Document:

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                                                                    EXHIBIT 10.1

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                             DAVE & BUSTER'S, INC.,

                                 as the Company

                                       and

                                     BUYERS,

                                as defined herein

                          SECURITIES PURCHASE AGREEMENT

                           Dated as of August 6, 2003

                  5.0% Convertible Subordinated Notes due 2008
                      and Warrants to Purchase Common Stock

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                          SECURITIES PURCHASE AGREEMENT

                  THIS SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as
of August 6, 2003, by and among Dave & Buster's, Inc., a Missouri corporation
(the "Company"), and the Buyers listed on the Schedule of Buyers attached hereto
as Exhibit A (individually, a "Buyer" and, collectively, the "Buyers").

                  THE PARTIES TO THIS AGREEMENT enter into this Agreement on the
basis of the following facts, intentions and understandings:

                  A. In accordance with the terms and conditions of this
Agreement, the Company has agreed to issue and sell, and the Buyers have agreed
to purchase in the aggregate, (i) Thirty Million United States Dollars
($30,000,000) principal amount of the Company's 5.0% Convertible Subordinated
Notes due 2008 (such Convertible Subordinated Notes, substantially in the form
attached as Exhibit A to the Indenture (as defined below), as such form of Note
may be amended, modified or supplemented from time to time in accordance with
the terms thereof, the "Notes"), which shall be convertible into shares of the
common stock, $0.01 par value per share (the "Common Stock"), of the Company (as
converted, the "Conversion Shares"), and (ii) Warrants (such Warrants,
substantially in the form attached as Exhibit A to the Warrant Agent Agreement
(as defined below), as such form of Warrant may be amended, modified or
supplemented from time to time in accordance with the terms thereof, the "Buyer
Warrants") to purchase an aggregate 522,446 shares of Common Stock (as
exercised, collectively, the "Buyer Warrant Shares"). The Notes are being issued
pursuant to an Indenture, dated as of August 7, 2003 (the "Indenture") by and
between the Company and Bank of New York, as trustee (the "Trustee"),
substantially in the form attached hereto as Exhibit B. The Warrants are being
issued pursuant to a Warrant Agent Agreement, dated as of August 7, 2003 (the
"Warrant Agent Agreement") by and between the Company and Bank of New York, as
warrant agent (the "Warrant Agent"), substantially in the form attached hereto
as Exhibit C.

                  B. To induce U.S. Bancorp Piper Jaffray ("Piper Jaffray") to
act as lead placement agent with respect to the offering of the Notes and the
Buyer Warrants (the "Offering"), the Company has agreed to issue Warrants (such
Warrants, substantially in the form attached as Exhibit A to the Warrant Agent
Agreement, as such form of Warrant may be amended, modified or supplemented from
time to time in accordance with the terms thereof, the "Piper Jaffray Warrant"
and, together with the Buyer Warrants, the "Warrants") to purchase the number of
shares of Common Stock set forth on the Schedule of Fees (the "Schedule of
Fees") attached hereto as Exhibit D (as exercised, collectively, the "Piper
Jaffray Warrant Shares", and together with the Buyer Warrant Shares, the
"Warrant Shares").

                  C. Contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration Rights
Agreement substantially in the form attached hereto as Exhibit E (as the same
may be amended, modified or supplemented from time to time in accordance with
the terms thereof, the "Registration Rights Agreement") pursuant to which the
Company has agreed to provide the Buyers, Piper Jaffray and Fleet Securities,
Inc. ("Fleet" and together with Piper Jaffray, the "Placement Agents") with the
benefit of certain registration rights under the Securities Act of 1933, as
amended, and the rules

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and regulations promulgated thereunder (the "Securities Act") and applicable
state securities laws, on the terms and subject to the conditions set forth
therein.

                  NOW THEREFORE, in consideration of the promises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Buyers hereby agree as follows:

         SECTION 1. PURCHASE AND SALE OF NOTES AND WARRANTS.

         (a) Purchase of Notes and Warrants. Subject to the satisfaction (or
waiver) of the conditions set forth in Sections 6 and 7 of this Agreement, the
Company shall issue and sell to each Buyer, and each Buyer severally and not
jointly agrees to purchase from the Company, the respective principal amount of
Notes, together with the related Warrants, set forth opposite such Buyer's name
on the Schedule of Buyers attached hereto as Exhibit A (the "Closing"). The
Company shall issue to each Buyer One Thousand United States Dollars ($1,000)
principal amount of the Notes and Warrants to purchase 17.414867 Warrant Shares
for each One Thousand United States Dollars ($1,000) tendered by each such
Buyer.

         (b) The Closing. The date and time of the Closing (the "Closing Date")
shall be 10:00 a.m., Dallas time, on August 7, 2003, subject to the satisfaction
(or waiver) of the conditions set forth in Sections 6 and 7 of this Agreement.
The Closing shall occur on the Closing Date at the offices of Hallett & Perrin,
P.C., 2001 Bryan Street, Suite 3900, Dallas, Texas.

         (c) Form of Payment. On the Closing Date, (i) each Buyer shall pay the
Company for the Notes and the related Warrants to be issued and sold to such
Buyer on the Closing Date, by wire transfer of immediately available funds in
accordance with the Company's written wire instructions attached hereto on
Schedule A, (ii) the Company shall reimburse each Buyer for its reasonable
expenses to the extent required by Section 4(i) of this Agreement, and (iii) the
Company shall issue to each Buyer properly authenticated Notes (in the
denominations as such Buyer shall reasonably request) representing the principal
amount of Notes which such Buyer is then purchasing hereunder, along with
Warrants representing the related number of Warrant Shares, duly executed on
behalf of the Company and registered in the name of such Buyer.

         SECTION 2. BUYER'S REPRESENTATIONS AND WARRANTIES. Each Buyer
represents and warrants to the Company with respect to only itself that as of
the date hereof:

         (a) Investment Purpose. Such Buyer is acquiring the Notes and the
Warrants for its own account for investment only and not with a view towards, or
for resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered or exempted from registration under the Securities
Act; provided, however, that by making the representations herein, such Buyer
does not agree to hold any of the Notes, the Conversion Shares, the Warrants and
the Warrants Shares (collectively, the "Securities") for any minimum or other
specific term and reserves the right to dispose of the Securities at any time;
provided, further, that such disposition shall be in accordance with or pursuant
to a registration statement or an exemption under the Securities Act.

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         (b) Accredited Investor Status. Such Buyer is an "accredited investor"
as that term is defined in Rule 501(a) of Regulation D under the Securities Act
as of the date of this Agreement and was not organized for the specific purpose
of acquiring the Securities.

         (c) Reliance on Exemptions. Such Buyer understands that the Securities
are being offered and sold to it in reliance on specific exemptions from the
registration requirements of the United States federal and state securities laws
and that the Company is relying upon the truth and accuracy of, and such Buyer's
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Buyer set forth herein and in the applicable Note or
Warrant in order to determine the availability of such exemptions and the
eligibility of such Buyer to acquire the Securities.

         (d) Information. Such Buyer (i) has been furnished with or believes it
has had full access to all of the information that it considers necessary or
appropriate for deciding whether to purchase the Securities, (ii) has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and conditions of the offering of the Securities, (iii) can bear the
economic risk of a total loss of its investment in the Notes and the Warrants
and (iv) has such knowledge and experience in business and financial matters so
as to enable it to understand the risks of and form an investment decision with
respect to its investment in the Securities. Neither such inquiries nor any
other due diligence investigations conducted by such Buyer or its advisors, if
any, or its representatives shall limit, modify, amend or affect the Company's
representations and warranties contained in this Agreement and the Buyer's right
to rely thereon.

         (e) No Governmental Review. Such Buyer understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.

         (f) Transfer or Resale. Such Buyer understands that, except as provided
in the Registration Rights Agreement, the Securities have not been registered
under the Securities Act or any state securities laws, and may not be offered
for sale, sold, assigned or transferred without registration under the
Securities Act or an exemption therefrom and that, in the absence of an
effective registration statement under the Securities Act, such Securities may
only be sold under certain circumstances as set forth in the Securities Act. In
that connection, such Buyer is aware of Rule 144 under the Securities Act and
the restrictions imposed thereby.

         (g) Legends.

         (1) Such Buyer understands that, until two (2) years after the original
issuance date of the Notes and the Warrants, any certificate evidencing such
Notes and any certificate evidencing such Warrant (and all securities issued in
exchange therefor or in substitution thereof, other than Common Stock, if any,
issued upon conversion thereof (in the case of a Note) or upon exercise thereof
(in the case of a Warrant), which shall bear the legend set forth in Section
2(g)(2) of this Agreement, if applicable) shall bear a legend in substantially
the following form:

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         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
         APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR
         SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
         REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR
         APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM. THE
         SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
         OR OTHER LOAN SECURED BY THE SECURITIES.

         The Company may place the following legend on any Warrant or Note, as
appropriate, held by or transferred to an "affiliate" (as defined in Rule 501(b)
of Regulation D under the Securities Act) of the Company:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE HELD BY A PERSON WHO
         MAY BE DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR PURPOSES OF RULE 144
         PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
         "SECURITIES ACT"), AND MAY BE SOLD ONLY IN COMPLIANCE WITH RULE 144,
         PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
         ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
         ACT.

         The legends set forth above shall be removed and the Company shall
issue a new Note or Warrant, as appropriate, of like tenor and aggregate
principal amount or number of shares, as appropriate, and which shall not bear
the restrictive legends required by this Section 2(g)(1), (i) if such Notes or
Warrants, as appropriate, are registered for resale under the Securities Act and
are transferred or sold pursuant to such registration, (ii) if, in connection
with a sale transaction, such holder provides the Company with an opinion of
counsel reasonably acceptable to the Company to the effect that a public sale,
assignment or transfer of the Notes or Warrants, as appropriate, may be made
without registration under the Securities Act, or (iii) upon expiration of the
two-year period under Rule 144(k) of the Securities Act (or any successor rule)
if the holder of the Securities has not been an "affiliate" (as defined in Rule
501(b) of Regulation D under the Securities Act) during the preceding three (3)
months.

         (2) Such Buyer understands that any stock certificate representing
Conversion Shares or Warrant Shares shall bear a legend in substantially the
following form (unless (i) such Conversion Shares or Warrant Shares have been
transferred or sold pursuant to an effective registration statement, (ii) such
Conversion Shares or Warrant Shares, as appropriate, have been transferred or
sold pursuant to the exemption from registration provided by Rule 144 under the
Securities Act, (iii) such Conversion Shares or Warrant Shares, as appropriate,
may be transferred pursuant to Rule 144(k) under the Securities Act, or (iv)
unless otherwise agreed by the Company in writing with written notice to the
transfer agent):

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE

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         "SECURITIES ACT") OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
         MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
         ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
         THE SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
         THEREFROM. THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
         MARGIN ACCOUNT OR OTHER LOAN SECURED BY THE SECURITIES.

         The Company may instruct the transfer agent to place the following
legend on any certificate evidencing shares of Common Stock held by or
transferred to an "affiliate" (as defined in Rule 501(b) of Regulation D under
the Securities Act) of the Company:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE HELD BY A PERSON WHO
         MAY BE DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR PURPOSES OF RULE 144
         PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
         "SECURITIES ACT"), AND MAY BE SOLD ONLY IN COMPLIANCE WITH RULE 144,
         PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
         ACT OR PURSUANT TO A VALID EXEMPTION FROM REGISTRATION UNDER THE
         SECURITIES ACT.

