Document:

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                                                                    EXHIBIT 10.1

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                      INTEGRATED ELECTRICAL SERVICES, INC.

                     AND EACH OF THE GUARANTORS PARTY HERETO

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

                              THE BANK OF NEW YORK

                                     TRUSTEE

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

                                    INDENTURE

                          DATED AS OF NOVEMBER 24, 2004

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

                 SERIES A 6.5% SENIOR CONVERTIBLE NOTES DUE 2014

                 SERIES B 6.5% SENIOR CONVERTIBLE NOTES DUE 2014

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                                TABLE OF CONTENTS

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Article I Definitions and Incorporation by Reference.............................................................    1

         Section 1.1     Definitions.............................................................................    1
         Section 1.2     Other Definitions.......................................................................    8
         Section 1.3     Incorporation by Reference of Trust Indenture Act.......................................    9
         Section 1.4     Rules of Construction...................................................................   10
         Section 1.5     Acts of Holders.........................................................................   10

Article II The Securities........................................................................................   11

         Section 2.1     Form and Dating.........................................................................   11
         Section 2.2     Execution and Authentication............................................................   12
         Section 2.3     Registrar, Paying Agent and Conversion Agent............................................   13
         Section 2.4     Paying Agent to Hold Money and Securities in Trust......................................   13
         Section 2.5     Securityholder Lists....................................................................   13
         Section 2.6     Transfer and Exchange...................................................................   14
         Section 2.7     Replacement Securities..................................................................   15
         Section 2.8     Outstanding Securities; Determination of Holder's Action................................   16
         Section 2.9     Temporary Securities....................................................................   17
         Section 2.10    Cancellation............................................................................   17
         Section 2.11    Persons Deemed Owners...................................................................   17
         Section 2.12    Special Transfer Provisions.............................................................   18
         Section 2.13    CUSIP Numbers...........................................................................   22
         Section 2.14    Re-Issuance as Same Series..............................................................   22
         Section 2.15    Issuance of Additional Securities.......................................................   23

Article III Repurchase of Securities.............................................................................   23

         Section 3.1     Purchase of Securities at Option of the Holder..........................................   23
         Section 3.2     Purchase of Securities at Option of the Holder upon a Fundamental Change................   23
         Section 3.3     Conditions to the Company's Election to Pay the Repurchase Price or the
                         Fundamental Change Repurchase Price in Common Stock.....................................   24
         Section 3.4     Notices; Method of Exercising Repurchase Right, Etc. ...................................   26
         Section 3.5     Deposit of Repurchase Price or Fundamental Change Repurchase Price......................   31
         Section 3.6     Covenant to Comply With Securities Laws Upon Purchase of Securities.....................   31

Article IV Redemption of Securities..............................................................................   32

         Section 4.1     Optional Redemption.....................................................................   32
         Section 4.2     Election to Redeem; Notice to Trustee...................................................   32
         Section 4.3     Selection by Trustee of Securities to Be Redeemed.......................................   32
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<TABLE>
<S>                                                                                                                 <C>
         Section 4.4     Notice of Redemption....................................................................   33
         Section 4.5     Deposit of Redemption Price.............................................................   34
         Section 4.6     Securities Payable on Redemption Date...................................................   34
         Section 4.7     Conversion Arrangement on Call for Redemption...........................................   34

Article V Covenants..............................................................................................   35

         Section 5.1     Payment of Securities...................................................................   35
         Section 5.2     SEC and Other Reports...................................................................   35
         Section 5.3     Compliance Certificate..................................................................   36
         Section 5.4     Further Instruments and Acts............................................................   36
         Section 5.5     Maintenance of Office or Agency.........................................................   37
         Section 5.6     Delivery of Certain Information.........................................................   37
         Section 5.7     Existence...............................................................................   37
         Section 5.8     Resale of Certain Securities............................................................   37
         Section 5.9     Liquidated Damages Under the Registration Rights Agreement..............................   37
         Section 5.10    Information for IRS Filings.............................................................   38
         Section 5.11    Additional Subsidiary Guarantees........................................................   38
         Section 5.12    Book-Entry System.......................................................................   38

Article VI Make-Whole Premium and Redemption Premium.............................................................   38

         Section 6.1     Entitlement to Make-Whole Premium and Redemption Premium................................   38
         Section 6.2     Payment of Make-Whole Premium and Redemption Premium....................................   43
         Section 6.3     Adjustment to the Make-Whole Premium....................................................   43

Article VII Successor Corporation................................................................................   44

         Section 7.1     When Company May Merge or Transfer Assets...............................................   44

Article VIII Defaults and Remedies...............................................................................   45

         Section 8.1     Events of Default.......................................................................   45
         Section 8.2     Acceleration............................................................................   47
         Section 8.3     Other Remedies..........................................................................   47
         Section 8.4     Waiver of Past Defaults.................................................................   47
         Section 8.5     Control by Majority.....................................................................   47
         Section 8.6     Limitation on Suits.....................................................................   48
         Section 8.7     Rights of Holders to Receive Payment....................................................   48
         Section 8.8     Collection Suit by Trustee..............................................................   48
         Section 8.9     Trustee May File Proofs of Claim........................................................   48
         Section 8.10    Priorities..............................................................................   49
         Section 8.11    Undertaking for Costs...................................................................   49
         Section 8.12    Waiver of Stay, Extension or Usury Laws.................................................   50
         Section 8.13    Restoration of Rights and Remedies......................................................   50
         Section 8.14    Rights and Remedies Cumulative..........................................................   50
         Section 8.15    Delay or Omission Not Waiver............................................................   50
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<TABLE>
<S>                                                                                                                 <C>
Article IX Trustee...............................................................................................   51

         Section 9.1     Duties of Trustee.......................................................................   51
         Section 9.2     Rights of Trustee.......................................................................   52
         Section 9.3     Individual Rights of Trustee............................................................   53
         Section 9.4     Trustee's Disclaimer....................................................................   53
         Section 9.5     Notice of Defaults......................................................................   53
         Section 9.6     Reports by Trustee to Holders...........................................................   54
         Section 9.7     Compensation and Indemnity..............................................................   54
         Section 9.8     Replacement of Trustee..................................................................   55
         Section 9.9     Successor Trustee by Merger.............................................................   56
         Section 9.10    Eligibility; Disqualification...........................................................   56
         Section 9.11    Preferential Collection of Claims Against Company.......................................   56

Article X Discharge of Indenture.................................................................................   56

         Section 10.1    Discharge of Liability on Securities....................................................   56
         Section 10.2    Repayment to the Company................................................................   56

Article XI Amendments............................................................................................   57

         Section 11.1    Without Consent of Holders..............................................................   57
         Section 11.2    With Consent of Holders.................................................................   57
         Section 11.3    Compliance with Trust Indenture Act.....................................................   59
         Section 11.4    Revocation and Effect of Consents, Waivers and Actions..................................   59
         Section 11.5    Notation on or Exchange of Securities...................................................   59
         Section 11.6    Trustee to Sign Supplemental Indentures.................................................   59
         Section 11.7    Effect of Supplemental Indentures.......................................................   59

Article XII Subsidiary Guarantees................................................................................   59

         Section 12.1    Guarantee...............................................................................   59
         Section 12.2    Limitation on Guarantor Liability.......................................................   61
         Section 12.3    Execution and Delivery of Subsidiary Guarantee..........................................   61
         Section 12.4    Guarantors May Consolidate, Etc.  on Certain Terms......................................   62
         Section 12.5    Releases................................................................................   62

Article XIII Conversions.........................................................................................   63

         Section 13.1    Conversion Privilege; Limitations on Conversion.........................................   63
         Section 13.2    Conversion Procedure; Fractional Shares; Cash Settlement................................   67
         Section 13.3    Adjustment of Conversion Price..........................................................   69
         Section 13.4    Consolidation or Merger of the Company..................................................   77
         Section 13.5    Notice of Adjustment....................................................................   78
         Section 13.6    Notice in Certain Events................................................................   79
         Section 13.7    Company To Reserve Stock................................................................   79
         Section 13.8    Taxes on Conversion.....................................................................   80
         Section 13.9    Conversion After Record Date............................................................   80
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<TABLE>
<S>                                                                                                                 <C>
         Section 13.10   Responsibility of Trustee for Conversion Provisions.....................................   81
         Section 13.11   Unconditional Right of Holders to Convert...............................................   81
         Section 13.12   Common Stock Restricted Securities Legends..............................................   81

Article XIV Miscellaneous........................................................................................   82

         Section 14.1    Trust Indenture Act Controls............................................................   82
         Section 14.2    Notices.................................................................................   82
         Section 14.3    Communication by Holders with Other Holders.............................................   83
         Section 14.4    Certificate and Opinion as to Conditions Precedent......................................   83
         Section 14.5    Statements Required in Certificate or Opinion...........................................   83
         Section 14.6    Separability Clause.....................................................................   84
         Section 14.7    Rules by Trustee, Paying Agent, Conversion Agent and Registrar..........................   84
         Section 14.8    Governing Law...........................................................................   84
         Section 14.9    No Recourse Against Others..............................................................   84
         Section 14.10   Successors..............................................................................   84
         Section 14.11   Multiple Originals......................................................................   84
         Section 14.12   Designated Senior Indebtedness..........................................................   84
</TABLE>

SCHEDULE I     Existing Guarantors

EXHIBIT A      Form of Global Security

EXHIBIT B      Form of Certificated Security

EXHIBIT C      Transfer Certificate

EXHIBIT D      Institutional Accredited Investor Letter

EXHIBIT E      Exchange Certificate

EXHIBIT F      Common Stock Restricted Securities Legend

EXHIBIT G      Form of Notation of Subsidiary Guarantee

EXHIBIT H      Form of Supplemental Indenture

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      INDENTURE, dated as of November 24, 2004, among INTEGRATED ELECTRICAL
SERVICES, INC., a corporation duly organized and existing under the laws of the
State of Delaware, having its principal office at 1800 West Loop South, Suite
500, Houston, Texas 77027 (the "Company"), the Guarantors (as defined) and THE
BANK OF NEW YORK, a New York banking corporation, as Trustee hereunder (the
"Trustee").

      Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders of the Company's Series A 6.5%
Senior Convertible Notes due 2014 (the "Series A Securities") and the Company's
Series B 6.5% Senior Convertible Notes due 2014 (the "Series B Securities" and
together with the Series A Securities, the "Securities"):

                                   ARTICLE I

                   DEFINITIONS AND INCORPORATION BY REFERENCE

      Section 1.1 Definitions.

      "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.

      "AMEX" means American Stock Exchange LLC.

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

      "Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now or hereafter in effect, or any successor thereto.

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

      "Board Resolution" means a resolution of the Board of Directors.

      "Business Day" means a day other than a Saturday or Sunday or any day on
which banking institutions in The City of New York, New York or Houston, Texas
are authorized or obligated by law or regulation to close.

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

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      "Capital Stock" means, with respect to any Person, any and all shares,
interests, membership interests, rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated) the
equity of such Person, whether now outstanding or issued after the date hereof,
including without limitation, all common stock and preferred stock.

      "Certificated Securities" means Securities that are issued in
certificated, fully registered form, in the form attached hereto as Exhibit B.

      "Change of Control" means the occurrence of one or more of the following
events:

            (1) any sale, lease, exchange or other transfer (in one transaction
      or a series of related transactions) of all or substantially all of the
      Company's assets to any Person or group of related Persons (other than to
      any of the Company's wholly owned Subsidiaries) as defined in Section
      13(d) of the Exchange Act;

            (2) the approval by the holders of the Company's Capital Stock of
      any plan or proposal for liquidation or dissolution;

            (3) if any Person or group shall become the beneficial owner (as
      defined in Rule 13d-3 under the Exchange Act) of shares representing more
      than 50% of the aggregate ordinary voting power represented by issued and
      outstanding Voting Stock of the Company; or

            (4) any consolidation or merger by the Company where Persons who are
      beneficial owners (as defined in Rule 13d-3 under the Exchange Act) of the
      Company's shares of Voting Stock immediately prior to such transaction no
      longer own at least a majority of the total voting power of the continuing
      or surviving corporation or entity.

Notwithstanding anything in this Indenture to the contrary, a "Change of
Control" will not be deemed to have occurred in respect of any of the foregoing
if at least 90% of the consideration, excluding cash payments for fractional
shares, in the subject transaction or event consists of shares of Capital Stock
or American Depositary Shares that are (A) listed on, or immediately after the
transaction or event will be listed on the NYSE or another United States
national securities exchange, or (B) approved, or immediately after the
transaction or event will be approved, for quotation on the NASDAQ National
Market or any similar United States system of automated dissemination of
quotations of securities prices.

      "Closing Date" means the date of this Indenture.

      "Closing Price" means, for any security as of any date, the last closing
trade price for such security on the principal United States securities market
on which such security is traded (which is currently the NYSE with respect to
the Common Stock) as reported by Bloomberg Financial Markets (or any successor
thereto, "Bloomberg"), or, if such exchange begins to operate on an extended
hours basis and does not designate the closing trade price, then the last trade
price of such security prior to 4:00:00 p.m. (New York City time) as reported by
Bloomberg, or, if such exchange is not the principal securities exchange or
trading market for such security, the last trade price of such security on the
principal securities exchange or trading market where such security is listed or
traded as reported by Bloomberg, or if the foregoing do

                                       2
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not apply, the last trade price of such security in the over-the-counter market
on the electronic bulletin board for such security as reported by Bloomberg, or,
if no last trade price is reported for such security by Bloomberg, the average
of the highest bid prices and the lowest ask prices of any market makers for
such security as reported in the "pink sheets" by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.). If the Closing Price cannot be calculated for
a security on a particular date on any of the foregoing bases, the Closing Price
of such security on such date shall be the fair market value as mutually
determined by the Company and the Majority Holders.

      "Closing Price Per Share" means, with respect to the Common Stock, for any
day, the Closing Price per share of Common Stock.

      "Common Stock" means the Common Stock, par value $0.01 per share, of the
Company existing on the date of this Indenture or any other shares of Capital
Stock of the Company into which such Common Stock shall be reclassified or
changed.

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

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

      "Conversion Date" means, with respect to any Holder, the date on which
such Holder has satisfied all the requirements to convert its Securities
pursuant to Section 13.2.

      "Corporate Trust Office" means the principal office of the Trustee at
which at any time its corporate trust business shall be administered, which
office at the date hereof is located at 101 Barclay St., 8th Floor West, New
York, New York 10286, Attention: Corporate Trust Services, or such other address
as the Trustee may designate from time to time by notice to the Holders and the
Company, or the principal corporate trust office of any successor Trustee (or
such other address as a successor Trustee may designate from time to time by
notice to the Holders and the Company).

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

      "Domestic Subsidiary" means any Subsidiary of the Company formed under the
laws of the United States or any state of the United States or the District of
Columbia or that guarantees or otherwise provides direct credit support for any
Indebtedness of the Company.

      "DTC" means The Depository Trust Company.

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

      "Fundamental Change" means any Change of Control or Termination of
Trading.

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      "Fundamental Change Conversion Period" means the period from and including
the fifteenth (15th) Trading Day before the Effective Date of a Fundamental
Change to and including the fifteenth (15th) Trading Day after the Effective
Date of the Fundamental Change.

      "GAAP" means generally accepted accounting principles in the United States
of America in effect from time to time.

      "Global Security" means a Security that is registered in the register of
Securities in the name of a Depositary or a nominee thereof, in the form
attached hereto as Exhibit A.

      "Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take or pay or to maintain financial statement
conditions or otherwise).

      "Guarantors" means each Subsidiary of the Company that is bound by a
Subsidiary Guarantee in accordance with the provisions of this Indenture, and
their respective successors and assigns, in each case, until the Subsidiary
Guarantee of such Person has been released in accordance with the provisions of
this Indenture.

      "Hedging Obligations" means, with respect to any Person, the net payment
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other similar
agreements or arrangements in each case entered into in the ordinary course of
business and pursuant to past practices designed to protect such Person against
fluctuations in commodity prices, interest rates or currency exchange rates.

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

      "Indebtedness" of any Person means (a) any indebtedness, whether or not
contingent, (i) in respect of borrowed money, (ii) evidenced by bonds, notes,
debentures or similar instruments, (iii) letters of credit (or reimbursement
agreements in respect thereof), (iv) banker's acceptances, (v) representing
Capital Lease Obligations, (vi) the unpaid balance of the deferred purchase
price of any property, except to the extent that any such balance that
constitutes an accrued expense or trade payable in accordance with GAAP, (vii)
representing any Hedging Obligation, in each case, if and to the extent any of
the foregoing indebtedness (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet prepared in
accordance with GAAP, as well as all Indebtedness of others secured by a lien on
any asset of such Person (whether or not such Indebtedness is assumed by such
Person) and, (b) to the extent not otherwise included in clause (a) hereof, the
Guarantee by such Person of any Indebtedness of any other Person. The amount of
any Indebtedness outstanding as of any date shall be (i) the accreted value
thereof, in the case of any Indebtedness that does not require current payments
of interest, and (ii) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.

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      "Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.

      "Interest Payment Dates" shall mean each May 1 and November 1, commencing
on May 1, 2005.

      "Interest Rate" means 6.5%.

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

      "Liquidated Damages" shall mean all liquidated damages then owing pursuant
to the Registration Rights Agreement and all Conversion Block Liquidated Damages
then owning pursuant to the provisions of Section 13.1(c).

      "Majority Holders" shall mean the Holders of more than 50% of the
aggregate principal amount of the Securities at the time outstanding.

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

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

      "Officers' Certificate" means a written certificate containing the
information specified in Section 14.4 and Section 14.5, signed in the name of
the Company by any two Officers, and delivered to the Trustee. An Officers'
Certificate given pursuant to Section 5.3 shall be signed by the Chief Executive
Officer, Chief Financial Officer, Chief Accounting Officer, Treasurer or
Controller of the Company but need not contain the information specified in
Section 14.4 and Section 14.5. Upon request of the Trustee from time to time,
the Company shall deliver incumbency certificates of the Officers who are
authorized to deal with the Trustee on behalf of the Company, and such
certificates shall contain specimen or facsimile signatures of such Officers.

      "Opinion of Counsel" means a written opinion containing the information
specified in Section 14.4 and Section 14.5, from legal counsel who is reasonably
acceptable to the Trustee. The counsel may be an employee of, or counsel to, the
Company or the Trustee.

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

      "Purchase Agreement" means that certain Purchase Agreement dated as of
November 22, 2004 among the Company, the Guarantors (on the Closing Date) and
the Initial Purchasers.

      "QIB" means a Qualified Institutional Buyer as defined in Rule 144A of the
Securities Act.

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      "Redemption Conversion Period" means, with respect to any redemption of
Securities pursuant to Article IV and a related conversion of Securities
pursuant to Article XIII, the period from and including the date of the
applicable Redemption Notice to and including the last Trading Day prior to the
Redemption Date specified in such Redemption Notice. Notwithstanding the
foregoing or any other provision of this Indenture, a Redemption Conversion
Period shall be deemed not to include any day that occurs within a Fundamental
Change Conversion Period, and the Company shall not be obligated to pay any
Redemption Premium in respect of, or otherwise by reason of, any conversion of
Securities that gives rise to an obligation on the part of the Company to pay a
Make-Whole Premium.

      "Redemption Premium" means, with respect to any redemption of Securities
pursuant to Article IV and with respect to a conversion of such Securities
pursuant to Article XIII during the related Redemption Conversion Period, the
aggregate net present value of the remaining scheduled payments of interest
that, but for the redemption or conversion of such Securities hereunder, would
have accrued on such Securities during the period from the Redemption Date (in
the case of a redemption) or the Conversion Date (in the case of a conversion)
through the Stated Maturity, calculated using a discount rate equal to the
Treasury Yield at 5:00 p.m. on the third Business Day preceding such Redemption
Date or Conversion Date, as the case may be.

      "Registration Rights Agreement" means the Registration Rights Agreement,
dated as of the date hereof, among the Company and the Initial Purchasers.

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

      "Restricted Security" means a Security required to bear the restrictive
legend set forth in the form of Security set forth in Exhibits A or B of this
Indenture, as applicable.

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

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

      "SEC" means the Securities and Exchange Commission.

      "Securities" has the meaning assigned to it in the preamble to this
Indenture and shall include the Securities issued pursuant to Section 2.2
hereof.

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

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

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      "Series A Securities" has the meaning assigned to it in the preamble to
this Indenture.

      "Series B Securities" has the meaning assigned to it in the preamble to
this Indenture.

      "Share Limitation" means the Williams Act Limitation and, if and only if
the provisions of Section 13.1(c) are applicable as set forth in the first
sentence of Section 13.1(c), the limitations set forth in Section 13.1(c).

      "Significant Subsidiary" shall have the meaning ascribed to such term in
Rule 405 of the Securities Act.

      "Stated Maturity," when used with respect to any Security, means November
1, 2014.

      "Subsidiary" means any Person of which at least a majority of the
outstanding Voting Stock shall at the time directly or indirectly be owned or
controlled by the Company or by one or more Subsidiaries or by the Company and
one or more Subsidiaries.

      "Subsidiary Guarantee" means the Guarantee by each Guarantor of the
Company's obligations under this Indenture and the Securities pursuant to the
terms of this Indenture.

      "Termination of Trading" shall be deemed to have occurred if the Common
Stock or other Capital Stock into which the Securities are convertible is
neither listed for trading on the NYSE or the AMEX nor approved for listing on
the NASDAQ National Market or the NASDAQ SmallCap Market, and no American
Depositary Shares or similar instruments for such common stock are so listed or
approved for listing in the United States.

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

      "Trading Day" means (x) if the applicable security is quoted on the Nasdaq
National Market System, a day on which trades may be made thereon or (y) if the
applicable security is listed or admitted for trading on the NYSE, the AMEX or
another national securities exchange, a day on which the NYSE, the AMEX or such
other national securities exchange is open for business or (z) if the applicable
security is not so listed, admitted for trading or quoted, any day other than a
Saturday or Sunday or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close.

      "Treasury Yield" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519) that
has become publicly available on the third Business Day prior to the Redemption
Date (or, if such Statistical Release is no longer published, any publicly
available source for similar market data)) most nearly equal to the then
remaining term of the Securities to the Stated Maturity; provided, however, that
if the then remaining term of the Securities to the Stated Maturity is not equal
to the constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Yield shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the then

                                       7
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remaining term of the Securities to the Stated Maturity is less than one year,
the Treasury Yield will be the weekly average yield on actually traded United
States Treasury securities adjusted to a constant maturity of one year.

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

      "Voting Stock" of a Person means Capital Stock of such Person of the class
or classes pursuant to which the holders thereof have the general voting power
to elect, or the general power to appoint, at least a majority of the board of
directors, managers or trustees of such Person (other than by reason of the
happening of any contingency).

      "Weighted Average Price" means, for any security as of any date, the
dollar volume-weighted average price for such security on the principal United
States securities market on which such security is traded (which is currently
the NYSE with respect to the Common Stock) as reported by Bloomberg through its
"Volume at Price" functions during the period beginning at 9:30:01 a.m. (New
York City time) (or such other time as such market publicly announces is the
official open of trading), and ending at 4:00:00 p.m. (New York City time) (or
such other time as such market publicly announces is the official close of
trading), or, if such exchange is not the principal securities exchange or
trading market for such security, the dollar volume-weighted average price of
such security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or if the foregoing do
not apply, the dollar volume-weighted average price of such security in the
over-the-counter market on the electronic bulletin board for such security as
reported by Bloomberg, or, if the dollar volume-weighted average price of such
security is not reported for such security by Bloomberg, the average of the
highest bid prices and the lowest ask prices of any market makers for such
security as reported in the "pink sheets" by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.). If the Weighted Average Price cannot be
calculated for a security on a particular date on any of the foregoing bases,
the Weighted Average Price of such security on such date shall be the fair
market value as mutually determined by the Company and the Majority Holders.

      Section 1.2 Other Definitions.

<TABLE>
<CAPTION>
Term:                                                                 Defined in:
----                                                                  ----------
<S>                                                                  <C>
"Agent Members"...................................................   Section 2.12(e)(v)
"Aggregate Cap"...................................................   Section 13.1(c)
"Available Treasury Shares" ......................................   Section 13.1(c)
"Bankruptcy Law"..................................................   Section 12.2
"beneficial owner"................................................   Section 3.4(j)
"Calculation Agent"...............................................   Section 6.1(b)
"Cash Settlement Amount"..........................................   Section 13.2
"Cash Settlement Notice Period"...................................   Section 13.2
"Common Stock Restricted Securities Legend".......................   Section 13.12
"Company Notice"..................................................   Section 3.4(a)
</TABLE>

                                       8
<PAGE>

<TABLE>
<CAPTION>
Term:                                                                 Defined in:
----                                                                  ----------
<S>                                                                  <C>
"Conversion Agent"................................................   Section 2.3
"Conversion Block Liquidated Damages".............................   Section 13.1(c)
"Conversion Obligation"...........................................   Section 13.2
"Conversion Price"................................................   Section 13.1(a)
"Conversion Retraction Period"....................................   Section 13.2
"Depositary"......................................................   Section 2.1
"Effective Date"..................................................   Section 6.1(a)(i)
"Election of Holder to Require Repurchase"........................   Section 2.1
"Event of Default"................................................   Section 8.1
"Exchange Cap"....................................................   Section 13.1(c)
"Expiration Time".................................................   Section 13.3(f)
"Fundamental Change Repurchase Date"..............................   Section 3.2
"Fundamental Change Repurchase Notice"............................   Section 3.4(b)
"Fundamental Change Repurchase Price".............................   Section 3.2
"Holder's Conversion Notice"......................................   Section 13.2
"Initial Purchasers"..............................................   Section 2.15
"Legend"..........................................................   Section 2.6(f)
"Make-Whole Premium"..............................................   Section 6.1(a)(iii)
"Make-Whole Premium Table"........................................   Section 6.1(a)(iii)(C)
"Non-Electing Share" .............................................   Section 13.4
"Non-Stock-Converted Principal Amount"............................   Section 13.2
"Notice of Default"...............................................   Section 8.1
"Optional Redemption Price".......................................   Section 4.1
"Paying Agent"....................................................   Section 2.3
"Purchasers"......................................................   Section 4.7
"Purchased Shares" ...............................................   Section 13.3(f)
"Redemption Date".................................................   Section 4.4(a)
"Redemption Notice"...............................................   Section 4.4(a)
"Registrar".......................................................   Section 2.3
"Repurchase Date".................................................   Section 3.1
"Repurchase Notice"...............................................   Section 3.4(b)
"Repurchase Price"................................................   Section 3.1
"Rule 144A Information"...........................................   Section 5.6
"Stockholder Approval"............................................   Section 13.1(c)
"Stock Price".....................................................   Section 6.1(a)(ii)
"Stock Price Cap" ................................................   Section 6.1(a)(iii)(B)
"Stock Price Threshold" ..........................................   Section 6.1(a)(iii)(A)
"transfer" .......................................................   Section 2.6(g)
"Trigger Event" ..................................................   Section 13.3(d)
"Williams Act Limitation".........................................   Section 13.1(b)
</TABLE>

      Section 1.3 Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:

                                       9
<PAGE>

            "Commission" means the SEC.

            "indenture securities" means the Securities.

            "indenture security holder" means a Securityholder.

            "indenture to be qualified" means this Indenture.

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

            "obligor" on the Securities and the Subsidiary Guarantees means the
      Company and the Guarantors, respectively, and any successor obligor upon
      the Securities and the Subsidiary Guarantees, respectively.

      All other TIA terms used in this Indenture that are not defined herein and
that are defined by the TIA, defined by TIA reference to another statute or
defined by SEC rule have the meanings assigned to them by such definitions.

      Section 1.4 Rules of Construction. Unless the context otherwise requires:

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

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

            (c) "or" is not exclusive;

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

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

      Section 1.5 Acts of Holders.

            (a) Any request, demand, authorization, direction, notice, consent,
      waiver or other action provided by this Indenture to be given or taken by
      Holders may be embodied in and evidenced by one or more instruments of
      substantially similar tenor signed by such Holders in person or by an
      agent duly appointed in writing; and, except as herein otherwise expressly
      provided, such action shall become effective when such instrument or
      instruments are delivered to the Trustee and, where it is hereby expressly
      required, to the Company and/or the Guarantors, as described in Section
      14.2. Such instrument or instruments (and the action embodied therein and
      evidenced thereby) are herein sometimes referred to as the "Act" of
      Holders signing such instrument or instruments. Proof of execution of any
      such instrument or of a writing appointing any such agent shall be
      sufficient for any purpose of this Indenture and conclusive in favor of
      the Trustee, the Company and the Guarantors, if made in the manner
      provided in Section 1.5(b).

                                       10
<PAGE>

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

            (c) The principal amount and serial number of any Security and the
      ownership of Securities shall be proved by the Registrar.

            (d) Any request, demand, authorization, direction, notice, consent,
      waiver or other Act of the Holder of any Security shall bind every future
      Holder of the same Security and the Holder of every Security issued upon
      the registration of transfer thereof or in exchange therefor or in lieu
      thereof in respect of anything done, omitted or suffered to be done by the
      Trustee or the Company in reliance thereon, whether or not notation of
      such action is made upon such Security.

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

                                   ARTICLE II

                                 THE SECURITIES

      Section 2.1 Form and Dating. The Securities (including the form of
election to require repurchase (the "Election of Holder to Require Repurchase")
and the Trustee's certificate of authentication) shall be substantially in the
form of Exhibits A and B, which are a part of this Indenture. The Securities may
have such other notations, legends or endorsements required by law, stock
exchange rule or usage (provided, however, that any such notation, legend or
endorsement required by usage is in a form reasonably acceptable to the
Company). The

                                       11
<PAGE>

Company shall provide any such other notations, legends or endorsements to the
Trustee in writing. Each Security shall be dated the date of its authentication.

      The Securities shall initially be issued in the form of a Global Security,
which shall be (a) substantially in the form of Exhibit A attached hereto, (b)
registered in the name of DTC or the nominee thereof (DTC, or any successor
thereto, and any such nominee being hereinafter referred to as the
"Depositary"), (c) executed by the Company, and authenticated and delivered by
the Trustee, in accordance with this Section 2.1 and with Section 2.2 and (d)
deposited with the Trustee at its Corporate Trust Office, as custodian for the
Depositary.

      Each Global Security shall represent such of the outstanding Securities as
shall be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Securities from time to time endorsed thereon
and that the aggregate amount of outstanding Securities represented thereby may
from time to time be reduced or increased, as appropriate, to reflect exchanges,
repurchases and conversions. Any adjustment of the aggregate principal amount of
a Global Security to reflect the amount of any increase or decrease in the
amount of outstanding Securities represented thereby shall be made by the
Trustee in accordance with instructions given by the Holder thereof as required
by Section 2.12 hereof and shall be made on the records of the Trustee, the
Registrar and the Depositary.

      Section 2.2 Execution and Authentication. The Securities shall be executed
on behalf of the Company by any Officer. The signature of the Officer on the
Securities may be manual or facsimile.

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

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

      The Trustee shall authenticate and deliver for original issue, without any
further action by the Company (notwithstanding anything to the contrary set
forth in this Indenture), (a) on the Closing Date, Securities with an aggregate
principal amount not to exceed $36,000,000 and (b) then thereafter in accordance
with the provisions of Section 2.15, Securities (with an aggregate principal
amount not to exceed $14,000,000) in an aggregate principal amount specified in
one or more Company Orders (such Securities issued after the Closing Date, the
"Additional Securities").

      The Securities shall be issued only in registered form without coupons and
only in denominations of $1,000 of principal amount and any integral multiple of
$1,000.

                                       12
<PAGE>

      Section 2.3 Registrar, Paying Agent and Conversion Agent. The Company
shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange ("Registrar"), an office or agency in
the Borough of Manhattan, The City of New York, where Securities may be
presented for purchase or payment ("Paying Agent") and an office or agency where
Securities may be presented for conversion ("Conversion Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars, one or more additional paying agents
and one or more additional conversion agents. The term Paying Agent includes any
additional paying agent, including any named pursuant to Section 5.5. The term
Conversion Agent includes any additional conversion agent, including any named
pursuant to Section 5.5.

      The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (in each case, if such
Registrar, agent or co-registrar is a Person other than the Trustee). The
agreement shall implement the provisions of this Indenture that relate to such
agent. The Company shall notify the Trustee of the name and address of any such
agent. If the Company fails to maintain a Registrar, Paying Agent or Conversion
Agent, the Trustee shall act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 9.7. The Company or any Subsidiary or
an Affiliate of either of them may not act as Paying Agent, Registrar,
Conversion Agent or co-registrar under this Indenture.

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

      Section 2.4 Paying Agent to Hold Money and Securities in Trust. Except as
otherwise provided herein, on or prior to each due date of payments in respect
of any Security, the Company shall deposit with the Paying Agent a sum of money
(in immediately available funds if deposited on the due date) sufficient to make
such payments when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the making of payments in respect of the Securities and shall
notify the Trustee of any default by the Company in making any such payment. At
any time during the continuance of any such default, the Paying Agent shall,
upon the written request of the Trustee, forthwith pay to the Trustee all money
so held in trust. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee and to account for any funds and Common Stock
disbursed by it. Upon doing so, the Paying Agent shall have no further liability
for the money.

      Section 2.5 Securityholder Lists. If the Trustee is not the Registrar, the
Company shall cause to be furnished to the Trustee at least semi-annually on
January 1 and July 1 all information in the possession or control of the Company
as to the names and addresses of the Securityholders dated within 15 days of the
date on which the list is furnished and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Securityholders. The Trustee
shall preserve in as current a form as is reasonably practicable all information
received from the Company as to the names and addresses of Securityholders.

                                       13
<PAGE>

      Section 2.6 Transfer and Exchange.

            (a) Subject to Section 2.12 hereof, upon surrender for registration
      of transfer of any Security, together with a written instrument of
      transfer satisfactory to the Registrar duly executed by the Securityholder
      or such Securityholder's attorney duly authorized in writing, at the
      office or agency of the Company designated as Registrar or co-registrar
      pursuant to Section 2.3, the Company shall execute, and the Trustee shall
      authenticate and deliver, in the name of the designated transferee or
      transferees, one or more new Securities of any authorized denomination or
      denominations, of a like aggregate principal amount and of like series.
      The Company shall not charge a service charge for any registration of
      transfer or exchange, but the Company may require payment of a sum
      sufficient to pay all taxes, assessments or other governmental charges
      that may be imposed in connection with the transfer or exchange of the
      Securities from the Securityholder requesting such transfer or exchange,
      other than exchanges pursuant to Section 2.9 not involving any transfer.

            At the option of the Holder, Securities may be exchanged for other
      Securities of any authorized denomination or denominations, of a like
      aggregate principal amount and series upon surrender of the Securities to
      be exchanged, together with a written instrument of exchange satisfactory
      to the Registrar duly executed by the Securityholder or such
      Securityholder's attorney duly authorized in writing, at such office or
      agency. Whenever any Securities are so surrendered for exchange, the
      Company shall execute, and the Trustee shall authenticate and deliver, the
      Securities which the Holder making the exchange is entitled to receive.

            The Company shall not be required to make, and the Registrar need
      not register, transfers or exchanges of any Securities in respect of which
      a Repurchase Notice or Fundamental Change Repurchase Notice has been given
      and not withdrawn by the Holder thereof in accordance with the terms of
      this Indenture.

            (b) Notwithstanding any provision to the contrary herein, so long as
      a Global Security remains outstanding and is held by or on behalf of the
      Depositary, transfers of a Global Security, in whole or in part, shall be
      made only in accordance with Section 2.12 and this Section 2.6(b).
      Transfers of a Global Security shall be limited to transfers of such
      Global Security in whole or in part, to the Depositary, to nominees of the
      Depositary or to a successor of the Depositary or such successor's
      nominee.

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

            (d) Any Registrar appointed pursuant to Section 2.3 hereof shall
      provide to the Trustee such information as the Trustee may reasonably
      require in connection with the delivery by such Registrar of Securities
      upon transfer or exchange of Securities.

                                       14
<PAGE>

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

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

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

            (g) Notwithstanding the provisions of Section 2.6(a) above or
      Section 2.12(b) and (c) below, a pledge or other hypothecation of any
      Security to a bank or other financial institution that is either an
      accredited investor or a QIB, in connection with any bona fide margin
      agreement or other loan or financing arrangement shall not be deemed to
      constitute a "transfer" for purposes of this Indenture. Any foreclosure or
      other disposition of any Securities so pledged or otherwise hypothecated
      by such bank or other financial institution shall constitute a "transfer"
      for all purposes hereunder and shall be made only in accordance with the
      applicable provisions hereof.

