a number
of shares of Common Stock issuable upon conversion of such Securities
immediately prior to such reclassification, consolidation, merger, combination,
sale or conveyance, assuming that a Holder thereof would not have exercised any
rights of election as to the stock, securities or other property or assets
(including Cash) receivable in connection therewith. 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.

      The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder of Securities in the manner provided for
in Section 11.02 of this Indenture.

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

      If this Section applies, Section 10.06 shall not apply.

      Section X.13. Company Determination Final. Any determination that the
Company or the Board of Directors must make pursuant to this Article X is
conclusive.

      Section X.14. Trustee's Adjustment Disclaimer. The Trustee has no duty to
determine when an adjustment under this Article X should be made, how it should
be made or what it should be. The Trustee has no duty to determine whether a
supplemental indenture under Section 10.12 need be entered into or whether any
provisions of any supplemental indenture are correct. The Trustee shall not be
accountable for and makes no representation as to the validity or value of any
securities or assets issued upon conversion of Securities. The Trustee shall not
be responsible for the Company's failure to comply with this Article X, and
shall not be deemed to have knowledge of any adjustment unless and until it
shall have received a notice of adjustment pursuant to Section 10.09. Each
Conversion Agent shall have the same protection under this Section 10.14 as the
Trustee.

      Section X.15. Simultaneous Adjustments. In the event that this Article X
requires adjustments to the Conversion Rate under more than one of Sections
10.06(a), 10.06(b), 10.06(d) or 10.06(e), and the record dates for the
distributions giving rise to such adjustments shall occur on the same date, then
such adjustments shall be made by applying, first, the provisions of Section
10.06(d), second, the provisions of Section 10.06(e), third, the provisions of
Section 10.06(a) and, fourth, the provisions of Section 10.06(b), provided that
the Conversion Rate will not be adjusted under two provisions for the same
event.

      Section X.16. Successive Adjustments. After an adjustment to the
Conversion Rate under this Article X, any subsequent event requiring an
adjustment under this Article X shall cause an adjustment to the Conversion Rate
as so adjusted.

      Section X.17. General Considerations. Whenever successive adjustments to
the Conversion Rate are called for pursuant to this Article X, such adjustments
shall be made to the provisions of Section 10.06(h) as may be necessary or
appropriate to effectuate the intent of this Article X and to avoid unjust or
inequitable results as determined in good faith by the Board of Directors.


                                   ARTICLE XI

                                  MISCELLANEOUS

                                      -42-

<PAGE>

      Section XI.1. Trust Indenture Act. This Indenture is hereby made subject
to, and shall be governed by, the provisions of the TIA required to be part of
and to govern indentures qualified under the TIA; provided, however that this
Section 11.01 shall not require this Indenture or the Trustee to be qualified
under the TIA prior to the time such qualification is in fact required under the
terms of the TIA, nor shall it constitute any admission or acknowledgment by any
party that any such qualification is required prior to the time such
qualification is in fact required under the terms of the TIA. If any provision
hereof limits, qualifies or conflicts with another provision hereof which is
required to be included in an indenture qualified under the TIA, such required
provision shall control. If any provision hereof modifies or excludes any
provision of the TIA that may be so modified or excluded, the latter provision
of the TIA shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.

      Section XI.2. Notices. Any request, demand, authorization, notice, waiver,
consent or communication shall be in writing and delivered in Person or mailed
by first class mail, postage prepaid, addressed as follows or transmitted by
facsimile transmission (confirmed by overnight courier) to the following
facsimile numbers:

      If to the Company:

           AMF Bowling, Inc.
           8100 AMF Drive
           Richmond, VA  23111
           Attn: Secretary

           Telephone Number: (804) 730-4000
           Facsimile Number: (804) 730-4327

      With a copy to:

           McGuire, Woods, Battle & Boothe LLP
           901 East Cary Street
           Richmond, VA  23219
           Attn: Joseph C. Carter, III, Esq.

           Telephone Number: (804) 775-1000
           Facsimile Number:  (804) 775-1061

           and to

           Wachtell, Lipton, Rosen & Katz
           51 West 52nd Street
           New York, NY 10019
           Attn: Daniel A. Neff, Esq.

