Document:

Exhibit 4.1

                            COX COMMUNICATIONS, INC.

                                       AND

                              THE BANK OF NEW YORK,

                                   as Trustee

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

                          THIRD SUPPLEMENTAL INDENTURE

                           Dated as of April 19, 2000

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

                           Supplementing the Indenture

                            Dated as of June 27, 1995

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

                 Creating a series of Debt Securities designated

             Exchangeable Subordinated Discount Debentures due 2020

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         THIRD  SUPPLEMENTAL  INDENTURE,  dated  the  19th day of  April,  2000,
between COX COMMUNICATIONS,  INC., a corporation  existing under the laws of the
State of Delaware (the "Company"),  and THE BANK OF NEW YORK, a New York banking
corporation,  having its  principal  corporate  trust  office in The City of New
York, New York, as trustee (the "Trustee").

         WHEREAS,  the Company has  heretofore  executed  and  delivered  to the
Trustee an Indenture,  dated as of June 27, 1995 (the "Original  Indenture" and,
as supplemented to the date hereof, the "Indenture"), providing for the issuance
by the  Company  from  time to time of its  debentures,  notes,  bonds  or other
evidences  of  indebtedness  to be issued in one or more series (in the Original
Indenture and herein called the "Securities");

         WHEREAS,  the  Company,  in the  exercise  of the power  and  authority
conferred upon and reserved to it under the provisions of the Original Indenture
and pursuant to  appropriate  resolutions  of the Board of  Directors,  has duly
determined to make,  execute and deliver to the Trustee this Third  Supplemental
Indenture to the Original Indenture in order to establish the form and terms of,
and to provide for the creation and issue of, a series of Securities  designated
as the  "Exchangeable  Subordinated  Discount  Debentures  due  2020"  under the
Original  Indenture in an aggregate  original principal amount at maturity of up
to $2,290,755,000 (the "Debentures");

         WHEREAS,  Section 9.01 of the Original Indenture provides,  among other
things,  that  the  Company,  when  authorized  by a Board  Resolution,  and the
Trustee,  at any time and from time to time, without the consent of any Holders,
may enter into an indenture  supplemental to the Original Indenture to establish
the terms of  Securities of any series as permitted by Sections 2.01 and 2.03 of
the Original Indenture; and

         WHEREAS, all things necessary to make the Debentures,  when executed by
the Company and  authenticated  and delivered by the Trustee and issued upon the
terms and subject to the conditions  hereinafter  and in the Indenture set forth
against  payment  therefor,  the valid,  binding  and legal  obligations  of the
Company and to make this Third Supplemental Indenture a valid, binding and legal
agreement of the Company, have been duly authorized.

         NOW, THEREFORE,  THIS THIRD SUPPLEMENTAL  INDENTURE WITNESSETH that, in
order to  establish  the terms of the  series of  Securities  designated  as the
"Exchangeable  Subordinated  Discount  Debentures  due  2020,"  and  for  and in
consideration  of the  premises and of the  covenants  contained in the Original
Indenture  and in this  Third  Supplemental  Indenture  and for  other  good and
valuable   consideration  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, it is mutually covenanted and agreed as follows:

<PAGE>

                                  ARTICLE ONE

                              DEFINITIONS AND OTHER
                        PROVISIONS OF GENERAL APPLICATION

Section 101.      Definitions.

         Each  capitalized  term  that  is used  herein  and is  defined  in the
Original  Indenture shall have the meaning  specified in the Original  Indenture
unless such term is otherwise defined herein, in which case such term shall have
the meaning specified herein.

         "Adjusted  Principal  Amount"  shall  mean,  for each  $1,000  Original
Principal Amount at Maturity of the Debentures, (i) on the Issue Date, the Issue
Price and (ii) thereafter, for any date of determination,  the Issue Price, plus
any previous  accrual of Original  Issue  Discount to but excluding such date of
determination  and  minus  any and  all  Special  Cash  Payments  and  any  Cash
Reorganization  Event  Distributions  made in respect of such Debentures through
and including such date of  determination.  Notwithstanding  the foregoing,  the
Adjusted Principal Amount shall never be less than zero.

         "Adjusted  Principal Amount  Reduction" shall mean any reduction in the
Adjusted  Principal  Amount as a result of the  application  of any Special Cash
Payment or Cash Reorganization Event Distribution.

         "Aggregate Number" shall have the meaning set forth in Section 211(b).

         "Average  Transaction  Consideration"  shall  mean,  with  respect to a
holder of one Reference  Security in a Reference Share Offer,  (a) the aggregate
consideration   actually  paid  or  distributed  in  respect  of  all  Reference
Securities  accepted in such  Reference  Share  Offer,  divided by (b) the total
number of Reference Securities  outstanding  immediately prior to the expiration
of the Reference Share Offer and entitled to participate in such Reference Share
Offer.

         "Business  Day"  shall mean any day that is not a  Saturday,  Sunday or
legal holiday,  on which banking  institutions or trust companies in The City of
New York are authorized or obligated by law or regulation to close.

         "Cash  Reorganization  Event"  means  any  event  with  respect  to any
Reference  Company that results in the Reference  Property  consisting of 80% or
more of cash.

         "Cash  Reorganization  Event  Distribution"  shall have the meaning set
forth in Section 213 hereof.

         "Closing Price" shall mean,  with respect to any Reference  Security on
any date of determination,  the closing sale price (or, if no closing sale price
is reported,  the last reported sale price) of such Reference  Security (regular
way) on the New York Stock  Exchange on that date or, if the Reference  Security
is not  listed  for  trading on the New York  Stock  Exchange  on that date,  as
reported in the composite  transactions for the principal United States national
or regional  securities  exchange on which such Reference Security is so listed,
or if such  Reference  Security is not so listed on a United States  national or
regional securities exchange, as reported by the

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Nasdaq  National Market or, if such Reference  Security is not so reported,  the
last quoted bid price for such Reference Security in the over-the-counter market
as reported by the National Quotation Bureau or a similar  organization.  In the
event that no such  quotation is available for any day, the  Company's  Board of
Directors  shall  determine the Closing  Price on the basis of those  quotations
that it in good faith considers appropriate. To the extent that trading (regular
way) of, or quotations  for, any security as to which  "Closing  Price" is to be
determined  continues  past 4:00  p.m.,  New York City time,  on the  applicable
securities exchange,  the National Market System or over-the-counter  market, as
the case may be, "Closing Price" shall be deemed to refer to the price or bid at
the time that is then customary for  determining  the trading day's index levels
for stocks traded on such securities  exchange or automated  quotation system on
which the Reference Securities are then traded or quoted.

         "Company"  shall mean the Person  named as the  "Company"  in the first
paragraph  of this  instrument  until a successor  Person shall have become such
pursuant to the applicable provisions of the Indenture, and thereafter "Company"
shall mean such successor Person, and any other obligor upon the Debentures.

         "Company Notice" shall have the meaning set forth in Section 208(e).

         "Company Notice Date" shall have the meaning set forth in Section
208(e).

         "Debenture" shall mean $1,000 Original Principal Amount at Maturity of
the Debentures.

         "Debentures" shall mean the Company's Exchangeable Subordinated
Discount Debentures due 2020.

         "Depositary" shall have the meaning set forth in the Original Indenture

         "Distributed Assets" shall have the meaning set forth in Section 211(c)

         "DTC" shall mean The Depository Trust Company or any successor
Depositary.

         "Exchange Agent" shall mean any Person authorized by the Company to act
as Exchange  Agent for the  Debentures.  The Company  initially  authorizes  the
Trustee to act as Exchange Agent for the  Debentures on its behalf.  The Company
may at any time and from time to time  authorize one or more Persons  (including
the Company) to act as Exchange  Agent in addition to or in place of the Trustee
with respect to the Debentures.

         "Exchange Date" shall mean, with respect to any Notice of Exchange, the
date on which the Notice of Exchange and all documents, instruments and payments
required to be  tendered  in  connection  with the  related  exchange  have been
received by the Exchange Agent.

         "Extraordinary  Cash Dividend"  means,  with respect to any consecutive
12-month period,  the amount,  if any, by which the aggregate amount of all cash
dividends on any Reference  Security  consisting  of capital stock  occurring in
such 12-month period (or, if that reference  security was not outstanding at the
commencement  of such 12-month  period,  occurring in such shorter period during
which that Reference Security was outstanding)  exceeds on a per share basis 10%
of the average of the Closing Prices per share of that  Reference  Security over
such 12-

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month period (or such shorter  period during which that  Reference  Security was
outstanding);  provided  that,  for purposes of the  foregoing  definition,  the
amount  of  cash  dividends  paid on a per  share  basis  will be  appropriately
adjusted to reflect the  occurrence  during such period of any stock dividend or
distribution of shares of capital stock of the issuer of such Reference Security
or any subdivision,  split,  combination or  reclassification  of shares of that
Reference Security.

         "Interest Increase Date" shall have the meaning set forth in Section
205(c)(i).

         "Interest Payment Date" shall have the meaning set forth in Section
205.

         "Interest  Period" shall mean (i) the period from the Issue Date to but
excluding the initial Interest Payment Date and (ii) thereafter, the period from
and  including  any  Interest  Payment  Date to but  excluding  the  immediately
succeeding  Interest  Payment  Date or,  if  applicable,  Stated  Maturity,  any
Purchase Date, any Redemption Date or any Exchange Date.

         "Issue Date" shall mean April 19, 2000.

         "Issue Price" shall mean $425.89 per Debenture.

         "Notice of  Exchange"  shall mean the notice of  exchange  given to the
Exchange  Agent by a Holder of its  request to exchange  Debentures  pursuant to
Section 209(c).

         "Optional  Redemption" shall mean any redemption of the Debentures,  in
whole or in part, at the option of the Company pursuant to Section 207(a).

         "Original Issue Discount" shall mean, as of any date of  determination,
for each Debenture,  the excess,  if any, of the Adjusted  Principal  Amount for
such Debenture over the Issue Price.

         "Original  Principal  Amount at  Maturity"  shall mean $1,000  original
principal amount at maturity per Debenture, without regard to any adjustments to
the Adjusted Principal Amount.

         "Purchase Date" shall mean April 19, 2005, April 19, 2010 and April 19,
2015.

         "Purchase Notice" shall have the meaning set forth in Section 208(a)(i)

         "Purchase Price" shall have the meaning set forth in Section 208(a).

         "Receipt Date" shall have the meaning set forth in Section 211(b).

         "Redemption Date" shall have the meaning set forth in Section 207(a).

         "Redemption Price" shall have the meaning set forth in Section 207(a).

         "Reference Company" shall mean Sprint  Corporation,  for so long as any
Reference  Securities are Sprint PCS Stock, and shall also mean any other issuer
of a Reference Security.

         "Reference   Property"   shall  initially  only  consist  of  Reference
Securities and shall be subject to adjustment  from time to time prior to Stated
Maturity to reflect the addition or

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substitution of any cash,  securities  and/or other property  resulting from the
application of the provisions of Section 211 hereof.

         "Reference  Property  Value"  shall mean,  for the  Reference  Property
attributable  to the  Debentures  at  any  date  of  determination,  subject  to
adjustment in accordance with Section 211, the sum of (a) for any portion of the
Reference  Property  consisting  of cash,  the amount of such cash,  (b) for any
portion of the  Reference  Property  consisting  of property  other than cash or
Reference Securities, the fair market value of such property (as determined by a
nationally  recognized  independent  investment  banking firm  retained for this
purpose by the Company) as of the Trading Day immediately succeeding the related
Exchange Date, and (c) for any portion of the Reference Property consisting of a
Reference Security  (including Sprint PCS Stock): (1) in the case of a Notice of
Exchange  delivered to the Exchange  Agent for exchange  prior to the  Reference
Securities  Eligibility  Date, the Closing Price for such Reference  Security on
the Trading Day  immediately  succeeding  the  Exchange  Date  (unless more than
$5,000,000  aggregate  Original  Principal Amount at Maturity of Debentures have
been  validly  tendered  for  exchange  on such date,  in which  case  Reference
Property  Value shall equal the mean of the  Closing  Prices for such  Reference
Security  over the five  Trading  Day  period  ending on the fifth  Trading  Day
immediately  succeeding  the  Exchange  Date);  (2) in the case of a  Notice  of
Exchange  delivered to the Exchange  Agent on or after the Reference  Securities
Eligibility  Date,  the Closing Price for such  Reference  Security on the third
Trading  Day  immediately   succeeding  the  Exchange  Date  (unless  more  than
$5,000,000  aggregate  Original  Principal Amount at Maturity of Debentures have
been validly  tendered for  exchange on such date,  in which case the  Reference
Property  Value shall equal the mean of the  Closing  Prices for such  Reference
Security  during the five Trading Day period  beginning on the third Trading Day
immediately  succeeding the Exchange Date and ending on the seventh  Trading Day
immediately  succeeding  the Exchange Date) and (3) in the case of a purchase by
the  Company of any  Debentures  and payment of the  related  Purchase  Price by
delivery of Reference  Property in accordance with Section  208(d),  the mean of
the Closing  Prices for such  Reference  Security  during the three  Trading Day
period ending on the second Trading Day immediately preceding the Purchase Date;
provided,  however,  if  Closing  Prices  for a  Reference  Security  cannot  be
determined, the Reference Property Value of such Reference Security shall be the
fair market  value of such  Reference  Security (as  determined  by a nationally
recognized  independent investment banking firm retained for this purpose by the
Company).  The aggregate  Reference  Property Value of the Reference  Securities
attributable to any Debenture for which a Notice of Exchange is delivered to the
Exchange Agent or which is subject to purchase by the Company in accordance with
Section  208  shall  equal  the  sum of the  Reference  Property  Values  of the
Reference Property attributable to such Debenture.

         "Reference Securities" shall initially mean 7.5908 shares of Sprint PCS
Stock per Debenture, and after the date hereof shall be subject to adjustment in
accordance with Section 211.

         "Reference Securities Eligibility Date" shall mean April 19, 2002.

         "Reference  Share Offer" shall mean any tender offer or exchange  offer
made for 30% or more of the outstanding shares of a class or series of Reference
Securities   constituting   capital   stock  of  a  Reference   Company  or  any
consolidation, merger or statutory exchange involving a

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class or series of  Reference  Securities  of a  Reference  Company  in which an
election  is  given  to  holders  of  such   Reference   Securities  as  to  the
consideration to be received in the transaction. A "Reference Share Offer" shall
include a conversion or redemption by Sprint Corporation of less than all shares
of Sprint PCS Stock  pursuant to Article  Sixth,  Section 7.1 of its Articles of
Incorporation  or any  conversion  or redemption  by Sprint  Corporation  of all
shares of Sprint PCS Stock pursuant to Article Sixth, Section 7.1 or Section 7.2
of its Articles of  Incorporation in which a holder of Sprint PCS Stock is given
an election as to the consideration that he or she may receive.

         "Reference Share Offer  Adjustment" shall mean (a) an adjustment to the
Reference Property  attributable to each Debenture to include the portion of the
Average Transaction  Consideration received in a Reference Share Offer and (b) a
reduction in the number of Reference  Securities  attributable to each Debenture
immediately  prior  to the  expiration  of such  Reference  Share  Offer  by the
Reference Share Proportionate Reduction.

         "Reference  Share  Proportionate  Reduction" shall mean a proportionate
reduction  in the  number  of  Reference  Securities  of the  class or series of
Reference  Securities  which are the subject of the applicable  Reference  Share
Offer and included in the Reference  Property  attributable  to each  Debenture,
calculated in accordance with the following formula:

                                [OBJECT OMITTED]
where:

         R        = the fraction by which the number of Reference  Securities of
                  the class or series of  Reference  Securities  subject  to the
                  Reference Share Offer and  attributable to each Debenture will
                  be reduced;

         X        = the aggregate number of Reference Securities of the class or
                  series of Reference  Securities subject to the Reference Share
                  Offer accepted in the Reference Share Offer; and

         N        = the aggregate number of Reference Securities of the class or
                  series of Reference  Securities subject to the Reference Share
                  Offer  outstanding  immediately prior to the expiration of the
                  Reference Share Offer.

         "Regular Record Date" shall have the meaning set forth in Section
205(a).

         "Reorganization Event" shall have the meaning set forth in Section
211(d).

         "Securities  Act" shall mean the United States  Securities Act of 1933,
as amended.

         "Securities  Exchange  Act"  shall mean the  United  States  Securities
Exchange Act of 1934, as amended.

         "Senior  Indebtedness"  means the  principal of,  premium,  if any, and
interest  on, and any other  payment  due  pursuant  to,  any of the  following,
whether  outstanding  on the date the  Debentures  are issued or incurred by the
Company in the future:

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(a)                        all of the Company's indebtedness for money borrowed,
                           including any  indebtedness  secured by a mortgage or
                           other  lien  which is (1) given to secure all or part
                           of the  purchase  price of  property  subject  to the
                           mortgage or lien, whether given to the vendor of that
                           property  or to  another  lender or (2)  existing  on
                           property at the time the Company acquires it;

(b) all of the Company's indebtedness evidenced by notes,  debentures,  bonds or
other securities sold by the Company for money;

(c)                        all of the  Company's  lease  obligations  which  are
                           capitalized on the Company's books in accordance with
                           generally accepted accounting principles;

(d)                        all  indebtedness of others of the kinds described in
                           (a) and (b) above and all lease obligations of others
                           of the kind  described in (c) above that the Company,
                           in any  manner,  assume  or  guarantee  or  that  the
                           Company in effect guarantees  through an agreement to
                           purchase,  whether that  agreement is  contingent  or
                           otherwise; and

(e)                        all    renewals,    extensions   or   refundings   of
                           indebtedness  of the kinds  described  in (a), (b) or
                           (d) above and all renewals or extensions of leases of
                           the kinds described in (c) or (d) above;

unless, in the case of any particular indebtedness, lease, renewal, extension or
refunding,  the  instrument or lease creating or evidencing it or the assumption
or guarantee relating to it expressly  provides that such  indebtedness,  lease,
renewal,  extension  or  refunding  is not  superior  in right of payment to the
Debentures.