      Section 2.7 Replacement Securities. If (a) any mutilated Security is
surrendered to the Trustee, or (b) the Company and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Security, and
there is delivered to the Company and the Trustee such security or indemnity as
may be required by them to save each of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and upon its written request the
Trustee shall

                                       15
<PAGE>

authenticate and deliver, in exchange for any such mutilated Security or in lieu
of any such destroyed, lost or stolen Security, a new Security of like tenor and
principal amount and series, bearing a certificate number not contemporaneously
outstanding.

      In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article III hereof, the Company in its discretion may,
instead of issuing a new Security, pay or purchase such Security, as the case
may be.

      Upon the issuance of any new Securities under this Section 2.7, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

      Every new Security issued pursuant to this Section 2.7 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.

      The provisions of this Section 2.7 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.

      Section 2.8 Outstanding Securities; Determination of Holder's Action.
Securities outstanding at any time are all the Securities authenticated by the
Trustee except for those cancelled by it, those paid pursuant to Section 2.7,
those delivered to it for cancellation and those described in this Section 2.8
as not outstanding. A Security does not cease to be outstanding because the
Company or an Affiliate thereof holds the Security; provided, however, that in
determining whether the Holders of the requisite principal amount of Securities
have given or concurred in any request, demand, authorization, direction,
notice, consent, waiver, or other Act hereunder, Securities owned by the Company
or any other obligor upon the Securities or any Affiliate of the Company or such
other obligor shall be disregarded and deemed not to be outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent, waiver or other
Act, only Securities which a Responsible Officer knows are so owned shall be so
disregarded. Subject to the foregoing, only Securities outstanding at the time
of such determination shall be considered in any such determination (including,
without limitation, determinations pursuant to Article VIII and Article XI).

      If a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.

      If the Paying Agent holds, in accordance with this Indenture, on the
Business Day following a Repurchase Date or Fundamental Change Repurchase Date,
or on Stated Maturity, money sufficient to pay Securities payable on that date,
then immediately after such Repurchase

                                       16
<PAGE>

Date, Fundamental Change Repurchase Date or Stated Maturity, as the case may be,
such Securities shall cease to be outstanding and interest and Liquidated
Damages, if any, on such Securities shall cease to accrue.

      If a Security is converted in accordance with Article XIII, then from and
after the time of conversion on the date of conversion, such Security shall
cease to be outstanding and interest, and Liquidated Damages, if any, shall
cease to accrue on such Security.

      Section 2.9 Temporary Securities. Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities that are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities.

      If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.3,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.

      Section 2.10 Cancellation. All Securities surrendered for payment,
purchased by the Company pursuant to Article III, conversion or registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder that the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly cancelled by the Trustee. The Company may not issue new Securities to
replace Securities it has repurchased, paid for or delivered to the Trustee for
cancellation, or that any Holder has converted pursuant to Article XIII. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section 2.10, except as expressly permitted by
this Indenture. All cancelled Securities held by the Trustee shall be disposed
of by the Trustee in accordance with the Trustee's customary procedure.

      Section 2.11 Persons Deemed Owners. Prior to due presentment of a Security
for registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may deem and treat the Person in whose name such Security
is registered as the owner of such Security for the purpose of receiving payment
of principal of the Security or the payment of any Repurchase Price or
Fundamental Change Repurchase Price in respect thereof, and interest thereon,
for the purpose of conversion and for all other purposes whatsoever, whether or
not such Security be overdue, and neither the Company, the Trustee nor any agent
of the Company or the Trustee shall be affected by notice to the contrary.

                                       17
<PAGE>

      Section 2.12 Special Transfer Provisions.

            (a) Notwithstanding any other provisions of this Indenture or the
      Securities, (A) transfers of a Global Security, in whole or in part, shall
      be made only in accordance with Section 2.6 and Section 2.12(a)(i) below,
      (B) transfers of a beneficial interest in a Global Security in exchange
      for a Certificated Security shall comply with Section 2.6, Section
      2.12(a)(ii) below and Section 2.12(e)(i) below, and (C) transfers of a
      Certificated Security shall comply with Section 2.6 and Section
      2.12(a)(iii) and (iv) below.

                  (i) Transfer of Global Security. A Global Security may not be
            transferred, in whole or in part, to any Person other than the
            Depositary or a nominee or any successor thereof, and no such
            transfer to any such other Person may be registered; provided,
            however, that this clause (i) shall not prohibit any transfer of a
            Security that is issued in exchange for a Global Security but is not
            itself a Global Security. No transfer of a Security to any Person
            shall be effective under this Indenture or the Securities unless and
            until such Security has been registered in the name of such Person.
            Nothing in this Section 2.12(a)(i) shall prohibit or render
            ineffective any transfer of a beneficial interest in a Global
            Security effected in accordance with the other provisions of this
            Section 2.12(a).

                  (ii) Restrictions on Transfer of a Beneficial Interest in a
            Global Security in Exchange for a Certificated Security. A
            beneficial interest in a Global Security may not be exchanged for a
            Certificated Security except upon satisfaction of the requirements
            set forth below and in Section 2.12(e)(i) below. Upon receipt by the
            Trustee of a transfer of a beneficial interest in a Global Security
            in accordance with Applicable Procedures for a Certificated Security
            in the form satisfactory to the Trustee, together with:

                        (A) so long as the Securities are Restricted Securities,
                  certification in the form set forth in Exhibit C;

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

                        (C) if the Company so reasonably requests, an opinion of
                  counsel or other evidence reasonably satisfactory to it as to
                  the compliance with the restrictions set forth in the Legend,

            then the Trustee shall cause, or direct the Registrar to cause, in
            accordance with the standing instructions and procedures existing
            between the Depositary and the Registrar, the aggregate principal
            amount of the Securities represented by the Global Security to be
            decreased by the aggregate principal amount of the Certificated
            Security to be issued, shall issue such Certificated Security and
            shall

                                       18
<PAGE>

            debit or cause to be debited to the account of the Person specified
            in such instructions a beneficial interest in the Global Security
            equal to the principal amount of the Certificated Security so
            issued.

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

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

                        (z) to exchange such Certificated Securities for an
                  equal principal amount of Certificated Securities of other
                  authorized denominations,

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

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

                        (B) so long as such Securities are Restricted
                  Securities, such Securities are being transferred or exchanged
                  pursuant to an effective registration statement under the
                  Securities Act or pursuant to clause (1), (2) or (3) below,
                  and are accompanied by the following additional information
                  and documents, as applicable:

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

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

                              (3) if such Certificated Securities are being
                        transferred pursuant to an exemption from registration,
                        (i) a certification to that effect (in the form set
                        forth in Exhibit C, if applicable) and (ii) if the
                        Company so requests, an opinion of counsel or other
                        evidence reasonably satisfactory to it as to the
                        compliance with the restrictions set forth in the
                        Legend.

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

                                       19
<PAGE>

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

                        (A) so long as the Securities are Restricted Securities,
                  certification, in the form set forth in Exhibit E, that either
                  (x) the Holder of such Certificated Security is a QIB and is
                  exchanging its Certificated Security for an interest in the
                  Global Security pursuant to Section 2.1 or (y) the Securities
                  represented by such Certificated Security are being
                  transferred in compliance with Rule 144A; and

                        (B) written instructions directing the Trustee to make,
                  or to direct the Registrar to make, an adjustment on its books
                  and records with respect to such Global Security to reflect an
                  increase in the aggregate principal amount of the Securities
                  represented by the Global Security, such instructions to
                  contain information regarding the Depositary account to be
                  credited with such increase, then the Trustee shall cancel
                  such Certificated Security and cause, or direct the Registrar
                  to cause, in accordance with the standing instructions and
                  procedures existing between the Depositary and the Registrar,
                  the aggregate principal amount of Securities represented by
                  the Global Security to be increased by the aggregate principal
                  amount of the Certificated Security to be exchanged, and shall
                  credit or cause to be credited to the account of the Person
                  specified in such instructions a beneficial interest in the
                  Global Security equal to the principal amount of the
                  Certificated Security so cancelled. If no Global Securities
                  are then outstanding, the Company shall issue and the Trustee
                  shall authenticate, upon written order of the Company in the
                  form of an Officers' Certificate, a new Global Security in the
                  appropriate principal amount.

            (b) Subject to the succeeding Section 2.12(c), every Security shall
      be subject to the restrictions on transfer provided in the Legend
      including the delivery of an opinion of counsel, if so provided. Whenever
      any Restricted Security is presented or surrendered for registration of
      transfer or for exchange for a Security registered in a name other than
      that of the Holder, such Security must be accompanied by a certificate in
      substantially the form set forth in Exhibit C, dated the date of such
      surrender and signed by the Holder of such Security, as to compliance with
      such restrictions on transfer. The Registrar shall not be required to
      accept for such registration of transfer or exchange any Security not so
      accompanied by a properly completed certificate.

            (c) The restrictions imposed by the Legend upon the transferability
      of any Security shall cease and terminate when such Security has been sold
      pursuant to an effective registration statement under the Securities Act
      or transferred in compliance with Rule 144 or, if earlier, upon the
      expiration of the holding period applicable to sales thereof under Rule
      144(k). Any Security as to which such restrictions on transfer shall have
      expired in accordance with their terms or shall have terminated may, upon
      a surrender of such Security for exchange to the Registrar in accordance
      with the

                                       20
<PAGE>

      provisions of this Section 2.12 (accompanied, in the event that such
      restrictions on transfer have terminated by reason of a transfer in
      compliance with Rule 144, by an opinion of counsel having substantial
      experience in practice under the Securities Act and otherwise reasonably
      acceptable to the Company, addressed to the Company and in form reasonably
      acceptable to the Company, to the effect that the transfer of such
      Security has been made in compliance with Rule 144), be exchanged for a
      new Security, of like tenor and aggregate principal amount, which shall
      not bear the restrictive Legend. The Company shall inform the Trustee of
      the effective date of any registration statement registering the
      Securities under the Securities Act. The Trustee shall not be liable for
      any action taken or omitted to be taken by it in good faith in accordance
      with the aforementioned opinion of counsel or registration statement.

            (d) As used in the preceding two paragraphs of this Section 2.12,
      the term "transfer" encompasses any sale, transfer, loan or other
      disposition of any Security; but subject to the provisions of Section
      2.6(g) above.

            (e) The provisions of this paragraph (e) shall apply only to Global
      Securities:

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

                  (ii) Securities issued in exchange for a Global Security or
            any portion thereof shall be issued in definitive, fully registered
            form, without interest coupons, shall have an aggregate principal
            amount equal to that of such Global Security or portion thereof to
            be so exchanged, shall be registered in such names and be in such
            authorized denominations as the Depositary shall designate and shall
            bear the applicable legends provided for herein. Any Global Security
            to be exchanged in whole shall be surrendered by the Depositary to
            the Trustee, as Registrar. With regard to any Global Security to be
            exchanged in part, either such Global Security shall be so
            surrendered for exchange or, if the Trustee is acting as custodian
            for the Depositary or its nominee with respect to such Global
            Security, the principal amount thereof shall be reduced, by an
            amount equal to the portion

                                       21
<PAGE>

            thereof to be so exchanged, by means of an appropriate adjustment
            made on the records of the Trustee. Upon any such surrender or
            adjustment, the Trustee shall authenticate and deliver the Security
            issuable on such exchange to or upon the order of the Depositary or
            an authorized representative thereof.

                  (iii) Subject to the provisions of clause (v) below, the
            registered Holder may grant proxies and otherwise authorize any
            Person, including Agent Members (as defined below) and Persons that
            may hold interests through Agent Members, to take any action which a
            Holder is entitled to take under this Indenture or the Securities.

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

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

      Section 2.13 CUSIP Numbers. The Company in issuing the Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.

      Section 2.14 Re-Issuance as Same Series. In the event the Company shall
issue new Securities or replacement Securities in connection with any exchange,
transfer or other re-issuance, the newly issued Securities shall be of the same
series as the Securities surrendered in such transfer, exchange or other
re-issuance.

                                       22
<PAGE>

      Section 2.15 Issuance of Additional Securities. The Company will be
entitled to issue Securities under this Indenture in an aggregate principal
amount of $36 million on the Closing Date and up to an additional aggregate
principal amount not to exceed $14 million to the initial purchasers of the
Securities on such date (the "Initial Purchasers"), or a later date, pursuant to
the terms of the Purchase Agreement. Other than as set forth in the preceding
sentence, the Company shall not issue any Securities under this Indenture.

                                  ARTICLE III

                            REPURCHASE OF SECURITIES

      Section 3.1 Purchase of Securities at Option of the Holder. Each Holder
shall have the right, at the Holder's option, to require the Company to
repurchase, and upon the exercise of such right the Company shall repurchase,
all of such Holder's Securities not theretofore called for redemption, or any
portion of the principal amount thereof that is equal to $1,000 or any integral
multiple of $1,000 in excess thereof on November 1, 2008 (the "Repurchase
Date"), provided that no single Security may be repurchased in part unless the
portion of the principal amount of such Security to be outstanding after such
repurchase is equal to $1,000 or an integral multiple of U.S. $1,000 in excess
thereof), at a repurchase price equal to 100% of the principal amount of the
Securities to be repurchased plus interest (and Liquidated Damages, if any)
accrued but unpaid to, but excluding, the Repurchase Date (the "Repurchase
Price"). At the option of the Company, the Repurchase Price may be paid in cash,
or subject to the fulfillment by the Company of the conditions set forth in
Section 3.3 and subject to the Share Limitation, by delivery of shares of Common
Stock or a combination of cash and Common Stock. Each Holder whose Securities
are repurchased pursuant to this Section 3.1 shall receive the same
percentage(s) of cash and/or shares of Common Stock in payment of the Repurchase
Price for such Securities, except with regard to the payment of cash in lieu of
fractional shares of Common Stock. The number of shares of Common Stock to be
delivered shall equal such number of shares of Common Stock as have a fair
market value (as determined under Section 3.3 hereof) equal to the percentage of
the Repurchase Price to be paid in shares of Common Stock as set forth in the
applicable Company Notice. At any time prior to the delivery of the applicable
Company Notice, the Company may unilaterally irrevocably waive its right under
this Section 3.1 to pay all or any portion of the Repurchase Price in shares of
Common Stock by providing written notice of such waiver to the Trustee and the
Holders.

      Section 3.2 Purchase of Securities at Option of the Holder upon a
Fundamental Change. In the event that a Fundamental Change shall occur, then
each Holder shall have the right, at the Holder's option, to require the Company
to repurchase, and upon the exercise of such right the Company shall repurchase,
all of such Holder's Securities not theretofore called for redemption, or any
portion of the principal amount thereof that is equal to $1,000 or any integral
multiple of $1,000 in excess thereof (provided, however, that no single Security
may be repurchased in part unless the portion of the principal amount of such
Security to be outstanding after such repurchase is equal to $1,000 or an
integral multiple of $1,000 in excess thereof), on the date (the "Fundamental
Change Repurchase Date") that is (i) in the event of a Fundamental Change
arising from a Change of Control, on the first Business Day after expiration of
the Fundamental Change Conversion Period and (ii) otherwise on the 35th Business
Day after a Termination of Trading, at a repurchase price equal to 100% of the
principal amount of the

                                       23
<PAGE>

Securities to be repurchased plus interest (and Liquidated Damages, if any)
accrued but unpaid to, but excluding, the Fundamental Change Repurchase Date
(the "Fundamental Change Repurchase Price"). Such right to require the
repurchase of the Securities shall not continue after a discharge of the Company
from its obligations with respect to the Securities in accordance with Article
X, unless a Fundamental Change shall have occurred prior to such discharge. The
Fundamental Change Repurchase Price shall be paid in cash; provided, that the
Company shall have the option to pay the Fundamental Change Repurchase Price,
subject to the fulfillment by the Company of the conditions set forth in Section
3.3 and subject to the Share Limitation, by delivery of shares of Common Stock
or a combination of cash and Common Stock. Each Holder whose Securities are
repurchased pursuant to this Section 3.2 shall receive the same percentage(s) of
cash and/or shares of Common Stock in payment of the Fundamental Change
Repurchase Price for such Securities, except with regard to the payment of cash
in lieu of fractional shares of Common Stock. The number of shares of Common
Stock to be delivered shall equal such number of shares of Common Stock as have
a fair market value (as determined under Section 3.3 hereof) equal to the
percentage of the Fundamental Change Repurchase Price to be paid in shares of
Common Stock as set forth in the applicable Company Notice. At any time prior to
the delivery of the applicable Company Notice, the Company may unilaterally
irrevocably waive its right under this Section 3.2 to pay all or any portion of
the Fundamental Change Repurchase Price in shares of Common Stock by providing
written notice of such waiver to the Trustee and the Holders.

      Section 3.3 Conditions to the Company's Election to Pay the Repurchase
Price or the Fundamental Change Repurchase Price in Common Stock. The Company
may elect to pay all or any portion of the Repurchase Price or the Fundamental
Change Repurchase Price, as the case may be, in shares of Common Stock if and
only if the following conditions shall have been satisfied (or waived by the
applicable Holder):

            (a) The shares of Common Stock deliverable in payment of the
      Repurchase Price, or the Fundamental Change Repurchase Price, as the case
      may be, shall not exceed the amount calculated pursuant to the provisions
      of Section 3.3(f) below. For purposes of this Article III only, the "fair
      market value" of shares of Common Stock means the product of (i) 0.97
      times (ii) the arithmetic average of the Closing Prices per share of the
      Common Stock for the fifteen (15) consecutive Trading Days immediately
      preceding and including the third Trading Day prior to the Repurchase Date
      or the Fundamental Change Repurchase Date, as the case may be,
      appropriately adjusted to take into account the occurrence, during such
      fifteen (15) Trading Day period, of any event described in Section 13.3;

            (b) The Repurchase Price or the Fundamental Change Repurchase Price,
      as the case may be, shall be paid only in cash (1) in the event of a
      Termination of Trading or (2) in the event that any shares of Common Stock
      to be issued upon repurchase of Securities hereunder (i) require
      registration or approval under any federal securities law before such
      shares may be freely transferable without being subject to any transfer
      restrictions under the Securities Act upon repurchase and if such
      registration is not completed or does not become effective prior to the
      delivery of the Company Notice and such completion and effectiveness is
      not maintained from after delivery of such Company Notice to the
      Repurchase Date or the Fundamental Change Repurchase Date, as the case may
      be, or (ii)

                                       24
<PAGE>

      require registration or qualification under any state securities law
      before such shares may be validly issued or delivered upon repurchase and
      if such registration or qualification is not completed or does not become
      effective prior to the delivery of the applicable Company Notice and such
      completion and effectiveness is not maintained from after delivery of such
      Company Notice to the Repurchase Date or the Fundamental Change Repurchase
      Date, as the case may be, or (iii) violates any Federal or state
      securities laws;

            (c) The shares of Common Stock to be issued in respect of the
      Repurchase Price or the Fundamental Change Repurchase Price, as the case
      may be, is, or shall have been, listed or approved for listing on the
      NYSE, the AMEX, the NASDAQ National Market or the NASDAQ SmallCap Market,
      in either case, prior to the delivery of the applicable Company Notice;

            (d) The Company shall have sufficient authorized but unissued (or
      issued but not outstanding) shares of Common Stock (or, in the event of a
      merger, consolidation or other similar transaction involving the Company
      that is otherwise permitted under the terms of this Indenture in which the
      Company is not the surviving entity, out of the authorized but unissued
      Common Stock of the surviving entity or its direct or indirect parent
      entity) to issue the shares of Common Stock to be issued upon repurchase
      of the Securities on the Repurchase Date or the Fundamental Change
      Repurchase Date, as the case may be, and, such Common Stock will upon
      issue, be duly and validly issued and fully paid and nonassessable and
      free of any preemptive rights;

            (e) The Company has timely given a Company Notice containing all the
      information required under Section 3.4 and such Company Notice shall set
      forth the percentage of the Repurchase Price or the Fundamental Change
      Repurchase Price, as the case may be, that will be paid in shares of
      Common Stock;

            (f) The total principal amount to be paid in shares of Common Stock
      shall not exceed 20% of the product of (x) the total daily trading volume
      of the Common Stock as reported by Bloomberg through its "HP" function
      during the ten Trading Days immediately preceding the date of delivery of
      the Company Notice and (y) the arithmetic average of the Weighted Average
      Price per share of Common Stock on each of such ten Trading Days as
      reported by Bloomberg through its "HP" function; and

            (g) The Trustee shall receive at the time of delivery of the
      applicable Company Notice and just prior to the Repurchase Date or the
      Fundamental Change Repurchase Date, as the case may be, (i) an Officer's
      Certificate stating that the terms of the issuance of the shares of Common
      Stock are in conformity with this Indenture, (ii) an Opinion of Counsel to
      the effect that the shares of Common Stock to be issued by the Company in
      respect of the Repurchase Price or the Fundamental Change Repurchase
      Price, as the case may be, have been duly authorized and, when issued and
      delivered pursuant to the terms of this Indenture, will be validly issued,
      fully paid and non-assessable and (iii) an Officer's Certificate stating
      that the conditions to the issuance of the shares of Common Stock have
      been satisfied.

                                       25
<PAGE>

Promptly after determination of the actual number of shares of Common Stock to
be issued upon repurchase of Securities, the Company shall disseminate a press
release through Dow Jones & Company, Inc. or Bloomberg Business News containing
this information or publish the information on the Company's web site or through
such other public medium as the Company may use at that time.

      Section 3.4 Notices; Method of Exercising Repurchase Right, Etc.

            (a) Unless the Company shall have theretofore called for redemption
      all of the outstanding Securities, the Company shall give to the Trustee,
      the Paying Agent and all Holders of Securities, in the manner provided in
      this Section 3.4, a notice containing the information required pursuant to
      the following provisions of this Section 3.4(a) (the "Company Notice") (i)
      on or before the 20th Business Day prior to the Repurchase Date or, in the
      event of a Fundamental Change arising from a Change of Control, the
      anticipated Effective Date (but in no event earlier than 45 days prior to
      the Repurchase Date or anticipated Effective Date, as the case may be),
      and (ii) within 15 Business Days after the Company knows or reasonably
      should know of the occurrence of a Fundamental Change that arises as a
      result of any Termination of Trading. Prior to or concurrently with the
      delivery of any Company Notice, the Company will issue a press release or
      publish such information on the Company's then existing website including
      the information required to be included in such Company Notice hereunder.
      The Company shall also deliver a copy of any Company Notice to the
      Trustee. At the request and expense of the Company on or before the fifth
      Business Day prior to the date on which the Company Notice is to be
      mailed, the Trustee shall provide the Company Notice to the Holders in
      accordance with the provisions of this Indenture.

      Each Company Notice shall state:

                  (i) the Repurchase Date or the Fundamental Change Repurchase
            Date, as the case may be,

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

                  (iii) the Repurchase Price or the Fundamental Change
            Repurchase Price, as the case may be, and whether the Repurchase
            Price or the Fundamental Change Repurchase Price, as the case may
            be, shall be paid by the Company in cash or by delivery of shares of
            Common Stock, or a specified combination thereof and the percentage
            of the Repurchase Price or the Fundamental Change Repurchase Price,
            as the case may be, that will be paid in shares of Common Stock
            (which indication shall be irrevocable, subject to the satisfaction
            (or waiver) of the conditions set forth in Section 3.3),

                  (iv) if the notice relates to the occurrence of a Fundamental
            Change, the events causing the Fundamental Change and the date of
            the Fundamental Change,

                  (v) that Securities with respect to which a Holder gives a
            Repurchase Notice or Fundamental Change Repurchase Notice may be
            converted only if the

                                       26
<PAGE>

            Holder withdraws the Repurchase Notice or Fundamental Change
            Repurchase Notice as to such Securities in accordance with the terms
            of this Indenture,

                  (vi) a description of the procedure that a Holder must follow
            to exercise a repurchase right, and the place or places where such
            Securities are to be surrendered for payment of the Repurchase Price
            or the Fundamental Change Repurchase Price, as the case may be, and
            accrued but unpaid interest (and Liquidated Damages), if any, to,
            but excluding, the Repurchase Date or the Fundamental Change
            Repurchase Date, as the case may be,

                  (vii) that on the Repurchase Date or the Fundamental Change
            Repurchase Date, as the case may be, the Repurchase Price or the
            Fundamental Change Repurchase Price, as the case may be, and accrued
            but unpaid interest (and Liquidated Damages), if any, to, but
            excluding, the Repurchase Date or the Fundamental Change Repurchase
            Date, as the case may be, will become due and payable upon each such
            Security designated by the Holder to be repurchased, and that
            interest thereon shall cease to accrue on and after said date,

                  (viii) the Conversion Price then in effect,

                  (ix) the place or places that the Security certificate
            (including the Election of Holder to Require Repurchase attached
            thereto) and the Repurchase Notice (as defined below) shall be
            delivered, and, if the Security is a Restricted Security, the place
            or places that the Transfer Certificate in the form set forth in
            Exhibit C, required by Section 2.12 shall be delivered,

                  (x) the name and address of the Paying Agent and Conversion
            Agent, and

                  (xi) if the notice relates to a Fundamental Change, the
            estimated amount of any Make-Whole Premium and the respective
            percentages of such Make-Whole Premium that will be paid (as
            contemplated by Section 6.1(b)) in shares of Common Stock and in
            cash (which indication shall be irrevocable), subject to the
            satisfaction (or waiver) of the conditions set forth in Section
            6.1(c), in the event that a Holder should, in lieu of electing to
            have Securities repurchased on the Fundamental Change Repurchase
            Date, elect to convert such Securities during the Fundamental Change
            Conversion Period, and

                  (xii) any other information to be included therein pursuant to
            Section 6.1.

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

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

                                       27
<PAGE>

            (b) To exercise a repurchase right pursuant to Section 3.1 or
      Section 3.2, a Holder shall deliver to the Paying Agent (i) written notice
      (in the case of a repurchase pursuant to Section 3.1, a "Repurchase
      Notice" and, in the case of a repurchase pursuant to Section 3.2, a
      "Fundamental Change Repurchase Notice") of the Holder's exercise of such
      right, which notice shall set forth the name of the Holder, the principal
      amount of the Securities to be repurchased (and, if any Security is to
      repurchased in part, the portion of the principal amount thereof to be
      repurchased (which portion must be in principal amounts of $1,000 or a
      whole multiple of $1,000) and the name of the Person in which the portion
      thereof to remain outstanding after such repurchase is to be registered),
      if certificated, the certificate numbers of the Securities to be
      repurchased, and a statement that an election to exercise the repurchase
      right pursuant to the terms and conditions specified in the Securities and
      the Indenture is being made thereby, and, in the event that any portion of
      the Repurchase Price or the Fundamental Change Repurchase Price, as the
      case may be, shall be paid in shares of Common Stock, the name or names
      (with addresses) in which the certificate or certificates for shares of
      Common Stock shall be issued, and (ii) the Securities to which the
      Repurchase Notice or Fundamental Change Repurchase Notice relates at any
      time after delivery of the Repurchase Notice or the Fundamental Change
      Repurchase Notice, as the case may be (together with all necessary
      endorsements), at the offices of the Paying Agent, such delivery being a
      condition to receipt by the Holder of the Repurchase Price or the
      Fundamental Change Repurchase Price, as the case may be, thereof;
      provided, however, that such Repurchase Price or Fundamental Change
      Repurchase Price, as the case may be, shall be so paid pursuant to this
      Section 3.4(b) only if the Securities so delivered to the Paying Agent
      shall conform in all respects to the description thereof in the related
      Repurchase Notice or Fundamental Change Repurchase Notice. In the case of
      a repurchase right pursuant to Section 3.1 and Section 3.2, such delivery
      shall be at any time from the opening of business on the date that is 20
      Business Days prior to the Repurchase Date until the close of business on
      the second Business Day prior to the Repurchase Date or the Fundamental
      Change Repurchase Date, as the case may be, subject to extension to comply
      with applicable law. Owners of beneficial interests in Global Securities
      shall provide a Repurchase Notice or Fundamental Change Repurchase Notice
      in accordance with the Applicable Procedures of the Depositary.

      A Repurchase Notice or Fundamental Change Repurchase Notice given by a
      Holder in accordance with this Section 3.4(b) may be withdrawn, in whole
      or in part, by means of a written notice of withdrawal delivered to the
      office of the Paying Agent at any time prior to the close of business on
      the day that is one Business Day before the Repurchase Date or Fundamental
      Change Repurchase Date, as the case may be, specifying:

                  (i) the certificate number, if any, of the Security in respect
            of which such notice of withdrawal is being submitted, or the
            appropriate Depositary procedures if Certificated Securities have
            not been issued,

                  (ii) the principal amount of the Security with respect to
            which such notice of withdrawal is being submitted, and

                                       28
<PAGE>

                  (iii) the principal amount, if any, of such Security which
            remains subject to the original Repurchase Notice and which has been
            or will be delivered for purchase by the Company.

      The Company may, in its sole and complete discretion, accept a written
      notice of withdrawal on or after the close of business on the day that is
      one Business Day prior to the Repurchase Date or the Fundamental Change
      Repurchase Date, as the case may be. The decision of the Company to accept
      or reject such a withdrawal notice shall be conclusive and binding on the
      Holder proposing to make the withdrawal.

            (c) There shall be no purchase of any Securities pursuant to this
      Article III if an Event of Default has occurred and is continuing (other
      than a default that is cured by the payment of the Repurchase Price or
      Fundamental Change Repurchase Price, as the case may be). The Paying Agent
      shall promptly return to the respective Holders thereof any Securities (i)
      with respect to which a Repurchase Notice or Fundamental Change Repurchase
      Notice, as the case may be, has been withdrawn in compliance with this
      Indenture or (ii) held by it during the continuance of an Event of Default
      (other than a default that is cured by the payment of the Repurchase Price
      or the Fundamental Change Repurchase Price, as the case may be) in which
      case, upon such return, the Repurchase Notice or the Fundamental Change
      Repurchase Notice with respect thereto shall be deemed to have been
      withdrawn.

            (d) In the event a repurchase right shall be exercised in accordance
      with the terms hereof, the Company shall pay or cause to be paid to the
      Trustee the Repurchase Price or the Fundamental Change Repurchase Price,
      as the case may be, in cash and/or shares of Common Stock, subject to and
      as provided in Section 3.3 and subject to the Share Limitation, for
      payment to the Holder on the Repurchase Date or the Fundamental Change
      Repurchase Date, as the case may be, together with accrued and unpaid
      interest to, but excluding, the Repurchase Date or the Fundamental Change
      Repurchase Date, as the case may be, payable with respect to the
      Securities as to which the repurchase right has been exercised.

            (e) If any Security (or portion thereof) surrendered for repurchase
      shall not be so paid on the Repurchase Date or the Fundamental Change
      Repurchase Date, as the case may be, the Repurchase Price or the
      Fundamental Change Repurchase Price, as the case may be with respect to
      such Security shall, until so repurchased, bear interest to the extent
      permitted by applicable law from the Repurchase Date or the Fundamental
      Change Repurchase Date, as the case may be, at a rate equal to the
      Interest Rate on the Security plus 1% per annum, and such Security shall
      remain convertible into Common Stock until the Repurchase Price or the
      Fundamental Change Repurchase Price, as the case may be, plus any default
      interest accrued under this Section 3.4(e), shall have been paid or duly
      provided for.

            (f) Any Security that is to be repurchased only in part shall be
      surrendered to the Trustee (with, if the Company or the Trustee so
      requires, due endorsement by, or a written instrument of transfer in form
      satisfactory to the Company and the Trustee duly executed by, the Holder
      thereof or his attorney duly authorized in writing), and the

                                       29
<PAGE>

      Company shall execute, and the Trustee shall authenticate and make
      available for delivery to the Holder of such Security without service
      charge, a new Security or Securities, containing identical terms and
      conditions, each in an authorized denomination in aggregate principal
      amount equal to and in exchange for the unrepurchased portion of the
      principal of the Security so surrendered.

            (g) Any issuance of shares of Common Stock in respect of the
      Repurchase Price or the Fundamental Change Repurchase Price, as the case
      may be, shall be deemed to have been effected immediately prior to the
      close of business on the Repurchase Date or the Fundamental Change
      Repurchase Date, as the case may be, and the Person or Persons in whose
      name or names any certificate or certificates for shares of Common Stock
      shall be issuable upon such repurchase shall be deemed to have become on
      the Repurchase Date or the Fundamental Change Repurchase Date, as the case
      may be, the holder or holders of record of the shares represented thereby;
      provided, however, that any surrender for repurchase on a date when the
      stock transfer books of the Company shall be closed shall constitute the
      Person or Persons in whose name or names the certificate or certificates
      for such shares are to be issued as the record holder or holders thereof
      for all purposes at the opening of business on the next succeeding day on
      which such stock transfer books are open. No payment or adjustment shall
      be made for dividends or distributions on any Common Stock issued upon
      repurchase of any Security declared prior to the Repurchase Date or the
      Fundamental Change Repurchase Date, as the case may be.

            (h) No fractional shares shall be issued upon repurchase of
      Securities. If more than one Security shall be repurchased from the same
      Holder and the Repurchase Price or the Fundamental Change Repurchase
      Price, as the case may be, shall be payable in shares of Common Stock,
      then the number of full shares that shall be issuable upon such repurchase
      shall be computed on the basis of the aggregate principal amount of the
      Securities so repurchased. Instead of any fractional share of Common Stock
      that would otherwise be issuable on the repurchase of any Security or
      Securities, the Company will deliver to the applicable Holder its check
      for the current market value of such fractional share. The current market
      value of a fraction of a share is determined by multiplying the current
      market price of a full share by the fraction, and rounding the result to
      the nearest cent. For purposes of this Section 3.4(h), the current market
      price of a share of Common Stock is the Closing Price Per Share on the
      most recent Trading Day immediately preceding the Repurchase Date or the
      Fundamental Change Repurchase Date, as the case may be.

            (i) Any issuance and delivery of certificates for shares of Common
      Stock on repurchase of Securities shall be made without charge to the
      Holder of Securities being repurchased for such certificates or for any
      tax or duty in respect of the issuance or delivery of such certificates or
      the securities represented thereby; provided, however, that the Company
      shall not be required to pay any tax or duty that may be payable in
      respect of (1) income of the Holder or (2) any transfer involved in the
      issuance or delivery of certificates for shares of Common Stock in a name
      other than that of the Holder of the Securities being repurchased, and no
      such issuance or delivery shall be made unless and until the Person
      requesting such issuance or delivery has paid to the Company the amount

                                       30
<PAGE>

      of any such tax or duty or has established, to the satisfaction of the
      Company, that such tax or duty has been paid.

            (j) If shares of Common Stock to be delivered upon repurchase of a
      Restricted Security are to be registered in a name other than that of the
      "beneficial owner" of such Security (determined in accordance with Rule
      13d-3, as in effect on the date of the original execution of this
      Indenture, promulgated by the SEC pursuant to the Exchange Act), then such
      Holder must deliver to the Trustee a Transfer Certificate in the form set
      forth in Exhibit C, dated the date of surrender of such Restricted
      Security and signed by such beneficial owner, as to compliance with the
      restrictions on transfer applicable to such Restricted Security. Neither
      the Trustee nor any Registrar or Transfer Agent or other agents shall be
      required to register in a name other than that of the beneficial owner
      shares of Common Stock issued upon repurchase of any such Restricted
      Security not so accompanied by a properly completed Transfer Certificate.

            (k) All Securities delivered for repurchase shall be delivered to
      the Trustee to be canceled at the direction of the Trustee.

      Section 3.5 Deposit of Repurchase Price or Fundamental Change Repurchase
Price. Prior to 10:00 a.m. (New York City time) on the Repurchase Date or the
Fundamental Change Repurchase Date, as the case may be, the Company shall
deposit with the Paying Agent (or if the Company is the Paying Agent, shall
segregate and hold in trust) cash and/or Common Stock (if permitted pursuant to
Section 3.3) sufficient to pay the Repurchase Price or the Fundamental Change
Repurchase Price, as the case may be. The Company shall promptly notify the
Trustee in writing of the amount of any deposits of cash or Common Stock made
pursuant to this Section 3.5.

      Upon payment of the Repurchase Price or the Fundamental Change Repurchase
Price, as the case may be, interest will cease to accrue on the Securities or
the portions of Securities repurchased and such Securities or portions thereof
shall cease to be outstanding. If a Security is repurchased on or after an
interest record date but on or prior to the related Interest Payment Date, then
any accrued and unpaid interest shall be paid to the Person in whose name such
Security was registered at the close of business on such record date.

      Section 3.6 Covenant to Comply With Securities Laws Upon Purchase of
Securities. When complying with the provisions of Section 3.1 and Section 3.2
hereof, the Company shall comply with all Federal and state securities laws so
as to permit the rights and obligations under Section 3.1 and Section 3.2 to be
exercised in the time and in the manner specified in Section 3.1 and Section 3.2
and shall, provided that such offer or purchase constitutes an "issuer tender
offer" for purposes of Rule 13e-4 (which term, as used herein, includes any
successor provision thereto) under the Exchange Act at the time of such offer or
purchase, subject to any exemptions available under applicable law, (i) comply
with Rule 13e-4 and Rule 14e-1 (or any successor provision) under the Exchange
Act and (ii) file the related Schedule TO (or any successor schedule, form or
report) under the Exchange Act.

