================================================================================




                              Young & Rubicam Inc.

                                       to

                              The Bank of New York,
                                   as Trustee
                                                    -----------

                                    Indenture

                          Dated as of January 20, 2000

                   3% Convertible Subordinated Notes due 2005





================================================================================

<PAGE>

                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----

                                    ARTICLE I


                   DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01      Definitions..................................................1
Section 1.02      Other Definitions............................................9
Section 1.03      Incorporation by Reference of Trust Indenture Act...........10
Section 1.04      Rules of Construction.......................................11

                                   ARTICLE II


                                 THE SECURITIES

Section 2.01      Form and Dating.............................................11
Section 2.02      Execution, Authentication and Delivery......................14
Section 2.03      Registrar, Paying Agent and Conversion Agent................14
Section 2.04      Paying Agent to Hold Money in Trust.........................15
Section 2.05      Noteholder Lists............................................15
Section 2.06      Transfer and Exchange.......................................15
Section 2.07      Replacement Securities......................................20
Section 2.08      Outstanding Securities......................................21
Section 2.09      Treasury Securities.........................................21
Section 2.10      Temporary Securities; Exchange of Global Security
                  for Definitive Securities...................................22
Section 2.11      Cancellation................................................23
Section 2.12      Payment of Interest: Interest Rights........................23
Section 2.13      Computation of Interest.....................................25
Section 2.14      CUSIP Number................................................25
Section 2.15      RegulationS.................................................25
Section 2.16      Persons Deemed Owners.......................................25

                                   ARTICLE III


                                   REDEMPTION

Section 3.01      Notices to Trustee..........................................26
Section 3.02      Selection of Securities to be...............................26
Section 3.03      Notice of Redemption........................................27
Section 3.04      Effect of Notice of Redemption..............................28
Section 3.05      Deposit of Redemption Price.................................28
Section 3.06      Securities Redeemed in Part.................................29
Section 3.07      Optional Redemption.........................................29
Section 3.08      Designated Event Offer......................................29


                                       i

<PAGE>

                                   ARTICLE IV


                                    COVENANTS

Section 4.01      Payment of Securities.......................................33
Section 4.02      SEC Reports.................................................33
Section 4.03      Compliance Certificate......................................34
Section 4.04      Stay, Extension and Usury Law...............................35
Section 4.05      Corporate Existence.........................................35
Section 4.06      Taxes.......................................................36
Section 4.07      Designated Event............................................36

                                    ARTICLE V


                                   CONVERSION

Section 5.01      Conversion Privilege........................................36
Section 5.02      Conversion Procedure........................................37
Section 5.03      Fractional Shares...........................................38
Section 5.04      Taxes on Conversion.........................................38
Section 5.05      Company to Provide..........................................39
Section 5.06      Adjustment of Conversion Price..............................39
Section 5.07      No Adjustment...............................................45
Section 5.08      Other Adjustments...........................................45
Section 5.09      Adjustments for Tax.........................................45
Section 5.10      Adjustments by the Company..................................46
Section 5.11      Notice of Adjustment........................................46
Section 5.12      Notice of Certain Transactions..............................46
Section 5.13      Effect of Reclassifications, Consolidations, Mergers,
                  Continuances or Sales on Conversion Privilege...............46
Section 5.14      Trustee's Disclaimer........................................48
Section 5.15      Cancellation of Converted Securities........................48
Section 5.16      Restriction on Common Stock Issuable Upon
                  Conversion..................................................48

                                   ARTICLE VI


                                  SUBORDINATION

Section 6.01      Agreement to Subordinate....................................49
Section 6.02      No Payment on Securities if Senior Debt in Default..........50
Section 6.03      Distribution on Acceleration of Securities; Dissolution ....
                  and Reorganization; Subrogation of Securities...............51
Section 6.04      Reliance by Senior Debt on Subordination....................55
Section 6.05      No Waiver of Subordination..................................55
Section 6.06      Trustee's Relation to Senior................................56
Section 6.07      Other Provisions Subject Hereto.............................57


                                       ii

<PAGE>

                                   ARTICLE VII


                                   SUCCESSORS

Section 7.01      Merger, Consolidation or Sale of Assets.....................57
Section 7.02      Successor Corporation.......................................58

                                  ARTICLE VIII


                              DEFAULTS AND REMEDIES

Section 8.01      Events of Default...........................................59
Section 8.02      Acceleration................................................61
Section 8.03      Other Remedies..............................................61
Section 8.04      Waiver of Defaults..........................................62
Section 8.05      Control by Majority.........................................62
Section 8.06      Limitation on Suits.........................................62
Section 8.07      Rights of Noteholders to Receive Payment....................63
Section 8.08      Collection Suit by Trustee..................................63
Section 8.09      Trustee May File Proofs of Claim............................63
Section 8.10      Priorities..................................................65
Section 8.11      Undertaking for Costs.......................................65
Section 8.12      Restoration of Rights and Remedies..........................66
Section 8.13      Rights and Remedies Cumulative..............................66
Section 8.14      Delay or Omission Not Waiver................................66

                                   ARTICLE IX


                                     TRUSTEE

Section 9.01      Duties of Trustee...........................................66
Section 9.02      Rights of Trustee...........................................68
Section 9.03      Individual Rights of Trustee................................69
Section 9.04      Trustee's Disclaimer........................................69
Section 9.05      Notice of Defaults..........................................70
Section 9.06      Reports by Trustee to Noteholders...........................70
Section 9.07      Compensation and Indemnity..................................70
Section 9.08      Replacement of Trustee......................................71
Section 9.09      Successor Trustee by Merger, Etc............................73
Section 9.10      Eligibility; Disqualification...............................73
Section 9.11      Preferential Collection of Claims Against Company...........73

                                    ARTICLE X


                             DISCHARGE OF INDENTURE

Section 10.01     Termination of the Company's Obligations....................73
Section 10.02     Repayment to Company........................................75


                                      iii

<PAGE>

Section 10.03     Reinstatement...............................................76

                                   ARTICLE XI


                       AMENDMENTS, SUPPLEMENTS AND WAIVERS

Section 11.01     Without Consent of Noteholders..............................76
Section 11.02     With Consent of Noteholders.................................77
Section 11.03     Compliance with Trust Indenture Act.........................79
Section 11.04     Revocation and Effect of Consents...........................79
Section 11.05     Notation on or Exchange of Securities.......................80
Section 11.06     Trustee Protected...........................................80
Section 11.07     Trustee to Sign Supplemental Indentures.....................80
Section 11.08     Payment for Consent.........................................81

                                   ARTICLE XII


                                  MISCELLANEOUS

Section 12.01     Trust Indenture Act Controls................................82
Section 12.02     Notices.....................................................82
Section 12.04     Certificate and Opinion as to Conditions Precedent..........83
Section 12.05     Statements Required in Certificate or Opinion...............84
Section 12.06     Rules by Trustee and Agents.................................85
Section 12.07     Legal Holidays..............................................85
Section 12.08     No Recourse Against Others..................................85
Section 12.09     Counterparts................................................85
Section 12.10     Variable Provisions.........................................85
Section 12.11     GOVERNING LAW...............................................87
Section 12.12     No Adverse Interpretation of Other Agreements...............87
Section 12.13     Successors..................................................87
Section 12.14     Severability................................................87
Section 12.15     Table of Contents, Headings, Etc............................88


                                       iv

<PAGE>

         INDENTURE  dated as of January 20, 2000 between Young & Rubicam Inc., a
Delaware  corporation  (the  "Company"),  and The Bank of New  York,  a New York
banking corporation, as trustee (the "Trustee").

         Each party agrees as follows for the benefit of the other party and for
the equal and ratable  benefit of the holders of the  Company's  3%  Convertible
Subordinated Notes due 2005 (the "Securities"):


                                   ARTICLE I

                   DEFINITIONS AND INCORPORATION BY REFERENCE


Section 1.01 Definitions.

     "Additional  Amounts" has the meaning specified in paragraph 11 of the form
of Security which is attached as Exhibit A hereto.

     "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,  shall mean the  possession,  directly  or  indirectly,  of the power to
direct or cause the  direction  of the  management  or policies of such  person,
whether through the ownership of voting securities or by agreement or otherwise.

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

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

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

     "Business Day" means any day that is not a Legal Holiday.

     "Capital Stock" means any and all shares, interests, participations, rights
or other  equivalents  (however  designated) of equity  interests in any entity,
including, without limitation, corporate stock and partnership interests.


                                       1
<PAGE>

     "Change of Control" means any event where:  (i) any "person" or "group" (as
such  terms are used in  Sections  13(d) and  14(d) of the  Exchange  Act) is or
becomes  the  "beneficial  owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act) of shares  representing more than 50% of the combined voting power
of the then  outstanding  securities  entitled to vote generally in elections of
directors of the Company ("Voting Stock"), (ii) the Company consolidates with or
merges into any other person, or any other person merges into the Company,  and,
in the case of any such transaction, the outstanding Common Stock of the Company
is reclassified  into or exchanged for any other property or securities,  unless
the  stockholders  of the  Company  immediately  before  such  transaction  own,
directly  or  indirectly  immediately  following  such  transaction,  at least a
majority of the combined voting power of the then outstanding  voting securities
entitled  to  vote  generally  in  elections  of  directors  of the  corporation
resulting from such transaction in substantially the same respective proportions
as their  ownership of the Voting  Stock  immediately  before such  transaction,
(iii) the Company or the Company and its Subsidiaries,  taken as a whole, sells,
assigns, conveys, transfers or leases all or substantially all the assets of the
Company or of the Company and its Subsidiaries, taken as a whole, as applicable,
(other than to one or more whollyowned  Subsidiaries of the Company) or (iv) any
time the  Continuing  Directors  do not  constitute  a majority  of the board of
directors  of the Company (or, if  applicable,  a successor  corporation  to the
Company); provided, however, that (a) a Change of Control under clause (i), (ii)
or (iii) above shall not be deemed to have  occurred if the Daily  Market  Price
per share of Common  Stock for any five  Trading  Days  within  the period of 10
consecutive  Trading  Days ending  immediately  after the later of the Change of
Control or the public  announcement  of the Change of Control  (in the case of a
Change of  Control  under  clause  (i)  above) or the  period of 10  consecutive
Trading Days ending  immediately  before the Change of Control (in the case of a
Change of Control  under  clause (ii) or (iii) above) shall equal or exceed 105%
of the  Conversion  Price of the Securities in effect on the date of such Change
of Control or the public  announcement of such Change of Control, as applicable,
or (b) a Change of Control  under  clause (i),  (ii) or (iii) above shall not be
deemed to have  occurred if at least 90% of the  consideration  in the Change of
Control  transaction  consists  of  shares  of  capital  stock  traded on a U.S.
national  securities  exchange  or  quoted  on the NNM,  and as a result of such
transaction, the Securities become convertible solely into such capital stock.

     "Closing Date" means January 20, 2000.


                                       2
<PAGE>

     "Common  Stock" means the common stock of the Company as the same exists at
the date of this  Indenture  or as such  stock may be  constituted  from time to
time.

     "Company" means the party named as such above until a successor replaces it
in accordance with Article VII and thereafter means the successor.

     "Continuing  Directors" means, as of any date of determination,  any member
of the board of  directors  of the Company who (i) was a member of such board of
directors on the date of this  Indenture or (ii) was  nominated  for election or
elected to such  board of  directors  with the  approval  of a  majority  of the
Continuing  Directors who were members of such board of directors at the time of
such nomination or election.

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

     "Daily  Market  Price"  means the  price of a share of Common  Stock on the
relevant  date,  determined  (a) on the basis of the last  reported  sale  price
regular way of the Common Stock as reported on the New York Stock  Exchange (the
"NYSE"),  or if the Common Stock is not then listed on the NYSE,  as reported on
the  principal  national  securities  exchange  upon which the  Common  Stock is
listed, or (b) if there is no such reported sale on the day in question,  on the
basis of the average of the closing bid and asked  quotations  regular way as so
reported,  or (c) if the  Common  Stock  is not  listed  on the  NYSE  or on any
national  securities  exchange,  on the basis of the average of the high bid and
low asked  quotations  regular way on the day in question in the  overthecounter
market as reported by the National  Association of Securities  Dealers Automated
Quotation System, or if not so quoted, as reported by National Quotation Bureau,
Incorporated, or a similar organization.

     "Damages  Payment  Date"  has the  meaning  set  forth in the  Registration
Agreement.

     "Default"  means  any event  that is or,  with the  passage  of time or the
giving of notice or both, would be an Event of Default.


                                       3
<PAGE>

     "Depositary"  means The Depository  Trust  Company,  its nominees and their
respective successors.

     "Designated  Event"  means  the  occurrence  of a Change  of  Control  or a
Termination of Trading.

     "Designated  Senior  Debt"  means any  Senior  Debt  which,  at the date of
determination,  has an aggregate principal amount outstanding of, or commitments
to lend up to,  at  least  $15,000,000  and is  specifically  designated  by the
Company  in  the  instrument   evidencing  or  governing  such  Senior  Debt  as
"Designated Senior Debt" for purposes of this Indenture.

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

     "GAAP" means  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 approved by a significant  segment of the accounting  profession
of the United States, which are in effect from time to time.

     "Global Securities Legend" means the legend labeled as such and that is set
forth in Exhibit A hereto.

     "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;  and  such  term,  when  used as a verb,  shall  have  correlative
meaning.

     "Indebtedness" means, with respect to any Person, all Obligations,  whether
or not contingent, of such Person (i)(a) for borrowed money (including,  but not
limited to, any indebtedness  secured by a security interest,  mortgage or other
lien on the  assets of such  Person  which is (1) given to secure all or part of
the purchase price of property subject  thereto,  whether given to the vendor of
such  property  or to  another,  or (2)  existing  on  property  at the  time of
acquisition thereof), (b) evidenced by a note, debenture,  bond or other written
instrument, (c) under a lease required to be capitalized on the balance sheet of
the  lessee  under  GAAP or under any lease or  related  document  (including  a
purchase  agreement) which provides that such Person is contractually  obligated
to purchase or to cause a third party to purchase such leased


                                       4
<PAGE>

property,  (d) in respect of letters of  credit,  bank  guarantees  or  bankers'
acceptances  (including  reimbursement  obligations  with  respect to any of the
foregoing),  (e) with  respect to  Indebtedness  secured by a mortgage,  pledge,
lien,  encumbrance,  charge or adverse claim  affecting title or resulting in an
encumbrance to which the property or assets of such Person are subject,  whether
or not the Obligation  secured  thereby shall have been assumed or Guaranteed by
or shall  otherwise  be such  Person's  legal  liability,  (f) in respect of the
balance of the deferred and unpaid purchase price of any property or assets, and
(g) under  interest  rate or currency  swap  agreements,  cap,  floor and collar
agreements,  spot and forward contracts and similar agreements and arrangements;
(ii) with  respect  to any  Obligation  of others of the type  described  in the
preceding clause (i) or under clause (iii) below assumed by or Guaranteed in any
manner  by such  Person  or in  effect  Guaranteed  by such  Person  through  an
agreement to purchase (including,  without limitation, "take or pay" and similar
arrangements), contingent or otherwise (and the Obligations of such Person under
any such assumptions,  Guarantees or other such arrangements); and (iii) any and
all  deferrals,  renewals,  extensions,   refinancings  and  refundings  of,  or
amendments, modifications or supplements to, any of the foregoing.

     "Indenture"  means this Indenture,  as amended or supplemented from time to
time by one or more indentures  supplemental hereto entered into pursuant to the
applicable  provisions hereof,  including for all purposes of this Indenture any
supplemental  indenture  and the  provisions  of the TIA that are deemed to be a
part of and govern this Indenture and any supplemental indenture.

     "Initial  Purchasers" means Salomon Smith Barney Inc., Bear,  Stearns & Co.
Inc, Donaldson, Lufkin & Jenrette Securities Corporation, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated and Thomas Weisel
Partners LLC.

     "interest  payment date" means,  when used with respect to the  Securities,
each January 15 and July 15.

     "Issuance Date" means January 20, 2000.

     "Junior  Securities"  means  securities  of the Company as  reorganized  or
readjusted or any other corporation  provided for by a plan or reorganization or
readjustment  the  payment  of which  is  subordinate,  at  least to the  extent
provided for in this  Indenture  with respect to  Securities,  to the payment in
full without diminution or modification by such plan of all Senior Debt.


                                       5
<PAGE>

     "Legal  Holiday"  means a  Saturday,  a Sunday  or a day on  which  banking
institutions in the State of New York are not required to be open.

     "Material Subsidiary" means any Subsidiary of the Company which at the date
of  determination  is a  "significant  subsidiary" as defined in Rule 1-02(w) of
Regulation S-X under the Securities Act and the Exchange Act.

     "maturity  date" and "final  maturity date" mean, when used with respect to
the Securities, January 15, 2005.

     "NNM" means the electronic interdealer quotation system operated by NASDAQ,
Inc., a subsidiary of the National Association of Securities Dealers, Inc.

     "Noteholder"  or  "holder"  means a person  in  whose  name a  Security  is
registered.

     "NYSE" means the New York Stock Exchange.

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

     "Offering  Memorandum"  means  the  offering  memorandum  relating  to  the
Securities dated January 14, 2000.

     "Officers'  Certificate" means a certificate signed by two Officers, one of
whom must be the  Chairman  of the  Board,  the  Chief  Executive  Officer,  the
President,  the  Chief  Financial  Officer,  Senior  Vice  President  - Tax  and
Treasury,  Senior Vice President - Finance or the Treasurer of the Company,  and
delivered to the Trustee that meets the requirements of this Indenture.

     "Opinion  of Counsel"  means a written  opinion  from legal  counsel who is
acceptable  to the Trustee  that meets the  requirements  of Sections  12.04 and
12.05 hereof. The counsel may be an employee of or counsel to the Company or the
Trustee unless otherwise expressly stated herein.

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


                                       6
<PAGE>

     "Registration  Agreement" means the Registration  Agreement relating to the
Securities and Common Stock issuable upon  conversion of such  Securities  dated
January 20,  2000,  between the  Company  and the  Initial  Purchasers,  as such
agreement may be amended, modified or supplemented from time to time.

     "Representative" means the trustee, agent or representative (if any) for an
issue of Senior Debt.

     "Restricted  Common Stock Legend" means the legend labeled as such and that
is set forth in Exhibit D hereto.

     "Restricted  Definitive Securities Legend" means the legend labeled as such
and that is set forth in Exhibit A hereto.

     "Restricted  Global Securities Legend" means the legend labeled as such and
that is set forth in Exhibit A hereto.

     "Restricted  Securities Legend" means the Restricted  Definitive Securities
Legend or the Restricted  Global  Securities  Legend or both, as the context may
require.

     "SEC" means the Securities and Exchange Commission.

     "Securities" means the Securities  described in the preamble above that are
issued, authenticated and delivered under this Indenture.

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

     "Senior Debt" means the principal of, premium,  if any, on, interest on and
other amounts due on  Indebtedness  of the Company,  whether  outstanding on the
date of this Indenture or thereafter created, incurred, assumed or Guaranteed by
the Company  (including all deferrals,  renewals,  extensions,  refinancings and
refundings  of, or  amendments,  modifications  or  supplements  to,  any of the
foregoing),  unless,  in the  instrument  creating or  evidencing or pursuant to
which such  Indebtedness  is  outstanding,  it is expressly  provided  that such
Indebtedness  is not senior in right of payment to, or ranks pari passu in right
of payment  with,  the  Securities.  Senior Debt  includes,  with respect to the
obligations  described above,  interest accruing,  pursuant to the terms of such
Senior  Debt,  on or after  the  filing of any  petition  in  bankruptcy  or for
reorganization  relating to the Company,  whether or not post-filing interest is
allowed in such  proceeding,  at the rate specified in the instrument  governing
the


                                       7
<PAGE>

relevant obligation.  Notwithstanding anything to the contrary in the foregoing,
Senior  Debt shall not  include:  (a)  Indebtedness  of or  amounts  owed by the
Company for  compensation  to  employees,  or for goods,  services or  materials
purchased in the ordinary course of business; (b) Indebtedness of the Company to
a Subsidiary of the Company;  or (c) any liability for federal,  state, local or
other taxes owed or owing by the Company.

     "Shelf  Registration  Statement"  shall have the  meaning  set forth in the
Registration Agreement.

     "Subsidiary"  of a  Person  means  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 that Person or one or more of
the other Subsidiaries of that Person or a combination thereof.

     "Termination  of Trading"  means an event where the Common  Stock (or other
securities into which the Securities are then convertible) is neither listed for
trading on a United States national securities exchange nor approved for trading
on the  NASDAQ  National  Market  (the  "NNM")  or other  established  automated
overthecounter trading market in the United States.

     "TIA"  means  the  Trust  Indenture  Act  of  1939  (15  U.S.  Code  ss.ss.
77aaa-77bbbb) and the rules and regulations  thereunder as in effect on the date
on which this  Indenture  is  qualified  under the Trust  Indenture  Act of 1939
except as required by Section 11.03 hereof, provided that if the Trust Indenture
Act of 1939 or the rules and regulations thereunder are amended after such date,
"TIA" means, if so required by such amendment,  the Trust Indenture Act of 1939,
as so amended.

     "Trading  Day"  shall  mean (A) if the  applicable  security  is  listed or
admitted  for  trading  on the New  York  Stock  Exchange  or  another  national
securities  exchange,  a day on which the New York Stock  Exchange or such other
national  securities  exchange  is  open  for  business,  (B) if the  applicable
security is quoted on the NNM, a day on which  trades may be made thereon or (C)
if the applicable security is not so listed, admitted for trading or quoted, any
day other than a Legal Holiday.

     "Trustee" means the party named as such above until a successor replaces it
in accordance  with the  applicable  provisions of this Indenture and thereafter
means the successor.


                                       8
<PAGE>

     "Trust Officer" means 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, and who shall have
direct  responsibility  for the  administration of this Indenture or to whom any
corporate  trust matter is referred  because of such  person's  knowledge of and
familiarity with the particular subject.

Section 1.02 Other Definitions.

Term                                                                  Defined in
----                                                                     Section
                                                                         -------
"Agent Members"....................................................         2.01
"Bankruptcy Law"...................................................         8.01
"Cedel Bank".......................................................         2.01
"Commencement Date"................................................         3.08
"Conversion Agent".................................................         2.03
"Conversion Date"..................................................         5.02
"Conversion Price".................................................         5.01
"Conversion Shares"................................................         5.06
"Current Market Price".............................................         5.06
"Custodian"........................................................         8.01
"Default Rate".....................................................         2.13
"Defaulted Interest................................................         2.12
"Definitive Securities"............................................         2.01
"Designated Event Offer"...........................................         4.07
"Designated Event Payment".........................................         4.07
"Designated Event Payment Date"....................................         3.08
"Distribution Date"................................................         5.06
"Distribution Record Date".........................................         5.06
"Excess Payment"...................................................         5.06
"Euroclear"........................................................         2.01
"Event of Default".................................................         8.01
"Global Security"..................................................         2.01
"Legal Holiday"....................................................        12.07
"Non-Global Purchasers"............................................         2.01
"Officer"..........................................................        12.10


                                       9
<PAGE>

"Paying Agent".....................................................         2.03
"Payment Blockage Notice"..........................................         6.02
"Payment Blockage Period"..........................................         6.02
"Payment Default"..................................................         8.01
"Purchase Agreement"...............................................         2.01
"Purchase Date"....................................................         5.06
"QIBs".............................................................         2.01
"Registrar"........................................................         2.03
"Regulation S".....................................................         2.01
"Rights"...........................................................         5.06
"Rule 144A"........................................................         2.01
"Tender Period"....................................................         3.08

Section 1.03  Incorporation  by Reference of Trust Indenture Act.  Whenever this
Indenture  refers to a provision of the TIA, the  provision is  incorporated  by
reference in and made a part of this Indenture.

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

     "indenture securities" means the Securities;

     "indenture security holder" means a Noteholder;

     "indenture to be qualified" means this Indenture;

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

     "obligor" on the  Securities  means the Company or any other obligor on the
Securities.

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

     Section 1.04 Rules of Construction. Unless the context otherwise requires:


                                       10
<PAGE>

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

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

(b)  "or" is not exclusive;

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

(e)  provisions apply to successive events and transactions.

                                   ARTICLE II


                                 THE SECURITIES

Section 2.01 Form and Dating.  The Securities  and the Trustee's  certificate of
authentication  shall be  substantially in the form of Exhibit A which is hereby
incorporated in and expressly made a part of this Indenture.

     The Securities may have notations, legends or endorsements required by law,
stock  exchange  rule,  agreements  to which the Company is subject,  if any, or
usage  (provided  that any such  notation,  legend or  endorsement  is in a form
acceptable  to the  Company).  The  Company  shall  furnish  any such legend not
contained in Exhibit A to the Trustee in writing.  Each Security  shall be dated
the date of its  authentication.  The terms and provisions of the Securities set
forth in  Exhibit A are part of the terms of this  Indenture  and to the  extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.

(a)  Global Securities. The Securities are being offered and sold by the Company
     pursuant to a Purchase Agreement relating to the Securities,  dated January
     14,  2000,  among the  Company and the Initial  Purchasers  (the  "Purchase
     Agreement").

     Securities  offered  and sold (i) in  reliance  on  Regulation  S under the
Securities Act ("Regulation S") or (ii) to "qualified  institutional  buyers" as
defined in Rule 144A ("QIBs") in reliance on Rule 144A under the  Securities Act
("Rule 144A"),  each as provided in the Purchase  Agreement,  shall be issued in
the  form  of one or more  permanent  global  Securities  in  definitive,  fully
registered form without interest


                                       11
<PAGE>

coupons  with the Global  Securities  Legend and  Restricted  Global  Securities
Legend set forth in Exhibit A hereto  (each,  a "Global  Security").  Any Global
Security  shall be  deposited  on behalf  of the  purchasers  of the  Securities
represented  thereby with the Trustee,  at its New York office, as custodian for
the Depositary, and registered in the name of the Depositary or a nominee of the
Depositary for the accounts of participants in the Depositary  (and, in the case
of  Securities  held in  accordance  with  Regulation  S,  registered  with  the
Depositary  for the  accounts  of  designated  agents  holding  on behalf of the
Euroclear System  ("Euroclear") or Cedel Bank,  societe anonyme ("Cedel Bank")),
duly  executed by the Company and  authenticated  by the Trustee as  hereinafter
provided.  The aggregate  principal amount of a Global Security may from time to
time be increased or decreased by adjustments made on the records of the Trustee
and the Depositary or its nominee as hereinafter provided.

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

     The Company shall execute and the Trustee  shall,  in accordance  with this
Section 2.01(b) and the written order of the Company,  authenticate  and deliver
initially one or more Global Securities that (i) shall be registered in the name
of Cede & Co. or other nominee of such Depositary and (ii) shall be delivered by
the Trustee to such Depositary or pursuant to such Depositary's  instructions or
held by the Trustee as custodian for the  Depositary  pursuant to a FAST Balance
Certificate Agreement between the Depositary and the Trustee.

     Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary or by the Trustee as the custodian of the Depositary or
under such Global  Security,  and the  Depositary may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing  herein  shall  prevent  the  Company,  the  Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other  authorization  furnished  by the  Depositary  or impair,  as between  the
Depositary and its Agent Members,  the operation of customary  practices of such
Depositary  governing  the  exercise  of the rights of a holder of a  beneficial
interest in any Global Security.

     The  provisions of the "Operating  Procedures of the Euroclear  System" and
"Terms  and  Conditions   Governing  Use  of  Euroclear"  and  the   "Management
Regulations and  Instructions to Participants" of Cedel Bank shall be applicable
to  interests in any Global  Securities  that are held by  participants  through
Euroclear or


                                       12
<PAGE>

Cedel Bank.  The Trustee shall have no obligation to notify  holders of any such
procedures or to monitor or enforce compliance with the same.

(c)  Definitive Securities.  Except as provided in Section 2.06 and 2.10, owners
     of  beneficial  interests  in Global  Securities  will not be  entitled  to
     receive  physical  delivery of certificated  Securities in definitive form.
     Purchasers of Securities  who are not QIBs and did not purchase  Securities
     sold in reliance on  Regulation  S under the  Securities  Act  (referred to
     herein as the "Non-Global Purchasers") will receive certificated Securities
     in definitive form bearing the Restricted  Definitive Securities Legend set
     forth in Exhibit A hereto ("Definitive Securities").  Definitive Securities
     will bear the Restricted  Definitive Securities Legend set forth on Exhibit
     A unless removed in accordance with Section 2.06(b).

Section 2.02 Execution, Authentication and Delivery. Two Officers shall sign the
Securities for the Company by manual or facsimile signature.  The Company's seal
or a facsimile thereof shall be reproduced on the Securities.

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

     A Security  shall not be entitled to any benefits  under this  Indenture or
the  Registration  Agreement or otherwise  be valid until  authenticated  by the
manual signature of an authorized  signatory of the Trustee. The signature shall
be  conclusive  evidence  that the  Security has been  authenticated  under this
Indenture.

     Upon a written  order of the Company  signed by two  Officers,  the Trustee
shall  authenticate  the  Securities  for  original  issue  up to  an  aggregate
principal amount of $250,000,000 (plus up to an additional $37,500,000 aggregate
principal  amount  which may be issued  from time to time upon  exercise  by the
Initial  Purchasers  of the  over-allotment  option  set  forth in the  Purchase
Agreement) and deliver such authenticated  Securities as directed in such order.
The aggregate  principal amount of Securities  outstanding at any time shall not
exceed such amount except as provided in Section 2.07.