         The  Company's  senior  Debt  Securities   issued  under  the  Original
Indenture constitute Senior Indebtedness for purposes of the Debentures.

         Senior Indebtedness does not include:

(a)      any indebtedness of the Company or of any Restricted Subsidiary to the
Company or another Restricted Subsidiary;

(b) any guarantee by the Company or any Restricted Subsidiary of indebtedness of
the Company or another Restricted Subsidiary;

(c)                        any  accounts  payable  or other  liability  to trade
                           creditors  arising in the ordinary course of business
                           (including    guarantees   thereof   or   instruments
                           evidencing such liabilities);

(d)                        letters  of  credit,  performance  bonds and  similar
                           obligations   issued  in  favor  of  governmental  or
                           franchising   authorities   as  a  term  of  a  cable
                           television franchise or other governmental franchise,
                           license,  permit or authorization held by the Company
                           or any of its Subsidiaries;

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(e)                        debt securities  issued under the Original  Indenture
                           and designated  pursuant to the Original Indenture as
                           subordinated to Senior  Indebtedness  (including,  at
                           the date of this Third  Supplemental  Indenture,  the
                           Company's  Exchangeable  Subordinated  Debentures due
                           2029   (the   "PRIZES"),   and   the   Company's   3%
                           Exchangeable  Subordinated  Debentures  due 2030 (the
                           "Premium PHONES"), each of which rank pari passu with
                           the Debentures).

         "Special Cash Payment" shall have the meaning set forth in Section 212.

         "Sprint Corporation" shall mean Sprint Corporation, a Kansas
corporation.

         "Sprint  PCS  Stock"  shall  mean the  Sprint  Corporation  PCS  common
stock-Series 1, par value $1.00 per share.

         "Stated Maturity" shall have the meaning set forth in Section 204(a).

         "Trading  Day"  shall  mean a day on which a  Reference  Security,  the
Closing Price of which is being determined, (a) is not suspended from trading or
quotation  at the close of  business  on the  national  or  regional  securities
exchange,  the National  Market  System or  over-the-counter  market that is the
primary  market for the trading or quotation of that security and (b) has traded
or been quoted at least once on the  national or regional  securities  exchange,
the National Market System or over-the-counter market that is the primary market
for the trading or quotation of that security;  provided that, if such Reference
Security is not traded or quoted,  then  Business  Day shall be used in place of
Trading Day for such determination.

Section 102.      Section References.

         Each  reference  to a  particular  section  set  forth  in  this  Third
Supplemental  Indenture shall, unless the context otherwise  requires,  refer to
this Third Supplemental Indenture.

         Section 103.  Conflict with Original Indenture.

         To  the  extent  that  any  of  the  terms  set  forth  in  this  Third
Supplemental  Indenture or the  certificates  representing  the Debentures shall
conflict  with any of the  terms of the  Original  Indenture,  the terms of this
Third  Supplemental  Indenture and the certificates  representing the Debentures
shall be controlling with respect to the Debentures.

                                  ARTICLE TWO

                        TITLE AND TERMS OF THE SECURITIES

Section 201.      Title of the Securities.

         The title of the Securities of the series established hereby is the
"Exchangeable Subordinated Discount Debentures due 2020."

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Section 202.      Amount.

         The aggregate  Original  Principal Amount at Maturity of the Debentures
which may be  authenticated  and  delivered  under the  Indenture  is  initially
limited to $2,290,755,000 except for Debentures authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Debentures
pursuant  to  Section  2.07,  2.08,  2.09  or 9.04  of the  Original  Indenture;
provided,  however,  that the  series of  Securities  established  hereby may be
reopened,  without  the consent of the Holders of  Outstanding  Debentures,  for
issuance of additional Debentures.

Section 203.      Registered Securities.

         The certificates for the Debentures shall be Registered  Securities and
shall be in substantially  the form attached hereto as Exhibit A, and shall bear
the legends as are inscribed thereon.

Section 204.      Stated Maturity; Payment at Maturity; Notices; Changes to
Adjusted Principal Amount.

(a)      The Stated Maturity shall be April 19, 2020.

(b) The principal  amount  payable at Stated  Maturity of each  Debenture  shall
equal the Adjusted  Principal Amount of such Debenture on such date. Upon Stated
Maturity,  the Adjusted  Principal  Amount of each Debenture,  plus accrued cash
interest  payable in accordance  with Section 205(a) to but excluding the Stated
Maturity shall be due and payable.

(c)  In  calculating   the  Adjusted   Principal   Amount  as  of  any  date  of
determination,  the Adjusted Principal Amount on such date shall be equal to the
Issue  Price (i) plus the  amount of any  previous  accrual  of  Original  Issue
Discount, to but excluding such date of determination, and (ii) minus the amount
of any Special Cash Payment and Cash Reorganization  Event Distribution made, to
and  including  such  date of  determination.  In no event  shall  the  Adjusted
Principal Amount be less than zero.

(d) At least five  Business  Days prior to Stated  Maturity,  the Company  shall
deliver an Officers' Certificate to the Trustee which: (i) sets forth the amount
to be paid in  accordance  with  Section  204(b)  at  Stated  Maturity  for each
Debenture and for all Debentures then Outstanding,  (ii) sets forth a reasonably
detailed  calculation  of such amounts,  and (iii) directs the Trustee to adjust
its  records  accordingly  and to request the  Depositary  to adjust its records
accordingly.  At or prior to 10:00 a.m., New York City time, at Stated Maturity,
the Company  shall  deposit  with the Trustee or with a Paying Agent (or, if the
Company  is  acting  as its own  Paying  Agent,  segregate  and hold in trust as
provided in Section 3.03 of the Original Indenture) an amount in cash sufficient
to pay, in accordance with Section 204(b), the amount due on all Debentures that
are  Outstanding  at 5:00 p.m.,  New York City time,  on the date of such Stated
Maturity.

(e) In the event of an  acceleration  of maturity of the Debentures  pursuant to
Section  6.01 of the  Original  Indenture  (as  modified by Section 219 hereof),
there shall become immediately due and payable:

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(i)      in the case of an Event of Default specified in Section 6.01(a), (b) or
         (h), an amount equal to the sum of the Adjusted  Principal Amount as of
         the date of such  default and  accrued but unpaid cash  interest to but
         excluding the date of such default;

(ii)     in the case of an Event of Default  specified in Section  6.01(c),  the
         greater  of (A) the  Adjusted  Principal  Amount as of the date of such
         default plus accrued and unpaid cash interest to but excluding the date
         of such default and (B) the Reference  Property  Value of the Reference
         Property to be delivered upon exchange as if the Exchange Date were the
         date of such default;

(iii)    in the case of an Event of Default specified in Section 6.01(d) or (e),
         an amount equal to the sum of the Adjusted  Principal  Amount as of the
         date of such  declaration  and accrued but unpaid cash  interest to but
         excluding the date of such declaration; and

(iv)     in the case of an Event of Default specified in Section 6.01(f) or (g),
         an amount equal to the sum of the Adjusted  Principal  Amount as of the
         date of  occurrence  of such event and accrued but unpaid cash interest
         to but excluding the date of the occurrence of such event.

Section 205.      Cash Interest and Original Issue Discount; Option to Increase
Cash Interest Payments.

(a)      Cash Interest.

         The  Debentures  shall bear  interest in cash on each  Debenture at the
rate  of  1.0%  of the  Issue  Price  per  Debenture  per  annum  so long as the
Debentures are Outstanding.  Such cash interest shall accrue from April 19, 2000
or from the most recent Interest Payment Date to which interest has been paid or
provided  for, and shall be payable  semiannually  on April 19 and October 19 of
each year (each, an "Interest  Payment Date"),  commencing  October 19, 2000, to
the  Persons  in  whose  names  the  Debentures  (or  one  or  more  Predecessor
Securities)  are  registered  at the  close  of  business  on the  Business  Day
immediately  preceding  such  Interest  Payment Date  ("Regular  Record  Date").
Accrual of cash  interest  payable on each  Debenture  in  accordance  with this
Section  205(a) shall be  calculated  on the basis of a 360-day year composed of
twelve 30-day months and shall be  calculated  without  regard to changes in the
Adjusted Principal Amount. Cash interest payments may be increased in accordance
with Section 205(c) hereof.

(b)      Original Issue Discount.

(i)      For any Interest Period (or portion  thereof),  Original Issue Discount
         shall accrue on the Adjusted  Principal  Amount of each  Debenture,  as
         determined in accordance with Section 208(b)(iii) and (iv) below, in an
         amount equal to the excess (if an amount  greater than zero) of (A) the
         amount of  interest  accrued on such  Debenture  during  such  Interest
         Period (or portion thereof) that represents an annualized yield of 5.0%
         on the applicable  Adjusted Principal Amount of such Debenture over (B)
         the  amount of  accrued  cash  interest  for such  Interest  Period (or
         portion  thereof)  payable on each Debenture in accordance with Section
         205(a).

                                       10
<PAGE>

(ii)     Accrual of Original  Issue Discount shall be calculated on the basis of
         a 360-day year composed of twelve  30-day months and shall  commence on
         the Issue Date,  and shall cease to accrue on the  earliest of: (A) the
         date  on  which  such  Debenture  is no  longer  Outstanding;  (B)  the
         effective date of the Company's  election to increase  semiannual  cash
         interest  payments as provided in Section  205(c)  hereof;  and (C) the
         date on which cash interest  payable in accordance  with Section 205(a)
         represents  an  annualized  yield  of  5.0%  or  more  on the  Adjusted
         Principal Amount of such Debenture for the related Interest Period.

(iii)    As of any date of  determination,  the  applicable  Adjusted  Principal
         Amount for calculating  the amount of Original Issue Discount  accruing
         daily on each  Debenture  during the  related  Interest  Period (or any
         portion thereof), so long as no Adjusted Principal Amount Reduction has
         occurred during such Interest Period, will equal:

(A)      for any date of determination occurring during the initial Interest
Period, the Issue Price; or

(B)               for any date of determination  occurring during any subsequent
                  Interest Period, the Adjusted Principal Amount on the Interest
                  Payment Date on which such Interest Period begins.

(iv)     As of any date of  determination,  the  applicable  Adjusted  Principal
         Amount for calculating  the amount of Original Issue Discount  accruing
         daily on each  Debenture  during the  related  Interest  Period (or any
         portion  thereof) in which an Adjusted  Principal  Amount Reduction has
         occurred, will equal:

(A)               if such Interest Period (or a portion  thereof) is the initial
                  Interest Period, for any date of determination occurring prior
                  to such Adjusted Principal Amount Reduction, the Issue Price;

(B)               for  any  date of  determination  in any  subsequent  Interest
                  Period (or a portion thereof) occurring prior to such Adjusted
                  Principal Amount Reduction,  the Adjusted  Principal Amount on
                  the  Interest  Payment  Date on  which  such  Interest  Period
                  begins; and

(C)               for any date of determination in the initial or any subsequent
                  Interest Period (or a portion  thereof)  occurring on or after
                  such  Adjusted   Principal  Amount  Reduction,   the  Adjusted
                  Principal Amount on the date of such Adjusted Principal Amount
                  Reduction, after giving effect to such Adjusted Principal
                  Amount Reduction.

(c)      Option to Increase Cash Interest Payments.

(i) Increase in  Semiannual  Cash  Interest.  On and after April 19,  2005,  the
Company may elect, by delivery to the Trustee of a written notice on a date that
is no less than 20 calendar  days prior to the  effective  date of such election
(the effective  date of such  election,  the "Interest  Increase  Date"),  which
Interest Increase Date shall be an

                                       11
<PAGE>

Interest  Payment  Date,  to pay cash  interest  in lieu of  future  accrual  of
Original Issue Discount in accordance  with Section  205(b).  Such cash interest
shall accrue at a rate per annum on the Adjusted  Principal Amount per Debenture
(initially,  the Adjusted  Principal Amount on the Interest Increase Date) equal
to an amount representing an annualized yield of 5.0% on such Adjusted Principal
Amount.  Such cash interest shall accrue from the Interest Increase Date or from
the most recent Interest Payment Date thereafter to which interest has been paid
or duly provided for and shall be payable  semiannually on each Interest Payment
Date  after such  Interest  Increase  Date to  Holders of record at the  Regular
Record Date  immediately  preceding such Interest Payment Date. In the event the
Company  exercises  such  option,  interest  will be  computed on the basis of a
360-day  year  composed of twelve  30-day  months,  commencing  on the  Interest
Increase Date.

(ii)     Interest  Accrual  to  Cease.   The  Company's   election  to  increase
         semiannual  cash  interest  payments in  accordance  with this  Section
         205(c)  shall be  irrevocable.  In the  event  the  Company  elects  to
         exercise such option,  future  accrual of Original Issue Discount shall
         cease on and after the Interest Increase Date.

(iii)    Adjustments to Accrual.  In the event of an Adjusted  Principal  Amount
         Reduction  occurring  after the Interest  Increase Date, the applicable
         Adjusted  Principal  Amount for  calculating  cash interest  payable in
         accordance  with this Section  205(c) shall be determined in the manner
         described in Section 205(b)(iv);  provided, however, that cash interest
         shall not be  reduced  at any time to an  amount  less than 1.0% of the
         Issue  Price  per  Debenture  per  annum so long as such  Debenture  is
         Outstanding.

(iv)     Notice.  Not less than 20 calendar days prior to the Interest  Increase
         Date,  the Company  shall  deliver  notice to the Trustee in the manner
         provided for in the Original  Indenture and provide such notice through
         the Trustee to DTC for dissemination through the DTC broadcast facility
         in the Company's name and at the Company's expense, as to the Company's
         election to pay such cash  interest  in  accordance  with this  Section
         208(c). Such notice shall specify:

(A)      the interest rate per annum on the Debentures;

(B)      the Interest Payment Dates;

(C)      the related Regular Record Dates; and

(D) the Adjusted  Principal Amount of each Debenture as of the Interest Increase
Date.

(d)      Default Interest

                  If (i) any accrued cash interest  payable on each Debenture in
         accordance  with Section  205(a) or (c) or (ii) the Adjusted  Principal
         Amount of any  Debenture  or any  portion  of such  Adjusted  Principal
         Amount  on  any   Debenture,   is  not  paid  when  due  (whether  upon
         acceleration  pursuant to Section 6.01 of the Original Indenture,  upon
         any date set for payment of the  Redemption  Price  pursuant to Section
         207,  upon any date set for payment of the Purchase  Price  pursuant to
         Section 208, upon the date set for payment

                                       12
<PAGE>

         of the applicable  Adjusted Principal Amount plus accrued cash interest
         payable upon Stated Maturity or if the Reference  Property (and cash in
         lieu of fractional  shares or units) or cash in lieu thereof in respect
         of any exchange is not  delivered or paid when due),  then in each such
         case,  the overdue  amount shall bear  interest at the rate of 5.0% per
         annum,  which  interest  shall accrue from the date such overdue amount
         was due to the date payment of such amount, including interest thereon,
         has been made or duly provided for. All such interest  shall be payable
         upon demand.

Section 206.      Registration of Transfer and Exchange.

         The  Debentures  may be  surrendered  for  registration  of transfer or
exchange at the office or agency of the Company  maintained for such purposes in
The City of New York,  from time to time,  and the Company  hereby  appoints the
Trustee,  acting through its principal corporate trust office in The City of New
York  designated  from  time to time  for such  purpose,  as its  agent  for the
foregoing  purposes;  provided,  however,  that, (subject to Section 4.02 of the
Original Indenture) the Company may at any time remove the Trustee as its office
or agency in The City of New York designated for the foregoing  purposes and may
from time to time  designate  one or more  other  offices  or  agencies  for the
foregoing purposes and may from time to time rescind such designations.

Section 207.      Redemption of the Debentures.

(a) Optional  Redemption.  No sinking fund is provided for the  Debentures.  The
Debentures will be redeemable for cash at the option of the Company, in whole or
in part at any time or from time to time after  April 19,  2005,  on at least 20
calendar  days (but not more than 60 calendar  days) prior  notice to Holders of
the Debentures at a price per Debenture equal to the Adjusted  Principal  Amount
as of the date of redemption  specified in such notice (the  "Redemption  Date")
plus accrued and unpaid cash interest to but excluding such Redemption Date (the
"Redemption  Price").  Upon not less than 20 calendar days (but not more than 60
calendar days) prior to any Redemption Date, the Company shall deliver notice to
the Trustee in the manner  provided  for in the Original  Indenture  and provide
such  notice  through  the  Trustee  to DTC for  dissemination  through  the DTC
broadcast facility in the Company's name and at the Company's expense, as to the
Company's  election to redeem the  Debentures  in whole or in part.  Such notice
shall specify:

(i)      the related Redemption Date;

(ii)     the related Redemption Price;

(iii)    the  consideration  to be  delivered  upon any  exchange of  Debentures
         occurring  between the date of such  notice and the related  Redemption
         Date;

(iv)     the CUSIP number of any Debentures subject to redemption; and

(v) such other applicable  information specified in Section 3.03 of the Original
Indenture.

                                       13
<PAGE>

(b)  Interest  Accrual to Cease.  Once notice of  redemption  has been given and
funds  are  irrevocably  deposited  with the  Trustee,  cash  interest  and,  if
applicable,  Original Issue Discount,  on the Debentures will cease to accrue on
and after the  Redemption  Date and all rights of the Holders of the  Debentures
called for redemption will cease, except for the right of Holders to receive the
Redemption Price (but without interest on such Redemption Price).

(c) Notices.  In case of any redemption,  the Company shall deliver an Officers'
Certificate  to the  Trustee  not less  than  five  Business  Days  prior to the
Redemption  Date which sets forth (i) the  Redemption  Price to be paid for each
Debenture  called for redemption on such  Redemption Date and (ii) the aggregate
amount payable for all Debentures called for redemption on such Redemption Date.
Such notice shall be accompanied by an additional  Officers'  Certificate and an
Opinion of  Counsel to the effect  that such  redemption  will  comply  with the
conditions  set forth in the  Original  Indenture  and this  Third  Supplemental
Indenture.