                                       31
<PAGE>

                                   ARTICLE IV

                            REDEMPTION OF SECURITIES

      Section 4.1 Optional Redemption. The Securities are not redeemable prior
to November 1, 2008. On and after November 1, 2008, the Company may, at its
option, redeem the Securities in whole at any time or in part from time to time,
on any date prior to the Stated Maturity of the Securities upon at least 30
days' notice and not more than 60 days' notice given in the manner set forth in
Section 4.4, at a redemption price (the "Optional Redemption Price") equal to
the sum of (i) 100% of the principal amount of the Securities to be redeemed
plus (ii) interest (and Liquidated Damages, if any) accrued but unpaid to, but
excluding the Redemption Date, plus (iii) the Redemption Premium; provided that
such redemption may only occur if (x) on the date that the Company gives such
notice, the Closing Price Per Share for at least 20 Trading Days of the 30
consecutive Trading Days immediately preceding such date is at least 150% of the
Conversion Price then in effect, appropriately adjusted to take into account the
occurrence, during such 30 Trading Day period, of any event described in Section
13.3 and (y) on the date that the Company delivers such Company Notice through
the date of redemption, the Common Stock issuable upon conversion of the
Securities is either (1) covered by a registration statement covering resales
thereof that is effective and available for use and is expected to remain
effective and available for use for the 30 days following the date of such
notice or (2) eligible to be resold by non-affiliates pursuant to Rule 144(k)
under the Securities Act.

      Each Holder who elects to convert Securities pursuant to the provisions of
Article XIII during a Redemption Conversion Period shall be entitled to receive
the Redemption Premium in respect of the Securities so converted as provided in
Section 6.1.

      Section 4.2 Election to Redeem; Notice to Trustee. The election of the
Company to redeem any Securities shall be evidenced by a Board Resolution. In
case of any redemption at the election of the Company of any of the Securities,
the Company shall, at least 35 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee in writing of such Redemption Date, the Optional Redemption Price
and whether, if Holders elect to convert their Securities during the Redemption
Conversion Period, the Redemption Premium will be payable in cash or shares of
Common Stock valued at the Conversion Price or a specified combination thereof,
and, if less than all the Securities are being redeemed, the principal amount of
the Securities to be redeemed.

      Section 4.3 Selection by Trustee of Securities to Be Redeemed. If less
than all the Securities are to be redeemed, the particular Securities to be
redeemed shall be selected (in principal amounts of $1,000 or integral multiples
thereof) by the Trustee on a pro rata basis, treating the Series A Securities
and the Series B Securities as a single series, within five Business Days after
it receives the notice described in Section 4.2, from the outstanding Securities
not previously called for redemption. If any Security selected for partial
redemption is converted in part before termination of the conversion right with
respect to the portion of the Security so selected, the converted portion of
such Security shall be deemed (so far as may be) to be the portion selected for
redemption. Securities which have been converted during a selection of
Securities to be redeemed may be treated by the Trustee as outstanding for the
purpose of such selection. The Trustee shall promptly notify the Company and
each Security Registrar in writing

                                       32
<PAGE>

of the Securities selected for redemption pursuant to this Section 4.3 and, in
the case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed. For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.

      Section 4.4 Notice of Redemption. Notice of redemption (a "Redemption
Notice") shall be given by the Company in the manner provided in this Section
4.4 to the Trustee, the Paying Agent and the Holders of Securities to be
redeemed not less than 30 nor more than 60 days prior to the Redemption Date,
and such notice shall be irrevocable. The Company shall, concurrently with the
giving of such notice, publish a press release including the information
required to be included in such Redemption Notice hereunder.

      All Redemption Notices shall state:

            (a) the date of redemption (the "Redemption Date"),

            (b) the Optional Redemption Price and the amounts attributable to
      each element thereof, as specified in clause (i), (ii) and (iii) of the
      definition of "Optional Redemption Price" in Section 4.1,

            (c) whether, if Holders elect to convert their Securities during the
      Redemption Conversion Period, the Redemption Premium will be paid in cash
      or shares of Common Stock valued a the Conversion Price or in a specified
      combination thereof,

            (d) if less than all outstanding Securities are to be redeemed, the
      aggregate principal amount of Securities to be redeemed and the aggregate
      principal amount of Securities that will be outstanding after such partial
      redemption,

            (e) that on the Redemption Date the Optional Redemption Price will
      become due and payable upon each such Security to be redeemed, and that
      interest thereon shall cease to accrue on and after said date,

            (f) the Conversion Price, that the right to convert the Securities
      to be redeemed will terminate on the Redemption Date and the places where
      such Securities may be surrendered for conversion,

            (g) the place or places where such Securities are to be surrendered
      for payment of the Optional Redemption Price; and

            (h) the CUSIP numbers of the Securities to be redeemed.

In case of a partial redemption, the notice shall specify the serial and CUSIP
numbers (if any) and the portions thereof called for redemption and that
transfers and exchanges may occur on or prior to the Redemption Date.

                                       33
<PAGE>

      Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's written request, by
the Trustee in the name of and at the expense of the Company. Notice of
redemption of Securities to be redeemed at the election of the Company received
by the Trustee shall be given by the Trustee to each Paying Agent in the name of
and at the expense of the Company.

      Section 4.5 Deposit of Redemption Price. On or prior to 10:00 a.m. (New
York City time) on the Redemption Date, the Company shall deposit with the
Trustee an amount of money (which shall be in immediately available funds on
such Redemption Date) sufficient to pay the Optional Redemption Price of all the
Securities which are to be redeemed on that date other than any Securities
called for redemption on that date which have been converted prior to the date
of such deposit. If any Security called for redemption is converted, any money
deposited with the Trustee or so segregated and held in trust for the redemption
of such Security shall be paid to the Company on Company Request or, if then
held by the Company, shall be discharged from such trust.

      Section 4.6 Securities Payable on Redemption Date. Notice of redemption
having been given as aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Optional Redemption Price therein
specified and from and after such date (unless the Company shall default in the
payment of the Optional Redemption Price) such Securities shall cease to bear
interest. Upon surrender of any Security for redemption in accordance with said
notice such Security shall be paid by the Company at the Optional Redemption
Price.

      If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the Optional Redemption Price with respect to such
Security, to the extent permitted by applicable law, shall, until paid, bear
interest from the Redemption Date at a rate equal to the Interest Rate on the
Security plus 1% per annum and such Security shall remain convertible into
Common Stock until the Optional Redemption Price plus any default interest
accrued under this Section 4.6, shall have been paid in full or duly provided
for.

      Any Security that is to be redeemed only in part shall be surrendered at
the Corporate Trust Office or an office or agency of the Company designated for
that purpose pursuant to Section 5.5 (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and make available for delivery to the Holder of
such Security without service charge, a new Security or Securities, of like
series and of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered. Upon redemption, interests in
Global Securities shall be reduced in accordance with the Applicable Procedures.

      Section 4.7 Conversion Arrangement on Call for Redemption. In connection
with any redemption of Securities, the Company may arrange for the purchase and
conversion of any Securities to be redeemed by an agreement with one or more
investment bankers or other purchasers (the "Purchasers") to purchase such
securities by paying to the Trustee in trust for the

                                       34
<PAGE>

Holders, on or before 10:00 a.m. (New York City time) on the Redemption Date, an
amount not less than the applicable Optional Redemption Price. Notwithstanding
anything to the contrary contained in this Article IV, the obligation of the
Company to pay the Optional Redemption Price shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such Purchasers. If such an
agreement is entered into (a copy of which shall be filed with the Trustee prior
to the close of business on the Business Day immediately prior to the Redemption
Date), any Securities called for redemption that are not duly surrendered for
conversion by the Holders thereof may, at the option of the Company, be deemed,
to the fullest extent permitted by law, and consistent with any agreement or
agreements with such Purchasers, to be acquired by such Purchasers from such
Holders and (notwithstanding anything to the contrary contained in Article XIII)
surrendered by such Purchasers for conversion, all as of immediately prior to
the close of business on the Business Day prior to the Redemption Date, subject
to payment of the above amount as aforesaid. At the direction of the Company,
the Trustee shall hold and dispose of any such amount paid to it by the
Purchasers to the Holders in the same manner as it would monies deposited with
it by the Company for the redemption of Securities. Without the Trustee's prior
written consent, no arrangement between the Company and such Purchasers for the
purchase and conversion of any Securities shall increase or otherwise affect any
of the powers, duties, responsibilities or obligations of the Trustee as set
forth in this Indenture, and the Company agrees to indemnify the Trustee from,
and hold it harmless against, any loss, liability or expense arising out of or
in connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such Purchasers, including the costs and
expenses, including reasonable legal fees, incurred by the Trustee in the
defense of any claim or liability arising out of or in connection with the
exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture.

                                   ARTICLE V

                                   COVENANTS

      Section 5.1 Payment of Securities. The Company shall promptly make all
payments in respect of the Securities on the dates and in the manner provided in
the Securities or pursuant to this Indenture. Any amounts of cash to be given to
the Trustee or Paying Agent shall be deposited with the Trustee or Paying Agent
by 10:00 a.m. (New York City time) on the applicable date by the Company.
Principal amount plus accrued interest, if any, including the Repurchase Price,
the Fundamental Change Repurchase Price, the Optional Redemption Price,
Liquidated Damages, if any, and interest, if any, shall be considered paid on
the applicable date due if on such date the Trustee or the Paying Agent holds,
in accordance with this Indenture, cash sufficient to pay all such amounts then
due.

      Section 5.2 SEC and Other Reports. The Company shall file with the
Trustee, within 15 days after it is required to file such annual and quarterly
reports, information, documents and other reports with the SEC, copies of its
annual report and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) that the Company is required to file with the SEC pursuant to Section
13 or 15(d) of the Exchange Act. The Company also shall comply with the other
provisions of TIA Section 314(a), whether or not the Securities are governed by
the TIA. Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's

                                       35
<PAGE>

receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely conclusively on Officers' Certificates). At any time
when the Company is not subject to Section 13 of 15(d) of the Exchange Act, the
Company shall furnish to the Trustee (i) quarterly financial statements on or
before the 45th day after the end of each fiscal quarter that are substantially
equivalent to those the Company would be required to file with the SEC in a
Quarterly Report on Form 10-Q, (ii) annual financial statements on or before the
90th day after the end of each fiscal year that are substantially equivalent to
those the Company would be required to file with the SEC in an Annual Report on
Form 10-K, including a report thereon by the Company's certified independent
accountants, (iii) accompanying each of the financial statements required by (i)
and (ii) above, information substantially equivalent to that required by
Regulation S-K Item 303, "Management Discussion and Analysis of Financial
Condition and Results of Operations;", and (iv) all reports that are
substantially equivalent to that which would be required to be filed with the
SEC on Form 8-K if the Company were required to file such reports, provided,
that in each case the delivery of materials to the Trustee by electronic means
shall be deemed "furnished" to the Trustee for purposes of this Section 5.2;
provided, further, that the Company shall be deemed to have satisfied its
obligations under each of (i), (ii), (iii) and (iv) above if it files such
information with the SEC (if the SEC will accept such filing) or otherwise makes
such financial statements and other information available on or through its web
site.

      Notwithstanding anything to the contrary set forth in this Indenture, the
obligations of the Company set forth in the immediately preceding paragraph
shall commence on December 15, 2004, and the Company shall be under no
obligation to comply with the provisions of the immediately preceding paragraph
before such date.

      Section 5.3 Compliance Certificate. The Company and each Guarantor (to the
extent that such Guarantor is so required under the TIA) shall deliver to the
Trustee on or before the 120th day after the end of each fiscal year of the
Company (beginning with the fiscal year ending on September 30, 2005) an
Officers' Certificate which complies with the requirements of the TIA, stating
whether or not to the knowledge of the signers thereof, the Company is in
default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which
they may have knowledge.

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

      Section 5.4 Further Instruments and Acts. Upon request of the Trustee, the
Company will execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purposes of this Indenture.

                                       36
<PAGE>

      Section 5.5 Maintenance of Office or Agency. The Company will maintain an
office or agency in the Borough of Manhattan, The City of New York, of the
Trustee, Registrar, Paying Agent and Conversion Agent where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer, exchange, purchase or conversion and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The office of The Bank of New York, a New York banking
corporation, at 101 Barclay St., 8th Floor West, New York, New York 10286, shall
initially be such office or agency for all of the aforesaid purposes. The
Company shall give prompt written notice to the Trustee of the location, and of
any change in the location, of any such office or agency (other than a change in
the location of the office of the Trustee). If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the address of the Trustee set forth in Section
14.2.

      The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations.

      Section 5.6 Delivery of Certain Information. Upon the request of a Holder
or any beneficial owner of Securities or holder or beneficial owner of shares of
Common Stock issued upon conversion thereof, the Company and the Guarantors will
promptly furnish or cause to be furnished Rule 144A Information (as defined
below) and any reports required to be filed by them under the Exchange Act or
the Securities Act to such Holder or any beneficial owner of Securities or
holder or beneficial owner of shares of Common Stock, or to a prospective
purchaser of any such security designated by any such holder, as the case may
be, to the extent required to permit compliance by such Holder or holder with
Rule 144A under the Securities Act in connection with the resale of any such
security. "Rule 144A Information" shall be such information as is specified
pursuant to Rule 144A(d)(4) under the Securities Act.

      Section 5.7 Existence. Subject to Article VII, the Company shall do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights (charter and statutory) and franchises; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company.

      Section 5.8 Resale of Certain Securities. During the period beginning on
the Issue Date and ending on the date that is two years from the Issue Date, the
Company shall not, and shall not permit any of its "affiliates" (as defined in
Rule 144 under the Securities Act or any successor provision thereto) to, resell
any Securities which constitute "restricted securities" under Rule 144 that have
been reacquired by any of them.

      Section 5.9 Liquidated Damages Under the Registration Rights Agreement. If
at any time Liquidated Damages become payable by the Company pursuant to the
Registration Rights Agreement, the Company shall promptly deliver to the Trustee
a certificate to that effect and stating (i) the amount of such Liquidated
Damages that are payable and (ii) the date on which such Liquidated Damages are
payable pursuant to the terms of the Registration Rights Agreement. Unless and
until a Responsible Officer of the Trustee receives such a certificate, the

                                       37
<PAGE>

Trustee may assume without inquiry that no Liquidated Damages are payable. If
the Company has paid Liquidated Damages directly to the Persons entitled to such
Liquidated Damages, the Company shall deliver to the Trustee a certificate
setting forth particulars of such payment.

      Section 5.10 Information for IRS Filings. Upon request, the Company shall
provide to the Trustee on a timely basis such information as the Trustee
requires to enable the Trustee to prepare and file any form required to be
submitted by the Company with the Internal Revenue Service and the Holders of
the Securities.

      Section 5.11 Additional Subsidiary Guarantees. If, after the date of this
Indenture, any Domestic Subsidiary of the Company that is not a Guarantor shall
be a Significant Subsidiary, then the Company shall cause such Significant
Subsidiary to become a Guarantor by executing a supplemental indenture in
substantially the form of Exhibit H hereto, and the Company shall deliver an
Opinion of Counsel satisfactory to the Trustee, within 10 Business Days of the
date on which such Domestic Subsidiary became a Significant Subsidiary to the
effect that such supplemental indenture has been duly authorized, executed and
delivered by that Significant Subsidiary and constitutes a valid and binding
agreement of that Significant Subsidiary, enforceable in accordance with its
terms (subject to customary exceptions).

      Section 5.12 Book-Entry System. If the Securities cease to be traded in
the Depositary's book-entry settlement system, the Company covenants and agrees
that it shall use reasonable efforts to make other book entry arrangements that
it determines are reasonable for the Securities.

                                   ARTICLE VI

                    MAKE-WHOLE PREMIUM AND REDEMPTION PREMIUM

      Section 6.1 Entitlement to Make-Whole Premium and Redemption Premium. If a
Fundamental Change occurs, Holders who convert their Securities (in accordance
with the provisions of Article XIII) during the Fundamental Change Conversion
Period in which such Fundamental Change occurs shall receive from the Company
the Make-Whole Premium upon such conversion. If a Redemption Notice has been
provided in accordance with the provisions of Section 4.4, Holders who convert
their Securities (in accordance with the provisions of Article XIII) during the
Redemption Conversion Period beginning on the date of such Redemption Notice
shall receive from the Company the Redemption Premium upon such conversion, and
Holders who do not convert their Securities during the Redemption Conversion
Period shall receive from the Company the Redemption Premium upon redemption in
accordance with Article IV.

            (a) The Make-Whole Premium shall be determined as follows:

                  (i) "Effective Date" means the date that the applicable
            Fundamental Change becomes effective.

                  (ii) "Stock Price" means the price per share of Common Stock,
            determined as follows:

                                       38
<PAGE>

                        (A) if, in connection with a transaction constituting a
                  Fundamental Change, holders of Common Stock receive only cash
                  pursuant to such Fundamental Change, the Stock Price shall be
                  the cash amount paid per share of Common Stock; or

                        (B) in all other circumstances, the Stock Price shall be
                  the arithmetic average of the Closing Prices Per Share of the
                  Common Stock on the five Trading Days prior to, but not
                  including, the Effective Date.

                  (iii) "Make-Whole Premium" means a number of additional shares
            of Common Stock to be received upon conversion per $1,000 principal
            amount of Securities during a Fundamental Change Conversion Period,
            equal to:

                        (A) if the Stock Price is less than $2.16 (subject to
                  adjustment pursuant to Section 6.3) (the "Stock Price
                  Threshold"), no shares;

                        (B) if the Stock Price is more than $36.00 (subject to
                  adjustment pursuant to Section 6.3) (the "Stock Price Cap"),
                  no shares; and

                        (C) otherwise, consideration as determined in accordance
                  with the provisions of this Section 6.1 having a value equal
                  to the number of shares of Common Stock set forth in the
                  following table (the "Make-Whole Premium Table") corresponding
                  to the Stock Price and the Effective Date applicable pursuant
                  to the terms hereof, to the Fundamental Change to be
                  consummated during such Fundamental Change Conversion Period.

                                       39
<PAGE>

<TABLE>
<CAPTION>
  STOCK PRICE     $2.16 $2.17  $2.44  $2.71  $2.98 $3.25  $6.00 $9.00 $12.00 $15.00 $18.00 $21.00 $24.00 $27.00 $30.00 $33.00 $36.00
  -----------     ----- ------ ------ ------ ----- ------ ----- ----- ------ ------ ------ ------ ------ ------ ------ ------ ------
<S>               <C>   <C>    <C>    <C>    <C>   <C>    <C>   <C>   <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
EFFECTIVE DATE

November 24, 2004 0.00  155.25 131.97 113.73 99.94  89.04 39.76 22.04  13.74  9.07   6.18   4.27   2.96   2.04   1.39   0.91   0.00

November 15, 2005 0.00  155.12 131.81 113.52 99.09  88.16 38.72 21.51  13.46  8.93   6.11   4.24   2.96   2.02   1.38   0.90   0.00

November 15, 2006 0.00  154.90 131.74 113.43 98.78  86.91 37.48 20.84  13.09  8.73   6.00   4.18   2.93   2.01   1.38   0.90   0.00

November 15, 2007 0.00  154.66 131.62 113.18 97.75  85.39 35.72 19.84  12.51  8.37   5.78   4.05   2.84   1.99   1.37   0.89   0.00

November 15, 2008 0.00  154.30 118.48 102.06 89.20  78.89 33.34 18.46  11.68  7.85   5.44   3.82   2.69   1.89   1.30   0.87   0.00

November 15, 2009 0.00  137.89 115.27  98.20 84.99  74.53 30.19 16.61  10.55  7.14   4.98   3.52   2.49   1.75   1.21   0.81   0.00

November 15, 2010 0.00  136.16 111.85  93.76 79.95  69.18 26.14 14.21   9.06  6.17   4.33   3.08   2.19   1.54   1.06   0.71   0.00

November 15, 2011 0.00  134.33 107.53  87.91 73.21  61.97 20.77 11.09   7.12  4.90   3.47   2.48   1.77   1.25   0.86   0.56   0.00

November 15, 2012 0.00  133.31 102.55  80.42 64.23  52.21 13.82  7.21   4.70  3.29   2.36   1.71   1.23   0.87   0.59   0.39   0.00

November 15, 2013 0.00  133.20  96.96  70.00 50.88  37.35  4.80  2.49   1.67  1.19   0.87   0.64   0.46   0.33   0.22   0.13   0.00

November 15, 2014 0.00    0.00   0.00   0.00  0.00   0.00  0.00  0.00   0.00  0.00   0.00   0.00   0.00   0.00   0.00   0.00   0.00
</TABLE>

                                       40
<PAGE>

If the Stock Price is between two Stock Price amounts on the Make-Whole Premium
Table or the Effective Date is between two dates on the Make-Whole Premium
Table, the Make-Whole Premium shall be determined by straight-line interpolation
between the number of additional shares set forth in the Make-Whole Premium
Table for the higher and lower Stock Price amounts and the two dates, as
applicable, based on a 365-day year. The Stock Prices set forth in the column
headers are subject to adjustment pursuant to Section 6.3.

            (b) Subject to Section 6.1(c) and the Share Limitation, the Company
      may pay any Make-Whole Premium required pursuant to Section 6.1(a): (i) in
      shares of Common Stock (other than cash paid in lieu of fractional
      shares), (ii) in cash, (iii) in the same form of consideration into which
      shares of Common Stock have been converted in connection with the
      applicable Fundamental Change; or (iv) in any combination of the
      foregoing. The Company Notice delivered pursuant to Section 3.4 in
      connection with the Fundamental Change shall state the percentage of any
      Make-Whole Premium, that will be paid in shares of Common Stock (which
      indication shall be irrevocable). If holders of Common Stock have the
      right to elect the form of consideration received in a Fundamental Change,
      then for purposes of the foregoing, the consideration into which a share
      of Common Stock has been converted shall be deemed to equal the same
      percentage of each form of consideration as encompasses the aggregate
      consideration distributed in respect of all shares of Common Stock
      participating in the distribution. Unless the Company gives notice to the
      contrary, and provided that the applicable conditions set forth in Section
      6.1(c) have been satisfied, the Make-Whole Premium shall be paid in shares
      of Common Stock (or, if applicable, in the same form of consideration into
      which shares of Common Stock have been converted in connection with the
      applicable Fundamental Change). With respect to all or any portion of the
      Make-Whole Premium to be paid in cash, the amount of cash to be paid by
      the Company shall equal the product of (i) the portion of the Make-Whole
      Premium to be paid in cash expressed as a number of shares of Common Stock
      and (ii) the Stock Price.

            The Company, in its sole discretion, may elect to pay all or any
      portion of any Redemption Premium required pursuant to Section 6.1(a) to
      be paid upon the conversion of Securities as described in Section 13.1
      within the Redemption Conversion Period (i) in shares of Common Stock
      (other than cash paid in lieu of fractional shares) valued at the
      Conversion Price, (ii) in cash or (iii) in any combination of the
      foregoing, in accordance with the provisions of Article XIII.

            The Company may from time to time appoint a calculation agent with
      respect to the calculation of the Make-Whole Premium (the "Calculation
      Agent"). The Calculation Agent shall, on behalf of and upon request by the
      Company or the Trustee, calculate (A) the Stock Price and (B) the
      Make-Whole Premium with respect to such Stock Price based on the Effective
      Date specified by the Company or the Trustee and shall deliver its
      calculation of the Stock Price and Make-Whole Premium to the Company and
      the Trustee within five Business Days of the request by the Company or the
      Trustee. The Company, or at the Company's request, the Trustee in the name
      and at the expense of the Company, (X) shall notify the Holders of the
      Stock Price and the estimated Make-Whole Premium per $1,000 principal
      amount of Securities with respect to a Fundamental Change as part of the
      Company Notice delivered in connection with a Fundamental Change in

                                       41
<PAGE>

      accordance with Section 3.4 and (Y) shall notify the Holders promptly upon
      the opening of business on the Effective Date of the consideration
      expressed as the number of additional shares (or, at the option of the
      Company, cash or other securities, assets or property into which all or
      substantially all of the shares of Common Stock have been converted as of
      the Effective Date as described above) to be delivered in respect of the
      Make-Whole Premium, if any, payable in connection with conversions during
      the Fundamental Change Conversion Period.

            (c) Provided that the Company has timely given a Company Notice
      containing all the information required under Section 3.4 and subject to
      compliance with the Share Limitation, the Company may elect to pay all or
      any portion of the Make-Whole Premium in Common Stock rather than cash, if
      and only if the following conditions shall have been satisfied (or waived
      by the applicable Holder):

                  (i) From and after the delivery of the Company Notice relating
            to the Make-Whole Premium through the payment of the Make-Whole
            Premium, (i) the shares of Common Stock to be issued in connection
            with the Make-Whole Premium are (x) either registered, approved
            and/or qualified, as applicable, or exempt from any such
            registration, approval and qualification, as applicable, under
            applicable federal and state securities law such that such shares of
            Common Stock shall be upon issue validly issued and delivered in
            accordance with applicable federal and state securities laws and not
            subject to any transfer restrictions under the Securities Act or
            other securities laws and (y) listed or approved for listing on the
            NYSE, the AMEX, the Nasdaq National Market or The Nasdaq SmallCap
            Market; and (ii) there shall be sufficient authorized but unissued
            (or issued but not outstanding) shares of Common Stock to issue the
            shares of Common Stock in connection with the Make-Whole Premium,
            and such Common Stock will upon issue, be duly and validly issued
            and fully paid and nonassessable and free of any preemptive or
            similar rights; and

                  (ii) The Trustee shall receive at the time of delivery of the
            applicable Company Notice and just prior to the date of payment of
            the Make-Whole Premium, (i) an Officer's Certificate stating that
            the terms of the issuance of such shares of Common Stock are in
            conformity with this Indenture, (ii) an Opinion of Counsel to the
            effect that the shares of Common Stock in respect of the Make-Whole
            Premium have been duly authorized and, when issued and delivered
            pursuant to the terms of this Indenture, will be validly issued,
            fully paid and non-assessable and (iii) an Officer's Certificate
            stating that the conditions to the issuance of the shares of Common
            Stock have been satisfied.

      In the event of a Fundamental Change where the Company is not the
      surviving entity, for each conversion by a Holder after the Effective
      Date, such Holder shall receive in lieu of each share of Common Stock
      payable as part of the Make-Whole Premium, consideration in the form and
      amount payable in respect of a share of Common Stock pursuant to such
      Fundamental Change (provided that any securities that are issuable as part
      of such consideration shall meet the conditions set forth in this Section
      6.1(c) as if such securities were "Common Stock" under this Section
      6.1(c)).

                                       42
<PAGE>

            Promptly after determination of the actual number of shares of
      Common Stock to be issued in respect of the Make-Whole Premium, the
      Company shall disseminate a press release through Dow Jones & Company,
      Inc. or Bloomberg Business News containing the information or publish this
      information on the Company's web site or through such other public medium
      as the Company may use at that time.

      Section 6.2 Payment of Make-Whole Premium and Redemption Premium. On or
prior to 10:00 a.m. (New York City time) on the sixteenth (16th) Trading Day
following the Effective Date, the Company will deposit with the Trustee or with
one or more Paying Agents additional shares of Common Stock and/or cash
sufficient to satisfy the entitlement of the Holders of Securities under Section
6.1 to receive a Make-Whole Premium. Payment of the Make-Whole Premium pursuant
to Section 6.1 to Holders of Securities surrendered for conversion within a
Fundamental Change Conversion Period will be made promptly following the later
of the Effective Date of the Fundamental Change and the date of such surrender
for conversion, as the case may be, by delivering entitlements to securities,
mailing checks in respect of cash and/or delivering other assets or property for
the amount payable to the Holders of such Securities entitled thereto as they
(and their addresses) shall appear in the security register. To the extent that
the aggregate number of shares of Common Stock or amount of cash deposited by
the Company pursuant to this Section 6.2 exceeds the aggregate entitlement to
receive the Make-Whole Premium under Section 6.1 of the Holders of Securities
that are converted during a Fundamental Change Conversion Period, then, promptly
after the end of the Fundamental Change Conversion Period, as the case may be,
the Paying Agent shall return any such excess to the Company.

      If the Company elects to pay all or any portion of the Redemption Premium
required pursuant to the provisions of Section 6.1 to be paid upon the
conversion of Securities as described in Section 13.1 within the Redemption
Conversion Period in cash, the Company will deposit with the Trustee or with one
or more Paying Agents on or prior to 10:00 am (New York City time) on the
Redemption Date cash sufficient to satisfy the portion of the entitlement of the
Holders of Securities under Section 6.1 to such Redemption Premium to be paid in
cash. Payment of such all or a portion of such entitlement in the form of cash
pursuant to Section 6.1 to Holders of Securities surrendered for conversion
within a Redemption Conversion Period will be made promptly following the
Conversion Date (but in no event later than the Redemption Date immediately
following the Redemption Conversion Period) by mailing checks in respect of cash
for the amount payable to the Holders of such Securities entitled thereto as
they (and their addresses) shall appear in the security register. To the extent
that the aggregate amount of cash deposited by the Company pursuant to this
Section 6.2 exceeds the aggregate entitlement to receive the Redemption Premium
under Section 6.1 of the Holders of Securities that are converted during a
Redemption Conversion Period, then, promptly after the end of the Redemption
Conversion Period, the Trustee or such Paying Agent shall return any such excess
to the Company. If the Company elects to pay all or any portion of the
Redemption Premium in shares of Common Stock, the number of shares of Common
Stock to be issued upon conversion of Securities during a Redemption Conversion
Period shall be increased pursuant to the provisions of Section 13.1.

      Section 6.3 Adjustment to the Make-Whole Premium. Whenever the Conversion
Price shall be adjusted from time to time by the Company pursuant to Section
13.3, the Stock

                                       43
<PAGE>

Price Threshold and the Stock Price Cap shall be adjusted and each of the Stock
Prices set forth in the Make-Whole Premium Table shall be adjusted by
multiplying each such amount by a fraction the numerator of which is the
Conversion Price as so adjusted and the denominator of which is the Conversion
Price immediately prior to such adjustment. If an adjustment is made to the
Conversion Price pursuant to Section 13.3, the number of additional shares as
set forth in each entry on the Make-Whole Premium Table shall be adjusted by
multiplying each such amount by a fraction the numerator of which is the
Conversion Price immediately prior to such adjustment and the denominator of
which is the Conversion Price as so adjusted.

                                  ARTICLE VII

                              SUCCESSOR CORPORATION

      Section 7.1 When Company May Merge or Transfer Assets. The Company shall
not consolidate with or merge with or into any other Person or convey, transfer,
sell, lease or otherwise dispose of all or substantially all of its properties
and assets to any Person, unless:

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

            (b) immediately after giving effect to such transaction, no Event of
      Default, and no event that, after notice or lapse of time or both, would
      become an Event of Default, shall have occurred and be continuing; and

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

The successor Person formed by such consolidation or into which the Company is
merged or the successor Person to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor had been named as the Company herein; and thereafter, the Company
shall be discharged from all obligations and covenants under this Indenture and
the Securities. Subject to Section 11.6, the Company, the Trustee and the
successor Person shall enter into a supplemental indenture to evidence the
succession and substitution of such successor Person and such discharge and
release of the Company.

                                       44
<PAGE>

                                  ARTICLE VIII

                              DEFAULTS AND REMEDIES

      Section 8.1 Events of Default. So long as any Securities are outstanding,
each of the following shall be an "Event of Default":

            (a) default in the payment of the principal amount on any Security
      when the same becomes due and payable, whether at Stated Maturity, upon
      redemption or repurchase or otherwise;

            (b) default in the payment of the Make-Whole Premium, if any, when
      due and payable;

            (c) default in the payment of any accrued and unpaid interest, or
      the payment of any Liquidated Damages, if any, on any Security, or any
      other amount due on any Securities (other than those referred to in
      clauses (a) and (b) above), in each case when due and payable, and
      continuance of such default for a period of 30 days;

            (d) failure by the Company or any Guarantor to comply with any of
      their respective agreements or covenants in the Securities or this
      Indenture (other than those referred to in clauses (a) through (c) above)
      and such failure continues for a period of 30 consecutive days after
      receipt by the Company of a Notice of Default;

            (e) except as provided in Section 8.1(b), the failure to deliver
      shares of Common Stock, together with cash instead of fractional shares,
      when those shares of Common Stock or cash instead of fractional shares is
      required to be delivered following conversion of a Security, and that
      failure continues for a period of 10 days;

            (f) a default under any Indebtedness for money borrowed by the
      Company or any Guarantor having a principal amount then outstanding,
      individually or in the aggregate, of $25 million or more, for a period of
      30 days after written notice of default is given to the Company by the
      Trustee or to the Company and the Trustee by Holders of not less than 50%
      in aggregate principal amount of the Securities then outstanding, which
      default results in the acceleration of such Indebtedness, unless such
      acceleration is waived, cured, rescinded or annulled or unless such
      Indebtedness is discharged;

            (g) the rendering of a final judgment or judgments (not subject to
      appeal) against the Company or any of its Subsidiaries in an aggregate
      amount in excess of $25 million which remains unstayed, undischarged or
      unbonded for a period of 60 days thereafter;

            (h) the Company fails to timely provide a Company Notice in
      connection with a Fundamental Change in accordance with Section 3.4;

            (i) the entry by a court having jurisdiction in the premises of (i)
      a decree or order for relief in respect of the Company or any Subsidiary
      that is a Significant Subsidiary, in an involuntary case or proceeding
      under the Bankruptcy Code or any other applicable bankruptcy, insolvency,
      reorganization or other similar law or (ii) a decree or order

                                       45
<PAGE>

adjudging the Company or any Subsidiary that is a Significant Subsidiary, as
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of the
Company or any Subsidiary that is a Significant Subsidiary, under the Bankruptcy
Code or any other applicable law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or of any substantial part of its property, or ordering the winding up
or liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a period
of 60 consecutive days; or

      (j) the commencement by the Company or any Subsidiary that is a
Significant Subsidiary, of a voluntary case or proceeding under the Bankruptcy
Code or any other applicable bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by the Company or any Subsidiary that is a Significant
Subsidiary, to the entry of a decree or order for relief in respect of the
Company or any Subsidiary that is a Significant Subsidiary, in an involuntary
case or proceeding under the Bankruptcy Code or any other applicable bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against the Company, or the filing
by the Company or any Subsidiary that is a Significant Subsidiary, of a petition
or answer or consent seeking reorganization or relief under any applicable law,
or the consent by the Company to the filing of such petition or to the
appointment of or the taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or of
any substantial part of its property, or the making by the Company or any
Subsidiary that is a Significant Subsidiary, of an assignment for the benefit of
creditors, or the admission by the Company or any Subsidiary that is a
Significant Subsidiary, in writing of its inability to pay its debts generally
as they become due.

      A Default under Section 8.1(d) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
principal amount of the Securities at the time outstanding notify the Company
and the Trustee, of the Default and the Company does not cure such Default (and
such Default is not waived) within the time specified in Section 8.1(d) above
after receipt of such notice. Any such notice must specify the Default, demand
that it be remedied and state that such notice is a "Notice of Default."

      The Trustee shall, on or before the 90th day after the occurrence of a
Default, give to the Holders of the Securities notice of all uncured Defaults
known to it and written notice of any event which with the giving of notice or
the lapse of time, or both, would become an Event of Default, its status and
what action the Company is taking or proposes to take with respect thereto;
provided, however, the Trustee shall be protected in withholding such notice if
it, in good faith, determines that the withholding of such notice is in the best
interest of such Holders, except in the case of a Default under Section
8.1(a),(b) or (c).

                                       46
<PAGE>

      Section 8.2 Acceleration. If an Event of Default (other than an Event of
Default specified in Section 8.1(i) or (j) with respect to the Company) occurs
and is continuing, the Trustee by notice to the Company, or the Holders of at
least 25% in aggregate principal amount of the Securities at the time
outstanding by notice to the Company and the Trustee, may declare the principal
amount plus accrued and unpaid interest, and Liquidated Damages, if any, on all
the Securities to be immediately due and payable in cash. To the extent
permitted by applicable law, if an Event of Default specified in Section 8.1(i)
or (j) occurs, the principal amount plus accrued and unpaid interest, and
Liquidated Damages, if any, on all the Securities shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders. The Majority Holders or the Holders originally
causing such acceleration, by notice to the Trustee (and without notice to any
other Securityholder) may rescind an acceleration and its consequences if the
rescission would not violate any judgment or decree and if all existing Events
of Default have been cured or waived except nonpayment of the principal amount
plus accrued and unpaid interest, and Liquidated Damages, if any, that have
become due solely as a result of acceleration and if all amounts due to the
Trustee under Section 9.7 have been paid. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.