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


                                       13
<PAGE>

Section 2.03  Registrar,  Paying Agent and Conversion  Agent.  The Company shall
maintain in the Borough of  Manhattan,  The City of New York,  State of New York
(i) an office or agency where  Securities may be presented for  registration  of
transfer  or for  exchange  (the  "Registrar"),  (ii) an office or agency  where
Securities may be presented for payment (the "Paying Agent"), (iii) an office or
agency where Securities may be presented for conversion (the "Conversion Agent")
and (iv) an office or agency  where  notices to or demands  upon the  Company in
respect of the Securities  and this  Indenture may be sent. The Registrar  shall
keep a register  of the  Securities  and of their  transfer  and  exchange.  The
Company has  initially  appointed the Trustee (at 101 Barclay  Street,  Floor 21
West, New York,  New York 10286) as its  Registrar,  Paying Agent and Conversion
Agent in New York.  The Company may  appoint one or more  co-registrars,  one or
more additional  paying agents and one or more additional  conversion  agents in
such other locations as it shall determine.  The term  "Registrar"  includes any
co-registrar,  the term "Paying Agent" includes any additional  paying agent and
the term  "Conversion  Agent"  includes any  additional  conversion  agent.  The
Company may change any Paying  Agent,  Registrar or Conversion  Agent,  provided
that it will give notice to the  Noteholders  in  accordance  with Section 12.02
hereof.  The  Company  shall  notify the  Trustee of the name and address of any
newly-appointed  Agent not a party to this  Indenture.  If the Company  fails to
appoint or maintain  another  entity as  Registrar,  Paying Agent or  Conversion
Agent, the Trustee shall act as such.

Section 2.04 Paying Agent to Hold Money in Trust. The Company shall require each
Paying  Agent other than the Trustee to agree in writing  that the Paying  Agent
will hold in trust for the benefit of  Noteholders or the Trustee all money held
by the Paying  Agent for the  payment of  principal  of,  premium,  if any,  on,
interest and Additional Amounts, if any, on, the Securities, and will notify the
Trustee of any default by the Company in making any such payment. While any such
default continues,  the Trustee may require a Paying Agent to pay all money held
by it to the Trustee.  The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee and to account  for any money  disbursed  by
it.  Upon  payment  over to the  Trustee,  the  Paying  Agent (if other than the
Company or an Affiliate of the Company) shall have no further  liability for the
money.  If the Company or an Affiliate of the Company acts as Paying  Agent,  it
shall  segregate  and  hold in a  separate  trust  fund for the  benefit  of the
Noteholders all money held by it as Paying Agent.


                                       14
<PAGE>

Section 2.05 Noteholder  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 Noteholders and shall otherwise  comply with TIA ss.312(a).  If
the Trustee is not the  Registrar,  the Company  shall furnish to the Trustee at
least seven  Business Days before each  interest  payment date and at such other
times as the  Trustee  may request in writing a list in such form and as of such
date as the  Trustee  may  reasonably  require  of the  names and  addresses  of
Noteholders, and the Company shall otherwise comply with TIA ss.312(a).

Section 2.06  Transfer  and  Exchange.  Where  Securities  are  presented to the
Registrar with a request to register a transfer or to exchange them for an equal
principal  amount of Securities of other  denominations,  such  Registrar  shall
register the transfer or make the exchange if the requirements set forth in this
Indenture  and as otherwise may be  reasonably  required by the  Registrar  with
respect to such  transactions are met. To permit  registrations of transfers and
exchanges, the Company shall issue and the Trustee shall authenticate Securities
at the Registrar's request. No service charge shall be made for any registration
of transfer or exchange (except as otherwise  expressly  permitted herein),  but
the Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any such
transfer tax or similar  governmental  charge payable upon exchanges pursuant to
Sections 2.10,  3.06,  3.08,  5.02 or 11.05 hereof not involving any transfer of
the Securities).

     The Company  shall not be required (i) to issue,  register the transfer of,
or exchange  Securities  during a period beginning at the opening of business 15
days  before the day of  mailing of notice of  redemption  of  Securities  under
Section  3.03  hereof  and  ending at the close of  business  on the day of such
mailing,  or (ii) to  exchange  or  register  the  transfer  of any  Security so
selected for redemption in whole or in part,  except the  unredeemed  portion of
any Security being redeemed in part.

(a)  Notwithstanding  any provision to the contrary herein,  so long as a Global
     Security remains outstanding and is held by or on behalf of the Depositary,
     transfers of a Global  Security,  in whole or in part, or of any beneficial
     interest  therein,  shall only be made in accordance with Sections  2.01(b)
     and 2.10 and this  Section  2.06(a);  provided,  however,  that  beneficial
     interests  in a Global  Security  may be  transferred  to persons  who take
     delivery  thereof  in the  form  of a  beneficial  interest  in the  Global
     Security in accordance with the transfer  restrictions  set forth under the
     heading   "Notice  to  Investors"  in  the  Offering   Memorandum  and,  if
     applicable, in the Restricted Global Securities Legend.


                                       15
<PAGE>

(i)  Except for transfers or exchanges  made in  accordance  with any of clauses
     (ii) through (v) of this Section  2.06(a) and Section 2.10,  transfers of a
     Global  Security  shall be limited to transfers of such Global  Security in
     whole,  but not in part, to nominees of the Depositary or to a successor of
     the Depositary or such successor's nominee.

(ii) Global  Security  to  Definitive  Security.  If an  owner  of a  beneficial
     interest in a Global  Security  deposited  with the  Depositary or with the
     Trustee as custodian for the Depositary  wishes at any time to transfer its
     interest  in such  Global  Security  to a Person  who is  required  to take
     delivery  thereof  in the form of a  Definitive  Security,  such owner may,
     subject  to the  rules  and  procedures  of  Euroclear  or Cedel  Bank,  if
     applicable, and the Depositary, cause the exchange of such interest for one
     or  more   Definitive   Securities  of  any  authorized   denomination   or
     denominations and of the same aggregate  principal amount.  Upon receipt by
     the  Registrar  of (1)  instructions  from  Euroclear  or  Cedel  Bank,  if
     applicable,  and the Depositary  directing the Trustee to authenticate  and
     deliver one or more Definitive  Securities of the same aggregate  principal
     amount as the beneficial  interest in the Global  Security to be exchanged,
     such instructions to contain the name or names of the designated transferee
     or  transferees,  the  authorized  denomination  or  denominations  of  the
     Definitive   Securities   to  be  so  issued   and   appropriate   delivery
     instructions,  (2) a  certificate  substantially  in the form of  Exhibit B
     attached  hereto  given by the  owner of such  beneficial  interest,  (3) a
     certificate substantially in the form of Exhibit C attached hereto given by
     the person  acquiring the Definitive  Securities for which such interest is
     being  exchanged,  to the  effect  set forth  therein,  and (4) such  other
     certifications or other information and, in the case of transfers  pursuant
     to Rule 144 under the  Securities  Act,  legal  opinions as the Company may
     reasonably  require to confirm that such transfer is being made pursuant to
     an exemption  from,  or in a transaction  not subject to, the  registration
     requirements  of the  Securities  Act,  then  Euroclear  or Cedel Bank,  if
     applicable,  or the  Registrar,  as the  case  may be,  will  instruct  the
     Depositary  to reduce or cause to be reduced  such  Global  Security by the
     aggregate  principal  amount  of  the  beneficial  interest  therein  to be
     exchanged  and to  debit or cause to be  debited  from the  account  of the
     Person making such transfer the beneficial  interest in the Global Security
     that is being  transferred,  and concurrently with such reduction and debit
     the Company shall execute,  and the Trustee shall authenticate and deliver,
     one or more Definitive Securities of the same aggregate principal amount in
     accordance with the instructions referred to above.


                                       16
<PAGE>

(iii)Definitive  Security to  Definitive  Security.  If a holder of a Definitive
     Security  wishes  at any time to  transfer  such  Definitive  Security  (or
     portion  thereof) to a Person who is required to take  delivery  thereof in
     the  form  of a  Definitive  Security,  such  holder  may,  subject  to the
     restrictions on transfer set forth herein and in such Definitive  Security,
     cause the transfer of such Definitive Security (or any portion thereof in a
     principal  amount equal to an authorized  denomination) to such transferee.
     Upon  receipt  by the  Registrar  of (1)  such  Definitive  Security,  duly
     endorsed as provided herein,  (2)  instructions  from such holder directing
     the Trustee to authenticate  and deliver one or more Definitive  Securities
     of the same  aggregate  principal  amount as the  Definitive  Security  (or
     portion thereof) to be transferred,  such  instructions to contain the name
     or  names of the  designated  transferee  or  transferees,  the  authorized
     denomination or denominations of the Definitive  Securities to be so issued
     and appropriate delivery instructions, (3) a certificate from the holder of
     the  Definitive  Security to be transferred  in  substantially  the form of
     Exhibit B attached hereto,  (4) a certificate  substantially in the form of
     Exhibit C attached  hereto  given by the person  acquiring  the  Definitive
     Securities (or portion thereof),  to the effect set forth therein,  and (5)
     such  other  certifications  or  other  information  and,  in the  case  of
     transfers  pursuant to Rule 144 under the Securities Act, legal opinions as
     the Company may  reasonably  require to confirm that such transfer is being
     made pursuant to an exemption from, or in a transaction not subject to, the
     registration requirements of the Securities Act, then the Registrar,  shall
     cancel or cause to be canceled such  Definitive  Security and  concurrently
     therewith,  the Company shall execute,  and the Trustee shall  authenticate
     and deliver, one or more Definitive Securities in the appropriate aggregate
     principal  amount,  in accordance with the  instructions  referred to above
     and,  if  only  a  portion  of a  Definitive  Security  is  transferred  as
     aforesaid,  concurrently  therewith  Company  shall execute and the Trustee
     shall  execute and deliver to the  transferor  a  Definitive  Security in a
     principal  amount  equal  to  the  principal  amount  which  has  not  been
     transferred.  A holder of a Definitive  Security  may at any time  exchange
     such  Definitive  Security for one or more  Definitive  Securities of other
     authorized  denominations  and in the same aggregate  principal  amount and
     registered in the same name by delivering  such Definitive  Security,  duly
     endorsed as provided herein,  to the Registrar  together with  instructions
     directing the Trustee to  authenticate  and deliver one or more  Definitive
     Securities in the same  aggregate  principal  amount and  registered in the
     same name as the  Definitive  Security to be  exchanged,  and the Registrar
     thereupon shall cancel or caused to be cancelled such  Definitive  Security
     and concurrently therewith


                                       17
<PAGE>

     the Company shall execute and Trustee shall  authenticate and deliver,  one
     or more Definitive  Securities in the same aggregate  principal  amount and
     registered in the same name as the Definitive Security being exchanged.

(iv) Definitive  Security  to  Global  Security.  If a  holder  of a  Definitive
     Security  wishes  at any time to  transfer  such  Definitive  Security  (or
     portion  thereof) to a Person who is not required to take delivery  thereof
     in the form of a Definitive  Security,  such holder  shall,  subject to the
     restrictions on transfer set forth herein and in such  Definitive  Security
     and  the  rules  of  the  Depositary  and  Euroclear  and  Cedel  Bank,  as
     applicable, cause the exchange of such Definitive Security for a beneficial
     interest in the Global Security.  Upon receipt by the Registrar of (1) such
     Definitive  Security,  duly endorsed as provided  herein,  (2) instructions
     from such holder directing the Trustee to increase the aggregate  principal
     amount of the Global  Security  deposited  with the  Depository or with the
     Trustee as custodian  for the  Depository by the same  aggregate  principal
     amount  at  maturity  as the  Definitive  Security  to be  exchanged,  such
     instructions  to contain  the name or names of a member of, or  participant
     in, the  Depository  that is designated as the  transferee,  the account of
     such member or participant and other appropriate delivery instructions, (3)
     the  assignment  form on the back of the Definitive  Security  completed in
     full  (certifying  in effect that such transfer  complies with Rule 144A or
     Regulation  S under the  Securities  Act or is  otherwise  being  made to a
     Person who is not required to take delivery of such Security in the form of
     a  Definitive   Security)  and  (4)  such  other  certifications  or  other
     information  and, in the case of  transfers  pursuant to Rule 144 under the
     Securities  Act, legal  opinions as the Company may  reasonably  require to
     confirm that such transfer is being made pursuant to an exemption  from, or
     in a  transaction  not subject  to, the  registration  requirements  of the
     Securities  Act, then the  Registrar,  shall cancel or cause to be canceled
     such  Definitive  Security and  concurrently  therewith  shall increase the
     aggregate  principal  amount of the Global  Security by the same  aggregate
     principal amount as the Definitive Security canceled.

(v)  Other  Exchanges.  In the event that a Global  Security  is  exchanged  for
     Securities in definitive registered form pursuant to Section 2.10, prior to
     the  effectiveness of a Shelf  Registration  Statement with respect to such
     Securities,  such  Securities may be exchanged only in accordance with such
     procedures as are  substantially  consistent with the provisions of clauses
     (ii) and (iii) above (including the certification  requirements intended to
     ensure that such transfers  comply with Rule 144A or Regulation S under the
     Securities  Act, as the case


                                       18
<PAGE>

     may be) and such  other  procedures  as may from time to time be adopted by
     the Company.

(b)  Except in connection with a Shelf  Registration  Statement  contemplated by
     and in  accordance  with  the  terms  of  the  Registration  Agreement,  if
     Securities  are issued  upon the  registration  of  transfer,  exchange  or
     replacement of Securities  bearing a Restricted  Securities Legend, or if a
     request  is  made  to  remove  such  a  Definitive   Securities  Legend  on
     Securities,  the Securities so issued shall bear the Restricted  Securities
     Legend, or a Restricted Securities Legend shall not be removed, as the case
     may  be,  unless  there  is  delivered  to the  Company  such  satisfactory
     evidence,  which, in the case of a transfer made pursuant to Rule 144 under
     the Securities Act, may include an opinion of counsel  licensed to practice
     law in the State of New York, as may be reasonably required by the Company,
     that neither the legend nor the  restrictions on transfer set forth therein
     are required to ensure that transfers thereof comply with the provisions of
     Rule 144A,  Rule 144 or Regulation S under the  Securities Act or that such
     Securities  are not  "restricted"  within the meaning of Rule 144 under the
     Securities  Act.  Upon  provision  to  the  Company  of  such  satisfactory
     evidence,  the Trustee,  at the written  direction  of the  Company,  shall
     authenticate  and  deliver  Securities  that do not  bear the  legend.  The
     Company  shall not otherwise be entitled to require the delivery of a legal
     opinion in connection with any transfer or exchange of Securities.

(c)  Neither the Trustee  nor any Agent  shall have any  responsibility  for any
     actions taken or not taken by the Depositary.

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

Section 2.07 Replacement Securities. If the holder of a Security claims that the
Security has been lost,  destroyed or  wrongfully  taken or if such  Security is
mutilated and is surrendered  to the Registrar,  the Company shall issue and the
Trustee  shall  authenticate  a  replacement  Security if the  Trustee's and the


                                       19
<PAGE>

Company's  requirements  (as shall  have  been  previously  communicated  to the
Trustee in a written letter of standing  instruction) are met. An indemnity bond
must be sufficient in the judgment of the Trustee, the Registrar and the Company
to protect the Company,  the Trustee, any Agent or any authenticating agent from
any loss which any of them may suffer if a Security is replaced. The Company may
charge for its expenses in replacing a Security.

     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 redeemed or purchased
by the Company pursuant to Article III hereof or converted into shares of Common
Stock pursuant to Article V hereof,  the Company in its discretion may,  instead
of issuing a new Security, pay, redeem or convert such Security, as the case may
be.

     Every replacement  Security is an additional  obligation of the Company and
shall  be  entitled  to  all of the  benefits  of  this  Indenture  equally  and
proportionately with 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  of  mutilated,
destroyed, lost or stolen Securities.

Section 2.08 Outstanding Securities.  The 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,  those paid pursuant to Section 2.07 and
those described in this Section as not outstanding.

     If a Security is replaced,  paid,  redeemed or  converted,  it ceases to be
outstanding  unless,  in the case of a replaced  Security,  the Trustee receives
proof  satisfactory  to it that the  replaced  Security  is held by a bona  fide
purchaser.

     If Securities are considered paid under Section 4.01 hereof,  they cease to
be outstanding and interest (and Additional  Amounts,  if any) on them ceases to
accrue.

     Except as set forth in Section 2.09 hereof, a Security does not cease to be
outstanding  because  the  Company  or an  Affiliate  of the  Company  holds the
Security.

Section 2.09 Treasury Securities.  In determining whether the Noteholders of the
required principal amount of Securities have concurred in any direction,  waiver
or consent, Securities owned by the Company or an Affiliate of the Company shall
be considered as though they are not  outstanding,  except that for the purposes
of  determining  whether the Trustee  shall be  protected in relying on


                                       20
<PAGE>

any such direction,  waiver or consent,  only  Securities  which a Trust Officer
actually knows are so owned shall be so disregarded.

Section 2.10 Temporary  Securities;  Exchange of Global  Security for Definitive
Securities.

(a)  Until definitive Securities are ready for delivery, the Company may prepare
     and  the  Trustee  shall  authenticate   temporary  Securities.   Temporary
     Securities shall be substantially in the form of definitive  Securities but
     may have  variations that the Company  considers  appropriate for temporary
     Securities  and shall be  reasonably  acceptable  to the  Trustee.  Without
     unreasonable  delay,  the  Company  shall  prepare  and the  Trustee  shall
     authenticate definitive Securities in exchange for temporary Securities.

(b)  Except for  transfers  made in  accordance  with Section 2.06 (a), a Global
     Security deposited with the Depositary or with the Trustee as custodian for
     the  Depositary  pursuant  to  Section  2.01  shall be  transferred  to the
     beneficial  owners  thereof  in the  form  of  certificated  Securities  in
     definitive  form only if such  transfer  complies with Section 2.06 and (i)
     the  Depositary  notifies  the Company  that it is  unwilling  or unable to
     continue  as  Depositary  for such  Global  Security or if at any time such
     Depositary ceases to be a "clearing  agency"  registered under the Exchange
     Act and a successor  Depositary is not  appointed by the Company  within 90
     days of such  notice,  or (ii) an  Event of  Default  has  occurred  and is
     continuing.

(c)  Any  Global  Security  or  interest  thereon  that is  transferable  to the
     beneficial  owners  thereof  in the  form  of  certificated  Securities  in
     definitive  form shall,  if held by the  Depository,  be surrendered by the
     Depositary  to  the  Trustee,   without  charge,   and  the  Trustee  shall
     authenticate and deliver, upon such transfer of each portion of such Global
     Security,  an equal aggregate  principal amount of Securities of authorized
     denominations  in the form of certificated  Securities in definitive  form.
     Any portion of a Global Security transferred pursuant to this Section shall
     be executed,  authenticated  and delivered only in  denominations of $1,000
     and any  integral  multiple  thereof  and  registered  in such names as the
     Depositary  shall  direct.  Any  Securities  in the  form  of  certificated
     Securities in definitive  form delivered in exchange for an interest in the
     Global Security  shall,  except as otherwise  provided by Section  2.06(b),
     bear the  Restricted  Definitive  Securities  Legend set forth in Exhibit A
     hereto.


                                       21
<PAGE>

(d)  Prior to any transfer pursuant to Section 2.10(b), the registered holder of
     a Global  Security may grant  proxies and  otherwise  authorize any Person,
     including  Agent Members and Persons that may hold interests  through Agent
     Members,  to take any action  which a holder is entitled to take under this
     Indenture or the Securities.

(e)  The  Company  will make  available  to the Trustee a  reasonable  supply of
     certificated Securities in definitive form without interest coupons.

Section 2.11 Cancellation. The Company at any time may deliver Securities to the
Registrar for  cancellation.  The Registrar,  Paying Agent and Conversion  Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer,  redemption,  conversion,  exchange or payment.  The Trustee  shall
promptly  cancel  all  Securities  surrendered  for  registration  of  transfer,
redemption, conversion, exchange, payment, replacement or cancellation and shall
dispose  of all such  canceled  Securities  in  accordance  with  its  customary
procedures.  The Company may not issue new Securities to replace Securities that
it has paid or that have been  delivered to the  Registrar for  cancellation  or
that any holder has converted.

     All Securities which are redeemed,  purchased or otherwise  acquired by the
Company or any of its  Subsidiaries  or Affiliates  prior to the final  maturity
date of the Securities  shall be delivered to the Trustee for  cancellation  and
the  Company  may not hold or  resell  any  such  Securities  or  issue  any new
Securities to replace any such  Securities or any Securities that any holder has
converted pursuant to this Indenture.

Section  2.12  Payment  of  Interest:   Interest  Rights.   Interest  (including
Additional Amounts, if any) on any Security which is payable,  and is punctually
paid or duly  provided  for on any  January  15 or July 15  shall be paid to the
Person in whose name such Security (or one or more  predecessor  Securities)  is
registered  at the  close of  business  on the  record  date  for such  interest
payment,  which shall be the January 1 or July 1 (whether or not a Business Day)
immediately preceding such interest payment date.

         Any interest and Additional  Amounts,  if any, on any Security which is
payable,  but is not  punctually  paid or duly  provided  for,  on any  interest
payment date (herein  collectively called "Defaulted  Interest") shall forthwith
cease to be payable to the registered  holder on the relevant  record date, and,
except as hereinafter provided, such Defaulted Interest and any interest payable
on such  Defaulted  Interest may be paid by the  Company,  at its  election,  as
provided in subsection (a) or (b) below:


                                       22
<PAGE>

(a)  The Company may elect to make payment of any  Defaulted  Interest,  and any
     interest payable on such Defaulted Interest,  to the Persons in whose names
     the  Securities are registered at the close of business on a special record
     date for the payment of such  Defaulted  Interest,  which shall be fixed in
     the  following  manner.  The Company shall notify the Trustee in writing of
     the amount of Defaulted  Interest proposed to be paid on the Securities and
     the date of the proposed  payment,  and at the same time the Company  shall
     deposit with the Trustee an amount of money equal to the  aggregate  amount
     proposed  to be  paid in  respect  of such  Defaulted  Interest  (including
     Additional Amounts, if any) or shall make arrangements  satisfactory to the
     Trustee for such deposit  prior to the date of the proposed  payment,  such
     money when  deposited  to be held in trust for the  benefit of the  Persons
     entitled to such  Defaulted  Interest as provided in this  subsection  (a).
     Thereupon,  the Trustee shall fix a special  record date for the payment of
     such  Defaulted  Interest which shall be not more than 15 calendar days and
     not less than 10 calendar  days prior to the date of the  proposed  payment
     and not less than 10 calendar  days after the receipt by the Trustee of the
     notice of the  proposed  payment.  The Trustee  shall  promptly  notify the
     Company of such special  record date and, in the name and at the expense of
     the Company,  shall cause notice of the proposed  payment of such Defaulted
     Interest and the special record date therefor to be sent, first class mail,
     postage  prepaid,  to each holder at such holder's address as it appears in
     the register for the  Securities,  not less than 10 calendar  days prior to
     such special record date.  Notice of the proposed payment of such Defaulted
     Interest  and the  special  record  date  therefor  having  been  mailed as
     aforesaid,  such  Defaulted  Interest shall be paid to the Persons in whose
     names  the  Securities  are  registered  at the close of  business  on such
     special  record  date and  shall  no  longer  be  payable  pursuant  to the
     following subsection (b).

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

     Subject to the foregoing  provisions  of this Section  2.12,  each Security
delivered under this Indenture upon  registration of transfer of, or in exchange
for, or in lieu of, or in substitution for, any other Security,  shall carry the
rights to interest


                                       23
<PAGE>

(and Additional Amounts,  if any) accrued and unpaid, and to accrue,  which were
carried by such other Security.

Section  2.13  Computation  of  Interest.  Interest on the  Securities  shall be
computed on the basis of a 360day year  consisting of twelve 30-day  months.  In
the event that any  principal of or premium,  if any, or interest or  Additional
Amounts,  if any,  on the  Securities  is not paid when due,  then except to the
extent permitted by law, such overdue principal,  premium,  if any, interest and
Additional  Amounts, if any, shall bear interest until paid at the Default Rate,
compounded  semi-annually.  As used herein, the term "Default Rate" means, as of
any date and whether or not any Securities are  outstanding on such date, a rate
per annum  equal to (i) 3% per annum  plus (ii) if a  Registration  Default  (as
defined in the  Registration  Agreement)  has occurred and is continuing on such
date,  the per  annum  rate of  interest  at  which  Additional  Amounts  on the
Securities are being computed on such date or, if no Securities are  outstanding
on such date, the per annum rate of interest at which Additional  Amounts on the
Securities  would  have  been  computed  on  such  date if the  Securities  were
outstanding.

Section  2.14 CUSIP  Number.  The  Company in issuing the  Securities  may use a
"CUSIP" number in notices of redemption or exchange as a convenience to holders;
provided that any such notice may state that no representation is made as to the
correctness  or  accuracy  of the CUSIP  number  printed in the notice or on the
Securities  and that  reliance  may be placed  only on the other  identification
numbers printed on the Securities. The Company shall promptly notify the Trustee
of any change in the CUSIP number.

Section 2.15  Regulation  S. The Company  agrees that it will refuse to register
any transfer of Securities or any shares of Common Stock issued upon  conversion
of Securities that is not made in accordance with the provisions of Regulation S
under the Securities  Act,  pursuant to a registration  statement which has been
declared  effective  under  the  Securities  Act  or  pursuant  to an  available
exemption from the  registration  requirements of the Securities  Act;  provided
that the provisions of this paragraph  shall not be applicable to any Securities
which do not bear a  Restricted  Securities  Legend  or to any  shares of Common
Stock  evidenced by  certificates  which do not bear a  Restricted  Common Stock
Legend.

Section 2.16 Persons Deemed Owners.  Prior to due  presentment of a Security for
registration of transfer,  the Company, the Trustee and any Agent of the Company
may treat the Person in whose name such  Security is  registered as the owner of
such Security for the purpose of receiving payment of principal of


                                       24
<PAGE>

and premium,  if any, and (subject to Sections 2.06 and 2.13 above) interest and
Additional  Amounts,  if any,  on such  Security  and  for  all  other  purposes
whatsoever,  whether or not such  Security be overdue,  and neither the Company,
the Trustee nor any Agent shall be affected by notice to the contrary.

                                  ARTICLE III

                                   REDEMPTION

Section  3.01  Notices to Trustee.  If the Company  elects to redeem  Securities
pursuant to Section 3.07  hereof,  it shall notify the Trustee in writing of the
redemption  date and the  principal  amount of  Securities  to be redeemed.  The
Company  shall give each notice  provided  for in this  Section 3.01 at least 45
days  before  the  redemption  date  (unless a shorter  notice  period  shall be
satisfactory to the Trustee).

Section 3.02  Selection of Securities to be. If less than all the Securities are
to be  redeemed,  the Trustee  shall select the  Securities  to be redeemed by a
method that complies with the requirements of the principal national  securities
exchange,  if any, on which the Securities are listed, or, if the Securities are
not so  listed,  on a pro rata  basis,  by lot or by such  other  method  as the
Trustee considers fair and appropriate. The Trustee shall make the selection not
more  than 60 days and not less than 30 days  before  the  redemption  date from
Securities  outstanding not previously  called for  redemption.  The Trustee may
select  for  redemption  portions  of the  principal  of  Securities  that  have
denominations  larger than  $1,000.  Securities  and portions of them it selects
shall be in  principal  amounts  of  $1,000 or  integral  multiples  of  $1,000.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Securities called for redemption.  The Trustee shall notify
the Company  promptly of the  Securities  or portions of Securities to be called
for redemption.

     If any Security selected for partial  redemption is converted in part after
such selection,  the converted  portion of such Security shall be deemed (so far
as may be) to be the portion to be selected for  redemption.  The Securities (or
portions  thereof) so selected  shall be deemed duly selected for redemption for
all  purposes  hereof,  notwithstanding  that any such  Security is converted in
whole or in part  before  the  mailing  of the  notice of  redemption.  Upon any
redemption  of less than all the  Securities,  the  Company  and the Trustee may
treat as outstanding any Securities surrendered for conversion during the period
15 days next  preceding the mailing of a notice of redemption and need not treat
as outstanding any Security authenticated and


                                       25
<PAGE>

delivered  during  such period in exchange  for the  unconverted  portion of any
Security converted in part during such period.

Section  3.03 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 to each
holder whose Securities are to be redeemed at such holder's registered address.

     The notice shall  identify the  Securities  to be redeemed  (including  the
CUSIP number) and shall state:

(a)  the redemption date;

(b)  the  redemption  price and the  amount  accrued  and  unpaid  interest  and
     Additional Amounts, if any, to be paid;

(c)  if any  Security is being  redeemed in part,  the portion of the  principal
     amount of such Security to be redeemed and that, after the redemption date,
     upon  cancellation  of such  Security,  a new  Security  or  Securities  in
     principal amount equal to the unredeemed portion will be issued in the name
     of the holder thereof;

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

(e)  that  Securities  called for  redemption  must be surrendered to the Paying
     Agent to collect the redemption  price plus accrued interest and Additional
     Amounts, if any;

(f)  that, unless the Company defaults in making such redemption  payment or the
     Paying Agent is prohibited  from making such payment  pursuant to the terms
     of this Indenture, by law or otherwise, interest and Additional Amounts, if
     applicable,  on  Securities  called for  redemption  cease to accrue on and
     after the redemption date;

(g)  the paragraph of the Securities pursuant to which the Securities called for
     redemption are being redeemed; and

(h)  any other information necessary to enable holders to comply with the notice
     of redemption.


                                       26
<PAGE>

     Such notice shall also state the current  Conversion  Price and the date on
which the right to convert such Securities or portions thereof into Common Stock
of the Company will expire.

     At the  Company's  request,  the Trustee shall give notice of redemption in
the Company's  name and at the  Company's  expense.  In such event,  the Company
shall provide the Trustee with the information  required by this Section 3.03 in
a timely manner;  provided that the Company shall give the Trustee not less than
60 days' written notice unless the Trustee consents to a shorter period.