           Telephone Number: (212) 403-1000
           Facsimile Number:  (212) 403-2000

      If to the Trustee:

           The Bank of New York
           101 Barclay Street
           Floor 21 West
           New York, New York  10286
           (Attention: Corporate Trust Administration)

           Telephone Number: (212) 815-5939
           Facsimile Number:  (212) 815-5915

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

                                      -43-

<PAGE>

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

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

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

      Section XI.3. Communication by Holders with Other Holders.  Holders may
Communication by Holders with Other Holders communicate pursuant to TIA Section
312(b) with other Holders with respect to their rights under this Indenture or
the Securities. The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent and anyone else shall have the protection of TIA Section
312(c).

      Section XI.4. Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee:

           (a) an Officers' Certificate 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

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

      Section XI.5. Statements Required in Certificate or Opinion. Each
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:

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

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

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

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

      Section XI.6. Separability Clause. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

      Section XI.7. Rules by Trustee, Paying Agent, Conversion Agent and
Registrar. The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar, Conversion Agent and the Paying Agent may make
reasonable rules for their functions.

      Section XI.8. Legal Holidays. A "Legal Holiday" is any day other than a
Business Day. If any specified date (including a date for giving notice) is a
Legal Holiday, the action shall be taken on the next succeeding day that is not
a Legal Holiday, and to the extent applicable no Original Issue Discount or
interest, if any, or Liquidated Damages, if any, shall accrue for the
intervening period. If the last day (other than the Stated Maturity) on which a
Security may be converted is a Legal Holiday in a place where a Conversion Agent
is located, the Security may be surrendered to that Conversion Agent on the next
succeeding day that it is not a Legal Holiday.

                                      -44-

<PAGE>

      Section XI.9. Governing Law. THE LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THIS INDENTURE AND THE SECURITIES, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS.

      Section XI.10. No Recourse Against Others. A director, officer, employee
or stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.

      Section XI.11. Successors. All agreements of the Company in this Indenture
and the Securities shall bind its successor. All agreements of the Trustee in
this Indenture shall bind its successor.

      Section XI.12. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.

      Section XI.13. Liquidated Damages. The Company agrees that the Holders are
entitled to the benefits of the Registration Rights Agreement and that
Liquidated Damages, if any, will be payable on the Securities and the Common
Stock issuable upon conversion, redemption or repurchase thereof in accordance
with, and subject to, the terms and conditions set forth herein and therein.

                                      -45-

<PAGE>


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

                                           AMF BOWLING, INC.


                                           By_____________________________
                                              Name:
                                              Title:

                                           THE BANK OF NEW YORK


                                           By_____________________________
                                             Authorized Signatory


                                      -46-
<PAGE>

STATE OF NEW YORK  )   ss.:
COUNTY OF NEW YORK )

           On the _____ day of May, 1998, before me personally came Stephen E.
Hare, to me known, who, being by me duly sworn, did depose and say that he is
the Executive Vice President of AMF Bowling, Inc., one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.

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



STATE OF NEW YORK  )   ss.:
COUNTY OF NEW YORK )


           On the _____ day of May, 1998, before me personally came
___________________________, to me known, who, being by me duly sworn, did
depose and say that he is ___________________________________________________ of
The Bank of New York, one of the corporations described in and which executed
the foregoing instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation, and that he signed
his name thereto by like authority.



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

                                      -47-
<PAGE>


                                    EXHIBIT A

                           [FORM OF FACE OF SECURITY]

      FOR UNITED STATES FEDERAL INCOME TAX PURPOSES, THIS SECURITY BEARS
ORIGINAL ISSUE DISCOUNT. INFORMATION INCLUDING THE ISSUE PRICE, AMOUNT OF
ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE, AND THE YIELD TO MATURITY WILL BE MADE
AVAILABLE TO HOLDERS UPON REQUEST TO THE SECRETARY OF THE COMPANY AT (804)
730-4000.


                      [FORM OF LEGEND FOR GLOBAL SECURITY]

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

      THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION,
REDEMPTION OR REPURCHASE OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.

      THIS SECURITY AND ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION,
REDEMPTION OR REPURCHASE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER ACQUIRING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (II) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 904 OF REGULATION
S UNDER THE SECURITIES ACT, (III) TO AN INSTITUTION THAT IS AN ACCREDITED
INVESTOR WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) or (7) UNDER THE
SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, (IV) PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (V) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND IN EACH OF
CASES (I) THROUGH (V) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES AND OTHER JURISDICTIONS OF THE UNITED STATES. NO REPRESENTATION CAN BE
MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 FOR RESALES OF
THE SECURITIES OR ANY SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION,
REDEMPTION OR REPURCHASE THEREOF.