      Section 8.3 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of the principal amount plus accrued and unpaid interest, including the
Repurchase Price, the Fundamental Change Repurchase Price, the Optional
Redemption Price, the Redemption Premium, the Make-Whole Premium and Liquidated
Damages, if any, on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.

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

      Section 8.4 Waiver of Past Defaults. The Majority Holders, by notice to
the Trustee (and without notice to any other Securityholder), may waive an
existing Default and its consequences except (i) an Event of Default described
in Section 8.1(a), Section 8.1(b) or Section 8.1(c), (ii) a Default in respect
of a provision that under Section 11.2 cannot be amended without the consent of
each Securityholder affected or (iii) a Default which constitutes a failure to
deliver shares of Common Stock upon conversion of any Security in accordance
with the terms of Article XIII. When a Default is waived, it is deemed cured,
but no such waiver shall extend to any subsequent or other Default or impair any
consequent right. This Section 8.4 shall be in lieu of Section 316(a)(1)(B) of
the TIA and such Section 316(a)(1)(B) is hereby expressly excluded from this
Indenture, as permitted by the TIA.

      Section 8.5 Control by Majority. The Majority Holders may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that violates law or this
Indenture or that the Trustee determines in good faith is unduly

                                       47
<PAGE>

prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability unless the Trustee is offered indemnity satisfactory to
it. This Section 8.5 shall be in lieu of Section 316(a)(1)(A) of the TIA and
such Section 316(a)(1)(A) is hereby expressly excluded from this Indenture, as
permitted by the TIA.

      Section 8.6 Limitation on Suits. A Holder may not pursue any remedy with
respect to this Indenture or the Securities unless:

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

            (b) the Majority Holders make a written request and offer
      indemnification reasonably satisfactory to the Trustee to pursue the
      remedy;

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

            (d) the Majority Holders do not give the Trustee a direction
      inconsistent with the request during such 60-day period.

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

      Section 8.7 Rights of Holders to Receive Payment. The right of any Holder
to receive payment of the principal amount, the Repurchase Price, the
Fundamental Change Repurchase Price, the Optional Redemption Price, the
Make-Whole Premium, the Redemption Premium and Liquidated Damages, if any, or
interest in respect of the Securities held by such Holder, on or after the
respective due dates expressed in the Securities, and to convert the Securities
in accordance with Article XIII, or to bring suit for the enforcement of any
such payment on or after such respective dates or the right to convert, shall
not be impaired or affected adversely without the consent of such Holder.

      Section 8.8 Collection Suit by Trustee. If an Event of Default described
in Section 8.1(a), (b) or (c) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount owing with respect to the Securities and the amounts
provided for in Section 9.7.

      Section 8.9 Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal amount, Repurchase Price, Fundamental Change Repurchase
Price, Make-Whole Premium, Liquidated Damages, if any, or interest in respect of
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of any such amount) shall be entitled
and empowered, by intervention in such proceeding or otherwise,

                                       48
<PAGE>

            (a) to file and prove a claim for the whole amount of the principal
      amount, Repurchase Price, Fundamental Change Repurchase Price, Make-Whole
      Premium, Liquidated Damages, if any or interest and to file such other
      papers or documents as may be necessary or advisable in order to have the
      claims of the Trustee (including any claim for the reasonable
      compensation, expenses, disbursements and advances of the Trustee, its
      agents and counsel or any other amounts due the Trustee under Section 9.7)
      and of the Holders allowed in such judicial proceeding, and

            (b) to collect and receive any moneys or other property payable or
      deliverable on any such claims and to distribute the same; and any
      custodian, receiver, assignee, trustee, liquidator, sequestrator or
      similar official in any such judicial proceeding is hereby authorized by
      each Holder to make such payments to the Trustee and, in the event that
      the Trustee shall consent to the making of such payments directly to the
      Holders, to pay the Trustee any amount due it for the reasonable
      compensation, expenses, disbursements and advances of the Trustee, its
      agents and counsel, and any other amounts due the Trustee under Section
      9.7.

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

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

      FIRST: to the Trustee for amounts due under Section 9.7;

      SECOND: to Securityholders for amounts due and unpaid on the Securities
for the principal amount, Repurchase Price, Fundamental Change Repurchase Price,
Make-Whole Premium, Liquidated Damages, if any, or interest, or any other amount
due and owing on the Securities or to the Holders from the Company, as the case
may be, ratably, without preference or priority of any kind, according to such
amounts due and payable on the Securities; and

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

      The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 8.10. At least 15 days before such
record date, the Trustee shall mail to each Securityholder and the Company a
notice that states the record date, the payment date and the amount to be paid.

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

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<PAGE>

the Securities at the time outstanding. This Section 8.11 shall be in lieu of
Section 315(e) of the TIA and such Section 315(e) is hereby expressly excluded
from this Indenture, as permitted by the TIA.

      Section 8.12 Waiver of Stay, Extension or Usury Laws. Each of the Company
and the Guarantors covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury or
other law wherever enacted, now or at any time hereafter in force, which would
prohibit or forgive the Company from paying all or any portion of the principal
amount or Repurchase Price, Fundamental Change Repurchase Price or Make-Whole
Premium in respect of Securities, Liquidated Damages or any interest on such
amounts, as contemplated herein, or which may affect the covenants or the
performance of this Indenture; and each of the Company and the Guarantors (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.

      Section 8.13 Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case, subject to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding has been
instituted.

      Section 8.14 Rights and Remedies Cumulative. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities in the last paragraph of Section 2.7, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

      Section 8.15 Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article VIII or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.

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<PAGE>

                                   ARTICLE IX

                                     TRUSTEE

      Section 9.1 Duties of Trustee.

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

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

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

                  (ii) in the absence of bad faith on its part, the Trustee may
            conclusively rely, as to the truth of the statements and the
            correctness of the opinions expressed therein, upon certificates or
            opinions furnished to the Trustee conforming to the requirements of
            this Indenture, but in the case of any such certificates or opinions
            which by any provision hereof are specifically required to be
            furnished to the Trustee, the Trustee shall examine the certificates
            and opinions to determine whether or not they conform to the
            requirements of this Indenture, but need not confirm or investigate
            the accuracy of mathematical calculations or other facts stated
            therein. This Section 9.1(b) shall be in lieu of Section 315(a) of
            the TIA and such Section 315(a) is hereby expressly excluded from
            this Indenture, as permitted by the TIA.

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

                  (i) this paragraph (c) does not limit the effect of paragraph
            (b) of this Section 9.1;

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

                  (iii) the Trustee shall not be liable with respect to any
            action it takes or omits to take in good faith in accordance with a
            direction received by it pursuant to Section 8.5.

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

            (d) Every provision of this Indenture that in any way relates to the
      Trustee is subject to paragraphs (a), (b), (c), (e) and (f) of this
      Section 9.1.

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<PAGE>

            (e) Subject to Section 9.1(c), the Trustee may refuse to perform any
      duty or exercise any right or power or extend or risk its own funds or
      otherwise incur any financial liability unless it receives indemnity
      satisfactory to it against any loss, liability or expense.

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

      Section 9.2 Rights of Trustee. Subject to its duties and responsibilities
under the TIA,

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

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

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

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

            (e) subject to Section 9.1(c), the Trustee may consult with counsel
      selected by it and any advice or Opinion of Counsel shall be full and
      complete authorization and protection in respect of any action taken or
      suffered or omitted by it hereunder in good faith and in accordance with
      such advice or Opinion of Counsel;

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

            (g) any request or direction of the Company mentioned herein shall
      be sufficiently evidenced by an Officer's Certificate (unless other
      evidence in respect thereof be herein specifically prescribed); and any
      Board Resolution may be evidenced to

                                       52
<PAGE>

      the Trustee by a copy thereof certified by the Secretary or an Assistant
      Secretary of the Company;

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

            (i) the Trustee shall not be deemed to have notice of any Default or
      Event of Default, except a Default under Section 8.1(a), (b) and (c),
      unless written notice of any event which is in fact such a default is
      received by the Trustee from the Company or the Holders of at least 25% of
      the Securities then outstanding at the Corporate Trust Office of the
      Trustee, and such notice references the Securities and this Indenture;

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

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

      Section 9.3 Individual Rights of Trustee. The Trustee in its individual or
any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, Conversion Agent or
co-registrar may do the same with like rights. However, the Trustee must comply
with Section 9.10 and Section 9.11.

      Section 9.4 Trustee's Disclaimer. The Trustee makes no representation as
to the validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company's use or application of the proceeds from the
Securities, it shall not be responsible for any statement in any registration
statement for the Securities under the Securities Act or in any offering
document for the Securities, the Indenture or the Securities (other than its
certificate of authentication), or the determination as to which beneficial
owners are entitled to receive any notices hereunder.

      Section 9.5 Notice of Defaults. If a Default occurs and if it is known to
the Trustee, the Trustee shall give to each Holder notice of the Default within
90 days after it occurs or, if later, within 15 days after it is known to the
Trustee, unless such Default shall have been cured or

                                       53
<PAGE>

waived before the giving of such notice. Notwithstanding the preceding sentence,
except in the case of a Default described in Section 8.1(a), (b) or (c), the
Trustee may withhold the notice if and so long as a committee of Responsible
Officers in good faith determines that withholding the notice is in the interest
of the Securityholders. The preceding sentence shall be in lieu of the proviso
to Section 315(b) of the TIA and such proviso is hereby expressly excluded from
this Indenture, as permitted by the TIA. The Trustee shall not be deemed to have
knowledge of a Default unless a Responsible Officer has received written notice
of such Default by the Company or the Holders of at least ten percent (10%) in
aggregate principal amount of the Securities then outstanding, which notice
specifically references this Indenture and the Securities.

      Section 9.6 Reports by Trustee to Holders. Within 60 days after each May
15th beginning with the May 15th following the date of this Indenture, the
Trustee shall mail to each Securityholder and such others in compliance with TIA
Section 313(a) a brief report dated as of such May 15 that complies with TIA
Section 313(a), if required by such Section 313(a). The Trustee also shall
comply with TIA Section 313(b).

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

      Section 9.7 Compensation and Indemnity. The Company and the Guarantors
agree:

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

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

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

      To secure the Company's and the Guarantors' payment obligations in this
Section 9.7, the Trustee shall have a lien prior to the Securities on all money
or property held or collected by the Trustee, except amounts held in trust to
pay the principal amount, the Repurchase Price, the

                                       54
<PAGE>

Fundamental Change Repurchase Price, the Make-Whole Premium, the Liquidated
Damages, if any, or interest, as the case may be, on particular Securities.

      The Company's and the Guarantors' payment obligations pursuant to this
Section 9.7 shall survive the discharge of this Indenture and the resignation or
removal of the Trustee. When the Trustee incurs expenses after the occurrence of
a Default specified in Section 8.1(i) or (j), the expenses including the
reasonable charges and expenses of its counsel, are intended to constitute
expenses of administration under any bankruptcy law.

      Section 9.8 Replacement of Trustee. The Trustee may resign by so notifying
the Company and to the Holders of Securities; provided, however, no such
resignation shall be effective until a successor Trustee has accepted its
appointment pursuant to this Section 9.8. The Majority Holders may remove the
Trustee by so notifying the Trustee and the Company. The Company shall remove
the Trustee if:

            (a) the Trustee fails to comply with Section 9.10;

            (b) the Trustee is adjudged bankrupt or insolvent;

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

            (d) the Trustee otherwise becomes incapable of acting.

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

      A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company satisfactory in form and substance to
the retiring Trustee and the Company. Thereupon the resignation or removal of
the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Securityholders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 9.7.

      If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, (i) the retiring Trustee may upon ten
Business Days' notice to the Company and the Securityholders, appoint a
successor identified in such notice, or (ii) the Trustee, the Company or the
Majority Holders may petition any court of competent jurisdiction at the expense
of the Company for the appointment of a successor Trustee.

      The Majority Holders may upon removal of the Trustee nominate a successor
trustee that shall be deemed appointed as successor trustee unless, within ten
Business Days after notice to the Company of such nomination, the Company
objects thereto, in which case the Trustee so removed or any other
Securityholder, or if such Trustee so removed or any Securityholder fails to
act, the Company, upon the terms and conditions provided herein, may petition
any court of competent jurisdiction for an appointment of a successor trustee.

                                       55
<PAGE>

      If the Trustee fails to comply with Section 9.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.

      No successor trustee shall accept appointment as provided in this Section
9.8 unless, at the time of such acceptance, such successor complies with Section
9.10 hereof.

      Section 9.9 Successor Trustee by Merger. If the Trustee consolidates with,
merges or converts into, or transfers all or substantially all its corporate
trust business or assets to, another corporation, the resulting, surviving or
transferee corporation without any further act shall be the successor Trustee.

      Section 9.10 Eligibility; Disqualification. The Trustee shall at all times
satisfy the requirements of TIA Sections 310(a)(1) and (5) and 310(b). The
Trustee (or its parent holding company) shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition. Nothing herein contained shall prevent the Trustee from
filing with the SEC the application referred to in the penultimate paragraph of
TIA Section 310(b).

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

                                   ARTICLE X

                             DISCHARGE OF INDENTURE

      Section 10.1 Discharge of Liability on Securities. If (i) the Company
delivers to the Trustee all outstanding Securities (other than Securities
replaced or repaid pursuant to Section 2.7) for cancellation or (ii) all
outstanding Securities shall become due and payable and, in each case, the
Company deposits with the Trustee cash sufficient to pay all amounts due and
owing on all outstanding Securities (other than Securities replaced pursuant to
Section 2.7), and if in each case the Company pays all other sums payable
hereunder by the Company or otherwise payable to the Holders in relation
thereto, then this Indenture shall, subject to Section 9.7, cease to be of
further effect. The Trustee shall join in the execution of a document prepared
by the Company acknowledging satisfaction and discharge of this Indenture on
demand of the Company accompanied by an Officers' Certificate and Opinion of
Counsel and at the cost and expense of the Company. Notwithstanding the
satisfaction and discharge of this Indenture, the obligations of the Company to
the Trustee under Section 9.7 and the obligations of the Trustee as to the
application and discharge of any funds deposited with it shall survive such
satisfaction and discharge.

      Section 10.2 Repayment to the Company. The Trustee and the Paying Agent
shall return to the Company upon written request any money or securities held by
them with respect to the Securities and not applied that remains unclaimed for
two years, subject to applicable unclaimed property law. After return to the
Company, Holders entitled to the money or

                                       56
<PAGE>

securities must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another Person and the Trustee and
the Paying Agent shall have no further liability to the Securityholders with
respect to such money or securities for that period commencing after the return
thereof.

                                   ARTICLE XI

                                   AMENDMENTS

      Section 11.1 Without Consent of Holders. The Company, the Guarantors and
the Trustee may amend this Indenture, all (but not less than all) of the
Securities or the Subsidiary Guarantees without the consent of any
Securityholder to:

            (a) add to the covenants of the Company for the benefit of the
      Holders of Securities;

            (b) surrender any right or power herein conferred upon the Company;

            (c) provide for the assumption of the Company's or a Guarantor's
      obligations to the Holders of Securities in the case of a merger,
      consolidation, conveyance, transfer or lease pursuant to Article VII or
      Section 13.4 hereof and in accordance with the terms of this Indenture;

            (d) reduce the Conversion Price with respect to all outstanding
      Securities; provided, however, that such reduction in the Conversion Price
      shall be in accordance with the terms of this Indenture and shall not
      adversely affect the interests of the Holders of Securities (including
      after taking into account tax and other consequences of such reduction);

            (e) cure any ambiguity, to correct or supplement any provision
      herein which may be inconsistent with any other provision herein or which
      is otherwise defective; provided, however, that such action pursuant to
      this clause (e) does not adversely affect the interests of the Holders of
      Securities in any material respect;

            (f) add or modify any other provisions herein with respect to
      matters or questions arising hereunder which the Company and the Trustee
      may deem necessary or desirable and that will not adversely affect the
      interests of the Holders of Securities;

            (g) to add new Guarantors with respect to the Securities pursuant to
      Section 5.11;

            (h) add additional Events of Default; or

            (i) convey, transfer, assign, mortgage or pledge to the Trustee as
      security for the Securities any property or assets.

      Section 11.2 With Consent of Holders. Except as provided below in this
Section 11.2, this Indenture, the Securities and the Subsidiary Guarantees may
be amended, modified or supplemented, and noncompliance in any particular
instance with any provision of this

                                       57
<PAGE>

Indenture, the Securities or Subsidiary Guarantees may be waived, in each case
with the written consent of the Majority Holders.

      Without the written consent or the affirmative vote of each Holder of
Securities affected thereby, an amendment or waiver under this Section 11.2 may
not:

            (a) change the Stated Maturity of the principal amount of, or the
      date any installment of interest, or the payment of Liquidated Damages, is
      due on, any Security;

            (b) reduce the principal amount of, or interest, or the payment of
      Liquidated Damages payable on, any Security;

            (c) make any change that impairs the conversion rights of any
      Securities under Article XIII;

            (d) reduce the Repurchase Price, the Fundamental Change Repurchase
      Price, the Optional Redemption Price, the Redemption Premium or the
      Make-Whole Premium of any Security or amend or modify in any manner
      adverse to the Holders of Securities the Company's obligation to make such
      payments;

            (e) modify the provisions of Section 4.1 in any manner adverse to
      the Holders of Securities;

            (f) reduce the quorum or voting requirements under this Indenture;

            (g) change the currency of any amount owed or owing under the
      Security or any interest thereon from U.S. Dollars;

            (h) impair the right of any Holder, or the percentage of Holders
      required hereunder, to institute suit or give instructions or directions
      to the Trustee for the enforcement of any payment or with respect to, or
      conversion of, any Security;

            (i) modify any of the provisions of this Section 11.2 or Section 8.4
      (Waiver of Past Defaults), except to provide that certain other provisions
      of this Indenture cannot be modified or waived without the consent of the
      Holder of each outstanding Security affected thereby; or

            (j) reduce the percentage of the principal amount of the outstanding
      Securities the consent of whose Holders is required for any such
      supplemental indenture or the consent of whose Holders is required for any
      waiver provided for in this Indenture.

      It shall not be necessary for the consent of the Holders under this
Section 11.2 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.

      After an amendment under this Section 11.2 becomes effective, the Company
shall mail to each Holder a notice briefly describing the amendment.

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<PAGE>

      Section 11.3 Compliance with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article XI shall comply with the TIA.

      Section 11.4 Revocation and Effect of Consents, Waivers and Actions. Until
an amendment, waiver or other action by Holders becomes effective, a consent
thereto by a Holder of a Security hereunder is a continuing consent by the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same obligation as the consenting Holder's Security, even if
notation of the consent, waiver or action is not made on the Security. However,
any such Holder or subsequent Holder may revoke the consent, waiver or action as
to such Holder's Security or portion of the Security if the Trustee receives the
notice of revocation before the date the amendment, waiver or action becomes
effective. After an amendment, waiver or action becomes effective, it shall bind
every Securityholder.

      Section 11.5 Notation on or Exchange of Securities. Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article XI may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
outstanding Securities.

      Section 11.6 Trustee to Sign Supplemental Indentures. In signing a
supplemental indenture permitted by this Article XI, the Trustee shall receive,
and (subject to the provisions of Section 9.1) shall be fully protected in
relying upon, an Officers' Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture. Subject to the
preceding sentence, the Trustee shall sign any supplemental indenture authorized
pursuant to this Article XI if the amendment contained therein does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may, but need not, sign such supplemental indenture.

      Section 11.7 Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article XI, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.

                                  ARTICLE XII

                             SUBSIDIARY GUARANTEES

      Section 12.1 Guarantee.

            (a) Subject to this Article XII, each of the Guarantors hereby,
      jointly and severally, fully and unconditionally guarantees to each Holder
      of a Security authenticated and delivered by the Trustee and to the
      Trustee and its successors and assigns, irrespective of the validity and
      enforceability of the Securities or the obligations of the Company
      hereunder or thereunder, that:

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                  (i) the principal, the Repurchase Price, the Fundamental
            Change Repurchase Price and the Optional Redemption Price of, and
            the Redemption Premium, any Make-Whole Premium (only to the extent
            not otherwise satisfied by the Company in other than cash in
            accordance with the applicable Company Notice), Liquidated Damages,
            if any, and interest on, the Securities will be promptly paid in
            full when due, whether at Stated Maturity, by acceleration,
            redemption, repurchase or otherwise, and interest on the overdue
            principal of and interest on the Securities, if any, if lawful, and
            all other cash payment obligations of the Company to the Holders or
            the Trustee hereunder or thereunder will be promptly paid in full or
            performed, all in accordance with the terms hereof and thereof; and

                  (ii) in case of any extension of time of payment or renewal of
            any Securities or any of such other obligations, that same will be
            promptly paid in full when due or performed in accordance with the
            terms of the extension or renewal, whether at Stated Maturity, by
            acceleration or otherwise;

      Failing payment when due of any amount so guaranteed or any performance so
      guaranteed for whatever reason, the Guarantors will be jointly and
      severally obligated to pay the same immediately. Each Guarantor agrees
      that this is a guarantee of payment and not a guarantee of collection. No
      Guarantor shall have any obligation to guarantee the Company's performance
      of its obligations under Article XIII.

            (b) The Guarantors hereby agree that their obligations hereunder are
      unconditional, irrespective of the validity, regularity or enforceability
      of the Securities or this Indenture, the absence of any action to enforce
      the same, any waiver or consent by any Holder of the Securities with
      respect to any provisions hereof or thereof, the recovery of any judgment
      against the Company, any action to enforce the same or any other
      circumstance which might otherwise constitute a legal or equitable
      discharge or defense of a Guarantor. Each Guarantor hereby waives
      diligence, presentment, demand of payment, filing of claims with a court
      in the event of insolvency or bankruptcy of the Company, any right to
      require a proceeding first against the Company, protest, notice and all
      demands whatsoever and covenant that this Subsidiary Guarantee will not be
      discharged except by complete performance of the obligations contained in
      the Securities and this Indenture (other than the Company's obligations
      pursuant to Article XIII);

            (c) If any Holder or the Trustee is required by any court or
      otherwise to return to the Company, the Guarantors or any custodian,
      trustee, liquidator or other similar official acting in relation to either
      the Company or the Guarantors, any amount paid by either to the Trustee or
      such Holder, this Subsidiary Guarantee, to the extent theretofore
      discharged, will be reinstated in full force and effect.

            (d) Each Guarantor agrees that it will not be entitled to exercise
      any right of subrogation in relation to the Holders in respect of any
      obligations guaranteed hereby until payment in full of all obligations
      guaranteed hereby. Each Guarantor further agrees that, as between the
      Guarantors, on the one hand, and the Holders and the Trustee, on the other
      hand, (1) the maturity of the obligations guaranteed hereby may be
      accelerated as

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      provided in Article VIII hereof for the purposes of this Subsidiary
      Guarantee, notwithstanding any stay, injunction or other prohibition
      preventing such acceleration in respect of the obligations guaranteed
      hereby, and (2) in the event of any declaration of acceleration of such
      obligations as provided in Article VIII hereof, such obligations (whether
      or not due and payable) will forthwith become due and payable by the
      Guarantors for the purpose of this Subsidiary Guarantee. The Guarantors
      will have the right to seek contribution from any non-paying Guarantor so
      long as the exercise of such right does not impair the rights of the
      Holders under the Subsidiary Guarantee.

      Section 12.2 Limitation on Guarantor Liability. Each Guarantor, and by its
acceptance of Securities, each Holder, hereby confirms that it is the intention
of all such parties that the Subsidiary Guarantee of such Guarantor not
constitute a fraudulent transfer or conveyance for purposes of Title 11, U.S.
Code or any similar federal or state law for the relief of debtors ("Bankruptcy
Law"), the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer
Act or any similar federal or state law to the extent applicable to any
Subsidiary Guarantee. To effectuate the foregoing intention, the Trustee, the
Holders and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor will be limited to the maximum amount that will, after giving effect
to such maximum amount and all other contingent and fixed liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article XII, result in the obligations of such Guarantor
under its Subsidiary Guarantee not constituting a fraudulent transfer or
conveyance.

      Section 12.3 Execution and Delivery of Subsidiary Guarantee. To evidence
its Subsidiary Guarantee set forth in Section 12.1 hereof, each Guarantor hereby
agrees that a notation of such Subsidiary Guarantee substantially in the form
attached as Exhibit G hereto will be endorsed by an Officer of such Guarantor on
each Security authenticated and delivered by the Trustee and that this Indenture
will be executed on behalf of such Guarantor by one of its Officers.

      Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 12.1 hereof will remain in full force and effect notwithstanding any
failure to endorse on each Security a notation of such Subsidiary Guarantee.

      If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Security on which a Security Guarantee is endorsed, the Subsidiary Guarantee
will be valid nevertheless.

      The delivery of any Security by the Trustee, after the authentication
thereof hereunder, will constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Guarantors.

      In the event that the Company creates or acquires any Domestic Subsidiary
after the date of this Indenture, if required by Section 5.11 hereof, the
Company will cause such Domestic Subsidiary to comply with the provisions of
Section 5.11 hereof and this Article XII, to the extent applicable.

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      Section 12.4 Guarantors May Consolidate, Etc. on Certain Terms. Except as
otherwise provided in Section 12.5 hereof, no Guarantor may sell or otherwise
dispose of all or substantially all of its assets to, or consolidate with or
merge with or into (whether or not such Guarantor is the surviving Person)
another Person, other than the Company or another Guarantor, unless:

            (a) immediately after giving effect to such transaction, no Default
      or Event of Default exists; and

            (b) subject to Section 12.5 hereof, the Person acquiring the
      property in any such sale or disposition or the Person formed by or
      surviving any such consolidation or merger unconditionally assumes all the
      obligations of that Guarantor under this Indenture and its Subsidiary
      Guarantee on the terms set forth herein or therein, pursuant to a
      supplemental indenture in form and substance reasonably satisfactory to
      the Trustee.

      In case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the
Subsidiary Guarantee endorsed upon the Securities and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Guarantor, such successor Person will succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee. All the Subsidiary Guarantees so
issued will in all respects have the same legal rank and benefit under this
Indenture as the Subsidiary Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such Subsidiary
Guarantees had been issued at the date of the execution hereof.

      Except as set forth in Article V and Article VII hereof, and
notwithstanding clauses (a) and (b) above, nothing contained in this Indenture
or in any of the Securities will prevent any consolidation or merger of a
Guarantor with or into the Company or another Guarantor, or will prevent any
sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to the Company or another Guarantor.

      Section 12.5 Releases.

            (a) In the event of any sale or other disposition of all or
      substantially all of the assets of any Guarantor, by way of merger,
      consolidation or otherwise, or a sale or other disposition of all of the
      Capital Stock of any Guarantor, in each case to a Person that is not
      (either before or after giving effect to such transactions) the Company or
      a Guarantor, then such Guarantor or the corporation acquiring the
      property, as applicable, will be released and relieved of any obligations
      under its Subsidiary Guarantee. Upon delivery by the Company to the
      Trustee of an Officers' Certificate and an Opinion of Counsel to the
      effect that such sale or other disposition was made by the Company in
      accordance with the provisions of this Indenture, the Trustee will execute
      any documents reasonably required in order to evidence the release of any
      Guarantor from its obligations under its Subsidiary Guarantee.

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<PAGE>

            (b) In the event that any Guarantor ceases to be a Significant
      Subsidiary, such Guarantor will be released and relieved of any
      obligations under its Subsidiary Guarantee immediately upon such
      cessation.

            (c) Upon satisfaction and discharge of this Indenture in accordance
      with Article X hereof, each Guarantor will be released and relieved of any
      obligations under its Subsidiary Guarantee.

Any Guarantor not released from its obligations under its Subsidiary Guarantee
as provided in this Section 12.5 will remain liable for the full amount of the
principal amount, the Repurchase Price, the Fundamental Change Repurchase Price
and the Optional Redemption Price of, and interest, any Make-Whole Premium (only
to the extent not otherwise satisfied by the Company in other than cash in
accordance with the applicable Company Notice), any Redemption Premium and any
Liquidated Damages on, the Securities and for the other obligations of any
Guarantor under this Indenture as provided in this Article XII.

                                  ARTICLE XIII

                                  CONVERSIONS

      Section 13.1 Conversion Privilege; Limitations on Conversion.

            (a) Subject to and upon compliance with the provisions of this
      Article XIII, a Holder of a Security shall have the right, at such
      Holder's option, at any time and from time to time, to convert all or any
      portion (if the portion to be converted is $1,000 or an integral multiple
      of $1,000) of the principal amount of such Security (the "Converted
      Principal Amount") into a number of shares of Common Stock, equal to the
      quotient of (i) the sum of (1) the Converted Principal Amount plus (2) the
      Redemption Premium (or portion thereof), if any, payable in respect of
      such Converted Principal Amount pursuant to the provisions of Section 6.1
      and not paid in cash, divided by (ii) the Conversion Price in effect on
      the date of conversion. The Conversion Price shall initially be $3.25 (the
      "Conversion Price"), and shall be adjusted in certain instances as
      provided in this Article XIII. In addition, pursuant to Article VI,
      Holders may be entitled to a Make-Whole Premium if they elect to convert
      their Securities within a Fundamental Change Conversion Period.

            (b) The limitation set forth below in this Section 13.1(b) is
      referred to herein as the "Williams Act Limitation." The Company shall not
      (i) have the right to pay any amount due under this Indenture (including
      the Repurchase Price, the Fundamental Change Repurchase Price, any
      Make-Whole Premium and any Redemption Premium) in shares of Common Stock
      or (ii) effect any conversion of any Security (and no Holder shall have
      the right to convert any portion of any Security) to the extent that after
      giving effect to any such payment in shares of Common Stock or conversion,
      the Holder (together with the Holder's affiliates) receiving such payment
      or effecting such conversion would beneficially own in excess of 4.99% of
      the number of shares of Common Stock outstanding immediately after giving
      effect to such payment in shares of Common Stock or such conversion. For
      purposes of the foregoing sentence, the number of shares of Common Stock
      beneficially owned by the Holder and its affiliates shall

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<PAGE>

      include the number of shares of Common Stock issuable upon payments of any
      amounts payable in shares of Common Stock pursuant to the terms of this
      Indenture and the Securities and the number of shares issuable upon
      conversion of any Security with respect to which the determination
      pursuant to such sentence is being made, but shall exclude the number of
      shares of Common Stock which would be issuable upon (A) conversion of the
      remaining, nonconverted portion of any Security beneficially owned by the
      Holder or any of its affiliates and (B) exercise or conversion of the
      unexercised or nonconverted portion of any other securities of the Company
      subject to a limitation on conversion or exercise analogous to the
      limitation contained herein beneficially owned by the Holder or any of its
      affiliates. Except as set forth in the preceding sentence, for purposes of
      this Section, beneficial ownership shall be calculated in accordance with
      Section 13(d) of the Exchange Act. For purposes of this Section 13.1(b),
      in determining the number of outstanding shares of Common Stock, the
      Holder may rely on the number of outstanding shares of Common Stock as
      reflected in (x) the Company's most recent report on Form 10-K, Form 10-Q
      or Form 8-K, as the case may be, (y) a more recent public announcement by
      the Company or (z) any other notice by the Company (which shall be
      provided upon request) setting forth the number of shares of Common Stock
      outstanding. In any case, the number of outstanding shares of Common Stock
      as of the date of any payment or conversion shall be determined after
      giving effect to payment or conversion or exercise of securities of the
      Company, including any Security, by the Holder or its affiliates since the
      date as of which such number of outstanding shares of Common Stock was
      reported. In order to facilitate compliance with the foregoing, each
      Holder will be required, as a condition to any conversion of Securities
      held by such Holder, to make a representation to the Company that such
      Holder and its Affiliates shall be in compliance with the Williams Act
      Limitation immediately after converting any Security and receipt of any
      shares of Common Stock issuable upon such conversion. By written notice to
      the Company, any Holder may increase or decrease the Williams Act
      Limitation to any other percentage not in excess of 9.99% specified in
      such notice; provided that (i) no such notice may be sent prior to the
      second anniversary of the Issue Date, (ii) any such increase will not be
      effective until the 61st day after such notice is delivered to the
      Company, and (iii) any such increase or decrease will apply only to the
      Holder sending such notice and not to any other holder of Securities.
      Notwithstanding the foregoing, the Williams Act Limitation shall not be
      applicable (i) on any of the ten Trading Days up to and including the
      Stated Maturity, (ii) on any of the ten Trading Days up to and including
      the Effective Date, or (iii) during the Fundamental Change Conversion
      Period or the Redemption Conversion Period.

            (c) Notwithstanding any contrary provision of this Indenture, the
      following provisions shall apply (and any such contrary provisions shall
      be qualified by the following provisions of this Section 13.1(c)), but
      only until (and not on or after) the date on which Stockholder Approval
      (as defined below) shall have been obtained:

                  (i) In connection with the Company's first annual meeting or
            special meeting of stockholders next succeeding the Closing Date,
            the Company shall (1) provide each stockholder entitled to vote at
            such special or annual meeting of stockholders, a proxy statement
            soliciting each such stockholder's affirmative vote for approval in
            accordance with the Company's Certificate of Incorporation

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<PAGE>

            and (if the Common Stock is then listed and admitted to trading on
            the NYSE) the rules of the NYSE (such affirmative approval being
            referred to as the "Stockholder Approval") of resolutions providing
            for the issuance and delivery of all shares of Common Stock
            (including, without limitation, shares in excess of the Exchange Cap
            (as defined below)) issuable upon conversion, redemption or
            repurchase of the aggregate principal amount of the Securities
            issued or issuable under this Indenture or upon any election in
            accordance with the terms hereof to pay any amounts due hereunder or
            under the Securities in shares of Common Stock and (2) otherwise use
            its best efforts to obtain the Stockholder Approval by February 24,
            2005, and failing to obtain Stockholder Approval by such date, use
            its best efforts to continue to seek and obtain the Stockholder
            Approval at the earliest possible time thereafter. Upon receipt by
            the Company of the Stockholder Approval, the Company shall deliver a
            written notice thereof to the Trustee and the Paying Agent, and the
            Trustee shall in turn give prompt written notice thereof to the
            Holders in the manner set forth in this Indenture.

                  (ii) In addition to any authorized but unissued shares of
            Common Stock that may be reserved for issuance upon conversion of
            Securities in accordance with the provisions of this Article XIII,
            the Company shall reserve for delivery upon such conversion all
            Available Treasury Shares. "Available Treasury Shares" means all
            shares of Common Stock held by the Company in treasury on the
            Closing Date or acquired by the Company after the Closing Date and
            held in treasury (other than 232,134 shares of Common Stock held in
            treasury by the Company on the Closing Date and previously
            reserved). If and for so long as any Available Treasury Shares
            remain so held in treasury, the Company shall not (A) deliver any
            such Available Treasury Shares to any Person other than Holders of
            Securities, or for any purpose other than in connection with
            conversion of Securities held by such Holders, or (B) issue or
            deliver any shares of Common Stock (other than Available Treasury
            Shares) to Holders of Securities upon conversion of such Securities.

                  (iii) The Company shall not issue or deliver any shares of
            Common Stock in satisfaction of any obligation under this Indenture
            or under the Securities (that it is otherwise entitled to deliver in
            satisfaction of such obligation), other than pursuant to a
            conversion by a Holder of a Security pursuant to the terms of this
            Indenture.

                  (iv) If and only if the Stockholder Approval is not received
            by March 1, 2006, liquidated damages ("Conversion Block Liquidated
            Damages") shall accrue on all the issued and outstanding Securities
            at the rate of 1.0% per annum (computed on the basis of a 360-day
            year of twelve 30-day months) of the principal amount of such
            Securities from and including March 1, 2006 until the Stated
            Maturity. Conversion Block Liquidated Damages, if any, shall be
            payable to the Holders semi-annually in arrears on each Interest
            Payment Date, commencing on the first Interest Payment Date next
            following March 1, 2006.

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<PAGE>

                  (v) The Company shall not issue or deliver shares of Common
            Stock upon conversion of any Security to the extent that such
            issuance of shares of Common Stock would result in the aggregate
            number of shares of Common Stock issued or delivered in respect of
            all conversions hereunder to exceed the Aggregate Cap. Subject to
            clause (viii) and clause (ix) and to the other provisions of this
            Section 13.1(c), if the preceding sentence precludes the Company
            from issuing or delivering shares of Common Stock in complete
            satisfaction of its obligations to convert a Security (or portion
            thereof) surrendered for conversion, the Company shall settle such
            conversion in cash or in a combination of cash and shares of Common
            Stock (but only to the extent not prohibited by the preceding
            sentence), in each case, pursuant to the provisions of Section 13.2.