                  The legends set forth above shall be removed and the Company
shall issue the relevant Securities without such legends to the holder of the
Securities upon which it is stamped, (i) if such Securities are registered for
resale under the Securities Act and are transferred or sold pursuant to such
registration, (ii) if, in connection with a sale transaction, such holder
provides the Company with an opinion of counsel reasonably acceptable to the
Company to the effect that a public sale, assignment or transfer of the
Securities may be made without registration under the Securities Act, or (iii)
upon expiration of the two-year period under Rule 144(k) of the Securities Act
(or any successor rule) if the holder of the Securities has not been an
"affiliate" (as defined in Rule 501(b) of Regulation D under the Securities Act)
during the preceding three (3) months.

         (3) Such Buyer understands that, in the event Rule 144(k) as
promulgated under the Securities Act (or any successor rule) is amended to
change the two-year or three-month periods under Rule 144(k) (or the
corresponding periods under any successor rule), (i) each reference in Sections
2(g)(1) and 2(g)(2) of this Agreement to "two (2) years" or the "two-year
period" and to "three (3) months" shall be deemed for all purposes of this
Agreement to be references to such changed period or periods, and (ii) all
corresponding references in the Notes and Warrants shall be deemed for all
purposes to be references to the changed period or periods, provided that such
changes shall not become effective if they are otherwise prohibited by, or would
otherwise cause a violation of, the then-applicable federal securities laws.

         (h) Authorization; Enforcement; Validity. This Agreement and the
Registration Rights Agreement have been duly and validly authorized, executed
and delivered on behalf of such Buyer and are valid and binding agreements of
such Buyer enforceable against such Buyer in accordance with their terms,
subject as to enforceability to general principles of equity and to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies.

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         (i) Residency. Such Buyer is a resident of that country or state
specified in its address on the Schedule of Buyers attached hereto as Exhibit A.

         (j) No Conflicts. The execution and performance of this Agreement and
the Registration Rights Agreement do not conflict with any agreement to which
such Buyer is a party or is bound thereby, any court order or judgment addressed
to such Buyer, or the constituent documents of such Buyer.

         (k) Conversion/Exercise Limitation. (i) Subject to Buyer's election on
the signature pages hereto to be governed by this Section 2(k)(i), each Buyer
hereby agrees that in no event will it convert any of the Notes or exercise any
of the Warrants in excess of the number of such Notes or Warrants, upon the
conversion of which (x) the number of shares of Common Stock beneficially owned
by such Buyer (other than the shares which would otherwise be deemed
beneficially owned except for being subject to a limitation on conversion or
exercise analogous to the limitation contained in this Section 2(k)(i)) plus (y)
the number of shares of Common Stock issuable upon the conversion of such Notes
and the exercise of such Warrants, would be equal to or exceed 9.99% of the
number of shares of Common Stock then issued and outstanding (after giving
effect to such conversion or exercise), it being the intent of the Company and
the Buyers that no Buyer be deemed at any time to have the power to vote or
dispose of greater than 9.99% of the number of shares of Common Stock issued and
outstanding. As used herein, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (the "Exchange
Act"). To the extent that the limitation contained in this Section 2(k)(i)
applies (and without limiting any rights the Company may otherwise have), the
Company may rely on the Buyer's determination of whether the Notes are
convertible and whether the Warrants are exercisable pursuant to the terms
hereof, the Company having no obligation whatsoever to verify or confirm the
accuracy of such determination, and the submission of the Conversion Notice (as
that term is defined in the Note) or the Exercise Notice (as that term is
defined in the Warrant) by the Buyer shall be deemed to be the Buyer's
representation that the Notes or the Warrants specified therein are convertible
or exercisable pursuant to the terms hereof. Nothing contained herein shall be
deemed to restrict the right of a Buyer to convert the Notes or exercise the
Warrants at such time as the conversion or exercise thereof will not violate the
provisions of this Section 2(k)(i). Notwithstanding anything to the contrary,
this Section 2(k)(i) shall only apply to a Buyer who has elected to be subject
to this Section by so indicating in the signature page.

         (ii) Subject to Buyer's election on the signature pages hereto to be
subject to this Section 2(k)(ii), each Buyer hereby agrees that in no event will
it convert any of the Notes or exercise any of the Warrants in excess of the
number of such Notes or Warrants, upon the conversion of which (x) the number of
shares of Common Stock beneficially owned by such Buyer (other than the shares
which would otherwise be deemed beneficially owned except for being subject to a
limitation on conversion or exercise analogous to the limitation contained in
this Section 2(k)(ii)) plus (y) the number of shares of Common Stock issuable
upon the conversion of such Notes and the exercise of such Warrants, would be
equal to or exceed 4.99% of the number of shares of Common Stock then issued and
outstanding (after giving effect to such conversion or exercise), it being the
intent of the Company and the Buyers that no Buyer be deemed at any time to have
the power to vote or dispose of greater than 4.99% of the number of shares of
Common Stock issued and outstanding. As used herein, beneficial ownership shall
be determined in accordance

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with Section 13(d) of the Exchange Act. To the extent that the limitation
contained in this Section 2(k)(ii) applies (and without limiting any rights the
Company may otherwise have), the Company may rely on the Buyer's determination
of whether the Notes are convertible and whether the Warrants are exercisable
pursuant to the terms hereof, the Company having no obligation whatsoever to
verify or confirm the accuracy of such determination, and the submission of the
Conversion Notice (as that term is defined in the Note) or the Exercise Notice
(as that term is defined in the Warrant) by the Buyer shall be deemed to be the
Buyer's representation that the Notes or the Warrants specified therein are
convertible or exercisable pursuant to the terms hereof. Nothing contained
herein shall be deemed to restrict the right of a Buyer to convert the Notes or
exercise the Warrants at such time as the conversion or exercise thereof will
not violate the provisions of this Section 2(k)(ii). Notwithstanding anything to
the contrary, this Section 2(k)(ii) shall only apply to a Buyer who has elected
to be subject to this Section by so indicating in the signature page.

         (l) Additional Acknowledgement. Each Buyer acknowledges that it has
independently evaluated the merits of the transactions contemplated by this
Agreement, the Indenture, the Warrant Agent Agreement, the Notes, the
Registration Rights Agreement and the Warrants, that it has independently
determined to enter into the transactions contemplated hereby and thereby, that
it is not relying on any advice from or evaluation by any other Buyer, and that
it is not acting in concert with any other Buyer in purchasing the Securities
offered hereunder. The Buyers and, to its knowledge, the Company agree that the
Buyers have not taken any actions that would make such Buyers to be deemed as
members of a "group" for purposes of Section 13(d) of the Exchange Act.

         The Buyer's representations and warranties made in this Section 2 are
made solely for the purpose of permitting the Company to make a determination
that the offer and sale of the Notes and Warrants pursuant to this Agreement
complies with applicable U.S. federal and state securities laws and not for any
other purpose. Accordingly, the Company shall not rely on such representations
and warranties for any other purpose.

         SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Placement Agents and each of the Buyers that as
of the date hereof subject to such exceptions as set forth in a Disclosure
Schedule:

         (a) Organization and Qualification. The Company and its Subsidiaries
(as defined below) are corporations, partnerships or limited liability companies
duly organized and validly existing in good standing under the laws of the
jurisdiction in which they are incorporated or organized, and have the requisite
corporate, limited liability company or partnership power and authorization to
own their properties and to carry on their business as now being conducted.
Copies of the Company's Articles of Incorporation and Bylaws, and all amendments
thereto, have been filed as exhibits to the Company's SEC Documents (as defined
in Section 3(f) of this Agreement), are in full effect and have not been
modified. Each of the Company and its Subsidiaries is duly qualified as a
foreign corporation, partnership or limited liability company to do business and
is in good standing in every jurisdiction in which its ownership of property or
the nature of the business conducted and proposed to be conducted by it makes
such qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect. As
used in this Agreement, "Material Adverse Effect" means

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any material adverse effect on the business, properties, assets, operations,
results of operations or financial condition of the Company and its
Subsidiaries, taken as a whole, or on the transactions contemplated hereby or by
the agreements and instruments to be entered into in connection herewith, or on
the authority or ability of the Company to perform its obligations under the
Transaction Documents (as defined below). "Subsidiary" means any entity in which
the Company, directly or indirectly, owns a majority of the capital stock or
other equity or similar interests. A complete list of the Company's "
Subsidiaries" is set forth on Schedule 3(a).

         (b) Authorization; Enforcement; Validity. The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Indenture, the Warrant Agent Agreement, the Notes, the
Warrants, the Registration Rights Agreement, the Irrevocable Transfer Agent
Instructions (as defined in Section 5 of this Agreement) and each of the other
agreements entered into by the parties hereto in connection with the
transactions contemplated by this Agreement (collectively, the "Transaction
Documents"), and to issue the Securities in accordance with the terms hereof and
thereof. The execution and delivery of the Transaction Documents by the Company
and the consummation by it of the transactions contemplated hereby and thereby,
including, without limitation, the issuance and repayment of the Notes, the
reservation for issuance and the issuance of the Conversion Shares issuable upon
conversion thereof, the issuance of the Warrants and the reservation for
issuance and the issuance of the Warrant Shares issuable upon exercise of the
Warrants, have been duly authorized by the Company's Board of Directors and no
further consent or authorization is required of the Company's Board of Directors
or stockholders. The Transaction Documents have been duly executed and delivered
by the Company. The Transaction Documents constitute the valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, except (i) as rights to indemnification and contribution may be
limited by federal or state securities laws and policies underlying such laws
and (ii) as such enforceability may be limited by general principles of equity
or applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of creditors' rights and remedies.

         (c) Capitalization. Except for any shares issuable upon exercise of
options issued pursuant to employee benefit plans disclosed in the Company's SEC
Documents, the capitalization of the Company is as described in the Company's
SEC Documents. All of the Company's outstanding shares have been, or upon
issuance will be, validly issued and are fully paid and nonassessable. The
Company's Common Stock is registered pursuant to Section 12(b) of the Exchange
Act and is listed for trading on the Principal Market (as defined in Section
4(f) of this Agreement). Except as set forth in this Agreement, the Indenture,
the Warrant Agent Agreement, the Registration Rights Agreement and as set forth
in the SEC Documents, (i) no shares of the Company's capital stock are subject
to preemptive rights or any other similar rights or any liens or encumbrances
created by the Company; (ii) there are no outstanding options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of the Company or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the
Company or any of its Subsidiaries or options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries (other than any such

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options, warrants, scrip, rights, calls, commitments, securities, understandings
and arrangement outstanding under plans disclosed in the SEC Documents); (iii)
there are no outstanding debt securities, notes, credit agreements, credit
facilities or other agreements, documents or instruments evidencing indebtedness
of the Company or any of its Subsidiaries or by which the Company or any of its
Subsidiaries is or may become bound; (iv) there are no amounts outstanding
under, and there will be no amounts due upon termination of, any credit
agreement or credit facility; (v) there are no financing statements securing
obligations in any amounts greater than Fifty Thousand United States Dollars
($50,000), singly, or Two Hundred Fifty Thousand United States Dollars
($250,000) in the aggregate, filed in connection with the Company or any of its
Subsidiaries, except for those issued in respect of the Revolving Credit and
Term Loan Agreement dated June 30, 2000, among the Company, its Subsidiaries,
Fleet National Bank (as agent) and the lenders named therein (the "Senior
Facility"); (vi) there are no agreements or arrangements under which the Company
or any of its Subsidiaries is obligated to register the sale of any of its
securities under the Securities Act; (vi) there are no outstanding securities or
instruments of the Company or any of its Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to redeem a security of the Company or any of its
Subsidiaries; (vii) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities as described in this Agreement; (viii) the Company does not have
any stock appreciation rights or "phantom" stock plans or agreements or any
similar plan or agreement; and (ix) the Company and its Subsidiaries have no
liabilities or obligations required to be disclosed in the SEC Documents but not
so disclosed in the SEC Documents, other than those incurred in the ordinary
course of the Company's or its Subsidiaries' respective businesses and which,
individually or in the aggregate, do not or would not have a Material Adverse
Effect on the Company and its Subsidiaries taken as a whole.