      THIS SECURITY, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION,
REDEMPTION OR REPURCHASE AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER
TRANSFERS OF THIS SECURITY AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN
APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES
RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE
HOLDER OF THIS SECURITY AND ANY SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF
THIS SECURITY OR ANY SUCH SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR
SUPPLEMENT.

<PAGE>

                                AMF BOWLING, INC.


                   ZERO COUPON CONVERTIBLE DEBENTURE DUE 2018


No. _________                                                  CUSIP: 03113VAA7


Issue Date:  May 12, 1998                     Original Issue Discount:  $743.43
Issue Price: $252.57                          (for each $1,000 Principal Amount)
(for each $1,000 Principal Amount)



      AMF Bowling, Inc., a Delaware corporation, promises to pay to          or
registered assigns, on May 12, 2018 [the Principal Amount of
Dollars ($    )].(1)

      This Security shall not bear interest except as specified on the other
side of this Security. Original Issue Discount will accrue as specified on the
other side of this Security. This Security is convertible and subject to
repurchase or redemption as specified on the other side of this Security.

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

      IN WITNESS WHEREOF, AMF Bowling, Inc. has caused this instrument to be
duly executed under its corporate seal.

                                          AMF BOWLING, INC.


                                          By:_________________________________
                                              Name:
                                              Title:
[SEAL]

Attest:


By:_________________________________
     Name:
     Title:

Dated:  May 12, 1998

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

THE BANK OF NEW YORK,
as Trustee, certifies that this is one of the Securities
referred to in the within-mentioned Indenture.

By_____________________________
           Authorized Signatory

(1) The global Security will read instead: "The Principal Amount then shown on
    Schedule A hereto."

                                      A-2
<PAGE>



                       [FORM OF REVERSE SIDE OF SECURITY]

                                AMF BOWLING, INC.

                   ZERO COUPON CONVERTIBLE DEBENTURE DUE 2018


1.    Interest

      This Security shall not bear interest, except that if any amount payable
hereunder is not paid when due (whether upon acceleration pursuant to Section
6.02 of the Indenture, upon the date set for payment of the Redemption Price
pursuant to paragraph 5 hereof, upon the date set for payment of a Purchase
Price or Change of Control Redemption Price pursuant to paragraph 6 hereof or
upon the Stated Maturity of this Security, or otherwise), then in each such case
the overdue amount shall bear interest at the rate of 7% per annum, compounded
semiannually (to the extent that the payment of such interest shall be legally
enforceable), which interest shall accrue from the date such overdue amount was
due to the date payment of such amount, including interest thereon, has been
made or duly provided for. All such interest shall be payable on demand. The
accrual of such interest on overdue amounts shall, in the case of any late
payment of the Principal Amount, Purchase Price or Change of Control Redemption
Price, be in lieu of, and not in addition to, the continued accrual of Original
Issue Discount.

      The Original Issue Discount (the difference between the Issue Price and
the Principal Amount of the Security) in the period during which a Security
remains outstanding, shall accrue at 7% per annum, on a semiannual bond
equivalent basis using a 360-day year composed of twelve 30-day months,
commencing on May 12, 1998.

2.    Method of Payment

      Subject to the terms and conditions of the Indenture, the Company will
make payments in respect of the Securities to the Persons who are registered
Holders of Securities at the close of business on the Business Day preceding the
Redemption Date or Stated Maturity, as the case may be, or at the close of
business on a Purchase Date or Repurchase Date, as the case may be. Holders must
surrender Securities to a Paying Agent to collect such payments in respect of
the Securities. The Company will pay cash amounts in money of the United States
that at the time of payment is legal tender for payment of public and private
debts.

3.    Paying Agent, Conversion Agent and Registrar

      Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent, Conversion Agent and Registrar. The
Company may appoint and change any Paying Agent, Conversion Agent, Registrar or
co-registrar without notice, other than notice to the Trustee. The Company or
any of its Subsidiaries or any of their Affiliates may act as Paying Agent,
Conversion Agent, Registrar or co-registrar.