                  (vi) "Exchange Cap" means an aggregate of 7,515,754 shares of
            Common Stock, subject to adjustment as follows: In case outstanding
            shares of Common Stock shall be subdivided into a greater number of
            shares of Common Stock, the Exchange Cap in effect at the opening of
            business on the day following the day upon which such subdivision
            becomes effective shall be proportionately increased, and
            conversely, in case outstanding shares of Common Stock shall be
            combined into a smaller number of shares of Common Stock, the
            Exchange Cap in effect at the opening of business on the day
            following the day upon which such combination becomes effective
            shall be proportionately reduced, such increase or reduction, as the
            case may be, to become effective immediately after the opening of
            business on the day following the day upon which such subdivision or
            combination becomes effective.

                  (vii) "Aggregate Cap" means the Exchange Cap plus the number
            of Available Treasury Shares.

                  (viii) Prior to March 1, 2006, the Company shall not convert
            any Security (regardless of whether such conversion would be into
            shares of Common Stock or settled for cash or any other property)
            and no Holder shall have the right to convert any Security, to the
            extent that effecting such conversion completely by issuing or
            delivering shares of Common Stock would result in the Company
            issuing or delivering shares of Common Stock in excess of the
            Aggregate Cap in respect of such conversion when taken together with
            all previous conversions of Securities.

                  (ix) On or after March 1, 2006 and prior to November 1, 2008,
            if the Current Market Price (as defined in Section 13.3(g)) on any
            Conversion Date is less than the Conversion Price on such Conversion
            Date, then the Company shall not be required to convert any Security
            into cash, and no Holder shall have the right to convert any such
            Security into cash.

                  (x) In the event that the Company receives a Conversion Notice
            from more than one Holder for the same Conversion Date and the
            Company can convert into shares of Common Stock some, but not all,
            of such portions of the Securities submitted for conversion, the
            Company shall convert from each Holder

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<PAGE>

            electing to have Securities converted on such date a pro rata amount
            of such Holder's Securities submitted for conversion based on the
            principal amount of Securities submitted for conversion on such date
            relative to the aggregate principal amount of all Securities
            submitted for conversion on such date.

                  (xi) Prior to March 1, 2006, as long as any Series A
            Securities are issued and outstanding, the Company shall not convert
            any Series B Security (regardless of whether such conversion would
            be into shares of Common Stock or settled for cash or any other
            property) and no Holder shall have the right to convert any Series B
            Security.

                  (xii) Following the Initial Series B Conversion Date, the
            maximum number of shares of Common Stock that the Company may
            deliver in satisfaction of a Conversion Obligation in respect of
            each $1,000 principal amount of Series B Securities shall not exceed
            the Per Series B Security Allocation and the Company shall be
            required to deliver cash in accordance with the provisions of
            Section 13.2 in respect of the remaining portion of such Conversion
            Obligation. "Initial Series B Conversion Date" shall mean the
            earlier of the first date as of which no Series A Securities shall
            remain outstanding and March 1, 2006. The "Per Series B Security
            Allocation" shall mean a number of shares of Common Stock equal to
            the product of (A) the quotient of $1,000 divided by the Conversion
            Price, times (B) a fraction, the numerator of which shall be the
            Series B Aggregate Cap and the denominator of which shall equal the
            quotient of the aggregate principal amount of all Series B
            Securities outstanding as of the applicable Conversion Date divided
            by the Conversion Price. The "Series B Aggregate Cap" shall mean the
            number of shares of Common Stock equal to the Aggregate Cap less the
            sum of (A) all shares of Common Stock that as of the applicable
            Conversion Date have been previously issued by the Company pursuant
            to conversions of the Securities and (B) all shares of Common Stock
            that would be deliverable upon conversion of all Series A Securities
            outstanding as of the applicable Conversion Date.

      Section 13.2 Conversion Procedure; Fractional Shares; Cash Settlement.
Subject to the Share Limitation and Section 13.1, each Security shall be
convertible at the office of the Conversion Agent into fully paid and
nonassessable shares (calculated to the nearest 1/100th of a share) of Common
Stock on the Conversion Date. The Security will be converted into shares of
Common Stock at the Conversion Price therefor. No payment or adjustment shall be
made in respect of dividends on the Common Stock or accrued interest on a
converted Security, except as described in Section 13.9 hereof. The Company
shall not issue any fraction of a share of Common Stock in connection with any
conversion of Securities, but instead shall make a cash payment (calculated to
the nearest cent) equal to such fraction multiplied by the Closing Price of the
Common Stock on the last Trading Day prior to the date of conversion.
Notwithstanding the foregoing, a Security in respect of which a Holder has
delivered a Repurchase Notice or Fundamental Change Repurchase Notice exercising
such Holder's option to require the Company to repurchase such Security may be
converted only if such notice of exercise is withdrawn as to such conversion
amount in accordance with Section 3.4 hereof.

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      Before any Holder of a Security shall be entitled to convert the same into
Common Stock, such Holder shall, in the case of Global Securities, comply with
the procedures of the Depositary in effect at that time, and in the case of
Certificated Securities, surrender such Securities, duly endorsed to the Company
or in blank, at the office of the Conversion Agent, and shall give written
notice ("Holder's Conversion Notice") to the Company at said office or place
that such Holder elects to convert the same and shall state in writing therein
the principal amount of Securities to be converted and the name or names (with
addresses) in which such Holder wishes the certificate or certificates for
Common Stock to be issued.

      Before any such conversion, a Holder also shall pay all funds required, if
any, relating to interest on the Securities, as provided in Section 13.9, and
all taxes or duties, if any, as provided in Section 13.8.

      If more than one Security shall be surrendered for conversion at one time
by the same Holder, the number of full shares of Common Stock which shall be
deliverable upon conversion shall be computed on the basis of the aggregate
principal amount of the Securities (or specified portions thereof to the extent
permitted thereby) so surrendered. Subject to the next succeeding sentence, the
Company will, as soon as practicable thereafter, issue and deliver at said
office or place to such Holder of a Security, or to such Holder's nominee or
nominees, certificates for the number of full shares of Common Stock to which
such Holder shall be entitled as aforesaid, together with cash in lieu of any
fraction of a share to which such Holder would otherwise be entitled. The
Company shall not be required to deliver certificates for shares of Common Stock
while the stock transfer books for such stock or the security register are duly
closed for any purpose, but certificates for shares of Common Stock shall be
issued and delivered as soon as practicable after the opening of such books or
security register.

      A Security shall be deemed to have been converted as of the close of
business on the date of the surrender of such Securities for conversion as
provided above, and the Person or Persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the record
Holder or Holders of such Common Stock as of the close of business on such date.

      In case any Security shall be surrendered for partial conversion, the
Company shall execute and the Trustee shall authenticate and deliver to or upon
the written order of the Holder of the Security so surrendered, without charge
to such Holder (subject to the provisions of Section 13.8 hereof), a new
Security or Securities in authorized denominations in an aggregate principal
amount equal to the unconverted portion of the surrendered Securities.

      In the case of a conversion during a Fundamental Change Conversion Period,
Holders electing to convert Securities shall also receive the Make-Whole Premium
payable upon such conversion as set forth in Article VI hereof. Holders may
surrender Securities for conversion at any time within the Fundamental Change
Conversion Period. In the case of a conversion during a Redemption Conversion
Period, Holders electing to convert Securities shall also receive the Redemption
Premium payable upon such conversion as set forth in Article IV and Article VI
hereof. Holders may surrender Securities for conversion at any time within the
Redemption Conversion Period.

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      Notwithstanding the foregoing, subject to the provisions of Section
13.1(c)(v), the Company, in its sole discretion, may satisfy all or any portion
of its obligation to convert the Securities (the "Conversion Obligation"), by
paying cash in lieu of issuing or delivering shares of Common Stock upon
conversion, including the Make-Whole Premium, if any. If the Company elects to
satisfy all or any portion of its Conversion Obligation in cash, the Company
shall deliver a written notice to the Trustee, who will in turn give written
notice to the Holders of the portion of the Conversion Obligation to be
satisfied in cash and the portion, if any, of the Conversion Obligation to be
satisfied in shares of Common Stock (which portions shall be expressed as a
number of shares of Common Stock), at any time on or before the date that is two
(2) Trading Days following receipt of the Holder's Conversion Notice (the "Cash
Settlement Notice Period"). If the Company timely elects to pay cash for any
portion of the Common Stock otherwise issuable to a Holder upon conversion, such
Holder may retract its Holder's Conversion Notice at any time during the six (6)
Trading Days following the final day of the Cash Settlement Notice Period (the
"Conversion Retraction Period") by delivering written notice of such retraction
to the Company and the Trustee during the Conversion Retraction Period. No such
retraction can be made (and a Holder's Conversion Notice shall be irrevocable)
if the Company does not elect to deliver cash (other than cash in lieu of
fractional shares) in lieu of all or a portion of the Common Stock otherwise to
be issued or delivered upon conversion. Upon the expiration of a Conversion
Retraction Period, a Holder's Conversion Notice shall be irrevocable. If the
Company is required to satisfy all or any portion of the Conversion Obligation
in cash, and one or more pending Conversion Notices have not been retracted,
then the Company shall deposit cash and/or shares of Common Stock sufficient to
satisfy the Conversion Obligation with the Trustee no later than the fifteenth
(15th) Trading Day following the last day of the Conversion Retraction Period.
Such settlement shall be distributed to the Holders as their interests may
appear upon surrender of their Securities.

      If any portion of the Conversion Obligation is to be paid in cash, the
amount of cash (the "Cash Settlement Amount") payable in settlement of the
aggregate principal amount which will not be paid in shares of Common Stock
(such principal amount, the "Non-Stock-Converted Principal Amount") shall be
equal to the product of (a) the Non-Stock-Converted Principal Amount divided by
the Conversion Price times (b) the arithmetic average of the Closing Prices of
the Common Stock for the five (5) consecutive Trading Days following the last
day of the Conversion Retraction Period. The Company shall deliver a written
statement of the results of such calculation to the Trustee, and of any other
information relating thereto as the Trustee may reasonably request.

      Section 13.3 Adjustment of Conversion Price. The Conversion Price shall be
adjusted from time to time by the Company as follows:

            (a) In case the Company shall hereafter pay a dividend or make a
      distribution to all Holders of the outstanding Common Stock in shares of
      Common Stock, the Conversion Price in effect at the opening of business on
      the date following the date fixed for the determination of stockholders
      entitled to receive such dividend or other distribution shall be reduced
      by multiplying such Conversion Price by a fraction, the numerator of which
      shall be the number of shares of Common Stock outstanding at the close of
      business on the date fixed for such determination and the denominator of
      which shall be the sum of such number of shares and the total number of
      shares constituting

                                       69
<PAGE>

      such dividend or other distribution, such reduction to become effective
      immediately after the opening of business on the day following the date
      fixed for such determination. If any dividend or distribution of the type
      described in this Section 13.3(a) is declared but not so paid or made, the
      Conversion Price shall again be adjusted to the Conversion Price which
      would then be in effect if such dividend or distribution had not been
      declared.

            (b) In case the Company shall issue rights or warrants to all
      Holders of its outstanding shares of Common Stock entitling them (for a
      period expiring within 45 days after the date fixed for determination of
      stockholders entitled to receive such rights or warrants) to subscribe for
      or purchase shares of Common Stock (or securities convertible into Common
      Stock) at a price per share (or having a conversion price per share) less
      than the Current Market Price (as defined below) on the date fixed for
      determination of stockholders entitled to receive such rights or warrants,
      the Conversion Price shall be adjusted so that the same shall equal the
      price determined by multiplying the Conversion Price in effect immediately
      prior to the date fixed for determination of stockholders entitled to
      receive such rights or warrants by a fraction, the numerator of which
      shall be the number of shares of Common Stock outstanding at the close of
      business on the date fixed for determination of stockholders entitled to
      receive such rights or warrants plus the number of shares which the
      aggregate offering price of the total number of shares so offered would
      purchase at such Current Market Price (or the aggregate conversion price
      of the convertible securities so offered, which shall be determined by
      multiplying the number of shares of Common Stock issuable upon conversion
      of such convertible securities by the conversion price per share of Common
      Stock pursuant to the terms of such convertible securities), and the
      denominator of which shall be the number of shares of Common Stock
      outstanding on the date fixed for determination of stockholders entitled
      to receive such rights or warrants plus the total number of additional
      shares of Common Stock offered for subscription or purchase or into which
      convertible securities so offered are convertible; provided, however, the
      Company may, at its option and in lieu of the foregoing adjustment, elect
      to distribute or reserve for distribution the pro rata portion of such
      rights or warrants so that each Holder of Securities shall receive, or
      shall have the right to receive upon conversion, as the case may be, the
      amount of such rights or warrants that such Holder of Securities would
      have received if such Holder of Securities had converted such Securities
      on the date fixed for determination of stockholders to receive such rights
      or warrants. Such adjustment shall be successively made whenever any such
      rights or warrants are issued, and shall become effective immediately
      after the opening of business on the day following the date fixed for
      determination of stockholders entitled to receive such rights or warrants.
      To the extent that shares of Common Stock (or securities convertible into
      Common Stock) are not delivered before the expiration of such rights or
      warrants, then after the expiration of such rights or warrants the
      Conversion Price shall be readjusted to the Conversion Price which would
      then be in effect had the adjustments made upon the issuance of such
      rights or warrants been made on the basis of delivery of only the number
      of shares of Common Stock actually delivered (or the number of shares of
      Common Stock issuable upon conversion of convertible securities actually
      issued). In the event that such rights or warrants are not so issued, the
      Conversion Price shall again be adjusted to be the Conversion Price which
      would then be in effect if such date fixed for the determination of
      stockholders entitled to receive such rights or warrants had not been
      fixed. In

                                       70
<PAGE>

      determining whether any rights or warrants entitle the Holders to
      subscribe for or purchase shares of Common Stock at less than such Current
      Market Price, and in determining the aggregate offering price of such
      shares of Common Stock, there shall be taken into account any
      consideration received by the Company for such rights or warrants or to be
      received upon exercise of such rights or warrants, the value of such
      consideration, if other than cash, to be determined in good faith by the
      Board of Directors and set forth in a Board Resolution.

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

            (d) In case the Company shall, by dividend or otherwise, distribute
      to all Holders of its Common Stock shares of any class of capital stock of
      the Company (other than any dividends or distributions to which Section
      13.3(a) applies) or evidences of its indebtedness or assets (including
      securities, but excluding any rights or warrants referred to in Section
      13.3(b), and excluding any dividend or distribution (x) paid exclusively
      in cash or (y) referred to in Section 13.3(a)) (any of the foregoing
      hereinafter in this Section 13.3(d) called the "Distributed Securities"),
      then, in each such case, the Conversion Price shall be reduced so that the
      same shall be equal to the price determined by multiplying the Conversion
      Price in effect on the Record Date (as defined below) with respect to such
      distribution by a fraction, the numerator of which shall be the Current
      Market Price per share of the Common Stock on such Record Date less the
      fair market value (as determined by the Board of Directors, whose good
      faith determination shall be conclusive, and described in a resolution of
      the Board if Directors) on the Record Date of the portion of the
      Distributed Securities so distributed applicable to one share of Common
      Stock and the denominator of which shall be the Current Market Price per
      share of the Common Stock on such Record Date, such reduction to become
      effective immediately prior to the opening of business on the day
      following such Record Date. If the Board of Directors determines the fair
      market value of any distribution for purposes of this Section 13.3(d) by
      reference to the actual or when issued trading market for any securities,
      it must in doing so consider the prices in such market over the same
      period used in computing the Current Market Price of the Common Stock.
      Each share of Common Stock issued upon conversion of securities pursuant
      to this Article 13 shall be entitled to receive the appropriate number of
      common stock or preferred stock purchase rights, if any, as may be
      provided by the terms of any stockholder rights plan adopted by the
      Company (notwithstanding the occurrence of an event causing such rights to
      separate from the Common Stock at or prior to the time of conversion). Any
      distribution of rights or warrants pursuant to a stockholder rights plan
      complying with the requirements set forth in the immediately preceding
      sentence of this paragraph shall not constitute a

                                       71
<PAGE>

      distribution of rights or warrants for the purposes of Section 13.3(b) or
      this Section 13.3(d).

            Rights or warrants distributed by the Company to all holders of
      Common Stock entitling the Holders thereof to subscribe for or purchase
      shares of the Company's capital stock (either initially or under certain
      circumstances), which rights or warrants, until the occurrence of a
      specified event or events ("Trigger Event"): (i) are deemed to be
      transferred with such shares of Common Stock; (ii) are not exercisable;
      and (iii) are also issued in respect of future issuances of Common Stock,
      shall be deemed not to have been distributed for purposes of this Section
      13.3 (and no adjustment to the Conversion Price under this Section 13.3
      will be required) until the occurrence of the earliest Trigger Event,
      whereupon such rights and warrants shall be deemed to have been
      distributed and an appropriate adjustment (if any is required) to the
      Conversion Price shall be made under this Section 13.3(d). If any such
      right or warrant, including any such existing rights or warrants
      distributed prior to the date of this Indenture, are subject to events,
      upon the occurrence of which such rights or warrants become exercisable to
      purchase different securities, evidences of indebtedness or other assets,
      then the date of the occurrence of any and each such event shall be deemed
      to be the date of distribution and record date with respect to new rights
      or warrants with such rights (and a termination or expiration of the
      existing rights or warrants without exercise by any of the Holders
      thereof). In addition, in the event of any distribution (or deemed
      distribution) of rights or warrants, or any Trigger Event or other event
      (of the type described in the preceding sentence) with respect thereto
      that was counted for purposes of calculating a distribution amount for
      which an adjustment to the Conversion Price under this Section 13.3 was
      made, (1) in the case of any such rights or warrants which shall all have
      been repurchased without exercise by any holders thereof, the Conversion
      Price shall be readjusted upon such final repurchase to give effect to
      such distribution or Trigger Event, as the case may be, as though it were
      a cash distribution, equal to the per share repurchase price received by a
      holder or holders of Common Stock with respect to such rights or warrants
      (assuming such holder had retained such rights or warrants), made to all
      applicable holders of Common Stock as of the date of such repurchase, and
      (2) in the case of such rights or warrants which shall have expired or
      been terminated without exercise by any holders thereof, the Conversion
      Price shall be readjusted as if such rights and warrants had not been
      issued.

            For purposes of Section 13.3(a), Section 13.3(b) and this Section
      13.3(d), any dividend or distribution to which this Section 13.3(d) is
      applicable that also includes shares of Common Stock, or rights or
      warrants to subscribe for or purchase shares of Common Stock (or both),
      shall be deemed instead to be (1) a dividend or distribution of the
      evidences of indebtedness, assets or shares of capital stock other than
      such shares of Common Stock or rights or warrants (and any Conversion
      Price reduction required by this Section 13.3(d) with respect to such
      dividend or distribution shall then be made) immediately followed by (2) a
      dividend or distribution of such shares of Common Stock or such rights or
      warrants (and any further Conversion Price reduction required by Section
      13.3(a) and Section 13.3(b) with respect to such dividend or distribution
      shall then be made), except (A) the Record Date of such dividend or
      distribution shall be substituted as "the date fixed for the determination
      of stockholders entitled to receive

                                       72
<PAGE>

      such dividend or other distribution" and "the date fixed for such
      determination" within the meaning of Section 13.3(a) and Section 13.3(b)
      and (B) any shares of Common Stock included in such dividend or
      distribution shall not be deemed "outstanding at the close of business on
      the date fixed for such determination" within the meaning of Section
      13.3(a).

            (e) In case the Company shall, by dividend or otherwise, distribute
      to all Holders of its Common Stock cash (excluding any cash that is
      distributed upon a merger or consolidation to which Section 13.4 applies
      or as part of a distribution referred to in Section 13.3(d)), in an
      aggregate amount that, combined together with (1) the aggregate amount of
      any other such distributions to all Holders of its Common Stock made
      exclusively in cash within the 12 months preceding the date of payment of
      such distribution, and in respect of which no adjustment pursuant to this
      Section 13.3(e) has been made, and (2) the aggregate of any cash plus the
      fair market value (as determined by the Board of Directors, whose good
      faith determination shall be conclusive and described in a resolution of
      the Board of Directors) of consideration payable in respect of any tender
      offer by the Company or any of its subsidiaries for all or any portion of
      the Common Stock concluded within the 12 months preceding the date of
      payment of such distribution, and in respect of which no adjustment
      pursuant to Section 13.3(f) has been made, exceeds 12.5% of the product of
      the Current Market Price on the Record Date with respect to such
      distribution times the number of shares of Common Stock outstanding on
      such date, then, and in each such case, immediately after the close of
      business on such date, the Conversion Price shall be reduced so that the
      same shall equal the price determined by multiplying the Conversion Price
      in effect immediately prior to the close of business on such Record Date
      by a fraction (i) the numerator of which shall be equal to the Current
      Market Price on the Record Date less an amount equal to the quotient of
      (x) the excess of such combined amount over such 12.5% and (y) the number
      of shares of Common Stock outstanding on the Record Date and (ii) the
      denominator of which shall be equal to the Current Market Price on such
      date; provided, however, that in the event the portion of the cash so
      distributed applicable to one share of Common Stock is equal to or greater
      than the Current Market Price of the Common Stock on the Record Date, in
      lieu of the foregoing adjustment, adequate provision shall be made so that
      each Security holder shall have the right to receive upon conversion of a
      Security (or any portion thereof) the amount of cash such Holder would
      have received had such Holder converted such Security (or portion thereof)
      immediately prior to such Record Date. In the event that such dividend or
      distribution is not so paid or made, the Conversion Price shall again be
      adjusted to be the Conversion Price which would then be in effect if such
      dividend or distribution had not been declared. Any cash distribution to
      all Holders of Common Stock as to which the Company makes the election
      permitted by Section 13.3(m) and as to which the Company has complied with
      the requirements of such Section shall be treated as not having been made
      for all purposes of this Section 13.3(e).

            (f) In case a tender offer made by the Company or any of its
      subsidiaries for all or any portion of the Common Stock shall expire and
      such tender offer (as amended upon the expiration thereof) shall require
      the payment to stockholders (based on the acceptance (up to any maximum
      specified in the terms of the tender offer) of Purchased Shares (as
      defined below)) of an aggregate consideration having a fair market value
      (as determined by the Board of Directors, whose good faith determination
      shall be conclusive and described in a resolution of the Board of
      Directors) that combined together with (1) the aggregate of the cash plus
      the fair market value (as determined by the Board of Directors, whose good
      faith determination shall be conclusive and

                                       73
<PAGE>

      described in a resolution of the Board of Directors), as of the expiration
      of such tender offer, of consideration payable in respect of any other
      tender offers, by the Company or any of its subsidiaries for all or any
      portion of the Common Stock expiring within the 12 months preceding the
      expiration of such tender offer and in respect of which no adjustment
      pursuant to this Section 13.3(f) has been made and (2) the aggregate
      amount of any distributions to all Holders of the Common Stock made
      exclusively in cash within 12 months preceding the expiration of such
      tender offer and in respect of which no adjustment pursuant to Section
      13.3(e) has been made, exceeds 12.5% of the product of the Current Market
      Price as of the last time (the "Expiration Time") tenders could have been
      made pursuant to such tender offer (as it may be amended) times the number
      of shares of Common Stock outstanding (including any tendered shares) at
      the Expiration Time, then, and in each such case, immediately prior to the
      opening of business on the day after the date of the Expiration Time, the
      Conversion Price shall be reduced so that the same shall equal the price
      determined by multiplying the Conversion Price in effect immediately prior
      to close of business on the date of the Expiration Time by a fraction of
      which the numerator shall be the number of shares of Common Stock
      outstanding (including any tendered shares) at the Expiration Time
      multiplied by the Current Market Price of the Common Stock on the Trading
      Day next succeeding the Expiration Time and the denominator shall be the
      sum of (x) the fair market value (determined as aforesaid) of the
      aggregate consideration payable to stockholders based on the acceptance
      (up to any maximum specified in the terms of the tender offer) of all
      shares validly tendered and not withdrawn as of the Expiration Time (the
      shares deemed so accepted, up to any such maximum, being referred to as
      the "Purchased Shares") and (y) the product of the number of shares of
      Common Stock outstanding (less any Purchased Shares) at the Expiration
      Time and the Current Market Price of the Common Stock on the Trading Day
      next succeeding the Expiration Time, such reduction (if any) to become
      effective immediately prior to the opening of business on the day
      following the Expiration Time. In the event that the Company is obligated
      to purchase shares pursuant to any such tender offer, but the Company is
      permanently prevented by applicable law from effecting any such purchases
      or all such purchases are rescinded, the Conversion Price shall again be
      adjusted to be the Conversion Price which would then be in effect if such
      tender offer had not been made. If the application of this Section 13.3(f)
      to any tender offer would result in an increase in the Conversion Price,
      no adjustment shall be made for such tender offer under this Section
      13.3(f). Any cash distribution to all holders of Common Stock as to which
      the Company has made the election permitted by Section 13.3(m) and as to
      which the Company has complied with the requirements of such Section shall
      be treated as not having been made for all purposes of this Section
      13.3(f).

            (g) For purposes of this Section 13.3, the following terms shall
      have the meaning indicated:

                  (i) "Closing Price" with respect to any securities on any day
            shall mean the closing sale price, regular way, on such day or, in
            case no such sale takes place on such day, the average of the
            reported closing bid and asked prices,

                                       74
<PAGE>

            regular way, in each case on the principal national securities
            exchange or quotation system on which such security is quoted or
            listed or admitted to trading, or, if not quoted or listed or
            admitted to trading on any national securities exchange or quotation
            system, the average of the closing bid and asked prices of such
            security on the over-the-counter market on the day in question as
            reported by the National Quotation Bureau Incorporated, or a similar
            generally accepted reporting service, or if not so available, in
            such manner as furnished by any NYSE member firm selected from time
            to time by the Board of Directors for that purpose, or a price
            determined in good faith by the Board of Directors whose
            determination shall be conclusive.

                  (ii) "Current Market Price" shall, for the purposes of any
            computation under paragraphs (b), (d), (e) and (f) of this Section
            13.3 relating to the current market price per share of Common Stock
            at a specified date, mean the average of the Closing Prices for the
            10 consecutive Trading Days (as defined below) preceding the day
            before the record date (or, if earlier, the ex-dividend date) with
            respect to any distribution, issuance or other event requiring such
            computation.

                  (iii) "fair market value" shall mean the amount which a
            willing buyer would pay a willing seller in an arm's length
            transaction.

                  (iv) "Record Date" shall mean, with respect to any dividend,
            distribution or other transaction or event in which the holders of
            Common Stock have the right to receive any cash, securities or other
            property or in which the Common Stock (or other applicable security)
            is exchanged for or converted into any combination of cash,
            securities or other property, the date fixed for determination of
            stockholders entitled to receive such cash, securities or other
            property (whether such date is fixed by the Board of Directors or by
            statute, contract or otherwise).

            (h) The Company may make such reductions in the Conversion Price, in
      addition to those required by paragraphs (a), (b), (c), (d), (e) or (f) of
      this Section 13.3, as the Board of Directors considers to be advisable to
      avoid or diminish any income tax to Holders of Common Stock or rights to
      purchase Common Stock resulting from any dividend or distribution of stock
      (or rights to acquire stock) or from any event treated as such for income
      tax purposes. To the extent permitted by applicable law, the Company from
      time to time may reduce the Conversion Price by any amount for any period
      of time if the period is at least 20 days, the reduction is irrevocable
      during the period and the Board of Directors shall have made a
      determination that such reduction would be in the best interests of the
      Company, which determination shall be conclusive. Whenever the Conversion
      Price is reduced pursuant to the preceding sentence, the Company shall
      mail to Holders of record of the Securities a notice of the reduction at
      least 15 days prior to the date the reduced Conversion Price takes effect,
      and such notice shall state the reduced Conversion Price and the period
      during which it will be in effect.

            (i) No adjustment in the Conversion Price shall be required unless
      such adjustment would require an increase or decrease of at least 1% in
      such price; provided,

                                       75
<PAGE>

      however, that any adjustments which by reason of this Section 13.3(i) are
      not required to be made shall be carried forward and taken into account in
      making the first subsequent adjustment made following the event which did
      not result in an adjustment by reason of this Section 13.3(i). All
      calculations under this Article XIII shall be made by the Company and
      shall be made to the nearest cent or to the nearest one-hundredth of a
      share, as the case may be. No adjustment need be made for rights to
      purchase Common Stock pursuant to a Company plan for reinvestment of
      dividends or interest. To the extent the Securities become convertible
      into cash, assets, property or securities (other than capital stock of the
      Company), no adjustment need be made thereafter as to the cash, assets,
      property or such securities. Interest will not accrue on the cash.

            (j) Whenever the Conversion Price is adjusted as herein provided,
      the Company shall promptly file with the Conversion Agent an Officers'
      Certificate setting forth the Conversion Price after such adjustment and
      setting forth a brief statement of the facts requiring such adjustment.
      Unless and until a Responsible Officer of the Trustee shall have received
      such Officers' Certificate, the Trustee shall not be deemed to have
      knowledge of any adjustment of the Conversion Price and may assume without
      inquiry that the last Conversion Price of which it has knowledge is still
      in effect. Promptly after delivery of such certificate, the Company shall
      prepare a notice of such adjustment of the Conversion Price setting forth
      the adjusted Conversion Price and the date on which each adjustment
      becomes effective and shall mail such notice of such adjustment of the
      Conversion Price to each Holder of Securities at such Holder's last
      address appearing on the list of Security holders provided for in Section
      2.5 of this Indenture, within 20 days after execution thereof. Failure to
      deliver such notice shall not affect the legality or validity of any such
      adjustment.

            (k) In any case in which this Section 13.3 provides that an
      adjustment shall become effective immediately after a Record Date for an
      event, the Company may defer until the occurrence of such event (i)
      issuing to the Holder of any Securities converted after such Record Date
      and before the occurrence of such event the additional shares of Common
      Stock issuable upon such conversion by reason of the adjustment required
      by such event over and above the Common Stock issuable upon such
      conversion before giving effect to such adjustment and (ii) paying to such
      Holder any amount in cash in lieu of any fractional shares pursuant to
      Section 13.2.

            (l) For purposes of this Section 13.3, the number of shares of
      Common Stock at any time outstanding shall not include shares held in the
      treasury of the Company but shall include shares issuable in respect of
      scrip certificates issued in lieu of fractions of shares of Common Stock.
      The Company will not pay any dividend or make any distribution on shares
      of Common Stock held in the treasury of the Company.

            (m) In lieu of making any adjustment to the Conversion Price
      pursuant to Section 13.3(e) or Section 13.3(f), the Company may elect to
      reserve an amount of cash for distribution to the Holders of the
      Securities upon the conversion of the Securities so that any such Holder
      converting Securities will receive upon such conversion, in addition to
      the shares of Common Stock and other items to which such Holder is
      entitled, the full amount of cash which such Holder would have received if
      such Holder had, immediately

                                       76
<PAGE>

      prior to the Record Date for such distribution of cash or the Expiration
      Time of the tender offer, as the case may be, converted its Securities
      into Common Stock, together with any interest accrued with respect to such
      amount, in accordance with this Section 13.3(m). The Company may make such
      election by providing an Officers' Certificate to the Trustee to such
      effect on or prior to the payment date for any such distribution and
      depositing with the Trustee on or prior to such date an amount of cash
      equal to the aggregate amount the Holders of the Securities would have
      received if such Holders had, immediately prior to the Record Date for
      such distribution or the Expiration Time, as the case may be, converted
      all of the Securities into Common Stock. Any such funds so deposited by
      the Company with the Trustee shall be invested by the Trustee pursuant to
      written direction by the Company in marketable obligations issued or fully
      guaranteed by the United States government with a maturity not more than 3
      months from the date of issuance. Upon conversion of Securities by a
      Holder, the Holder will be entitled to receive, in addition to the Common
      Stock issuable upon conversion, an amount of cash equal to the amount such
      Holder would have received if such Holder had, immediately prior to the
      Record Date for such distribution or the Expiration Time, as the case may
      be, converted its Security into Common Stock, along with such Holder's pro
      rata share of any accrued interest earned as a consequence of the
      investment of such funds. Promptly after making an election pursuant to
      this Section 13.3(m), the Company shall give or shall cause to be given
      notice to all Security holders of such election, which notice shall state
      the amount of cash per $1,000 principal amount of Securities such Holders
      shall be entitled to receive (excluding interest) upon conversion of the
      Securities as a consequence of the Company having made such election.

      Section 13.4 Consolidation or Merger of the Company.

      If any of the following events occurs, namely:

            (a) any reclassification or change of the outstanding Common Stock
      (other than a change in par value, or from par value to no par value, or
      from no par value to par value, or as a result of a subdivision or
      combination);

            (b) any merger, consolidation, statutory share exchange or
      combination of the Company with another corporation as a result of which
      holders of Common Stock shall be entitled to receive stock, securities or
      other property or assets (including cash) with respect to or in exchange
      for such Common Stock; or

            (c) any sale or conveyance of the properties and assets of the
      Company as, or substantially as, an entirety to any other corporation as a
      result of which holders of Common Stock shall be entitled to receive
      stock, securities or other property or assets (including cash) with
      respect to or in exchange for such Common Stock;

the Company or the successor or purchasing corporation, as the case may be,
shall execute with the Trustee a supplemental indenture (which shall comply with
the Trust Indenture Act as in force at the date of execution of such
supplemental indenture, if such supplemental indenture is then required to so
comply) providing that such Securities shall be convertible into the kind and
amount of shares of stock and other securities or property or assets (including
cash) which such

                                       77
<PAGE>

Holder would have been entitled to receive upon such reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or conveyance
had such Securities been converted into Common Stock immediately prior to such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance assuming such holder of Common Stock did not
exercise its rights of election, if any, as to the kind or amount of securities,
cash or other property receivable upon such merger, consolidation, statutory
share exchange, sale or conveyance (provided, however, that if the kind or
amount of securities, cash or other property receivable upon such merger,
consolidation, statutory share exchange, sale or conveyance is not the same for
each share of Common Stock in respect of which such rights of election shall not
have been exercised ("Non-Electing Share"), then for the purposes of Section
13.3, the kind and amount of securities, cash or other property receivable upon
such merger, consolidation, statutory share exchange, sale or conveyance for
each Non-Electing Share shall be deemed to be the kind and amount so receivable
per share by a plurality of the Non-Electing Shares). Such supplemental
indenture shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article XIII. If, in
the case of any such reclassification, change, merger, consolidation, statutory
share exchange, combination, sale or conveyance, the stock or other securities
and assets receivable thereupon by a holder of Common Stock includes shares of
stock or other securities and assets of a corporation other than the successor
or purchasing corporation, as the case may be, in such reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or
conveyance, then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to protect the
interests of the Holders of the Securities as the Board of Directors shall
reasonably consider necessary by reason of the foregoing, including to the
extent practicable the provisions providing for the conversion rights set forth
in this Article XIII.

      The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder, at the address of such Holder as it
appears on the register of the Securities maintained by the Registrar, within 20
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.

      The above provisions of this Section 13.4 shall similarly apply to
successive reclassifications, mergers, consolidations, statutory share
exchanges, combinations, sales and conveyances. If this Section 13.4 applies to
any event or occurrence, Section 13.3 shall not apply.

      Section 13.5 Notice of Adjustment.

      Whenever an adjustment in the Conversion Price with respect to the
Securities is required:

            (a) the Company shall forthwith place on file with the Trustee and
      any Conversion Agent for such securities a certificate of the Treasurer of
      the Company, stating the adjusted Conversion Price determined as provided
      herein and setting forth in reasonable detail such facts as shall be
      necessary to show the reason for and the manner of computing such
      adjustment; and

                                       78
<PAGE>

            (b) a notice stating that the Conversion Price has been adjusted and
      setting forth the adjusted Conversion Price shall forthwith be given by
      the Company or, at the Company's request, by the Trustee in the name and
      at the expense of the Company, to each Holder in the manner provided in
      Section 14.2. Any notice so given shall be conclusively presumed to have
      been duly given, whether or not the Holder receives such notice.

      Section 13.6 Notice in Certain Events.

      In case:

            (a) of a consolidation or merger to which the Company is a party and
      for which approval of any stockholders of the Company is required, or of
      the sale or conveyance to another Person or entity or group of Persons or
      entities acting in concert as a partnership, limited partnership,
      syndicate or other group (within the meaning of Rule 13d-3 under the
      Securities Exchange Act of 1934, as amended) of all or substantially all
      of the property and assets of the Company; or

            (b) of the voluntary or involuntary dissolution, liquidation or
      winding up of the Company; or

            (c) of any action triggering an adjustment of the Conversion Price
      referred to in clauses (x) or (y) below;

then, in each case, the Company shall cause to be filed with the Trustee and the
Conversion Agent, and shall cause to be given, to the Holders of the Securities
in the manner provided in Section 14.2, at least 15 days prior to the applicable
date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of any distribution or grant of rights or warrants
triggering an adjustment to the Conversion Price pursuant to this Article XIII,
or, if a record is not to be taken, the date as of which the holders of record
of Common Stock entitled to such distribution, rights or warrants are to be
determined, or (y) the date on which any reclassification, consolidation,
merger, sale, conveyance, dissolution, liquidation or winding up triggering an
adjustment to the Conversion Price pursuant to this Article XIII is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their Common Stock for securities
or other property deliverable upon such reclassification, consolidation, merger
sale, conveyance, dissolution, liquidation or winding up.