         (d) Issuance of Securities. The Securities are duly authorized and,
upon issuance in accordance with the terms of the applicable Transaction
Documents, shall be (i) validly issued, fully paid and non-assessable and (ii)
free from all taxes, liens and charges with respect to the issuance thereof,
other than any liens or encumbrances created by or imposed by the Buyers, and
shall not be subject to preemptive rights or other similar rights of
stockholders of the Company. As of the Closing, 3,041,506 shares of Common Stock
(subject to adjustment pursuant to the Company's covenant set forth in Section
4(e) of this Agreement) will have been duly authorized and reserved for issuance
upon conversion of the Notes and exercise of the Warrants. Upon conversion or
issuance in accordance with the terms of the Notes or upon exercise or issuance
in accordance with the terms of the Warrants, as applicable, the Conversion
Shares and the Warrant Shares, as the case may be, will be validly issued, fully
paid and non-assessable and free from all taxes, liens and charges with respect
to the issue thereof, other than any liens or encumbrances created by or imposed
by the Buyers, with the holders being entitled to all rights accorded to a
holder of Common Stock. Subject to the accuracy of the representations and
warranties of each of the Buyers in this Agreement, the issuance by the Company
of the Securities is exempt from registration under the Securities Act and
applicable state securities laws.

         (e) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the
reservation for issuance and

                                       9
<PAGE>

issuance of the Conversion Shares and the Warrant Shares) will not (i) result in
a violation of the Company's Articles of Incorporation or the Bylaws; (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its Subsidiaries is a
party, except for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect; or (iii) result in a violation of any
law, rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations and the rules and regulations of the Principal
Market applicable to the Company or any of its Subsidiaries or by which any
property or asset of the Company or any of its Subsidiaries is bound or
affected. Neither the Company nor any of its Subsidiaries is in violation of any
material term of or in default under its Articles of Incorporation, Bylaws or
their organizational charter or bylaws, respectively. Neither the Company nor
any of its Subsidiaries is in violation of any term of or in default under any
contract, agreement, mortgage, indebtedness, indenture, instrument, judgment,
decree or order or any statute, rule or regulation applicable to the Company or
its Subsidiaries, except where such violations and defaults would not result,
either individually or in the aggregate, in a Material Adverse Effect. The
business of the Company and its Subsidiaries is not being conducted in violation
of any law, ordinance or regulation of any governmental entity, except where
such violations would not result, either individually or in the aggregate, in a
Material Adverse Effect. Except as specifically contemplated by this Agreement,
as required under the Securities Act or as required by Blue Sky filings (but
only to the extent that such filings may be made after the Closing), the Company
is not required to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency or any regulatory
or self-regulatory agency in order for it to execute, deliver or perform any of
its obligations under or contemplated by the Transaction Documents. All
consents, authorizations, orders, filings and registrations which the Company is
required to obtain pursuant to the preceding sentence have been obtained or
effected on or prior to the date hereof and copies of such consents,
authorizations, orders, filings and registrations have been delivered to the
Buyers. The Company is not in violation of the listing requirements of the
Principal Market, and has no actual knowledge of any facts which would
reasonably lead to delisting or suspension of the Common Stock by the Principal
Market in the foreseeable future. The Company and its Subsidiaries are not in
violation of any covenants or other terms of its outstanding indebtedness for
borrowed money, which could reasonably be expected to have a Material Adverse
Effect. The Company and its Subsidiaries are currently unaware of any facts or
circumstances which might give rise to any of the foregoing events set forth in
this paragraph.

         (f) SEC Documents; Financial Statements. Since January 1, 2001, the
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the Securities and Exchange Commission (the
"Commission") pursuant to the reporting requirements of the Exchange Act (all of
the foregoing filed prior to or on the date hereof and all exhibits included
therein and financial statements and schedules thereto and documents
incorporated by reference therein being hereinafter referred to as the "SEC
Documents"). As of the date of filing of such SEC Documents, each such SEC
Document, as it may have been subsequently amended by filings made by the
Company with the Commission prior to the date hereof, complied in all material
respects with the requirements of the Exchange Act applicable to such SEC
Document. As of their respective dates, the financial statements of the Company
included in the SEC Documents complied as to form in all material respects with
applicable

                                       10
<PAGE>

accounting requirements and published rules and regulations of the Commission
with respect thereto. Such financial statements have been prepared in accordance
with generally accepted accounting principles, consistently applied in the
United States ("GAAP"), during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements), correspond to the books
and records of the Company and fairly present in all material respects the
financial position of the Company and its Subsidiaries as of the dates thereof
and the results of operations and cash flows for the periods then ended. No
other written information provided by or on behalf of the Company to the Buyers
which is not included in the SEC Documents, including, without limitation,
information referred to in Section 2(d) of this Agreement, contains 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 are or were made, not misleading. The Company satisfies the
requirements for use of Form S-3 for registration of the resale of Registrable
Securities (as that term is defined in the Registration Rights Agreement) and
does not have any knowledge or reason to believe that it does not satisfy such
requirements or have any knowledge of any fact which would reasonably result in
its not satisfying such requirements. The Company is not required to file and
will not be required to file any agreement, note, lease, mortgage, deed or other
instrument entered into prior to the date hereof and to which the Company is a
party or by which the Company is bound which has not been previously filed as an
exhibit to its reports filed with the Commission under the Exchange Act. Except
for the issuance of the Notes and the Warrants contemplated by this Agreement,
no event, liability, development or circumstance has occurred or exists, or is
currently contemplated to occur, with respect to the Company or its Subsidiaries
or their respective business, properties, prospects, operations or financial
condition, that is currently required to be disclosed by the Company under
applicable securities laws and which has not been publicly disclosed. To the
Company's knowledge its independent auditors do not intend to withhold their
consent to the inclusion of their audit opinion concerning the Company's
financial statements which shall be included in the Registration Statement (as
such term is defined in the Registration Rights Agreement).

         (g) Absence of Litigation. Except as disclosed in the section titled
"Legal Proceedings" in the Company's Annual Report on Form 10-K for the period
ended February 2, 2003, there is no action, suit, proceeding, inquiry or
investigation ("Material Litigation") before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Company or any of its Subsidiaries, threatened in writing
against the Company or any of its Subsidiaries or any of the Company's or the
Subsidiaries' officers or directors in their capacities as such that would have
a Material Adverse Effect. The Company believes it has set aside on its books
provisions reasonably adequate for the payment of all judgments, damages, costs,
and expenses arising out of its pending Material Litigation and has
appropriately accounted for such reserves under GAAP.

         (h) No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of
the Securities Act or any applicable stockholder approval provisions, including,
without limitation, under the rules and regulations of any exchange or automated
quotation system on

                                       11
<PAGE>

which any of the securities of the Company are listed or designated, nor will
the Company or any of its Subsidiaries take any action or steps that would cause
the offering of the Securities to be integrated with other offerings.

         (i) Intellectual Property Rights. The Company and its Subsidiaries own,
possess, license or can acquire or make use of on reasonable terms, adequate
rights or licenses to use all trademarks, trade names, trade dress, service
marks, service mark registrations, service names, patents, patent rights,
copyrights, inventions, technology licenses, approvals, governmental
authorizations, trade secrets, and other intellectual property rights
(collectively, "Intellectual Property") necessary to conduct their respective
businesses as now conducted and as currently contemplated to be conducted by
them as described in the SEC Documents, except where the failure to currently
own or possess Intellectual Property would not have a Material Adverse Effect.
The Company and its Subsidiaries do not have any knowledge of any infringement
by the Company or its Subsidiaries of Intellectual Property rights of others, or
of any development of similar or identical trade secrets or technical
information by others. There is no claim, action or proceeding being made by the
Company or its Subsidiaries regarding the Intellectual Property rights of the
Company or its Subsidiaries or to the Company's knowledge, brought or currently
threatened against the Company or its Subsidiaries regarding the Intellectual
Property rights of or the use of any Intellectual Property by the Company or its
Subsidiaries of any third party that, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect.

         (j) Insurance. The Company and each of its Subsidiaries are insured
against such losses and risks and in such amounts as are commensurate with
similarly situated companies engaged in similar businesses as the Company and
its Subsidiaries.

         (k) Regulatory Permits. The Company and its Subsidiaries possess all
material certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct
their respective businesses as currently conducted (the "Permits"), and neither
the Company nor any of its Subsidiaries has received any written notice of
proceedings relating to the revocation or material modification of any such
Permit.

         (l) Tax Status. The Company and each of its Subsidiaries (i) has made
or filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject and all such
tax returns are accurate and complete in all material respects, (ii) has paid
all taxes and other governmental assessments and charges due with respect to the
periods covered by such returns, reports and declarations, except those being
contested in good faith and for which the Company has made appropriate reserves
on its books in accordance with GAAP, and (iii) has paid or set aside on its
books provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations
(referred to in clause (i) above) apply. There are no unpaid taxes or
assessments for tax deficiencies that are individually or in the aggregate
material in amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company know of no basis for any such
claim, and there are no audits in progress with respect to any tax returns, no
extension of time is in force with respect to any date on which any tax return
was or is to be filed, and no waiver or agreement is in force for the extension
of time for the assessment or payment of any tax. All provisions for tax
liabilities of the Company and each of its Subsidiaries have been disclosed in
the Company's financial statements and made in accordance

                                       12
<PAGE>

with GAAP, and all liabilities for taxes of the Company and each of its
Subsidiaries attributable to periods prior to or ending on the Closing Date have
been adequately disclosed in the Company's financial statements.

         (m) Application of Takeover Protections. The Company and its Board of
Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Articles of Incorporation, the laws of the
state of its incorporation or the laws of any other state which is applicable to
the Buyers as a result of the transactions contemplated by this Agreement,
including, without limitation, the Company's issuance of the Securities and the
Buyers' ownership of the Securities.

         (n) Foreign Corrupt Practices. Neither the Company nor any of its
Subsidiaries, nor, to the Company's knowledge, any director, officer, agent,
employee or other person acting on behalf of the Company or any Subsidiary has,
in the course of his actions for, or on behalf of, the Company or any Subsidiary
used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expenses relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any provision of
the United States Foreign Corrupt Practices Act of 1977, as amended, or made any
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee.