4.    Indenture

      The Company issued the Securities under an Indenture (the "Indenture"),
dated as of May 12, 1998, between the Company and the Trustee. Capitalized terms
used herein and not defined herein have the meanings ascribed thereto in the
Indenture. The Securities are subject to all such terms, and Holders are
referred to the Indenture for a statement of those terms.

      The Securities are general unsecured obligations of the Company limited to
$900,000,000 aggregate Principal Amount (subject to Sections 2.02 and 2.07 of
the Indenture). The Indenture does not limit the incurrence of other
indebtedness of the Company, secured or unsecured.

                                      A-3

<PAGE>

5.    Redemption at the Option of the Company

      No sinking fund is provided for the Securities. Subject to the terms and
conditions of the Indenture, the Securities are redeemable as a whole, or from
time to time in part, at any time at the option of the Company at the Redemption
Prices set forth below, provided that the Securities are not redeemable prior to
May 12, 2003.

      The "Redemption Price" of any Security shall be equal to the Issue Price
of such Security plus accrued Original Issue Discount, interest, if any, and
Liquidated Damages, if any, thereon to the date of redemption. The table below
shows the Redemption Price of a Security per $1,000 Principal Amount on the
dates shown below and at Stated Maturity, which prices reflect accrued Original
Issue Discount calculated to each such date. The Redemption Price of a Security
redeemed between such dates would include an additional amount reflecting the
additional Original Issue Discount accrued since the next preceding date in the
table to the actual Redemption Date.


<TABLE>
<CAPTION>
                                    (1)                    (2)                     (3)
                               Security Issue        Accrued Original          Redemption
                                   Price           Issue Discount at 7%           Price
   Redemption Date                                                              (1) + (2)
--------------------------    -----------------    ---------------------   --------------------
<S>   <C>
May 12, 2003.............              $252.57                  $103.71                $356.28

May 12, 2004.............               252.57                   129.08                 381.65

May 12, 2005.............               252.57                   156.27                 408.84

May 12, 2006.............               252.57                   185.39                 437.96

May 12, 2007.............               252.57                   216.58                 469.15

May 12, 2008.............               252.57                   250.00                 502.57

May 12, 2009.............               252.57                   285.79                 538.36

May 12, 2010.............               252.57                   324.14                 576.71

May 12, 2011.............               252.57                   365.21                 617.78

May 12, 2012.............               252.57                   409.21                 661.78

May 12, 2013.............               252.57                   456.35                 708.92

May 12, 2014.............               252.57                   506.84                 759.41

May 12, 2015.............               252.57                   560.93                 813.50

May 12, 2016.............               252.57                   618.87                 871.44

May 12, 2017.............               252.57                   680.94                 933.51

Stated Maturity..........               252.57                   747.43               1,000.00
</TABLE>

6.    Purchase by the Company at the Option of the Holder; Redemption at the
      Option of the Holder Upon a Change of Control

           (a) Subject to the terms and conditions of the Indenture, the Company
shall become obligated to purchase, at the option of the Holder, the Securities
held by such Holder on the following Purchase Dates and at a Purchase Price
equal to the Issue Price of such Security plus accrued Original Issue Discount,

                                      A-4

<PAGE>

interest, if any, and Liquidated Damages, if any, thereon to the date of
purchase, upon delivery of a Purchase Notice containing the information set
forth in the Indenture, from the opening of business on the date that is 20
Business Days prior to such Purchase Date until the close of business on such
Purchase Date and upon delivery of the Securities to the Paying Agent by the
Holder as set forth in the Indenture. Such Purchase Prices may be paid, at the
option of the Company, in cash or by the issuance and delivery of shares of
Common Stock of the Company, or in any combination thereof.

                PURCHASE DATE              PURCHASE PRICE
                ------------               --------------
                May 12, 2003                   $356.28
                May 12, 2008                   $502.57
                May 12, 2013                   $708.92

Securities in denominations larger than $1,000 of Principal Amount may be
required by the Holder to be purchased in part, but only in integral multiples
of $1,000 of Principal Amount.

           (b) At the option of the Holder and subject to the terms and
conditions of the Indenture, the Company shall become obligated to redeem the
Securities held by such Holder 45 days after the date of the Company's notice of
a Change of Control occurring on or prior to May 12, 2018 for a Change of
Control Redemption Price per $1,000 Principal Amount equal to the Issue Price
plus accrued Original Issue Discount, interest, if any, and Liquidated Damages,
if any, to the Repurchase Date. Securities in denominations larger than $1,000
of Principal Amount may be required by the Holder to be redeemed in part in
connection with a Change of Control, but only in integral multiples of $1,000 of
Principal Amount.