      Failure to give such notice or any defect therein shall not affect the
legality or validity of the proceedings described in clause (a), (b) or (c) of
this Section 13.6.

      Section 13.7 Company To Reserve Stock. The Company shall, in accordance
with the laws of the State of Delaware, at all times reserve and keep available,
free from preemptive rights, out of its authorized but unissued shares of Common
Stock, for the purpose of effecting the conversion of the Securities, such
number of its duly authorized shares of Common Stock as shall from time to time
be sufficient to effect the conversion of all Securities then outstanding into
such Common Stock at any time; provided, however, that nothing contained herein
shall preclude the Company from satisfying its obligations in respect of the
conversion of the

                                       79
<PAGE>

Securities by delivery of purchased shares of Common Stock which are then held
in the treasury of the Company. The Company covenants that all shares of Common
Stock which may be issued upon conversion of Securities will upon issue be fully
paid and nonassessable and free from all liens and charges arising by, through
or under the Company, and, except as provided in Section 13.8, taxes with
respect to the issue thereof.

      Section 13.8 Taxes on Conversion. The issue of stock certificates on
conversion of Securities shall be made without charge to the converting Holder
for any documentary, stamp or similar issue or transfer taxes in respect of the
issue thereof, and the Company shall pay any and all documentary, stamp or
similar issue or transfer taxes that may be payable in respect of the issue or
delivery of shares of Common Stock on conversion of Securities pursuant hereto.
The Company shall not, however, be required to pay any such tax which may be
payable in respect of any transfer involved in the issue or delivery of shares
of Common Stock or the portion, if any, of the Securities which are not so
converted in a name other than that in which the Securities so converted were
registered, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of such tax or
has established to the satisfaction of the Company that such tax has been paid.

      Section 13.9 Conversion After Record Date. Except as provided in the next
succeeding paragraph of this Section 13.9 and in the proviso to this sentence,
upon surrender of Securities for conversion, the Holder of such Securities shall
not be entitled to receive any interest that has accrued on such Securities
since the prior Interest Payment Date; provided, however, that (a) if any
Securities are surrendered for conversion during a Fundamental Change Conversion
Period, then the Holder thereof shall be entitled to receive all interest that
has accrued on such Securities since the prior Interest Payment Date until the
Effective Date of the applicable Fundamental Change and (b) if any Securities
are surrendered for conversion during a Redemption Conversion Period, then the
Holder thereof shall be entitled to receive all interest that has accrued on
such Securities since the prior Interest Payment Date until the Redemption Date
immediately following the Redemption Conversion Period. Except as set forth in
the proviso to the preceding sentence, by delivery to the Holder of the number
of shares of Common Stock or other consideration issuable upon conversion in
accordance with this Article XIII, any accrued and unpaid interest on such
Securities will be deemed to have been paid in full.

      If any Securities are surrendered for conversion subsequent to the record
date preceding an Interest Payment Date but on or prior to such Interest Payment
Date, the Holder of such Securities at the close of business on such record date
shall receive the interest payable on such Securities on such Interest Payment
Date notwithstanding the conversion thereof. Securities surrendered for
conversion during the period from the close of business on any record date
preceding any Interest Payment Date to the opening of business on such Interest
Payment Date shall, unless the Securities being converted (a) have been called
for redemption during such period or on such Interest Payment Date or (b) are
being converted during a Fundamental Change Conversion Period, be accompanied by
payment by the Holders thereof, for the account of the Company, of an amount
equal to the interest payable on such Interest Payment Date on the Securities
being surrendered for conversion. Except as provided in this Section 13.9, no
adjustments in respect of payments of interest on Securities surrendered for
conversion or any dividends or distributions or interest on the Common Stock
issued upon conversion shall be made upon the conversion of any Securities.

                                       80
<PAGE>

      Section 13.10 Responsibility of Trustee for Conversion Provisions. The
Trustee has no duty to determine when an adjustment under this Article XIII
should be made, how it should be made or what it should be. The Trustee has no
duty to determine whether a supplemental indenture under Section 13.4 need be
entered into or whether any provisions of any supplemental indenture are
correct. The Trustee makes no representation as to the validity or value of any
securities or assets issued upon conversion of Securities. The Trustee shall not
be responsible for any failure of the Company to comply with this Article XIII.
Each Conversion Agent other than the Company shall have the same protection
under this Section 13.10 as the Trustee.

      The rights, privileges, protections, immunities and benefits given to the
Trustee under the Indenture including, without limitation, its rights to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each Paying Agent or Conversion Agent acting
hereunder.

      Section 13.11 Unconditional Right of Holders to Convert. Notwithstanding
any other provision in this Indenture, the Holder of any Security shall have the
right, which is absolute and unconditional, to convert its Security in
accordance with this Article XIII and to bring an action for the enforcement of
any such right to convert, and such rights shall not be impaired or affected
without the consent of such Holder.

      Section 13.12 Common Stock Restricted Securities Legends. Unless such
Common Stock has been sold or otherwise transferred pursuant to a registration
statement that has been declared effective under the Securities Act or is
eligible for resale pursuant to Rule 144(k), each stock certificate representing
Common Stock issued upon conversion of the Securities will bear the legend set
forth on Exhibit F hereto (the "Common Stock Restricted Securities Legend"). The
Common Stock Restricted Securities Legend may be removed from any stock
certificate representing shares of the Common Stock issued upon conversion of
any Security only if there is delivered to the Company such satisfactory
evidence, which shall include an Opinion of Counsel, as may be reasonably
required by the Company and the transfer agent for the Common Stock, that
neither the Common Stock Restricted Securities Legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof comply
with the provisions of Rule 144A or Rule 144 or that such shares of Common Stock
are not "restricted" within the meaning of Rule 144. Upon provision of such
satisfactory evidence, at the written direction of the Company, the transfer
agent for the Common Stock shall authenticate and deliver in exchange for the
stock certificate or stock certificates representing such shares of Common Stock
bearing such legend, one or more new stock certificates representing a like
aggregate number of shares of Common Stock that do not bear such legend. If the
Common Stock Restricted Securities Legend has been removed from a stock
certificate representing shares of the Common Stock issued upon conversion of
any Security as provided above, no other stock certificates representing shares
of the Common Stock issued upon conversion of such Security shall bear such
legend, unless the Company has reasonable cause to believe that such shares of
Common Stock are "restricted securities" within the meaning of Rule 144.

                                       81
<PAGE>

                                  ARTICLE XIV

                                 MISCELLANEOUS

      Section 14.1 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or violates another provision which is required to
be included in this Indenture by the TIA, the required provision shall control.

      Section 14.2 Notices. Any request, demand, authorization, notice, waiver,
consent or communication shall be in writing and delivered in person or mailed
by first-class mail, postage prepaid, addressed as follows or transmitted by
facsimile transmission (confirmed by guaranteed overnight courier) to the
following facsimile numbers:

      if to the Company and/or any Guarantor:

      Integrated Electrical Services, Inc.
      1800 West Loop South, Suite 500
      Houston, Texas 77027-3233
      Attention: Chief Financial Officer
      Facsimile: (713) 860-1599
      Telephone: (713) 860-1500

      with a copy (which shall not constitute notice) to:

      Andrews Kurth LLP
      600 Travis Street
      Suite 4200
      Houston, Texas 77002-3090
      Attention: G. Michael O'Leary, Esq.
      Facsimile: (713) 220-4285
      Telephone: (713) 220-4360
      if to the Trustee:

      The Bank of New York
      101 Barclay St., 8th Floor West
      New York, New York 10286
      Attention: Corporate Trust Services
      Facsimile.: (212) 815-5704
      Telephone: (212) 815-5704

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

      Any notice or communication given to a Securityholder shall be mailed to
the Securityholder, by first-class mail, postage prepaid, at the
Securityholder's address as it appears

                                       82
<PAGE>

on the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.

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

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

      Section 14.3 Communication by Holders with Other Holders. Securityholders
may communicate pursuant to TIA Section 312(b) with other Securityholders with
respect to their rights under this Indenture or the Securities. The Trustee
shall comply with TIA Section 312(b) relating to Securityholder communications.
The Company, the Trustee, the Registrar, the Paying Agent, the Conversion Agent
and anyone else shall have the protection of TIA Section 312(c).

      Section 14.4 Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee:

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

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

      Section 14.5 Statements Required in Certificate or Opinion. Except as
otherwise herein provided, each Officers' Certificate or Opinion of Counsel with
respect to compliance with a covenant or condition provided for in this
Indenture shall include:

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

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

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

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

                                       83
<PAGE>

      Section 14.6 Separability Clause. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

      Section 14.7 Rules by Trustee, Paying Agent, Conversion Agent and
Registrar. The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar, the Conversion Agent and the Paying Agent may
make reasonable rules for their functions.

      Section 14.8 Governing Law. THIS INDENTURE, THE SECURITIES AND THE
SUBSIDIARY GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.

      Section 14.9 No Recourse Against Others. A director, officer, employee,
stockholder, member, manager, limited partner or general partner (and their
respective Affiliates, other than the Company or any Guarantor), as such, of the
Company or any Guarantor shall not have any liability for any obligations of the
Company under the Securities, Subsidiary Guarantees or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.

      Section 14.10 Successors. All agreements of the Company in this Indenture
and the Securities shall bind its successor. All agreements of the Trustee in
this Indenture shall bind its successor. All agreements of each Guarantor in
this Indenture will bind its successors, except as otherwise provided in Section
9.5 hereof.

      Section 14.11 Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.

      Section 14.12 Designated Senior Indebtedness. The Company hereby
designates all of the Securities as Designated Senior Indebtedness for purposes
of the Indenture dated as of January 28, 1999 under which the Company's 9-3/8%
Senior Subordinated Notes, Series A and Series B, due 2009 are issued and for
purposes of the Indenture dated as of May 29, 2001 under which the Company's
9-3/8% Senior Subordinated Notes, Series A and Series B, due 2009 are issued.

                            (Signature Pages Follow)

                                       84
<PAGE>

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

                                        COMPANY:

                                        INTEGRATED ELECTRICAL SERVICES, INC.

                                        By: /s/ Herbert R. Allen
                                            ---------------------------------
                                            Name: Herbert R. Allen
                                            Title: Chief Executive Officer

                          [SIGNATURE PAGE TO INDENTURE]

<PAGE>

                                        GUARANTORS:

                                        EACH OF THE GUARANTORS NAMED ON SCHEDULE
                                        I HERETO

                                        By: /s/ Herbert R. Allen
                                            ---------------------------------
                                        Name: Herbert R. Allen

                                        Acting in his capacity as (i) the Chief
                                        Executive Officer of the Guarantors
                                        listed in Part I of Schedule I and (ii)
                                        Sole Manager and Chief Executive Officer
                                        of the general partner of each of the
                                        Guarantors listed in Part II of Schedule
                                        I (such general partners acting on
                                        behalf of such Guarantors).

                                        By: /s/ Victor Duva
                                            ---------------------------------
                                            Name: Victor Duva

                                        Acting in his capacity as the President
                                        of the Guarantors listed in Part III of
                                        Schedule I.

                                        By: /s/ John Seli
                                            ---------------------------------

                                            Name: John Seli

                                        Acting in his capacity as the Manager of
                                        the Guarantors listed in Part IV of
                                        Schedule I.

                          [SIGNATURE PAGE TO INDENTURE]

<PAGE>

                                        THE BANK OF NEW YORK,
                                        a New York banking corporation,
                                        as Trustee

                                        By: /s/ Remo J. Reale
                                            ---------------------------------
                                            Name: Remo J. Reale
                                            Title: Vice President

                          [SIGNATURE PAGE TO INDENTURE]

<PAGE>

                                                                      SCHEDULE I

                               EXISTING GUARANTORS

PART I:

NAME

Pan American Electric, Inc.

Houston-Stafford Electric Holdings III, Inc.

Mills Electrical Contractors, Inc.

PART II:

NAME                                            GENERAL PARTNER

Houston-Stafford Electrical Contractors LP    Houston-Stafford Management LLC,
                                              an Arizona limited liability
                                              company

Mills Electric LP                             Mills Management LLC, an Arizona
                                              limited liability company

PART III:

NAME

Houston-Stafford Holdings LLC

Mills Electrical Holdings LLC

PART IV:

NAME

Houston-Stafford Holdings II LLC

Mills Electrical Holdings II LLC

<PAGE>

                                                                       EXHIBIT A

                        [FORM OF FACE OF GLOBAL SECURITY]

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

TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF
THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN Article II OF
THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

THE SECURITY EVIDENCED BY THIS CERTIFICATE AND ANY SHARES OF COMMON STOCK
ISSUABLE UPON THE CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER:

(1) REPRESENTS THAT IT IS (A) A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT (A "QIB"); (B) AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE SECURITIES ACT) (AN "IAI"); OR (C) NOT A U.S. PERSON AND IS ACQUIRING THIS
SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT;

(2) AGREES THAT (I) IT WILL NOT, PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d)
UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT
ON THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON
WHOM SUCH SELLER REASONABLY BELIEVES TO BE A QIB PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) TO PERSONS OTHER THAN U.S. PERSONS OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) TO A PERSON WHOM SUCH SELLER REASONABLY
BELIEVES TO BE AN IAI OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, SUBJECT TO THE OBLIGATION OF SUCH HOLDER TO FURNISH
THE COMPANY AND THE TRUSTEE SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS MAY BE REQUIRED PURSUANT TO THE INDENTURE AND, IN EACH CASE, IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (II) IT WILL, AFTER THE
EXPIRATION OF THE HOLDING PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO
ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE)
UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS
SECURITY, PROVIDE A REPRESENTATION TO THE COMPANY THAT IT HAS HELD THE SECURITY
EVIDENCED BY THIS CERTIFICATE FOR A PERIOD OF TWO YEARS AND IS NOT AN AFFILIATE
(AS SUCH TERM IS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) PRIOR TO ANY
RESALE OR TRANSFER OF THIS SECURITY;

                                      A-1
<PAGE>

(3) AGREES THAT IT WILL NOTIFY EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST
HEREIN IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (2)(I)(F) ABOVE)
OF THE RESALE RESTRICTIONS CONTAINED IN THIS LEGEND;

AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS.

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

                                      A-2
<PAGE>

                      INTEGRATED ELECTRICAL SERVICES, INC.

          [Series A] [Series B] 6.5% Senior Convertible Notes due 2014

No.                                           CUSIP: ________
Issue Date: ________  __, 20__                Principal Amount: $

      INTEGRATED ELECTRICAL SERVICES, INC., a Delaware corporation, promises to
pay to ______________________ or registered assigns, the principal amount of
______________________ DOLLARS ($_____________) on November 1, 2014.

      Interest Payment Dates: May 1 and November 1, commencing May 1, 2005.

      Record Dates: April 15 and October 15.

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

      The Company hereby designates this Security as "Designated Senior
Indebtedness" for purposes of the Indenture dated as of January 28, 1999 under
which the Company's 9-3/8% Senior Subordinated Notes, Series A and Series B, due
2009 are issued and for purposes of the Indenture dated as of May 29, 2001 under
which the Company's 9-3/8% Senior Subordinated Notes, Series A and Series B, due
2009 are issued.

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

Dated: ________  __, 20__         INTEGRATED ELECTRICAL SERVICES, INC.

                                  By: _______________________________________

                                  Title: ____________________________________

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

By __________________________________
         Authorized Signatory

Dated: ________  __, 20__

                                      A-3
<PAGE>

                      [FORM OF REVERSE OF GLOBAL SECURITY]

          [Series A] [Series B] 6.5% Senior Convertible Notes due 2014

      This Security is one of a duly authorized issue of [Series A] [Series B]
6.5% Senior Convertible Notes due 2014 of Integrated Electrical Services, Inc.,
a Delaware corporation (including any successor corporation under the Indenture
hereinafter referred to, the "Company"), issued under an Indenture, dated as of
November 24, 2004 (together with any supplemental indenture thereto, the
"Indenture"), between the Company, the Guarantors and The Bank of New York, a
New York banking corporation, as trustee (the "Trustee"). The terms of the
Security include those stated in the Indenture, those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended ("TIA"), and those
set forth in this Security. This Security is subject to all such terms, and
Holders are referred to the Indenture and the TIA for a statement of all such
terms. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Security and the terms of the Indenture,
the terms of the Indenture shall control. Capitalized terms used but not defined
herein have the meanings assigned to them in the Indenture unless otherwise
indicated.

1.    Interest.

      The Company promises to pay interest on the principal amount of the
outstanding Securities at the interest rate of 6.5% per annum (the "Interest
Rate") from the Closing Date. The Company will pay Interest on this Security
semi-annually in arrears on May 1 and November 1 of each year (each, an
"Interest Payment Date"), commencing May 1, 2005.

      Interest on the Securities shall be computed (i) for any full semi-annual
period for which a particular Interest Rate is applicable, on the basis of a
360-day year of twelve 30-day months and (ii) for any period for which a
particular Interest Rate is applicable for less than a full semiannual period
for which Interest is calculated, on the basis of a 30-day month and, for such
periods of less than a month, the actual number of days elapsed over a 30-day
month.

      A Holder of any Security at the close of business on a record date will be
entitled to receive interest (and Liquidated Damages, if any) on such Security
on the corresponding Interest Payment Date; provided that if this Security is
repurchased by the Company on a date that is after the record date and prior to
the corresponding Interest Payment Date, interest and Liquidated Damages, if
any, accrued and unpaid hereon to but not including the applicable Repurchase
Date or Fundamental Change Repurchase Date, as the case may be, will be paid to
the same Holder to whom the Company pays the purchase price of this Security.
Interest on Securities converted after a record date but prior to the
corresponding Interest Payment Date (other than any Security whose maturity is
prior to such Interest Payment Date) will be paid on the next succeeding
Interest Payment Date to the Holder of the Securities on the record date but,
upon conversion, the converting Holder must pay the Company the interest, and
Liquidated Damages, if any, specified in Section 13.9 of the Indenture.

      If the principal amount hereof, any portion thereof, any interest,
including the payment of Liquidated Damages, if any, or any Repurchase Price,
Fundamental Change Repurchase Price, Optional Redemption Price or Make-Whole
Premium, if applicable, on any Security is not paid when due (whether upon
acceleration pursuant to Section 8.2 of the Indenture, upon the date set for
payment of the Repurchase Price, the Fundamental Change Repurchase Price, the
Optional Redemption Price or the Make-Whole Premium hereof or upon the Stated
Maturity of this Security), then in each such case the overdue amount shall, to
the extent permitted by law, bear interest at 1% over the then Interest Rate,
which interest shall accrue from the date on which such overdue amount was
originally due to the date of payment of such amount, including interest
thereon, has been made or duly provided for. All such interest shall be payable
on demand.

2.    Method of Payment.

      Except as provided below, interest and Liquidated Damages will be paid (i)
on the Global Securities to DTC in immediately available funds, and (ii) with
respect to Certificated Securities, to the Person in whose name Securities are
registered at the close of business on the record date, (a) on any Certificated
Securities having an aggregate principal amount of $2,000,000 or less, by check
mailed to the Holders of such Securities; and (b) on any Securities having an
aggregate principal amount of more than $2,000,000, by wire transfer in
immediately available

                                      A-4
<PAGE>

funds at the election of the Holders of those Securities.
At Stated Maturity the Company will pay principal and interest in cash on
Securities, with respect to Global Securities in accordance with the Applicable
Procedures of DTC, and otherwise at the Company's office for payment, which
initially will be the Corporate Trust Office of the Trustee.

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

3.    Paying Agent, Conversion Agent and Registrar.

      Initially, The Bank of New York, a New York banking corporation (the
"Trustee"), will act as Paying Agent, Conversion Agent and Registrar. The
Company may appoint and change any of the Paying Agent, Conversion Agent or
Registrar without notice, other than notice to the Trustee. Neither the Company
nor any of its Subsidiaries nor any of their Affiliates may act as Paying Agent,
Conversion Agent or Registrar.

4.    Indenture.

      This Security is one of a duly authorized issue of Securities of the
Company designated as its [Series A] [Series B] 6.5% Senior Convertible Notes
due 2014, issued under the Indenture. The terms of this Security include those
stated in the Indenture and those required by or made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended, as in effect on the
date of the Indenture. This Security is subject to all such terms, and the
Holder of this Security is referred to the Indenture and said Act for a
statement of them.

      The Securities are general unsecured obligations of the Company. The
aggregate principal amount of Securities that may be issued under the Indenture
is limited to $50,000,000.

5.    Repurchase of Securities at the Option of the Holder.

      Subject to the terms and conditions of the Indenture, the Company shall
repurchase all or a portion of the Securities (any such portion being at least
$1,000 or an integral multiple of $1,000 in excess thereof and provided that no
single Security may be repurchased in part unless the portion of the principal
amount of such Security to be outstanding after such repurchase is equal to
$1,000 or integral multiples of $1,000 in excess thereof) at the option of the
Holder on November 1, 2008 (the "Repurchase Date"), at a repurchase price equal
to 100% of the principal amount of the Securities to be repurchased, plus
interest (and Liquidated Damages, if any) accrued but unpaid to, but excluding,
such Repurchase Date (the "Repurchase Price"). At the option of the Company and
subject to the provisions set forth in the Indenture, the Repurchase Price may
be paid in cash, or subject to the fulfillment by the Company of the conditions
set forth in the Indenture, by delivery of shares of Common Stock having a fair
market value determined as set forth in the Indenture.

      If a Fundamental Change occurs, the Holder of this Security, at the
Holder's option, shall have the right, in accordance with the provisions of the
Indenture, to require the Company to repurchase this Security (or any portion of
the principal amount hereof that is at least $1,000 or an integral multiple of
$1,000 in excess thereof, provided that the portion of the principal amount of
this Security to be outstanding after such repurchase is at least equal to
$1,000) at a Fundamental Change Repurchase Price equal to 100% of the principal
amount thereof plus interest (and Liquidated Damages, if any) accrued to, but
excluding, the Fundamental Change Repurchase Date. At the option of the Company
and subject to the provisions set forth in the Indenture, the Fundamental Change
Repurchase Price may be paid in cash, by delivery of shares of Common Stock
having a fair market value equal to the Fundamental Change Repurchase Price
(subject to the conditions set forth in the Indenture), or any combination
thereof.

6.    Optional Redemption

      The Securities are not redeemable prior to November 1, 2008. On and after
November 1, 2008, the Company may, at its option, redeem the Securities in whole
at any time or in part from time to time, on any date

                                      A-5
<PAGE>

prior to the Stated Maturity upon at least 30 days' notice and not more than 60
days' notice given in the manner set forth in the Indenture, at a redemption
price (the "Optional Redemption Price") equal to 100% of the principal amount of
the Securities to be redeemed plus interest (and Liquidated Damages, if any)
accrued but unpaid to, but excluding the Redemption Date, plus the Redemption
Premium; provided, however, that each such optional redemption may occur only in
accordance with the terms set forth in the Indenture and only if (i) on the date
that the Company gives such notice, the Closing Price per share of the Common
Stock for at least 20 Trading Days of the 30 consecutive Trading Days
immediately preceding such date is at least 150% of the Conversion Price then in
effect, appropriately adjusted to take into account the occurrence, during such
30 Trading Day period, of any event described in Section 13.3 of the Indenture
and (ii) on the date that the Company delivers such Company Notice through the
date of redemption, the Common Stock issuable upon conversion of the Securities
is either (1) covered by a registration statement covering resales thereof that
is effective and available for use and is expected to remain effective and
available for use for the 30 days following the date of such notice or (2)
eligible to be resold by non-affiliates pursuant to Rule 144(k) under the
Securities Act.

7.    Make-Whole Premium

      If a Fundamental Change occurs, Holders of this Security will be entitled
to receive the Make-Whole Premium with respect to this Security to the extent
this Security is converted during the related Fundamental Change Conversion
Period. Subject to the provisions of the Indenture, the Company may, at its
option, pay the Make-Whole Premium in Common Stock, cash, the same form of
consideration into which all or substantially all of the Common Stock has been
converted in connection with the applicable Fundamental Change (valued as set
forth in the Indenture), or any combination of the foregoing. If holders of
Common Stock have the right to elect the form of consideration received in a
Fundamental Change, then for purposes of the foregoing the consideration into
which a share of Common Stock has been converted shall be deemed to equal the
same percentage of each form of consideration as encompasses the aggregate
consideration distributed in respect of all shares of Common Stock participating
in the distribution. Subject to the provisions of the Indenture, unless the
Company gives notice to the contrary, the Make-Whole Premium shall be paid in
shares of Common Stock (or, if applicable, in the same form of consideration
into which shares of Common Stock have been converted in connection with the
applicable Fundamental Change). The amount of cash to be received shall equal
the product of (i) the portion of the Make-Whole Premium to be paid in cash
expressed as a number of shares of Common Stock and (ii) the arithmetic average
of the Closing Prices per share of the Common Stock on the five Trading Days
prior to, but not including, the Effective Date.

8.    Conversion.

      (a) Subject to and in compliance with the provisions of the Indenture, a
Holder shall have the right, at such Holder's option, to convert all or any
portion (if the portion to be converted is $1,000 or an integral multiple
$1,000) of this Security into fully paid and nonassessable shares of Common
Stock at the Conversion Price in effect on the Conversion Date. The Conversion
Price is subject to adjustment from time to time as set forth in Section 13.3 of
the Indenture. In the case of a conversion during a Fundamental Change
Conversion Period, Holders electing to convert Securities shall also receive the
Make-Whole Premium payable upon such conversion as set forth in Article VI of
the Indenture. Holders may surrender Securities for conversion at any time
within the Fundamental Change Conversion Period. In the case of a conversion
during a Redemption Conversion Period, Holders electing to convert Securities
shall also receive the Redemption Premium payable upon such conversion as set
forth in Article IV and Article VI of the Indenture. Holders may surrender
Securities for conversion at any time within the Redemption Conversion Period.
Pursuant to the terms of the Indenture, the Redemption Premium, if any, payable
upon conversion of Securities may be paid in the form of cash or additional
shares of Common Stock.

      (b) All conversions of this Security shall comply with the provisions of
Article XIII of the Indenture, including without limitation, the provisions
relating to the Share Limitation.

      (c) A Security in respect of which a Holder has delivered a Repurchase
Notice or Fundamental Change Repurchase Notice, exercising the option of such
Holder to require the Company to purchase such Security, may be converted only
if such Repurchase Notice or Fundamental Change Repurchase Notice is withdrawn
in accordance with the terms of the Indenture.

                                      A-6
<PAGE>

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

      (e) No fractional shares of Common Stock shall be issued upon conversion
of any Security. Instead of any fractional share of Common Stock that would
otherwise be issued upon conversion of such Security, the Company shall pay a
cash adjustment as provided in the Indenture.

9.    Denominations; Transfer; Exchange.

      The Securities are in fully registered form, without coupons, in
denominations of $1,000 of principal amount and integral multiples of $1,000. A
Holder may register a transfer or exchange of Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements, legal opinions and transfer documents and to pay any
taxes and fees required by law or permitted by the Indenture. The Registrar need
not transfer or exchange any Securities in respect of which a Repurchase Notice
or Fundamental Change Repurchase Notice has been given and not withdrawn.

10.   Persons Deemed Owners.

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

11.   Unclaimed Money or Securities.

      The Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of any amount with respect to the
Securities that remains unclaimed for two years after the date upon which such
payment shall have been due. After payment to the Company, Holders entitled to
the money or securities must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another Person
after the date upon which such payment shall have become due.

12.   Amendment; Waiver.

      Subject to certain exceptions set forth in the Indenture, (i) the
Indenture, all (but not less than all) of the Securities or the Subsidiary
Guarantees may be amended with the written consent of the Holders of at least a
majority in aggregate principal amount of the outstanding Securities and (ii)
certain defaults may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the outstanding Securities. The
Indenture, all (but not less than all) of the Securities and the Subsidiary
Guarantees may also be amended by the Company and the Trustee, without the
consent of any Holder, in certain circumstances set forth in the Indenture;
provided, however, that certain provisions of the Indenture and the Securities
may not be amended without the consent of each affected Holder.

13.   Defaults and Remedies.

      If any Event of Default with respect to the Securities shall occur and be
continuing, the principal of all the Securities may be declared due and payable
in the manner and with the effect provided in the Indenture.

14.   Trustee Dealings with the Company.

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

15.   No Recourse Against Others.

      A director, officer, employee, stockholder, member, manager, limited
partner or general partner (and their respective Affiliates, other than the
Company or any Guarantor), as such, of the Company or any Guarantor shall not

                                      A-7
<PAGE>

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

16.   Authentication.

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

17.   Abbreviations.

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

18.   GOVERNING LAW.

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

19.   Requests for Copies.

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

      Integrated Electrical Services, Inc.
      1800 West Loop South, Suite 500
      Houston, Texas 77027-3233
      Attention: Chief Financial Officer
      Facsimile: (713) 860-1599
      Telephone: (713) 860-1500

20.   Registration Rights.

      The Holders of the Securities are entitled to the benefits of the
Registration Rights Agreement, dated as of November 24, 2004, between the
Company and the purchasers identified on the signature pages thereto, including
the receipt of Liquidated Damages (as defined in such agreement).

                                      A-8
<PAGE>

ASSIGNMENT FORM                           CONVERSION NOTICE

To assign this Security, fill in the      To convert this Security into Common
form below:                               Stock of the Company, check the box [
                                          ].

I or we assign and transfer this          To convert only part of this
Security to                               Security, state the principal amount
_________________________                 to be converted (which must be $1,000
_________________________                 or an integral multiple of $1,000):
(Insert assignee's soc. sec. or tax
ID no.)                                   If you want the stock certificate
_________________________                 made out in another person's name
_________________________                 fill in the form below:
_________________________
(Print or type assignee's name,           _________________________
address and zip code)                     _________________________

and irrevocably appoint                   (Insert the other person's soc. sec.
                                          tax ID no.)
____________________ agent to
transfer this Security on the books       _________________________
of the Company. The agent may             _________________________
substitute another to act for him.        _________________________
                                          _________________________
                                          _________________________
                                          (Print or type other person's name,
                                          address and zip code)

                                          The undersigned, on behalf of itself
                                          and its affiliates, hereby represents
                                          to the Company that upon and
                                          immediately after the conversion of
                                          Securities into shares of Common
                                          Stock, it and its affiliates are and
                                          will be in compliance with the Share
                                          Limitation applicable to such
                                          Securities pursuant to paragraph 8 of
                                          this Security.

Date: __________  Your Signature: _________________________________
_________________________________________________________________________
   (Sign exactly as your name appears on the other side of this Security)
Signature Guaranteed

_____________________________________
Participant in a Recognized Signature
Guarantee Medallion Program

By: _____________________________
        Authorized Signatory

                                      A-9
<PAGE>

                    ELECTION OF HOLDER TO REQUIRE REPURCHASE

      Pursuant to Section 3.4 of the Indenture, the undersigned hereby elects to
have this Security repurchased by the Company.

Dated:

__________________________________________

__________________________________________

Signature(s)

Signature(s) must be guaranteed by an
Eligible Guarantor Institution with
membership in an approved signature
guarantee program pursuant to Rule
17Ad-15 under the Securities Exchange
Act of 1934.

__________________________________________
Signature Guaranteed

Principal amount to be repurchased (at
least U.S. $1,000 or an integral
multiple of $1,000 in excess thereof):
___________________

Remaining principal amount following
such repurchase (not less than U.S.
$1,000):

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

NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.

                                      A-10
<PAGE>

             SCHEDULE OF INCREASES AND DECREASES OF GLOBAL SECURITY

    Initial Principal Amount of Global Security: ____________($___________).
<TABLE>
<CAPTION>
                                                           Principal Amount of
            Amount of Increase     Amount of Decrease in     Global Security            Notation by
            in Principal Amount     Principal Amount of    After Increase or           Registrar or
Date        of Global Security       Global Security            Decrease            Security Custodian
------------------------------------------------------------------------------------------------------
<S>         <C>                    <C>                     <C>                      <C>
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
</TABLE>

                                      A-11
<PAGE>

                                                                       EXHIBIT B

                     [FORM OF FACE OF CERTIFICATED SECURITY]

THE SECURITY EVIDENCED BY THIS CERTIFICATE AND ANY SHARES OF COMMON STOCK
ISSUABLE UPON THE CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER:

(1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT (A "QIB"); (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE SECURITIES ACT) (AN "IAI"); OR (C) IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT;

(2) AGREES THAT (I) IT WILL NOT, PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d)
UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT
ON THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON
WHOM SUCH SELLER REASONABLY BELIEVES TO BE A QIB PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) TO PERSONS OTHER THAN U.S. PERSONS OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) TO A PERSON WHOM SUCH SELLER REASONABLY
BELIEVES TO BE AN IAI OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, SUBJECT TO THE OBLIGATION OF SUCH HOLDER TO FURNISH
THE COMPANY AND THE TRUSTEE SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS MAY BE REQUIRED PURSUANT TO THE INDENTURE AND, IN EACH CASE, IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (II) IT WILL, AFTER THE
EXPIRATION OF THE HOLDING PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO
ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE)
UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS
SECURITY, PROVIDE A REPRESENTATION TO THE COMPANY THAT IT HAS HELD THE SECURITY
EVIDENCED BY THIS CERTIFICATE FOR A PERIOD OF TWO YEARS AND IS NOT AN AFFILIATE
(AS SUCH TERM IS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) PRIOR TO ANY
RESALE OR TRANSFER OF THIS SECURITY;

(3) AGREES THAT IT WILL NOTIFY EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST
HEREIN IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (2)(I)(F) ABOVE)
OF THE RESALE RESTRICTIONS CONTAINED IN THIS LEGEND;

AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS.

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

                                      B-1
<PAGE>

                      INTEGRATED ELECTRICAL SERVICES, INC.

          [Series A] [Series B] 6.5% Senior Convertible Notes due 2014

No.                                                   CUSIP: ________
Issue Date: ________ __, 20__                         Principal Amount:  $

      INTEGRATED ELECTRICAL SERVICES, INC., a Delaware corporation, promises to
pay to ______________________ or registered assigns, the principal amount of
______________________ DOLLARS ($_____________) on November 1, 2014.

      Interest Payment Dates: May 1 and November 1, commencing May 1, 2005.

      Record Dates: April 15 and October 15.

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

      The Company hereby designates this Security as "Designated Senior
Indebtedness" for purposes of the Indenture dated as of January 28, 1999 under
which the Company's 9-3/8% Senior Subordinated Notes, Series A and Series B, due
2009 are issued and for purposes of the Indenture dated as of May 29, 2001 under
which the Company's 9-3/8% Senior Subordinated Notes, Series A and Series B, due
2009 are issued.

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

Dated: ________ __, 20__                INTEGRATED ELECTRICAL SERVICES, INC.

                                        By:_________________________________
                                        Title:______________________________

TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NEW YORK, a New York banking corporation,
as Trustee, certifies that this
is one of the Securities referred
to in the within-mentioned Indenture.

By ________________________
     Authorized Signatory
Dated: ________ __, 20__

                                      B-2
<PAGE>

      [FORM OF REVERSE OF CERTIFICATED SECURITY IS IDENTICAL TO EXHIBIT A]

                                      B-3
<PAGE>

                                                                       EXHIBIT C

                      Integrated Electrical Services, Inc.

          [Series A] [Series B] 6.5% Senior Convertible Notes due 2014

                              Transfer Certificate

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

      [_]   A transfer of the Surrendered Securities is made to Integrated
            Electrical Services, Inc. (the "Company") or any of its
            Subsidiaries;

      [_]   The transfer of the Surrendered Securities complies with Rule 144A
            under the Securities Act;

      [_]   The transfer of the Surrendered Securities is pursuant to an
            effective registration statement under the Securities Act;

      [_]   The transfer of the Surrendered Securities is being effected to an
            Institutional Accredited Investor and pursuant to an exemption from
            the registration requirements of the Securities Act other than Rule
            144A, Rule 144 or Rule 904, and the transferor hereby further
            certifies that it has not engaged in any general solicitation within
            the meaning of Regulation D under the Securities Act and the
            transfer complies with the transfer restrictions applicable to
            beneficial interests in a Restricted Security under the Indenture
            and the requirements of the exemption claimed, which certification
            is supported by (1) a certificate executed by the transferee in the
            form of Exhibit D to the Indenture and (2) an opinion of counsel
            provided by the transferor or the transferee (a copy of which the
            transferor has attached to this certification), to the effect that
            such transfer is in compliance with the Securities Act; or

      [_]   The transfer of the Surrendered Securities is pursuant to another
            available exemption from the registration requirement of the
            Securities Act;

and unless such Securities are being transferred to the Company or a subsidiary
thereof, the undersigned confirms that, to the undersigned's knowledge, such
Securities are not being transferred to an "affiliate" of the Company as defined
in

                                      C-1
<PAGE>

Rule 144 under the Securities Act (an "Affiliate"). Capitalized terms used
but not defined herein have the meanings set forth in the Indenture.