         (o) Confidential Private Placement Memorandum. The information supplied
by the Company for inclusion or incorporation by reference in the Confidential
Private Placement Memorandum dated as of August 5, 2003 (the "Confidential
Private Placement Memorandum") in connection with the Offering 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, in
light of the circumstances under which they are made, not misleading. If, at any
time prior to the Closing Date, any event with respect to the Company shall
occur which is required to be described in the Confidential Private Placement
Memorandum, such event shall be so described, and an appropriate amendment or
supplement shall be prepared by the Company.

         (p) Transactions With Affiliates. Except as disclosed in the SEC
Documents, other than the grant of stock options granted pursuant to the
Company's employee benefit plans, none of the officers, directors or employees
of the Company is presently a party to any transaction with the Company or any
of its Subsidiaries (other than in connection with the provision of services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any such officer, director or employee or, to the knowledge of the
Company, any corporation, partnership, trust or other entity in which any such
officer, director, or employee has a substantial interest or is an officer,
director, trustee or partner, such that the transaction would be required to be
disclosed pursuant to Item 404 of Regulation S-K promulgated under the
Securities Act.

         (q) Brokers and Finders. Except for fees payable to Piper Jaffray and
Fleet as placement agents, and to Merriman Curhan Ford & Co. as financial
advisors, no brokers, finders or

                                       13
<PAGE>

financial advisory fees or commissions will be payable by the Company with
respect to the transactions contemplated by this Agreement.

         (r) Absence of Certain Changes. Except as disclosed in the SEC
Documents available on the EDGAR system, since February 2, 2003, there has been
no change or development that has had or could reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.

         (s) No Material Non-Public Information. Except for the issuance of the
Securities and the transactions contemplated by this Agreement, the transactions
related to the Company's intended use of the net proceeds from the sale of the
Notes and Warrants and the confirmation of existing guidance as to the Company's
projected annual financial results (which such information shall be fully
disclosed in the Current Report on Form 8-K filed pursuant to Section 4(g)(1)
hereof), the Company has not provided the Buyers with, and the Confidential
Private Placement Memorandum does not contain, material non-public information.

         (t) Acknowledgment Regarding Buyer's Purchase of Securities. The
Company acknowledges and agrees that each Buyer is acting solely in the capacity
of arm's length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and that no Buyer is (i) an officer
or director of the Company, (ii) an "affiliate" of the Company (as defined in
Rule 144) or (iii) to the knowledge of the Company, a "beneficial owner" of more
than 10% of the Common Stock (as defined for purposes of Rule 13d-3 of the
Exchange Act). The Company further acknowledges that no Buyer is acting as a
financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to the Transaction Documents and the transactions contemplated hereby
and thereby, and any advice given by a Buyer or any of its representatives or
agents in connection with the Transaction Documents and the transactions
contemplated hereby and thereby is merely incidental to such Buyer's purchase of
the Securities. The Company further represents to each Buyer that the Company's
decision to enter into the Transaction Documents has been based solely on the
independent evaluation by the Company and its representatives. The Company
acknowledges and agrees that no Buyer makes or has made any representations or
warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 2.

         (u) Dilutive Effect. The Company understands and acknowledges that the
number of Conversion Shares issuable upon conversion of the Notes and the Buyer
Warrant Shares issuable upon exercise of the Buyer Warrants will increase in
certain circumstances. The Company further acknowledges that its obligation to
issue Conversion Shares upon conversion of the Notes in accordance with this
Agreement and the Notes and its obligation to issue the Buyer Warrant Shares
upon exercise of the Buyer Warrants in accordance with this Agreement and the
Buyer Warrants is, in each case, absolute and unconditional regardless of the
dilutive effect that such issuance may have on the ownership interests of other
stockholders of the Company.

         (v) Insolvency. The Company has not taken any steps to seek protection
pursuant to any bankruptcy law nor does the Company have any knowledge or reason
to believe that its creditors intend to initiate involuntary bankruptcy
proceedings or any actual knowledge of any fact which would reasonably lead a
creditor to do so. The Company is not as of the date hereof, and after giving
effect to the transactions contemplated hereby to occur at each Closing, will
not be

                                       14
<PAGE>

Insolvent (as defined below). For purposes of this Section 3(v), "Insolvent"
means (i) the present fair saleable value of the Company's assets is less than
the amount required to pay the Company's total Indebtedness (as defined in the
Senior Facility), (ii) the Company is unable to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured, (iii) the Company intends to incur or believes that it
will incur debts that would be beyond its ability to pay as such debts mature or
(iv) the Company has unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted.

         (w) Employee Relations.

                (i) Neither the Company nor any of its Subsidiaries is a party
to any collective bargaining agreement or employs any member of a union. The
Company and its Subsidiaries believe that their relations with their employees
are good. No executive officer of the Company (as defined in Rule 501(f) of the
Securities Act) has notified the Company that such officer intends to leave the
Company or otherwise terminate such officer's employment with the Company. No
executive officer of the Company, to the knowledge of the Company, is, or is now
expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement,
non-competition agreement, or any other contract or agreement or any restrictive
covenant, and the continued employment of each such executive officer does not
subject the Company or any of its Subsidiaries to any liability with respect to
any of the foregoing matters.

              (ii) The Company and its Subsidiaries are in compliance with all
federal, state, local and foreign laws and regulations respecting employment and
employment practices, terms and conditions of employment and wages and hours,
except where failure to be in compliance would not, either individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect.

         (x) Title. The Company and its Subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the Company
and its Subsidiaries, in each case free and clear of all liens, encumbrances and
defects except for such as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such property
by the Company and any of its Subsidiaries. Any real property and facilities
held under lease by the Company and any of its Subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its Subsidiaries.

         (y) Environmental Laws. The Company and its Subsidiaries (i) are in
compliance with any and all Environmental Laws (as hereinafter defined), (ii)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit, license or
approval where, in each of the foregoing clauses (i), (ii) and (iii), the
failure to so comply could be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect. The term "Environmental Laws" means
all federal, state, local or foreign laws

                                       15
<PAGE>

relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata), including, without limitation, laws relating to
emissions, discharges, releases or threatened releases of chemicals, pollutants,
contaminants, or toxic or hazardous substances or wastes (collectively,
"Hazardous Materials") into the environment, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials, as well as all authorizations,
codes, decrees, demands or demand letters, injunctions, judgments, licenses,
notices or notice letters, orders, permits, plans or regulations issued,
entered, promulgated or approved thereunder.

         (z) Subsidiary Rights. The Company or one of its Subsidiaries has the
unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its
material Subsidiaries as owned by the Company or such Subsidiary.

         (aa) Internal Accounting Controls. The Company and each of its
Subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
and liability accountability, (iii) access to assets or incurrence of
liabilities is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets and
liabilities is compared with the existing assets and liabilities at reasonable
intervals and appropriate action is taken with respect to any difference.

         (bb) Sarbanes-Oxley Act. The Company is in compliance with any and all
applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as
of the date hereof, and any and all applicable rules and regulations promulgated
by the SEC thereunder that are effective as of the date hereof, except where
such noncompliance would not have, individually or in the aggregate, a Material
Adverse Effect.

         SECTION 4. COVENANTS.

         (a) Obligations. Each party shall use commercially reasonable efforts
to timely satisfy each of the conditions to be satisfied by it as provided in
Sections 6 and 7 of this Agreement.

         (b) Form D and Blue Sky. The Company agrees to file timely a Form D
with the Commission with respect to the Securities as required under Regulation
D and to provide, upon request, a copy thereof to each Buyer. The Company shall,
on or before the Closing Date, take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for, or to qualify the
Securities for, sale to the Buyers at the Closing pursuant to this Agreement
under applicable securities or "Blue Sky" laws of the states of the United
States (or to obtain an exemption from such qualification), and shall provide
evidence of any such action so taken to the Buyers on or prior to the Closing
Date. The Company shall make all timely filings and reports relating to the
offer and sale of the Securities required under applicable securities or "Blue
Sky" laws of the states of the United States following the Closing Date. The
Company

                                       16
<PAGE>

shall pay all fees and expenses in connection with satisfying its obligations
under this Section 4(b).

         (c) Reporting Status. With a view to making available to the Investors
(as that term is defined in the Registration Rights Agreement) the benefits of
Rule 144 promulgated under the Securities Act or any similar rule or regulation
of the Commission that may at any time permit the Investors to sell securities
of the Company to the public without registration ("Rule 144"), the Company
shall: (i) make and keep public information available, as those terms are
understood and defined in Rule 144; (2) file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and (3) furnish to each Investor, so long
as such Investor owns Registrable Securities (the "Reporting Period"), promptly
upon request, (A) a written statement by the Company, if true, that it has
complied with the applicable reporting requirements of Rule 144, the Securities
Act and the Exchange Act, (B) a copy of the most recent annual or quarterly
report of the Company and copies of such other reports and documents so filed by
the Company, (C) the information required by Rule 144A(d)(4) (or any successor
rule) under the Securities Act, and (D) such other information as may be
reasonably requested to permit the Investors to sell such securities pursuant to
Rule 144 without registration.

         (d) Use of Proceeds. The Company intends to use the net proceeds from
the sale of the Notes and the Warrants as described in the Confidential Private
Placement Memorandum.

         (e) Reservation of Shares. The Company shall take all actions necessary
to at all times have authorized, and reserved for the purpose of issuance, no
less than one hundred five percent (105%) of the number of shares of Common
Stock (the "Reservation Amount") needed to provide for the issuance of the
Conversion Shares upon conversion of all of the Notes and the Warrant Shares
upon exercise of all of the Warrants without regard to any limitations on
conversions or exercise.

         (f) Listing. The Company shall promptly use its best efforts to secure
the listing of all of the Conversion Shares and Warrant Shares upon each
national securities exchange and automated quotation system, if any, upon which
shares of Common Stock are then listed (subject to official notice of issuance)
and, shall maintain, so long as any other shares of Common Stock shall be so
listed, such listing of all Conversion Shares and Warrant Shares from time to
time issuable under the terms of the Transaction Documents. So long as any
Securities are outstanding, the Company shall maintain the Common Stock's
authorization for quotation or listing on The New York Stock Exchange, Inc. (the
"NYSE"), the American Stock Exchange, Inc. ("AMEX") or The Nasdaq National
Market or SmallCap Market ("NASDAQ") (as applicable, the "Principal Market").
The Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section 4(f).

         (g) Filing of Form 8-K. On the day of closing of the transaction
contemplated hereby, the Company shall issue a press release announcing the
transactions contemplated hereby. The Company shall use reasonable efforts
within twenty-four (24) hours after the public announcement of the transactions
contemplated hereby to file (1) a Current Report on Form 8-K with the Commission
including as an exhibit to such Current Report on Form 8-K the press release
announcing the signing of this Agreement after the issuance of such press
release, and (2)

                                       17
<PAGE>

a Current Report on Form 8-K with the Commission describing the terms of the
transactions contemplated by the Transaction Documents and including as exhibits
to such Current Report on Form 8-K (i) this Agreement and the Exhibits hereto,
(ii) the form of Note, (iii) the form of Warrant, (iv) the Registration Rights
Agreement, (v) the form of Indenture and (vi) the form of Warrant Agent
Agreement, each in the form required by the Exchange Act; provided, however,
that the signature pages and all references to the names of the Buyers shall be
redacted from the Transaction Documents filed as exhibits to such Current Report
on Form 8-K and in any press release filed in connection with the transactions
contemplated hereby. "Business Day" means any day other than Saturday, Sunday or
other day on which commercial banks in the City of New York are required by law
to remain closed.