Section  3.04  Effect of Notice of  Redemption.  Once  notice of  redemption  is
mailed,  Securities  called  for  redemption  become  due  and  payable  on  the
redemption  date at the  price  set  forth in the  Security  plus  interest  and
Additional  Amounts, if any, accrued and unpaid to the redemption date; provided
that accrued  interest and  Additional  Amounts which are due and payable on any
interest  payment  date  which is on or prior to the  redemption  date  shall be
payable  to  the  holders  of  such  Securities,  or  one  or  more  predecessor
Securities,  registered as such at the close of business on the relevant  record
date; and provided,  further,  that if a redemption  date is not a Business Day,
payment shall be made on that next succeeding Business Day and no interest shall
accrue for the period from such redemption date to such succeeding  Business Day
unless the Company  shall  default in the payment due on such Business Day. Upon
surrender to the Paying Agent,  such Securities  shall be paid at the redemption
price stated in such notice.  Failure to give notice or any defect in the notice
to any holder shall not affect the validity of the notice to any other holder.

     The notice if mailed in the manner herein  provided  shall be  conclusively
presumed  to have been  given.  In any case,  failure to give such notice to any
holder or any defect in the notice to any 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 Securities.

Section 3.05 Deposit of  Redemption  Price.  Prior to 10:00 a.m.  (New York City
time) on the redemption  date, the Company shall deposit with the Trustee or the
Paying  Agent  in  immediately  available  funds,  money  sufficient  to pay the
redemption price of and accrued and unpaid interest and Additional  Amounts,  if
applicable,  to but not including the  redemption  date on all  Securities to be
redeemed on that date (subject to the right of holders of record on the relevant
record date to receive interest (and Additional  Amounts,  if applicable) due on
an interest  payment  date)  unless  theretofore  converted  into  Common  Stock
pursuant


                                       27
<PAGE>

to the provisions  hereof.  The Trustee or such Paying Agent shall return to the
Company any money not required for that purpose.

     So long as the Company complies with the preceding  paragraph and the other
provisions  of this Article III and unless the Paying Agent is  prohibited  from
making  such  payment  pursuant  to  the  terms  of  this  Indenture,  by law or
otherwise,  interest (and  Additional  Amounts,  if any) on the Securities to be
redeemed on the applicable  redemption date shall cease to accrue from and after
such redemption date and such Securities or portions thereof shall be deemed not
to be entitled to any benefit under this Indenture  except to receive payment on
the  redemption  date of the  redemption  price  plus  interest  and  Additional
Amounts,  if any,  accrued and unpaid to the  redemption  date.  If any Security
called for redemption shall not be so paid upon surrender for redemption,  then,
from the  redemption  date  until  such  redemption  price  (including,  without
limitation,  accrued interest and Additional  Amounts,  if any) is paid in full,
the Company  shall pay interest,  to the extent  permitted by law, on the unpaid
principal of and premium,  if any, interest and Additional  Amounts,  if any, on
such Security at the Default Rate, compounded semiannually.

Section 3.06  Securities  Redeemed in Part. Upon surrender of a Security that is
redeemed in part, the Company shall issue and the Trustee shall authenticate for
the  holder at the  expense of the  Company a new  Security  equal in  principal
amount to the unredeemed portion of the Security surrendered.

Section 3.07 Optional  Redemption.  The Company may redeem all or any portion of
the Securities,  upon the terms and at he redemption prices set forth in each of
the  Securities.  Any  redemption  pursuant to this  Section  3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.

Section 3.08 Designated Event Offer.

(a)  In the event  that,  pursuant to Section  4.07  hereof,  the Company  shall
     commence a Designated  Event Offer, the Company shall follow the procedures
     in this Section 3.08.

(b)  The Designated  Event Offer shall remain open for a period specified by the
     Company  which  shall be no less than 30 days and no more than 60 days from
     and including the date of the mailing of notice in accordance  with Section
     3.08(d)  hereof  (the  "Commencement  Date"),  except to the extent  that a
     longer period is required by applicable law (the "Tender  Period").  On the
     day (the "Designated  Event Payment Date")  immediately  following the last
     day of the


                                       28
<PAGE>

     Tender  Period,   the  Company  shall  purchase  the  principal  amount  of
     Securities duly surrendered for repurchase and not withdrawn.

(c)  If a  Designated  Event  Payment Date is after a record date and before the
     related interest payment date, accrued interest and Additional  Amounts, if
     any, to the related  interest  payment  date will be paid to the persons in
     whose names the  Securities  (or one or more  predecessor  Securities)  are
     registered  at the close of business on such record  date,  notwithstanding
     the  repurchase  of any such  Securities on such  Designated  Event Payment
     Date,  and no additional  interest or Additional  Amounts,  if any, will be
     payable  to  Noteholders  who  tender   Securities  for  purchase  on  such
     Designated Event Payment Date.

(d)  The Company shall provide the Trustee with written notice of the Designated
     Event Offer at least 10 Business Days before the Commencement Date.

(e)  Within 30 days  following  any  Designated  Event,  unless  the  Company is
     entitled  to and has  previously  elected to redeem all of the  outstanding
     Securities at its option and has  previously  given  holders  notice of its
     intention to redeem all of the  outstanding  Securities in accordance  with
     Article III of this  Indenture,  the Company or the Trustee (at the request
     and expense of the  Company)  shall send,  by first class mail, a notice to
     each of the  Noteholders,  which shall  govern the terms of the  Designated
     Event Offer and shall state:

     (i)  that the Designated Event Offer is being made pursuant to this Section
          3.08 and Section 4.07 hereof and that all Securities  validly tendered
          will be accepted for payment;

     (ii) the purchase  price (as  determined  in  accordance  with Section 4.07
          hereof,  subject to Section  3.08(c)  hereof),  the length of time the
          Designated  Event  Offer will  remain  open and the  Designated  Event
          Payment Date;

     (iii)that any Security or portion thereof not validly  tendered or accepted
          for payment will continue to accrue  interest and Additional  Amounts,
          if applicable, and will continue to have conversion rights;

     (iv) that,  unless the Company  defaults  in the payment of the  Designated
          Event Payment,  any Security or portion  thereof  accepted for payment
          pursuant to the Designated  Event Offer shall cease to accrue interest
          and Additional Amounts,  if applicable,  from and after the Designated
          Event Payment Date


                                       29
<PAGE>

          and will cease to have  conversion  rights after the Designated  Event
          Payment Date;

     (v)  that  Noteholders  electing  to have a  Security  or  portion  thereof
          purchased  pursuant to any Designated  Event Offer will be required to
          surrender the Security,  with the form entitled  "Option of Noteholder
          To Elect  Purchase",  that is set forth in  Exhibit  A hereto,  on the
          reverse of the  Security  completed,  to a Paying Agent at the address
          specified in the notice (which shall include an address in the Borough
          of Manhattan,  The City of New York) prior to the close of business on
          the third Business Day preceding the Designated Event Payment Date;

     (vi) that  Noteholders  will be entitled to  withdraw  their  election if a
          Paying  Agent  receives,  not later than the close of  business on the
          second  Business Day  preceding the  Designated  Event Payment Date, a
          letter  or  facsimile  transmission  setting  forth  the  name  of the
          Noteholder,  the principal amount of the Securities or portion thereof
          delivered  for  purchase  and a  statement  that  such  Noteholder  is
          withdrawing his election to have such  Securities or portions  thereof
          purchased; and

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

     In addition,  the notice shall contain all instructions,  other information
and materials  that the Company shall  reasonably  deem necessary to enable such
Noteholders to tender  Securities  pursuant to the Designated  Event Offer or to
withdraw tendered Securities. If the Company is not required to mail such notice
because,  as provided above, it has previously  given notice of its intention to
redeem  the  Securities  in whole but the  Company  thereafter  defaults  in the
payment of the  redemption  price  (including  accrued  interest and  Additional
Amounts,  if any) on any of the Securities on the relevant redemption date, then
the Company shall be required to give notice pursuant to this Section 3.08(e) no
later than the second Business Day following such redemption date, in which case
the Tender  Period shall be 30 days except to the extent that a longer period is
required  by  applicable  law.  In the event  that the  Company is  required  by
applicable law to extend the Tender Period beyond the  Designated  Event Payment
Date set forth in such notice, the Company will, as promptly as possible,  issue
a press release and send notice to holders announcing such


                                       30
<PAGE>

extension and the new  Designated  Event  Payment Date,  which press release and
notice  shall  state  the  new  deadlines  for   surrendering   and  withdrawing
Securities.

(f)  Prior to 10:00 A.M.  (New York City Time) on the  Designated  Event Payment
     Date, the Company shall irrevocably  deposit with the Trustee or the Paying
     Agent in  immediately  available  funds an amount  equal to the  Designated
     Event  Payment in respect of all  Securities  or portions  thereof  validly
     tendered and not withdrawn, such funds to be held for payment in accordance
     with the terms of this Section 3.08. On the Designated  Event Payment Date,
     the  Company  shall,  to the extent  lawful,  (i) accept  for  payment  the
     Securities or portions thereof validly tendered  pursuant to the Designated
     Event  Offer,  (ii)  deliver or cause to be  delivered  to the  Trustee the
     Securities  so  accepted  and (iii)  deliver to the  Trustee  an  Officers'
     Certificate identifying the Securities or portions thereof tendered and not
     withdrawn  to the  Company  and  stating  that  such  Securities  have been
     accepted  for payment by the Company in  accordance  with the terms of this
     Section  3.08.  The Paying Agent shall  promptly (but in any case not later
     than five  calendar days after the  Designated  Event Payment Date) mail or
     deliver to each holder of Notes so accepted  for payment an amount equal to
     the  Designated  Event Payment for such  Securities,  and the Trustee shall
     promptly authenticate and mail or otherwise deliver to each such Noteholder
     a new Security equal in principal amount to any unpurchased  portion of the
     Security  surrendered;  provided  that  each  new  Security  shall  be in a
     principal amount of $1,000 or an integral multiple thereof.  Any Securities
     not so accepted  shall be promptly  mailed or otherwise  delivered by or on
     behalf of the Company to the holders  thereof.  The Company  will  publicly
     announce  the  results  of the  Designated  Event  Offer  on, or as soon as
     practicable after, the Designated Event Payment Date.

(g)  The Designated  Event Offer shall be made by the Company in compliance with
     all applicable provisions of the Exchange Act and any other securities laws
     and regulations (including, without limitation, Rules 13e-4 and 14e-1 under
     the Exchange Act) to the extent such laws and regulations are applicable in
     connection  with the  repurchase of the  Securities  in  connection  with a
     Designated Event.

                                   ARTICLE IV

                                    COVENANTS

Section 4.01 Payment of  Securities.  The Company  shall pay the  principal  of,
premium,  if any, and interest (and  Additional  Amounts,  if applicable) on the


                                       31
<PAGE>

Securities on the dates and in the manner  provided in the  Securities  and this
Indenture.  Principal, premium, if any, and interest (and Additional Amounts, if
applicable)  shall be considered paid on the date due if the Paying Agent (other
than the  Company  or an  Affiliate  of the  Company)  holds on that date  money
designated for and sufficient to pay all principal, premium, if any and interest
(and  Additional  Amounts,  if  any)  then  due and  such  Paying  Agent  is not
prohibited  from paying such money to the  Noteholders  on that date pursuant to
the  terms of this  Indenture.  To the  extent  lawful,  the  Company  shall pay
interest  (including   post-petition   interest  in  any  proceeding  under  any
Bankruptcy Law) on overdue  installments of interest (and on overdue  principal,
premium,  if any, and  Additional  Amounts,  if applicable (in each case without
regard  to any  applicable  grace  period)),  at the  Default  Rate,  compounded
semiannually.

Section 4.02 SEC Reports.  The Company will comply with the  requirements of TIA
Section  314(a).  In  addition,  whether  or  not  required  by  the  rules  and
regulations of the SEC, so long as any Securities are  outstanding,  the Company
will file with the SEC and furnish (without  exhibits) to the Trustee and to the
holders of Securities all quarterly and annual financial information required to
be  contained  in a filing  with the SEC on Forms  10-Q and  10-K,  including  a
"Management's  Discussion  and Analysis of Financial  Conditions  and Results of
Operations" and, with respect to annual consolidated  financial statements only,
a report  on the  annual  consolidated  financial  statements  by the  Company's
independent accountants. The Company shall not be required to file any report or
other information with the SEC if the SEC does not permit such filing.  Delivery
of such reports,  information and documents to the Trustee is for  informational
purposes  only  and  the  Trustee's   receipt   thereof  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.

     In addition, if the Company at any time is not subject to either Section 13
or 15(d) of the  Exchange  Act,  the  Company  will  provide to each  holder and
beneficial owner of Securities and shares of Common Stock issued upon conversion
of Securities, and to any prospective purchaser designated by any such holder or
beneficial  owner,  upon  request,  the  information  required  pursuant to Rule
144A(d)(4) of the Securities Act.

Section 4.03 Compliance  Certificate.  The Company shall deliver to the Trustee,
within 120 days after the end of each fiscal year of the  Company,  an Officers'
Certificate  stating  that a review of the  activities  of the  Company  and its


                                       32
<PAGE>

subsidiaries   during  the  preceding  fiscal  year  has  been  made  under  the
supervision  of the  signing  Officers  with a view to  determining  whether the
Company has kept,  observed,  performed and fulfilled its obligations under, and
complied with the covenants and  conditions  contained in, this  Indenture,  and
further stating,  as to each such Officer signing such certificate,  that to the
best of such Officer's knowledge the Company has kept,  observed,  performed and
fulfilled  each  and  every  covenant,  and  complied  with  the  covenants  and
conditions  contained in this Indenture and is not in default (without regard to
periods of grace or notice requirements) in the performance or observance of any
of the terms,  provisions  and  conditions  hereof (or, if a Default or Event of
Default shall have  occurred,  describing all such Defaults or Events of Default
of which such Officer may have knowledge) and that to the best of such Officer's
knowledge  no event has  occurred  and remains in  existence  by reason of which
payments  on  account of the  principal  of, or  premium,  if any,  interest  or
Additional Amounts, if any, on, the Securities are prohibited.

     One of the Officers signing such Officers'  Certificate shall be either the
Company's principal executive officer,  principal financial officer or principal
accounting officer.

     The Company will, so long as any of the Securities are outstanding, deliver
to the  Trustee,  forthwith  upon,  but in any event within five  Business  Days
after, becoming aware of:

(a)  any  Default,  Event  of  Default  or  default  in the  performance  of any
     covenant, agreement or condition contained in this Indenture; or

(b)  any default under any other mortgage, indenture or instrument of the nature
     described in Section 8.01(e),

an Officers'  Certificate  specifying such Default,  Event of Default or default
and what action the Company is taking or proposing to take with respect thereto.

     Immediately  upon the  occurrence of any event giving rise to an obligation
of the Company to pay  Additional  Amounts  with  respect to the  Securities  in
accordance with paragraph 11 of the form thereof and the Registration  Agreement
or the  termination of any such  obligation,  the Company shall give the Trustee
notice of such commencement or termination,  of the obligation to pay Additional
Amounts with regard to the  Securities  and the amount  thereof and of the event
giving rise to such  commencement or termination (such notice to be contained in
an Officers'


                                       33
<PAGE>

Certificate),  and prior to receipt of such  Officers'  Certificate  the Trustee
shall be  entitled  to  assume  that no such  commencement  or  termination  has
occurred, as the case may be.

Section 4.04 Stay, Extension and Usury Law. The Company covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon,  plead, or
in any manner  whatsoever  claim or take the benefit or advantage  of, any stay,
extension or usury law wherever enacted,  now or at any time hereafter in force,
which may affect the covenants or the  performance  of this  Indenture;  and the
Company  (to the  extent it may  lawfully  do so)  hereby  expressly  waives all
benefit or advantage of any such law, and covenants  that it will not, by resort
to any such law,  hinder,  delay or impede  the  execution  of any power  herein
granted to the Trustee,  but will suffer and permit the  execution of every such
power as though no such law has been enacted.

Section 4.05 Corporate Existence.  Except as provided in Article VII hereof, the
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect  its  corporate  existence;  provided,  however,  that the
Company shall not be required to preserve any such right,  license or franchise,
or the corporate, partnership or other existence of any Subsidiary, if the Board
of  Directors  shall  determine  that  the  preservation  thereof  is no  longer
desirable  in the conduct of the  business  of the Company and its  Subsidiaries
taken as a whole  and  that the loss  thereof  is not  adverse  in any  material
respect to the Noteholders.

Section  4.06  Taxes.  The  Company  shall  pay,  and  shall  cause  each of its
Subsidiaries  to  pay,  prior  to  delinquency,   all  taxes,   assessments  and
governmental  levies,  the  non-payment  of which would have a material  adverse
effect on the  business,  financial  condition or results of  operations  of the
Company and its Subsidiaries,  taken as a whole, except such as are contested in
good faith and by appropriate  proceedings  and for which  adequate  reserves in
accordance with GAAP or other appropriate provisions have been made.

Section 4.07 Designated  Event.  Upon the occurrence of a Designated Event, each
holder of Securities  shall have the right, in accordance with this Section 4.07
and Section 3.08 hereof,  to require the Company to  repurchase  all or any part
(equal to $1,000 or an integral  multiple  thereof) of such holder's  Securities
pursuant  to the  terms  of an offer  made as  provided  in  Section  3.08  (the
"Designated  Event  Offer") at a purchase  price equal to 100% of the  principal
amount thereof, plus accrued and unpaid interest and Additional Amounts, if any,


                                       34
<PAGE>

thereon to the Designated Event Payment Date (the "Designated Event Payment").

                                   ARTICLE V

                                   CONVERSION

Section  5.01  Conversion  Privilege.  A holder of any  Security may convert the
principal amount thereof (or any portion thereof that is an integral multiple of
$1,000) into fully paid and nonassessable  shares of Common Stock of the Company
at any time after 90 days  following the Issuance Date and prior to the close of
business on the Business Day  immediately  preceding the final  maturity date of
the Security at the Conversion  Price then in effect,  except that, with respect
to any Security called for redemption,  such conversion right shall terminate at
the close of business on the Business Day  immediately  preceding the redemption
date (unless the Company shall default in making the redemption  payment when it
becomes due, in which case the conversion  right shall terminate at the close of
business  on the date on which such  default is cured).  The number of shares of
Common Stock  issuable  upon  conversion of a Security is determined by dividing
the principal amount of the Security converted by the Conversion Price in effect
on the Conversion Date.

     "Conversion  Price" means $73.36,  as the same may be adjusted from time to
time as provided in this Article V.

     Provisions of this  Indenture that apply to conversion of all of a Security
also  apply to  conversion  of a portion  of it. A holder of  Securities  is not
entitled  to any  rights  of a holder  of  Common  Stock  until  such  holder of
Securities  has converted  such  Securities  into Common Stock,  and only to the
extent that such  Securities are deemed to have been converted into Common Stock
under this Article V.

Section 5.02 Conversion Procedure.  To convert a Security, a holder must satisfy
the requirements in paragraph 10 of the Securities. The date on which the holder
satisfies all of those  requirements  is the  conversion  date (the  "Conversion
Date").  As promptly as practicable on or after the Conversion Date, the Company
shall issue and deliver to the Trustee a  certificate  or  certificates  for the
number of whole shares of Common Stock  issuable upon the conversion and a check
or other payment for any fractional  share in an amount  determined  pursuant to
Section 5.03. Such  certificate or  certificates  will be sent by the Trustee to
the  Conversion  Agent for delivery to the holder.  The Person in whose name the
certificate is


                                       35
<PAGE>

registered shall become the stockholder of record on the Conversion Date and, as
of such date, such Person's rights as a Noteholder with respect to the converted
Security shall cease;  provided,  however, that, except as otherwise provided in
this  Section  5.02,  no  surrender  of a  Security  on any date  when the stock
transfer  books of the Company  shall be closed shall be effective to constitute
the Person  entitled to receive the shares of Common Stock upon such  conversion
as the  stockholder  of record of such shares of Common Stock on such date,  but
such surrender  shall be effective to constitute the Person  entitled to receive
such  shares of  Common  Stock as the  stockholder  of  record  thereof  for all
purposes at the close of business on the next succeeding day on which such stock
transfer books are open; provided,  further, however, that such conversion shall
be at the  Conversion  Price in effect on the date that such Security shall have
been  surrendered for conversion,  as if the stock transfer books of the Company
had not been closed.

     No payment or  adjustment  will be made for accrued and unpaid  interest or
Additional Amounts on a converted Security or for dividends or distributions on,
or Additional  Amounts,  if any,  attributable to, shares of Common Stock issued
upon conversion of a Security,  except that, if any holder surrenders a Security
for conversion after the close of business on any record date for the payment of
an  installment  of  interest  and prior to the  opening of business on the next
succeeding interest payment date, then, notwithstanding such conversion, accrued
and unpaid  interest and  Additional  Amounts,  if  applicable,  payable on such
Security on such interest  payment date shall be paid on such  interest  payment
date  to the  person  who  was  the  holder  of  such  Security  (or one or more
predecessor  Securities)  at the close of business on such record  date.  In the
case of any Security surrendered for conversion after the close of business on a
record  date for the  payment of an  installment  of  interest  and prior to the
opening of business on the next succeeding  interest payment date, then,  unless
such Security has been called for  redemption  on a redemption  date or is to be
repurchased on a Designated  Event Payment Date after such record date and prior
to such interest  payment date, such Security,  when surrendered for conversion,
must be accompanied by payment in an amount equal to the interest and Additional
Amounts,  if any,  payable on such interest payment date on the principal amount
of such  Security so converted.  Holders of Common Stock issued upon  conversion
will not be entitled to receive any dividends payable to holders of Common Stock
as of any record time before the close of business on the Conversion Date.


                                       36
<PAGE>

     If a holder converts more than one Security at the same time, the number of
whole shares of Common Stock issuable upon the conversion  shall be based on the
total principal amount of Securities converted.

     Upon  surrender of a Security that is converted in part,  the Trustee shall
authenticate  for the holder a new  Security  equal in  principal  amount to the
unconverted portion of the Security surrendered.

Section 5.03 Fractional  Shares. The Company will not issue fractional shares of
Common Stock upon  conversion of a Security.  In lieu thereof,  the Company will
pay an amount in cash based upon the Daily  Market  Price of the Common Stock on
the Trading Day prior to the Conversion Date.

Section 5.04 Taxes on  Conversion.  The issuance of  certificates  for shares of
Common Stock upon the conversion of any Security shall be made without charge to
the converting Noteholder for such certificates or for any tax in respect of the
issuance  of such  certificates,  and such  certificates  shall be issued in the
respective  names of, or in such  names as may be  directed  by,  the  holder or
holders of the converted  Security;  provided,  however,  that in the event that
certificates  for  shares of Common  Stock are to be issued in a name other than
the  name  of  the  holder  of  the  Security  converted,  such  Security,  when
surrendered for conversion,  shall be accompanied by an instrument of assignment
or  transfer,  in  form  satisfactory  to  the  Company,  duly  executed  by the
registered  holder  thereof  or his  duly  authorized  attorney;  and  provided,
further,  however,  that the Company  shall not be required to pay any tax which
may be payable in respect of any transfer  involved in the issuance and delivery
of any  such  certificates  in a name  other  than  that  of the  holder  of the
converted  Security,  and the Company  shall not be required to issue or deliver
such certificates  unless or until the person or persons requesting the issuance
thereof  shall  have paid to the  Company  the  amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid or is
not applicable.

Section 5.05 Company to Provide. The Company shall at all times reserve and keep
available,  free from  preemptive  rights,  out of its  authorized  but unissued
Common Stock,  solely for the purpose of issuance upon  conversion of Securities
as herein provided,  a sufficient number of shares of Common Stock to permit the
conversion of all outstanding Securities for shares of Common Stock.

     All  shares of Common  Stock  which may be issued  upon  conversion  of the
Securities   shall  be  duly   authorized,   validly  issued,   fully  paid  and
nonassessable when


                                       37
<PAGE>

so issued.  The  Company  shall take such  action  from time to time as shall be
necessary  so that par value of the Common  Stock shall at all times be equal to
or less than the Conversion Price then in effect.

     The Company  shall from time to time take all action  necessary so that the
Common Stock which may be issued upon conversion of Securities, immediately upon
their issuance (or, if such Common Stock is subject to  restrictions on transfer
under the  Securities  Act,  upon their resale  pursuant to an  effective  Shelf
Registration  Statement or in a  transaction  pursuant to which the  certificate
evidencing  such Common Stock shall no longer bear the  Restricted  Common Stock
Legend),  will be  listed on the  principal  securities  exchanges,  interdealer
quotation systems (including the NNM) and markets, if any, on which other shares
of Common Stock of the Company are then listed or quoted.

Section 5.06  Adjustment  of Conversion  Price.  The  Conversion  Price shall be
subject to adjustment from time to time as follows:

(a)  In case the Company  shall (1) pay a dividend in shares of Common  Stock to
     holders of Common Stock,  (2) make a distribution in shares of Common Stock
     to holders of Common Stock, (3) subdivide its outstanding  shares of Common
     Stock into a greater  number of shares of Common  Stock or (4)  combine its
     outstanding  shares of  Common  Stock  into a  smaller  number of shares of
     Common Stock,  the  Conversion  Price in effect  immediately  prior to such
     action  shall be  adjusted  so that the holder of any  Security  thereafter
     surrendered  for  conversion  shall be  entitled  to receive  the number of
     shares of Common Stock which he would have owned immediately following such
     action had such Securities been converted  immediately  prior thereto.  Any
     adjustment  made  pursuant to this  subsection  (a) shall become  effective
     immediately after the record date in the case of a dividend or distribution
     and shall become effective immediately after the effective date in the case
     of a subdivision or combination. In the event such dividend or distribution
     is not paid or made, or such  subdivision  or  combination is not effected,
     the  Conversion  Price shall be adjusted  immediately  to be the Conversion
     Price  which  would  then  be in  effect  if such  dividend,  distribution,
     subdivision or combination had not occurred.

(b)  In case the Company shall issue rights or warrants to all holders of Common
     Stock  entitling  them to subscribe for or purchase  shares of Common Stock
     (or  securities  convertible  into  Common  Stock) at a price per share (or
     having a conversion price per share) less than the Current Market Price per
     share (as determined  pursuant to subsection (f) below) of the Common Stock
     on the


                                       38
<PAGE>

     record date for  determining  the holders of the Common  Stock  entitled to
     receive such rights or warrants,  the Conversion Price shall be adjusted so
     that  the  same  shall  equal  the  price  determined  by  multiplying  the
     Conversion  Price in  effect  immediately  prior to such  record  date by a
     fraction  of which the  numerator  shall be the  number of shares of Common
     Stock  outstanding as of the close of business on such record date plus the
     number of shares of Common Stock which the aggregate  offering price of the
     total  number of shares of Common  Stock so  offered  for  subscription  or
     purchase (or the aggregate  conversion price of the convertible  securities
     so offered) would  purchase at such Current Market Price,  and of which the
     denominator  shall be the number of shares of Common Stock  outstanding  on
     such record date plus the number of  additional  shares of Common  Stock so
     offered  for  subscription  or  purchase  (or into  which  the  convertible
     securities  so offered are  convertible).  Such  adjustments  shall  become
     effective  immediately  after such record  date.  For the  purposes of this
     subsection  (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 such Common Stock.  The Company shall not
     issue any rights,  options or warrants in respect of shares of Common Stock
     held in the treasury of the Company.

(c)  In case the Company shall  distribute to all holders of Common Stock shares
     of Capital  Stock of the Company  (other than Common  Stock),  evidences of
     indebtedness,  cash,  rights or warrants  entitling the holders  thereof to
     subscribe  for or  purchase  securities  (other  than  rights  or  warrants
     described in subsection (b) above) or other assets (including securities of
     Persons other than the Company but excluding (i) dividends or distributions
     paid  exclusively in cash,  (ii) dividends and  distributions  described in
     subsection  (b)  above  and  (iii)  distributions  in  connection  with the
     consolidation,  merger or transfer of assets covered by Section 5.13), then
     in each such case the  Conversion  Price shall be adjusted so that the same
     shall equal the price  determined by multiplying  the  Conversion  Price in
     effect  immediately  prior to the record date for the  determination of the
     holders of Common Stock entitled to receive such distribution by a fraction
     of which the numerator  shall be the Current  Market Price  (determined  as
     provided in  subsection  (f) below) of the Common  Stock on the record date
     mentioned  below  less  the  fair  market  value  on such  record  date (as
     determined  by  the  Board  of  Directors,  whose  determination  shall  be
     conclusive  evidence of such fair  market  value and  described  in a Board
     Resolution  delivered  to the  Trustee) of the portion of the  evidences of
     indebtedness,  shares of Capital  Stock,  cash,  rights,  warrants or other
     assets so distributed  applicable to one share of Common Stock  (determined


                                       39
<PAGE>

     on the basis of the number of shares of the Common Stock outstanding on the
     record date),  and of which the  denominator  shall be such Current  Market
     Price  of  the  Common  Stock.   Such  adjustment  shall  become  effective
     immediately  after the record date for the  determination of the holders of
     Common  Stock  entitled  to receive  such  distribution.  In the event such
     distribution  is not paid or made, the  Conversion  Price shall be adjusted
     immediately  to be the  Conversion  Price  which would then be in effect if
     such distribution had not occured.  Notwithstanding the foregoing,  in case
     the Company shall distribute rights or warrants to subscribe for additional
     shares of the  Company's  Capital  Stock  (other  than  rights or  warrants
     referred to in  subsection  (b) above)  ("Rights") to all holders of Common
     Stock,  the Company may, in lieu of making any  adjustment  pursuant to the
     foregoing provisions of this Section 5.06(c), make proper provision so that
     each  holder of a Security  who  converts  such  Security  (or any  portion
     thereof)  after  the  record  date for such  distribution  and prior to the
     expiration  or  redemption  of the Rights shall be entitled to receive upon
     such  conversion,  in addition to the shares of Common Stock  issuable upon
     such  conversion  (the  "Conversion  Shares"),  a number  of  Rights  to be
     determined  as follows:  (i) if such  conversion  occurs on or prior to the
     date for the distribution to the holders of Rights of separate certificates
     evidencing such Rights (the "Distribution Date"), the same number of Rights
     to which a holder of a number of shares of Common Stock equal to the number
     of  Conversion  Shares  is  entitled  at the  time  of such  conversion  in
     accordance  with the terms and  provisions of the Rights;  and (ii) if such
     conversion occurs after the Distribution Date, the same number of Rights to
     which a holder of the  number of shares  of  Common  Stock  into  which the
     principal  amount of the Security so converted was convertible  immediately
     prior to the Distribution Date would have been entitled on the Distribution
     Date in accordance with the terms and provisions of the Rights.