      Unless one of the boxes above is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof.

DATE: __________________________________
      Signature(s)

Notice: Signature must conform to name written on face of Security.

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

Signature(s) must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Securities 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 Securities Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.

_______________________
Signature Guarantee

                                      C-2
<PAGE>

                                                                       EXHIBIT D

                            FORM OF CERTIFICATE FROM
                  ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

Integrated Electrical Services, Inc.
1800 West Loop South, Suite 500
Houston, Texas 77027-3233
Attention: Chief Financial Officer

[Registrar address block]

      Re: [Series A] [Series B] 6.5% Senior Convertible Notes due 2014

      Reference is hereby made to the Indenture, dated as of November 24, 2004
(the "Indenture"), among Integrated Electrical Services, Inc., as issuer (the
"Company"), the Guarantors party thereto and The Bank of New York, a New York
banking corporation, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.

In connection with our proposed purchase of $____________ aggregate principal
amount of:

(a) [ ] a beneficial interest in a Global Security, or

(b) [ ] a Certificated Security,

we confirm that:

      1. We understand that any subsequent transfer of the Securities or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell or
otherwise transfer the Securities or any interest therein except in compliance
with, such restrictions and conditions and the Securities Act of 1933, as
amended (the "Securities Act").

      2. We understand that the offer and sale of the Securities have not been
registered under the Securities Act, and that the Securities and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Securities or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and an opinion
of legal counsel in form reasonably acceptable to the Company to the effect that
such transfer is in compliance with the Securities Act, (D) outside the United
States in accordance with Rule 904 of Regulation S under the Securities Act, (E)
pursuant to the provisions of Rule 144(k) under the Securities Act or (F)
pursuant to an effective registration statement under the Securities Act, and we
further agree to provide to any Person purchasing the Certificated Security or
beneficial interest in a Global Security from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.

      3. We understand that, on any proposed resale of the Securities or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Securities purchased
by us will bear a legend to the foregoing effect.

      4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or its investment.

                                      D-1
<PAGE>

      5. We are acquiring the Securities or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.

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

                                 ______________________________________________
                                        [Insert Name of Accredited Investor]

                                 By:___________________________________________
                                  Name:
                                  Title:

Dated: _______________________

                                      D-2
<PAGE>

                                                                       EXHIBIT E

Integrated Electrical Services, Inc.
[Series A] [Series B] 6.5% Senior Convertible Notes due 2014
Exchange Certificate

      In connection with the exchange of a Certificated Security for an interest
in a Global Security pursuant to Section 2.12(a)(iv) of the Indenture
representing $____________ principal amount of the above-captioned Securities
presented or surrendered on the date hereof (the "Surrendered Securities"), the
undersigned registered owner of this Security hereby certifies that either:

      [_]   the undersigned is a "qualified institutional buyer" as defined in
            Rule 144A under the Securities Act of 1933, as amended (the
            "Securities Act"); or

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

      [_]   The transferee is an Affiliate of the Company.

DATE: __________________________________
      Signature(s)

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

Signature Guaranteed

______________________________________
Participant in a Recognized Signature

                                      E-1
<PAGE>

                                                                       EXHIBIT F

                    COMMON STOCK RESTRICTED SECURITIES LEGEND

THE SHARES OF COMMON STOCK EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ACQUISITION
HEREOF, THE HOLDER:

(1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT (A "QIB"); (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE SECURITIES ACT) (AN "IAI"); OR (C) IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT;

(2) AGREES THAT (I) IT WILL NOT, PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d)
UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT
ON THE DATE OF THE TRANSFER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON
WHOM SUCH SELLER REASONABLY BELIEVES TO BE A QIB PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) TO PERSONS OTHER THAN U.S. PERSONS OUTSIDE THE UNITED STATES IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT,
(D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) TO A PERSON WHOM SUCH SELLER REASONABLY
BELIEVES TO BE AN IAI OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE COMPANY AND THE TRUSTEE TO
REQUIRE DELIVERY OF SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
MAY BE NECESSARY TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS, AND (II) IT WILL, AFTER THE EXPIRATION OF THE
HOLDING PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS
OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT
AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS SECURITY, PROVIDE A
REPRESENTATION TO THE COMPANY THAT IT HAS HELD THE SECURITY EVIDENCED BY THIS
CERTIFICATE FOR A PERIOD OF TWO YEARS AND IS NOT AN AFFILIATE (AS SUCH TERM IS
DEFINED IN RULE 144 UNDER THE SECURITIES ACT) PRIOR TO ANY RESALE OR TRANSFER OF
THIS SECURITY;

(3) AGREES THAT IT WILL NOTIFY EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST
HEREIN IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (2)(I)(F) ABOVE)
OF THE RESALE RESTRICTIONS CONTAINED IN THIS LEGEND;

AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER
ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS.

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

                                      F-1
<PAGE>

                                                                       EXHIBIT G

                    FORM OF NOTATION OF SUBSIDIARY GUARANTEE

For value received, each Guarantor (which term includes any successor Person
under the Indenture) has, jointly and severally, fully and unconditionally and
irrevocably guaranteed, to the extent set forth in the Indenture and subject to
the provisions in the Indenture dated as of November 24, 2004 (the "Indenture")
among Integrated Electrical Services, Inc. (the "Company"), the Guarantors party
thereto and The Bank of New York, a New York banking corporation, as trustee
(the "Trustee"), (a) the due and punctual payment of the principal, Repurchase
Price or Fundamental Change Repurchase Price of, and the Make-Whole Premium
(only to the extent not otherwise satisfied by the Company in other than cash in
accordance with the applicable Company Notice), Redemption Premium, if any, and
Liquidated Damages, if any, and interest on, the Securities, whether at
maturity, by acceleration, redemption, repurchase or otherwise, the due and
punctual payment of interest on overdue principal of and interest on the
Securities, if any, and, to the extent permitted by law, the due and punctual
performance of all other obligations of the Company to the Holders (other than
the Company's obligations under Article XIII) or the Trustee all in accordance
with the terms of the Indenture and (b) in case of any extension of time of
payment or renewal of any Securities or any of such other obligations, that the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise. The obligations of the Guarantors to the Holders of Securities and
to the Trustee pursuant to the Subsidiary Guarantee and the Indenture are
expressly set forth in Article XII of the Indenture and reference is hereby made
to the Indenture for the precise terms of the Subsidiary Guarantee. The
Subsidiary Guarantee shall be governed by and construed in accordance with the
laws of the State of New York.

Capitalized terms used but not defined herein have the meanings given to them in
the Indenture.

                                     [NAME OF GUARANTOR]

                                     By:
                                        Name:
                                        Title:

                                      G-1
<PAGE>

                                                                       EXHIBIT H

                         FORM OF SUPPLEMENTAL INDENTURE
                    TO BE DELIVERED BY SUBSEQUENT GUARANTORS

      SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
_______________, 200__, among [NAME OF SUBSIDIARY] (the "Guaranteeing
Subsidiary"), a subsidiary of Integrated Electrical Services, Inc. (or its
permitted successor), a Delaware corporation (the "Company"), the other
Guarantors (as defined in the Indenture referred to herein) and The Bank of New
York, a New York banking corporation, as trustee under the Indenture referred to
below (the "Trustee").

                               W I T N E S S E T H

      WHEREAS, the Company and the Guarantors have heretofore executed and
delivered to the Trustee an indenture (the "Indenture"), dated as of November
24, 2004 providing for the issuance of Series A 6.5% Senior Convertible
Securities due 2014 and Series B 6.5% Senior Convertible Securities due 2014
(collectively, the "Securities");

      WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company' obligations (only to the extent not otherwise
satisfied by the Company in other than cash in accordance with the applicable
Company Notice) under the Securities and the Indenture on the terms and
conditions set forth herein and in the Indenture (the "Subsidiary Guarantee");
and

      WHEREAS, pursuant to Section 11 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.

      NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Securities as follows:

      1. CAPITALIZED TERMS. Capitalized terms used herein without definition
shall have the meanings assigned to them in the Indenture.

      2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to
provide an unconditional Guarantee on the terms and subject to the conditions
set forth in the Subsidiary Guarantee and in the Indenture including but not
limited to Article XII thereof. The obligations of the Guaranteeing Subsidiary
to the Holders of Securities and to the Trustee pursuant to the Subsidiary
Guarantee and the Indenture are expressly set forth in Article XII of the
Indenture and reference is hereby made to the Indenture for the precise terms of
the Subsidiary Guarantee. This Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and the
Indenture.

      4. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have

                                      H-1
<PAGE>

any liability for any obligations of the Company or any Guaranteeing Subsidiary
under the Securities, any Subsidiary Guarantees, the Indenture or this
Supplemental Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder of the Securities by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Securities.

      5. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

      6. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

      7. EFFECT OF HEADINGS. The Section headings herein are for convenience
only and shall not affect the construction hereof.

      8. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.

      IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.

Dated: _______________, 20___

                                      [GUARANTEEING SUBSIDIARY]

                                      By: _______________________________
                                          Name:
                                          Title:

                                      INTEGRATED ELECTRICAL SERVICES, INC.

                                      By: _______________________________
                                          Name:
                                          Title:

                                      [EXISTING GUARANTORS]

                                      By: _______________________________
                                          Name:
                                          Title:

                                      H-2
<PAGE>

                                      [TRUSTEE],
                                       as Trustee

                                      By: _______________________________
                                          Authorized Signatory

                                      H-3<PAGE>

                                                                    EXHIBIT 10.2

                          REGISTRATION RIGHTS AGREEMENT

      THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and entered
into as of November 24, 2004 by and among Integrated Electrical Services, Inc.,
a Delaware corporation (the "COMPANY"), the parties set forth on Schedule I
hereto (each, a "PURCHASER" and collectively, the "PURCHASERS") and the
subsidiaries of the Company set forth on Schedule II hereto (each, a "GUARANTOR"
and collectively, the "GUARANTORS").

      In order to induce each of the Purchasers to enter into that certain
Purchase Agreement of dated as of November 22, 2004, by and among the Company,
the Guarantors and the Purchasers (the "PURCHASE AGREEMENT"), the Company has
agreed to provide the registration rights set forth in this Agreement. The
execution of this Agreement is a condition to the closing under the Purchase
Agreement.

      The Company and the Guarantors agree with the Purchasers (i) for their
benefit as the Purchasers and (ii) for the benefit of the beneficial owners
(including the Purchasers) from time to time of the Notes (as defined herein)
and the beneficial owners from time to time of the Underlying Common Stock (as
defined herein) issued upon conversion of the Notes (each of the foregoing a
"HOLDER" and together the "HOLDERS"), as follows:

      Section 1. Definitions. Capitalized terms used herein without definition
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following terms shall have the following meanings:

      "AFFILIATE" means with respect to any specified person, an "affiliate," as
defined in Rule 144, of such person.

      "AMENDMENT EFFECTIVENESS DEADLINE DATE" has the meaning set forth in
Section 2(d) hereof.

      "APPLICABLE CONVERSION PRICE" means, as of any date of determination, the
Conversion Price of the Notes then in effect as determined in accordance with
the terms of the Indenture or, if no Notes are then outstanding, the Conversion
Rate that would be in effect were Notes then outstanding.

      "BUSINESS DAY" has the meaning assigned to such term in the Indenture.

      "COMMON STOCK" has the meaning assigned to such term in the Indenture.

      "COMPANY INDEMNIFIED PARTY" has the meaning set forth in Section 6(b)
hereof.

      "CONVERSION PRICE" has the meaning assigned to such term in the Indenture.

      "EDGAR" means the Electronic Data Gathering, Analysis, and Retrieval
system by which companies file forms with the SEC.

      "EFFECTIVENESS DEADLINE DATE" has the meaning set forth in Section 2(a)
hereof.

<PAGE>

      "EFFECTIVENESS PERIOD" means a period that will terminate upon the
earliest of (1) the date on which all Registrable Securities held by
non-affiliates are eligible to be sold to the public pursuant to Rule 144(k)
under the Securities Act or any successor provision thereof, (2) the date when
each of the Registrable Securities covered by the Shelf Registration Statement
has been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement, (3) the date on which all
Registrable Securities have been resold pursuant to Rule 144 under the
Securities Act, (4) the date on which all the Notes and the Registrable
Securities cease to be outstanding and (5) 60 days after the date that is the
two year anniversary of the Issue Date.

      "EVENT" has the meaning set forth in Section 2(e) hereof.

      "EVENT DATE" has the meaning set forth in Section 2(e) hereof.

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

      "FILING DEADLINE DATE" has the meaning set forth in Section 2(a) hereof.

      "GUARANTOR" and "GUARANTORS" have the meanings set forth in the preamble
of this Agreement.

      "HOLDER" has the meaning set forth in the third paragraph of this
Agreement.

      "HOLDER INDEMNIFIED PARTY" has the meaning set forth in Section 6(a)
hereof.

      "INDEMNIFIED PARTY" has the meaning assigned to such term in Section 6(c)
hereof.

      "INDEMNIFYING PARTY" has the meaning set forth in Section 6(c) hereof.

      "INDENTURE" means the Indenture, dated as of November 24, 2004, by and
among the Company, the Guarantors and The Bank of New York, a New York banking
corporation, as Trustee, pursuant to which the Notes are being issued.

      "INITIAL SHELF REGISTRATION STATEMENT" has the meaning set forth in
Section 2(a) hereof.

      "ISSUE DATE" means the first date of original issuance of the Notes.

      "LIQUIDATED DAMAGES ACCRUAL PERIOD" has the meaning set forth in Section
2(e) hereof.

      "LIQUIDATED DAMAGES" has the meaning set forth in Section 2(e) hereof.

      "LIQUIDATED DAMAGES PAYMENT DATE" means each interest payment date under
the Indenture in the case of Notes, and each May 1 and November 1 in the case of
the Underlying Common Stock.

      "MAKE-WHOLE PREMIUM" has the meaning assigned to such term in the
Indenture.

      "MATERIAL EVENT" has the meaning set forth in Section 3(i) hereof.

                                       2
<PAGE>

      "NOTES" means the Series A 6.5% Senior Convertible Notes due 2014 and the
Series B 6.5% Senior Convertible Notes due 2014, of the Company, to be purchased
pursuant to the Purchase Agreement.

      "NOTICE AND QUESTIONNAIRE" means a written notice and questionnaire
delivered to the Company containing the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex A hereto.

      "NOTICE HOLDER" means, on any date, any Holder that has delivered a Notice
and Questionnaire to the Company on or prior to such date, so long as all of
their Registrable Securities that have been registered for resale pursuant to a
Notice and Questionnaire have not been sold in accordance with a Shelf
Registration Statement.

      "PURCHASE AGREEMENT" has the meaning set forth in the preamble hereof.

      "PROCEEDING" has the meaning set forth in Section 6(c) hereof.

      "PROSPECTUS" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 415 promulgated under the
Securities Act), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all materials incorporated
by reference or explicitly deemed to be incorporated by reference in such
Prospectus.

      "PURCHASER" and "PURCHASERS" have the meaning set forth in the preamble of
this Agreement.

      "RECORD HOLDER" means (i) with respect to any Liquidated Damages Payment
Date relating to any Notes as to which any such Liquidated Damages has accrued,
the holder of record of such Note on the record date with respect to the
interest payment date under the Indenture on which such Liquidated Damages
Payment Date shall occur and (ii) with respect to any Liquidated Damages Payment
Date relating to the Underlying Common Stock as to which any such Liquidated
Damages has accrued, the registered holder of such Underlying Common Stock 15
days prior to such Liquidated Damages Payment Date.

      "REGISTRABLE SECURITIES" means the Underlying Common Stock and any
securities into or for which such Underlying Common Stock has been converted,
and any security issued with respect thereto upon any stock dividend, split or
similar event until, in the case of any such security, the Effectiveness Period.

      "REGISTRATION EXPENSES" has the meaning set forth in Section 5 hereof.

      "RULE 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

      "RULE 144A" means Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.

                                       3
<PAGE>

      "SEC" means the Securities and Exchange Commission.

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

      "SHELF REGISTRATION STATEMENT" has the meaning set forth in Section 2(a)
hereof.

      "SUBSEQUENT SHELF REGISTRATION STATEMENT" has the meaning set forth in
Section 2(b) hereof.

      "SUSPENSION NOTICE" has the meaning set forth in Section 3(i) hereof.

      "SUSPENSION PERIOD" has the meaning set forth in Section 3(i) hereof.

      "TRUSTEE" means The Bank of New York, a New York banking corporation, the
Trustee under the Indenture.

      "UNDERLYING COMMON STOCK" means the Common Stock issued or issuable upon
conversion or repurchase of the Notes, including any Common Stock issued or
issuable in connection with a Make-Whole Premium (as defined in the Indenture)
to be paid in accordance with Article VIII of the Indenture.

      Section 2. Shelf Registration.

      (a) The Company shall prepare and file or cause to be prepared and filed
with the SEC, as soon as practicable but in any event by the date (the "FILING
DEADLINE DATE") that is 180 days after the Issue Date, a registration statement
for an offering to be made on a delayed or continuous basis pursuant to Rule 415
of the Securities Act (a "SHELF REGISTRATION STATEMENT") registering the resale
from time to time by Holders thereof of all of the Registrable Securities (the
"INITIAL SHELF REGISTRATION STATEMENT"). The Initial Shelf Registration
Statement shall be on Form S-3 or another appropriate form permitting
registration of such Registrable Securities for resale by such Holders in
accordance with the reasonable methods of distribution elected by the Holders,
reasonably approved by the Company, and set forth in the Initial Shelf
Registration Statement. The Company shall not permit any securities other than
the Registrable Securities to be included in any Shelf Registration Statement.
The Company shall use its reasonable best efforts to cause the Initial Shelf
Registration Statement to be declared effective under the Securities Act as
promptly as is practicable but in any event by the date (the "EFFECTIVENESS
DEADLINE DATE") that is 360 days after the Issue Date, and to keep the Initial
Shelf Registration Statement (or any Subsequent Shelf Registration Statement)
continuously effective under the Securities Act until the expiration of the
Effectiveness Period. At the time the Initial Shelf Registration Statement is
declared effective, each Holder that became a Notice Holder on or prior to the
date that is five Business Days prior to such time of effectiveness shall be
named as a selling securityholder in the Initial Shelf Registration Statement
and the related Prospectus in such a manner as to permit such Holder to deliver
such Prospectus to purchasers of Registrable Securities in accordance with
applicable law.

      (b) If the Initial Shelf Registration Statement or any Subsequent Shelf
Registration Statement ceases to be effective for any reason at any time during
the Effectiveness Period, the

                                       4
<PAGE>

Company shall use its reasonable best efforts to obtain the prompt withdrawal of
any order suspending the effectiveness thereof, and in any event shall within 10
days of such cessation of effectiveness amend the Shelf Registration Statement
in a manner reasonably expected to obtain the withdrawal of the order suspending
the effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a "SUBSEQUENT SHELF REGISTRATION STATEMENT"). If a
Subsequent Shelf Registration Statement is filed, the Company shall use its
reasonable best efforts to cause the Subsequent Shelf Registration Statement to
become effective as promptly as is practicable after such filing and to keep
such Shelf Registration Statement (or subsequent Shelf Registration Statement)
continuously effective until the end of the Effectiveness Period.

      (c) The Company shall supplement and amend the Shelf Registration
Statement if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement,
if required by the Securities Act or as reasonably requested by the Purchasers
or Trustee on behalf of the Holders covered by such Shelf Registration
Statement.

      (d) Each Holder agrees that if such Holder wishes to sell Registrable
Securities pursuant to a Shelf Registration Statement and related Prospectus, it
will do so only in accordance with this Section 2(d) and Section 3(i). Each
Holder wishing to sell Registrable Securities pursuant to a Shelf Registration
Statement and related Prospectus agrees to deliver a completed and executed
Notice and Questionnaire to the Company prior to any attempted or actual
distribution of Registrable Securities under the Shelf Registration Statement;
provided that (A) the Company shall send the Notice and Questionnaire to each
Holder as soon as practicable, but not later than 30 Business Days prior to the
Filing Deadline Date and (B) Holders shall have at least 20 Business Days from
the date on which the Notice and Questionnaire is first sent to such Holders by
the Company to complete and return the Notice and Questionnaire to the Company.
From and after the date the Initial Shelf Registration Statement is declared
effective, the Company shall, as promptly as practicable after the date a Notice
and Questionnaire is delivered, and in any event within the later of (x) five
Business Days after such date or (y) five Business Days after the expiration of
any Suspension Period (1) in effect when the Notice and Questionnaire is
delivered or (2) put into effect within five Business Days of such delivery
date, (i) if required by applicable law, file with the SEC a post-effective
amendment to the Shelf Registration Statement or, if required by applicable law,
prepare and file a supplement to the related Prospectus or a supplement or
amendment to any document incorporated therein by reference or file any other
required document so that the Holder delivering such Notice and Questionnaire is
named as a selling securityholder in the Shelf Registration Statement and the
related Prospectus in such a manner as to permit such Holder to deliver such
Prospectus to purchasers of the Registrable Securities in accordance with
applicable law and, if the Company shall file a post-effective amendment to the
Shelf Registration Statement, use its reasonable best efforts to cause such
post-effective amendment to be declared effective under the Securities Act as
promptly as is practicable, but in any event by the date (the "AMENDMENT
EFFECTIVENESS DEADLINE DATE") that is 45 days after the date such post-effective
amendment is required by this clause to be filed; (ii) provide such Holder a
reasonable number of copies of any documents filed pursuant to Section 2(d)(i);
and (iii) notify such Holder as promptly as practicable after the effectiveness
under the Securities Act of any post-effective amendment filed pursuant to
Section 2(d)(i); provided that if such Notice and Questionnaire is delivered
during a Suspension Period,

                                       5
<PAGE>

or a Suspension Period is put into effect within five Business Days after such
delivery date, the Company shall so inform the Holder delivering such Notice and
Questionnaire and shall take the actions set forth in clauses (i), (ii) and
(iii) above within ten Business Days after expiration of the Suspension Period
in accordance with Section 3(i). Notwithstanding anything contained herein to
the contrary, the Company shall be under no obligation to name any Holder that
is not a Notice Holder as a selling securityholder in any Shelf Registration
Statement or related Prospectus; provided, however, that any Holder that becomes
a Notice Holder pursuant to the provisions of this Section 2(d) (whether or not
such Holder was a Notice Holder at the time the Shelf Registration Statement was
declared effective) shall be named as a selling securityholder in the Shelf
Registration Statement or related Prospectus in accordance with the requirements
of this Section 2(d).

      (e) The parties hereto agree that the Holders of Registrable Securities
will suffer damages, and that it would not be feasible to ascertain the extent
of such damages with precision, if (i) the Initial Shelf Registration Statement
has not been filed on or prior to the Filing Deadline Date, (ii) the Initial
Shelf Registration Statement has not been declared effective under the
Securities Act on or prior to the Effectiveness Deadline Date or (iii) the
Initial Shelf Registration Statement is filed and declared effective but shall
thereafter cease to be effective (without being succeeded immediately by an
additional registration statement filed and declared effective) or usable for
the offer and sale of Registrable Securities for a period of time (including any
Suspension Period) which shall exceed 45 days in the aggregate in any
three-month period or 90 days in the aggregate in any 12-month period (each of
the events of a type described in any of the foregoing clauses (i) through (iii)
are individually referred to herein as an "EVENT," and the Filing Deadline Date
in the case of clause (i), the Effectiveness Deadline Date in the case of clause
(ii), the date on which the duration of the ineffectiveness or unusability of
the Initial Shelf Registration Statement in any period exceeds the number of
days permitted by clause (iii) hereof in the case of clause (iii), being
referred to herein as an "EVENT DATE"). Events shall be deemed to continue until
the following dates with respect to the respective types of Events: the date the
Initial Shelf Registration Statement is filed in the case of an Event of the
type described in clause (i), the date the Initial Shelf Registration Statement
is declared effective under the Securities Act in the case of an Event of the
type described in clause (ii), and the date the Initial Shelf Registration
Statement becomes effective or usable again in the case of an Event of the type
described in clause (iii).

      Accordingly, commencing on (and including) any Event Date and ending on
(but excluding) the next date on which there are no Events that have occurred
and are continuing (a "LIQUIDATED DAMAGES ACCRUAL PERIOD"), the Company and the
Guarantors severally agree to pay, as liquidated damages and not as a penalty,
("LIQUIDATED DAMAGES") at the rate described below, payable periodically on each
Liquidated Damages Payment Date to Record Holders of Notes that are Registrable
Securities and of shares of Underlying Common Stock issued upon conversion of
Notes that are Registrable Securities, as the case may be, to the extent of, for
each such Liquidated Damages Payment Date, accrued and unpaid Liquidated Damages
to (but excluding) such Liquidated Damages Payment Date (or, if the Liquidated
Damages Accrual Period shall have ended prior to such Liquidated Damages Payment
Date, to the date of the end of the Liquidated Damages Accrual Period); provided
that any Liquidated Damages accrued with respect to any Note or portion thereof
called for redemption on a redemption date or converted into Underlying Common
Stock on a conversion date prior to the Liquidated Damages Payment

                                       6
<PAGE>

Date, shall, in any such event, be paid instead to the Holder who submitted such
Note or portion thereof for redemption or conversion on the applicable
redemption date or conversion date, as the case may be, on such date (or
promptly following the conversion date, in the case of conversion). Liquidated
Damages shall accrue at a rate per annum equal to (1) 0.25% for the first 90-day
period from the Event Date and (2) 0.50% thereafter of (i) the aggregate
principal amount of such Notes or, without duplication, (ii) in the case of
Notes that have been converted into Underlying Common Stock, the Applicable
Conversion Price of such shares of Underlying Common Stock, as the case may be,
in each case determined as of the Business Day immediately preceding the next
Liquidated Damages Payment Date. Notwithstanding the foregoing, no Liquidated
Damages shall accrue as to any Registrable Security from and after the earlier
of (x) the date such security is no longer a Registrable Security and (y)
expiration of the Effectiveness Period. The rate of accrual of Liquidated
Damages with respect to any period shall not exceed the rate provided for in
this paragraph notwithstanding the occurrence of multiple concurrent Events.
Following the cure of all Events requiring the payment by the Company or any
Guarantor of Liquidated Damages to the Holders of Registrable Securities
pursuant to this Section, the accrual of Liquidated Damages shall cease (without
in any way limiting the effect of any subsequent Event requiring the payment of
Liquidated Damages by the Company or any Guarantor).

      The Trustee shall be entitled, on behalf of Holders of Notes, to seek any
available remedy for the enforcement of this Agreement, including for the
payment of any Liquidated Damages. Notwithstanding the foregoing, the parties
agree that the sole monetary damages payable for a violation of the terms of
this Agreement with respect to which liquidated damages are expressly provided
shall be such liquidated damages. Nothing shall preclude a Holder from pursuing
or obtaining a specific performance or equitable relief with respect to this
Agreement.

      All of the Company's and each Guarantor's obligations set forth in this
Section 2(e) that are outstanding with respect to any Registrable Security at
the time such security ceases to be a Registrable Security shall survive until
such time as all such obligations with respect to such security have been
satisfied in full (notwithstanding termination of this Agreement pursuant to
Section 8(k)).

      The parties hereto agree that the liquidated damages provided for in this
Section 2(e) constitutes a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of the
Shelf Registration Statement to be filed or declared effective or available for
effecting resales of Registrable Securities in accordance with the provisions
hereof.

      Section 3. Registration Procedures. In connection with the registration
obligations of the Company under Section 2 hereof, the Company shall:

      (a) Prepare and file with the SEC a Shelf Registration Statement or Shelf
Registration Statements on Form S-3 or any other appropriate form under the
Securities Act available for the sale of the Registrable Securities by the
Holders thereof in accordance with the intended method or methods of
distribution thereof, and use its reasonable best efforts to cause each such
Shelf Registration Statement to become effective and remain effective as
provided herein; provided that before filing any Shelf Registration Statement or
Prospectus or any amendments or

                                       7
<PAGE>

supplements thereto with the SEC, the Company shall furnish to the Holders and
counsel for the Holders copies of all such documents proposed to be filed which
documents (other than a prospectus supplement filed solely to update the selling
stockholder information in the Prospectus) will be subject to the review of such
counsel for a period of no less than ten Business Days prior to the initial
filing of the Shelf Registration Statement or any post-effective amendment
thereto or no less than three Business Days prior to the filing of a
pre-effective amendment to the Shelf Registration Statement, and the Company
will not file the Shelf Registration Statement or Prospectus or any amendment or
supplement thereto (other than documents incorporated by reference) to which
such counsel shall reasonably object within three Business Days after the
receipt thereof.

      (b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration Statement as may be necessary to keep such
Shelf Registration Statement continuously effective until the expiration of the
Effectiveness Period; cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provisions then in force) under the Securities Act; and
use its reasonable best efforts to comply with the provisions of the Securities
Act applicable to it with respect to the disposition of all securities covered
by such Shelf Registration Statement during the Effectiveness Period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such Shelf Registration Statement as so amended or such Prospectus as
so supplemented.

      (c) As promptly as practicable give notice to the Notice Holders, the
Purchasers and counsel to the Holders (i) when any Prospectus, Prospectus
supplement, Shelf Registration Statement or post-effective amendment to a Shelf
Registration Statement has been filed with the SEC and, with respect to a Shelf
Registration Statement or any post-effective amendment, when the same has been
declared effective, (ii) of any request, following the effectiveness of the
Initial Shelf Registration Statement under the Securities Act, by the SEC or any
other federal or state governmental authority for amendments or supplements to
any Shelf Registration Statement or related Prospectus or for additional
information, (iii) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of any
Shelf Registration Statement or the initiation or threatening of any proceedings
for that purpose, (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification
of any of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose, (v) after the
effective date of any Shelf Registration Statement filed pursuant to this
Agreement of the occurrence of (but not the nature of or details concerning) a
Material Event and (vi) of the determination by the Company that a
post-effective amendment to a Shelf Registration Statement will be filed with
the SEC, which notice may, at the discretion of the Company (or as required
pursuant to Section 3(i)), state that it constitutes a Suspension Notice, in
which event the provisions of Section 3(i) shall apply.

      (d) Use its reasonable best efforts to prevent the issuance of, and, if
issued, to obtain the withdrawal of any order suspending the effectiveness of a
Shelf Registration Statement or the lifting of any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction in which they have been qualified for
sale, in

                                       8
<PAGE>

either case at the earliest possible moment, and provide prompt notice to each
Notice Holder and the Purchasers of the withdrawal of any such order.

      (e) If requested by the Purchasers or any Notice Holder, as promptly as
practicable incorporate in a Prospectus supplement or post-effective amendment
to a Shelf Registration Statement such information as the Purchasers or such
Notice Holder shall, on advice from counsel, determine to be required to be
included therein by applicable law and make any required filings of such
Prospectus supplement or such post-effective amendment; provided that the
Company shall not be required to take any actions under this Section 3(e) that,
on advice from counsel for the Company, the Company determines would not be in
compliance with applicable law.

      (f) As promptly as practicable furnish to each Notice Holder, counsel for
the Holders and for the Purchasers, without charge, at least one conformed copy
of the Shelf Registration Statement and any amendment thereto, including
financial statements but excluding schedules, all documents incorporated or
deemed to be incorporated therein by reference and all exhibits, which
obligation shall be deemed satisfied if such information is available through
EDGAR or on or through the Company's website.

      (g) During the Effectiveness Period, deliver to each Notice Holder, the
Purchasers and counsel for the Holders, in connection with any sale of
Registrable Securities pursuant to a Shelf Registration Statement, without
charge, as many copies of the Prospectus or Prospectuses relating to such
Registrable Securities (including each preliminary prospectus) and any amendment
or supplement thereto as such Notice Holder and the Purchasers may reasonably
request; and the Company hereby consents (except during such periods that a
Suspension Notice is outstanding and has not been revoked) to the use of such
Prospectus or each amendment or supplement thereto by each Notice Holder, in
connection with any offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto in the manner set forth
therein.

      (h) Prior to any public offering of the Registrable Securities pursuant to
the Shelf Registration Statement, use its reasonable best efforts to register or
qualify or cooperate with the Notice Holders in connection with the registration
or qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Notice Holder reasonably
requests in writing (which request may be included in the Notice and
Questionnaire); and prior to any public offering of the Registrable Securities
pursuant to the Shelf Registration Statement, use its reasonable best efforts to
keep each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period in connection with such Notice Holder's offer
and sale of Registrable Securities pursuant to such registration or
qualification (or exemption therefrom) and do any and all other acts or things
reasonably necessary or advisable to enable the disposition in such
jurisdictions of such Registrable Securities in the manner set forth in the
relevant Shelf Registration Statement and the related Prospectus; provided that
the Company will not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it would not otherwise be
required to qualify but for this Agreement or (ii) take any action that would
subject it to general service of process in suits or to taxation in any such
jurisdiction where it is not then so subject.

                                       9
<PAGE>

      (i) Upon (A) the issuance by the SEC of a stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of
proceedings with respect to the Shelf Registration Statement under Section 8(d)
or 8(e) of the Securities Act, (B) the occurrence of any event or the existence
of any fact as a result of which any Shelf Registration Statement shall contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any Prospectus shall contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or (C) the occurrence or existence of any pending
corporate development (a "MATERIAL EVENT") that, in the reasonable discretion of
the Company, makes it appropriate to suspend the availability of the Shelf
Registration Statement and the related Prospectus, (i) in the case of clause (B)
or (C) above, subject to the next sentence, as promptly as practicable, prepare
and file, if necessary pursuant to applicable law, a post-effective amendment to
such Shelf Registration Statement or a supplement to the related Prospectus or
any document incorporated therein by reference or file any other required
document that would be incorporated by reference into such Shelf Registration
Statement and Prospectus so that such Shelf Registration Statement does not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and such Prospectus does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that the Company may rely on
information provided by each Notice Holder with respect to such Notice Holder),
as thereafter delivered to the purchasers of the Registrable Securities being
sold thereunder, and, in the case of a post-effective amendment to a Shelf
Registration Statement, subject to the next sentence, use its reasonable best
efforts to cause it to be declared effective as promptly as is practicable, and
(ii) give notice to the Notice Holders and counsel for the Holders and for the
Purchasers (or, if applicable, separate counsel for the Holders) that the
availability of the Shelf Registration Statement is suspended (a "SUSPENSION
NOTICE") and, upon receipt of any Suspension Notice, each Notice Holder agrees
not to sell any Registrable Securities pursuant to such Shelf Registration
Statement until such Notice Holder's receipt of copies of the supplemented or
amended Prospectus provided for in clause (g) above, or until it is advised in
writing by the Company that the Prospectus may be used, and has received copies
of any additional or supplemental filings that are incorporated or deemed
incorporated by reference in such Prospectus. The Company will use its
reasonable best efforts to ensure that the use of the Prospectus may be resumed
(x) in the case of clause (A) above, as promptly as is practicable, (y) in the
case of clause (B) above, as soon as, in the reasonable judgment of the Company,
the Shelf Registration Statement does not contain any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading and the Prospectus
does not contain any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and (z) in the
case of clause (C) above, as soon as, in the reasonable discretion of the
Company, such suspension is no longer appropriate. The period during which the
availability of the Shelf Registration Statement and any Prospectus may be
suspended (the "SUSPENSION PERIOD") without the Company incurring any obligation
to pay liquidated damages pursuant to Section 2(e) shall not exceed 30 days in
any three-month period and 90 days in any 12-month period; provided, however,
that if the use

                                       10
<PAGE>

of the Shelf Registration Statement or any Prospectus is suspended by the
Company pursuant to clause (C) above and the subject Material Event relates to a
previously undisclosed proposed or pending material business transaction, the
disclosure of which would impede the Company's ability to consummate such
transaction or cause the Company to violate any non-disclosure agreement or
confidentiality agreement in any contract relating to such transaction, the
Company may extend a Suspension Period from 30 days to 45 days.