         (h) Stockholder Approval. In the event that Stockholder Approval is
required pursuant to the rules of the Principal Market for the issuance of a
number of Conversion Shares and Warrant Shares greater in the aggregate than
19.99% of the number of shares of Common Stock outstanding immediately prior to
the Closing Date (the "19.99% Rule"), the Company shall provide each stockholder
entitled to vote at the next meeting of stockholders of the Company, which
meeting shall occur on or before ninety (90) days from the date of such
determination (the "Stockholders Meeting Deadline"), a proxy statement, which
has been previously reviewed by Piper Jaffray, the Buyers and a counsel of their
choice, soliciting each such stockholder's affirmative vote at such stockholder
meeting for approval of the Company's issuance of all of the Securities as
described in the Transaction Documents in accordance with applicable law and the
rules and regulations of the Principal Market (such affirmative approval being
referred to herein as the "Stockholder Approval"), and the Company shall solicit
its stockholders' approval of such issuance of the Securities and cause the
Board of Directors of the Company to recommend to the stockholders that they
approve such proposal.

         (i) Expenses. Subject to Section 9(o) of this Agreement, at the
Closing, the Company shall reimburse the Buyers for the Buyers' reasonable,
documented, out-of-pocket expenses incurred in connection with the consummation
of the transactions contemplated by this Agreement, up to a maximum of $25,000,
which amount shall be paid by the Company to the Buyers concurrently with the
Company's receipt of the Purchase Price at the Closing and shall be allocated
pro rata among the Buyers based on the respective principal amount of Notes set
forth opposite such Buyer's name on the Schedule of Buyers attached hereto as
Exhibit A.

         (j) Additional Securities. For so long as any Buyer beneficially owns
any Securities, the Company will not issue any Notes or Warrants other than to
the Buyers as contemplated hereby and the Company shall not issue any other
securities that would cause a breach or default under the Notes.

         (k) Tax Matters. For United States Federal income tax purposes, the
Company and each Buyer agree (i) to treat the Notes as indebtedness, (ii) that
$1,159,839 of the aggregate purchase price for the securities issued by the
Company to the Buyers hereunder (assuming the sale of $30,000,000 of Securities)
is attributable to the purchase of the Warrants, and (iii) to treat the Notes as
having been issued for an aggregate purchase price of $28,840,161 (assuming the
sale of $30,000,000 of Securities), such that the aggregate original issue
discount that will accrue over the term of One Thousand Dollars ($1,000)
principal amount of the Notes is $38.66. If the Company shall be required to
withhold or deduct any tax or other governmental charge from any

                                       18
<PAGE>

payment made hereunder or under any Note to any Buyer, then, subject to the last
sentence of this Section 4(k), the Company shall pay to such Buyer such
additional amounts as are necessary such that such Buyer actually receives the
amount such Buyer would have received if no such withholding or deduction had
been required. If any Buyer is organized under the laws of a jurisdiction other
than the United States, any State thereof or the District of Columbia (a
"Non-United States Buyer"), such Buyer shall deliver to the Company either (a)
two (2) copies of either United States Internal Revenue Service Form W-8BEN or
Form W-8ECI, or (b) in the case of a Non-United States Buyer claiming exemption
from United States Federal withholding tax under Section 871(h) or 881(c) of the
Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (the "Code") with respect to payments of "portfolio
interest", a certificate in form and substance reasonably acceptable to the
Company representing that such Non-United States Buyer is not a bank for
purposes of Section 881(c) of the Code, is not a ten percent (10%) shareholder
(within the meaning of Section 871(h)(3)(B) of the Code) of the Company and is
not a controlled foreign corporation related to the Company (within the meaning
of Section 864(d)(4) of the Code), together with Internal Revenue Service Form
W-8 or W-9, as applicable, in all cases such forms and other documents being
properly completed and duly executed by such Non-United States Buyer claiming
complete exemption from United States Federal withholding tax on payments of
interest by the Company (or accruals of original issue discount) under the
Notes. In addition, each Buyer that is not otherwise exempt from "back-up
withholding" shall deliver to the Company properly completed and duly executed
Internal Revenue Service Form W-8 or W-9 indicating that such Buyer is subject
to "back-up withholding" for United States Federal income tax purposes. The
forms and other documents required to be delivered pursuant to the two preceding
sentences shall be delivered within ten (10) days after the Closing Date. The
Company shall not be required to pay any additional amounts (x) to any
Non-United States Buyer in respect of United States Federal withholding tax or
(y) to any Buyer in respect of United States Federal "back-up withholding" tax
to the extent that the obligation to pay such additional amounts would not have
arisen but for a failure by such Non-United States Buyer or Buyer, as the case
may be, to comply with the provisions of this Section 4(k).

         (l) Violation of Laws. The business of the Company and its Subsidiaries
shall not be conducted in violation of any law, ordinance or regulation of any
governmental entity, except where such violations would not result, either
individually or in the aggregate, in a Material Adverse Effect.

         (m) Limits on Additional Issuances. The Company shall not, in any
manner, until the later of (i) 180 days after the Closing or (ii) the date on
which the Registration Statement required to be filed pursuant to Section 2(a)
of the Registration Rights Agreement is declared effective by the Commission,
issue or sell any Common Stock or rights, warrants or options to subscribe for
or purchase Common Stock or any security directly or indirectly convertible into
or exchangeable or exercisable for Common Stock (the "Equity Limitation"). The
Equity Limitation shall not apply (i) to the issuance of Conversion Shares or
Warrant Shares, as the case may be, pursuant to the Notes or the Warrants, (ii)
to the issuance of securities pursuant to the conversion or exchange of
convertible or exchangeable securities or the exercise of warrants or options,
in each case outstanding on the date hereof, (iii) if holders representing a
majority of the outstanding principal amount of the Notes give their prior
written consent to such issuance or sale, (iv) if the issuance is pursuant to
employee benefits plans approved by the Company's

                                       19
<PAGE>

Board of Directors, (v) to the filing of a Registration Statement on Form S-8,
(vi) if the securities are issued for consideration other than cash in
connection with a bona fide business acquisition by the Company whether by
merger, consolidation, purchase of assets, sale or exchange of stock or
otherwise; or (vii) if the issuance is in connection with a (A) commercial
banking arrangement, (B) equipment financing, (C) sponsored research, (D)
collaboration, (E) technology licensing, (F) development agreements or (G) other
strategic partnership; provided, however, that with respect to (C) through (G)
hereof, the primary purpose of such transaction is not to raise equity capital.

         (n) CUSIP Numbers. The Company in issuing the Securities shall use
"CUSIP" numbers (if then generally in use), and shall use such "CUSIP" numbers
in notices to holders as a convenience to holders thereof; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any notice
to such holders and that reliance may be placed only on other identification
numbers printed on such Securities, and any such Company action referenced in
such notice (including, without limitation, redemption or automatic conversion
of Notes) shall not be affected by any defect in or omission of such numbers.

         (o) Accounting Matters. The Company shall use its reasonable best
efforts to cause to be delivered to the Buyers a letter in form and substance
reasonably acceptable to the Buyers and reasonably customary in scope and
substance for comfort letters delivered by independent accountants in connection
with offerings similar to the Offering.

         (p) Nonpublic Information. The Company shall not, and shall cause each
of its Subsidiaries and its and each of their respective officers, directors,
employees and agents, not to, provide those Buyers listed on Schedule 4(p) with
any material, nonpublic information regarding the Company or any of its
Subsidiaries from and after the filing of the 8-K Filing with the SEC without
the express written consent of such Buyer' provided, however that the foregoing
shall not restrict in any way the distribution of any information to any such
Buyers by the Company or its Subsidiaries and its and each of their respective
officers, directors, employees and agents (i) as reasonably required by the
terms of the Transaction Documents or (ii) in connection with any request by or
on behalf of the Company to waive, amend or modify any provision of the
Transaction Documents.

         (q) Independent Nature of Buyers' Obligations and Rights. The
obligations of each Buyer under any Transaction Document are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible
in any way for the performance of the obligations of any other Buyer under any
Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall be
deemed to constitute the Buyers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Buyers are
in any way acting in concert or as a group with respect to such obligations or
the transactions contemplated by the Transaction Documents. Each Buyer confirms
that it has independently participated in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. Except as
provided by the Transaction Documents, each Buyer shall be entitled to
independently protect and enforce its rights, including, without limitations,
the rights arising out of this Agreement or out of any other

                                       20
<PAGE>

Transaction Documents, and it shall not be necessary for any other Buyer to be
joined as an additional party in any proceeding for such purpose.

         SECTION 5. TRANSFER AGENT INSTRUCTIONS. The Company shall issue
irrevocable instructions to its transfer agent, and any subsequent transfer
agent, to issue certificates or credit shares to the applicable balance accounts
at the Company's designated registrar (the "Registrar"), registered in the name
of Piper Jaffray, Fleet and each Buyer or their respective nominee(s), for the
Conversion Shares and Warrant Shares in such amounts as specified from time to
time by Piper Jaffray, Fleet or a Buyer to the Company upon conversion of the
Notes or exercise of the Warrants, as applicable and in accordance with their
respective terms (the "Irrevocable Transfer Agent Instructions"), substantially
in the form attached hereto as Exhibit F. Prior to transfer or sale pursuant to
a registration statement or Rule 144 under the Securities Act of the Conversion
Shares and the Warrant Shares, all such certificates shall bear the restrictive
legend specified in Section 2(g) of this Agreement. The Company represents and
warrants that no instruction inconsistent with the Irrevocable Transfer Agent
Instructions referred to in this Section 5 will be given by the Company to its
transfer agent and that the Securities shall be freely transferable on the books
and records of the Company as and to the extent provided in this Agreement, the
Notes, the Indenture, the Warrants and the Registration Rights Agreement.
Subject to the Indenture and the Warrant Agent Agreement, if a Buyer provides
the Company with an opinion of counsel, in form reasonably acceptable to the
Company, to the effect that a public sale, assignment or transfer of the
Securities has been made without registration under the Securities Act or that
the Securities can be sold pursuant to Rule 144(k) without any restriction as to
the number of securities acquired as of a particular date that can then be
immediately sold, and provides such representations that the Company shall
reasonably request confirming compliance with the requirements of Rule 144, the
Company shall permit the transfer, and, in the case of the Conversion Shares and
the Warrant Shares, promptly instruct its transfer agent to issue one or more
certificates, or credit shares to one or more balance accounts at the Registrar,
in such name and in such denominations as specified by such Buyer and without
any restrictive legend. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Buyers by vitiating the
intent and purpose of the transaction contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Section 5 will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Section 5, that the
Buyers shall be entitled, in addition to all other available remedies, to an
order and/or injunction restraining any breach and requiring immediate issuance
and transfer, without the necessity of showing economic loss and without any
bond or other security being required.

         SECTION 6. CONDITIONS TO THE COMPANY'S OBLIGATION TO CLOSE. The
obligation of the Company to issue and sell the Notes and the Warrants to each
respective Buyer at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion by providing such Buyer with prior written
notice thereof, and provided further such waiver shall not be effective against
any other Buyer who does not consent in writing:

         (a) Transaction Documents. Such Buyer shall have executed each of the
Transaction Documents to which it is a party and delivered the same to the
Company.