Section 208.      Purchase of the Debentures at Option of Holder.

(a) The  Debentures  shall be purchased by the Company in  accordance  with this
Section 208 at a price equal to the Adjusted  Principal  Amount per Debenture as
of any Purchase Date,  plus any accrued and unpaid cash interest  thereon to but
excluding such Purchase Date (the "Purchase Price"), at the option of the Holder
thereof, upon:

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

(A) the CUSIP  number and  certificate  number(s) of the  Debenture(s)  that the
Holder will deliver to be purchased;

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

(C)               that such  Debentures  shall be purchased on the Purchase Date
                  pursuant to the terms and  conditions  specified in this Third
                  Supplemental Indenture and in the Debentures; and

(D)               if the Company  elects  pursuant to Section  208(b) to pay the
                  Purchase  Price on such Purchase Date, in whole or in part, in
                  Reference Property,  but such portion of the Purchase Price to
                  be paid in Reference Property is ultimately to be paid in cash
                  because any condition in Section 210(a) is not satisfied, such
                  Holder elects (1) to withdraw such Purchase  Notice as to some
                  or all of the  Debentures  to which it  relates  (stating  the
                  aggregate   Original   Principal   Amount  at   Maturity   and
                  certificate  numbers  of  the  Debentures  as  to  which  such
                  withdrawal  shall relate) or (2) to receive cash in respect of
                  the Purchase Price for all Debentures subject to such Purchase
                  Notice; and

                                       14
<PAGE>

(ii)     delivery of such  Debentures  prior to, on or after the  Purchase  Date
         (together with all necessary  endorsements)  to the Paying Agent at the
         offices of the Paying Agent, such delivery being a condition to receipt
         by the Holder of the Purchase Price therefor;  provided,  however, that
         such Purchase  Price shall be so paid pursuant to this Section 208 only
         if  the  Debentures  so  delivered  conform  in  all  respects  to  the
         description thereof in the related Purchase Notice.

         If a Holder, in such Holder's Purchase Notice and in any written notice
of withdrawal  delivered by such Holder pursuant to the terms of Section 208(g),
fails to indicate such Holder's choice with respect to the election set forth in
clause (D) of  Section  208(a)(i)  above,  such  Holder  shall be deemed to have
elected to receive cash in respect of the Purchase  Price  otherwise  payable in
Reference Property.

         The Company shall  purchase from the Holder  thereof,  pursuant to this
Section  208, a portion  of a  Debenture  if the  Original  Principal  Amount at
Maturity of such portion is $1,000 or an integral multiple of $1,000. Provisions
of the Original  Indenture and this Third  Supplemental  Indenture that apply to
the purchase of all of a Debenture also apply to the purchase of such portion of
such Debenture.

         Notwithstanding  anything herein to the contrary, any Holder delivering
to the Trustee the Purchase  Notice  contemplated  by this Section  208(a) shall
have the right to  withdraw  at any time prior to the close of  business  on the
Purchase Date such Purchase Notice by delivery of a written notice of withdrawal
to the Trustee in accordance with Section 208(g).

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

(b) Company's Right to Elect Manner of Payment of Purchase Price. The Debentures
to be purchased  pursuant to Section  208(a) may be paid for, at the election of
the Company,  in cash or Reference  Property,  or in any combination of cash and
Reference Property, subject to the conditions set forth in this Section 208. The
Company  shall  designate,  in the Company  Notice,  whether  the  Company  will
purchase the  Debentures for cash or Reference  Property,  and, if a combination
thereof, the percentages of the Purchase Price of Debentures in respect of which
it will pay in cash or Reference  Property;  provided  that the Company will pay
cash for fractional  units or interests of Reference  Property.  For purposes of
determining  the  existence  of potential  fractional  units or  interests,  all
Debentures  subject  to  purchase  by the  Company  held by a  Holder  shall  be
considered  together  (no  matter  how  many  separate  certificates  are  to be
presented).  Each Holder whose Debentures are purchased pursuant to this Section
208 shall receive the same  percentage of cash or Reference  Property in payment
of the  Purchase  Price for such  Debentures,  except (i) as provided in Section
208(d)  with  regard  to the  payment  of cash in lieu of  fractional  units  or
interests of Reference Property and (ii) in the event that the Company is unable
to purchase the Debentures of a Holder or Holders for Reference Property because
any condition in Section 210(a) is not satisfied, the Company shall purchase the
Debentures  of such Holder or Holders  for cash.  The Company may not change its
election with respect to the  consideration  (or  components or  percentages  of
components  thereof)  to be paid once the Company  has given  notice  thereof to
Holders except pursuant to Section 208(d).

                                       15
<PAGE>

         At least five Business Days before the Company  Notice Date (as defined
below),  the  Company  shall  deliver an  Officers'  Certificate  to the Trustee
specifying:

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

(ii)     the information required by Section 208(e);

(iii) that the conditions to such manner of payment set forth in Section 210 (a)
have or will be complied with; and

(iv)  whether  the Company  desires  the Trustee to give the notice  required by
Section 208(e).

(c) Purchase with Cash. On the Purchase Date, at the option of the Company,  the
Original  Principal  Amount at Maturity of the  Debentures in respect of which a
Purchase  Notice  pursuant  to Section  208(a) has been  given,  or a  specified
percentage  thereof,  may be  purchased  by the  Company  with cash equal to the
aggregate Purchase Price of such Debentures.

(d) Payment by Reference  Property.  On each Purchase Date, at the option of the
Company,  the Original Principal Amount at Maturity of the Debentures in respect
of which a Purchase  Notice  pursuant  to Section  208(a) has been  given,  or a
specified percentage thereof, may be purchased by the Company by the delivery of
a fraction of the Reference  Property then  attributable to the Debentures equal
to the quotient obtained by dividing (i) the amount of cash to which the Holders
would have been  entitled had the Company  elected to pay all or such  specified
percentage, as the case may be, of the Purchase Price of such Debentures in cash
by (ii) the Reference Property Value of such Reference Property,  subject to the
next succeeding paragraph.

         The Company will not issue  fractional  units or interests of Reference
Property in payment of the Purchase Price.  Instead the Company will pay cash in
an amount equal to the Reference  Property Value of any such fractional units or
interests. The Reference Property Value of a fraction of such units or interests
shall be determined by multiplying the Reference  Property Value for purposes of
Section  208(d)(ii)  by such  fraction  and  rounding the product to the nearest
whole cent, with one-half cent being rounded upward.  It is understood that if a
Holder elects to have more than one Debenture purchased,  the Reference Property
to be delivered  shall be based on the aggregate  Original  Principal  Amount at
Maturity of  Debentures to be  purchased.  Upon a payment by Reference  Property
pursuant to the terms hereof,  that portion of accrued  Original  Issue Discount
attributable to the period from the Issue Date to the Purchase Date with respect
to any purchased Debenture shall not be cancelled, extinguished or forfeited but
rather  shall be deemed paid in full to the Holder  through the  delivery of the
Reference Property in exchange for the Debenture being purchased pursuant to the
terms  hereof,  and the  Reference  Property  Value of such  Reference  Property
(together  with any cash  payments in lieu of  fractional  units or interests of
Reference Property) shall be treated as issued, to the extent thereof,  first in
exchange for the Original Issue Discount  accrued through the Purchase Date, and
the balance,  if any, of the Reference Property Value of such Reference Property
shall be  treated as issued in  exchange  for the Issue  Price of the  Debenture
being purchased pursuant to the provisions hereof.

                                       16
<PAGE>

(e) Notice of Election.  The Company shall deliver  notices of its election (the
"Company Notice") to purchase with cash or Reference Property or any combination
thereof to the Holders (and to beneficial owners as required by applicable law).
The Company  shall deliver  notice to the Trustee in the manner  provided for in
the Original  Indenture  and provide such notice  through the Trustee to DTC for
dissemination  through the DTC broadcast  facility in the Company's  name and at
the Company's  expense;  provided,  however,  that in all cases the text of such
notice shall be prepared by the Company.

         The Company  Notice shall be sent to Holders (and to beneficial  owners
as required by applicable law) on a date not less than 20 Business Days prior to
the  Purchase  Date  (such  date not less  than 20  Business  Days  prior to the
Purchase  Date being herein  referred to as the  "Company  Notice  Date").  Such
notices  shall  state the  manner of  payment  elected  and  shall  contain  the
following information:

(i)      In the event the Company has elected to pay the Purchase  Price (or any
         specified percentage thereof) with Reference Property, the notice shall
         state that each Holder will receive Reference Property with a Reference
         Property Value  determined as of a specified date prior to the Purchase
         Date equal to such  specified  percentage of the Purchase  Price of the
         Debentures  held by such Holder  (except for any cash amount to be paid
         in lieu of fractional units or interests);

(ii) In any case,  each notice  shall  include a form of  Purchase  Notice to be
completed by the Holder and shall state:

(A)      the Purchase Price;

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

(C)               that  Debentures as to which a Purchase  Notice has been given
                  may be exchanged into Reference  Property at any time prior to
                  the close of business on the applicable  Purchase Date only if
                  the   applicable   Purchase   Notice  has  been  withdrawn  in
                  accordance   with  the  terms  of  this   Third   Supplemental
                  Indenture;

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

(E)               that  the  Purchase  Price  for any  Debenture  as to  which a
                  Purchase  Notice has been given and not withdrawn will be paid
                  no later than the tenth  Business Day  immediately  succeeding
                  the Purchase Date;

(F) the procedures the Holder must follow to exercise  rights under this Section
208 and a brief description of those rights;

(G)               briefly,  the exchange rights of the Holders of the Debentures
                  and that Holders who want to exchange  Debentures must satisfy
                  the requirements set forth in Section 209 hereof; and

                                       17
<PAGE>

(H)               the procedures for withdrawing a Purchase  Notice  (including,
                  without limitation,  for a conditional  withdrawal pursuant to
                  the terms of Section 208(a)(i)(D)).

          Upon  determination of the Reference  Property,  if applicable,  to be
delivered in respect of the Purchase  Price for each $1,000  Original  Principal
Amount at  Maturity  of  Debentures,  the Company  will  publish  notice of such
determination  and the  related  Reference  Property  Value in The  Wall  Street
Journal or another daily newspaper of national circulation.

(f)  Procedure  Upon  Purchase.  The Company shall deposit cash (in respect of a
cash purchase  under Section  208(c) or for  fractional  units or interests,  as
applicable) or Reference  Property,  or any combination  thereof, as applicable,
with the Trustee or Paying Agent prior to 12:00 p.m., New York City time, on the
fifth Business Day following the Purchase Date,  sufficient to pay the aggregate
Purchase Price of all  Debentures to be purchased  pursuant to this Section 208.
As soon as  practicable  after the later of the Purchase  Date and the date such
Debentures  are  surrendered  to the Paying Agent,  the Company shall deliver to
each Holder entitled to receive Reference Property through the Paying Agent such
Reference Property and cash in lieu of any fractional units or interests.

(g) Payment of Purchase Price;  Withdrawal of Purchase  Notice.  Upon receipt by
the Paying Agent of the Purchase Notice, the Holder of the Debentures in respect
of which such Purchase  Notice was given shall  (unless such Purchase  Notice is
withdrawn as specified in the following two  paragraphs)  thereafter be entitled
to receive  solely the  Purchase  Price with  respect to such  Debentures.  Such
Purchase Price shall be paid to such Holder no later than the tenth Business Day
following  the  Purchase  Date with  respect  to such  Debenture  (provided  the
conditions in Section 210(a),  have been  satisfied).  If the Paying Agent holds
cash  or  Reference  Property  sufficient  to pay  the  Purchase  Price  of such
Debentures,  plus  accrued  cash  interest,  if any, on the tenth  Business  Day
immediately  succeeding  the Purchase  Date,  such  Debentures  will cease to be
Outstanding  and cash interest and Original  Issue Discount will cease to accrue
and will be deemed paid,  whether or not such  Debentures  are  delivered to the
Paying Agent, and all other rights of the related Holders shall terminate (other
than the right to receive the Purchase  Price,  plus accrued cash  interest,  if
any,  upon  delivery  of such  Debentures).  Debentures  in  respect  of which a
Purchase  Notice has been given by the Holder  thereof may not be exchanged into
Reference  Property on or after the date of the delivery of such Purchase Notice
unless such Purchase Notice has first been validly withdrawn as specified in the
following two paragraphs.

         A Purchase  Notice  may be  withdrawn  by means of a written  notice of
withdrawal  delivered  to the office of the Paying Agent at any time on or prior
to the Purchase Date specifying:

(i)      the CUSIP number and the certificate number(s) of the Debenture(s) in
respect of which such notice of withdrawal is being
         submitted;

(ii)     the aggregate  Original  Principal Amount at Maturity of the Debentures
         with respect to which such notice of withdrawal is being submitted; and

                                       18
<PAGE>

(iii)    the aggregate  Original  Principal Amount at Maturity,  if any, of such
         Debentures  which remain  subject to the original  Purchase  Notice and
         which has been or will be delivered for purchase by the Company.

         A written notice of withdrawal of a Purchase  Notice may be in the form
set forth in the preceding  paragraph or may be in the form of (i) a conditional
withdrawal  contained  in a  Purchase  Notice  pursuant  to the terms of Section
208(a)(i)(D)  or (ii) a conditional  withdrawal  containing the  information set
forth in Section  208(a)(i)(D)  and the  preceding  paragraph and contained in a
written  notice of withdrawal  delivered to the Paying Agent as set forth in the
preceding paragraph.

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

(h) Covenant to comply with  Securities  Laws upon  Purchase of  Debentures.  In
connection  with any offer to  purchase or  purchase  of  Debentures  under this
Section 208,  the Company  shall (i) comply with Rule 13e-4 and Rule 14e-1 under
the Exchange Act, if  applicable,  (ii) file the related  Schedule 13E-4 (or any
successor schedule,  form or report) under the Exchange Act, if applicable,  and
(iii) otherwise comply with all Federal and state securities laws regulating the
offer and  delivery of  Reference  Securities  upon  purchase of the  Debentures
(including  positions of the United States  Securities  and Exchange  Commission
under applicable  no-action  letters) so as to permit the rights and obligations
under this Section 208 to be  exercised in the time and in the manner  specified
herein.

(i)  Repayment to the Company.  The Trustee and the Paying Agent shall return to
the Company, upon written request, any cash or Reference Property, together with
interest on such cash as hereinafter provided and dividends and distributions on
such  Reference  Property,  if any,  held by them for the  payment of a Purchase
Price of the  Debentures  that remain  unclaimed  as  provided  in the  Original
Indenture;  provided,  however,  that to the extent that the aggregate amount of
cash or  Reference  Property  deposited  by the  Company  in respect of any such
Purchase  Price  exceeds  the  aggregate  Purchase  Price of the  Debentures  or
portions thereof to be purchased, then promptly after the Business Day following
the payment of such Purchase Price to the applicable Holders,  the Trustee shall
return any such  excess to the Company  together  with  interest as  hereinafter
provided or dividends,  if any, thereon.  Any cash deposited with the Trustee or
with the Paying Agent pursuant to this Section 208 hereof,  shall be invested by
the Trustee or Paying Agent,  as applicable,  in short term  obligations  of, or
fully guaranteed by, the United States of America, or commercial paper rated A-1
or  better by  Standard  and  Poor's  Corporation  or P-1 or  better by  Moody's
Investors Service, Inc. as specifically directed in

                                       19
<PAGE>

writing by the Company.  If the Company  fails to so direct  Trustee in writing,
Trustee may invest any cash deposited  with it in money market funds  (including
funds  of  the   Trustee  and  its   affiliates   for  which  they  may  receive
compensation).  Interest  earned  on such  investments  shall be  repaid  to the
Company pursuant to this Section 208(i).  Except as provided for in this Section
208(i),  the  Trustee  shall be under no  liability  for  interest  on any money
received by it pursuant hereto.

Section 209.      Exchange of the Debentures.

(a) As specified below, each Debenture will be exchangeable at the option of the
Holder at any time (except as otherwise  provided in  subsection  (f) below) for
the Reference Property attributable to that Debenture.

(b) The Company shall pay 100% of the Reference  Property  attributable  to each
Debenture,  only in cash, for all exchanges  made prior to the Reference  Shares
Eligibility  Date.  On and after the  Reference  Shares  Eligibility  Date,  the
Company may, at its option,  (i) pay 100% of the Reference Property Value of the
Reference  Property  attributable  to each  Debenture in cash,  (ii) deliver the
Reference Property attributable to such Debenture or (iii) deliver a combination
of  Reference  Property  and cash.  Such  payment  or  delivery  will be made as
promptly as  practicable,  but in any event within ten  Business  Days after the
relevant  Exchange  Date.  The Company  shall notify the  Exchange  Agent of its
election to pay cash or deliver  Reference  Property,  or a  combination  of the
foregoing,  by no later than 9:30 a.m.,  New York City time,  on the Trading Day
immediately  succeeding the  applicable  Exchange Date. The Exchange Agent shall
notify an exchanging Holder of the Company's  election under this Section 209(b)
prior to 10:00 a.m., New York City time, on the second  Trading Day  immediately
succeeding the applicable Exchange Date.

(c) To exchange a  Debenture  a Holder must (i) in the case of a Debenture  held
through the Depositary, surrender such Debenture for exchange through book-entry
transfer  into the account of the Exchange  Agent,  transmit an agent's  message
requesting such exchange and comply with such other procedures of the Depositary
as may be  applicable  in the  case of an  exchange  and  (ii) in the  case of a
Debenture held in  certificated  form, (A) complete and manually sign the Notice
of Exchange  attached to the  Debenture (or complete and sign a facsimile of the
Notice of Exchange)  and deliver such Notice of Exchange to the Exchange  Agent,
(B)  surrender  the  Debenture to the Exchange  Agent,  (C) furnish  appropriate
endorsements  and transfer  documents,  if required by the Exchange  Agent,  the
Company or the Trustee and (D) pay any transfer or similar tax, if required.  An
exchange shall be deemed to have been effected at 5:00 p.m., New York City time,
on the  Exchange  Date.  The delivery of a Notice of Exchange or, in the case of
book-entry,  an agent's message  requesting  exchange,  shall be irrevocable.  A
Holder may  exchange a portion of its  Debentures  only if the portion is $1,000
Original Principal Amount at Maturity or an integral multiple thereof. Following
the Exchange  Date for an exchange of  Debentures,  the accrual of cash interest
and  Original  Issue  Discount  shall  cease and all rights of the  Holder  with
respect to such Debentures  shall cease,  except for the right of such Holder to
receive the  consideration  specified in Section  209(b) (but  without  interest
thereon).