(d)  In case the Company  shall,  by dividend or  otherwise,  at any time make a
     distribution  to all  holders  of its  Common  Stock  exclusively  in  cash
     (including any distributions of cash out of current or retained earnings of
     the  Company  but  excluding  any  cash  that is  distributed  as part of a
     distribution  requiring a Conversion Price adjustment pursuant to paragraph
     (c) of this Section) in an aggregate amount that,  together with the sum of
     (x) the aggregate  amount of any other  distributions  made  exclusively in
     cash to all holders of Common Stock within the 12 months preceding the date
     fixed for determining the stockholders  entitled to such  distribution (the
     "Distribution  Record  Date") and in respect of which no  Conversion  Price
     adjustment  pursuant  to  paragraph  (c) or (e) of  this  Section  or  this
     paragraph (d) has been made plus (y) the aggregate amount of all


                                       40
<PAGE>

     Excess  Payments  in  respect  of any  tender  offers  or other  negotiated
     transactions  by the Company or any of its  Subsidiaries  for Common  Stock
     concluded within the 12 months  preceding the Distribution  Record Date and
     in respect of which no Conversion Price  adjustment  pursuant to paragraphs
     (c) or (e) of this Section or this paragraph (d) has been made,  exceeds 12
     1/2% of the product of the Current  Market Price per share  (determined  as
     provided  in  paragraph  (f) of this  Section)  of the Common  Stock on the
     Distribution Record Date multiplied by the number of shares of Common Stock
     outstanding on the Distribution  Record Date (excluding  shares held in the
     treasury of the Company), the Conversion Price shall be reduced so that the
     same shall equal the price  determined by multiplying such Conversion Price
     in effect  immediately  prior to the  effectiveness of the Conversion Price
     reduction  contemplated  by this  paragraph  (d) by a fraction of which the
     numerator  shall be the  Current  Market  Price  per share  (determined  as
     provided  in  paragraph  (f) of this  Section)  of the Common  Stock on the
     Distribution  Record Date less the sum of the aggregate  amount of cash and
     the aggregate  Excess  Payments so distributed or paid within such 12 month
     period (including, without limitation, the distribution in respect of which
     such  adjustment  is being made)  applicable  to one share of Common  Stock
     (which shall be determined  by dividing the sum of the aggregate  amount of
     cash and the aggregate  Excess  Payments so distributed or paid within such
     12 months (including,  without  limitation,  the distribution in respect of
     which  such  adjustment  is being  made) by the  number of shares of Common
     Stock  outstanding  on the  Distribution  Record Date) and the  denominator
     shall be such  Current  Market Price per share  (determined  as provided in
     paragraph  (f) of this  Section)  of the Common  Stock on the  Distribution
     Record Date, such reduction to become  effective  immediately  prior to the
     opening of business on the day following the  Distribution  Record Date. In
     the event such distribution is not paid or made, the Conversion Price shall
     be adjusted  immediately to be the Conversion  Price which would then be in
     effect if such distribution had not occurred.

(e)  In case a tender offer or other negotiated  transaction made by the Company
     or any Subsidiary of the Company for all or any portion of the Common Stock
     shall be  consummated,  if an Excess  Payment  is made in  respect  of such
     tender offer or other  negotiated  transaction and the aggregate  amount of
     such Excess Payment,  together with the sum of (x) the aggregate  amount of
     any distributions,  by dividend or otherwise,  to all holders of the Common
     Stock made in cash (including any  distributions  of cash out of current or
     retained  earnings  of  the  Company,   but  excluding  any  cash  that  is
     distributed  as  part  of  a  distribution  requiring  a  Conversion  Price
     adjustment  pursuant to paragraph (c) of this Section)


                                       41
<PAGE>

     within  the 12  months  preceding  the  date of  payment  of  such  current
     negotiated  transaction  consideration or expiration of such current tender
     offer,  as the  case  may be (the  "Purchase  Date"),  and as to  which  no
     adjustment in the  Conversion  Price pursuant to paragraph (c) or paragraph
     (d) of this  Section  or this  paragraph  (e) has  been  made  plus (y) the
     aggregate  amount of all Excess  Payments  in  respect of any other  tender
     offers  or  other  negotiated  transactions  by the  Company  or any of its
     Subsidiaries  for Common Stock concluded within the 12 months preceding the
     Purchase Date and in respect of which no adjustment in the Conversion Price
     pursuant to paragraph (c) or (d) of this Section or this  paragraph (e) has
     been made,  exceeds 12 1/2% of the product of the Current  Market Price per
     share  (determined  as provided in  paragraph  (f) of this  Section) of the
     Common Stock on the  Purchase  Date  multiplied  by the number of shares of
     Common Stock  outstanding  on the  Purchase  Date  (including  any tendered
     shares but excluding  any shares held in the treasury of the Company),  the
     Conversion  Price  shall be reduced so that the same shall  equal the price
     determined by multiplying such Conversion Price in effect immediately prior
     to the effectiveness of the Conversion Price reduction contemplated by this
     paragraph  (e) by a fraction  of which the  numerator  shall be the Current
     Market Price per share  (determined  as provided in  paragraph  (f) of this
     Section)  of the  Common  Stock on the  Purchase  Date  less the sum of the
     aggregate  amount of cash and the aggregate  Excess Payments so distributed
     or paid within such 12 month period  (including,  without  limitation,  the
     Excess  Payment  in  respect  of  which  such  adjustment  is  being  made)
     applicable  to one share of Common  Stock  (which  shall be  determined  by
     dividing the sum of the aggregate  amount of cash and the aggregate  Excess
     Payments so distributed or paid within such 12 months  (including,  without
     limitation, the Excess Payment in respect of which such adjustment is being
     made) by the number of shares of Common Stock  outstanding  on the Purchase
     Date and the  denominator  shall be such  Current  Market  Price  per share
     (determined  as provided in  paragraph  (f) of this  Section) of the Common
     Stock on the Purchase Date, such reduction to become effective  immediately
     prior to the opening of business on the day following the Purchase Date.

(f)  The "Current  Market  Price" per share of Common Stock on any date shall be
     deemed to be the average of the Daily Market  Prices for the shorter of (i)
     30  consecutive  Business  Days ending on the last full  Trading Day on the
     exchange or market  referred to in  determining  such Daily  Market  Prices
     prior to the time of  determination  or (ii) the period  commencing  on the
     date next succeeding the first public  announcement of the issuance of such
     rights or such warrants or such other  distribution or such tender offer or
     other negotiated


                                       42
<PAGE>

     transaction  through  such last full  Trading Day on the exchange or market
     referred to in  determining  such Daily Market  Prices prior to the time of
     determination.

(g)  "Excess Payment" means the excess of (A) the aggregate of the cash and fair
     market value (as determined by the Board of Directors,  whose determination
     shall be  conclusive  evidence of such fair market value and described in a
     Board Resolution  delivered to the Trustee) of other  consideration paid by
     the Company or any of its Subsidiaries with respect to the shares of Common
     Stock acquired in a tender offer or other  negotiated  transaction over (B)
     the  Daily  Market  Price on the  Trading  Day  immediately  following  the
     completion of the tender offer or other negotiated  transaction  multiplied
     by the number of acquired shares of Common Stock.

(h)  In any case in which this Section 5.06 shall  require that an adjustment be
     made  immediately  following  a record  date for an event,  the Company may
     elect to defer,  until such  event,  issuing to the holder of any  Security
     converted  after  such  record  date the  shares of Common  Stock and other
     Capital Stock of the Company  issuable upon such  conversion over and above
     the shares of Common Stock and other Capital Stock of the Company  issuable
     upon  such  conversion  on the  basis  of the  Conversion  Price  prior  to
     adjustment;  and,  in  lieu of the  shares  the  issuance  of  which  is so
     deferred, the Company shall issue or cause its transfer agents to issue due
     bills or other appropriate evidence of the right to receive such shares.

Section 5.07 No  Adjustment.  No  adjustment  in the  Conversion  Price shall be
required  until  cumulative  adjustments  amount to 1% or more of the Conversion
Price as last adjusted;  provided, however, that any adjustments which by reason
of this Section  5.07 are not  required to be made shall be carried  forward and
taken into account in any subsequent  adjustment.  All  calculations  under this
Article V shall be made to the nearest cent or to the nearest one-hundredth of a
share,  as the case may be. 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.

Section 5.08 Other Adjustments.

(a)  In the event that,  as a result of an  adjustment  made pursuant to Section
     5.06  above,  the  holder  of  any  Security  thereafter   surrendered  for
     conversion  shall become entitled to receive any shares of Capital Stock of
     the  Company  other  than


                                       43
<PAGE>

     shares of its Common Stock,  thereafter the Conversion  Price of such other
     shares so receivable upon conversion of any Securities  shall be subject to
     adjustment from time to time in a manner and on terms as nearly  equivalent
     as practicable to the provisions  with respect to Common Stock contained in
     this Article V.

(b)  In the event that any  shares of Common  Stock (or  securities  convertible
     into Common Stock) issuable upon exercise of any of the rights,  options or
     warrants  referred to in Section 5.06(b) and Section 5.06(c) hereof are not
     delivered prior to the expiration of such rights, options, or warrants, the
     Conversion  Price shall be readjusted to the  Conversion  Price which would
     otherwise have been in effect had the adjustment  made upon the issuance of
     such rights, options or warrants been made on the basis of delivery of only
     the  number of such  rights,  options  and  warrants  which  were  actually
     exercised.

Section 5.09  Adjustments  for Tax.  The Company  may, at its option,  make such
reductions in the  Conversion  Price,  in addition to those  required by Section
5.06 above,  as the Board of Directors  deems advisable to avoid or diminish any
income  tax  to  holders  of  Common  Stock   resulting  from  any  dividend  or
distribution  of stock (or rights to acquire stock) or from any event treated as
such for federal income tax purposes.

Section 5.10  Adjustments by the Company.  The Company from time to time may, to
the extent  permitted by law, reduce the Conversion  Price by any amount for any
period of at least 20 days,  in which  case the  Company  shall give at least 15
days' notice of such reduction in accordance  with Section 5.11, if the Board of
Directors  has made a  determination  that such  reduction  would be in the best
interests of the Company, which determination shall be conclusive.

Section 5.11 Notice of Adjustment.  Whenever the  Conversion  Price is adjusted,
the Company shall promptly mail to Noteholders at the addresses appearing on the
Registrar's  books a notice  of the  adjustment  and file  with the  Trustee  an
Officers' Certificate briefly stating the facts requiring the adjustment and the
manner of computing it.

Section 5.12 Notice of Certain Transactions. In the event that:

(a)  the Company  takes any action  which  would  require an  adjustment  in the
     Conversion Price;


                                       44
<PAGE>

(b)  the Company  takes any action that would require a  supplemental  indenture
     pursuant to Section 5.13; or

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

the  Company  shall  mail  to  Noteholders  at the  addresses  appearing  on the
Registrar's  books  and the  Trustee a notice  stating  the  proposed  record or
effective  date,  as the case may be. The Company shall mail the notice at least
15 days  before  such date;  however,  failure to mail such notice or any defect
therein shall not affect the validity of any  transaction  referred to in clause
(a), (b), (c), (d) or (e) of this Section 5.12.

Section 5.13 Effect of Reclassifications,  Consolidations, Mergers, Continuances
or Sales on Conversion  Privilege.  If any of the following shall occur, namely:
(i) any  reclassification  or change  of  outstanding  shares  of  Common  Stock
issuable upon  conversion of  Securities  (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),  (ii) any  consolidation  or merger to
which the  Company is a party  other  than a merger in which the  Company is the
continuing  corporation and which does not result in any reclassification of, or
change (other than a change in name,  or 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) in,  outstanding shares of Common Stock, (iii) any continuance in a
new jurisdiction which results in a reclassification of, or change (other than a
change in name, or par value,  or from par value to no par value, or from no par
value to par value) in,  outstanding shares of Common Stock, or (iv) any sale or
conveyance  of  all  or  substantially  all  of  the  property  of  the  Company
(determined on a  consolidated  basis),  then the Company,  or such successor or
purchasing  corporation,  as the case may be, shall, as a condition precedent to
such  reclassification,  change,  consolidation,  merger,  continuance,  sale or
conveyance,  execute and deliver to the Trustee a supplemental indenture in form
reasonably  satisfactory  to the  Trustee  providing  that  the  holder  of each
Security then outstanding shall have the right to convert such Security into the
kind and amount of shares of stock and other securities and property  (including
cash)  receivable upon such  reclassification,  change,  consolidation,  merger,
continuance,  sale or  conveyance  by a holder of the number of shares of Common
Stock  deliverable  upon conversion of such Security  immediately  prior to such
reclassification,   change,   consolidation,   merger,   continuance,   sale  or
conveyance.  Such  supplemental  indenture  shall provide for adjustments of the
Conversion  Price which shall be as nearly  equivalent as may be  practicable to
the  adjustments  of the  Conversion  Price  provided for in this Article V. The
foregoing, however, shall


                                       45
<PAGE>

not in any way  affect  the right a holder of a  Security  may  otherwise  have,
pursuant to clause (ii) of the last sentence of subsection  (c) of Section 5.06,
to receive  Rights upon  conversion  of a Security.  If, in the case of any such
consolidation,  merger,  continuance,  sale or  conveyance,  the  stock or other
securities and property  (including  cash)  receivable  thereupon by a holder of
Common  Stock  includes  shares of stock or other  securities  and property of a
corporation  or other  business  entity other than the  successor or  purchasing
corporation,  as the case may be, in such  consolidation,  merger,  continuance,
sale or conveyance,  then such supplemental  indenture shall also be executed by
such  other  corporation  or  other  business  entity  and  shall  contain  such
additional  provisions to protect the interests of the holders of the Securities
as the Board of Directors of the Company shall reasonably  consider necessary by
reason of the  foregoing.  The  provision of this  Section 5.13 shall  similarly
apply to successive consolidations, mergers, continuances, sales or conveyances.

In the event the Company shall execute a supplemental indenture pursuant to this
Section 5.13,  the Company shall promptly file with the Trustee (x) an Officers'
Certificate  briefly stating the reasons therefor,  the kind or amount of shares
of stock or securities or property (including cash) receivable by holders of the
Securities   upon  the   conversion   of  their   Securities   after   any  such
reclassification, change, consolidation, merger, continuance, sale or conveyance
and any adjustment to be made with respect thereto and (y) an Opinion of Counsel
stating that all conditions  precedent  relating to such  transaction  have been
complied with, and shall promptly mail notice thereof to all holders.

Section 5.14 Trustee's Disclaimer.  The Trustee has no duty to determine when an
adjustment  under this  Article V should be made,  how it should be made or what
such  adjustment  should be or whether a  supplemental  indenture is required by
this Article V, but may accept as conclusive  evidence of the correctness of any
such  adjustment,  and  shall  be  protected  in  relying  upon,  the  Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 5.11. The Trustee makes no  representation as to the
validity  or value  of any  securities  or  assets  issued  upon  conversion  of
Securities,  and the Trustee shall not be responsible for the Company's  failure
to comply with any provisions of this Article V.

     The  Trustee  shall  not be  under  any  responsibility  to  determine  the
correctness of any provisions  contained in any supplemental  indenture executed
pursuant  to  Section  5.13,  but  may  accept  as  conclusive  evidence  of the
correctness thereof, and


                                       46
<PAGE>

shall be protected  in relying  upon,  the  Officers'  Certificate  with respect
thereto  which the Company is  obligated  to file with the  Trustee  pursuant to
Section 5.13.

Section 5.15 Cancellation of Converted Securities.  All Securities delivered for
conversion  shall  be  delivered  to the  Trustee  to be  canceled  by or at the
direction of the Trustee, which shall dispose of the same as provided in Section
2.11.

Section 5.16  Restriction  on Common Stock  Issuable  Upon  Conversion.



(a)  Shares of Common Stock to be issued upon conversion of Securities  prior to
     the  effectiveness  of a Shelf  Registration  Statement shall be physically
     delivered in  certificated  form to the holders  converting such Securities
     and the certificate representing such shares of Common Stock shall bear the
     Restricted  Common Stock Legend unless  removed in accordance  with Section
     5.16(c).

(b)  If (i) shares of Common  Stock to be issued upon  conversion  of a Security
     prior to the  effectiveness  of a Shelf  Registration  Statement  are to be
     registered in a name other than that of the holder of such Security or (ii)
     shares of Common Stock represented by a certificate  bearing the Restricted
     Common  Stock Legend are  transferred  subsequently  by such holder,  then,
     unless  the Shelf  Registration  Statement  has become  effective  and such
     shares are being transferred pursuant to the Shelf Registration  Statement,
     the holder  must  deliver  to the  transfer  agent for the  Common  Stock a
     certificate in  substantially  the form of Exhibit E as to compliance  with
     the restrictions on transfer  applicable to such shares of Common Stock and
     neither the transfer  agent nor the registrar for the Common Stock shall be
     required to register any  transfer of such Common Stock not so  accompanied
     by a properly completed certificate.

(c)  Except in connection with a Shelf Registration  Statement,  if certificates
     representing  shares of Common  Stock are issued upon the  registration  of
     transfer,  exchange or  replacement of any other  certificate  representing
     shares of Common Stock bearing the Restricted  Common Stock Legend, or if a
     request  is made  to  remove  such  Restricted  Common  Stock  Legend  from
     certificates  representing  shares of Common  Stock,  the  certificates  so
     issued shall bear the  Restricted  Common Stock Legend,  or the  Restricted
     Common Stock Legend shall not be removed,  as the case may be, unless there
     is delivered to the Company such satisfactory evidence,  which, in the case
     of a transfer  made  pursuant  to Rule 144 under the  Securities  Act,  may
     include an opinion of counsel  licensed to practice law in the State of New
     York, as may be reasonably required by the Company, that neither the legend
     nor the  restrictions  on transfer set forth therein


                                       47
<PAGE>

     are required to ensure that transfers thereof comply with the provisions of
     Rule 144A,  Rule 144 or Regulation S under the  Securities Act or that such
     shares of Common Stock are securities that are not "restricted"  within the
     meaning of Rule 144 under the Securities Act. Upon provision to the Company
     of such  reasonably  satisfactory  evidence,  the  Company  shall cause the
     transfer agent for the Common Stock to countersign and deliver certificates
     representing shares of Common Stock that do not bear the legend.

                                   ARTICLE VI

                                  SUBORDINATION

Section  6.01  Agreement  to  Subordinate.  The  Company,  for  itself  and  its
successors, and each Noteholder, by his acceptance of Securities, agree that the
payment of the principal of and premium,  if any, interest,  Additional Amounts,
if any, and any other amounts due on the Securities is  subordinated in right of
payment, to the extent and in the manner stated in this Article VI, to the prior
payment in full of all existing and future Senior Debt.

Section  6.02 No Payment on  Securities  if Senior Debt in Default.  Anything in
this  Indenture  to the  contrary  notwithstanding,  no  payment  on  account of
principal of or premium,  if any, interest or Additional  Amounts,  if any on or
other amounts due on the Securities  (including the making of a deposit pursuant
to Section 3.05 or 3.08(f)),  and no redemption,  purchase, or other acquisition
of the Securities,  shall be made by or on behalf of the Company unless (i) full
payment of all amounts  then due for  principal  of and  interest on, and of all
other  amounts  then due on, all Senior Debt has been made or duly  provided for
pursuant to the terms of the instruments  governing such Senior Debt and (ii) at
the time for, and immediately after giving effect to, such payment,  redemption,
purchase or other  acquisition,  there shall not exist under any Senior Debt, or
any  agreement  pursuant to which any Senior Debt is issued,  any default  which
shall not have been cured or waived and which default shall have resulted in the
full amount of such Senior Debt being declared due and payable. In addition,  if
the  Trustee  shall  receive  written  notice  from  any of the  holders  of any
Designated  Senior Debt or their  Representative  (a "Payment  Blockage Notice")
that there has occurred and is continuing under such Designated  Senior Debt, or
any  agreement  pursuant to which such  Designated  Senior  Debt is issued,  any
default,  which default shall not have been cured or waived,  giving the holders
of such Designated  Senior Debt the right to declare such Designated Senior Debt
immediately  due and payable,  then,  anything in this Indenture to the contrary
notwithstanding, no payment on account


                                       48
<PAGE>

of the principal of or premium,  if any, interest or Additional Amounts, if any,
on or any other amounts due on the Securities  (including,  without  limitation,
the making of a deposit pursuant to Section 3.05 or 3.08(f)), and no redemption,
purchase or other  acquisition of the Securities,  shall be made by or on behalf
of the Company during the period (the "Payment Blockage  Period")  commencing on
the date of receipt of the Payment  Blockage  Notice and ending (unless  earlier
terminated  by notice given to the Trustee by the holders or the  Representative
of the holders of such Designated Senior Debt) on the earlier of (a) the date on
which  such  default  shall  have been  cured or waived or (b) 180 days from the
receipt of the Payment Blockage Notice. Notwithstanding the provisions described
in the immediately  preceding sentence (but subject to the provisions  contained
in Section 6.01 and the first sentence of this Section 6.02), unless the holders
of such Designated Senior Debt or the  Representative of such holders shall have
accelerated the maturity of such Designated  Senior Debt, the Company may resume
payments on the Securities after the end of such Payment  Blockage  Period.  Not
more than one Payment  Blockage Notice may be given in any  consecutive  365-day
period,  irrespective  of the number of  defaults  with  respect to Senior  Debt
during such period.

     In the event that,  notwithstanding  the  provisions  of this Section 6.02,
payments  are  made by or on  behalf  of the  Company  in  contravention  of the
provisions of this Section 6.02, such payments shall be held by the Trustee, any
Paying Agent or the  holders,  as  applicable,  in trust for the benefit of, and
shall be paid over to and  delivered  to, the  Representative  of the holders of
Senior Debt or the trustee  under the  indenture  or other  agreement  (if any),
pursuant  to which any  instruments  evidencing  any  Senior  Debt may have been
issued for  application  to the payment of all Senior Debt ratably  according to
the aggregate amounts remaining unpaid to the extent necessary to pay all Senior
Debt in full in  accordance  with the terms of such Senior  Debt,  after  giving
effect to any concurrent payment or distribution to or for the holders of Senior
Debt.

     The Company shall give prompt  written notice to the Trustee and any Paying
Agent of any  default  or event of default  under any  Senior  Debt or under any
agreement pursuant to which any Senior Debt may have been issued.

Section  6.03  Distribution  on  Acceleration  of  Securities;  Dissolution  and
Reorganization; Subrogation of Securities.

(a)  If the Securities are declared due and payable because of the occurrence of
     an Event of Default,  the Company shall give prompt  written  notice


                                       49
<PAGE>

     to the holders of all Senior Debt or to the trustee(s) for such Senior Debt
     of such acceleration. The Company may not pay the principal of, or premium,
     if any,  interest or Additional  Amounts,  if any, on, or any other amounts
     due on, the  Securities  until  five  Business  Days after such  holders or
     trustee(s) of Senior Debt receive such notice and, thereafter,  the Company
     may pay the  principal  of, and premium,  if any,  interest and  Additional
     Amounts,  if any, on, and any other amounts due on, the Securities  only if
     the provisions of this Article VI permit such payment.

(b)  Upon (i) any  acceleration  of the principal  amount due on the  Securities
     because of an Event of Default or (ii) any direct or indirect  distribution
     of assets of the Company upon any dissolution,  winding up,  liquidation or
     reorganization  of  the  Company  (whether  in  bankruptcy,  insolvency  or
     receivership proceedings or upon an assignment for the benefit of creditors
     or any other dissolution,  winding up, liquidation or reorganization of the
     Company):

               (1) the  holders of all Senior  Debt shall  first be  entitled to
          receive payment in full of the principal thereof, the interest thereon
          and any other  amounts due thereon  before the holders are entitled to
          receive  payment on account of the principal  of, or premium,  if any,
          interest or Additional  Amounts,  if any, on, or any other amounts due
          on,  the  Securities  (other  than  payments  in the  form  of  Junior
          Securities);

               (2) any payment or  distribution  of assets of the Company of any
          kind or character, whether in cash, property or securities (other than
          Junior  Securities),  to which the  holders  or the  Trustee  would be
          entitled  (other  than in respect of  amounts  payable to the  Trustee
          pursuant to Section  9.07) except for the  provisions of this Article,
          shall be paid by the  liquidating  trustee  or  agent or other  Person
          making  such a payment or  distribution,  directly  to the  holders of
          Senior Debt (or their  representative(s) or trustee(s) acting on their
          behalf),  ratably  according to the aggregate amounts remaining unpaid
          on account of the  principal of and interest on and all other  amounts
          due on the  Senior  Debt held or  represented  by each,  to the extent
          necessary to make payment in full of all Senior Debt remaining unpaid,
          after giving effect to any concurrent  payment or  distribution to the
          holders of such Senior Debt; and

               (3) in the event that, notwithstanding the foregoing, any payment
          or  distribution  of assets of the  Company of any kind or  character,
          whether  in  cash,   property   or   securities   (other  than  Junior
          Securities),  shall be received by the Trustee  (other than in respect
          of amounts payable to the Trustee pursuant


                                       50
<PAGE>

          to Section  9.07) or the  holders  before  all Senior  Debt is paid in
          full,  such  payment  or  distribution  shall be held in trust for the
          benefit  of,  and be paid over to upon  request  by a holder of Senior
          Debt,  to the  holders of the Senior  Debt  remaining  unpaid or their
          representatives  or  trustee(s)  acting on their  behalf,  ratably  as
          aforesaid,  for  application  to the payment of such Senior Debt until
          all such Senior Debt shall have been paid in full, after giving effect
          to any  concurrent  payment  or  distribution  to the  holders of such
          Senior Debt.

     Subject to the payment in full of all Senior  Debt,  the  holders  shall be
subrogated  to the rights of the holders of Senior Debt to receive  payments and
distributions of cash,  property or securities of the Company  applicable to the
Senior Debt until the principal of, and premium, if any, interest and Additional
Amounts,  if any on, and all other amounts  payable in respect of the Securities
shall be paid in full and, for purposes of such subrogation, no such payments or
distributions  to the  holders of Senior Debt of cash,  property  or  securities
which  otherwise would have been payable or  distributable  to holders shall, as
between the Company,  its creditors  other than the holders of Senior Debt,  and
the  holders,  be deemed to be a payment by the  Company to or on account of the
Senior Debt, it being understood that the provisions of this Article are and are
intended  solely for the purpose of defining the relative rights of the holders,
on the one hand, and the holders of Senior Debt, on the other hand.

     Nothing  contained in this Article or elsewhere in this Indenture or in the
Securities  is intended  to or shall (i) impair,  as between the Company and its
creditors  other than the holders of Senior Debt, the obligation of the Company,
which is absolute and  unconditional,  to pay to the holders the  principal  of,
premium,  if any,  on, and  interest  and  Additional  Amounts,  if any, on, the
Securities as and when the same shall become due and payable in accordance  with
the terms of the Securities,  (ii) affect the relative rights of the holders and
creditors  of the Company  other than  holders of Senior Debt or, as between the
Company and the Trustee, the obligations of the Company to the Trustee, or (iii)
prevent  the Trustee or the  holders  from  exercising  all  remedies  otherwise
permitted by applicable  law upon default under this  Indenture,  subject to the
rights,  if any,  under this Article of the holders of Senior Debt in respect of
cash,  property and securities of the Company  received upon the exercise of any
such remedy.

     Upon distribution of assets of the Company referred to in this Article, the
Trustee, subject to the provisions of Section 9.01 hereof, and the holders shall
be entitled to rely upon a certificate  of the  liquidating  trustee or agent or
other Person  making any  distribution  to the Trustee or to the holders for the
purpose of


                                       51
<PAGE>

ascertaining  the Persons  entitled to  participate  in such  distribution,  the
holders of the Senior Debt and other  indebtedness  of the  Company,  the amount
thereof or payable  thereon,  the amount or amounts paid or distributed  thereon
and all other facts pertinent thereto or to this Article. The Trustee,  however,
shall not be deemed to owe any  fiduciary  duty to the  holders of Senior  Debt.
Nothing  contained in this Article or elsewhere in this Indenture,  or in any of
the Securities,  shall prevent the good faith  application by the Trustee of any
moneys which were deposited  with it hereunder,  prior to its receipt of written
notice of facts which would  prohibit such  application,  for the purpose of the
payment of or on account of the principal of,  premium,  if any, on, interest or
Additional  Amounts,  if any, on, the  Securities  unless,  prior to the date on
which such application is made by the Trustee, the Trustee shall be charged with
actual notice under Section 6.03(d) hereof of the facts which would prohibit the
making of such application.

(c)  The  provisions  of this  Article  shall  not be  applicable  to any  cash,
     properties  or  securities  received  by the  Trustee or by any holder when
     received as a holder of Senior  Debt and nothing in Section  9.11 hereof or
     elsewhere  in this  Indenture  shall  deprive the Trustee or such holder of
     Senior Debt of any of its rights as such holder of Senior Debt.