                                       21
<PAGE>

         (b) Payment of Purchase Price. Such Buyer shall have delivered to the
Company the purchase price for the Notes and the Warrants being purchased by
such Buyer at the Closing, by wire transfer of immediately available funds
pursuant to the wire instructions attached hereto as Schedule A.

         (c) Representations and Warranties; Covenants. The representations and
warranties of such Buyer shall be true, correct and complete in all material
respects (except to the extent that any of such representations and warranties
is already qualified as to materiality in Section 2 above, in which case such
representations and warranties shall be true, correct and complete without
further qualification) as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a specific date (which shall be true, correct and complete as of such
date)), and such Buyer shall have performed, satisfied and complied with in all
material respects the covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by such Buyer
at or prior to the Closing Date.

         (d) Investor Questionnaires. Such Buyer shall have completed an
investor questionnaire and the Company shall be reasonably satisfied with such
Buyer's declaration in the investor questionnaire of its status as an
"accredited investor" as that term is defined in Rule 501(a) of Regulation D
under the Securities Act.

         (e) Minimum Subscription. The Company has received subscriptions for an
aggregate principal amount of the Notes that will be purchased by the Buyers on
the Closing Date is not less than U.S. Fifteen Million Dollars ($15,000,000.00)
in the aggregate.

         SECTION 7. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE. The
obligation of each Buyer hereunder to purchase the Notes and the Warrants from
the Company at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for each Buyer's sole benefit and may be waived by such Buyer at
any time in its sole discretion by providing the Company with prior written
notice thereof:

         (a) Transaction Documents. The Company shall have executed each of the
Transaction Documents and delivered the same to such Buyer. The Trustee shall
have executed and delivered the Indenture to the Company. The Warrant Agent
shall have executed and delivered the Warrant Agent Agreement to the Company.

         (b) No Delisting of Common Stock. The Common Stock (i) shall be
designated for quotation or listed on the Principal Market and (ii) shall not
have been suspended by the Commission or the Principal Market from trading on
the Principal Market nor shall suspension by the Commission or the Principal
Market have been threatened either (A) in writing by the Commission or the
Principal Market or (B) by falling below the minimum listing maintenance
requirements of the Principal Market.

         (c) Representations and Warranties; Covenants. The representations and
warranties of the Company shall be true, correct and complete in all material
respects (except to the extent that any of such representations and warranties
is already qualified as to materiality in Section 3 of

                                       22
<PAGE>

this Agreement, in which case such representations and warranties shall be true,
correct and complete without further qualification) as of the date when made and
as of the Closing Date as though made at that time (except for representations
and warranties that speak as of a specific date (which shall be true, correct
and complete as of such date)) and the Company shall have performed, satisfied
and complied with in all material respects the covenants, agreements and
conditions required by the Transaction Documents to be performed, satisfied or
complied with by the Company at or prior to the Closing Date. Piper Jaffray
shall have received a certificate, executed by the Chief Executive Officer of
the Company, dated as of the Closing Date, to the foregoing effect.

         (d) Opinion of Counsel. The Company shall have delivered to Piper
Jaffray the opinion of Hallett & Perrin, P.C., dated as of the Closing Date, in
the form of Exhibit G attached hereto.

         (e) Delivery of Notes and Warrants. The Company shall have executed and
delivered to such Buyer the Notes and the Warrants (in such denominations as
such Buyer shall reasonably request) for the Notes and the Warrants being
purchased by such Buyer at the Closing.

         (f) Reservation of Common Stock. As of the Closing Date, the Company
shall have reserved out of its authorized and unissued Common Stock, solely for
the purpose of effecting the conversion of the Notes and the exercise of the
Warrants, the number of shares of Common Stock equal to the Reservation Amount
(as defined in Section 4(e) of this Agreement).

         (g) Irrevocable Transfer Agent Instructions. The Company shall have
delivered the Irrevocable Transfer Agent Instructions, in the form of Exhibit F
attached hereto, to the Company's transfer agent.

         (h) Good Standing Certificates. The Company shall have delivered to
Piper Jaffray (i) a certificate evidencing the incorporation and good standing
of the Company in Missouri issued by the Secretary of State of Missouri as of a
recent date; and (ii) a certificate of good standing (or appropriate
counterpart) from the appropriate governmental authority in each domestic
jurisdiction in which the Subsidiaries are incorporated or organized as of a
recent date.

         (i) Secretary's Certificate. The Company shall have delivered to Piper
Jaffray a secretary's certificate, dated as of the Closing Date, certifying as
to (i) adoption of the form of resolutions of the Board of Directors of the
Company consistent with Section 3(b) of this Agreement and in a form reasonably
acceptable to such Buyer, (ii) the Articles of Incorporation and (iii) the
Bylaws, each as in effect at the Closing.

         (j) Filings; Authorizations. The Company shall have made all filings
under all applicable federal and state securities laws necessary to consummate
the issuance of the Securities pursuant to this Agreement in compliance with
such laws, and shall have obtained all authorizations, approvals and permits
necessary to consummate the transactions contemplated by the Transaction
Documents and such authorizations, approvals and permits shall be effective as
of the Closing Date.

         (k) No Injunctions. No temporary restraining order, preliminary or
permanent injunction or other order or decree, and no other legal restraint or
prohibition shall exist which prevents or arguably prevents the consummation of
the transactions contemplated by the Transaction

                                       23
<PAGE>

Documents, nor shall any proceeding have been commenced or threatened with
respect to the foregoing.

         (l) No Material Adverse Effect. Between the time of execution of this
Agreement and the Closing Date, (i) no Material Adverse Effect shall occur or
become known (whether or not arising in the ordinary course of business) and
(ii) no transaction which is material and unfavorable to the Company shall have
been entered into by the Company.

         (m) Payment of Fees. The Company shall have satisfied its obligations
under Section 9(p) of this Agreement.

         (n) Minimum Offering. The Company shall have confirmed in writing to
the Buyers that it will be issuing at least an aggregate of $20,000,000
principal amount of Notes and Warrants to the Buyers on the Closing Date.

         (o) Comfort Letter. The Company's independent accountants shall have
delivered to Piper Jaffray a letter in form and substance reasonably acceptable
to the Buyers and reasonably customary in scope and substance for comfort
letters delivered by independent accountants in connection with offerings
similar to the Offering.

         SECTION 8. INDEMNIFICATION.

         (a) Indemnification by the Company. In consideration of each Buyer's
execution and delivery of the Transaction Documents and acquiring the Securities
thereunder and Piper Jaffray's and Fleet's agreement to act as exclusive
placement agents and in addition to all of the Company's other obligations under
the Transaction Documents, the Company shall defend, protect, indemnify and hold
harmless Piper Jaffray, Fleet and each Buyer and each other holder of the
Securities and all of their shareholders, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing
persons' agents or other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the "Indemnitees") from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys' fees and disbursements
(collectively, "Claims"), incurred by any Indemnitee as a result of, or arising
out of, or relating to (i) an untrue statement or alleged untrue statement of a
material fact contained in the Confidential Private Placement Memorandum, or in
any amendment or supplement thereto, or in any Blue Sky filings executed by the
Company or based on any information furnished in writing by the Company and
filed in any jurisdiction in order to qualify any or all of the Securities under
(or obtain exemption from) the securities laws thereof, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or (ii)
any breach of any representation, warranty, covenant or agreement made by the
Company in the Transaction Documents. To the extent that the foregoing
undertaking by the Company may be unenforceable for any reason, the Company
shall make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities which is permissible under applicable law. Subject
to Section 8(b) of this Agreement,

                                       24
<PAGE>

the Company shall reimburse the Indemnitees, promptly as such expenses are
incurred and are due and payable, for any legal fees or other reasonable
expenses incurred by them in connection with the investigating or defending any
such Claim.

         (b) Procedures for Indemnification. Promptly after an Indemnitee has
knowledge of any Claim as to which such Indemnitee reasonably believes indemnity
may be sought or promptly after such Indemnitee receives notice of the
commencement of any action or proceeding (including any governmental action or
proceeding) involving a Claim, such Indemnitee shall, if a Claim in respect
thereof is to be made against the Company under this Section 8, deliver to the
Company a written notice of such Claim, and the Company shall have the right to
participate in, and, to the extent the Company so desires, to assume control of
the defense thereof with counsel mutually satisfactory to the Company and the
Indemnitee; provided, however, that an Indemnitee shall have the right to retain
its own counsel if, in the reasonable opinion of counsel retained by the
Company, the representation by such counsel of the Indemnitee and the Company
would be inappropriate due to actual or potential differing interests between
such Indemnitee and the Company; provided, further, that the Company shall not
be responsible for the reasonable fees and expense of more than one (1) separate
legal counsel for such Indemnitee. In the case of an Indemnitee, the legal
counsel referred to in the immediately preceding sentence shall be selected by
the Investors holding at least a majority in interest of the Securities to which
the Claim relates. The Indemnitee shall cooperate fully with the Company in
connection with any negotiation or defense of any such action or Claim by the
Company and shall furnish to the Company all information reasonably available to
the Indemnitee which relates to such action or Claim. The Company shall keep the
Indemnitee fully apprised at all times as to the status of the defense or any
settlement negotiations with respect thereto. The Company shall not be liable
for any settlement of any Claim effected without its prior written consent;
provided, however, that the Company shall not unreasonably withhold, delay or
condition its consent. The Company shall not, without the prior written consent
of the Indemnitee, consent to entry of any judgment or enter into any settlement
or other compromise which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnitee of a full release from
all liability in respect to such Claim and action and proceeding. The failure to
deliver written notice to the Company as provided in this Agreement shall not
relieve the Company of any liability to the Indemnitee under this Section 8,
except to the extent that the Company is materially prejudiced in its ability to
defend such action.

         (c) Survival of Indemnification Obligations. The obligations of the
Company under this Section 8 shall survive the transfer of the Securities by the
Indemnitees.

         SECTION 9. MISCELLANEOUS.

         (a) Governing Law; Jurisdiction. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of

                                       25
<PAGE>

process and notice thereof. Nothing contained herein shall be deemed to limit in
any way any right to serve process in any manner permitted by law. If any
provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.

         (b) Counterparts. This Agreement may be executed in identical
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other parties hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this
Agreement.

         (c) Headings. The headings of this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

         (d) Entire Agreement. This Agreement, the Registration Rights
Agreement, the Notes and the Warrants and the documents referenced herein and
therein constitute the entire agreement among the parties hereto with respect to
the subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, the Registration Rights Agreement, the Notes and the
Warrants supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.

         (e) Consents. All consents and other determinations required to be made
by Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by Investors holding at least a majority of the
Conversion Shares and Warrant Shares, determined as if all of the Notes held by
Buyers then outstanding have been converted into Conversion Shares and all
Warrants then outstanding have been exercised for Warrant Shares without regard
to any limitations on conversion of the Notes or on the exercise of the
Warrants.

         (f) Waivers. No provision of this Agreement may be amended or waived
other than by an instrument in writing signed by the Company and Investors
holding at least a majority of the Conversion Shares and Warrant Shares,
determined as if all of the Notes held by Buyers then outstanding have been
converted into Conversion Shares and all Warrants then outstanding have been
exercised for Warrant Shares without regard to any limitations on the conversion
of the Notes or on the exercise of the Warrants. No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
Notes then outstanding. No consideration shall be offered or paid to any holder
of any Securities who is an "affiliate" (as defined in Rule 501(b) of Regulation
D under the Securities Act) to amend or consent to a waiver or modification of
any provision of any of the Transaction Documents unless the same consideration
is offered to all of the holders of such Securities.