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

           (d) If the Paying Agent holds, in accordance with the Indenture, on
the Business Day following a Purchase Date or a Repurchase Date money or
securities, if permitted hereunder and under the Indenture, sufficient to pay
the Securities payable on that date, then on and after that date such Securities
shall cease to be outstanding and Original Issue Discount and interest, if any,
on such Securities shall cease to accrue, whether or not book-entry transfer of
such Securities is made or such Securities are delivered to the Paying Agent,
and the Holders thereof shall have no other rights as such (other than the right
to receive such payment).

7.    Notice of Redemption at the Option of the Company

      Notice of redemption at the option of the Company will be mailed at least
30 days but not more than 60 days before the Redemption Date to each Holder of
Securities at the Holder's registered address. If the Paying Agent holds, in
accordance with this Indenture, on a Redemption Date money sufficient to pay the
Securities payable on that date, then on and after that date such Securities
shall cease to be outstanding and Original Issue Discount and interest, if any,
on such Securities shall cease to accrue, whether or not book-entry transfer of
such Securities is made or such Securities are delivered to the Paying Agent,
and the Holders thereof shall have no other rights as such (other than the right
to receive such payment); provided that notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made. Securities in denominations larger than $1,000 of
Principal Amount may be redeemed in part but only in integral multiples of
$1,000 of Principal Amount.

8.    Conversion

      Subject to the next two succeeding sentences and the terms and conditions
of the Indenture, a Holder of a Security may convert this Security for Common
Stock of the Company at any time prior to the close of business on May 12, 2018.
If this Security is called for redemption, the Holder may convert it at any time
before the close of business on the applicable Redemption Date unless the
Company defaults in the payment of the Redemption Price. A Security in respect
of which a Holder has delivered a notice of exercise of the option to require
the Company to purchase such Security pursuant to Section 3.08 of the Indenture
or to repurchase such Security in the event of a Change of Control pursuant to
Section 3.09 of the Indenture may be converted only if the notice of such
exercise is withdrawn in accordance with the terms of the Indenture.

<PAGE>



      The initial Conversion Rate is 8.6734 shares of Common Stock per $1,000
Principal Amount, subject to adjustment in certain events specified in Section
10.06 of the Indenture. The Company will deliver Cash in lieu of any fractional
share of Common Stock as provided in the Indenture.

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

      A Holder may convert a portion of this Security if the Principal Amount of
such portion is $1,000 or an integral multiple of $1,000. No payment or
adjustment will be made for dividends on the Common Stock except as provided in
the Indenture. On conversion of this Security, that portion of accrued Original
Issue Discount attributable to the period from the Issue Date to the Conversion
Date with respect to the converted portion of this Security shall not be
canceled, extinguished or forfeited, but rather shall be deemed to be paid in
full to the Holder thereof through the delivery of the Common Stock (together
with any cash payment in lieu of fractional shares) in exchange for the portion
of this Security being converted pursuant to the terms hereof.

9.    Conversion Arrangement on Call for Redemption

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

10.   Registration Rights

      The Holder of this Security and the Common Stock issuable upon conversion,
redemption or repurchase thereof is entitled to the benefits of a Registration
Rights Agreement (subject to the provisions thereof), dated as of May 12, 1998,
among the Company, the Designated Subsidiaries named therein and the Initial
Purchasers.

11.   Denominations; Transfer; Exchange

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

<PAGE>



12.   Persons Deemed Owners

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

13.   Unclaimed Money or Securities

      The Trustee and the Paying Agent shall return to the Company upon written
request any money or securities held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years, provided,
however, that the Trustee or such Paying Agent, before being required to make
any such return, may at the expense of the Company cause to be published once in
a newspaper of general circulation in The City of New York or mail to each such
Holder notice that such money or securities remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication or mailing, any unclaimed money or securities then remaining
will be returned to the Company.

14.   Amendment; Waiver

      Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount of the Securities
at the time outstanding and (ii) certain defaults or noncompliance with certain
provisions may be waived with the written consent of the Holders of a majority
in aggregate Principal Amount of the Securities at the time outstanding. Subject
to certain exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, defect or inconsistency, or to comply with
Article V or Section 10.12 of the Indenture, to provide for uncertificated
Securities in addition to or in place of certificated Securities or to make any
change that does not adversely affect the rights of any Securityholder or to
comply with any requirement of the SEC in connection with the qualification of
the Indenture under the TIA.