(d)  The  Company  shall give prompt  written  notice to the Trustee of any fact
     known to the  Company  which  would  prohibit  the making of any payment of
     money to or by the  Trustee in respect of the  Securities  pursuant  to the
     provisions  of this  Article.  The Trustee,  subject to the  provisions  of
     Section 9.01  hereof,  shall be entitled to assume that no such fact exists
     unless  the  Company  or any  holder  of  Senior  Debt  or any  trustee  or
     Representative  therefor  has given actual  notice  thereof to the Trustee.
     Notwithstanding  the provisions of this Article or any other  provisions of
     this  Indenture,  the Trustee  shall not be charged  with  knowledge of the
     existence  of any fact which  would  prohibit  the making of any payment of
     moneys to or by the  Trustee in respect of the  Securities  pursuant to the
     provisions in this Article,  unless,  and until three  Business Days after,
     the Trustee shall have received  written notice thereof from the Company or
     any holder or holders of Senior Debt or from any trustee or  Representative
     therefor;  and,  prior to the  receipt  of any  such  written  notice,  the
     Trustee,  subject  to the  provisions  of  Section  9.01  hereof,  shall be
     entitled in all respects  conclusively  to assume that no such facts exist;
     provided that if on a date not less than three  Business  Days  immediately
     preceding  the date upon which,  by the terms  hereof,  any such moneys may
     become payable for any purpose (including,  without limitation,  to pay the
     principal of, premium,  if any, on, interest or Additional Amounts, if any,


                                       52
<PAGE>

     on, any Security), the Trustee shall not have received with respect to such
     moneys the notice  provided  for in this  Section  6.03(d),  then  anything
     herein  contained to the contrary  notwithstanding,  the Trustee shall have
     full power and  authority  to receive  such moneys and to apply the same to
     the purpose for which they were received,  and shall not be affected by any
     notice to the  contrary  which may be received by it on or after such prior
     date.

         The Trustee shall be entitled to rely  conclusively  on the delivery to
it of a written notice by a Person representing himself to be a holder of Senior
Debt (or a trustee or Representative on behalf of such holder) to establish that
such  notice  has been  given by a  holder  of  Senior  Debt  (or a  trustee  or
Representative  on behalf of any such holder or holders).  In the event that the
Trustee  determines in good faith that further evidence is required with respect
to the right of any  Person as a holder of  Senior  Debt to  participate  in any
payment or distribution  pursuant to this Article,  the Trustee may request such
Person to furnish  evidence to the reasonable  satisfaction of the Trustee as to
the amount of Senior Debt held by such  Person,  the extent to which such person
is entitled to participate in such payment or  distribution  and any other facts
pertinent to the rights of such Person under this Article, and, if such evidence
is not  furnished,  the Trustee  may defer any  payment to such  Person  pending
judicial  determination  as to the right of such Person to receive such payment;
nor shall the Trustee be charged with  knowledge or the curing or waiving of any
default of the  character  specified in Section 6.02 hereof or that any event or
any condition  preventing  any payment in respect of the  Securities  shall have
ceased to exist, unless and until the Trustee shall have received written notice
to such effect.

(e)  The provisions of this Section 6.03 applicable to the Trustee shall (unless
     the  context  requires  otherwise)  also apply to any Paying  Agent for the
     Company.

Section  6.04  Reliance  by Senior  Debt on  Subordination.  Each  holder of any
Security by his acceptance  thereof  acknowledges  and agrees that the foregoing
subordination  provisions  are,  and are  intended  to be, an  inducement  and a
consideration  for each holder of any Senior Debt,  whether such Senior Debt was
created or acquired before or after the issuance of the  Securities,  to acquire
and continue to hold, or to continue to hold,  such Senior Debt, and such holder
of Senior Debt shall be deemed conclusively to have relied on such subordination
provisions in acquiring and  continuing to hold, or in continuing to hold,  such
Senior Debt.  Notice of any default in the payment of any Senior Debt, except as
expressly  stated in this Article,  and notice of  acceptance of the  provisions
hereof are, to the extent permitted by law, hereby expressly  waived.  Except as
otherwise


                                       53
<PAGE>

expressly  provided herein,  no waiver,  forbearance or release by any holder of
Senior Debt under such  Senior Debt or under this  Article  shall  constitute  a
release of any of the  obligations  or  liabilities of the Trustee or holders of
the Securities provided in this Article.

Section 6.05 No Waiver of Subordination.  Except as otherwise expressly provided
herein,  no right of any present or future  holder of any Senior Debt to enforce
subordination  as herein  provided shall at any time in any way be prejudiced or
impaired  by any act or failure to act on the part of the  Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the  Company  with  the  terms,  provisions  and  covenants  of this  Indenture,
regardless  of any  knowledge  thereof any such holder may have or be  otherwise
charged with.

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

Section  6.06  Trustee's  Relation  to Senior.  The  Trustee  in its  individual
capacity  shall be  entitled  to all the  rights  set forth in this  Article  in
respect  of any  Senior  Debt at any time held by it, to the same  extent as any
holder of Senior  Debt,  and nothing in Section 9.11 hereof or elsewhere in this
Indenture shall deprive the Trustee of any of its rights as such holder.

     With  respect to the  holders of Senior  Debt,  the Trustee  undertakes  to
perform  or to  observe  only  such of its  covenants  and  obligations,  as are
specifically set forth in this Article,  and no implied covenants or obligations
with  respect to the  holders of Senior  Debt shall be read into this  Indenture
against the Trustee. The Trustee shall not owe any fiduciary duty to the holders
of Senior  Debt but shall  have only such  obligations  to such  holders  as are
expressly set forth in this Article.


                                       54
<PAGE>

     Each holder of a Security by his acceptance  thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to  effectuate  the  subordination  provided in this  Article and  appoints  the
Trustee his  attorney-in-fact for any and all such purposes,  including,  in the
event of any dissolution,  winding up or liquidation or reorganization under any
applicable  bankruptcy law of the Company (whether in bankruptcy,  insolvency or
receivership  proceedings  or  otherwise),  the timely filing of a claim for the
unpaid  balance  of  such  holder's  Securities  in the  form  required  in such
proceedings  and the causing of such claim to be  approved.  If the Trustee does
not file a claim or proof of debt in the form required in such proceedings prior
to 30 days before the expiration of the time to file such claims or proofs, then
any holder or holders of Senior Debt or their  Representative or Representatives
shall have the right to demand,  sue for,  collect,  receive and receipt for the
payments and distributions in respect of the Securities which are required to be
paid or  delivered to the holders of Senior Debt as provided in this Article and
to file and prove all claims  therefor  and to take all such other action in the
name  of  the  holders  or  otherwise,   as  such  holders  of  Senior  Debt  or
Representative  thereof may  determine to be necessary  or  appropriate  for the
enforcement of the provisions of this Article.

Section 6.07 Other Provisions Subject Hereto. Except as expressly stated in this
Article,  notwithstanding  anything contained in this Indenture to the contrary,
all the  provisions  of this  Indenture  and the  Securities  are subject to the
provisions of this Article VI.  However,  nothing in this Article shall apply to
or  adversely  affect  the claims of, or payment  to, the  Trustee  pursuant  to
Section 9.07.  Notwithstanding  the foregoing,  the failure to make a payment on
account of principal of, premium, if any, on, or interest or Additional Amounts,
if any, on, the  Securities  by reason of any provision of this Article VI shall
not be construed  as  preventing  the  occurrence  of an Event of Default  under
Section 8.01.

                                  ARTICLE VII

                                   SUCCESSORS

Section  7.1.  Merger,  Consolidation  or Sale of Assets.  The Company  will not
consolidate or merge with or into any person  (whether or not the Company is the
surviving  corporation),  continue  in  a  new  jurisdiction  or  sell,  assign,
transfer,  lease, convey or otherwise dispose of all or substantially all of its
properties or assets unless:


                                       55
<PAGE>

(a)  the Company is the surviving  corporation  (in the case of a merger) or the
     Person  formed by or surviving any such  consolidation  or merger (if other
     than the  Company)  or the  Person  which  acquires  by  sale,  assignment,
     transfer,  lease, conveyance or other disposition the properties and assets
     of the Company is a corporation  organized  and existing  under the laws of
     the United States, any state thereof or the District of Columbia;  provided
     that  in  the  event  of  the  continuation  of  the  Company  in  the  new
     jurisdiction,  the Company must remain a corporation organized and existing
     under the laws of the United  States,  any state thereof or the District of
     Columbia;

(b)  the corporation formed by or surviving any such consolidation or merger (if
     other than the Company) or the corporation to which such sale,  assignment,
     transfer,  lease,  conveyance  or other  disposition  will  have  been made
     assumes all the  obligations  of the  Company,  pursuant to a  supplemental
     indenture  in a form  reasonably  satisfactory  to the  Trustee,  under the
     Securities, the Registration Agreement and the Indenture;

(c)  such sale, assignment,  transfer, lease, conveyance or other disposition of
     all or substantially all of the Company's  properties or assets shall be as
     an  entirety  or  virtually  as an  entirety  to one  corporation  and such
     corporation shall have assumed all the obligations of the Company, pursuant
     to a supplemental indenture in form reasonably satisfactory to the Trustee,
     under the Securities, the Registration Agreement and the Indenture;

(d)  immediately  after such  transaction no Default or Event of Default exists;
     and

(e)  the  Company or such  corporation  shall have  delivered  to the Trustee an
     Officers'  Certificate  and an Opinion of Counsel,  each  stating that such
     transaction and the supplemental  indenture,  if required,  comply with the
     Indenture and that all  conditions  precedent in the Indenture  relating to
     such transaction have been satisfied.

Section 7.02  Successor  Corporation.  Upon any  consolidation  or merger or any
sale,  assignment,  transfer,  lease,  conveyance or other disposition of all or
substantially  all of the assets of the Company in accordance  with Section 7.01
hereof,  the successor  corporation  (if other than the Company)  formed by such
consolidation  or into or with which the Company is merged or the corporation to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be  substituted  for and may exercise every right and


                                       56
<PAGE>

power of, the  Company  under  this  Indenture  with the same  effect as if such
successor Person has been named as the Company herein.

                                  ARTICLE VIII

                              DEFAULTS AND REMEDIES

Section 8.01 Events of Default. An "Event of Default" occurs if:

(a)  the Company  defaults in the payment of any interest or Additional  Amounts
     on any  Security  when the same  becomes  due and  payable  and the default
     continues for a period of 30 days; or

(b)  the Company defaults in the payment of any principal of or premium, if any,
     on any Security when the same becomes due and payable, whether at maturity,
     upon redemption or otherwise (including, without limitation, failure by the
     Company  to  purchase  Securities  tendered  for  purchase  pursuant  to  a
     Designated  Event Offer as and when  required  pursuant to Section  3.08 or
     Section 4.07 hereof); or

(c)  the  Company  fails to observe or perform any other  covenant or  agreement
     contained  in  this  Indenture  or  the  Securities  required  by  it to be
     performed  and the  failure  continues  for a period  of 60 days  after the
     receipt of written notice by the Company from the Trustee or by the Company
     and the  Trustee  from the holders of at least 25% in  aggregate  principal
     amount of the then  outstanding  Securities  stating  that such notice is a
     "Notice of Default"; or

(d)  a default under any mortgage, indenture or instrument under which there may
     be issued or by which there may be secured or  evidenced  any  Indebtedness
     for money borrowed by the Company or any Material Subsidiary of the Company
     (or the  payment  of  which  is  Guaranteed  by the  Company  or any of its
     Material  Subsidiaries),  whether such  Indebtedness or Guarantee exists on
     the date of this Indenture or is created  thereafter,  which default (i) is
     caused by a failure to pay when due any  principal  of or  interest on such
     Indebtedness  within the grace  period  provided  for in such  Indebtedness
     (which failure  continues  beyond any applicable  grace period) (a "Payment
     Default") or (ii) results in the acceleration of such Indebtedness prior to
     its  express  maturity  (without  such  acceleration   being  rescinded  or
     annulled)  and, in each case,  the principal  amount of such  Indebtedness,
     together with the  principal  amount of any other such  Indebtedness  under
     which  there is a  Payment  Default  or the  maturity  of which has


                                       57
<PAGE>

     been so  accelerated,  aggregates  $15,000,000  or more and  which  Payment
     Default is not cured or which  acceleration  is not annulled within 30 days
     after  receipt of written  notice by the Company from the Trustee or by the
     Company and the Trustee  from any holder of  Securities  stating  that such
     notice is a "Notice of Default"; or

(e)  a final,  non-appealable judgment or final non-appealable  judgments (other
     than any  judgment as to which a reputable  insurance  company has accepted
     full  liability)  for the payment of money are entered by a court or courts
     of competent  jurisdiction against the Company or any Material Subsidiaries
     of the Company and remain  unstayed,  unbonded or undischarged for a period
     (during  which  execution  shall  not be  effectively  stayed)  of 60 days,
     provided that the aggregate of all such judgments exceeds $15,000,000; or

(f)  the Company or any Material Subsidiary pursuant to or within the meaning of
     any Bankruptcy Law:

     (A)  commences a voluntary case or proceeding; or

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

     (C)  consents  to the  appointment  of a  Custodian  of the  Company or any
          Material  Subsidiary  or  for  all  or  any  substantial  part  of its
          property; or

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

     (E)  takes  corporate or similar action in respect of any of the foregoing;
          or

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

     (A)  is for relief  against the Company or any  Material  Subsidiary  in an
          involuntary case or proceeding; or

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

     (C)  orders the liquidation of the Company or any Material Subsidiary;


                                       58
<PAGE>

     and in each  case  referred  to in this  paragraph  (h) the order or decree
     remains unstayed and in effect for 60 days.

     The term "Bankruptcy Law" means Title 11, U.S. Code or any similar federal,
state or foreign  bankruptcy,  insolvency  or similar law. The term  "Custodian"
means any  custodian,  receiver,  trustee,  assignee,  sequestor,  liquidator or
similar official under any Bankruptcy Law.

Section  8.02  Acceleration.  If an Event  of  Default  (other  than an Event of
Default  specified in clauses (g) and (h) of Section 8.01 hereof)  occurs and is
continuing, the Trustee by notice to the Company, or the Noteholders of at least
25% in aggregate  principal amount of the then outstanding  Securities by notice
to the Company and the  Trustee,  may declare all the  Securities  to be due and
payable.  Upon such  declaration,  the  principal  of,  premium,  if any, on and
accrued and unpaid interest and Additional  Amounts,  if any , on the Securities
shall be due and payable immediately. If an Event of Default specified in clause
(g) or (h) of Section 8.01 hereof occurs, the principal of, premium,  if any, on
and  accrued  and  unpaid  interest  and  Additional  Amounts,  if  any,  on the
Securities  shall ipso facto become and be immediately  due and payable  without
any declaration or other act on the part of the Trustee or any  Noteholder.  The
Noteholders of a majority in aggregate  principal amount of the then outstanding
Securities  by  notice  to the  Trustee  may  rescind  an  acceleration  and its
consequences  if the rescission  would not conflict with any judgment or decree,
if all amounts payable to the Trustee  pursuant to Section 9.07 hereof have been
paid and if all existing Events of Default have been cured or waived as provided
for  herein  except  nonpayment  of  principal,  premium,  if any,  interest  or
Additional  Amounts,  if  any,  that  has  become  due  solely  because  of  the
acceleration.

Section 8.03 Other  Remedies.  If an Event of Default  occurs and is continuing,
the Trustee may pursue any available  remedy to collect the payment of principal
of,  premium,  if any, on or interest and  Additional  Amounts,  if any, on, the
Securities or to enforce the  performance  of any provision of the Securities or
this Indenture.

     The Trustee may  maintain a  proceeding  even if it does not possess any of
the  Securities  or does not produce any of them in the  proceeding.  A delay or
omission  by the Trustee or any  Noteholder  in  exercising  any right or remedy
accruing  upon an Event of  Default  shall  not  impair  the  right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.


                                       59
<PAGE>

Section 8.04 Waiver of Defaults. Subject to Section 8.07 hereof, the Noteholders
of a majority in aggregate  principal amount of the then outstanding  Securities
by notice to the Trustee  may waive an existing  Default or Event of Default and
its consequences  except a continuing Default or Event of Default in the payment
of the  Designated  Event Payment or the principal of,  premium,  if any, on, or
interest or  Additional  Amounts,  if any,  on, any  Security or in respect of a
covenant in or other provision of this Indenture or the Securities  which cannot
be amended or waived  without the consent of each  Noteholder  affected.  When a
Default  or Event of  Default is  waived,  it is cured and  ceases;  but no such
waiver shall extend to any  subsequent  or other  Default or Event of Default or
impair any right consequent thereon.

Section  8.05 Control by Majority.  The  Noteholders  of a majority in aggregate
principal amount of the then outstanding  Securities may direct the time, method
and place of conducting any  proceeding for any remedy  available to the Trustee
or  exercising  any trust or power  conferred  on it.  However,  the Trustee may
refuse to follow any direction that conflicts with law or this  Indenture,  that
may be  unduly  prejudicial  to the  rights  of other  Noteholders,  or that may
involve the Trustee in personal  liability;  provided  that the Trustee may take
any  other  action  deemed by the  Trustee  that is not  inconsistent  with such
direction.  Prior to taking any action hereunder,  the Trustee shall be entitled
to indemnification  satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.

Section 8.06  Limitation on Suits. A Noteholder may pursue a remedy with respect
to this Indenture or the Securities only if:

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

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

(c)  such  Noteholder or  Noteholders  offer and, if  requested,  provide to the
     Trustee indemnity  satisfactory to the Trustee against any loss,  liability
     or expense;

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


                                       60
<PAGE>

(e)  during  such  60-day  period the  Noteholders  of a majority  in  aggregate
     principal amount of the then outstanding Securities do not give the Trustee
     a direction inconsistent with the request.

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

Section 8.07 Rights of Noteholders to Receive Payment. Notwithstanding any other
provision  of this  Indenture,  the right of any  Noteholder  of a  Security  to
receive payment of principal of, premium, if any on, and interest and Additional
Amounts, if any, on the Security, on or after the respective due dates expressed
in the Security and this Indenture,  or to bring suit for the enforcement of any
such  payment  on or after  such  respective  dates,  shall not be  impaired  or
affected without the consent of the Noteholder made pursuant to this Section.

Section 8.08  Collection  Suit by Trustee.  If an Event of Default  specified in
Section  8.01(a)  or (b) 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 of  principal,  premium,  if any,  interest and  Additional
Amounts, if any, remaining unpaid on the Securities and, to the extent permitted
by law, interest on overdue principal,  premium, if any, interest and Additional
Amounts,  if any and such  further  amount as shall be  sufficient  to cover the
costs  and,  to  the  extent  lawful,  expenses  of  collection,  including  the
reasonable  compensation,  expenses,  disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due under Section 9.07 hereof.

Section 8.09 Trustee May File Proofs of Claim. The Trustee shall be entitled and
empowered,  without  regard to whether the Trustee or any holder shall have made
any demand or performed any other act pursuant to the provisions of this Article
and without regard to whether the principal of the Securities  shall then be due
and payable as therein expressed or by declaration or otherwise, by intervention
in any  proceedings  relative  to the  Company  or any  other  obligor  upon the
Securities, or to the creditors or property or assets of the Company or any such
other obligor or otherwise, to take any and all actions authorized under the TIA
in order to have  claims of the  holders  and the  Trustee  allowed  in any such
proceeding.  In particular,  the Trustee shall be entitled and empowered in such
instances:

(a)  to file and prove a claim or claims for the whole amount of  principal  and
     premium,  if any,  interest,  Additional  Amounts,  if any,  and any  other
     amounts


                                       61
<PAGE>

     owing and  unpaid in  respect  of the  Securities,  and to file such  other
     papers or  documents  as may be necessary or advisable in order to have the
     claims of the Trustee  (including all amounts owing to the Trustee and each
     predecessor  Trustee  pursuant to Section  9.07  hereof) and of the holders
     allowed  in any  judicial  proceedings  relating  to the  Company  or other
     obligor  upon the  Securities  property  of the  Company  or any such other
     obligor,

(b)  unless  prohibited by applicable law and regulations,  to vote on behalf of
     the  holders of the  Securities  in any  election of a trustee or a standby
     trustee in arrangement, reorganization,  liquidation or other bankruptcy or
     insolvency proceedings or Person performing similar functions in comparable
     proceedings, and

(c)  to collect and receive  any moneys or other  property or assets  payable or
     deliverable on any such claims, and to distribute all amounts received with
     respect to the claims of the holders  and of the  Trustee on their  behalf;
     and any  trustee,  receiver,  or  liquidator,  custodian  or other  similar
     official is hereby  authorized  by each of the holders to make  payments to
     the Trustee, and, in the event that the Trustee shall consent to the making
     of payments directly to the holders,  to pay to the Trustee such amounts as
     shall be  sufficient  to cover all  amounts  owing to the  Trustee and each
     predecessor Trustee pursuant to Section 9.07 hereof.

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

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

Section 8.10  Priorities.  If the Trustee  collects  any money  pursuant to this
Article, it shall pay out the money in the following order:


                                       62
<PAGE>

          First:  to the  Trustee for amounts  due under  Section  9.07  hereof,
     including  payment of all compensation,  expense and liabilities  incurred,
     and all  advances  made,  by the  Trustee  and the  costs and  expenses  of
     collection;

          Second:  to the  holders  of Senior  Debt to the  extent  required  by
     Article VI;

          Third:  to  the  Noteholders,  for  amounts  due  and  unpaid  on  the
     Securities for principal, premium, if any, interest and Additional Amounts,
     if any, ratably,  without preference or priority of any kind,  according to
     the amounts due and payable on the Securities for  principal,  premium,  if
     any, interest and Additional Amounts, if any; and

          Fourth:  to the Company or to such other party as a court of competent
     jurisdiction shall direct.

     Except as otherwise  provided in Section 2.12 hereof, the Trustee may fix a
record date and payment  date for any payment to  Noteholders  made  pursuant to
this Section 8.10.  At least 15 days before such record date,  the Company shall
mail to each holder and the Trustee a notice  that states the record  date,  the
payment date and amount to be paid. The Trustee may mail such notice in the name
and at the expense of the Company.

Section 8.11 Undertaking for Costs. In any suit for the enforcement of any right
or remedy under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as a Trustee,  a court in its  discretion may require the
filing by any party  litigant in the suit of an  undertaking to pay the costs of
the suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section does not apply to a suit by the Trustee, a suit
by a holder  pursuant to Section 8.07 hereof,  or a suit by  Noteholders of more
than 10% in principal amount of the then outstanding Securities.

Section 8.12 Restoration of Rights and Remedies. If the Trustee or any holder of
Securities  has  instituted  any proceeding to enforce any right or remedy under
this Indenture and such  proceeding has been  discontinued  or abandoned for any
reason, or has been determined  adversely to the Trustee or to such holder, then
and in every such case the Company,  the Trustee and the holders shall,  subject
to any determination in such proceeding, be restored severally and


                                       63
<PAGE>

respectively to their former positions hereunder,  and thereafter all rights and
remedies  of the  Trustee  and the  holders  shall  continue  as  though no such
proceeding has been instituted.

Section 8.13 Rights and  Remedies  Cumulative.  Except as otherwise  provided in
Section 2.07 hereof,  no right or remedy conferred  herein,  upon or reserved to
the Trustee or to the holders is intended to be  exclusive of any other right or
remedy,  and every right and remedy  shall,  to the extent  permitted by law, be
cumulative  and in addition to every other right and remedy  given  hereunder or
now or hereafter  existing at law or in equity or  otherwise.  The  assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent (to
the extent permitted by law) the concurrent assertion or employment of any other
appropriate right or remedy.

Section 8.14 Delay or Omission  Not Waiver.  No delay or omission of the Trustee
or of any holder of any Security to exercise any right or remedy  accruing  upon
any Event of Default  shall (to the  extent  permitted  by law)  impair any such
right or  remedy  or  constitute  a waiver of any such  Event of  Default  or an
acquiescence  therein.  Every right and remedy  given by this Article VIII or by
law to the  Trustee or to the holders  may (to the extent  permitted  by law) be
exercised  from  time to time and as often as may be  deemed  expedient,  by the
Trustee or by the holders, as the case may be.

                                   ARTICLE IX

                                     TRUSTEE

Section 9.01 Duties of Trustee.

(a)  If an Event of Default has occurred and is  continuing,  the Trustee  shall
     exercise such of the rights and powers vested in it by this Indenture,  and
     use the same  degree  of care and  skill in their  exercise,  as a  prudent
     Person would exercise or use under the circumstances in the conduct of such
     Person's 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, if required by the terms  hereof,
     conforming to the requirements of this

                                       64
<PAGE>

     Indenture.  However, in the case of any such certificates or opinions which
     by any provision  hereof are  specifically  required to be furnished to the
     Trustee,  the  Trustee  shall  examine  the  certificates  and  opinions to
     determine  whether or not they conform to the applicable  requirements,  if
     any, of this Indenture.  During the continuance of an Event of Default, the
     Trustee may consult  with its legal  counsel and rely upon advice from such
     counsel with respect to legal matters.

(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 does not limit the effect of paragraph (b)
     of this Section 9.01; (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 8.05 hereof.

(d)  Every provision of this Indenture that in any way relates to the Trustee is
     subject to paragraphs (a), (b) and (c) of this Section 9.01.

(e)  No provision of this Indenture  shall require the Trustee to expend or risk
     its own  funds  or  incur  any  liability.  The  Trustee  shall be under no
     obligation to exercise any of its rights and powers under this Indenture at
     the request of any  holders,  unless such holder  shall have offered to the
     Trustee  security  and  indemnity  satisfactory  to it  against  any  loss,
     liability or expense.

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

Section 9.02 Rights of Trustee.  Subject to the  provisions  of Section  9.01(a)
hereof,  the Trustee may conclusively  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.

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

                                       65
<PAGE>

     Officers'  Certificate or Opinion of Counsel.  The Trustee may consult with
     counsel  of its choice  and the  advice of such  counsel or any  Opinion of
     Counsel with respect to legal  matters  relating to this  Indenture and the
     Securities  shall be full and complete  authorization  and protection  from
     liability  in  respect  of any  action  taken,  suffered  or  omitted by it
     hereunder  in good  faith and in  accordance  with the advice or opinion of
     such 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)  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;  provided,  however, that the Trustee's conduct does not constitute
     willful misconduct or negligence.

(e)  The Trustee  shall not be charged  with  knowledge  of any Event of Default
     under  subsection  (c),  (d),  (e),  (f), (g) or (h) of Section 8.01 unless
     either (1) a Trust Officer assigned to its corporate trust department shall
     have  actual  knowledge  thereof,  or (2) the Trustee  shall have  received
     notice thereof in accordance  with Section 12.02 hereof from the Company or
     any holder;  provided  that the Trustee  shall  comply with the  "automatic
     stay" provisions contained in U.S. Bankruptcy Law, if applicable.

(f)  Prior to the  occurrence  of an Event of  Default  hereunder  and after the
     curing and waiving of all Events of Default, the Trustee shall not be bound
     to  make  any  investigation  into  the  facts  or  matters  stated  in any
     resolution,  certificate,  statement,  instrument, opinion, report, notice,
     request, direction,  consent, order, bond, debentures, note, other evidence
     of indebtedness  or other paper or document unless  requested in writing to
     do so by the  holders of not less than a majority  in  aggregate  principal
     amount of the  Securities  then  outstanding;  provided that if the payment
     within  a  reasonable  time  to the  Trustee  of  the  costs,  expenses  or
     liabilities likely to be incurred by it in the making of such investigation
     is, in the opinion of the Trustee, not reasonably assured to the Trustee by
     the security afforded to it by the terms of this Indenture, the Trustee may
     require reasonable indemnity against expenses or liabilities as a condition
     to proceeding;  the reasonable  expenses of every such examination shall be
     paid by the Company or, if advanced by the Trustee,  shall be repaid by the
     Company upon demand. The Trustee shall not be bound to ascertain or inquire
     as to the  performance  or  observance  of any  covenants,  conditions,  or
     agreements  on the part of the  Company,  except  as  otherwise  set  forth
     herein,  but the Trustee may, in

                                       66
<PAGE>


     its discretion,  make such further inquiry or investigation into such facts
     or matters as it may see fit and if the  Trustee  shall  determine  to make
     such further inquiry or investigation,  it shall be entitled to examine the
     books,  records  and  premises  of the  Company  personally  or by agent or
     attorney at the sole cost of the Company.

(g)  The Trustee  shall not be required to give any bond or surety in respect of
     the performance of its powers and duties hereunder.

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

Section 9.03 Individual Rights of Trustee. The Trustee in its individual or any
other  capacity may become the owner or pledgee of Securities  and may otherwise
deal with the Company or an  Affiliate  with the same rights it would have if it
were not Trustee.  Any Agent may do the same with like rights.  However,  in the
event that the Trustee acquires any conflicting interest (as defined in the TIA)
it must  eliminate  such conflict  within 90 days,  apply to the  Commission for
permission to continue as Trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 9.10 and 9.11 hereof.

Section 9.04 Trustee's Disclaimer. The Trustee makes no representation as to the
validity  or  adequacy  of this  Indenture  or the  Securities,  it shall not be
accountable  for the Company's use of the proceeds from the  Securities,  and it
shall not be  responsible  for any statement of the Company in this Indenture or
any statement in the Securities  (other than its certificate of  authentication)
or for compliance by the Company with the Registration Agreement.

Section 9.05 Notice of Defaults.  If a Default or Event of Default occurs and is
continuing  and if it is  known  to the  Trustee,  the  Trustee  shall  mail  to
Noteholders a notice of the Default or Event of Default  within 90 days after it
occurs.  Except in the case of a Default  or Event of  Default  relating  to the
failure to pay any  principal  of or premium,  if any,  interest  or  Additional
Amounts, if any, on any Security,  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 Noteholders.

                                       67
<PAGE>

Section  9.06  Reports  by  Trustee  to  Noteholders.  Within 60 days  after the
reporting date stated in Section 12.10,  the Trustee shall mail to Noteholders a
brief report dated as of such  reporting  date that complies with TIA ss. 313(a)
if and to the extent required by such ss. 313(a).  The Trustee also shall comply
with TIA ss.  313(b)(2).  The Trustee shall also transmit by mail all reports as
required by TIA ss. 313(c).