                                       20
<PAGE>

(d) As soon as practicable on each Trading Day following receipt by the Exchange
Agent of  notification  from DTC that DTC has received an agent's message from a
DTC  participant  electing to exercise its  exchange  option with respect to its
Debentures,  and  delivery  of such  Debentures  into the  Exchange  Agent's DTC
participant  account,  or following receipt of a complete manually signed Notice
of Exchange and receipt of certificated  Debentures from a Holder,  the Exchange
Agent shall notify the Company of the  aggregate  Original  Principal  Amount at
Maturity of Debentures  which has been  tendered.  When the  Reference  Property
Value has been determined, the Company shall deliver an Officers' Certificate to
the Trustee setting forth the exact amount to be paid or the amount of Reference
Property to be delivered to the  tendering  Holder and shall deposit such amount
with the  Exchange  Agent.  Upon  receipt of such  payment or delivery  from the
Company,  the  Exchange  Agent shall pay DTC as soon as  practicable  or, in the
cases of Debentures that are held in  certificated  form, as directed in writing
by the tendering Holder.

(e) On exchange of a Debenture, that portion of accrued and unpaid cash interest
and Original Issue Discount  attributable to the period from the Issue Date (or,
in the case of cash  interest,  the date on which interest was last paid or duly
provided for) to the Exchange Date with respect to the exchanged Debenture shall
not be cancelled,  extinguished  or forfeited,  but rather shall be deemed to be
paid in full to the Holder thereof through delivery of the Reference Property in
exchange for the Debenture being exchanged pursuant to the terms hereof, and the
Reference  Property  (together  with any cash payment in lieu of any  fractional
units or interests of such Reference  Property) shall be treated as a repayment,
to the extent  thereof,  first in exchange  for the cash  interest  and Original
Issue Discount  accrued  through the Exchange Date, and the balance,  if any, of
such  Reference  Property (and any such cash payment) shall be treated as issued
in exchange for the Issue Price of the Debenture being exchanged pursuant to the
provisions hereof.

(f) The  right  to  exchange  Debentures  pursuant  to this  Section  209  shall
terminate at 5:00 p.m., New York City time: (i) in the case of Stated  Maturity,
on the Trading Day immediately preceding Stated Maturity; (ii) in the case of an
optional  redemption in accordance with Section 207, at the close of business on
the Redemption Date,  provided,  that any such  termination  shall only apply to
Debentures  that  have  been  called  for  redemption;  and (iii) in the case of
purchase by Company in accordance  with Section 208, at the close of business on
the related Purchase Date, provided,  that any such termination shall only apply
to Debentures  that have been tendered for purchase as of such Purchase Date and
not withdrawn.

(g) If more than $5,000,000  aggregate  Original Principal Amount at Maturity of
Debentures  are tendered for exchange on any given date,  the Company shall give
notice of such event to the Trustee and the Trustee shall give notice thereof to
DTC for dissemination  through the DTC broadcast  facility in the Company's name
and at the Company's expense.

Section 210.      Distributions of Reference Securities.

(a) The Company's  right to deliver  Reference  Securities  shall be conditioned
upon:

(i)      the registration of the Reference  Securities to be delivered under the
         Securities  Act and the  Securities  Exchange  Act,  in each  case,  if
         required; and

                                       21
<PAGE>

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

If such  conditions are not satisfied prior to or on any date of payment and the
Company  elected to satisfy its  obligations  under the  Debentures  through the
delivery of  Reference  Securities  in respect of any  Reference  Property,  the
Company shall pay, without further notice, the applicable amount due in cash.

(b) The Company  will not issue a  fractional  units or  interests  of Reference
Property upon exchange or purchase by the Company of a Debenture.  Instead,  the
Company will deliver cash for the Reference  Property  Value of such  fractional
unit or interest.

(c) The Company  will pay any and all  documentary,  stamp,  transfer or similar
taxes that may be payable in respect of the  transfer  and delivery of Reference
Securities  or any  securities  delivered  in  connection  with the  delivery of
Reference Property pursuant hereto;  provided,  however,  that the Company shall
not be  required  to pay any such tax which may be  payable  in  respect  of any
transfer  involved  in  delivery  of such  property to a name other than that in
which the Debentures were registered,  and no such transfer or delivery shall be
made  unless  and until the  Person  requesting  such  transfer  has paid to the
Company the amount of any such tax, or has  established,  to the satisfaction of
the Company, that such tax has been paid.

(d) The Company hereby  warrants that upon delivery of any Reference  Securities
or any  securities  delivered  in  connection  with the  delivery  of  Reference
Property  pursuant  hereto,  the Holder of a Debenture  shall receive all rights
held by the Company in the  Reference  Securities or securities to be delivered,
free and clear of any and all liens,  claims,  charges and  encumbrances,  other
than any liens,  claims,  charges  and  encumbrances  which may have been placed
thereon by the prior owner thereof prior to the time acquired by the Company. In
addition,  the  Company  further  warrants  that  any  Reference  Securities  or
securities to be delivered hereunder shall be free of any transfer  restrictions
under federal or state  securities laws (other than such as are  attributable to
any Holder's  status as an affiliate of the issuer of such Reference  Securities
or securities).

Section 211.      Adjustment of Reference Property.

(a)      Adjustment for Subdivisions, Splits, Combinations or Reclassifications.
If an issuer of a Reference Security shall:

(i)      subdivide or split the outstanding units of such Reference Security
into a greater number of units;

(ii) combine the  outstanding  units of such  Reference  Security into a smaller
number of units; or

(iii) issue by reclassification of units of such Reference Security any units of
another security of such issuer;

then,  in any such event,  the  Reference  Property  shall be adjusted to add or
substitute the number of units of

                                       22
<PAGE>

such Reference  Security  and/or other security of such issuer which a holder of
units of such  Reference  Security  would have owned or been entitled to receive
immediately   following  any  event   described  above  had  such  holder  held,
immediately prior to such event, the number of units of such Reference  Security
constituting  part of the Reference  Property  immediately  prior to such event.
Each such adjustment shall become effective immediately after the effective date
for such subdivision,  split,  combination or reclassification,  as the case may
be. Each such adjustment shall be made successively.

(b)  Adjustment  for Issuance of Certain  Rights or Warrants.  If an issuer of a
Reference  Security  shall  issue  rights or  warrants  to all  holders  of such
Reference  Security entitling them, for a period expiring prior to the fifteenth
calendar day following the Stated Maturity,  to subscribe for or purchase any of
its  securities or other  property  (other than rights to purchase units of such
Reference  Security  pursuant to a plan for the  reinvestment  of  dividends  or
interest),  then in each such case, the Reference  Property shall be adjusted to
include  an  amount  in cash  equal  to the fair  market  value  (determined  as
described  below),  as of the fifth  Business  Day  (except as  provided  below)
following   the  date  on  which  such  rights  or  warrants   are  received  by
securityholders  entitled  thereto (the "Receipt  Date"),  of each such right or
warrant  multiplied  by the product of (A) the number of such rights or warrants
issued for each unit of such  Reference  Security and (B) the number of units of
such Reference Security  constituting part of the Reference Property on the date
of issuance  of such rights or  warrants,  immediately  prior to such  issuance,
without interest  thereon.  For purposes of this subsection (b), the fair market
value of each such right or warrant shall be determined by the Company and shall
be the quotient of (x) the highest net bid, as of approximately  10:00 A.M., New
York City time,  on the fifth  Business  Day  following  the  Receipt  Date (for
settlement three Business Days later), by a recognized  securities dealer in The
City of New York  selected by or on behalf of the  Company  (from three (or such
fewer number of dealers as may be providing such bids) such  recognized  dealers
selected  by or on behalf of the  Company),  for the  purchase  by such  quoting
dealer of the  number of rights or  warrants  (the  "Aggregate  Number")  that a
holder of such  Reference  Security would receive if such holder held, as of the
record date for determination of stockholders entitled to receive such rights or
warrants,  a number of units of such Reference  Security equal to the product of
(1) the aggregate  number of Debentures then  Outstanding as of such record date
and (2) the number of units of such Reference Security  constituting part of the
Reference  Property,  divided by (y) the Aggregate Number.  Each such adjustment
shall become  effective on the fifth  Business Day following the Receipt Date of
such rights or  warrants.  If for any reason the Company is unable to obtain the
required bid on the fifth  Business Day  following  the Receipt  Date,  it shall
attempt to obtain such bid at  successive  intervals of three months  thereafter
and on the third  Trading  Day prior to the  Exchange  Date  until it is able to
obtain the  required  bid.  From the date of issuance of such rights or warrants
until the required bid is obtained,  the  Reference  Property  shall include the
number  of such  rights  or  warrants  issued  for each  unit of such  Reference
Security   multiplied  by  the  number  of  units  of  such  Reference  Security
constituting  part of the  Reference  Property  on the date of  issuance of such
rights or  warrants,  immediately  prior to such  issuance,  and such  rights or
warrants  constituting  part of the  Reference  Property  shall  be  deemed  for
purposes of the  definition of Reference  Property Value and this Section 211 to
have a fair market value of zero.

(c) Adjustment for Distributions. If an issuer of a Reference Security shall pay
a dividend or make a distribution  to all holders of such Reference  Security of
cash, securities or other property (excluding any cash dividend on any Reference
Security consisting of capital

                                       23
<PAGE>

stock that does not constitute an  Extraordinary  Cash  Dividend,  excluding any
payment of  interest  on any  Reference  Security  consisting  of an evidence of
indebtedness and excluding any dividend or distribution  described in subsection
(a) or (b)  above) or shall  issue to all  holders  of such  Reference  Security
rights or warrants to subscribe  for or purchase any of its  securities or other
property  (excluding any rights or warrants referred to in subsection (b) above)
(any of the foregoing being referred to herein as "Distributed Assets"), then in
each such case, the Reference  Property  shall be adjusted to include,  from and
after such dividend,  distribution or issuance,  (x) in respect of that portion,
if any,  of the  Distributed  Assets  consisting  of cash,  the  amount  of such
Distributed  Assets  consisting of cash received for each unit of such Reference
Security   multiplied  by  the  number  of  units  of  such  Reference  Security
constituting  part of the  Reference  Property  on the  date  of such  dividend,
distribution or issuance,  immediately  prior to such dividend,  distribution or
issuance, without interest thereon, plus (y) in respect of that portion, if any,
of the  Distributed  Assets  which are other than cash,  the number or amount of
each type of  Distributed  Assets other than cash  received with respect to each
unit of such  Reference  Security  multiplied  by the  number  of  units of such
Reference  Security  constituting part of the Reference  Property on the date of
such dividend,  distribution  or issuance,  immediately  prior to such dividend,
distribution or issuance.

(d) Adjustment for Consolidation,  Merger or Other Reorganization  Event. In the
event of (i) any  consolidation  or merger of a Reference  Company  with or into
another entity (other than a merger or consolidation in which such issuer is the
continuing   corporation  and  in  which  the  Reference  Security   outstanding
immediately  prior to the merger or  consolidation  is not  exchanged  for cash,
securities or other property of such Reference Company or another entity),  (ii)
any statutory  exchange of securities of a Reference Company with another entity
(other  than  in  connection   with  a  merger  or  acquisition)  or  (iii)  any
liquidation,  dissolution,  winding  up or  bankruptcy  of a  Reference  Company
(excluding any  distribution  in such event referred to in subsection (c) above)
(any such  event  described  in clause  (i),  (ii) or (iii),  a  "Reorganization
Event"), the Reference Property shall be adjusted to include, from and after the
effective date for such Reorganization  Event, in lieu of the number of units of
such Reference Security  constituting part of the Reference Property immediately
prior to the effective date for such Reorganization  Event, the amount or number
of any  cash,  securities  and/or  other  property  owned  or  received  in such
Reorganization  Event  with  respect  to each  unit of such  Reference  Security
multiplied by the number of units of such Reference  Security  constituting part
of the  Reference  Property  immediately  prior to the  effective  date for such
Reorganization Event.

         For purposes of this Section 211(d),  (i) a conversion or redemption by
Sprint  Corporation of all shares of Sprint PCS Stock pursuant to Article Sixth,
Section 7.1 of its Articles of Incorporation  shall be deemed a consolidation or
merger and (ii) a redemption by Sprint  Corporation  pursuant to Article  Sixth,
Section 7.2 of its Articles of Incorporation of all of the outstanding shares of
Sprint  PCS  Stock in  exchange  for  common  stock of one or more  wholly-owned
subsidiaries that collectively hold all of the assets and liabilities attributed
to its PCS Group  shall be deemed a  statutory  exchange of shares of Sprint PCS
Stock for shares of common stock of the  relevant  subsidiary  or  subsidiaries;
provided,  however,  that if there is an election given to holders of Sprint PCS
Stock in connection  with any such  conversion or  redemption,  the  transaction
shall be deemed a Reference Share Offer.

                                       24
<PAGE>

(e) Adjustment  for Reference  Share Offers.  In the event of a Reference  Share
Offer with respect to the Reference  Property is made,  the  Reference  Property
shall be adjusted by the Reference Share Offer Adjustment.

(f) Adjustment for Cash Reorganization  Event  Distributions.  In the event of a
Cash Reorganization Event, the Reference Property attributable to each Debenture
shall  be  reduced  by the  amount  of the  related  Cash  Reorganization  Event
Distribution to be paid in respect of each Debenture  effective on the date such
Cash Reorganization Event Distribution is made.

Section 212.      Special Cash Payments.

(a) At any time,  the Company may elect on any Interest  Payment Date,  upon not
less than 20 calendar days prior written notice in the manner provided below, to
make one or more payments in cash ("Special Cash Payments"), pro rata to Holders
of record on the  fifteenth  day  (whether  or not a Business  Day)  immediately
preceding the effective date of an election (which  effective date shall be such
payment date), of all or part of the Adjusted Principal Amount of the Debentures
as of the date  immediately  preceding the effective date of such election.  Any
such election shall be irrevocable.

(b) Any Special  Cash  Payment  made with  respect to the  Debentures  shall not
constitute  a  redemption  of the  Debentures,  in whole or in part,  but  shall
represent  payment of accrued  Original  Issue  Discount  and, to the extent any
Special  Cash  Payment  amount  exceeds  the  amount of accrued  Original  Issue
Discount on the Debentures, such amount shall represent a repayment of the Issue
Price in whole or in part.

(c) Any Special  Cash  Payment  made with  respect to the  Debentures  shall not
impair a Holder's rights to exchange such Holder's Debenture pursuant to Section
209 hereof nor shall any Special  Cash  Payment  adjust the  Reference  Property
attributable to the Debentures.

(d) Not  less  than 20  calendar  days  prior to the  date of any  Special  Cash
Payment,  the Company shall deliver notice to the Trustee in the manner provided
for in the Original Indenture and provide such notice through the Trustee to DTC
for dissemination  through the DTC broadcast  facility in the Company's name and
at the Company's expense, as to the Company's election to make such Special Cash
Payment. Such notice shall specify:

(i)      the amount of the related Special Cash Payment;

(ii)     the related payment date (which must be a Business Day);

(iii)    the related record date; and

(iv)     the Adjusted  Principal  Amount of each  Debenture as of the  effective
         date of the  election,  after giving  effect to the Adjusted  Principal
         Amount  Reduction as a result of the  application  of such Special Cash
         Payment.

(e) The Company  shall  deposit cash in respect of any such Special Cash Payment
with the Trustee or Paying Agent prior to 12:00 p.m., New York City time, on the
Business Day  immediately  preceding the Interest  Payment Date on which Special
Cash Payment will be made.

                                       25
<PAGE>

Section 213.      Cash Reorganization Event Distributions.

(a) As soon as  practicable,  and in any event not later than 20 Business  Days,
following  the  date  of  any  Cash  Reorganization  Event,  the  Company  shall
distribute  all  of  the  Reference   Property   consisting  of  cash  (a  "Cash
Reorganization   Event   Distribution")  to  Holders  of  the  Debentures.   Any
distribution  pursuant  to this  Section  213  shall be made by the  Company  to
Holders of  Debentures  as of a special  record  date  which  shall be the tenth
Business  Day prior to the date of  payment  of such Cash  Reorganization  Event
Distribution,  and shall be  distributed  pro rata to such  Holders on the tenth
Business Day following such special record date, without interest thereon.

(b)  Any  Cash  Reorganization  Event  Distribution  made  with  respect  to the
Debentures  shall not constitute a redemption of the Debentures,  in whole or in
part, but shall represent payment of accrued Original Issue Discount and, to the
extent the amount of any Cash  Reorganization  Event  Distribution  exceeds  the
amount of accrued  Original Issue Discount on the Debentures,  such amount shall
represent a repayment of the Issue Price in whole or in part.

(c)  Prior  to the  date  of  such  Cash  Reorganization  Event  to  the  extent
practicable,  and in any event not later than five Business Days thereafter, the
Company  shall deliver  notice to the Trustee in the manner  provided for in the
Original  Indenture  and  provide  such  notice  through  the Trustee to DTC for
dissemination  through the DTC broadcast  facility in the Company's  name and at
the Company's expense, as to the related Cash Reorganization Event Distribution.
Such notice shall specify:

(i) the description of such cash reorganization  event and, briefly,  the events
causing such Cash Reorganization Event;

(ii)     the amount of the related Cash Reorganization Event Distribution;

(iii)    a  brief  description  of the  remaining  Reference  Property  and  the
         Adjusted  Principal Amount of the Debentures after giving effect to the
         reduction  caused  by  application  of such Cash  Reorganization  Event
         Distribution;

(iv)     the related payment date; and

(v)      the related record date.