15.   Defaults and Remedies

      If an Event of Default (as defined in the Indenture) occurs and is
continuing, the Trustee, or the Holders of at least 25% in aggregate Principal
Amount of the Securities at the time outstanding, may declare all the Securities
to be due and payable immediately. Certain events of bankruptcy or insolvency
are Events of Default which will result in the Securities being declared due and
payable immediately upon the occurrence of such Events of Default.

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

16.   Trustee Dealings with the Company

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

<PAGE>



17.   No Recourse Against Others

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

18.   Authentication

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

19.   Abbreviations

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

20.   Governing Law

      THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.


<PAGE>



                          [FORM OF CONVERSION NOTICE]

                               CONVERSION NOTICE

To:   AMF Bowling, Inc.

      The undersigned registered holder of this Security hereby irrevocably
exercises the option to convert this Security, or portion hereof (which is $
1,000 Principal Amount or an integral multiple thereof) below designated, for
shares of Common Stock of AMF Bowling, Inc. in accordance with the terms of the
Indenture referred to in this Security, and directs that the shares issuable and
deliverable upon such conversion, together with any check in payment for
fractional shares and any Securities representing any unconverted Principal
Amount hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares or any portion of this
Security not converted are to be issued in the name of a Person other than the
undersigned, the undersigned will pay any documentary, stamp or similar issue or
transfer taxes payable with respect thereto.

Dated:
                             ------------------------------

                             ------------------------------
                                       Signature (s)


Fill in for registration of shares if to be
delivered, and Securities if to be issued
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


<PAGE>



                     [FORM OF ELECTION OF HOLDER TO REQUIRE
                      REDEMPTION UPON A CHANGE OF CONTROL]


To:   The Bank of New York

      The undersigned registered holder of this Security hereby acknowledges
receipt of a notice from AMF Bowling, Inc. (the "Company") as to the occurrence
of a Change of Control with respect to the Company and requests and instructs
the Company to repurchase this Security, or the portion hereof (which is $1,000
Principal Amount or an integral multiple thereof) below designated, as of the
Repurchase Date pursuant to the terms and conditions specified in paragraph 6(b)
of this Security and in the Indenture the Indenture referred to in this
Security.

      The undersigned hereby directs the Company to pay ____________________ an
amount in Cash or, at the Company's election, Common Stock valued as set forth
in the Indenture, equal to the Issue Price plus accrued Original Issue Discount
and interest, if any, and Liquidated Damages, if any, to the Repurchase Date
(the "Change of Control Redemption Price"), as provided in the Indenture;
provided that if the Company elects to pay any portion of the Change of Control
Redemption Price in Common Stock but such portion will ultimately be payable in
Cash, pursuant to Section 3.09(d) or (e) of the Indenture, then the undersigned
elects (check one):

      (  ) to withdraw this notice with respect to the following Securities:

           Principal Amount:

           Certificate numbers:

      (  ) to receive Cash in respect of the entire Change of Control Redemption
           Price with respect to the Securities that are subject to this notice.

Notice: If the Holder fails to make an election, the Holder shall be deemed to
have elected to receive Cash in respect of the entire Change of Control
Redemption Price for all Securities subject to this notice.


Dated: __________

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

                                            --------------------------------
                                                              Signature (s)


                                            Security certificate number:

                                            Principal Amount to be redeemed
                                            (if less than all): $_____________

                                            Remaining Principal Amount after
                                            redemption: $________________

                                            --------------------------------
                                            Social Security or Other Taxpayer
                                            Identification Number


<PAGE>



             (FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITY
                    TO REFLECT CHANGES IN PRINCIPAL AMOUNT]

                                   Schedule A

Principal Amount of Global Security:  $____________, reduced as set forth below.

                 Changes to Principal Amount of Global Security

<TABLE>
<CAPTION>



     Date           Principal Amount of Securities by which         Remaining Principal Amount       Notation Made
                    this Global Security is to be Reduced,            of this Global Security             by
                           and Reason for Reduction
<S> <C>

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

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

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

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

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

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

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

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

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

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

</TABLE>