         (g) Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (evidenced by
mechanically or electronically generated receipt by the sender's facsimile
machine); or (iii) one (1) Business Day after deposit with a nationally
recognized

                                       26
<PAGE>

overnight delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:

                  If to the Company:

                        Dave & Buster's, Inc.
                        2481 Manana Drive
                        Dallas, Texas  75220
                        Telephone:     (214) 357-9588
                        Facsimile:     (214) 357-1536
                        Attention:     Mr. John Davis, Esq.,
                                       Senior Vice President and General Counsel

                  with a copy to:

                        Hallett & Perrin, P.C.
                        2001 Bryan Street, Suite 3900
                        Dallas, Texas  75201
                        Telephone:     (214) 922-4120
                        Facsimile:     (214) 922-4170
                        Attention:     Bruce H. Hallett, Esq.

                  If to U.S. Bancorp Piper Jaffray:

                        U.S. Bancorp Piper Jaffray
                        345 California Street, Suite 2100
                        San Francisco, California  94104
                        Telephone:     (415) 984-5127
                        Facsimile:     (415) 984-5121
                        Attention:     Mr. David Fullerton

                  with a copy to:

                        Gibson, Dunn & Crutcher LLP
                        1050 Connecticut Avenue NW
                        Washington, DC 20036
                        Telephone:     (202) 955-8500
                        Facsimile:     (202) 467-0539
                        Attention:     Brian Lane, Esq.

                                       27
<PAGE>

                  If to Fleet Securities, Inc.:

                        Fleet Securities, Inc.
                        100 Federal Street,
                        Boston, MA 02110,
                        Mail Stop: MA DE 10011D
                        Telephone:     (617) 434-6993
                        Facsimile:     (617) 434-4970
                        Attention:     Kelly Wall

              If to a Buyer, to its address and facsimile number set forth on
the Schedule of Buyers attached hereto as Exhibit A, with copies to such Buyer's
representatives as set forth on the Schedule of Buyers, or at such other address
and/or facsimile number and/or to the attention of such other person as the
recipient party has specified by written notice given to each other party.

         (h) Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

         (i) Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person other than Piper Jaffray or Fleet.

         (j) Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

         (k) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns,
including any purchasers of the Securities. The Company shall not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the holders of at least a majority of the outstanding principal
amount of the Notes including by merger or consolidation, except pursuant to a
Change of Control (as defined in the Notes) with respect to which the Company is
in compliance with the terms of the Notes. Other than in connection with a sale
pursuant to the Registration Rights Agreement, a Buyer may assign some or all of
its rights and obligations hereunder without the consent of the Company;
provided, however, that the transferee has agreed in writing to be bound by the
applicable provisions of this Agreement and provided, further, that such
assignment shall be in connection with a transfer of all or a portion of the
Notes and Warrants held by such Buyer and subject to the terms and conditions of
the Warrants and Notes, as applicable.

         (l) Survival. Unless this Agreement is terminated under Section 9(n) of
this Agreement, the representations and warranties of the Company and the Buyers
contained in Sections 2 and 3 of this Agreement, the indemnification provisions
set forth in Section 8 of this Agreement, and

                                       28
<PAGE>

the agreements and covenants set forth in Sections 4, 5 and 9 of this Agreement
shall survive with respect to each Note or Warrant for so long as such Note or
Warrant is outstanding and with respect to each Conversion Share or Warrant
Share until such Conversion Share or Warrant Share (x) has been transferred or
sold pursuant to an effective registration statement, or (y) has been
transferred or sold pursuant to the exemption from registration provided by Rule
144 under the Securities Act. Each Buyer shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.

         (m) Publicity. The Company and Piper Jaffray shall have the right to
approve before issuance any press releases or any other public statements with
respect to the transactions contemplated by the Transaction Documents; provided,
however, that none of the Company, Piper Jaffray, or Fleet shall have the right
to issue a press release referring to a Buyer or its affiliates without such
Buyer's prior written consent. Piper Jaffray and Fleet have the right to
describe their services to the Company in connection with the Offering and to
reproduce the Company's name and logo in their advertisements, marketing
materials and equity research reports, if any, in the form previously approved
by the Company and subject to the prior approval of the Company, which shall not
be unreasonably withheld, such additional uses as Piper Jaffray or Fleet may
from time to time request.

         (n) Termination. In the event that the Closing shall not have occurred
with respect to a Buyer on or before five (5) Business Days from the date hereof
due to the Company's or such Buyer's failure to satisfy the conditions set forth
in Sections 6 and 7 of this Agreement (and the nonbreaching party's failure to
waive such unsatisfied conditions), the nonbreaching party shall have the option
to terminate this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party, and the
Company or Piper Jaffray, as the case may be, shall return any and all funds
paid hereunder to the applicable Buyer no later than the close of business on
the Business Day following such termination; provided, however, that if this
Agreement is terminated pursuant to this Section 9(o), the Company shall remain
obligated to reimburse any nonbreaching Buyer for the expenses described in
Section 4(i) of this Agreement.

         (o) Placement Agent. The Company acknowledges that it has engaged U.S.
Bancorp Piper Jaffray Inc., and Fleet Securities, Inc., as placement agents in
connection with the sale of the Notes and the Warrants and that the compensation
of such agents is as set forth on the Schedule of Fees attached hereto as
Exhibit D. The Company shall be responsible for the payment of any placement
agents' fees, financial advisory fees, or brokers' commissions (other than for
persons engaged by any Buyer or its investment advisor) relating to or arising
out of the transactions contemplated hereby. The Company shall pay, and hold
each Buyer harmless against, any liability, loss or expense (including, without
limitation, attorney's fees and out-of-pocket expenses) arising in connection
with any such claim.

         (p) Remedies. Each Buyer and each holder of the Securities shall have
all rights and remedies set forth in the Transaction Documents and all rights
and remedies which such holders have been granted at any time under any other
agreement or contract and all of the rights which such holders have under any
law. Any person having any rights under any provision of this Agreement shall be
entitled to enforce such rights to recover damages by reason of any breach of
any provision of this Agreement and to exercise all other rights granted by law.

                                       29
<PAGE>

         (q) Payment Set Aside. To the extent that the Company makes a payment
or payments to any Buyer hereunder or pursuant to any of the other Transaction
Documents, or the Buyers enforce or exercise their rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other person under any law (including, without limitation, any
bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff
had not occurred.

                                       30
<PAGE>
         IN WITNESS WHEREOF, the parties have caused this Securities Purchase
Agreement to be duly executed as of the date first written above.

                                  "COMPANY"

                                  DAVE & BUSTER'S, INC.

                                  ----------------------------------------------
                                  W. C. Hammett, Senior Vice President and Chief
                                  Financial Officer

ACKNOWLEDGED AND AGREED:

"PIPER JAFFRAY"

U.S. BANCORP PIPER JAFFRAY

By:
   ----------------------------------
Its:
    ---------------------------------

"FLEET"

FLEET SECURITIES, INC.

By:
   ----------------------------------
Its:
    ---------------------------------

                    [Signatures of Buyers on Following Page]

<PAGE>

                [SIGNATURE PAGE TO SECURITIES PURCHASE AGREEMENT]

                                    "BUYER"

                                    --------------------------------------------
                                           (print full legal name of Buyer)

                                    By:
                                       -----------------------------------------
                                       (signature of authorized representative)

                                    Name:
                                         ---------------------------------------

                                    Its:
                                        ----------------------------------------

                                    Buyer's Allocated Investment Amount:

                                    --------------------------------------------
                                               (amount in U.S. Dollars)

                                    Buyer hereby elects to be subject to Section
                                    2(k)(A):

                                    By:
                                        ----------------------------------------
                                        (signature of authorized representative)

                                OR

                                    Buyer hereby elects to be subject to Section
                                    2(k)(B):

                                    By:
                                        ----------------------------------------
                                        (signature of authorized representative)

<PAGE>

                                    EXHIBIT A

                               SCHEDULE OF BUYERS

<Table>
<Caption>

                    NAME OF BUYERS               PRINCIPAL AMOUNT OF NOTES          NUMBER OF WARRANTS
     ---------------------------------           -------------------------          ------------------
<S>                                              <C>                                <C>
1.   [Name of Buyer]                                 $
     [Contact Information for Buyer]
</Table>

<PAGE>

                                    EXHIBIT B

                                FORM OF INDENTURE

<PAGE>
                                    EXHIBIT C

                         FORM OF WARRANT AGENT AGREEMENT

<PAGE>

                                    EXHIBIT D

                                SCHEDULE OF FEES

FEES PAYABLE TO PIPER JAFFRAY:

    CASH COMPENSATION:        $1,848,750.00

    WARRANTS:                 Warrants to purchase 52,245 shares of
                              Common Stock

    WIRE INSTRUCTIONS:

FEES PAYABLE TO FLEET:

    CASH COMPENSATION:        $326,250.00

    WIRE INSTRUCTIONS:

<PAGE>
                                    EXHIBIT E

                      FORM OF REGISTRATION RIGHTS AGREEMENT

<PAGE>

                                    EXHIBIT F

                 FORM OF IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

August 7, 2003

VIA FEDERAL EXPRESS

Mellon Investor Services LLC
Overpeck Centre
Ridgefield Park, NJ 07660

Attn:
     -----------------

         Re:      Reservation of Shares of Common Stock Pursuant to Sale by Dave
                  & Buster's, Inc. of up to $30,000,000 in Aggregate Principal
                  Amount of 5.0% Convertible Subordinated Notes due 2008 and
                  Warrants to Purchase up to 574,691 Shares of Common Stock

Ladies and Gentlemen:

         Dave & Buster's, Inc., a Missouri corporation (the "Company"), has
agreed (i) to sell to the buyers listed on Schedule A hereto (the "Buyers"), on
the date hereof, Thirty Million United States Dollars ($30,000,000) in aggregate
principal amount of 5.0% Convertible Subordinated Notes due 2008 (the "Notes"),
convertible into shares of the common stock, $0.01 par value per share (the
"Common Stock") of the Company, and warrants (the "Buyer Warrants") to purchase
522,446 shares of Common Stock, pursuant to that certain Securities Purchase
Agreement dated as of August 7, 2003, by and among the Company and each Buyer
(the "Securities Purchase Agreement"), and (ii) to issue to U.S. Bancorp Piper
Jaffray ("Piper Jaffray") a warrant to purchase the number of shares of Common
Stock set forth in the Schedule of Fees attached as Exhibit D to the Securities
Purchase Agreement (the "Piper Jaffray Warrant" and, together with the Buyer
Warrants, the "Warrants"). Capitalized terms used herein without definition have
the meanings assigned to them in the Securities Purchase Agreement.

         You are hereby instructed to:

<PAGE>
                  Establish as of the date of this letter a reserve of 2,438,080
shares of Common Stock for issuance to holders of Notes upon conversion of their
Notes (the "Conversion Share Reserve"). The Conversion Share Reserve shall be
adjusted to appropriately reflect the effect of any stock split, reverse stock
split, stock dividend (including any dividend or distribution of securities
convertible into Common Stock), reorganization, recapitalization,
reclassification, exchange or other like change with respect to Common Stock
occurring on or after the date hereof.