(d) The Company  shall  deposit cash in respect of any such Cash  Reorganization
Event  Distribution  with the Trustee or Paying  Agent prior to 12:00 p.m.,  New
York City time, on the Business Day immediately preceding the date of payment of
such Cash Reorganization Event Distribution.

                                       26
<PAGE>

Section 214.      Denominations.

         The  Debentures  shall be issued in  denominations  of $1,000  Original
Principal Amount at Maturity and integral multiples thereof.

Section 215.      Applicability of Certain Original Indenture Provisions.

(a)  Sections  11.01,  11.02 and 11.03 of the  Original  Indenture,  relating to
defeasance and covenant defeasance, shall not be applicable to the Debentures.

(b) Sections 4.08 and 4.09 of the Original  Indenture shall not be applicable to
the Debentures.

Section 216.      Security Registrar, Paying Agent and Exchange Agent.

         The Trustee shall be the initial Paying Agent,  initial  Exchange Agent
and initial  transfer agent for the Debentures  (subject to the Company's  right
(subject to Section  4.02 of the  Original  Indenture)  to remove the Trustee as
such Paying Agent,  Exchange Agent and/or transfer agent and, from time to time,
to designate  one or more  co-registrars  and one or more other  Paying  Agents,
Exchange  Agents and  transfer  agents and to rescind from time to time any such
designations),  and The City of New York is designated as a Place of Payment for
the Debentures.  The rights,  privileges,  protections,  immunities and benefits
given  to  the  Trustee  under  the  Original  Indenture,   including,   without
limitation,  its  right  to be  indemnified,  are  extended  to,  and  shall  be
enforceable  by, the Trustee in each of its  capacities  hereunder,  and to each
agent, custodian and other Person employed to act hereunder.

Section 217.      Global Debentures.

(a) The  Debentures  shall be  issued  in the form of one or more  temporary  or
global  Debentures.  The initial  Depositary for the global  Debentures shall be
DTC, and the depositary arrangements shall be those employed by whoever shall be
the Depositary with respect to the Debentures from time to time.

(b) The Debentures shall be issued in the form of permanent global Debentures in
definitive fully registered form without interest coupons,  substantially in the
form of Exhibit A. Each global  Debenture  shall be  deposited  on behalf of the
purchasers  of the  Debentures  represented  thereby with the  custodian for the
Depositary,  and  registered  in the name of a nominee of the  Depositary,  duly
executed  by the  Company  and  authenticated  by the Trustee as provided in the
Original Indenture.  The aggregate principal amount of a Debenture may from time
to time be  increased or  decreased  by  adjustments  made on the records of the
custodian for the Depositary or the  Depositary or its nominee,  as the case may
be.

(c) The global  Debentures will be exchangeable for  certificated  Debentures of
like tenor and terms and of differing  authorized  denominations  aggregating  a
like principal amount,  only if (i) the Depositary  notifies the Company that it
is unwilling or unable to continue as Depositary for the global Debentures, (ii)
the Depositary ceases to be a clearing agency under the Securities  Exchange Act
and a successor  Depositary is not  appointed by the Company  within 90 calendar
days,  (iii) the  Company  in its sole  discretion  determines  that the  global
Debentures shall

                                       27
<PAGE>

be exchangeable  for  certificated  Debentures or (iv) there shall have occurred
and be continuing  an Event of Default  under the Indenture  with respect to the
Debentures.  Upon such exchange, the certificated Debentures shall be registered
in the names of the beneficial  owners of the global  Debentures which they have
replaced;  such  names  shall  be  provided  to  the  Trustee  by  the  relevant
participants of the Depositary, as identified by the Depositary.

Section 218.      Sinking Fund.

         The  Debentures  shall not be  subject to any  sinking  fund or similar
provision.

Section 219.      Amendments to Certain Sections of the Original Indenture.

(a) The amendments to the Original Indenture contained in this Section 219 shall
apply  only to the  series of  Debentures  established  pursuant  to this  Third
Supplemental Indenture.

(b) Clause (a) of Section  6.01 of the Original  Indenture is hereby  amended by
adding the word "cash"  immediately  preceding the word "interest" on the second
line thereof.

(c) Clause (b) of Section  6.01 of the Original  Indenture is hereby  amended by
adding the words "Adjusted Principal Amount, Issue Price, accrued Original Issue
Discount,   Redemption  Price,   Purchase  Price  or  any  Cash   Reorganization
Distribution"  immediately  following  the words "if  any," on the  second  line
thereof.

(d) A new clause (c) is hereby added to Section  6.01 of the Original  Indenture
and supercedes and replaces clause (c) of the Original Indenture. New clause (c)
shall read as follows:

                           "(c)  failure  of the  Company  to  comply  with  its
                  obligations to deliver Reference  Property (or cash in lieu of
                  any portion thereof) when such Reference  Property is required
                  to be  delivered  (or  such  cash  is  required  to  be  paid)
                  following  an  exchange  of a  Debenture  in  accordance  with
                  Section  209 of the Third  Supplemental  Indenture,  or to pay
                  cash  in  lieu  of  any  fractional  unit  or  interest,   and
                  continuance of such default for 10 Business Days;"

(e) The seventh  line of the fourth  paragraph  of Section  6.01 of the Original
Indenture is hereby amended by adding the word "cash" immediately  preceding the
word "interest" in such line.

(f) Clause (i) of Section  9.02 of the Original  Indenture is hereby  amended by
adding the word "original" immediately preceding the words "principal amount" in
such clause and adding the words "at maturity" immediately  succeeding the words
"principal amount" such clause.

(g) Clause (ii) of Section 9.02 of the Original  Indenture is hereby  amended by
adding  the words "or alter the  manner or rate of  accrual  of  Original  Issue
Discount,  except as provided  in the Third  Supplemental  Indenture"  after the
words "any Coupon" in such clause.

                                       28
<PAGE>

(h) Clause (iii) of Section 9.02 of the Original  Indenture is hereby amended by
replacing  the word  "principal"  and adding the words "the  Adjusted  Principal
Amount,  the Redemption Price or the Purchase Price" in its place in such clause
and adding the words  "except as provided in the Third  Supplemental  Indenture"
after the words "any Debt Security" in such clause.

(i) Section 9.02 of the Original Indenture is hereby further amended by adding a
new clause (x), to read as follows:

                           "(x)     reduce the amount of cash or Reference
Property deliverable upon exchange of the Debentures."

(j)  Unless  the  context  otherwise  requires,  all  references  to  payment of
principal in the Original  Indenture  shall  include the payment of the Adjusted
Principal Amount.

Section 220.               Ranking.

         The Debentures  are, to the extent  provided herein and in the Original
Indenture,  subordinate  and subject in right of payment to the prior payment in
full of all Senior  Indebtedness.  The Debentures shall rank pari passu with the
PRIZES and the Premium PHONES.

Section 221.      Tax Matters

         The Company,  the Trustee and each Holder of the Debentures,  by virtue
of purchasing  the  Debentures,  agree (a) to treat the  Debentures,  for United
States federal,  state and local income tax purposes,  as debt  instruments that
are  subject to the  treasury  regulations  governing  contingent  payment  debt
instruments that are contained in U.S. Treasury  Regulation Section 1.1275-4 and
(b) to file all United States  federal,  state and local  income,  franchise and
estate tax returns  consistent  with the treatment set forth in clause (a) above
(in the absence of any change or  clarification in applicable law, by regulation
or otherwise, requiring a different characterization or treatment thereof).

ARTICLE Three

                            MISCELLANEOUS PROVISIONS

         The Trustee makes no undertaking or  representations in respect of, and
shall not be  responsible  in any manner  whatsoever  for and in respect of, the
validity  or  sufficiency  of this Third  Supplemental  Indenture  or the proper
authorization or the due execution hereof by the Company or for or in respect of
the  recitals  and  statements  contained  herein,  all of  which  recitals  and
statements are made solely by the Company.

         Except as  expressly  amended  hereby,  the  Original  Indenture  shall
continue in full force and effect in accordance with the provisions  thereof and
the Original  Indenture is in all respects hereby  ratified and confirmed.  This
Third Supplemental Indenture and all its provisions shall be

                                       29
<PAGE>

deemed a part of the  Original  Indenture  in the  manner and to the  extent
herein and  therein provided.

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

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

                                       30

<PAGE>

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

                            COX COMMUNICATIONS, INC.

                            By: /s/ Dallas S. Clement
                              ------------------------------------------
                                   Name:  Dallas S. Clement
                                   Title:  Vice President and Treasurer

                        THE BANK OF NEW YORK, as Trustee

                            By:/s/ Annette Kos
                              ------------------------------------------
                                   Name: Annette Kos
                                   Title:  Assistant Vice President

<PAGE>

                                                                       EXHIBIT A

         Form of Exchangeable Subordinated Discount Debentures due 2020

THIS  SECURITY  IS A  GLOBAL  SECURITY  WITHIN  THE  MEANING  OF  THE  INDENTURE
HEREINAFTER  REFERRED TO AND IS  REGISTERED  IN THE NAME OF THE  DEPOSITARY OR A
NOMINEE OF THE DEPOSITARY.  UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR THE INDIVIDUAL DEBT SECURITIES  REPRESENTED HEREBY, THIS GLOBAL SECURITY MAY
NOT BE  TRANSFERRED  EXCEPT AS A WHOLE BY THE  DEPOSITARY  TO A  NOMINEE  OF THE
DEPOSITARY  OR BY A NOMINEE  OF THE  DEPOSITARY  TO THE  DEPOSITARY  OR  ANOTHER
NOMINEE  OF  THE  DEPOSITARY  OR BY THE  DEPOSITARY  OR ANY  SUCH  NOMINEE  TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

UNLESS  THIS  SECURITY  IS  PRESENTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO COX COMMUNICATIONS,
INC. 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.

No. R-1                                                    CUSIP No. 224044 AX 5

Original Principal Amount at Maturity:                                $
Issue Price per $1,000 Original Principal Amount at Maturity:          $425.89

                            Cox Communications, Inc.

             Exchangeable Subordinated Discount Debentures due 2020

         Cox Communications,  Inc., a Delaware  corporation  (hereinafter called
the "Company," which term includes any successor corporation under the Indenture
referred to below), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the Adjusted Principal Amount of this Debenture on April 19,
2020 determined as provided in Section 204 of the Third  Supplemental  Indenture
referred to herein on April 19, 2020, and to pay interest as described below.

         The  Debentures  shall bear  interest in cash on each  Debenture at the
rate  of  1.0%  of the  Issue  Price  per  Debenture  per  annum  so long as the
Debentures are Outstanding.  Such cash interest shall accrue from April 19, 2000
or from the most recent Interest Payment Date to which interest has been paid or
provided  for, and shall be payable  semiannually  on April 19 and October 19 of
each year (each, an "Interest  Payment Date"),  commencing  October 19, 2000, to
the  Persons  in  whose  names  the  Debentures  (or  one  or  more  Predecessor
Securities)  are  registered  at the  close  of  business  on the  Business  Day
immediately preceding such Interest

                                     A-1-1
<PAGE>

Payment Date ("Regular  Record Date").  Accrual of cash interest payable on each
Debenture  shall be calculated on the basis of a 360-day year composed of twelve
30-day  months,  and such cash interest  shall be calculated  without  regard to
changes  in  the  Adjusted  Principal  Amount.  Cash  interest  payments  may be
increased in accordance with Section 205(c) of the Third Supplemental Indenture.

         For any Interest Period (or portion  thereof),  Original Issue Discount
shall accrue on the applicable  Adjusted  Principal  Amount of each Debenture as
determined  in  accordance  with  Section  208(b)(iii)  and  (iv)  of the  Third
Supplemental  Indenture,  in an amount equal to the excess (if an amount greater
than zero) of (A) the amount of interest  accrued on such Debenture  during such
Interest Period (or portion thereof) that represents an annualized yield of 5.0%
on the  Adjusted  Principal  Amount  of such  Debenture  over (B) the  amount of
accrued cash interest for such Interest Period (or portion  thereof)  payable on
each  Debenture  in  accordance  with Section  205(a) of the Third  Supplemental
Indenture.

         Accrual  of  Original  Issue  Discount  on  each  Debenture   shall  be
calculated  on the basis of a 360-day year  composed of twelve 30-day months and
shall  commence on the Issue Date, and shall cease to accrue on the earliest of:
(A) the date on which such Debenture is no longer Outstanding; (B) the effective
date of the Company's election to increase  semiannual cash interest payments as
provided in Section 205(c) of the Third Supplemental Indenture; and (C) the date
on which cash  interest  payable  in  accordance  with  Section  205(a)  thereof
represents an annualized yield of 5.0% or more on the Adjusted  Principal Amount
of such Debenture for the related Interest Period.

         Any such interest which is payable, but is not paid or provided for, on
any Interest  Payment Date shall forthwith cease to be payable to the registered
Holder hereof on the relevant  Regular Record Date by virtue of having been such
Holder,  and may be paid to the Person in whose name this  Debenture  (or one or
more Predecessor Securities) is registered at the close of business on a Special
Record  Date  for the  payment  of such  Defaulted  Interest  to be fixed by the
Company,  notice  whereof shall be given to the Holders of  Debentures  not less
than 10 days prior to such Special  Record  Date,  or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Debentures  may be listed,  and upon such notice as may be
required by such exchange, all as more fully provided in such Indenture.

         Payment of the Adjusted  Principal Amount,  interest and any other cash
amounts in respect of this Debenture at Stated  Maturity or any Redemption  Date
or Purchase Date will be made in immediately  available funds upon  presentation
and surrender of this Debenture (and with respect to any purchase by the Company
of this Debenture in certified form, upon delivery of a duly completed  election
form as contemplated on the reverse hereof) at the corporate trust office of the
Trustee maintained for that purpose in the Borough of Manhattan, The City of New
York, currently located at 101 Barclay Street, Floor 21 West, New York, New York
10286,  or at such other paying agency in the Borough of Manhattan,  The City of
New York,  as the  Company  may  determine.  Payment of  interest  or other cash
amounts due on any  Interest  Payment  Date or other  payment date other than at
Stated  Maturity or any  Redemption  Date or  Purchase  Date will be made at the
aforementioned  office or agency maintained by the Company,  provided,  however,
that, at the option of the Company,  interest or such other payments may be paid
by check mailed

                                     A-1-2
<PAGE>

to the address of the Person  entitled  thereto as such address  shall appear in
the Security Register;  provided,  further, that payment to DTC or any successor
Depositary may be made by wire transfer to the account designated by DTC or such
successor Depositary in writing.

         This Debenture is one of a duly  authorized  issue of Securities of the
Company (herein called the "Debentures")  issued and to be issued in one or more
series under an Indenture,  dated as of June 27, 1995 (the "Original Indenture,"
and together  with the Third  Supplemental  Indenture  referred to below and all
other indentures supplemental thereto, the "Indenture"), between the Company and
The Bank of New York,  as  Trustee  (the  "Trustee,"  which  term  includes  any
successor  trustee under the  Indenture),  to which Indenture and all indentures
supplemental  thereto reference is hereby made for a statement of the respective
rights,  limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the  Debentures,  and of the terms upon which the
Debentures are, and are to be,  authenticated  and delivered.  This Debenture is
one of the series  designated on the face hereof,  initially limited (subject to
exceptions provided in the Indenture) to the aggregate Original Principal Amount
at Stated Maturity  specified in the Third  Supplemental  Indenture  between the
Company and the Trustee,  dated as of April 19, 2000,  establishing the terms of
the Debentures pursuant to the Indenture (the "Third Supplemental Indenture").

         The Debentures are, to the extent provided herein, in the Indenture and
in the Third Supplemental Indenture, subordinate and subject in right of payment
to the prior payment in full of all Senior Indebtedness (as defined in the Third
Supplemental  Indenture),  and each Holder of this  Debenture by  accepting  the
same,  agrees  to and  shall be bound by the  provisions  hereof,  of the  Third
Supplemental Indenture and of Article XII of the Original Indenture.

         The Debentures are redeemable at the option of the Company, in whole or
in part at any time or from  time to time on or after  April  19,  2005,  on the
terms set forth in Section 207(a) of the Third Supplemental Indenture.

         The Debentures are subject to purchase by the Company, at the option of
the  Holder  thereof,  on the  terms  set  forth  in  Section  208 of the  Third
Supplemental Indenture.

         The Debentures are  exchangeable at the option of the Holders  thereof,
on the terms set forth in Section 209 of the Third Supplemental Indenture.

         In  accordance  with the Third  Supplemental  Indenture,  Special  Cash
Payments  and  Cash  Reorganization  Event  Distributions  may  be  made  on the
Debentures.

         If an Event of Default  (as  defined in the  Indenture,  including  the
amendments  thereto in the Third  Supplemental  Indenture)  with  respect to the
Debentures shall occur and be continuing, the principal of the Debentures may be
declared  due and  payable in the manner  and with the  effect  provided  in the
Indenture.

         The Original  Indenture  permits,  with certain  exceptions  as therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations  of the Company and the rights of the Holders of the  Securities  of
each  series  issued  under the  Indenture  at any time by the  Company  and the
Trustee with the consent of the Holders of not less than a majority in aggregate
Original  Principal  Amount at Stated  Maturity  of the  Securities  at the time
Outstanding of each

                                     A-1-3
<PAGE>

series  affected  thereby.  The  Original  Indenture  also  contains  provisions
permitting the Holders of specified  percentages in aggregate Original Principal
Amount  at  Stated  Maturity  of the  Securities  of  any  series  at  the  time
Outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance  by the Company with certain  provisions of the Indenture and certain
past defaults  under the Indenture and their  consequences.  Any such consent or
waiver by the Holder of this Debenture shall be conclusive and binding upon such
Holder  and upon all  future  Holders of this  Debenture  and of any  Debentures
issued upon the  registration  of transfer  hereof or in exchange  herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon this
Debenture or such Debentures.