      (j) Make available for inspection during normal business hours by
representatives for the Notice Holders of such Registrable Securities, and any
investment banks, attorneys and accountants retained by such Notice Holders, all
relevant financial and other records and pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the appropriate
officers, directors and employees of the Company and its subsidiaries to make
available for inspection during normal business hours all relevant information
reasonably requested by such representatives for the Notice Holders, or any such
investment banks, attorneys or accountants in connection with such disposition,
in each case as is customary for similar "due diligence" examinations; provided,
however, that such persons shall, at the Company's request, first agree in
writing with the Company that any information that is reasonably and in good
faith designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such persons and
shall be used solely for the purposes of exercising rights under this Agreement,
unless (i) disclosure of such information is required by court or administrative
order or is necessary to respond to inquiries of regulatory authorities, (ii)
disclosure of such information is required by law (including any disclosure
requirements pursuant to federal securities laws in connection with the filing
of any Shelf Registration Statement or the use of any Prospectus referred to in
this Agreement), (iii) such information becomes generally available to the
public other than as a result of a disclosure or failure to safeguard by any
such person or (iv) such information becomes available to any such person from a
source other than the Company and such source is not bound by a confidentiality
agreement or is not otherwise under a duty of trust to the Company, and provided
that the foregoing inspection and information gathering shall, to the greatest
extent possible, be coordinated on behalf of all the Notice Holders.

      (k) Cooperate with each Notice Holder to facilitate the timely preparation
and delivery of certificates representing Registrable Securities sold pursuant
to a Shelf Registration Statement, which certificates shall not bear any
restrictive legends, and cause such Registrable Securities to be registered in
such names as such Notice Holder may request in writing at least three Business
Days prior to any sale of such Registrable Securities.

      (l) Provide the Trustee and the transfer agent for the Common Stock with
certificates for the Registrable Securities that are in a form eligible for
deposit with The Depository Trust Company.

      (m) Comply with all applicable rules and regulations of the SEC and make
generally available to its securityholders earning statements (which need not be
audited) satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 days after the end of any 12-month period (or 90 days after the
end of any 12-month period if such period is a fiscal year) commencing on

                                       11
<PAGE>

the first day of the first fiscal quarter of the Company commencing after the
effective date of a Registration Statement, which statements shall cover said
12-month periods.

      (n) Upon (i) the filing of the Initial Registration Statement and (ii) the
effectiveness of the Initial Registration Statement, announce the same, in each
case by press release to a nationally recognized wire service.

      (o) Provide a CUSIP number for all Registrable Securities covered by each
Registration Statement not later than the effective date of such Registration
Statement and provide the Trustee and the transfer agent for the Common Stock
with printed certificates for the Registrable Securities that are in a form
eligible for deposit with The Depository Trust Company.

      (p) Cause all shares of Common Stock issuable upon conversion of the
Securities to be reserved for listing on each securities exchange or quotation
system on which the Common Stock is then listed no later than the date the
applicable Shelf Registration Statement is declared effective and, shall cause
all Common Stock to be so listed when issued.

      (q) Use its reasonable best efforts to take all other steps necessary to
effect the registration of the Registrable Securities covered by the Shelf
Registration Statement contemplated hereby.

      (r) Enter into such customary agreements and take all such other necessary
actions in connection therewith (including those requested by the holders of a
majority of the Registrable Securities being sold) in order to expedite or
facilitate the disposition of such Registrable Securities.

      (s) If the Registrable Securities are in certificated form, cooperate with
the Holders to facilitate the timely preparation and delivery of certificates
representing the Registrable Securities sold pursuant to any Shelf Registration
Statement free of any restrictive legends and, with respect to any Notes, in
such denominations permitted by the Indenture and registered in such names as
Holders may request at least two Business days prior to settlement of sales of
Registrable Securities pursuant to such Shelf Registration Statement.

      (t) Subject to the exceptions contained in clauses (i) and (ii) of Section
3(h) above, use its reasonable best efforts to cause the Registrable Securities
covered by the applicable Shelf Registration Statement to be registered with or
approved by such other federal, state and local governmental agencies or
authorities, and self-regulatory organizations in the United States as may be
necessary to enable the Holders to consummate the disposition of such
Registrable Securities as contemplated by the Shelf Registration Statement.

      Section 4. Holder's Obligations. Each Holder agrees, by acquisition of the
Registrable Securities, that no Holder shall be entitled to sell any of such
Registrable Securities pursuant to a Shelf Registration Statement or to receive
a Prospectus relating thereto, unless such Holder has furnished the Company with
a Notice and Questionnaire as required pursuant to Section 2(d) hereof
(including the information required to be included in such Notice and
Questionnaire) and the information set forth in the next sentence. Each Notice
Holder agrees promptly to furnish to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by such Notice Holder not misleading and any

                                       12
<PAGE>

other information regarding such Notice Holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably request.
Any sale of any Registrable Securities by any Holder shall constitute a
representation and warranty by such Holder that the information relating to such
Holder and its plan of distribution is as set forth in the Prospectus delivered
by such Holder in connection with such disposition, that such Prospectus does
not as of the time of such sale contain any untrue statement of a material fact
relating to or provided by such Holder or its plan of distribution and that such
Prospectus does not as of the time of such sale omit to state any material fact
relating to or provided by such Holder or its plan of distribution necessary in
order to make the statements in such Prospectus, in the light of the
circumstances under which they were made, not misleading.

      Section 5. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance by the Company of its
obligations under Section 2 and 3 of this Agreement whether or not any of the
Shelf Registration Statements are declared effective. Such fees and expenses
("REGISTRATION EXPENSES") shall include, without limitation, (i) all
registration and filing fees (including, without limitation, fees and expenses
(x) with respect to filings required to be made with the New York Stock
Exchange, and (y) of compliance with federal and state securities or Blue Sky
laws, (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities in a form eligible for deposit
with The Depository Trust Company), (iii) duplication and mailing expenses
relating to copies of any Shelf Registration Statement or Prospectus delivered
to any Holders hereunder, (iv) fees and disbursements of counsel for the Company
and the fees and disbursements of one counsel chosen by the Holders of a
majority of the then outstanding Underlying Common Stock constituting
Registrable Securities (with Holders of Notes deemed to be the Holders, for
purposes of this Section, of the number of outstanding shares of Underlying
Common Stock into which such Notes are or would be convertible, not including,
for this purpose only, any shares of Common Stock payable as a Make-Whole
Premium (as defined in the Indenture) upon conversion of any Note) in connection
with the Shelf Registration Statement, and (v) fees and disbursements of the
Trustee and its counsel and of the registrar and transfer agent for the Common
Stock. In addition, the Company shall pay the internal expenses of the Company
(including, without limitation, all salaries and expenses of officers and
employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing by the
Company of the Registrable Securities on any securities exchange on which
similar securities of the Company are then listed and the fees and expenses of
any person, including special experts, retained by the Company.

      Section 6. Indemnification; Contribution.

      (a) The Company and the Guarantors severally agree to indemnify and hold
harmless each Holder and its directors, officers, employees, members,
representatives and agents and each person, if any, who controls any Holder
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act (each, a "HOLDER INDEMNIFIED PARTY"), from and against (i) any
loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which such Holder Indemnified Party may incur under the
Securities Act, the Exchange Act or otherwise, as incurred, insofar as such
loss, damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Shelf Registration Statement or Prospectus or in any amendment or supplement
thereto or in any

                                       13
<PAGE>

preliminary prospectus, or arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated in any Shelf
Registration Statement or in any amendment or supplement thereto or necessary to
make the statements therein not misleading, or arises out of or is based upon
any omission or alleged omission to state a material fact necessary in order to
make the statements made in any Prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, in the light of the circumstances
under which they were made, not misleading, except insofar as any such loss,
damage, expense, liability or claim arises out of or is based upon any untrue
statement or omission or alleged untrue statement or omission of a material fact
contained in, or omitted from, and in conformity with information required to be
included in any Shelf Registration Statement or the related Prospectus pursuant
the Securities Act furnished in writing by or on behalf of any Holder to the
Company, (ii) any and all loss, liability, claim, damage and expense whatsoever,
as incurred, to the extent of the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission;
provided that any such settlement is effected with the written consent of the
Company; and (iii) any and all expense whatsoever, as incurred (including the
fees and disbursements of counsel chosen by any indemnified party), reasonably
incurred in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under subparagraph (i) or (ii) above; provided,
however, that as to any preliminary prospectus, this indemnity agreement shall
not inure to the benefit of any Holder Indemnified Party on account of any loss,
claim, damage, liability or action arising from the sale of the Registrable
Securities sold pursuant to the Shelf Registration Statement to any person by
such Holder Indemnified Party if (i) that Holder Indemnified Party failed to
send or give a copy of the Prospectus, as the same may be amended or
supplemented, to that person within the time required by the Securities Act
(other than as a result of a failure by the Company to timely deliver copies of
the Prospectus to such Holder Indemnified Party) and (ii) the untrue statement
or alleged untrue statement of a material fact or omission or alleged omission
to state a material fact in such preliminary prospectus was corrected in the
Prospectus or a supplement or amendment thereto, as the case may be. This
indemnity agreement will be in addition to any liability that the Company or any
Guarantor may otherwise have.

      (b) Each Holder, severally and not jointly, agrees to indemnify, defend
and hold harmless the Company and the Guarantors, and their directors, officers,
employees, members, representatives and agents and each person, if any, who
controls the Company or any Guarantor within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act (each, a "COMPANY
INDEMNIFIED PARTY") from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which such Company
Indemnified Party may incur under the Securities Act, the Exchange Act or
otherwise, insofar as such loss, damage, expense, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in information furnished in writing by or on behalf of
such Holder to the Company required to be included in any Shelf Registration
Statement or the related Prospectus pursuant the Securities Act, or arises out
of or is based upon any omission or alleged omission to state a material fact
required to be stated in any Shelf Registration Statement or in any amendment or
supplement thereto or necessary to make the statements therein not

                                       14
<PAGE>

misleading, or arises out of or is based upon any omission or alleged omission
to state a material fact necessary in order to make the statements in any
Prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, in the light of the circumstances under which they were made, not
misleading, in connection with such information; provided, however, that no such
Holder shall be liable for any claims hereunder in excess of the amount of net
proceeds received by such Holder from the sale of Registrable Securities
pursuant to such Shelf Registration Statement.

      (c) If any action, suit or proceeding (each, a "PROCEEDING") is brought
against any person in respect of which indemnity may be sought pursuant to
either subsection (a) or (b) of this Section 6, such person (the "INDEMNIFIED
PARTY") shall promptly notify the person against whom such indemnity may be
sought (the "INDEMNIFYING PARTY") in writing of the institution of such
Proceeding and the Indemnifying Party shall assume the defense of such
Proceeding with counsel reasonably satisfactory to the Indemnified Party and
shall pay the fees and expenses of such counsel; provided, however, that failure
to so notify the Indemnifying Party shall not relieve such Indemnifying Party
from any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may otherwise have than on account of this indemnity agreement. Such Indemnified
Party shall have the right to employ its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party unless (i) the
Indemnified Party is a Holder of Notes representing not less than 33% of the
aggregate principal amount of the then outstanding Notes, (ii) the Indemnifying
Party and the Indemnified Party shall have mutually agreed to the contrary,
(iii) the Indemnifying Party has failed within a reasonable time after receipt
of notice to assume defense of a Proceeding to retain counsel reasonably
satisfactory to the Indemnified Party or (iv) the named parties in any such
Proceeding (including any impleaded parties) include both the Indemnifying Party
and the Indemnified Party, the Indemnifying Party proposes to have the same
counsel represent it and the Indemnified Party, and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying Party
may, in connection with any Proceeding or related Proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Parties in accordance
with the foregoing sentence, and that all such fees and expenses actually
incurred shall be promptly reimbursed as incurred upon delivery to the
Indemnifying Party of reasonable documentation therefor setting forth such
expenses in reasonable detail. The Indemnifying Party shall not be liable for
any settlement of any Proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
Indemnifying Party agrees to indemnify and hold harmless any Indemnified Party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an Indemnified Party
shall have requested the Indemnifying Party to reimburse the Indemnified Party
as contemplated by this paragraph, the Indemnifying Party agrees that it shall
be liable for any settlement of any Proceeding effected without its consent if
(i) such settlement is entered into more than 60 Business Days after receipt by
the Indemnifying Party of the aforesaid request, (ii) such indemnifying party
shall not have reimbursed the Indemnified Party in accordance with such request
prior to the date of such settlement and (iii) such Indemnified Party shall have
given such Indemnifying Party at least 30 days' prior notice of its intention to
settle. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or threatened Proceeding
in respect of which any Indemnified Party is a party,

                                       15
<PAGE>

unless such settlement includes an unconditional release of such Indemnified
Party from all liability on claims that are the subject matter of such
Proceeding and without admission of fault by the Indemnified Party.

      (d) If the indemnification provided for in this Section 6 is unavailable
to an Indemnified Party under subsections (a) and (b) of this Section 6 in
respect of any losses, damages, expenses, liabilities or claims referred to
therein, then each applicable Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, damages, expenses, liabilities or
claims, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Holders on the
other hand from the offering of the Registrable Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Holders on the other in connection with the statements
or omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. Notwithstanding
the provisions of this Section 6, neither any of the Purchasers nor any Holder
shall be required to indemnify or contribute any amount in excess of the amount
by which the total price at which the Registrable Securities sold by such Holder
or Purchaser, as the case may be, exceeds the amount of any damages that such
Holder or Purchaser has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. The relative fault
of the Company on the one hand and of the Holders on the other shall be
determined by reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission
relates to information supplied by the Company or by the Holders and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, damages, expenses, liabilities and claims
referred to above shall be deemed to include any reasonable legal or other fees
or expenses reasonably incurred by such party in connection with investigating
or defending any Proceeding.

      (e) The Company, the Guarantors and the Holders agree that it would not be
just and equitable if contribution pursuant to this Section 6 were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in subsection (d) above. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Holders' respective
obligations to contribute pursuant to this Section 6 are several in proportion
to the respective amount of Registrable Securities they have sold pursuant to a
Shelf Registration Statement, and not joint. The remedies provided for in this
Section 6 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.

      (f) The indemnity and contribution provisions contained in this Section 6
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder or any person controlling any Holder, or the Company or Guarantors,
or the Company's or any Guarantor's officers or directors or any

                                       16
<PAGE>

person controlling the Company or any Guarantor and (iii) the sale of any
Registrable Security by any Holder.

      (g) Section 6 of this Agreement may not be amended except by an instrument
in writing signed by the Indemnified Party affected hereto.

      Section 7. Information Requirements.

      (a) The Company covenants that, if at any time before the end of the
Effectiveness Period it is not subject to the reporting requirements of the
Exchange Act, it will cooperate with any Holder and take such further action as
any Holder may reasonably request in writing, all to the extent required from
time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144, Rule 144A, Regulation S and Regulation D under the
Securities Act and customarily taken in connection with sales pursuant to such
exemptions. Upon the written request of any Holder, the Company shall deliver to
such Holder a written statement as to whether it has complied with such filing
requirements, unless such a statement has been included in the Company's most
recent report filed with the SEC pursuant to Section 13 or Section 15(d) of
Exchange Act. Notwithstanding the foregoing, nothing in this Section 7 shall be
deemed to require the Company to register any of its securities (other than the
Common Stock) under any section of the Exchange Act.

      (b) The Company shall file the reports required to be filed by it under
the Exchange Act and shall comply with all other requirements set forth in the
instructions to Form S-1 or Form S-3, as the case may be, in order to allow the
Company to be eligible to file registration statements on Form S-1 or Form S-3.

      Section 8. Miscellaneous.

      (a) No Contrary Agreements. The Company is not, as of the date hereof, a
party to, nor shall it, on or after the date of this Agreement, enter into, any
agreement with respect to its securities that violates the rights granted to the
Holders of Registrable Securities in this Agreement. The Company represents and
warrants that the rights granted to the Holders of Registrable Securities
hereunder do not in any way violate the rights granted to the holders of such
Company's securities under any other agreements. Notwithstanding the foregoing,
the Holders acknowledge that the Company is obligated, and may obligate itself
from time to time in the future, to register its securities for other holders.

      (b) Amendments and Waivers. Except as otherwise provided in Section 6(g),
the provisions of this Agreement, including the provisions of this sentence, may
not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, unless the Company has obtained the
written consent of Holders of a majority of the then outstanding Underlying
Common Stock constituting Registrable Securities (with Holders of Notes deemed
to be the Holders, for purposes of this Section, of the number of outstanding
shares of Underlying Common Stock into which such Notes are or would be
convertible as of the date on which such consent is requested excluding, for
this purpose only, any shares of Common Stock payable as a Make-Whole Premium
(as defined in the Indenture)

                                       17
<PAGE>

upon conversion of any Note). Notwithstanding the foregoing, a waiver or consent
to depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders of Registrable Securities whose securities
are being sold pursuant to a Shelf Registration Statement and that does not
directly or indirectly affect the rights of other Holders of Registrable
Securities may be given by Holders of at least a majority of the Registrable
Securities being sold by such Holders pursuant to such Shelf Registration
Statement; provided that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence. Each Holder at the time of any such amendment,
modification, supplement, waiver or consent or thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant to
this Section 8(b), whether or not any notice, writing or marking indicating such
amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.

      (c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier, by
courier guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one Business Day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:

            (i) if to a Holder, at the most current address given by such Holder
      to the Company in the Purchase Agreement or upon any transfer of the
      Notes;

                with a copy (for informational purposes only) to:

                Schulte Roth & Zabel LLP
                919 Third Avenue
                New York, New York 10022
                Telephone: (212) 756-2000
                Facsimile: (212) 593-5955
                Attention: Eleazer N. Klein, Esq.

                and

                Sidley Austin Brown & Wood LLP
                787 Seventh Avenue
                New York, New York 10019
                Telephone: (212) 839.5360
                Facsimile: (212) 839.5599
                Attention: Robert Mandell, Esq.

           (ii) if to the Company, to:

                1800 West Loop South, Suite 500
                Houston, Texas 77027
                Attention: Herbert R. Allen, Chief Executive Officer

                                       18
<PAGE>

                with a copy (for informational purposes only) to:

                Andrews Kurth LLP
                600 Travis, Suite 4200
                Houston, Texas 77002
                Attention: G. Michael O'Leary

or to such other address as such person may have furnished to the other persons
identified in this Section 8(c) in writing in accordance herewith.

      (d) Approval of Holders. Whenever the consent or approval of Holders is
required hereunder, Notes held by the Company or its affiliates (as such term is
defined in Rule 405 under the Securities Act) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.

      (e) Successors and Assigns. Any person who purchases any Notes or
Registrable Securities from the Purchasers or any Holder shall be deemed, for
purposes of this Agreement, to be an assignee of the Purchasers or such Holder,
as the case may be. This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties and shall inure to the
benefit of and be binding upon each Holder. Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
by this Agreement.

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

      (g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

      (h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. To the fullest extent
permitted by applicable law, the Company and the Guarantors hereby irrevocably
submit to the non-exclusive jurisdiction of any New York State court or Federal
court sitting in the County of New York in respect of any suit, action or
proceeding arising out of or relating to the provisions of this Agreement and
irrevocably agree that all claims in respect of any such suit, action or
proceeding may be heard and determined in any such court. The parties hereto
hereby waive, to the fullest extent permitted by applicable law, any objection
that they may now or hereafter have to the laying of venue of any such suit,
action or proceeding brought in any such court, and any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN

                                       19
<PAGE>

CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY.

      (i) Severability. If any term, provision, covenant or restriction of this
Agreement is held to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated thereby.

      (j) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and is intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and the registration rights granted by the
Company with respect to the Registrable Securities. Except as provided in the
Purchase Agreement, there are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein, with respect to
the registration rights granted by the Company with respect to the Registrable
Securities. This Agreement supersedes all prior agreements and undertakings
among the parties with respect to such registration rights.

      (k) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Section 4, 5 or 6 hereof and the
obligations to make payments of and provide for liquidated damages under Section
2(e) hereof to the extent such liquidated damages accrues prior to the end of
the Effectiveness Period, each of which shall remain in effect in accordance
with its terms.

                            (SIGNATURE PAGES FOLLOW)

                                       20
<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.

                                    COMPANY:

                                    INTEGRATED ELECTRICAL SERVICES, INC.

                                    By: /s/ Herbert R. Allen
                                        -----------------------
                                    Name: Herbert R. Allen
                                    Title: Chief Executive Officer

               [SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

<PAGE>

                                    GUARANTORS:

                                    EACH OF THE GUARANTORS NAMED ON
                                    SCHEDULE II HERETO

                                    By: /s/ Herbert R. Allen
                                        -------------------------------

                                    Name: Herbert R. Allen

                                    Acting in his capacity as (i) the Chief
                                    Executive Officer of the Guarantors listed
                                    in Part I of Schedule II and (ii) Sole
                                    Manager and Chief Executive Officer of the
                                    general partner of each of the Guarantors
                                    listed in Part II of Schedule II (such
                                    general partners acting on behalf of such
                                    Guarantors).

                                    By: /s/ Victor Duva
                                        -------------------------

                                    Name: Victor Duva

                                    Acting in his capacity as the President of
                                    the Guarantors listed in Part III of
                                    Schedule II.

                                    By: /s/ John Seli
                                        -------------------------

                                    Name: John Seli

                                    Acting in his capacity as the Manager of the
                                    Guarantors listed in Part IV of Schedule II.

               [SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

<PAGE>

                                    PURCHASERS:

                                    AMULET LIMITED

                                    By: Amaranth Advisors L.L.C., its Trading
                                        Advisor

                                    By: /s/ Karl Wachter
                                        ----------------------------
                                    Name: Karl J. Wachter
                                    Title: Authorized Signatory

               [SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

<PAGE>

                                    PURCHASERS:

                                    MARATHON GLOBAL CONVERTIBLE MASTER FUND,
                                    LTD.

                                    By: /s/ A. Rabinowitz
                                        -----------------------------
                                    Name: Andrew H. Rabinowitz
                                    Title: Chief Financial Officer

               [SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

<PAGE>

                                     ANNEX A

                      INTEGRATED ELECTRICAL SERVICES, INC.

             FORM OF SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

To be named as a selling securityholder in the prospectus, beneficial owners
shall complete and deliver this Notice and Questionnaire within 20 business days
after the date of the written request therefore by Integrated Electrical
Services, Inc. (the "COMPANY" or "REGISTRANT"). Beneficial owners that do not
complete this Notice and Questionnaire and deliver it to the Company within such
20 business day period will not be eligible to he named as selling
securityholders in the prospectus and therefore will not be permitted to sell
any Registrable Securities (as defined below) pursuant to the Shelf Registration
Statement (as defined below).

The undersigned beneficial owner of Series A 6.5% Senior Convertible Notes due
2014 (the "NOTES") of the Company or common stock of the Company, $0.01 par
value (the "common stock" or the "REGISTRABLE SECURITIES"), understands that the
Registrant has filed or intends to file with the Securities and Exchange
Commission a registration statement on Form S-1 or Form S-3 (the "SHELF
REGISTRATION STATEMENT") for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended (the "SECURITIES ACT"), of the Registrable
Securities, in accordance with the terms of the Registration Rights Agreement,
dated as of November 24, 2004 (the "REGISTRATION RIGHTS AGREEMENT"), between the
Company, the Guarantors (as defined therein) and the purchasers named therein. A
copy of the Registration Rights Agreement is available from the Company upon
request at the address set forth below. All capitalized terms not otherwise
defined herein shall have the meaning ascribed thereto in the Registration
Rights Agreement.

Each beneficial owner of Registrable Securities is entitled to the benefits of
the Registration Rights Agreement. In order to sell or otherwise dispose of any
Registrable Securities pursuant to the Shelf Registration Statement, a
beneficial owner of Registrable Securities generally will be required to be
named as a selling securityholder in the related prospectus, deliver a
prospectus to purchasers of Registrable Securities and be bound by those
provisions of the Registration Rights Agreement applicable to such beneficial
owner (including certain indemnification provisions, as described below).
Beneficial owners that do not complete this Notice and Questionnaire and deliver
it to the Company within the 20 business day period described in the first
paragraph of this Notice and Questionnaire will not be named as selling
securityholders in the prospectus and therefore will not be permitted to sell
any Registrable Securities pursuant to the Shelf Registration Statement.
Beneficial owners are encouraged to complete and timely deliver this Notice and
Questionnaire so that such beneficial owners may be named as selling
securityholders in the related prospectus at the time of effectiveness. Upon
receipt of a completed (if timely delivered) Notice and Questionnaire from a
beneficial owner following the effectiveness of the Shelf Registration
Statement, the Company will, as promptly as practicable but in any event within
five business days of such receipt, file such amendments to the Shelf
Registration Statement or supplements to the related prospectus as are necessary
to permit such holder to deliver such prospectus to purchasers of Registrable
Securities. The Company has agreed to pay liquidated damages pursuant to the
Registration Rights Agreement under certain circumstances as set forth therein.

                                      A-1
<PAGE>

Certain legal consequences arise from being named as a selling securityholder in
the Shelf Registration Statement and the related prospectus. Accordingly,
holders and beneficial owners of Registrable Securities are advised to consult
their own securities law counsel regarding the consequences of being named or
not being named as a selling securityholder in the Shelf Registration Statement
and the related prospectus.

                                     NOTICE

The undersigned beneficial owner (the "SELLING SECURITYHOLDER") of Registrable
Securities hereby gives notice to the Company of its intention to sell or
otherwise dispose of Registrable Securities beneficially owned by it and listed
below in Item 3 (unless otherwise specified under such Item 3) pursuant to the
Shelf Registration Statement. The undersigned, by signing and returning this
Notice and Questionnaire, understands that it will be bound by the terms and
conditions of this Notice and Questionnaire and the Registration Rights
Agreement.

Pursuant to the Registration Rights Agreement, the undersigned has agreed to
indemnify and hold harmless the Company's directors and officers and each
person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), from and against certain losses arising in
connection with statements concerning the undersigned made in the Shelf
Registration Statement or the related prospectus in reliance upon the
information provided in this Notice and Questionnaire.

If the Selling Securityholder transfers all or any portion of the Registrable
Securities listed in Item 3 below after the date on which such information is
provided to the Company, the Selling Securityholder agrees to notify the
transferee(s) at the time of the transfer of its rights and obligations under
this Notice and Questionnaire and the Registration Rights Agreement.

The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate and complete:

                                  QUESTIONNAIRE

1.    (a)   Full Legal Name of Selling Securityholder:

            ____________________________________________________________________

      (b)   Full Legal Name of Registered Holder (if not the same as (a) above)
            through which Registrable Securities Listed in Item 3 below are
            held:

            ____________________________________________________________________

      (c)   Full Legal Name of DTC participant (if applicable and if not the
            same as (b) above) through which Registrable Securities listed in
            Item 3 below are held:

            ____________________________________________________________________

                                      A-2
<PAGE>

2.    Address for Notices to Selling Securityholder:

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

Telephone:
          ______________________________________________________________________

Fax:____________________________________________________________________________

Contact Person:

3.    Beneficial Ownership of Registrable Securities:

      (a)   Type and Principal Amount or Number of Shares of Registrable
      Securities beneficially owned:

            ____________________________________________________________________

            ____________________________________________________________________

      (b)   CUSIP No(s). of such Registrable Securities beneficially owned:

            ____________________________________________________________________

            ____________________________________________________________________

4.    Beneficial Ownership of Other Securities of the Company Owned by the
      Selling Securityholder.

      Except as set forth below in this Item 4, the undersigned is not the
      beneficial or registered owner of any securities of the Company other than
      the Registrable Securities listed above in Item 3.

      (a)   Type and Amount of Other Securities beneficially owned by the
            Selling Securityholder:

            ____________________________________________________________________

            ____________________________________________________________________

      (b)   CUSIP No(s). of such Other Securities beneficially owned:

            ____________________________________________________________________

            ____________________________________________________________________

                                      A-3
<PAGE>

5.    Relationships with the Company:

      Except as set forth below, neither the undersigned nor any of its
      affiliates, officers, directors or principal equity holders (owners of 5%
      of more of the equity securities of the undersigned) has held any position
      or office or has had any other material relationship with the Company (or
      its predecessors or affiliates) during the past three years.

      State any exceptions here:

      __________________________________________________________________________

      __________________________________________________________________________

6.    Broker-Dealers and their Affiliates

      (a)   Is the Selling Securityholder a broker-dealer or an affiliate of a
      broker-dealer:

            Yes ____    No ____

      If so, please answer the remaining question in this section.

            (i)   Please advise whether the notes were received by the Selling
                  Securityholder as compensation for investment banking services
                  or as investment shares, and if so please describe the
                  circumstances.

      Note that in general we may be required to identify any registered
      broker-dealer as an underwriter in the prospectus.

            (ii)  Except as set forth below, if the Selling Securityholder is a
                  registered broker-dealer, the Selling Securityholder does not
                  plan to make a market in the Registrable Securities. If the
                  Selling Securityholder plans to make a market in the
                  Registrable Securities, please indicate whether the Selling
                  Securityholder plans to use the prospectus relating to the
                  Registrable Securities as a market-making prospectus.

      (b)   Affiliation with Broker-Dealers

      Is the Selling Securityholder an affiliate(1) of a registered
      broker-dealer?

            Yes ____    No ____

      If so, please answer the remaining question in this section.

-------------------
(1)   An "affiliate" of a specified person or entity means a person or entity
      that directly, or indirectly through one or more intermediaries, controls
      or is controlled by, or is under common control with, the person or entity
      specified.

                                      A-4
<PAGE>

            (i)   Please describe the affiliation between the Selling
                  Securityholder and any registered broker-dealer.

            (ii)  If the notes were purchased by the Selling Securityholder
                  other than in the ordinary course of business, please describe
                  the circumstances.

            (iii) Please advise whether the notes were received by the Selling
                  Securityholder as compensation for investment banking services
                  or as investment shares, and if so please describe the
                  circumstances.

            (iv)  If the Selling Securityholder, at the time of its purchase of
                  Registrable Securities, had any agreements or understandings,
                  directly or indirectly, with any person to distribute the
                  Registrable Securities, please describe such agreements or
                  undertakings.

      Note that if the Selling Securityholder is an affiliate of a broker-dealer
      and did not purchase its notes in the ordinary course of business or at
      the time of the purchase had any agreements or understandings, directly or
      indirectly, to distribute the securities, we may be required to identify
      the Selling Securityholder as an underwriter in the prospectus.

      (c)   Beneficial Ownership by Natural Persons:

      If the Selling Securityholder is an entity, does any natural person have
      voting or investing power over the Registrable Securities held by the
      Selling Securityholder?(2)

      If so, please state the person's or persons' name(s):

7.    Beneficial Ownership by Natural Persons or by a Board or Committee

      Is the Selling Securityholder a reporting entity with the Securities and
      Exchange Commission?

      Yes ____      No ____

            If the Selling Securityholder is a majority owned subsidiary of a
            reporting entity, identify the majority stockholder that is a
            reporting entity.

      If No, please answer the remaining questions in this section.

----------------------
(2)   Please answer "Yes" if any natural person, directly or indirectly, through
      any contract, arrangement, understanding, relationship, or otherwise has
      or shares: (a) voting power which includes the power to vote, or to direct
      the voting of, such security; and/or, (b) investment power which includes
      the power to dispose, or to direct the disposition of, the Registrable
      Securities held by the Selling Securityholder.

                                      A-5
<PAGE>

            (i)   Please name the natural person or person(s) having voting
                  and/or investment control over the Selling Securityholder.(3)

            (ii)  If the voting and/or investment control over the Selling
                  Securityholder is held by board or committee, please state the
                  name of the natural person or person(s) on such board or
                  committee.

8.    Plan of Distribution:

      Except as set forth below, the undersigned (including its donees or
      pledgees) intends to distribute the Registrable Securities listed above in
      Item 3 pursuant to the Shelf Registration Statement only as follows (if at
      all): Such Registrable Securities may be sold from time to time directly
      by the undersigned or, alternatively, through underwriters, broker dealers
      or agents. If the Registrable Securities are sold through underwriters,
      broker dealers or agents, the Selling Securityholder will be responsible
      for underwriting discounts or commissions or agents' commissions. Such
      Registrable Securities may be sold in one or more transactions at fixed
      prices, at prevailing market prices at the time of sale, at varying prices
      determined at the time of sale or at negotiated prices. Such sales may be
      effected in transactions (which may involve block transactions) (i) on any
      national securities exchange or quotation service on which the Registrable
      Securities may be listed or quoted at the time of sale, (ii) in the over
      the counter market, (iii) in transactions otherwise than on such exchanges
      or services or in the over the counter market, or (iv) through the writing
      of options. In connection with sales of the Registrable Securities or
      otherwise, the undersigned may enter into hedging transactions with broker
      dealers, which may in turn engage in short sales of the Registrable
      Securities in the course of hedging positions they assume. The undersigned
      may also sell Registrable Securities short and deliver Registrable
      Securities to close out short positions, or loan or pledge Registrable
      Securities to broker dealers that in turn may sell such securities.

      State any exceptions here:

      __________________________________________________________________________

      __________________________________________________________________________

Note: In no event will such method(s) of distribution take the form of an
underwritten offering of the Registrable Securities without the prior written
agreement of the Company.

The undersigned acknowledges its obligation to comply with the provisions of the
Exchange Act and the rules thereunder relating to stock manipulation,
particularly Regulation M thereunder (or any successor rules or regulations), in
connection with any offering of Registrable Securities

---------------------
(3)   Please include any natural person that, directly or indirectly, through
      any contract, arrangement, understanding, relationship, or otherwise has
      or shares: (a) voting power which includes the power to vote, or to direct
      the voting of, such security; and/or, (b) investment power which includes
      the power to dispose, or to direct the disposition of, the Registrable
      Securities held by the Selling Securityholder.

                                      A-6
<PAGE>

pursuant to the Registration Rights Agreement. The undersigned agrees that
neither it nor any person acting on its behalf will engage in any transaction in
violation of such provisions.

The Selling Securityholder hereby acknowledges its obligations under the
Registration Rights Agreement to indemnify and hold harmless certain persons as
set forth therein.

Pursuant to the Registration Rights Agreement, the Company has agreed under
certain circumstances to indemnify the Selling Securityholder against certain
liabilities.

In accordance with the undersigned's obligation under the Registration Rights
Agreement to provide such information as may be required by law for inclusion in
the Shelf Registration Statement, the undersigned agrees to promptly notify the
Company of any inaccuracies or changes in the information provided herein that
may occur subsequent to the date hereof at any time while the Shelf Registration
Statement remains effective.

All notices hereunder and pursuant to the Registration Rights Agreement shall be
made in writing by hand delivery, first class mail or air courier guaranteeing
overnight delivery to the address set forth below.

By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 8 and the inclusion of such
information in the Shelf Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Shelf Registration
Statement and the related prospectus.

Once this Notice and Questionnaire is executed by the Selling Securityholder and
received by the Company, the terms of this Notice and Questionnaire, and the
representations and warranties contained herein, shall be binding on, shall
inure to the benefit of and shall be enforceable by the respective successors,
heirs, personal representatives and assigns of the Company and the Selling
Securityholder with respect to the Registrable Securities beneficially owned by
such Selling Securityholder and listed in Item (3) above. This Agreement shall
be governed in all respects by the laws of the State of New York.

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

Dated:__________________________      Beneficial Owner:_________________________

                                      By:_______________________________________

                                      Name:_____________________________________

                                      Title:____________________________________

                                      A-7
<PAGE>

              PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND
             QUESTIONNAIRE TO INTEGRATED ELECTRICAL SERVICES, INC.

                 Integrated Electrical Services, Inc.
                 1800 West Loop South, Suite 500
                 Houston, Texas 77027
                 Attention: Herbert R. Allen, Chief Executive Officer

                                      A-8
<PAGE>

                                   SCHEDULE I

                                   PURCHASERS

AMULET LIMITED

MARATHON GLOBAL CONVERTIBLE MASTER FUND, LTD.

<PAGE>

                                   SCHEDULE II

                                   GUARANTORS

PART I:

NAME                                                  STATE OF INCORPORATION

Pan American Electric, Inc.                           Tennessee

Houston-Stafford Electric Holdings III, Inc.          Delaware

Mills Electrical Contractors, Inc.                    Delaware

PART II:

<TABLE>
<CAPTION>
NAME                                      STATE OF ORGANIZATION                  GENERAL PARTNER
----                                      ---------------------                  ---------------
<S>                                       <C>                                    <C>
Houston-Stafford Electrical               Texas                                  Houston-Stafford
Contractors LP                                                                   Management LLC, an
                                                                                 Arizona limited liability
                                                                                 company

Mills Electric LP                         Texas                                  Mills Management LLC, an
                                                                                 Arizona limited liability
                                                                                 company
</TABLE>

PART III:

NAME                                                 STATE OF ORGANIZATION

Houston-Stafford Holdings LLC                        Arizona

Mills Electrical Holdings LLC                        Arizona

PART IV:

NAME                                                 STATE OF ORGANIZATION

Houston-Stafford Holdings II LLC                     Delaware

Mills Electrical Holdings II LLC                     Delaware

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