         A copy of each report at the time of its mailing to  Noteholders  shall
be filed  with the SEC and each  stock  exchange  on which  the  Securities  are
listed.  The Company shall notify the Trustee when the  Securities are listed on
any stock exchange and of any delisting thereof.

Section 9.07  Compensation  and Indemnity.  The Company shall pay to the Trustee
from time to time  such  compensation  for its  services  hereunder  as shall be
agreed  upon from time to time in writing by the Company  and the  Trustee.  The
Trustee's  compensation  shall not be  limited by any law on  compensation  of a
trustee of an express  trust.  The Company  shall  reimburse  the  Trustee  upon
request for all reasonable disbursements, expenses and advances incurred or made
by it  in  connection  with  the  performance  of  its  duties  hereunder.  Such
disbursements   and   expenses   may  include  the   reasonable   disbursements,
compensation and expenses of the Trustee's agents and counsel.

         The Company shall  indemnify  each of the Trustee and each  predecessor
Trustee against any and all loss, damage, claim, liability or expense, including
taxes  (other than taxes based on the income of the  Trustee)  incurred by it in
connection with the performance of its duties  hereunder  except as set forth in
the next paragraph.  The Trustee shall notify the Company  promptly of any claim
for which it may seek  indemnity.  Failure by the  Trustee to notify the Company
shall not release the Company of its  obligations  hereunder.  The Company shall
defend the claim and the  Trustee  shall  cooperate  in the  defense.  If in the
reasonable  opinion of Trustee's  counsel, a conflict of interest exists between
the  Trustee and the Company  with  respect to such claim,  the Trustee may have
separate  counsel and the Company shall pay the reasonable  fees,  disbursements
and expenses of such counsel.  The Company need not pay for any settlement  made
without its consent, which consent shall not be unreasonably withheld.

         The Company need not  reimburse  any expense or  indemnify  against any
loss or liability  incurred by the Trustee  through the Trustee's  negligence or
bad faith.

                                       68
<PAGE>

         The  obligations  of the Company  under this Section 9.07 shall survive
the resignation or removal of the Trustee and the  satisfaction and discharge of
the Indenture.

         To secure  the  Company's  payment  obligations  in this  Section,  the
Trustee  shall have a lien on all money or  property  held or  collected  by the
Trustee, except money or property held in trust to pay principal of, or premium,
if any, interest or Additional Amounts, if any, on, particular Securities.  Such
lien shall survive the satisfaction or discharge of the indenture.

         When the Trustee incurs expenses or renders  services after an Event of
Default  specified  in  Section  8.01(g) or (h)  occurs,  the  expenses  and the
compensation   for  the  services  are  intended  to   constitute   expenses  of
administration under any Bankruptcy Law.

Section 9.08 Replacement of Trustee. A resignation or removal of the Trustee and
appointment  of a  successor  Trustee  shall  become  effective  only  upon  the
successor Trustee's acceptance of appointment as provided in this Section.

         The  Trustee may resign in writing at any time and be  discharged  from
the trust hereby  created by so  notifying  the Company.  The  Noteholders  of a
majority in principal amount of the then  outstanding  Securities may remove the
Trustee by so notifying the Trustee and the Company in writing.  The Company may
remove the Trustee if:

(a)  the Trustee fails to comply with Section 9.10 hereof,  unless the Trustee's
     duty to resign is stayed as provided in TIAss.310(b);

(b)  the Trustee is adjudged a bankrupt or an  insolvent  or an order for relief
     is entered with respect to the Trustee under any Bankruptcy Law;

(c)  a Custodian or public  officer takes charge of the Trustee or its property;
     or

(d)  the Trustee becomes incapable of acting.

         If the  Trustee  resigns or is  removed  or if a vacancy  exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.  Within  one  year  after  the  successor  Trustee  takes  office,  the
Noteholders of a majority

                                       69
<PAGE>

in principal amount of the then  outstanding  Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.

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

         If the Trustee  fails to comply with Section  9.10  hereof,  unless the
Trustee's duty to resign is stayed as provided in TIA ss. 310(b), any Noteholder
who has been a bona  fide  holder of a  Security  for at least  six  months  may
petition any court of competent  jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.

         A  successor  Trustee  shall  deliver  a  written   acceptance  of  its
appointment  to  the  retiring  Trustee  and  to  the  Company.   Thereupon  the
resignation or removal of the retiring Trustee shall become  effective,  and the
successor  Trustee  shall have all the rights,  powers and duties of the Trustee
under  this  Indenture.  The  successor  Trustee  shall  mail  a  notice  of its
succession to  Noteholders.  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  9.07  hereof.  Notwithstanding  the  resignation  or
replacement  of the  Trustee  pursuant  to  this  Section  9.08,  the  Company's
obligations  under  Section  9.07 hereof  shall  continue for the benefit of the
retiring  trustee with respect to expenses and liabilities  incurred by it prior
to such resignation or replacement.

Section  9.09  Successor  Trustee by Merger,  Etc. If the Trustee  consolidates,
merges or converts into, or transfers all or substantially  all of its corporate
trust business to, another  corporation,  the successor  corporation without any
further act shall be the successor Trustee.

         In case at the time such successor or successors by merger,  conversion
or  consolidation  to the Trustee  shall  succeed to the trusts  created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor  trustee,  and deliver such Securities so authenticated;  and in
case at that time any of the Securities shall not have been  authenticated,  any
successor to the Trustee may authenticate  such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates  shall have

                                       70
<PAGE>

the full force  which it is  anywhere  in the  Securities  or in this  Indenture
provided that the certificate of the Trustee shall have.

Section 9.10 Eligibility;  Disqualification.  This Indenture shall always have a
Trustee who satisfies the  requirements of TIA ss.  310(a)(1),  (2) and (5). The
Trustee  shall  always have a combined  capital and surplus as stated in Section
12.10 hereof. The Trustee is subject to TIA ss. 310(b); provided,  however, that
there shall be excluded from the operation of TIA ss. 310(b)(1) any indenture or
indentures   under  which  other  securities  or  certificates  of  interest  or
participation  in  other  securities  of  the  Company  are  outstanding  if the
requirements for such exclusion set forth in TIA ss. 310(b)(1) are met.

Section 9.11.  Preferential Collection of Claims Against Company. The Trustee is
subject to TIAss. 311(a),  excluding any creditor  relationship listed in TIAss.
311(b).  A Trustee who has resigned or been  removed  shall be subject to TIAss.
311(a) to the extent indicated therein.

                                   ARTICLE IX

                             DISCHARGE OF INDENTURE

Section 10.01  Termination of the Company's  Obligations.  This Indenture  shall
cease to be of further effect (except as to any surviving  rights of conversion,
registration of transfer or exchange of Securities herein expressly provided for
and except as further provided below), and the Trustee,  on demand of and at the
expense  of  the  Company,   shall  execute  proper  instruments   acknowledging
satisfaction and discharge of this Indenture, when

(a)  either

     (i)  all Securities theretofore authenticated and delivered (other than (i)
          Securities  which have been  destroyed,  lost or stolen and which have
          been replaced or paid as provided in Section 2.07 and (ii)  Securities
          for whose payment money has  theretofore  been  deposited in trust and
          thereafter  repaid to the Company as  provided in Section  10.02) have
          been delivered to the Trustee for cancellation; or

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

          (A)  have become due and payable, or

                                       71
<PAGE>

          (B)  will become due and payable at the final maturity date within one
               year, or

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

         and the  Company,  in the case of clause  (A),  (B) or (C)  above,  has
         irrevocably  deposited or caused to be  irrevocably  deposited with the
         Trustee  as trust  funds in trust  for the  purpose  cash in an  amount
         sufficient  to pay  and  discharge  the  entire  indebtedness  on  such
         Securities not theretofore  delivered to the Trustee for  cancellation,
         for principal,  premium,  if any, interest and Additional  Amounts,  if
         any, to the date of such deposit (in the case of Securities  which have
         become due and  payable) or to the final  maturity  date or  redemption
         date, as the case may be, in all other cases;

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

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

         Notwithstanding  the satisfaction and discharge of this Indenture,  the
obligations of the Company to the Trustee under Section 9.07, the obligations of
the Company to pay Additional  Amounts under this Indenture,  the Securities and
the  Registration  Agreement  and, if money shall have been  deposited  with the
Trustee pursuant to subclause (ii) of clause (a) of this Section, the provisions
of Sections 2.03, 2.04,  2.05,  2.06, 2.07, 2.10, 2.11 (second  paragraph only),
2.13, 2.15, 3.08, 4.02 (second paragraph only),  4.04, 4.07 and 4.08,  Article V
and this Article X, shall survive;  and,  notwithstanding  the  satisfaction and
discharge of this Indenture, the Company agrees to reimburse the Trustee for any
costs or expenses thereafter reasonably and properly incurred by the Trustee and
to compensate  the Trustee for any services  thereafter  reasonably and properly
rendered by the Trustee in  connection  with this  Indenture,  the  Registration
Agreement or the Securities. Thereupon, the Trustee upon request of the Company,
shall  acknowledge in writing the discharge of the Company's  obligations  under
this Indenture, except for those surviving obligations specified above.

                                       72
<PAGE>

         Subject to the provisions of Section  10.02,  the Trustee shall hold in
trust,  for the benefit of the holders,  all money deposited with it pursuant to
this Section 10.01 and shall apply the deposited  money in accordance  with this
Indenture and the Securities to the payment of the principal of, and premium, if
any, interest and Additional Amounts,  if any, on the Securities.  Money so held
in trust shall not be subject to the subordination provisions of Article VI.

Section 10.02 Repayment to Company. The Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess money or securities  held by
them at any time.

         The Trustee and the Paying  Agent shall pay to the Company upon written
request any money held by them for the  payment of  principal  or interest  that
remains  unclaimed  for two years after the date upon which such  payment  shall
have become due;  provided,  however,  that the Company  shall have first caused
notice of such payment to the Company to be mailed to each  Noteholder  entitled
thereto no less than 30 days prior to such  payment or within such period  shall
have  published such notice in a financial  newspaper of widespread  circulation
published  in The City of New  York,  including,  without  limitation,  The Wall
Street Journal (national edition). After payment to the Company, the Trustee and
the Paying Agent shall have no further  liability with respect to such money and
Noteholders  entitled  to the money  must look to the  Company  for  payment  as
general  creditors  unless any  applicable  abandoned  property  law  designates
another person.

Section  10.03.  Reinstatement.  If the Trustee or any Paying Agent is unable to
apply any money in  accordance  with the second  paragraph  of Section  10.01 by
reason of any legal  proceeding  or by  reason of any order or  judgment  of any
court or governmental authority enjoining,  restraining or otherwise prohibiting
such  application,  then the Company's  obligations under this Indenture and the
Securities  shall be revived and  reinstated  as though no deposit had  occurred
pursuant to Section 10.01 until such time as the Trustee or such Paying Agent is
permitted to apply all such money in accordance  with Section  10.01;  provided,
however,  that if the  Company  has  made any  payment  of the  principal  of or
premium,  if any,  interest or  Additional  Amounts,  if any, on any  Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the holders of such Securities to receive any such payment from
the money held by the Trustee or such Paying Agent.

                                       73
<PAGE>

                                   ARTICLE XI

                       AMENDMENTS, SUPPLEMENTS AND WAIVERS

Section 11.01 Without  Consent of  Noteholders.  The Company and the Trustee may
amend or supplement this Indenture or the Securities  without the consent of any
Noteholder:

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

(b) to comply with Sections 5.13 and 7.01 hereof;

(c)  to provide  for  uncertificated  Securities  in  addition  to  certificated
     Securities;

(d)  to make any  change  that  does  not  adversely  affect  the  legal  rights
     hereunder of any Noteholder;

(e)  to qualify this Indenture under the TIA or to comply with the  requirements
     of the SEC in order to maintain the  qualification  of the Indenture  under
     the TIA;

(f)  to make any change that provides any  additional  rights or benefits to the
     holders of Securities; or

(g)  to  evidence  and  provide  for the  acceptance  under the  Indenture  of a
     successor Trustee.

         Upon the  request  of the  Company  accompanied  by a Board  Resolution
authorizing  the execution of any such amended or  supplemental  Indenture,  and
upon receipt by the Trustee of the documents  described in Section 11.07 hereof,
the  Trustee  shall join with the  Company in the  execution  of any  amended or
supplemental  Indenture  authorized or permitted by the terms of this  Indenture
and to make any further  appropriate  agreements  and  stipulations  that may be
therein  contained,  but the Trustee  shall not be  obligated to enter into such
amended  or  supplemental  Indenture  that  affects  its own  rights,  duties or
immunities under this Indenture or otherwise.

         An amendment  under this Section may not make any change that adversely
affects  the  rights  under  Article  VI of  any  holder  of  Senior  Debt  then
outstanding   unless  the   holders  of  such  Senior  Debt  (or  any  group  or
representative thereof authorized to give a consent) consent to such change.

                                       74
<PAGE>

Section  11.02 With  Consent of  Noteholders.  Except as provided  below in this
Section  11.02,  the  Company  and the  Trustee  may  amend or  supplement  this
Indenture  or the  Securities  with  the  written  consent  (including  consents
obtained in connection  with any tender or exchange offer for Securities) of the
Noteholders  of at least a majority in  aggregate  principal  amount of the then
outstanding   Securities.   Subject  to  Sections  8.04  and  8.07  hereof,  the
Noteholders of a majority in aggregate  principal  amount of the Securities then
outstanding may also by their written consent  (including  consents  obtained in
connection  with any tender offer or exchange  offer for  Securities)  waive any
existing  Default  or Event of  Default as  provided  in  Section  8.04 or waive
compliance  in a particular  instance by the Company with any  provision of this
Indenture or the  Securities.  However,  without the consent of each  Noteholder
affected,  an  amendment,  supplement or waiver under this Section may not (with
respect to any Securities held by a nonconsenting Noteholder):

(a)  reduce  the  amount of  Securities  whose  Noteholders  must  consent to an
     amendment, supplement or waiver;

(b)  reduce  the rate  of,  or  change  the time for  payment  of,  interest  or
     Additional Amounts on any Security;

(c)  reduce the  principal  of or change the fixed  maturity of any  Security or
     alter the redemption  provisions with respect thereto  (including,  without
     limitation, the amount of any premium payable upon redemption);

(d)  make any Security payable in money other than that stated in the Security;

(e)  make any change in Section 8.04, 8.07 or 11.02 hereof (this sentence);

(f)  waive a default  in the  payment  of the  Designated  Event  Payment or any
     principal  of, or premium,  if any, or interest or Additional  Amounts,  if
     any, on, any Security (other than a rescission of acceleration  pursuant to
     Section 8.02 hereof and a waiver of nonpayment of  principal,  premium,  if
     any,  interest or Additional  Amounts,  if any, that have become due solely
     because of such acceleration of the Securities);

(g)  waive a redemption payment payable on any Security; or

                                       75
<PAGE>

(h)  make any change in the rights of holders of Securities  to receive  payment
     of principal of, or premium,  if any, or interest or Additional Amounts, if
     any, on, the Securities;

(i)  modify the  conversion or  subordination  provisions in a manner adverse to
     the holders of the Securities; or

(j)  impair the right of Noteholders to convert  Securities into Common Stock of
     the Company or otherwise to receive any cash,  securities or other property
     receivable by a holder upon conversion of Securities.

         Upon the  request  of the  Company  accompanied  by a Board  Resolution
authorizing  the execution of any such amended or  supplemental  Indenture,  and
upon the filing with the Trustee of evidence  satisfactory to the Trustee of the
consent of the  Holders of  Securities  as  aforesaid,  and upon  receipt by the
Trustee of the documents  described in Section  11.07 hereof,  the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental  Indenture affects the Trustee's own rights,
duties or  immunities  under  this  Indenture  or  otherwise,  in which case the
Trustee may in its  discretion,  but shall not be obligated  to, enter into such
amended or supplemental Indenture.

         To secure a consent of the  Noteholders  under this Section  11.02,  it
shall not be necessary for the Noteholders to approve the particular form of any
proposed  amendment,  supplement  or waiver,  but it shall be sufficient if such
consent approves the substance thereof.

Section 11.03  Compliance  with Trust  Indenture  Act.  Every  amendment to this
Indenture or the Securities shall be set forth in a supplemental  indenture that
complies with the TIA as then in effect.

Section 11.04 Revocation and Effect of Consents. Until an amendment,  supplement
or waiver becomes effective,  a consent to it by a Noteholder of a Security is a
continuing  consent  by the  Noteholder  and every  subsequent  Noteholder  of a
Security or portion of a Security that evidences the same debt as the consenting
Noteholder's  Security,  even if  notation  of the  consent  is not  made on any
Security.  However, any such Noteholder or subsequent  Noteholder may revoke the
consent as to such Noteholder's Security or portion of a Security if the Trustee
receives the notice of revocation  before the date on which the Trustee receives
an  Officers'  Certificate  certifying  that the  Noteholders  of the  requisite

                                       76
<PAGE>


principal  amount of Securities  have consented to the amendment,  supplement or
waiver.

         The Company may,  but shall not be obligated  to, fix a record date for
the purpose of determining the Noteholders entitled to consent to any amendment,
supplement  or  waiver.  If a record  date is fixed,  then  notwithstanding  the
provisions  of the  immediately  preceding  paragraph,  those  persons  who were
Noteholders  at such record date (or their duly  designated  proxies),  and only
those  persons,  shall be entitled to consent to such  amendment,  supplement or
waiver or to revoke any consent  previously  given,  whether or not such persons
continue to be Noteholders  after such record date. No consent shall be valid or
effective  for more than 90 days after such  record date  unless  consents  from
Noteholders of the principal  amount of Securities  required  hereunder for such
amendment,  supplement or waiver to be effective  shall have also been given and
not revoked within such 90-day period.

         After an  amendment,  supplement or waiver  becomes  effective it shall
bind every Noteholder,  unless it is of the type described in any of clauses (a)
through (j) of Section 11.02 hereof. In such case, the amendment,  supplement or
waiver shall bind each  Noteholder who has consented to it and every  subsequent
Noteholder that evidences the same debt as the consenting Noteholder's Security.

         Upon the execution of any supplemental indenture under this Article XI,
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.  After a supplemental  indenture becomes effective,  the
Company shall mail to holders a notice briefly  describing such  amendment.  The
failure to give such notice to all  holders,  or any defect  therein,  shall not
impair or affect the validity of an amendment under this Article.

Section 11.05.  Notation on or Exchange of Securities.  The Trustee may place an
appropriate  notation  about an amendment,  supplement or waiver on any Security
thereafter  authenticated.  The Company in exchange for all Securities may issue
and the Trustee shall  authenticate  new Securities  that reflect the amendment,
supplement or waiver.

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

                                       77
<PAGE>

Section  11.06  Trustee  Protected.  The  Trustee  shall  sign all  supplemental
indentures,  except that the Trustee  may, but need not,  sign any  supplemental
indenture that adversely affects its rights.

Section 11.07 Trustee to Sign Supplemental Indentures.  The Company may not sign
a supplemental  Indenture until the Board of Directors approves it. In executing
any supplemental  indenture,  the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it and to receive and (subject to Section 9.01) shall
be fully  protected in relying upon,  in addition to the  documents  required by
Section 12.04, an Officers' Certificate and an Opinion of Counsel stating that:

(a)  such  supplemental  indenture is authorized or permitted by this  Indenture
     and  that  all  conditions   precedent  to  the  execution,   delivery  and
     performance of such supplemental indenture have been satisfied;

(b)  the Company has all necessary  corporate power and authority to execute and
     deliver the  supplemental  indenture and that the  execution,  delivery and
     performance of such supplemental  indenture has been duly authorized by all
     necessary corporate action of the Company;

(c)  the execution,  delivery and performance of the  supplemental  indenture do
     not conflict with, or result in the breach of or constitute a default under
     any of the terms, conditions or provisions of (i) this Indenture,  (ii) the
     charter  documents  or  by-laws  of the  Company,  or  (iii)  any  material
     agreement or  instrument  to which the Company is subject and of which such
     counsel is aware;

(d)  to the  knowledge of legal  counsel  writing  such Opinion of Counsel,  the
     execution,  delivery and performance of the  supplemental  indenture do not
     conflict  with, or result in the breach of any of the terms,  conditions or
     provisions of (i) any law or regulation  applicable to the Company, or (ii)
     any material order, writ, injunction or decree of any court or governmental
     instrumentality applicable to the Company;

(e)  such  supplemental  indenture  has  been  duly  and  validly  executed  and
     delivered  by  the  Company,   and  this   Indenture   together  with  such
     supplemental indenture constitutes a legal, valid and binding obligation of
     the Company  enforceable against the Company, in accordance with its terms,
     except as such  enforceability  may be  limited by  applicable  bankruptcy,
     insolvency,  reorganization,  fraudulent conveyance or transfer, moratorium
     or similar laws

                                       78
<PAGE>

     affecting  the  enforcement  of  creditors'  rights  generally  and general
     equitable  principles  (whether  considered  in a  proceeding  at law or in
     equity); and

(a)  this Indenture together with such amendment or supplement complies with the
     TIA.

(b)  Payment for Consent.  Neither the Company nor any  Affiliate of the Company
     shall,  directly or indirectly,  pay or cause to be paid any consideration,
     whether by way of interest,  fee or  otherwise,  to any holder for or as an
     inducement  to any  consent,  waiver  or  amendment  of any of the terms or
     provisions of this Indenture or the Securities unless such consideration is
     offered to be paid to all holders that so consent,  waive or agree to amend
     in the time  frame set forth in  solicitation  documents  relating  to such
     consent, waiver or agreement.

                                   ARTICLE XII

                                  MISCELLANEOUS

Section 12.01 Trust  Indenture Act Controls.  If any provision of this Indenture
limits,  qualifies,  or conflicts with another  provision which is automatically
deemed  to be  incorporated  in this  Indenture  by the  TIA,  the  incorporated
provision shall control. If any provision of this Indenture modifies or excludes
any  provision  of the TIA that  may be so  modified  or  excluded,  the  latter
provision shall be deemed to apply to this Indenture as so modified or excluded,
as the case may be.

Section 12.02 Notices. Any notice or communication by the Company or the Trustee
to the other is duly given if in writing  and  delivered  in person or mailed by
first-class mail (registered or certified, return receipt requested), telecopier
(promptly  confirmed in writing) or overnight air courier  guaranteeing next day
delivery to the other's  address stated in Section 12.10 hereof.  The Company or
the  Trustee  by  notice  to the other may  designate  additional  or  different
addresses for subsequent notices or communications.

         Any  notice  or  communication  to a  Noteholder  shall  be  mailed  by
first-class  mail,  postage prepaid to his address shown on the register kept by
the Registrar. Any notice or communication shall also be so mailed to any Person
described in TIA ss. 313(c),  to the extent required by the TIA. Failure to mail
a notice or

                                       79
<PAGE>

     communication  to a  Noteholder  or any  defect in it shall not  affect its
     sufficiency with respect to other Noteholders.

         If a notice or  communication  is mailed in the manner  provided  above
within the time  prescribed,  it is duly  given,  whether  or not the  addressee
receives it; a notice or communication,  however, shall not be effective unless,
in the case of the Trustee, actually received.

         If the Company mails a notice or communication to Noteholders, it shall
mail a copy to the Trustee and each Agent at the same time.

         All other notices or communications shall be in writing.

         In case by reason of the  suspension  of regular  mail  service,  or by
reason of any other cause, it shall be impossible to mail any notice as required
by the  Indenture,  then such method of  notification  as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.

Section 12.03  Communication by Noteholders with Other Noteholders.  Noteholders
may communicate  pursuant to TIA ss. 312(b) with other  Noteholders with respect
to their  rights  under this  Indenture  or the  Securities.  The  Company,  the
Trustee,  the  Registrar  and anyone else shall have the  protection  of TIA ss.
312(c).

Section  12.04  Certificate  and Opinion as to  Conditions  Precedent.  Upon any
request or  application  by the Company to the Trustee to take any action  under
this Indenture, the Company shall furnish to the Trustee:

(a)  an Officers'  Certificate in form and substance reasonably  satisfactory to
     the Trustee  (which shall include the statements set forth in Section 12.05
     hereof)  stating  that,  in the  opinion  of the  signers,  all  conditions
     precedent and covenants, if any, provided for in this Indenture relating to
     the proposed action have been satisfied; and

(b)  an Opinion of Counsel in form and substance reasonably  satisfactory to the
     Trustee  (which shall  include the  statements  set forth in Section  12.05
     hereof)  stating that, in the opinion of such counsel,  all such conditions
     precedent and covenants have been satisfied.

                                       80
<PAGE>

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

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

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

         Any  Officers'  Certificate,  statement  or Opinion  of Counsel  may be
based,  insofar as it relates  to  accounting  matters,  upon a  certificate  or
opinion of or  representation  by an  accountant  (who may be an employee of the
Company),  or firm of accountants,  unless such Officer or counsel,  as the case
may be,  knows,  or in the exercise of  reasonable  care should  know,  that the
certificate or opinion or representation  with respect to the accounting matters
upon  which  his or her  certificate,  statement  or  opinion  may be  based  as
aforesaid is erroneous.

Section 12.05 Statements Required in Certificate or Opinion. Each certificate or
opinion with respect to compliance with a condition or covenant  provided for in
this Indenture (other than pursuant to Section 4.03) shall include:

(a)  a statement  that the Persons  signing such  certificate  or rendering such
     opinion has read such covenant or condition;

                                       81
<PAGE>

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

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

(d)  a  statement  as to whether or not,  in the  opinion of such  Person,  such
     condition or covenant has been complied with.

Section 12.06 Rules by Trustee and Agents. The Trustee may make reasonable rules
for action by, or a meeting of,  Noteholders.  The Registrar or Paying Agent may
make reasonable rules and set reasonable requirements for its functions.

Section 12.07 Legal Holidays. If a payment date is a Legal Holiday at a place of
payment,  payment may be made at that place on the next  succeeding  day that is
not a Legal Holiday,  and no interest or Additional Amounts shall accrue for the
intervening period unless the Company shall default in making the payment due on
such next  succeeding  day.  If any other  operative  date for  purposes of this
Indenture  shall  occur  on a Legal  Holiday  then  for all  purposes  the  next
succeeding day that is not a Legal Holiday shall be such operative date.

Section  12.08 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.  Each  Noteholder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Securities.

Section  12.09  Counterparts.  This  Indenture  may be executed in any number of
counterparts and by the parties hereto in separate  counterparts,  each of which
when so  executed  shall be  deemed  to be an  original  and all of which  taken
together shall constitute one and the same agreement.

Section 12.10 Variable  Provisions.  "Officer"  means the Chairman of the Board,
the Chief  Executive  Officer,  the  President,  any  Senior  Vice-President  or
Vice-President,  the Chief Financial Officer, the Treasurer,  the Secretary, any
Assistant Treasurer,  any Assistant Secretary,  the Controller of the Company or
the Assistant Controller of the Company.

                                       82
<PAGE>


         The Company initially  appoints the Trustee as Paying Agent,  Registrar
and Conversion Agent, and the Trustee hereby accepts such appointments.

         The first certificate  pursuant to Section 4.03 hereof shall be for the
fiscal year ending on December 31, 2001.

         The  reporting  date for Section 9.06 hereof is January 1 of each year.
The first reporting date is January 1, 2001.

         The  Trustee  shall  always  have a combined  capital and surplus of at
least  $50,000,000  as set forth in its most recent  published  annual report of
condition.

         The Company's address for purposes of the Indenture is:

         Young & Rubicam Inc.
         285 Madison Avenue
         New York, New York 10017
         Attn:  Chief Financial Officer
         Telephone No.:  (212) 210-3022
         Telecopier No.: (212) 687-1393

         The Trustee's address is:

         The Bank of New York
         101 Barclay Street, Floor 21 West
         New York, New York  10286
         Attn:  Corporate Trust Trustee Administration
         Telephone No.:  (212) 815-2588
         Telecopier No.: (212) 815-5915

         The Company or the Trustee may change its address for  purposes of this
Indenture by written notice to the other.

Section  12.11  GOVERNING  LAW. THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL
GOVERN  THIS  INDENTURE  AND  THE  SECURITIES,  WITHOUT  REGARD,  TO THE  EXTENT
PERMITTED BY LAW, TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

                                       83
<PAGE>

Section 12.12 No Adverse Interpretation of Other Agreements.  This Indenture may
not be used to  interpret  another  indenture,  loan  or debt  agreement  of the
Company or an Affiliate.  Any such indenture,  loan or debt agreement may not be
used to interpret this Indenture.

Section 12.13  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 12.14  Severability.  In case any provision in this  Indenture or in the
Securities  shall be  invalid,  illegal  or  unenforceable,  then (to the extent
permitted by law) the  validity,  legality and  enforceability  of the remaining
provisions shall not in any way be affected or impaired thereby.

Section  12.15 Table of  Contents,  Headings,  Etc.  The Table of  Contents  and
headings of the Articles and Sections of this Indenture and the Securities  have
been inserted for convenience of reference only, are not to be considered a part
hereof or thereof,  and shall in no way modify or  restrict  any of the terms or
provisions hereof or thereof.


                                       84
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.


                                            Young & Rubicam Inc., as Company,



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

                                            The Bank of New York, as Trustee,



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


<PAGE>

                                                                       EXHIBIT A
                      FORM OF CONVERTIBLE SUBORDINATED NOTE

                           [Global Securities Legend]

         UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY  TRUST COMPANY,  A NEW YORK  CORPORATION  ("DTC"),  NEW YORK, NEW
YORK,  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.