         No reference herein to the Indenture and no provision of this Debenture
or of the Indenture  shall alter or impair the obligation of the Company,  which
is absolute and unconditional, to pay the Adjusted Principal Amount and interest
on this  Debenture,  at the times,  place and rate, and in the coin or currency,
herein and in the Indenture prescribed.

         The Original  Indenture  contains  provisions for defeasance of (i) the
entire  indebtedness of the Debentures and (ii) certain  covenants and Events of
Default with respect to the Debentures  which  provisions shall not apply to the
Debentures. In addition,  provisions for certain covenants specified in Sections
4.08  and  4.09  of  the  Original  Indenture  shall  not be  applicable  to the
Debentures.

         As provided in the  Indenture  and subject to certain  limitations  set
forth  therein and in this  Debenture,  the  transfer of this  Debenture  may be
registered  on the  Security  Register  upon  surrender  of this  Debenture  for
registration  of transfer at the office or agency of the Company  maintained for
the purpose in any place where the Adjusted  Principal Amount,  interest and any
other  cash  amounts  on this  Debenture  are  payable,  duly  endorsed  by,  or
accompanied  by a written  instrument  of transfer in form  satisfactory  to the
Company and the Security Registrar duly executed by, the Holder hereof or by his
attorney duly authorized in writing, and thereupon one or more new Debentures of
this  series and of like tenor,  of  authorized  denominations  and for the same
aggregate  Original  Principal Amount at Stated Maturity,  will be issued to the
designated transferee or transferees.

         The Debentures are issuable only in registered  form without coupons in
the denominations specified in the Third Supplemental Indenture establishing the
terms  of the  Debentures,  all as more  fully  provided  in the  Indenture.  As
provided in the Indenture,  and subject to certain  limitations set forth in the
Indenture and in this  Debenture,  the  Debentures are  exchangeable  for a like
aggregate  Original  Principal  Amount at Stated  Maturity of Debentures of this
series in  different  authorized  denominations,  as  requested  by the  Holders
surrendering the same.

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

         Prior  to  due  presentment  of  this  Debenture  for  registration  of
transfer,  the Company,  the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this  Debenture  is  registered  as the owner
hereof for all purposes, whether or not this Debenture be

                                     A-1-4
<PAGE>

overdue,  and  neither  the  Company,  the  Trustee  nor any such agent shall be
affected by notice to the contrary.

         This  Debenture  shall be governed by and construed in accordance  with
the laws of the State of New York (without  regard to principles of conflicts of
law).

         All terms used in this  Debenture  which are  defined  in the  Original
Indenture or the Third  Supplemental  Indenture shall have the meanings assigned
to them in the  Original  Indenture  or the  Third  Supplemental  Indenture,  as
applicable.

         Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee under the  Indenture by the manual  signature of one of
its authorized signatories, this Debenture shall not be entitled to any benefits
under the Indenture or be valid or obligatory for any purpose.

                                     A-1-5

<PAGE>

         IN WITNESS  WHEREOF,  the Company has caused this instrument to be duly
executed.

                                   COX COMMUNICATIONS, INC.

                                   By:
                                        -----------------------------------
                                        Name:  Dallas S. Clement
                                        Title:  Vice President and Treasurer

                                   By:
                                        -----------------------------------
                                        Name:  Jimmy W. Hayes
                                        Title:  Executive Vice President

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Debentures of the series  designated herein referred
to in the within-mentioned Indenture.

Dated: April 19, 2000                            THE BANK OF NEW YORK,
                                                 as Trustee

                                                  By:
                                                     -------------------------
                                                  Authorized Signatory
                                     A-1-6

<PAGE>

                             CERTIFICATE OF TRANSFER

         To transfer or assign this Debenture, fill in the form below:

I or we transfer and assign this Debenture to

                       (Insert assignee's tax I.D. number)

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

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

Date:                                                Your signature:

<PAGE>

                                   SCHEDULE A

                              SCHEDULE OF EXCHANGES

The following  exchanges of Debentures  represented  by this Debenture have been
made:
<TABLE>
<S>                      <C>                     <C>                     <C>                   <C>

------------------------- ---------------------- ----------------------- ---------------------- ======================
                                                 Change in Original      Original Principal
Original Principal                               Principal Amount at     Amount at Maturity
Amount at Maturity of                            Maturity of this        of this Debenture
this Debenture as of      Date Exchange          Debenture due to        following such
April 19, 2000            Made                   Exchange                exchange               Notation made by
------------------------- ---------------------- ----------------------- ---------------------- ======================
------------------------- ---------------------- ----------------------- ---------------------- ======================
      $400,000,000
------------------------- ---------------------- ----------------------- ---------------------- ======================
------------------------- ---------------------- ----------------------- ---------------------- ======================

------------------------- ---------------------- ----------------------- ---------------------- ======================
------------------------- ---------------------- ----------------------- ---------------------- ======================

------------------------- ---------------------- ----------------------- ---------------------- ======================
------------------------- ---------------------- ----------------------- ---------------------- ======================

------------------------- ---------------------- ----------------------- ---------------------- ======================
------------------------- ---------------------- ----------------------- ---------------------- ======================

------------------------- ---------------------- ----------------------- ---------------------- ======================
------------------------- ---------------------- ----------------------- ---------------------- ======================

------------------------- ---------------------- ----------------------- ---------------------- ======================
------------------------- ---------------------- ----------------------- ---------------------- ======================

------------------------- ---------------------- ----------------------- ---------------------- ======================
------------------------- ---------------------- ----------------------- ---------------------- ======================

------------------------- ---------------------- ----------------------- ---------------------- ======================
------------------------- ---------------------- ----------------------- ---------------------- ======================

------------------------- ---------------------- ----------------------- ---------------------- ======================
------------------------- ---------------------- ----------------------- ---------------------- ======================

------------------------- ---------------------- ----------------------- ---------------------- ======================
------------------------- ---------------------- ----------------------- ---------------------- ======================

------------------------- ---------------------- ----------------------- ---------------------- ======================

</TABLE>

<PAGE>

                                                                         ANNEX A

                               NOTICE OF EXCHANGE

The Bank of New York
101 Barclay Street
New York, NY 10286

                  Re:      Exchangeable Subordinated Discount Debentures
                           due 2020 (the "Debentures")

Gentlemen:

         The  undersigned  Holder  of  Debentures  hereby  gives  notice  of its
intention to exchange  $______________  aggregate  original  principal amount at
maturity of Debentures.  This notice,  once delivered to the Exchange  Agent, is
irrevocable.

         If Reference Shares or any other securities are to be delivered as part
of this exchange, they should be delivered to:

         If cash is to be paid as part of this exchange, it should be sent to:

         Any communication to the Holder in connection with this exchange should
be directed to:

                                 [Holder's address]

                                           Very truly yours,

                                           [Name of Holder]

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

Date of Notice of Exchange:

<PAGE>

                                                                         ANNEX B

                       OPTION OF HOLDER TO ELECT PURCHASE

         If you want to elect to have this  Debenture  purchased  by the Company
pursuant to Section 208 of the Third Supplemental Indenture, check this box:
[ ]

         If you want to elect to have only part of this  Debenture  purchased by
the Company pursuant to Section 208 of the Third Supplemental  Indenture,  state
the amount you elect to have  purchased  in a  denomination  of $1,000  original
principal amount at maturity or an integral multiple thereof:

$

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

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

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

* Your  signature  must be  guaranteed  by an "eligible  guarantor  institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security  Transfer Agent Medallion  Program ("STAMP") or
such other "signature  guarantee  program" as may be determined by the Registrar
in addition  to, or in  substitution  for,  STAMP,  all in  accordance  with the
Securities Exchange Act of 1934, as amended.<PAGE>   1
                                                                     EXHIBIT 4.1

                  WARRANT AGREEMENT dated as of April 19, 2000 between NTN
Communications, Inc., a Delaware corporation (the "Company"), and Starr
Securities, Inc. ("Starr") and GunnAllen Financial, Inc. ("GunnAllen" and,
together with Starr, sometimes referred to as the Underwriters").

                              W I T N E S S E T H:

                  WHEREAS, the Company proposes to issue to GunnAllen warrants
("Warrants") to purchase up to an aggregate of 42,000 shares (the "Shares") of
common stock of the Company, par value $.005 per share (the "Common Stock"); and

                  WHEREAS, the Underwriters have agreed pursuant to the
underwriting agreement (the "Underwriting Agreement") dated April 14, 2000
between the Underwriters and the Company, to act as the underwriters in
connection with the Company's proposed public offering (the "Public Offering")
of 2,000,000 shares of Common Stock at an initial public offering price of $3.00
per share of Common Stock; and

                  WHEREAS, the Warrants issued pursuant to this Agreement are
being issued by the Company to the Underwriters or officers, directors or
partners of the Underwriters and members of the selling group (the "Selling
Group") and/or their officers, directors or partners, in consideration for, and
as part of the Underwriters' compensation in connection with, the Underwriters
acting as the underwriters pursuant to the Underwriting Agreement;

                  NOW, THEREFORE, in consideration of the foregoing premises,
the payment by the Underwriters to the Company of an aggregate of Forty-Two
Dollars and No Cents ($42.00) ($42.00 from GunnAllen), the agreements herein set
forth and other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

I.       GRANT. THE UNDERWRITERS, AND/OR THEIR DESIGNEES WHO ARE OFFICERS,
         DIRECTORS OR PARTNERS OF THE UNDERWRITERS OR MEMBERS OF THE SELLING
         GROUP IN CONNECTION WITH THE PUBLIC OFFERING, ARE HEREBY GRANTED THE
         RIGHT TO PURCHASE, AT ANY TIME FROM APRIL 14, 2000 UNTIL 5:00 P.M., NEW
         YORK CITY TIME, ON APRIL 14, 2005 (THE "WARRANT EXERCISE TERM"), UP TO
         AN AGGREGATE OF 42,000 SHARES AT AN INITIAL EXERCISE PRICE (SUBJECT TO
         ADJUSTMENT AS PROVIDED IN ARTICLE 8 HEREOF) OF $3.75 PER SHARE.

II.      WARRANT CERTIFICATES. THE WARRANT CERTIFICATES (THE WARRANT
         CERTIFICATES") DELIVERED AND TO BE DELIVERED PURSUANT TO THIS AGREEMENT
         SHALL BE IN THE FORM SET FORTH AS EXHIBIT A ATTACHED HERETO AND MADE A
         PART HEREOF, WITH SUCH APPROPRIATE INSERTIONS, OMISSIONS, SUBSTITUTIONS
         AND OTHER VARIATIONS AS REQUIRED OR PERMITTED BY THIS AGREEMENT.

III.     EXERCISE OF WARRANTS.

                                      -1-
<PAGE>   2

         A.       Cash Exercise. The Warrants initially are exercisable at a
                  price of $3.75 per Share, payable in cash or by check to the
                  order of the Company, or any combination of cash or check,
                  subject to adjustment as provided in Article 8 hereof. Upon
                  surrender of the Warrant Certificate with the annexed Form of
                  Election to Purchase duly executed, together with payment of
                  the Exercise Price (as hereinafter defined) for the Shares
                  purchased at the Company's principal offices, currently
                  located at The Campus, 5966 La Place Court, Suite 100,
                  Carlsbad, California 92008, the registered holder of a Warrant
                  Certificate ("Holder" or "Holders") shall be entitled to
                  receive a certificate or certificates for the Shares so
                  purchased. The purchase rights represented by each Warrant
                  Certificate are exercisable at the option of the Holder
                  hereof, in whole or in part (but not as to fractional shares
                  of the Common Stock). In the case of the purchase of less than
                  all the Shares purchasable under any Warrant Certificate, the
                  Company shall cancel said Warrant Certificate upon the
                  surrender thereof and shall execute and deliver a new Warrant
                  Certificate of like tenor for the balance of the Shares
                  purchasable thereunder.

         B.       Cashless Exercise. At any time during the Warrant Exercise
                  Term, the Holder may, at its option, exchange this Warrant, in
                  whole or in part (a "Warrant Exchange"), into the number of
                  Shares determined in accordance with this Section 3.2, by
                  surrendering this Warrant at the principal office of the
                  Company or at the office of its transfer agent, accompanied by
                  a notice stating (i) such Holder's intent to effect such
                  exchange, (ii) the number of Shares to be exchanged and (iii)
                  the date on which the Holder requests that such Warrant
                  Exchange occur (the "Notice of Exchange"). The Warrant
                  Exchange shall take place on the date specified in the Notice
                  of Exchange or, if later, the date the Notice of Exchange is
                  received by the Company (the "Exchange Date"). Certificates
                  for the Shares issuable upon such Warrant Exchange and, if
                  applicable, a new warrant of like tenor evidencing the balance
                  of the Shares remaining subject to this Warrant, shall be
                  issued as of the Exchange Date and delivered to the Holder
                  within five (5) business days following the Exchange Date. In
                  connection with any Warrant Exchange, this Warrant shall
                  represent the right to subscribe for and acquire the number of
                  Shares (rounded to the next highest integer) equal to (i) the
                  number of Shares specified by the Holder in its Notice of
                  Exchange (the "Total Number") less (ii) the number of Shares
                  equal to the quotient obtained by dividing (A) the product of
                  the Total Number and the existing Exercise Price (as
                  hereinafter defined) by (B) the current market value of a
                  share of Common Stock. For purposes of this Section 3.2, the
                  term "current market value" shall mean the (i) last reported
                  sale price on the last trading day or, in case no such
                  reported sale takes place on such day, the average last
                  reported sale price for the last three (3) trading days, in
                  either case as officially reported by the principal securities
                  exchange on which the Common Stock is listed or admitted to
                  trading, or by the Nasdaq National Market or SmallCap Market
                  (referred to hereinafter as "NASDAQ") if the Common Stock is
                  not listed or admitted to trading on any national securities
                  exchange but is listed or quoted upon NASDAQ, or (ii) if the
                  Common Stock is not traded on a national securities exchange
                  or NASDAQ, the closing bid price on the last trading day, or,
                  in case no such reported bid takes place on such day, the
                  average closing bid price for the last three (3) trading days,
                  as furnished by NASDAQ or similar organization if NASDAQ is no
                  longer reporting such information, or (iii) if the Common
                  Stock is not listed upon a principal exchange or quoted on

                                      -2-
<PAGE>   3

                  NASDAQ, but quotes for the Common Stock are available in the
                  OTC Bulletin Board or "pink sheets" the closing bid price on
                  the last trading day, or, in case no such bid takes place on
                  such day, the average closing bid price for the last three (3)
                  trading days as furnished on the OTC Bulletin Board or (iv) in
                  the event the Common Stock is not traded upon a principal
                  exchange and not listed on NASDAQ and quotes are not available
                  on the OTC Bulletin Board, the price as determined in good
                  faith by resolution of the Board of Directors of the Company,
                  based on the best information available to it.

IV.      ISSUANCE OF CERTIFICATES.

         A.       Issuance. Upon the exercise of the Warrants, the issuance of
                  certificates for the Shares shall be made forthwith (and in
                  any event within five (5) business days thereafter) without
                  charge to the Holder thereof including, without limitation,
                  any tax which may be payable in respect of the issuance
                  thereof, and such certificates shall (subject to the
                  provisions of Article 5 hereof) be issued in the name of, or
                  in such names as may be directed by, the Holder thereof;
                  provided 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 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.

         B.       Form of Certificates. The Warrant Certificates and
                  certificates representing the Shares shall be executed on
                  behalf of the Company by the manual or facsimile signature of
                  the present or any future Chairman or Vice Chairman of the
                  Board of Directors or president or Vice President of the
                  Company under its corporate seal reproduced thereon, attested
                  to by the manual or facsimile signature of the present or any
                  future Secretary or Assistant Secretary of the Company.
                  Warrant Certificates shall be dated the date of execution by
                  the Company upon initial issuance, division, exchange,
                  substitution or transfer. The Warrant Certificates and, upon
                  exercise of the Warrants, in part or in whole, certificates
                  representing the Shares shall bear a legend substantially
                  similar to the following:

                  "The securities represented by this certificate have not been
                  registered under the Securities Act of 1933, as amended (the
                  "Act"), and may not be offered or sold except (i) pursuant to
                  an effective registration statement under the Act, (ii) to the
                  extent applicable, pursuant to Rule 144 under the Act (or any
                  similar rule under such Act relating to the disposition of
                  securities), or (iii) upon the delivery by the holder to the
                  Company of an opinion of counsel, reasonably satisfactory to
                  counsel to the Company, stating that an exemption from
                  registration under such Act is available. "

V.       RESTRICTION ON TRANSFER OF WARRANTS. THE HOLDER OF A WARRANT
         CERTIFICATE, BY ITS ACCEPTANCE THEREOF, COVENANTS AND AGREES THAT THE
         WARRANTS ARE BEING ACQUIRED AS AN INVESTMENT AND NOT WITH A VIEW TO THE
         DISTRIBUTION THEREOF, AND THAT THE WARRANTS MAY NOT BE

                                      -3-
<PAGE>   4

         SOLD, TRANSFERRED, ASSIGNED, HYPOTHECATED OR OTHERWISE DISPOSED OF, IN
         WHOLE OR IN PART, FOR A PERIOD OF ONE (1) YEAR FROM THE DATE HEREOF,
         EXCEPT TO OFFICERS, DIRECTORS OR PARTNERS OF THE UNDERWRITERS OR TO ANY
         MEMBER OF THE SELLING GROUP PARTICIPATING IN THE DISTRIBUTION TO THE
         PUBLIC OF THE COMMON STOCK AND/OR THEIR RESPECTIVE OFFICERS OR
         PARTNERS.

                  In connection with the transfer or exercise of Warrants, the
purchaser and Holder agree to execute any documents which may be reasonably
required by counsel to the Company to comply with the provisions of the Act and
applicable state securities laws.