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

 [Restricted Global Securities Legend--For Inclusion in Global Securities Only]

         THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED  (THE  "SECURITIES  ACT").  THE HOLDER  HEREOF,  BY  PURCHASING  THIS
SECURITY,  AGREES FOR THE BENEFIT OF THE COMPANY  THAT THIS  SECURITY MAY NOT BE
RESOLD,  PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUANCE  HEREOF (OR ANY PREDECESSOR  SECURITY  HERETO) OR (Y) BY ANY HOLDER
THAT WAS AN  AFFILIATE  OF THE  COMPANY  AT ANY TIME  DURING  THE  THREE  MONTHS
PRECEDING  THE DATE OF SUCH  TRANSFER,  IN EITHER  CASE,  OTHER  THAN (1) TO THE
COMPANY,  (2) SO LONG AS THIS  SECURITY

                                      A-1

<PAGE>

ELIGIBLE  FOR  RESALE  PURSUANT  TO RULE 144A  UNDER THE  SECURITIES  ACT ("RULE
144A"),  TO A  PERSON  WHOM  THE  SELLER  REASONABLY  BELIEVES  IS  A  QUALIFIED
INSTITUTIONAL  BUYER  WITHIN THE  MEANING OF RULE 144A,  PURCHASING  FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED  INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE  RESALE,  PLEDGE OR OTHER  TRANSFER  IS BEING MADE IN RELIANCE ON
RULE 144A (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE  CERTIFICATE
OF TRANSFER ON THE REVERSE OF THIS SECURITY),  (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE  WITH  REGULATION S UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE  CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY),  (4) TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE  501(a)(1),  (2),  (3) OR (7)  UNDER  THE  SECURITIES  ACT  ("INSTITUTIONAL
ACCREDITED  INVESTOR") (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE
CERTIFICATE  OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS
SECURITY FOR INVESTMENT  PURPOSES AND NOT FOR  DISTRIBUTION  AND THAT,  PRIOR TO
SUCH  TRANSFER,  DELIVERS  TO THE  COMPANY  AND  THE  TRUSTEE  A  SIGNED  LETTER
CONTAINING CERTAIN  REPRESENTATIONS  AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON  TRANSFER  OF THE  SECURITY  EVIDENCED  HEREBY  (THE FORM OF WHICH  LETTER IS
ATTACHED TO THIS SECURITY), (5) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT
OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
IN EACH CASE IN ACCORDANCE  WITH ANY APPLICABLE  SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES.  PRIOR TO A TRANSFER OF THIS SECURITY  (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE (6) ABOVE),  THE HOLDER OF THIS  SECURITY MUST FURNISH TO THE
COMPANY  AND THE  TRUSTEE  SUCH  CERTIFICATES  AND OTHER  INFORMATION  AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF
THIS SECURITY  COMPLIES WITH THE FOREGOING  RESTRICTIONS.  THE HOLDER HEREOF, BY
PURCHASING  THIS SECURITY,  REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY
THAT  IT IS  (1)  A  QUALIFIED  INSTITUTIONAL  BUYER  OR  (2)  AN  INSTITUTIONAL
ACCREDITED INVESTOR AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES
AND NOT FOR  DISTRIBUTION  OR (3) NOT A U.S.  PERSON AND IS  OUTSIDE  THE UNITED
STATES  WITHIN THE  MEANING OF (OR AN ACCOUNT  SATISFYING  THE  REQUIREMENTS  OF
PARAGRAPH  (k)(2) OF RULE 902 UNDER)  REGULATION S UNDER THE SECURITIES  ACT. IN
ANY CASE THE HOLDER  HEREOF  WILL NOT,  DIRECTLY  OR  INDIRECTLY,  ENGAGE IN ANY
HEDGING  TRANSACTION  WITH REGARD TO THIS SECURITY OR ANY COMMON STOCK  ISSUABLE
UPON CONVERSION OF THIS SECURITY EXCEPT AS PERMITTED BY THE SECURITIES ACT."

            [Restricted Definitive Security Legend--For Inclusion in
                        Definitive Securities Only]


                                       A-2


<PAGE>

         "THIS  SECURITY HAS NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF
1933, AS AMENDED (THE "SECURITIES  ACT"). THE HOLDER HEREOF,  BY PURCHASING THIS
SECURITY,  AGREES FOR THE BENEFIT OF THE COMPANY  THAT THIS  SECURITY MAY NOT BE
RESOLD,  PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUANCE  HEREOF (OR ANY PREDECESSOR  SECURITY  HERETO) OR (Y) BY ANY HOLDER
THAT WAS AN  AFFILIATE  OF THE  COMPANY  AT ANY TIME  DURING  THE  THREE  MONTHS
PRECEDING  THE DATE OF SUCH  TRANSFER,  IN  EITHER  CASE  OTHER  THAN (1) TO THE
COMPANY,  (2) SO LONG AS THIS  SECURITY IS ELIGIBLE FOR RESALE  PURSUANT TO RULE
144A  UNDER THE  SECURITIES  ACT  ("RULE  144A"),  TO A PERSON  WHOM THE  SELLER
REASONABLY  BELIEVES IS A QUALIFIED  INSTITUTIONAL  BUYER  WITHIN THE MEANING OF
RULE 144A,  PURCHASING  FOR ITS OWN  ACCOUNT OR FOR THE  ACCOUNT OF A  QUALIFIED
INSTITUTIONAL  BUYER TO WHOM  NOTICE IS GIVEN THAT THE  RESALE,  PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED
BY THE  TRANSFEROR  ON THE  CERTIFICATE  OF  TRANSFER  ON THE  REVERSE  OF  THIS
SECURITY),  (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER
THE  SECURITIES  ACT (AS  INDICATED BY THE BOX CHECKED BY THE  TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY),  (4) TO AN INSTITUTION
THAT IS AN "ACCREDITED  INVESTOR" AS DEFINED IN RULE 501(a)(1),  (2), (3) OR (7)
UNDER THE SECURITIES ACT ("INSTITUTIONAL  ACCREDITED INVESTOR") (AS INDICATED BY
THE BOX CHECKED BY THE TRANSFEROR ON THE  CERTIFICATE OF TRANSFER ON THE REVERSE
OF THIS SECURITY)  THAT IS ACQUIRING  THIS SECURITY FOR INVESTMENT  PURPOSES AND
NOT FOR DISTRIBUTION  AND THAT, PRIOR TO SUCH TRANSFER,  DELIVERS TO THE COMPANY
AND  THE  TRUSTEE  A  SIGNED  LETTER  CONTAINING  CERTAIN   REPRESENTATIONS  AND
AGREEMENTS  RELATING TO THE  RESTRICTIONS ON TRANSFER OF THE SECURITY  EVIDENCED
HEREBY (THE FORM OF WHICH LETTER IS ATTACHED TO THIS SECURITY),  (5) PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF
APPLICABLE)   UNDER  THE   SECURITIES  ACT  OR  (6)  PURSUANT  TO  AN  EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH
ANY APPLICABLE  SECURITIES



                                      A-3
<PAGE>

LAWS OF ANY STATE OF THE UNITED  STATES.  PRIOR TO A TRANSFER  OF THIS  SECURITY
(OTHER  THAN A  TRANSFER  PURSUANT  TO CLAUSE  (6)  ABOVE),  THE  HOLDER OF THIS
SECURITY MUST FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER
INFORMATION AND OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT
ANY TRANSFER BY IT OF THIS SECURITY  COMPLIES  WITH THE FOREGOING  RESTRICTIONS.
THE HOLDER HEREOF,  BY PURCHASING  THIS SECURITY,  REPRESENTS AND AGREES FOR THE
BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED  INSTITUTIONAL BUYER OR (2) AN
INSTITUTIONAL  ACCREDITED  INVESTOR  AND THAT IT IS HOLDING  THIS  SECURITY  FOR
INVESTMENT  PURPOSES AND NOT FOR  DISTRIBUTION  OR (3) NOT A U.S.  PERSON AND IS
OUTSIDE THE UNITED  STATES WITHIN THE MEANING OF (OR AN ACCOUNT  SATISFYING  THE
REQUIREMENTS  OF  PARAGRAPH  (k)(2) OF RULE 902  UNDER)  REGULATION  S UNDER THE
SECURITIES ACT. IN ANY CASE THE HOLDER HEREOF WILL NOT,  DIRECTLY OR INDIRECTLY,
ENGAGE IN ANY HEDGING  TRANSACTION  WITH  REGARD TO THIS  SECURITY OR ANY COMMON
STOCK  ISSUABLE  UPON  CONVERSION  OF THIS  SECURITY  EXCEPT AS PERMITTED BY THE
SECURITIES ACT."


                                      A-4
<PAGE>

No.                                         CUSIP No. Global Security: 987425AA3
                                                  Definitive Security: 987425AB1

                    3% Convertible Subordinated Note due 2005

                              Young & Rubicam Inc.

         Young & Rubicam Inc., a Delaware corporation (the "Company"),  promises
to pay to Cede & Co. or its registered assigns,  the principal sum [indicated on
Schedule  A hereof]1* [of _________ Dollars ($_________)]** on January 15, 2005.

Interest Payment Dates:  January 15 and July 15, commencing July 15, 2000.

Record Dates: January 1 and July 1.

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

                            [Signature Page Follows]




--------------------------
1*   Applicable to Global Securities only.
2**  Applicable to Definitive Securities only.


                                      A-5
<PAGE>

         IN WITNESS WHEREOF, Young & Rubicam Inc. has caused this Security to be
signed  manually  or by  facsimile  by its  duly  authorized  Officers  and  its
corporate seal or a facsimile thereof to be affixed hereto or imprinted hereon.

                                            Young & Rubicam Inc.
                                            By
                                              ----------------------------------
                                            Name:
                                            Title:
[Seal]

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

Dated:

TRUSTEE'S CERTIFICATE OF
AUTHENTICATION

This is one of the Securities described in the within-
mentioned Indenture.

THE BANK OF NEW YORK, as Trustee,

by
  ----------------------------------
     Authorized Signatory


                                      A-6

<PAGE>

                              Young & Rubicam Inc.

                    3% Convertible Subordinated Note due 2005


1.   Interest. Young & Rubicam Inc., a Delaware corporation (the "Company"),  is
     the  issuer  of  the  3%  Convertible  Subordinated  Notes  due  2005  (the
     "Securities"),  of which this Security is a part.  The Company  promises to
     pay interest on the Securities in cash  semiannually on each January 15 and
     July 15,  commencing on July 15, 2000, to holders of record at the close of
     business on the immediately  preceding January 1 or July 1, as the case may
     be.

         Interest  on the  Securities  will  accrue from the most recent date to
which interest has been paid, or if no interest has been paid,  from January 20,
2000.  Interest will be computed on the basis of a 360-day year of twelve 30-day
months.  To the  extent  lawful,  the  Company  shall  pay  interest  (including
post-petition  interest in any proceeding  under any Bankruptcy  Law) on overdue
principal of and premium,  if any, interest,  and Additional Amounts, if any, on
the Securities  (in each case without regard to any applicable  grace period) at
the Default Rate, compounded semi-annually.

2.   Method of Payment. The Company will pay interest and Additional Amounts, if
     any, on the Securities  (except Defaulted  Interest) to the Persons who are
     registered holders of the Securities at the close of business on the record
     date for the applicable  interest  payment date even though  Securities are
     canceled after the record date and on or before the interest  payment date.
     The  Noteholder  hereof  must  surrender  Securities  to a Paying  Agent to
     collect principal  payments.  The Company will pay principal,  premium,  if
     any, interest and Additional Amounts, if any, in money of the United States
     that at the time of  payment  is legal  tender  for  payment  of public and
     private  debts.  However,  the Company may pay interest by check payable in
     such money. It may mail an interest check to a holder's registered address.

3.   Paying Agent and Registrar. The Trustee will act as Paying Agent, Registrar
     and Conversion  Agent. The Company may change any Paying Agent,  Registrar,
     or Conversion Agent without prior notice.

4.   Indenture.  The Company issued the Securities under an indenture,  dated as
     of January 20, 2000 (the "Indenture"),  between the Company and The Bank of
     New

                                      A-7


<PAGE>

     York, as Trustee.  The terms of the Securities  include those stated in the
     Indenture and those made part of the  Indenture by the Trust  Indenture Act
     of 1939 (15 U.S.  Codess.ss.  77aaa-77bbbb) as in effect on the date of the
     Indenture. The Securities are subject to, and qualified by, all such terms,
     certain of which are summarized hereon, and Noteholders are referred to the
     Indenture and such Act for a statement of such terms.  The  Securities  are
     general  unsecured  obligations  of the  Company  limited  to an  aggregate
     principal  amount of up to  $287,500,000.  The Indenture does not limit the
     ability of the Company or any of its Subsidiaries to incur  indebtedness or
     to grant security interests or liens in respect of their assets.

5.   Optional  Redemption.  The  Securities  are not redeemable at the Company's
     option  prior  to  January  20,  2003.  On such  date and  thereafter,  the
     Securities  will be subject to redemption at the option of the Company,  in
     whole or from time to time in part (in any integral multiple of $1,000), at
     the following  redemption prices (expressed as percentages of the principal
     amount), if redeemed during the 12-month period beginning January 15 of the
     years indicated (or January 20 in the case of 2003):

                  Year                               Redemption Price
                  2003                                   101.20%
                  2004                                   100.60%

in each case together with accrued interest and Additional  Amounts,  if any, to
(but  excluding) the redemption  date (subject to the right of holders of record
on the relevant record date to receive interest and Additional  Amounts, if any,
due on the  corresponding  interest  payment  date).  On or after the redemption
date,  interest  and  Additional  Amounts,  if any,  will cease to accrue on the
Securities,  or portions thereof, called for redemption unless the Company shall
default  in the  payment  of the  redemption  price  and  accrued  interest  and
Additional  Amounts, if any, payable on the redemption date on the Securities to
be redeemed.

6.   Notice of Redemption.  Notice of redemption will be mailed at least 30 days
     but not more than 60 days before the redemption  date to each holder of the
     Securities  to  be  redeemed  at  his  address  of  record.  Securities  in
     denominations  larger  than  $1,000  may be  redeemed  in part  but only in
     integral multiples of $1,000. In the

                                      A-8
<PAGE>


     event of a redemption of less than all of the  Securities,  the  Securities
     will be  chosen  for  redemption  by the  Trustee  in  accordance  with the
     Indenture.  Unless the Company  defaults in making such redemption  payment
     (including  accrued interest and Additional  Amounts,  if any), or a Paying
     Agent is prohibited from making such payment pursuant to the Indenture,  by
     law or otherwise,  interest and Additional Amounts, if any, cease to accrue
     on the  Securities  or portions of them called for  redemption on and after
     the redemption date.

         If this  Security is redeemed  subsequent to a record date with respect
to any interest  payment date  specified  above and on or prior to such interest
payment date, then any accrued interest and Additional  Amounts, if any, will be
paid to the person in whose name this  Security  is  registered  at the close of
business on such record date.

7.   Mandatory  Redemption.  The  Company  will  not be  required  to  make  any
     mandatory  redemption payment with respect to the Securities.  There are no
     sinking fund payments with respect to the Securities.

8.   Repurchase at Option of Holder. If there is a Designated Event, the Company
     shall be required to offer to purchase on the Designated Event Payment Date
     all  outstanding  Securities  at a  purchase  price  equal  to  100% of the
     principal  amount thereof,  plus accrued and unpaid interest and Additional
     Amounts,  if any, to the Designated  Event Payment Date;  provided that, on
     the terms and subject to the  conditions  set forth in the  Indenture,  the
     Company  shall not be  required  to offer to  purchase  the  Securities  as
     aforesaid  if the  Company  has given  notice of  redemption  of all of the
     outstanding  Securities to holders in  accordance  with the  Indenture.  If
     there is a Designated  Event,  the Company  shall mail a  Designated  Event
     Offer to Holder of Securities prior to any related Designated Event Payment
     Date.  Holders of  Securities  that are subject to an offer to purchase may
     elect  to  have  such   Securities   or  portions   thereof  in  authorized
     denominations   purchased  by  completing  the  form  entitled  "Option  of
     Noteholder To Elect Purchase"  appearing below.  Noteholders have the right
     to withdraw  their election by delivering a written notice of withdrawal to
     the  Company  or the  Paying  Agent in  accordance  with  the  terms of the
     Indenture.

9.   Subordination.  The  payment of the  principal  of,  premium,  if any,  on,
     interest and  Additional  Amounts,  if any, on and any other amounts due on
     the  Securities  is  subordinated  in right of payment to all  existing and
     future  Senior Debt of the

                                      A-9
<PAGE>


     Company,  as described in the Indenture.  Each  Noteholder,  by accepting a
     Security,  agrees to such  subordination  and  authorizes  and  directs the
     Trustee  on  its  behalf  to  take  such  action  as may  be  necessary  or
     appropriate  to effectuate the  subordination  so provided and appoints the
     Trustee as its attorney-in-fact for such purpose.

10.  Conversion.  The holder of any Security has the right,  exercisable  at any
     time after 90 days  following  the Issuance  Date and prior to the close of
     business on the Business Day immediately  preceding the final maturity date
     of the Security,  to convert the principal  amount  thereof (or any portion
     thereof that is an integral multiple of $1,000) into shares of Common Stock
     at the initial Conversion Price of $73.36 per share,  subject to adjustment
     under certain circumstances as provided in the Indenture,  except that if a
     Security is called for redemption,  the conversion  right will terminate at
     the close of business on the Business Day  immediately  preceding  the date
     fixed for  redemption  (unless  the  Company  shall  default  in making the
     redemption payment, including interest and Additional Amounts, if any, when
     it becomes due, in which case the conversion  right shall  terminate at the
     close of business on the date on which such default is cured).

         Beneficial  owners of interests in Global Securities may exercise their
right of conversion by delivering to the Depositary the appropriate instructions
for  conversion   pursuant  to  the  Depositary's   procedures.   To  convert  a
certificated  Security,  the  holder  must (1)  complete  and  sign a notice  of
election to convert  substantially  in the form set forth below (or complete and
manually  sign a  facsimile  thereof)  and deliver  such notice to a  Conversion
Agent, (2) surrender the Security to a Conversion Agent, (3) furnish appropriate
endorsements or transfer  documents if required by the Conversion  Agent and (4)
pay any  transfer or similar  tax, if required  by the  Conversion  Agent.  Upon
conversion,  no  adjustment  or  payment  will be made for  accrued  and  unpaid
interest or Additional  Amounts,  if any, on the  Securities so converted or for
dividends or distributions on, or Additional Amounts,  if any,  attributable to,
any Common Stock issued on  conversion  of the  Securities,  except that, if any
Noteholder surrenders a Security for conversion after the close of business on a
record date for the payment of interest  and prior to the opening of business on
the next interest  payment date,  then,  notwithstanding  such  conversion,  the
interest  payable on such  interest  payment date will be paid on such  interest
payment  date to the person who was the  registered  holder of such  Security on
such record date. Any Securities  surrendered  for conversion  during the period
after the close of business  on any record date for the payment of interest  and
before the

                                      A-10
<PAGE>


opening  of  business  on the next  succeeding  interest  payment  date  (except
Securities  called for redemption on a redemption date or to be repurchased on a
Designated Event Payment Date during such period) must be accompanied by payment
in an amount equal to the interest and Additional  Amounts,  if any,  payable on
such interest  payment date on the principal  amount of Securities so converted.
The number of shares of Common Stock  issuable upon  conversion of a Security is
determined  by dividing the  principal  amount of the Security  converted by the
Conversion Price in effect on the Conversion Date. No fractional  shares will be
issued upon  conversion  but a cash  adjustment  will be made for any fractional
interest.

         A Security  in respect  of which a holder has  delivered  an "Option of
Noteholder to Elect Purchase" form appearing below exercising the option of such
holder to require the Company to purchase such Security may be converted only if
the notice of exercise is withdrawn as provided above and in accordance with the
terms of the Indenture. The above description of conversion of the Securities is
qualified by reference  to, and is subject in its entirety to, the more complete
description thereof contained in the Indenture.

11.  Registration  Agreement.  The holder of this  Security  is  entitled to the
     benefits of a Registration  Agreement,  dated January 20, 2000, between the
     Company and the Initial Purchasers (the "Registration Agreement"). Pursuant
     to the Registration Agreement the Company has agreed for the benefit of the
     holders of the  Securities  and the Common Stock  issued and issuable  upon
     conversion of the Securities, that (i) it will, at its cost, within 90 days
     after the Closing Date,  file a shelf  registration  statement  (the "Shelf
     Registration  Statement") with the Securities and Exchange  Commission (the
     "Commission")  with  respect to resales  of the  Securities  and the Common
     Stock  issuable  upon  conversion  thereof,  (ii) the Company  will use its
     reasonable  best efforts to cause such Shelf  Registration  Statement to be
     declared  effective by the  Commission  under the Securities Act within 180
     days  after the  Closing  Date and (iii) the  Company  will keep such Shelf
     Registration  Statement  continuously  effective  under the  Securities Act
     until the earliest of (a) the second anniversary of the Closing Date or, if
     later, the second  anniversary of the last date on which any Securities are
     issued upon exercise of the Initial Purchasers'  over-allotment option, (b)
     the  date on  which  the  Securities  or the  Common  Stock  issuable  upon
     conversion  thereof  may be sold to Persons  who are not  "affiliates"  (as
     defined in Rule 144) of the Company  pursuant to paragraph  (k) of Rule 144
     (or any  successor  provision)

                                      A-11
<PAGE>


     promulgated by the Commission  under the Securities Act, (c) the date as of
     which the Securities or the Common Stock issuable upon  conversion  thereof
     have been (A) transferred pursuant to Rule 144 under the Securities Act (or
     any  similar  provision  then in force) or (B) sold  pursuant to such Shelf
     Registration  Statement  (in any such case,  such period  being  called the
     "Shelf Registration Period").

         If (i) the Shelf Registration Statement is not filed with the SEC on or
prior to 90 days after the Closing Date, (ii) the Shelf  Registration  Statement
has not been  declared  effective by the SEC within 180 days,  after the Closing
Date or (iii) the Shelf  Registration  Statement is filed and declared effective
but shall thereafter cease to be effective (without being succeeded  immediately
by a replacement shelf registration  statement filed and declared  effective) or
usable (including, as a result of a Suspension Period) for the offer and sale of
Transfer  Restricted  Securities for a period of time  (including any Suspension
Period)  which shall  exceed 90 days in the  aggregate  in any  12-month  period
during  the  period  beginning  on the  Closing  Date and  ending on the  second
anniversary of the Closing Date or, if later, the second anniversary of the last
date on which any Securities are issued upon exercise of the Initial Purchasers'
over-allotment  option (each such event referred to in clauses (i) through (iii)
being  referred to herein as a  "Registration  Default"),  the Company  will pay
Additional Amounts ("Additional  Amounts") to each holder of Transfer Restricted
Securities   who  has  complied  with  such  Holder's   obligations   under  the
Registration  Agreement.  The amount of Additional  Amounts  payable  during any
period in which a Registration  Default shall have occurred and be continuing is
that amount which is equal to  one-quarter  of one percent (25 basis points) per
annum per $1,000  principal amount of Securities and $2.50 per annum per 13.6314
shares of Common Stock (subject to adjustment  from time to time in the event of
a stock split,  stock  recombination,  stock dividend and the like) constituting
Transfer Restricted Securities for the first 90 days during which a Registration
Default has  occurred  and is  continuing  and one-half of one percent (50 basis
points) per annum per $1,000  principal amount of Securities and $5.00 per annum
per 13.6314  shares of Common Stock  (subject to  adjustment as set forth above)
constituting Transfer Restricted Securities for any additional days during which
such  Registration  Default has occurred and is continuing;  it being understood
that all  calculations  pursuant to this  sentence  shall be carried out to five
decimals.  Following the cure of a Registration Default, Additional Amounts will
cease  to  accrue  with  respect  to  such  Registration  Default.  All  accrued
Additional  Amounts  by wire  transfer  of  immediately  available  funds to the
accounts  specified  by the  Record  Holders  or,  if a  Record  Holder  has not

                                      A-12
<PAGE>


specified  such an amount,  by check  mailed by the  Company  to the  registered
address of such Record  Holder on each  Damages  Payment  Date,  and  Additional
Amounts will be calculated  on the basis of a 360-day year  consisting of twelve
30-day months.

         "Transfer Restricted  Securities" means each Security and each share of
Common Stock issued on  conversion  thereof until the earlier of (A) the date on
which  such  Security  or share,  as the case may be,  (i) has been  transferred
pursuant to the Shelf Registration  Statement or another registration  statement
covering  such  Security  or share  which  has been  filed  with the  Commission
pursuant to the Securities Act, in either case after such registration statement
has  become  and  while  such  registration  statement  is  effective  under the
Securities  Act,  (ii) has been  transferred  pursuant  to Rule  144  under  the
Securities Act (or any similar provision then in force), or (iii) may be sold or
transferred  pursuant to Rule 144(k)  under the  Securities  Act (or any similar
provision then in force) or (B) the second  anniversary of the Closing Date, or,
if later,  the second  anniversary  of the last date on which any Securities are
issued upon exercise of the Initial Purchasers' over-allotment option.

         Pursuant to the Registration Agreement, the Company may suspend the use
of the  prospectus  which is a part of the Shelf  Registration  Statement  for a
period not to exceed 30 days in any three-month  period or for three periods not
to exceed an  aggregate  of 90 days in any  twelve-month  period  under  certain
circumstances  (each, a "Suspension  Period");  provided that the existence of a
Suspension  Period will not prevent the occurrence of a Registration  Default or
otherwise limit the obligation of the Company to pay Additional Amounts.

         The  above  description  of  certain  provisions  of  the  Registration
Agreement is  qualified by reference  to, and is subject in its entirety to, the
more complete description thereof contained in the Registration Agreement.

12.  Denominations,  Transfer,  Exchange and Replacement.  The Securities are in
     registered form,  without coupons,  in denominations of $1,000 and integral
     multiples of $1,000.  The transfer of  Securities  may be  registered,  and
     Securities may be exchanged,  as provided in the  Indenture.  The Registrar
     may  require a  Noteholder,  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 exchange or
     register the transfer of any Security or portion of a Security selected for
     redemption (except the unredeemed portion of any Security being redeemed in
     part). Also,  it need not  exchange or

                                      A-13
<PAGE>


     register the transfer of any Security for a period beginning at the opening
     of business 15 days before the day of mailing of a notice of  redemption of
     Securities  and ending at the close of business on the day of such mailing.
     Replacement  Securities  for lost,  stolen or mutilated  Securities  may be
     issued in accordance with the terms of the Indenture.

13.  Persons  Deemed  Owners.  The  registered  Noteholder  of a Security may be
     treated as its owner for all purposes.

14.  Unclaimed  Money.  If money for the payment of principal of or premium,  if
     any,  interest  or  Additional  Amounts,  if  any,  on  Securities  remains
     unclaimed  for two years,  the Trustee  and the Paying  Agent shall pay the
     money back to the Company at its written request.  After that,  Noteholders
     of  Securities  entitled to the money must look to the Company for payment,
     unless  an  abandoned  property  law  designates  another  person,  and all
     liability  of the Trustee and such Paying  Agent with respect to such money
     shall cease.

15.  Defaults and Remedies.  The Securities  shall have the Events of Default as
     set forth in Section 8.01 of the Indenture.  Subject to certain limitations
     in the  Indenture,  if an Event of Default  occurs and is  continuing,  the
     Trustee,  by notice to the Company,  or the  Noteholders of at least 25% in
     aggregate principal amount of the then outstanding Securities, by notice to
     the Company and the Trustee,  may declare all the  Securities to be due and
     payable immediately, except that in the case of an Event of Default arising
     from certain  events of bankruptcy  or  insolvency,  all unpaid  principal,
     premium, if any, and accrued and unpaid interest and Additional Amounts, if
     any, on the  Securities  shall become due and payable  immediately  without
     further action or notice.  Upon  acceleration as described in either of the
     preceding sentences, the subordination provisions of the Indenture preclude
     any payment being made to  Noteholders  for at least 5 Business Days except
     as otherwise provided in the Indenture.

         The  Noteholders  of a majority in principal  amount of the  Securities
then  outstanding by written  notice to the Trustee 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  principal,  premium,  if any,  Additional  Amounts,  if any, and
interest that has become due solely because of the acceleration. Noteholders may
not enforce the Indenture or the Securities except as provided in the Indenture.
Subject to certain limitations,

                                      A-14
<PAGE>

Noteholders of a majority in principal amount of the then outstanding Securities
issued under the  Indenture  may direct the Trustee in its exercise of any trust
or power.  The  Company  must  furnish  compliance  certificates  to the Trustee
annually.  The above  description of Events of Default and remedies is qualified
by reference to, and subject in its entirety to, the more  complete  description
thereof contained in the Indenture.

16.  Amendments,  Supplements and Waivers.  Subject to certain  exceptions,  the
     Indenture or the Securities may be amended or supplemented with the consent
     of the  Noteholders of at least a majority in principal  amount of the then
     outstanding  Securities  (including  consents obtained in connection with a
     tender offer or exchange offer for  Securities),  and any existing  default
     may be  waived  with  the  consent  of the  Noteholders  of a  majority  in
     principal amount of the then  outstanding  Securities  (including  consents
     obtained  in  connection   with  a  tender  offer  or  exchange  offer  for
     Securities).  Without the consent of any  Noteholder,  the Indenture or the
     Securities  may be amended,  among  other  things,  to cure any  ambiguity,
     defect or  inconsistency,  to provide for  assumption by a successor of the
     Company's  obligations  to  Noteholders,  to make any change  that does not
     adversely  affect the rights of any  Noteholder,  to qualify the  Indenture
     under the TIA,  or to comply with the  requirements  of the SEC in order to
     maintain the qualification of the Indenture under the TIA.

17.  Trustee  Dealings with the Company.  The Trustee,  in its individual or any
     other  capacity,  may become the owner or pledgee of the Securities and may
     otherwise  deal with the Company or an  Affiliate  of the Company  with the
     same rights it would have,  as if it were not  Trustee,  subject to certain
     limitations  provided for in the Indenture and in the TIA. Any Agent may do
     the same with like rights.

18.  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.  Each
     Noteholder,   by  accepting  a  Security,  waives  and  releases  all  such
     liability.  The waiver and  release are part of the  consideration  for the
     issue of the Securities.

19.  Governing Law; Indenture to Control.  THE INTERNAL LAWS OF THE STATE OF NEW
     YORK SHALL GOVERN THE INDENTURE AND THE SECURITIES  WITHOUT REGARD,  TO THE
     EXTENT  PERMITTED  BY

                                      A-15
<PAGE>


     LAW, TO CONFLICT OF LAW  PROVISIONS  THEREOF.  IN THE EVENT OF ANY CONFLICT
     BETWEEN THE  PROVISIONS  OF THIS SECURITY ON THE ONE HAND AND THE INDENTURE
     OR THE  REGISTRATION  AGREEMENT,  ON THE OTHER HAND,  THE PROVISIONS OF THE
     INDENTURE OR THE REGISTRATION AGREEMENT, AS THE CASE MAY BE, SHALL CONTROL.

20.  Authentication.  The Securities  shall not be valid until  authenticated by
     the  manual  signature  of an  authorized  signatory  of the  Trustee or an
     authenticating agent.

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

21.  Definitions.  Capitalized  terms  not  defined  in this  Security  have the
     meanings given to them in the Indenture.

         The Company  will  furnish to any  Noteholder  of the  Securities  upon
written request and without charge a copy of the Indenture and the  Registration
Agreement. Request may be made to:

                                    Young & Rubicam Inc.
                                    Attention:  Chief Financial Officer
                                    285 Madison Avenue
                                    New York, New York 10017


                                      A-16
<PAGE>

                             CERTIFICATE OF TRANSFER

                To assign this Security, fill in the form below:

                (I) or (we) assign and transfer this Security to



--------------------------------------------------------------------------------
               (Insert assignee's social security or tax I.D. no.)

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


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

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

                           Your Signature:
                                          --------------------------------------
                                         (Sign  exactly  as  your  name  appears
                                          on the  other  side of this Security)

                           Date:
                                 -----------------------------------------------
                           Medallion Signature Guarantee:

[FOR INCLUSION ONLY IF THIS SECURITY  BEARS A RESTRICTED  SECURITIES  LEGEND] In
connection  with  any  transfer  of any  of the  Securities  evidenced  by  this
certificate  which are  "restricted  securities" (as defined in Rule 144 (or any
successor  thereto) under the Securities Act of 1933), the undersigned  confirms
that such Securities are being transferred:

CHECK ONE BOX BELOW

                  (1) [ ] to the Company; or

                  (2) [ ] pursuant to and in compliance with Rule 144A under the
                          Securities  Act of  1933;  or


                                      A-17
<PAGE>


                  (3) [ ] pursuant  to and in compliance with Regulation S under
                          the Securities Act of 1933; or

                  (4) [ ] to an institutional  "accredited investor" (as defined
                          in  Rule   501(a)(1),   (2),  (3)  or  (7)  under  the
                          Securities  Act of  1933)  that has  furnished  to the
                          Trustee   a   signed   letter    containing    certain
                          representations  and  agreements  (the  form of  which
                          letter can be obtained from the Trustee);

                  (5) [ ] pursuant to an exemption from  registration  under the
                          Securities   Act  of  1933   provided   by  Rule   144
                          thereunder; or

                  (6) [ ] pursuant to an effective  registration statement under
                          the Securities Act of 1933.

                  Unless one of the boxes is checked,  the Registrar will refuse
                  to  register   any  of  the   Securities   evidenced  by  this
                  certificate   in  the  name  of  any  person  other  than  the
                  registered holder thereof; provided, however, that if box (3),
                  (4) or (5) is  checked,  the  Trustee  may  require,  prior to
                  registering  any  such  transfer  of  the   Securities,   such
                  certifications  and  other  information,  and  if  box  (5) is
                  checked  such legal  opinions,  as the Company has  reasonably
                  requested in writing, by delivery to the Trustee of a standing
                  letter of instruction,  to confirm that such transfer is being
                  made pursuant to an exemption  from,  or in a transaction  not
                  subject to, the  registration  requirements  of the Securities
                  Act  of  1933;  provided  that  this  paragraph  shall  not be
                  applicable  to  any  Securities   which  are  not  "restricted
                  securities" (as defined in Rule 144 (or any successor thereto)
                  under the Securities Act of 1933).

                              Your Signature:---------------------------------
                                            (Sign exactly as your name appears
                                             on the other side of this Security)

                              Date:

Medallion Signature Guarantee:



                                      A-18
<PAGE>


                      [TO BE ATTACHED TO GLOBAL SECURITIES]

                                   SCHEDULE A


         The initial  principal amount of this Global Security shall be $______.
The  following  increases or decreases  in the  principal  amount of this Global
Security have been made:
<TABLE>
<CAPTION>

======================================================================================================
<S>            <C>                  <C>                    <C>                    <C>
Date Made      Amount of            Amount of              Principal Amount of    Signature of
               Increase in          decrease in            this Global Security   authorized
               Principal            Principal Amount       following such         signatory of
               Amount of this       of this Global         decrease or increase.  Trustee or
               Global Security      Security                                      Securities
               including upon                                                     Custodian
               exercise of
               over-allotment
               option
======================================================================================================
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
======================================================================================================

</TABLE>



                                                 A-19
<PAGE>


                                OPTION OF NOTEHOLDER TO ELECT PURCHASE


         If you  want to  elect  to have  this  Security  or a  portion  thereof
repurchased  by the Company  pursuant to Section 3.08 or 4.07 of the  Indenture,
check the box:    [ ]

         If the  purchase  is in  part,  indicate  the  portion  ($1,000  or any
integral multiple thereof) to be purchased: ____________

                           Your Signature:
                                          --------------------------------------
                                          (Sign exactly as your name appears on
                                           the  other  side of this Security)


Date:  ____________

Medallion Signature Guarantee: _______________________




                                      A-20
<PAGE>


                              ELECTION TO CONVERT


To Young & Rubicam Inc.:

         The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security,  or the portion below  designated,  into Common
Stock of Young & Rubicam  Inc.  in  accordance  with the terms of the  Indenture
referred  to in  this  Security,  and  directs  that  the  shares  issuable  and
deliverable upon  conversion,  together with any check in payment for fractional
shares,  be issued in the name of and  delivered  to the  undersigned,  unless a
different name has been indicated  below. If shares are to be issued in the name
of a person other than the  undersigned,  the undersigned  will pay all transfer
taxes payable with respect thereto.

         The  undersigned  agrees to be bound by the  terms of the  Registration
Agreement relating to the Common Stock issued upon conversion of the Securities.

         If you want to convert this Security in whole,  check the box below. If
you want to convert this Security in part, indicate the portion of this Security
to be converted in the space provided below.

                  In whole [ ]        or             Portion of Security to be
                                                     converted  ($1,000 or any
                                                     integral multiple thereof):
                                                     $______________

Date:    ______________             Your Signature:
                                                   -----------------------------
                                                   (Sign  exactly  as your name
                                                    appears on the other side of
                                                    this Security)

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

Please print or typewrite your name and address,  including zip code, and social
security or other identifying number:

If the Common  Stock is to be issued and  delivered  to someone  other than you,
please print or typewrite the name and address,  including zip code,  and social
security or other identifying number of that person:



                                      A-21
<PAGE>
                                                                       EXHIBIT B

                    FORM OF TRANSFER CERTIFICATE FOR TRANSFER
                   FROM GLOBAL SECURITY OR DEFINITIVE SECURITY
                             TO DEFINITIVE SECURITY

   (Transfers pursuant toss. 2.06(a)(ii) orss. 2.06(a)(iii) of the Indenture)

The Bank of New York, as Registrar

         Attn:    Corporate Trust Trustee Administration

         Re:      Young & Rubicam Inc. 3% Convertible Subordinated Notes
                  due 2005 (the "Securities")

         Reference is hereby made to the Indenture  dated as of January 20, 2000
(the  "Indenture")  between  Young & Rubicam Inc.  and The Bank of New York,  as
Trustee.  Capitalized  terms used but not defined herein shall have the meanings
given them in the Indenture.

         This letter relates to U.S. $             aggregate principal amount of
Securities which are held [in the form of a [Definitive] [Global Security (CUSIP
No. _____________)]* in the  name  of [name of transferor] (the "Transferor") to
effect the transfer of the Securities.

         In connection with such request, and in respect of such Securities, the
Transferor  does hereby certify that such  Securities  are being  transferred in
accordance  with (i) the transfer  restrictions  set forth in the Securities and
the  Indenture  and (ii) to a transferee  that is an  institutional  "accredited
investor" (as defined in Rule  501(a)(1),  (2), (3) or (7) of Regulation D under
the U.S.  Securities  Act of 1933,  as amended)  (an  "Institutional  Accredited
Investor")  which is acquiring such Securities for its own account or for one or
more accounts, each of which is an Institutional Accredited Investor, over which
it exercises sole investment  discretion and (iii) in accordance with applicable
securities  laws of any state of the United States;  and further  certifies that
the  transferee  and each such account,  if any, is acquiring at least  $100,000
principal amount of Securities.

--------------------------------
*   Insert, if appropriate.


                                       B-1



<PAGE>


                                            [Names of Transferor],

                                            By
                                               ---------------------------------
                                                 Name:
                                                 Title:
Dated:
cc:  Young & Rubicam Inc.
Attn:  Secretary




















                                      B-2
<PAGE>

                                                                       EXHIBIT C

               FORM OF ACCREDITED INVESTOR TRANSFEREE CERTIFICATE

           (Transfers pursuant toss. 2.06(a)(ii) andss. 2.06(a)(iii))

The Bank of New York, as Registrar

         Attn:    Corporate Trust Trustee Administration

         Re:      Young & Rubicam Inc. 3% Convertible Subordinated Notes
                  due 2005 (the "Securities")

         Reference is hereby made to the Indenture  dated as of January 20, 2000
(the  "Indenture")  between  Young & Rubicam Inc., a Delaware  corporation  (the
"Company"),  and The Bank of New York, as Trustee (the  "Trustee").  Capitalized
terms used but not  defined  herein  shall have the  meanings  given them in the
Indenture.

         In  connection  with our  proposed  purchase of $  aggregate  principal
amount of the  Securities,  which are  convertible  into shares of common  stock
("Common Stock") of the Company, we confirm that:

         1. We understand that the Securities and the Common Stock issuable upon
     conversion  thereof have not been  registered  under the  Securities Act of
     1933,  as amended  (the  "Securities  Act"),  and may not be sold except as
     permitted in the following  sentence.  We understand and agree,  on our own
     behalf and on behalf of any accounts for which we are acting as hereinafter
     stated,  (x)  that  such  Securities  are  being  transferred  to  us  in a
     transaction  not  involving any public  offering  within the meaning of the
     Securities Act, (y) that if we should resell,  pledge or otherwise transfer
     any such  Securities or any shares of Common Stock issuable upon conversion
     thereof  prior to the later of (I) the  expiration  of the  holding  period
     under Rule 144(k) (or any successor thereto) under the Securities Act which
     is applicable to such Securities or shares of Common Stock, as the case may
     be, or (II) within three  months after we cease to be an affiliate  (within
     the  meaning of Rule 144 under the  Securities  Act) of the  Company,  such
     Securities  or the Common Stock  issuable  upon

<PAGE>

     conversion  thereof may be resold,  pledged or transferred  only (i) to the
     Company,  (ii) so long as such  Securities are eligible for resale pursuant
     to Rule 144A under the Securities  Act ("Rule  144A"),  to a person whom we
     reasonably believe is a "qualified institutional buyer" (as defined in Rule
     144A)  ("QIB") that  purchases  for its own account or for the account of a
     QIB to whom  notice is given that the  resale,  pledge or transfer is being
     made in  reliance  on Rule 144A (as  indicated  by the box  checked  by the
     transferor on the Certificate of Transfer on the reverse of the certificate
     for the  Securities),  it being  understood  that the  Common  Stock is not
     eligible for resale pursuant to Rule 144A, (iii) in an offshore transaction
     (as defined in Regulation S under the  Securities  Act) in accordance  with
     Regulation S under the  Securities  Act (as indicated by the box checked by
     the  transferor  on the  Certificate  of  Transfer  on the  reverse  of the
     certificate  for the Securities or on a comparable  Certificate of Transfer
     for  the  Common  Stock  issuable  upon  conversion  thereof),  (iv)  to an
     institution  that is an  "accredited  investor"  as defined in Rule 501 (a)
     (1), (2), (3) or (7) under the Securities Act (an "Institutional Accredited
     Investor")  (as  indicated  by the box  checked  by the  transferor  on the
     Certificate  of  Transfer  on  the  reverse  of  the  certificate  for  the
     Securities or on a comparable  Certificate of Transfer for the Common Stock
     issuable upon conversion  thereof) that is acquiring the securities for its
     own  account  or  for  the  account  of  one or  more  other  Institutional
     Accredited Investors over which it exercises sole investment discretion and
     that prior to such  transfer,  delivers a signed  letter to the Company and
     the Trustee (or the  transfer  agent in the case of Common  Stock  issuable
     upon conversion  thereof)  certifying that it and each such account is such
     an Institutional Accredited Investor and is acquiring the Securities or the
     Common Stock issuable upon conversion  thereof for investment  purposes and
     not for  distribution  and agreeing to the  restrictions on transfer of the
     Securities or the Common Stock issuable upon

                                      C-1


<PAGE>

     conversion  thereof,  (v) pursuant to an exemption from registration  under
     the  Securities  Act  provided  by  Rule  144  (if  applicable)  under  the
     Securities  Act (as  indicated by the box checked by the  transferor on the
     Certificate  of  Transfer  on  the  reverse  of  the  certificate  for  the
     Securities  or a  comparable  Certificate  of Transfer for the Common Stock
     issuable  upon  conversion  thereof),  or  (vi)  pursuant  to an






                                       C-2
<PAGE>


     effective  registration statement under the Securities Act, in each case in
     accordance  with any applicable  securities laws of any state of the United
     States,  and we will notify any  purchaser of the  Securities or the Common
     Stock  issuable  upon  conversion  thereof  from  us of  the  above  resale
     restrictions,  if then applicable. We further understand that in connection
     with any  transfer of the  Securities  or the Common  Stock  issuable  upon
     conversion thereof (other than a transfer pursuant to clause (vi) above) by
     us that the Company and the Trustee (or the  transfer  agent in the case of
     Common Stock  issuable  upon  conversion  thereof)  may request,  and if so
     requested we will furnish,  such certificates and other information and, in
     the case of a transfer  pursuant  to clause (v) above,  a legal  opinion as
     they may reasonably require to confirm that any such transfer complies with
     the foregoing restrictions. Finally, we understand that in any case we will
     not directly or indirectly  engage in any hedging  transactions with regard
     to the  Securities  or the Common Stock  issuable  upon  conversion  of the
     Securities except as permitted by the Securities Act.

         2. We are able to fend for ourselves in connection with our purchase of
     the  Securities,  we have such  knowledge  and  experience in financial and
     business matters as to be capable of evaluating the merits and risks of our
     investment  in the  Securities,  and we and any  accounts  for which we are
     acting are each able to bear the economic risk of our or its investment and
     can afford the complete loss of such investment.

         3. We understand that the minimum  principal  amount of Securities that
     may be purchased by an  Institutional  Accredited  Investor is $100,000 and
     also  represent  that we and  any  accounts  for  which  we are  purchasing
     Securities are each  purchasing at least such minimum  principal  amount of
     Securities.

         4. We  understand  that the Company and others will rely upon the truth
     and accuracy of the foregoing acknowledgments,  representations, agreements
     and  warranties   and  we  agree  that  if  any  of  the   acknowledgments,
     representations,  agreements or warranties made or deemed to have been made
     by us by our purchase of the Securities,  for our own account or for one or
     more accounts as to each
                                      C-4


<PAGE>
     of which we exercise sole investment discretion, are no longer accurate, we
     shall promptly notify the Company.

         5. With  respect to the  certificates  representing  Securities  we are
     purchasing,  we  understand  that such  certificates  will be in definitive
     registered form and that the  notification  requirement  referred to in (1)
     above  requires  that,  until the  expiration  of the  holding  period with
     respect to sales of the  Securities  under clause (k) of Rule 144 under the
     Securities  Act  (unless  such  Securities  have  been sold  pursuant  to a
     registration   statement  that  has  been  declared   effective  under  the
     Securities  Act), that such Securities will bear a legend  substantially to
     the following effect:

         THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED  (THE  "SECURITIES  ACT").  THE HOLDER  HEREOF,  BY  PURCHASING  THIS
SECURITY,  AGREES FOR THE BENEFIT OF THE COMPANY  THAT THIS  SECURITY MAY NOT BE
RESOLD,  PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUANCE  HEREOF (OR ANY PREDECESSOR  SECURITY  HERETO) OR (Y) BY ANY HOLDER
THAT WAS AN  AFFILIATE  OF THE  COMPANY  AT ANY TIME  DURING  THE  THREE  MONTHS
PRECEDING  THE DATE OF SUCH  TRANSFER,  IN  EITHER  CASE  OTHER  THAN (1) TO THE
COMPANY,  (2) SO LONG AS THIS  SECURITY IS ELIGIBLE FOR RESALE  PURSUANT TO RULE
144A  UNDER THE  SECURITIES  ACT  ("RULE  144A"),  TO A PERSON  WHOM THE  SELLER
REASONABLY  BELIEVES IS A QUALIFIED  INSTITUTIONAL  BUYER  WITHIN THE MEANING OF
RULE 144A,  PURCHASING  FOR ITS OWN  ACCOUNT OR FOR THE  ACCOUNT OF A  QUALIFIED
INSTITUTIONAL  BUYER TO WHOM  NOTICE IS GIVEN THAT THE  RESALE,  PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED
BY THE  TRANSFEROR  ON THE  CERTIFICATE  OF  TRANSFER  ON THE  REVERSE  OF  THIS
SECURITY),  (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER
THE  SECURITIES  ACT (AS  INDICATED BY THE BOX CHECKED BY THE  TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY),  (4) TO AN INSTITUTION
THAT IS AN "ACCREDITED  INVESTOR" AS DEFINED IN RULE 501(a)(1),  (2), (3) OR (7)
UNDER THE SECURITIES ACT ("INSTITUTIONAL  ACCREDITED

                                      C-4
<PAGE>

INVESTOR") (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE
OF TRANSFER ON THE REVERSE OF THIS SECURITY) THAT IS ACQUIRING THIS SECURITY FOR
INVESTMENT  PURPOSES AND NOT FOR  DISTRIBUTION AND THAT, PRIOR TO SUCH TRANSFER,
DELIVERS  TO THE  COMPANY AND THE  TRUSTEE A SIGNED  LETTER  CONTAINING  CERTAIN
REPRESENTATIONS  AND AGREEMENTS  RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
SECURITY  EVIDENCED  HEREBY  (THE  FORM OF  WHICH  LETTER  IS  ATTACHED  TO THIS
SECURITY),  (5) PURSUANT TO AN EXEMPTION FROM REGISTRATION  UNDER THE SECURITIES
ACT  PROVIDED  BY RULE  144 (IF  APPLICABLE)  UNDER  THE  SECURITIES  ACT OR (6)
PURSUANT TO AN EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE SECURITIES  ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE  SECURITIES LAWS OF ANY STATE OF THE
UNITED  STATES.  PRIOR TO A TRANSFER  OF THIS  SECURITY  (OTHER  THAN A TRANSFER
PURSUANT TO CLAUSE (6) ABOVE),  THE HOLDER OF THIS  SECURITY MUST FURNISH TO THE
COMPANY  AND THE  TRUSTEE  SUCH  CERTIFICATES  AND OTHER  INFORMATION  AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT OF
THIS SECURITY  COMPLIES WITH THE FOREGOING  RESTRICTIONS.  THE HOLDER HEREOF, BY
PURCHASING  THIS SECURITY,  REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY
THAT  IT IS  (1)  A  QUALIFIED  INSTITUTIONAL  BUYER  OR  (2)  AN  INSTITUTIONAL
ACCREDITED INVESTOR AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT PURPOSES
AND NOT FOR  DISTRIBUTION  OR (3) NOT A U.S.  PERSON AND IS  OUTSIDE  THE UNITED
STATES  WITHIN THE  MEANING OF (OR AN ACCOUNT  SATISFYING  THE  REQUIREMENTS  OF
PARAGRAPH  (k)(2) OF RULE 902 UNDER)  REGULATION S UNDER THE SECURITIES  ACT. IN
ANY CASE THE HOLDER  HEREOF  WILL NOT,  DIRECTLY  OR  INDIRECTLY,  ENGAGE IN ANY
HEDGING  TRANSACTION  WITH REGARD TO THIS SECURITY OR ANY COMMON STOCK  ISSUABLE
UPON CONVERSION OF THIS SECURITY EXCEPT AS PERMITTED BY THE SECURITIES ACT.

         6. With  respect to  certificates  representing  shares of Common Stock
     issuable  upon  conversion  of  the  Securities,  we  understand  that  the
     notification  requirement referred to in (1) above requires that, until the
     expiration of the holding period with respect to

                                      C-5
<PAGE>

     sales  of such  Common  Stock  under  clause  (k) of  Rule  144  under  the
     Securities  Act  (unless  such  Common  Stock has been sold  pursuant  to a
     registration   statement  that  has  been  declared   effective  under  the
     Securities Act), such certificates will bear a legend  substantially to the
     effect  set  forth as  Exhibit D to the  Indenture  and that a copy of such
     legend may be obtained from the Trustee.

         7. We are  acquiring  the  Securities  purchased  by us for  investment
     purposes, and not for distribution,  for our own account or for one or more
     accounts as to each of which we exercise sole investment  discretion and we
     are and each such account is an Institutional Accredited Investor.

         8. You and the Company are  entitled to rely on this letter and you and
     the Company are  irrevocably  authorized  to produce  this letter or a copy
     hereof to any interested party in any administrative or legal proceeding or
     official inquiry with respect to the matters covered hereby.

                                            Very truly yours,


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

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

Dated:
      --------------
cc:  Young & Rubicam Inc.
     Attn:  Chief Financial Officer
     285 Madison Avenue
     New York, New York 10017



                                      C-6
<PAGE>

                                                                       EXHIBIT D

                     FORM OF RESTRICTED COMMON STOCK LEGEND

         THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED  (THE  "SECURITIES  ACT").  THE HOLDER  HEREOF,  BY  PURCHASING  THIS
SECURITY,  AGREES FOR THE BENEFIT OF THE COMPANY  THAT THIS  SECURITY MAY NOT BE
RESOLD,  PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF
THE ISSUANCE  HEREOF (OR ANY PREDECESSOR  SECURITY  HERETO) OR (Y) BY ANY HOLDER
THAT WAS AN  AFFILIATE  OF THE  COMPANY  AT ANY TIME  DURING  THE  THREE  MONTHS
PRECEDING  THE DATE OF SUCH  TRANSFER,  IN EITHER  CASE,  OTHER  THAN (1) TO THE
COMPANY,  (2) SO LONG AS THIS  SECURITY IS ELIGIBLE FOR RESALE  PURSUANT TO RULE
144A  UNDER  THE  SECURITIES  ACT  (RULE  144A),  TO A PERSON  WHOM  THE  SELLER
REASONABLY  BELIEVES IS A QUALIFIED  INSTITUTIONAL  BUYER  WITHIN THE MEANING OF
RULE 144A,  PURCHASING  FOR ITS OWN  ACCOUNT OR FOR THE  ACCOUNT OF A  QUALIFIED
INSTITUTIONAL  BUYER TO WHOM  NOTICE IS GIVEN THAT THE  RESALE,  PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED
BY THE  TRANSFEROR  ON THE  CERTIFICATE  OF  TRANSFER  ON THE  REVERSE  OF  THIS
SECURITY),  (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER
THE  SECURITIES  ACT (AS  INDICATED BY THE BOX CHECKED BY THE  TRANSFEROR ON THE
CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY),  (4) TO AN INSTITUTION
THAT IS AN "ACCREDITED  INVESTOR" AS DEFINED IN RULE 501(A)(1),  (2), (3) OR (7)
UNDER THE SECURITIES ACT ("INSTITUTIONAL  ACCREDITED INVESTOR") (AS INDICATED BY
THE BOX CHECKED BY THE TRANSFEROR ON THE  CERTIFICATE OF TRANSFER ON THE REVERSE
OF THIS SECURITY)  THAT IS ACQUIRING  THIS SECURITY FOR INVESTMENT  PURPOSES AND
NOT FOR DISTRIBUTION,  AND THAT, PRIOR TO SUCH TRANSFER, DELIVERS TO THE COMPANY
AND THE TRANSFER AGENT A SIGNED LETTER CONTAINING  CERTAIN  REPRESENTATIONS  AND
AGREEMENTS  RELATING TO THE  RESTRICTIONS ON TRANSFER OF THE SECURITY  EVIDENCED
HEREBY (THE FORM OF WHICH LETTER IS ATTACHED TO THIS SECURITY),  (5) PURSUANT TO
AN EXEMPTION

                                       D-1
<PAGE>

FROM REGISTRATION  UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE)
UNDER THE SECURITIES ACT OR (6) PURSUANT TO AN EFFECTIVE  REGISTRATION STATEMENT
UNDER  THE  SECURITIES  ACT,  IN EACH  CASE IN  ACCORDANCE  WITH ANY  APPLICABLE
SECURITIES  LAW OF ANY STATE OF THE UNITED  STATES.  PRIOR TO A TRANSFER OF THIS
SECURITY  (OTHER THAN A TRANSFER  PURSUANT  TO CLAUSE (6) ABOVE),  THE HOLDER OF
THIS  SECURITY  MUST  FURNISH  TO  THE  COMPANY  AND  THE  TRANSFER  AGENT  SUCH
CERTIFICATES  AND OTHER  INFORMATION AS THEY MAY  REASONABLY  REQUIRE TO CONFIRM
THAT  ANY  TRANSFER  BY  IT  OF  THIS  SECURITY   COMPLIES  WITH  THE  FOREGOING
RESTRICTIONS.  THE HOLDER HEREOF,  BY PURCHASING  THIS SECURITY,  REPRESENTS AND
AGREES FOR THE BENEFIT OF THE COMPANY  THAT IT IS (1) A QUALIFIED  INSTITUTIONAL
BUYER  WITHIN  THE  MEANING  OF  RULE  144a  OR (2) AN  INSTITUTION  THAT  IS AN
"ACCREDITED  INVESTOR" AS DEFINED IN RULE  501(a)(1),  (2), (3) OR (7) UNDER THE
SECURITIES ACT AND THAT IT IS HOLDING THIS SECURITY FOR INVESTMENT  PURPOSES AND
NOT FOR  DISTRIBUTION  OR (3) NOT A U.S. PERSON AND IS OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF (OR AN ACCOUNT  SATISFYING THE  REQUIREMENTS  OF PARAGRAPH
(k)(2) OF RULE 902 UNDER) REGULATION 2 UNDER THE SECURITIES ACT. IN ANY CASE THE
HOLDER  HEREOF  WILL  NOT,  DIRECTLY  OR  INDIRECTLY,   ENGAGE  IN  ANY  HEDGING
TRANSACTION  WITH REGARD TO THIS SECURITY  EXCEPT AS PERMITTED BY THE SECURITIES
ACT.



                                      D-2
<PAGE>

                                                                       EXHIBIT E

                    FORM OF TRANSFER CERTIFICATE FOR TRANSFER
                           OF RESTRICTED COMMON STOCK
               (Transfers pursuant toss.5.16(c) of the Indenture)

[NAME AND ADDRESS OF COMMON STOCK TRANSFER AGENT]

         Re:      Young & Rubicam Inc. 3% Convertible Subordinated Notes
                  due 2005 (the "Securities")

         Reference is hereby made to the Indenture  dated as of January 20, 2000
(the  "Indenture")  between  Young & Rubicam Inc.  and The Bank of New York,  as
Trustee.  Capitalized  terms used but not defined herein shall have the meanings
given them in the Indenture.

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

         In  connection  with the transfer of such shares of Common  Stock,  the
undersigned confirms that such shares of Common Stock are being transferred:

CHECK ONE BOX BELOW

                  (1)   [ ]   to the Company; or

                  (2)   [ ]   pursuant to and in  compliance  with  Regulation S
                              under the Securities Act of 1933; or

                  (3)   [ ]   to  an  institutional  "accredited  investor"  (as
                              defined in Rule  501(a)(1),  (2), (3) or (7) under
                              the  Securities Act of 1933) that has furnished to
                              the  transfer  agent a  signed  letter  containing
                              certain  representations  and agreements (the form
                              of which  letter can be obtained  from the Company
                              or transfer agent);

                  (4)   [ ]   pursuant to an exemption from  registration  under
                              the  Securities  Act of 1933  provided by Rule 144
                              thereunder; or


                                     -iii-



<PAGE>


                  (5)   [ ]   pursuant to an  effective  registration  statement
                              under the Securities Act of 1933.

                  Unless one of the boxes is checked,  the  transfer  agent will
                  refuse to register any of the Common  Stock  evidenced by this
                  certificate   in  the  name  of  any  person  other  than  the
                  registered holder thereof; provided, however, that if box (2),
                  (3) or (4) is checked,  the transfer agent may require,  prior
                  to  registering  any such  transfer  of the Common  Stock such
                  certifications  and  other  information,  and  if  box  (4) is
                  checked  such legal  opinions,  as the Company has  reasonably
                  requested in writing,  by delivery to the transfer  agent of a
                  standing letter of instruction,  to confirm that such transfer
                  is  being  made  pursuant  to  an  exemption  from,  or  in  a
                  transaction not subject to, the  registration  requirements of
                  the Securities Act of 1933.


                                                     [Name of Transferor],


                                                     By
                                                        ------------------------
                                                        Name:
                                                        Title:
Dated:
cc:  Young & Rubicam Inc.
Attn:  Secretary


                                       B-4