VI.      PRICE.

         A.       Initial and Adjusted Exercise Price. The initial exercise
                  price of each Warrant shall be $3.75 per Share. The adjusted
                  exercise price shall be the price which shall result from time
                  to time from any and all adjustments of the initial exercise
                  price in accordance with the provisions of Article 8 hereof.

         B.       Exercise Price. The term "Exercise Price" herein shall mean
                  the initial exercise price or the adjusted exercise price,
                  depending upon the context.

VII.     REGISTRATION RIGHTS.

         A.       Registration Under the Securities Act of 1933. The Warrants
                  and the Shares have not been registered for purposes of public
                  distribution under the Securities Act of 1933, as amended (the
                  "Act").

         B.       Registrable Securities. As used herein the term "Registrable
                  Security" means each of the Shares and any shares of Common
                  Stock issued upon any stock split or stock dividend in respect
                  of such Shares; provided, however, that with respect to any
                  particular Registrable Security, such security shall cease to
                  be a Registrable Security when, as of the date of
                  determination, (i) it has been effectively registered under
                  the Act and disposed of pursuant thereto, (ii) registration
                  under the Act is no longer required for the immediate public
                  distribution of all or any portion of such security or (iii)
                  it has ceased to be outstanding. The term "Registrable
                  Securities" means any and/or all of the securities falling
                  within the foregoing definition of a "Registrable Security. "
                  In the event of any merger, reorganization, consolidation,
                  recapitalization or other change in corporate structure
                  affecting the Common Stock, such adjustment shall be made in
                  the definition of "Registrable Security" as is appropriate in
                  order to prevent any dilution or enlargement of the rights
                  granted pursuant to this Article 7.

         C.       Piggyback Registration. If, at any time during the seven years
                  following the date of this Agreement, the Company proposes to
                  prepare and file any new registration statement or
                  post-effective amendments thereto covering equity or debt
                  securities of the Company, or any such securities of the
                  Company held by its shareholders (other than pursuant to a
                  Form S-4 or pursuant to a Form S-8 or comparable forms) (for
                  purposes of this Article 7, collectively, a "Registration
                  Statement"), it will, with respect to each

                                      -4-
<PAGE>   5

                  such registration statement and amendment, give written notice
                  of its intention to do so by registered mail ("Notice"), at
                  least thirty (30) days prior to the filing of each such
                  Registration Statement, to all holders of the Registrable
                  Securities. Upon the written request of such a holder (a
                  "Requesting Holder"), made within twenty (20) days after
                  receipt of the Notice, that the Company include any of the
                  Requesting Holder's Registrable Securities in the proposed
                  Registration Statement, the Company shall, as to each such
                  Requesting Holder, use its best efforts to effect the
                  registration under the Act of the Registrable Securities which
                  it has been so requested to register ("Piggyback
                  Registration"), at the Company's sole cost and expense and at
                  no cost or expense to the Requesting Holders (other than
                  underwriting discounts and commissions applicable to the sale
                  of such Registrable Securities and the fees and disbursements,
                  if any, of counsel or any advisor to the Requesting Holders),
                  provided that, if such Registration Statement relates to an
                  underwritten public offering and the managing underwriter
                  advises the Company and the Requesting Holders that the number
                  of Registrable Securities which can be included in such
                  offering must be limited, priority will be given to any
                  securities proposed to be offered and sold by the Company,
                  and, thereafter, the Requesting Holders will agree to reduce
                  the number of Registrable Securities included in such
                  Registration Statement on a pro rata basis with any other
                  selling security holder on whose behalf other securities of
                  the Company may be included therein for registration.
                  Notwithstanding the provisions of this Section 7.3, the
                  Company shall have the right at any time after it shall have
                  given written notice pursuant to this Section 7.3
                  (irrespective of whether any written request for inclusion of
                  Registrable Securities shall have already been made) to elect
                  not to file any such proposed Registration Statement, or to
                  withdraw the same after the filing but prior to the effective
                  date thereof.

         D.       Demand Registration

                  1.       At any time during the Warrant Exercise Term, any
                           "Demand Holder" (as such term is defined in Section
                           7.4(d) below) of the Registrable Securities shall
                           have the right (which right is in addition to the
                           piggyback registration rights provided for under
                           Section 7.3 hereof), exercisable by written notice to
                           the Company (the "Demand Registration Request"), to
                           have the Company prepare and file with the Securities
                           and Exchange Commission (the "Commission"), on one
                           occasion for all Demand Holders, at the sole expense
                           of the Company (other than underwriting discounts and
                           commissions applicable to the sale of the Registrable
                           Securities which are the subject of the Demand
                           Registration Request, and the fees and disbursements,
                           if any, of counsel or any advisor to the Demand
                           Holder), a Registration Statement and such other
                           documents, including a prospectus, as may be
                           necessary (in the opinion of both counsel for the
                           Company and counsel for such Demand Holder), in order
                           to comply with the provisions of the Act, so as to
                           permit a public offering and sale of the Registrable
                           Securities by the holders thereof, for nine (9)
                           consecutive months; provided, however, that the
                           Company shall not be required to effect such
                           registration if, in the opinion of counsel for the
                           Company, all of such Registrable Securities can be
                           sold publicly, pursuant to Rule 144 or otherwise,
                           without registration under the

                                      -5-
<PAGE>   6

                           Act; provided further, that neither Underwriter
                           (and/or any person who may acquire Warrants and/or
                           Registrable Securities from such Underwriter or
                           transferees of such Underwriter) shall be entitled to
                           exercise any registration right pursuant to this
                           Section 7.4(a) without the prior written consent of
                           the other Underwriter. Any such demand request by the
                           Holders shall coincide with the availability of the
                           Company's audited financial statements, unless the
                           holders demanding registration agree to pay the costs
                           to the Company of any special audit which may be
                           required under the rules and regulations of the
                           Securities and Exchange Commission. Notwithstanding
                           anything to the contrary herein contained, the
                           Company may postpone, for not more than 90 days, the
                           filing of a Registration Statement under this Section
                           7.4(a) (or suspend the use of any Registration
                           Statement filed under this Section 7.4 for a period
                           of not more than 30 days) for valid business reasons,
                           including the acquisition or divestiture of assets,
                           public filings with the Commission, pending corporate
                           developments and similar events.

                  2.       The Company covenants and agrees to give written
                           notice of any Demand Registration Request to all
                           holders of the Registrable Securities within ten (10)
                           days from the date of the Company's receipt of any
                           such Demand Registration Request. After receiving
                           notice from the Company as provided in this Section
                           7.4(b), holders of Registrable Securities may request
                           the Company to include their Registrable Securities
                           in the Registration Statement to be filed pursuant to
                           Section 7.4(a) hereof by notifying the Company of
                           their decision to have such securities included
                           within ten (10) days of their receipt of the
                           Company's notice.

                  3.       In addition to the registration rights provided for
                           under Section 7.3 hereof and subsection (a) of this
                           Section 7.4, at any time during the Warrant Exercise
                           Term, any Demand Holder (as defined below in Section
                           7.4(d)) of Registrable Securities shall have the
                           right, exercisable by written request to the Company,
                           to have the Company prepare and file with the
                           Commission, on one occasion in respect of all holders
                           of Registrable Securities, a Registration Statement
                           so as to permit a public offering and sale of such
                           Registrable Securities for nine (9) consecutive
                           months; provided, however, that all costs incident
                           thereto shall be at the expense of the holders of the
                           Registrable Securities included in such Registration
                           Statement; and, provided further, that the Company
                           shall not be required to effect such registration if,
                           in the opinion of counsel for the Company, all of
                           such Registrable Securities can be sold publicly,
                           pursuant to Rule 144 or otherwise, without
                           registration under the Act; and, provided, further,
                           that neither Underwriter (and/or any person who may
                           acquire Warrants and/or Registrable Securities from
                           such Underwriter or transferees of such Underwriter)
                           shall be entitled to exercise any registration right
                           pursuant to this Section 7.4(c) without the prior
                           written consent of the other Underwriter. If a Demand
                           Holder shall give notice to the Company at any time
                           of its or their desire to exercise the registration
                           right granted pursuant to this Section 7.4(c), then
                           within ten (10) days after the Company's receipt of
                           such notice, the

                                      -6-
<PAGE>   7

                           Company shall give notice to the other holders of
                           Registrable Securities advising them that the Company
                           is proceeding with such registration and offering to
                           include therein the Registrable Securities of such
                           holders, provided they furnish the Company with such
                           appropriate information in connection therewith as
                           the Company shall reasonably request in writing.
                           Notwithstanding contained herein shall require the
                           Company to undergo an audit of its financial
                           statements other than in the ordinary course of
                           business.

                  4.       The term "Demand Holder" as used in this Section 7.4
                           shall mean any holder or any combination of holders
                           of Registrable Securities, if included in such
                           holders' Registrable Securities are that aggregate
                           number of Shares (including Shares already issued and
                           Shares issuable pursuant to the exercise of
                           outstanding Warrants) as would constitute 50% or more
                           of the aggregate number of Shares (including Shares
                           already issued and Shares issuable pursuant to the
                           exercise of outstanding Warrants) included in all of
                           the Registrable Securities, but in any event not less
                           than 30,000 Shares.

         E.       Covenants of the Company With Respect to Registration. The
                  Company covenants and agrees as follows:

                  1.       In connection with any registration under Section 7.4
                           hereof, the Company shall file the Registration
                           Statement as expeditiously as possible, but in no
                           event later than forty-five (45) days following
                           receipt of any demand therefor (unless delayed by the
                           failure of a holder of Registrable Securities to
                           promptly furnish such information necessary to
                           complete such registration statement), shall use its
                           best efforts to have any such Registration Statement
                           declared effective at the earliest possible time and
                           shall furnish each holder of Registrable Securities
                           such number of prospectuses as shall reasonably be
                           requested.

                  2.       The Company shall pay all costs, fees and expenses in
                           connection with all Registration Statements filed
                           pursuant to Sections 7.3 and 7.4(a) hereof (excluding
                           any underwriting discounts and commissions which may
                           be incurred in connection with the sale of any
                           Registrable Securities and fees of counsel or any
                           advisor to the Holders of Registrable Securities)
                           including, without limitation, the Company's legal
                           and accounting fees, printing expenses, and blue sky
                           fees and expenses.

                  3.       The Company will take all reasonably necessary action
                           which may be required in qualifying or registering
                           the Registrable Securities included in a Registration
                           Statement for offering and sale under the securities
                           or blue sky laws of such states as are reasonably
                           requested by the holders of such securities, provided
                           that the Company shall not be obligated to execute or
                           file any general consent to service of process or to
                           qualify as a foreign corporation to do business under
                           the laws of any such jurisdiction.

                                      -7-
<PAGE>   8

                  4.       The Company shall indemnify any holder of the
                           Registrable Securities to be sold pursuant to any
                           Registration Statement and any underwriter or person
                           deemed to be an underwriter under the Act and each
                           person, if any, who controls such holder or
                           underwriter or person deemed to be an underwriter
                           within the meaning of Section 15 of the Act or
                           Section 20(a) of the Securities Exchange Act of 1934,
                           as amended ("Exchange Act"), against all loss, claim,
                           damage, expense or liability (including all expenses
                           reasonably incurred in investigating, preparing or
                           defending against any claim whatsoever) to which any
                           of them may become subject under the Act, the
                           Exchange Act or otherwise, arising from such
                           Registration Statement to the same extent and with
                           the same effect as the provisions pursuant to which
                           the Company has agreed to indemnify the Underwriters
                           contained in Section 5 of the Underwriting Agreement
                           and to provide for just and equitable contribution as
                           set forth in Section 6 of the Underwriting Agreement.

                  5.       Any holder of Registrable Securities to be sold
                           pursuant to a Registration Statement, and its
                           successors and assigns, shall severally, and not
                           jointly, indemnify, the Company, its officers and
                           directors and each person, if any, who controls the
                           Company within the meaning of Section 15 of the Act
                           or Section 20(a) of the Exchange Act, against all
                           loss, claim, damage or expense or liability
                           (including all expenses reasonably incurred in
                           investigating, preparing or defending against any
                           claim whatsoever) to which they may become subject
                           under the Act, the Exchange Act or otherwise, arising
                           from information furnished in writing by or on behalf
                           of such holder, or its successors or assigns, for
                           specific inclusion in such Registration Statement to
                           the same extent and with the same effect as the
                           provisions contained in Section 5 of the Underwriting
                           Agreement pursuant to which the Underwriters have
                           agreed to indemnify the Company and to provide for
                           just and equitable contribution as set forth in
                           Section 6 of the Underwriting Agreement.

                  6.       Nothing contained in this Agreement shall be
                           construed as requiring any Holder to exercise his
                           Warrants prior to the initial filing of any
                           Registration Statement or the effectiveness thereof.

                  7.       The Company shall deliver promptly to each holder of
                           Registrable Securities participating in the offering
                           copies of all correspondence between the Commission
                           and the Company, its counsel or auditors and all
                           memoranda relating to discussions with the Commission
                           or its staff with respect to the Registration
                           Statement and permit each holder of Registrable
                           Securities and underwriters to do such investigation,
                           upon reasonable advance notice, with respect to
                           information contained in or omitted from the
                           Registration Statement as it deems reasonably
                           necessary to comply with applicable securities laws
                           or rules of the National Association of Securities
                           Dealers, Inc. ("NASD"); provided that each such
                           holder of Registrable Securities agrees not to
                           disclose such information without the prior consent
                           of the Company. Such investigation shall include
                           access to books, records and properties and
                           opportunities to discuss the business of the Company
                           with its officers and

                                      -8-
<PAGE>   9

                           independent auditors, all to such reasonable extent
                           and at such reasonable times and as often as any such
                           holder of Registrable Securities or underwriter shall
                           reasonably request.

                  8.       If required by the underwriter in connection with an
                           underwritten offering which includes Registrable
                           Securities pursuant to Article 7, the Company shall
                           enter into an underwriting agreement with one or more
                           underwriters selected for such underwriting, such
                           agreement shall contain such representations,
                           warranties and covenants by the Company and such
                           other terms as are customarily contained in
                           agreements of that type used by the underwriters. If
                           required by the underwriter, the holders of
                           Registrable Securities shall be parties to any
                           underwriting agreement relating to an underwritten
                           sale of their Registrable Securities and may, at
                           their option, require that any or all the
                           representations and warranties of the Company to or
                           for the benefit of such underwriters shall, to the
                           extent that they may be applicable, also be made to
                           and for the benefit of such holders of Registrable
                           Securities. Such holders of Registrable Securities
                           shall not be required to make any representations or
                           warranties to or agreements with the Company or the
                           underwriters except as they may relate to such
                           holders of Registrable Securities and their intended
                           methods of distribution.

VIII.    ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF SHARES.

         A.       Computation of Adjusted Price. In case the Company shall at
                  any time after the date hereof pay a dividend in shares of
                  Common Stock or make a distribution in shares of Common Stock,
                  then upon such dividend or distribution the Exercise Price in
                  effect immediately prior to such dividend or distribution
                  shall forthwith be reduced to a price determined by dividing:

                  1.       an amount equal to the total number of shares of
                           Common Stock outstanding immediately prior to such
                           dividend or distribution multiplied by the Exercise
                           Price in effect immediately prior to such dividend or
                           distribution, by

                  2.       the total number of shares of Common Stock
                           outstanding immediately after such issuance or sale.
                           For the purposes of any computation to be made in
                           accordance with the provisions of this Section 8. 1,
                           the following provisions shall be applicable: Common
                           Stock issuable by way of dividend or other
                           distribution on any stock of the Company shall be
                           deemed to have been issued immediately after the
                           opening of business on the date following the date
                           fixed for the determination of stockholders entitled
                           to receive such dividend or other distribution.

         B.       Subdivision and Combination. In case the Company shall at any
                  time subdivide or combine the outstanding shares of Common
                  Stock, the Exercise Price shall forthwith be proportionately
                  decreased in the case of subdivision or increased in the case
                  of combination.

         C.       Adjustment in Number of Shares. Upon each adjustment of the
                  Exercise Price pursuant to the provisions of this Article 8,
                  the number of Shares

                                      -9-
<PAGE>   10

                  issuable upon the exercise of each Warrant shall be adjusted
                  to the nearest full Share, by multiplying a number equal to
                  the Exercise Price in effect immediately prior to such
                  adjustment by the number of Shares issuable upon exercise of
                  the Warrants immediately prior to such adjustment and dividing
                  the product so obtained by the adjusted Exercise Price.

         D.       Reclassification Consolidation Merger etc. In case of any
                  reclassification or change of the outstanding shares of Common
                  Stock (other than a change in par value to no par value, or
                  from no par value to par value, or as a result of a
                  subdivision or combination), or in the case of any
                  consolidation of the Company with, or merger of the Company
                  into, another corporation (other than a consolidation or
                  merger in which the Company is the surviving corporation and
                  which does not result in any reclassification or change of the
                  outstanding shares of Common Stock, except a change as a
                  result of a subdivision or combination of such shares or a
                  change in par value, as aforesaid), or in the case of a sale
                  or conveyance to another corporation of the property of the
                  Company as an entirety, the Holders shall thereafter have the
                  right to purchase the kind and number of shares of stock and
                  other securities and property receivable upon such
                  reclassification, change, consolidation, merger, sale or
                  conveyance as if the Holders were the owners of the shares of
                  Common Stock underlying the Warrants immediately prior to any
                  such events at a price equal to the product of (x) the number
                  of shares issuable upon exercise of the Warrants and (y) the
                  Exercise Price in effect immediately prior to the record date
                  for such reclassification, change, consolidation, merger, sale
                  or conveyance as if such Holders had exercised the Warrants.

         E.       Determination of Outstanding Shares of Common Stock. The
                  number of shares of Common Stock at any one time outstanding
                  shall include the aggregate number of shares issued or
                  issuable upon the exercise of options, rights, warrants and
                  upon the conversion or exchange of convertible or exchangeable
                  securities (excluding shares issuable upon the exercise of
                  options and warrants outstanding on the date hereof).

         F.       Dividends and Other Distributions with Respect to Outstanding
                  Securities. In the event that the Company shall at any time
                  prior to the exercise of all Warrants declare a dividend
                  (other than a dividend consisting solely of shares of Common
                  Stock or a cash dividend or distribution payable out of
                  current or retained earnings) or otherwise distribute to its
                  shareholders any monies, assets, property, rights, evidences
                  of indebtedness, securities (other than shares of Common
                  Stock), whether issued by the Company or by another person or
                  entity, or any other thing of value, the Holder or Holders of
                  the unexercised Warrants shall thereafter be entitled to
                  receive, upon the exercise of such Warrants, in addition to
                  the shares of Common Stock or other securities receivable upon
                  the exercise thereof, the same monies, property, assets,
                  rights, evidences of indebtedness, securities or any other
                  thing of value that they would have been entitled to receive
                  at the time of such dividend or distribution. At the time of
                  any such dividend or distribution, the Company shall make
                  appropriate reserves to ensure the timely performance of the
                  provisions of this Section 8.6.

IX.      EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES.

         A.       Exchange. Each Warrant Certificate is exchangeable without
                  expense,

                                      -10-
<PAGE>   11

                  upon the surrender hereof by the registered Holder at the
                  principal executive office of the Company, for a new Warrant
                  Certificate of like tenor and date representing in the
                  aggregate the right to purchase the same number of Shares in
                  such denominations as shall be designated by the Holder
                  thereof at the time of such surrender.

         B.       Replacement. Upon receipt by the Company of evidence
                  reasonably satisfactory to it of the loss, theft, destruction
                  or mutilation of any Warrant Certificate, and, in case of
                  loss, theft or destruction, of indemnity or security
                  reasonably satisfactory to it, and reimbursement to the
                  Company of all reasonable expenses incidental thereto, and
                  upon surrender and cancellation of the Warrants, if mutilated,
                  the Company will make and deliver a new Warrant Certificate of
                  like tenor, in lieu thereof.

X.       ELIMINATION OF FRACTIONAL INTERESTS. THE COMPANY SHALL NOT BE REQUIRED
         TO ISSUE CERTIFICATES REPRESENTING FRACTIONS OF SHARES OF COMMON STOCK
         AND SHALL NOT BE REQUIRED TO ISSUE SCRIP OR PAY CASH IN LIEU OF
         FRACTIONAL INTERESTS, IT BEING THE INTENT OF THE PARTIES THAT ALL
         FRACTIONAL INTERESTS SHALL BE ELIMINATED BY ROUNDING ANY FRACTION UP TO
         THE NEAREST WHOLE NUMBER OF SHARES OF COMMON STOCK.

XI.      RESERVATION AND LISTING OF SECURITIES. THE COMPANY SHALL AT ALL TIMES
         RESERVE AND KEEP AVAILABLE OUT OF ITS AUTHORIZED SHARES OF COMMON
         STOCK, SOLELY FOR THE PURPOSE OF ISSUANCE UPON THE EXERCISE OF THE
         WARRANTS, SUCH NUMBER OF SHARES OF COMMON STOCK AS SHALL BE ISSUABLE
         UPON THE EXERCISE THEREOF. THE COMPANY COVENANTS AND AGREES THAT, UPON
         EXERCISE OF THE WARRANTS AND PAYMENT OF THE EXERCISE PRICE THEREOF, ALL
         SHARES OF COMMON STOCK ISSUABLE UPON SUCH EXERCISE SHALL BE DULY AND
         VALIDLY ISSUED, FULLY PAID, NON-ASSESSABLE AND NOT SUBJECT TO THE
         PREEMPTIVE RIGHTS OF ANY SHAREHOLDER. AS LONG AS THE WARRANTS SHALL BE
         OUTSTANDING, THE COMPANY SHALL USE ITS BEST EFFORTS TO CAUSE ALL SHARES
         OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANTS TO BE LISTED
         ON OR QUOTED BY THE EXCHANGE UPON WHICH THE COMPANY'S COMMON STOCK IS
         THEN LISTED OR QUOTED.

XII.     NOTICES TO WARRANT HOLDERS. NOTHING CONTAINED IN THIS AGREEMENT SHALL
         BE CONSTRUED AS CONFERRING UPON THE HOLDER OR HOLDERS THE RIGHT TO VOTE
         OR TO CONSENT OR TO RECEIVE NOTICE AS A SHAREHOLDER IN RESPECT OF ANY
         MEETINGS OF SHAREHOLDERS FOR THE ELECTION OF DIRECTORS OR ANY OTHER
         MATTER, OR AS HAVING ANY RIGHTS WHATSOEVER AS A SHAREHOLDER OF THE
         COMPANY. IF, HOWEVER, AT ANY TIME PRIOR TO THE EXPIRATION OF THE
         WARRANTS AND THEIR EXERCISE, ANY OF THE FOLLOWING EVENTS SHALL OCCUR:

         1.       the Company shall take a record of the holders of its shares
                  of Common Stock for the purpose of entitling them to receive a
                  dividend or distribution payable otherwise than in cash, or a
                  cash

                                      -11-
<PAGE>   12

                  dividend or distribution payable otherwise than out of current
                  or retained earnings, as indicated by the accounting treatment
                  of such dividend or distribution on the books of the Company;
                  or

         2.       the Company shall offer to all the holders of its Common Stock
                  any additional shares of capital stock of the Company or
                  securities convertible into or exchangeable for shares of
                  capital stock of the Company, or any option, right or warrant
                  to subscribe therefor; or

         3.       a dissolution, liquidation or winding up of the Company (other
                  than in connection with a consolidation or merger) or a sale
                  of all or substantially all of its property, assets and
                  business as an entirety shall be proposed;

then, in any one or more of said events, the Company shall give written notice
of such event at least twenty (20) days prior to the date fixed as a record date
or the date of closing the transfer books for the determination of the
shareholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, options or warrants, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such
notice shall specify such record date or the date of closing of the transfer
books, as the case may be. Failure to give such notice or any defect therein
shall not affect the validity of any action taken in connection with the
declaration or payment of any such dividend or distribution, or the issuance of
any convertible or exchangeable securities or subscription rights, options or
warrants, or any proposed dissolution, liquidation, winding up or sale.

XIII.    NOTICES. ALL NOTICES, REQUESTS, CONSENTS AND OTHER COMMUNICATIONS
         HEREUNDER SHALL BE IN WRITING AND SHALL BE DEEMED TO HAVE BEEN DULY
         MADE WHEN DELIVERED, TELECOPIED OR MAILED BY REGISTERED OR CERTIFIED
         MAIL, RETURN RECEIPT REQUESTED:

                  1.       If to a registered Holder of the Warrants, to the
                           address of such Holder as shown on the books of the
                           Company; or

                  2.       If to the Company, to the address set forth in
                           Section 3 of this Agreement or to such other address
                           as the Company may designate by notice to the
                           Holders.

XIV.     SUPPLEMENTS AND AMENDMENTS. THE COMPANY AND THE UNDERWRITERS MAY FROM
         TIME TO TIME SUPPLEMENT OR AMEND THIS AGREEMENT WITHOUT THE APPROVAL OF
         ANY HOLDERS OF WARRANT CERTIFICATES IN ORDER TO CURE ANY AMBIGUITY, TO
         CORRECT OR SUPPLEMENT ANY PROVISION CONTAINED HEREIN WHICH MAY BE
         DEFECTIVE OR INCONSISTENT WITH ANY PROVISIONS HEREIN, OR TO MAKE ANY
         OTHER PROVISIONS IN REGARD TO MATTERS OR QUESTIONS ARISING HEREUNDER
         WHICH THE COMPANY AND THE UNDERWRITERS MAY DEEM NECESSARY OR DESIRABLE
         AND WHICH THE COMPANY AND THE UNDERWRITERS DEEM NOT TO ADVERSELY AFFECT
         THE INTERESTS OF THE HOLDERS OF WARRANT CERTIFICATES.

                                      -12-
<PAGE>   13

XV.      SUCCESSORS. ALL THE COVENANTS AND PROVISIONS OF THIS AGREEMENT BY OR
         FOR THE BENEFIT OF THE COMPANY AND THE HOLDERS INURE TO THE BENEFIT OF
         THEIR RESPECTIVE SUCCESSORS AND ASSIGNS HEREUNDER.

XVI.     TERMINATION. THIS AGREEMENT SHALL TERMINATE AT THE CLOSE OF BUSINESS ON
         APRIL 19, 2008. NOTWITHSTANDING THE FOREGOING, THIS AGREEMENT WILL
         TERMINATE ON ANY EARLIER DATE WHEN ALL WARRANTS HAVE BEEN EXERCISED AND
         ALL THE SHARES ISSUABLE UPON EXERCISE OF THE WARRANTS HAVE BEEN RESOLD
         TO THE PUBLIC; PROVIDED, HOWEVER, THAT THE PROVISIONS OF SECTION 7.5
         SHALL SURVIVE SUCH TERMINATION UNTIL THE CLOSE OF BUSINESS ON APRIL 19,
         2011.

XVII.    GOVERNING LAW. THIS AGREEMENT AND EACH WARRANT CERTIFICATE ISSUED
         HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE
         STATE OF NEW YORK WITH RESPECT TO CONTRACTS MADE AND TO BE WHOLLY
         PERFORMED IN SAID STATE AND FOR ALL PURPOSES SHALL BE CONSTRUED IN
         ACCORDANCE WITH THE LAWS OF SAID STATE. THE COMPANY, THE UNDERWRITERS
         AND ANY OTHER REGISTERED HOLDER OR HOLDERS AGREE OF THE WARRANT
         CERTIFICATES (1) AGREE THAT ANY LEGAL SUIT, ACTION OR PROCEEDING
         ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE INSTITUTED
         EXCLUSIVELY IN NEW YORK STATE SUPREME COURT, COUNTY OF NEW YORK, OR IN
         THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK,
         (2) WAIVE ANY OBJECTION WHICH THE THEY MAY HAVE NOW OR HEREAFTER TO THE
         VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND (3) IRREVOCABLY
         CONSENT TO THE JURISDICTION OF THE NEW YORK STATE SUPREME COURT, COUNTY
         OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
         DISTRICT OF NEW YORK IN ANY SUCH SUIT, ACTION OR PROCEDURE. THE
         COMPANY, THE UNDERWRITERS AND ANY OTHER REGISTERED HOLDER OR HOLDERS OF
         THE WARRANT CERTIFICATES, WARRANTS OR THE SHARES FURTHER AGREE TO
         ACCEPT AND ACKNOWLEDGE SERVICE OF ANY AND ALL PROCESS WHICH MAY BE
         SERVED IN ANY SUIT, ACTION OR PROCEEDING IN THE NEW YORK STATE SUPREME
         COURT, COUNTY OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE
         SOUTHERN DISTRICT OF NEW YORK, AND AGREE THAT SERVICE OF PROCESS UPON
         THEM MAILED BY CERTIFIED MAIL TO THEIR RESPECTIVE ADDRESSES SHALL BE
         DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THEM IN ANY
         SUCH SUIT, ACTION OR PROCEEDING. IN THE EVENT OF LITIGATION BETWEEN THE
         PARTIES ARISING HEREUNDER, THE PREVAILING PARTY SHALL BE ENTITLED TO
         COSTS AND REASONABLE ATTORNEY'S FEES.

XVIII.   BENEFITS OF THIS AGREEMENT. NOTHING IN THIS AGREEMENT SHALL BE
         CONSTRUED TO GIVE TO ANY PERSON OR CORPORATION, OTHER THAN THE COMPANY
         AND THE UNDERWRITERS AND ANY OTHER REGISTERED HOLDER OR HOLDERS OF THE
         WARRANT CERTIFICATES, WARRANTS OR THE SHARES, ANY LEGAL OR EQUITABLE
         RIGHT, REMEDY OR CLAIM UNDER THIS AGREEMENT; AND THIS AGREEMENT SHALL
         BE FOR THE SOLE AND EXCLUSIVE

                                      -13-
<PAGE>   14

         BENEFIT OF THE COMPANY AND THE UNDERWRITERS AND ANY OTHER HOLDER OR
         HOLDERS OF THE WARRANT CERTIFICATES, WARRANTS OR THE SHARES.

XIX.     COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF
         COUNTERPARTS AND EACH OF SUCH COUNTERPARTS SHALL FOR ALL PURPOSES BE
         DEEMED TO BE AN ORIGINAL, AND SUCH COUNTERPARTS SHALL TOGETHER
         CONSTITUTE BUT ONE AND THE SAME INSTRUMENT.

                                      -14-
<PAGE>   15

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

[SEAL]                                     NTN COMMUNICATIONS, INC.

                                           By:    /s/ Stanley B. Kinsey
                                              ----------------------------------
                                           Name:  Stanley B. Kinsey
                                           Title: Chief Executive Officer and
                                                  Chairman of the Board

Attest:

       /s/ Kendra S. Berger
--------------------------------------
Name:  Kendra Berger
Title: Chief Financial Officer
        and Secretary                      STARR SECURITIES, INC.

                                           By:         /s/ Martin Vegh
                                              ----------------------------------
                                           Name:  Martin Vegh
                                           Title:  President

                                           GUNNALLEN FINANCIAL, INC.

                                           By:         /s/ Howard Davis
                                              ----------------------------------
                                           Name:
                                           Title:

                                      -15-
<PAGE>   16

                                    EXHIBIT A

THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (1) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (11) TO THE EXTENT APPLICABLE,
PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (111) UPON THE DELIVERY BY THE HOLDER TO
THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE
COMPANY, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
AVAILABLE.

THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.

                            EXERCISABLE ON OR BEFORE
                 5:00 P.M., NEW YORK TIME, ______________, 200_
No. W-                                                         ________ Warrants

                               WARRANT CERTIFICATE

                  This Warrant Certificate certifies that ________________ or
registered assigns is the registered holder of _______ Warrants to purchase, at
any time from ______________ until 5:00 P.M. New York City time on
______________, 200_ ("Expiration Date") up to _______ shares ("Shares") of
fully-paid and nonassessable common stock, par value $.005 per share ("Common
Stock"), of NTN Communications, Inc., a Delaware corporation (the "Company"), at
the initial exercise price, subject to adjustment in certain events (the
"Exercise Price"), of $_____ per Share upon surrender of this Warrant
Certificate and payment of the Exercise Price at an office or agency of the
Company, but subject to the conditions set forth herein and in the warrant
agreement dated as of ____________ ("Warrant Agreement") between the Company,
Starr Securities, Inc. and GunnAllen Financial, Inc. Payment of the Exercise
Price may be made in cash, or by certified or official bank check in New York
Clearing House funds payable to the order of the Company, or any combination of
cash or check, or in accordance with Section 3.2 of the Warrant Agreement.

                  No Warrant may be exercised after 5:00 P.M., New York City
time, on the Expiration Date, at which time all Warrants evidenced hereby,
unless exercised prior thereto, shall thereafter be void.

                  The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants issued pursuant to the Warrant Agreement,
which Warrant Agreement is hereby incorporated by reference in and made a part
of this instrument and is hereby referred to in a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Company and the holders (the words "holders" or "holder" meaning the registered
holders or registered holder) of the Warrants.

                                      -16-
<PAGE>   17

                  The Warrant Agreement provides that upon the occurrence of
certain events, the Exercise Price and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted. In such
event, the Company will, at the request of the holder, issue a new Warrant
Certificate evidencing the adjustment in the Exercise Price and the number
and/or type of securities issuable upon the exercise of the Warrants; provided,
however, that the failure of the Company to issue such new Warrant Certificates
shall not in any way change, alter, or otherwise impair, the rights of the
holder as set forth in the Warrant Agreement.

                  Upon due presentment for registration of transfer of this
Warrant Certificate at an office or agency of the Company, a new Warrant
Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants shall be issued to the transferee(s) in
exchange for this Warrant Certificate, subject to the limitations provided
herein and in the Warrant Agreement, without any charge except for any tax, or
other governmental charge imposed in connection therewith.

                  Upon the exercise of less than all of the Warrants evidenced
by this Certificate, the Company shall forthwith issue to the holder hereof a
new Warrant Certificate representing such number of unexercised Warrants.

                  The Company may deem and treat the registered holder(s) hereof
as the absolute owner(s) of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, and of any distribution to the holder(s) hereof, and for
all other purposes, and the Company shall not be affected by any notice to the
contrary.

                  All terms used in this Warrant Certificate which are defined
in the Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.

                  IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed under its corporate seal.

Dated:                                      NTN COMMUNICATIONS, INC.
       -------------------
                                            By:
                                               ---------------------------------
                                            Name:
                                            Title:

Attest:

----------------------------------
Name:
Title:
[SEAL]

                                      -2-
<PAGE>   18

                         [FORM OF ELECTION TO PURCHASE]

                  The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to purchase Shares and herewith
tenders in payment for such Shares cash or a certified or official bank check
payable in New York Clearing House Funds to the order of _____________________
in the amount of $_______ all in accordance with the terms hereof. The
undersigned requests that a certificate for such Shares be registered in the
name of ____________________, whose address is _____________________ and that
such Certificate be delivered to whose address is ___________________________.

[ ] The Undersigned hereby elects to exercise of the Warrants held by it in
accordance with Section ___ of the Warrant Agreement dated ______________, 2000.

Dated:                            Signature: ___________________________________
                                  (Signature must conform in all respects to
                                  name of holder as specified on the face of the
                                  Warrant Certificate.)

                        (Insert Social Security or Other
                          Identifying Number of Holder)

<PAGE>   19

                              [FORM OF ASSIGNMENT]

                  (To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate.)

                  FOR VALUE RECEIVED _________________________________ hereby
sells, assigns and transfers unto

--------------------------------------------------------------------------------
                  (Please print name and address of transferee)

this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________________________,
Attorney, to transfer the within Warrant Certificate on the books of the
within-named Company, with full power of substitution.

Dated:                            Signature:
                                            -----------------------------------
                                  (Signature must conform in all respects to
                                  name of holder as specified on the face of the
                                  Warrant Certificate.)

                        (Insert Social Security or Other
                          Identifying Number of Holder)

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