                  Establish as of the date of this letter a reserve of 603,426
shares of Common Stock for issuance to holders of Warrants upon exercise of
their Warrants (the "Warrant Share Reserve"). The Warrant Share Reserve shall be
adjusted to appropriately reflect the effect of any stock split, reverse stock
split, stock dividend (including any dividend or distribution of securities
convertible into Common Stock), reorganization, recapitalization,
reclassification, exchange or other like change with respect to Common Stock
occurring on or after the date hereof.

                  A registration statement on Form S-3 to register the notes,
warrants and Common Stock issuable out of the Conversion Share Reserve and the
Warrant Share Reserve (the "Registration Statement") will be filed with the
Securities and Exchange Commission (the "Commission") on or before September 6,
2003. We will forward to you copies of the filing promptly after it is declared
or deemed effective by the Commission.

                  Until the Registration Statement is declared effective by the
Commission, the certificates evidencing the shares of Common Stock issued out of
the Conversion Share Reserve or the Warrant Share Reserve will bear the
restrictive legend set forth below:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
         APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR
         SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
         REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR
         APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION THEREFROM. THE
         SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
         OR OTHER LOAN SECURED BY THE SECURITIES.

                  Until the Registration Statement is declared effective by the
Commission, certificates evidencing shares of Common Stock held by or
transferred to an "affiliate" (as defined in Rule 501(b) of Regulation D under
the Securities Act) of the Company will bear the restrictive legend set forth
below:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE HELD BY A PERSON WHO
         MAY BE DEEMED TO BE AN AFFILIATE OF THE ISSUER FOR PURPOSES OF RULE 144
         PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
         "SECURITIES ACT"), AND MAY BE SOLD ONLY IN COMPLIANCE WITH RULE 144,

<PAGE>

         PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
         ACT OR PURSUANT TO A VALID EXEMPTION FROM REGISTRATION UNDER THE
         SECURITIES ACT.

                  So long as you have previously received (i) an opinion of the
Company's outside counsel (which the Company shall direct be delivered to you by
such outside counsel upon the effectiveness of the Registration Statement
covering the resales of the Common Stock) stating that a Registration Statement
covering the resales of the Common Stock has been declared effective by the
Commission under the Securities Act (the "Opinion"), (ii) a certification from
the clearing broker for the Buyers as to compliance with the prospectus delivery
requirements and as to the fact that the sale of the Common Stock was made in
compliance with the Plan of Distribution set forth in the Registration Statement
(the "Broker Certification"), (iii) a copy of the Registration Statement and
(iv) confirmation from the Company that sales are permitted under the
Registration Statement at that time, the certificates representing the Common
Stock sold pursuant to the Registration Statement shall not bear any legend
restricting transfer of the Common Stock thereby and should not be subject to
any stop-transfer restriction.

                  We enclose the following additional documents:

                  1.   A copy of the Securities Purchase Agreement; and

                  2.   A capitalization table listing the Buyers and Piper
                       Jaffray and their respective beneficial ownership
                       interests in the shares of Common Stock.

                  Please be advised that the Buyers have relied upon this
instruction letter as an inducement to enter into the Securities Purchase
Agreement and, accordingly, each of the Buyers is a third party beneficiary to
these instructions.

                  Please sign in the space provided below to evidence your
acceptance and acknowledgment of your responsibilities under this letter. Please
call me at (214) 357-9588 if you require any further information. Thank you for
your assistance.

                                           Very truly yours,

                                           DAVE & BUSTER'S, INC.

                                           -------------------------------------
                                           Its:
                                               ---------------------------------

Acknowledged and Agreed:

MELLON INVESTOR SERVICES LLC

By:
    ----------------------------
Its:

cc:  Mr. David J. Fullerton (w/o encl.)

Enclosures

<PAGE>

                                    EXHIBIT G

                         FORM OF COMPANY COUNSEL OPINION

         The Company is a corporation validly existing in good standing under
the laws of the State of Missouri, with all requisite corporate power and
authority to own, lease and operate its properties and assets, to conduct its
business as described in the Confidential Private Placement Memorandum, and to
enter into and perform its obligations under the Transaction Documents.

         The Subsidiaries are corporations validly existing in good standing
under the laws of their respective jurisdictions of incorporation, with all
requisite corporate power and authority to own, lease and operate its properties
and assets, to conduct their businesses as described in the Confidential Private
Placement Memorandum.

         The execution, delivery and performance of the Transaction Documents
have been duly authorized by all necessary corporate action on the part of the
Company and the Transaction Documents have been duly executed and delivered by
the Company.

         The Transaction Documents constitute the legally valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except (i) as rights to indemnification and contribution may be
limited by federal or state securities laws and policies underlying such laws
and (ii) as such enforceability may be limited by general principles of equity
or applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of creditors' rights and remedies.

         The execution and delivery by the Company of the Transaction Documents
do not, and the Company performance of its obligations under the Transaction
Documents will not, (i) violate the Company's Articles of Incorporation or
By-Laws, (ii) violate, breach or result in a default under, any existing
obligation of or restrictions on the Company under any other agreement listed in
an exhibit to the Company's most recent annual report on Form 10-K or any
quarterly report on Form 10-Q filed since such annual report, (iii) breach or
otherwise violate any existing obligation of or restriction on the Company under
any order, judgment or decree of any state or federal court or governmental
authority binding on the Company, and known to us, or (iv) to our knowledge,
violate any current Missouri, New York or federal statute, rule or regulation
that we have recognized as applicable to the Company or to transactions of the
type contemplated by the Transaction Documents.

         The Notes have been duly authorized by all necessary corporate action
on the part of the Company and, upon payment for and delivery of the Notes in
accordance with the Securities Purchase Agreement, to our knowledge will be made
and issued free of preemptive or similar rights.

         The Warrants have been duly authorized by all necessary corporate
action on the part of the Company and, upon payment for and delivery of the
Warrants in accordance with the

<PAGE>

Securities Purchase Agreement, the Warrants will be validly issued, fully paid,
and nonassessable and to our knowledge, free of preemptive or similar rights.

         The Conversion Shares have been duly authorized and reserved for
issuance upon conversion of the Notes by all necessary corporate action on the
part of the Company and, upon conversion of the Notes and delivery of the
Conversion Shares in accordance with the Notes, the Conversion Shares will be
validly issued, fully paid and nonassessable and to our knowledge, free of
preemptive or similar rights.

         The Warrant Shares have been duly authorized and reserved for issuance
upon exercise of the Warrants by all necessary corporate action on the part of
the Company and, upon payment of the exercise price upon exercise of the
Warrants and delivery of the Warrant Shares in accordance with the Warrants, the
Warrant Shares will be validly issued, fully paid, and nonassessable and to our
knowledge, free of preemptive or similar rights.

         No order, consent, permit or approval of any Missouri, New York or
federal governmental authority that we have recognized as applicable and
material to the Company or to the transactions of the type contemplated by the
Transaction Documents is required on the part of the Company for the execution
and delivery of, and performance of its obligations under, the Transaction
Documents except as may be required under applicable state and federal
securities laws and regulations applicable to the offer and sale of the
Securities and by federal and state securities laws with respect to the
Company's obligations under the Registration Rights Agreement.

         Assuming the accuracy of your representations in Section 2 of the
Securities Purchase Agreement and the representations made by Piper Jaffray and
Fleet in the Placement Agent Certificate, no registration under the Securities
Act, and no qualification of the Indenture under the Trust Indenture Act, is
required for the purchase and sale of the Notes and the Warrants or the issuance
to Piper Jaffray of the Piper Jaffray Warrants in the manner contemplated by the
Securities Purchase Agreement and the Confidential Private Placement Memorandum.
Assuming that the exemption provided by Section 3(a)(9) of the Securities Act of
1933 would be available, no registration under the Securities Act will be
required for the issuance of the Conversion Shares and the Warrant Shares in the
manner contemplated by the Note and the Warrant, respectively.

         We do not know of any contract or other document of a character
required to be filed as an SEC Document which is not filed as required.

         The SEC Documents incorporated by reference in the Confidential Private
Placement Memorandum, on the respective dates they were filed, appeared on their
face to comply in all material respects with the requirements as to form for
reports on Form 10-K, Form 10-Q, Form 8-K and Schedule 14-A, as applicable,
except that we express no opinion concerning the financial statements and other
financial or statistical information contained or incorporated by reference
therein or the exhibits thereto.

         In the course of acting as counsel for the Company in connection with
the preparation by the Company of the Confidential Private Placement Memorandum,
we have participated in

<PAGE>

conferences with officers and representatives of the Company, the independent
accountants of the Company, and representatives of Piper Jaffray and their
counsel, at which time the contents of the Confidential Private Placement
Memorandum and related matters were discussed. Although we are not passing upon
and do not assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Confidential Private Placement Memorandum,
based on such participation, no facts have come to our attention that would lead
us to believe that the Confidential Private Placement Memorandum (except that we
express no view with respect to the financial statements, including the notes
thereto, and schedules or other financial data included therein or the exhibits
contained in the SEC Documents), as of the date thereof, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.

<PAGE>

                                  SCHEDULE 3(a)

                                  SUBSIDIARIES

DANB Texas, Inc.
Dave & Buster's of Pennsylvania, Inc.
Dave & Buster's of Florida, Inc.
Dave & Buster's of Georgia, Inc.
Dave & Buster's of Illinois, Inc.
Dave & Buster's of Maryland, Inc.
Dave & Buster's of California, Inc.
Dave & Buster's of Colorado, Inc.
Dave & Buster's of New York, Inc.
Dave & Buster's of Pittsburgh, Inc.
Dave & Buster's of Hawaii, Inc.
D&B Leasing, Inc. (d/b/a Dave & Buster's Leasing, Inc.)
Dave & Buster's I, L.P.
D&B Realty Holding, Inc.

<PAGE>

                                   SCHEDULE A

                            COMPANY WIRE INSTRUCTIONS

Bank Name:            Texas Capital Bank, N.A.

ABA No.:              111017979

Account Name:         Hallett & Perrin, P.C. IOLTA Account

Account No.:          1111011613

<PAGE>

                                  SCHEDULE 4(p)

                                     BUYERS

<PAGE>

<Table>
<S>                                                                          <C>
SECTION 1. Purchase and Sale of Notes and Warrants............................2

SECTION 2. Buyer's Representations and Warranties.............................2

SECTION 3. Representations and Warranties of the Company......................7

SECTION 4. Covenants ........................................................16

SECTION 5. Transfer Agent Instructions.......................................21

SECTION 6. Conditions to the Company's Obligation to Close...................21

SECTION 7. Conditions to Each Buyer's Obligation to Purchase.................22

SECTION 8. Indemnification...................................................24

SECTION 9. Miscellaneous.....................................................25

                                    SCHEDULES

Schedule 3(a)...............................Subsidiaries

Schedule A..................................Company Wire Instructions

Schedule 4(p)...............................Buyers

                                    EXHIBITS

Exhibit A...................................Schedule of Buyers

Exhibit B...................................Form of Indenture

Exhibit C...................................Form of Warrant Agent Agreement

Exhibit D...................................Schedule of Fees

Exhibit E...................................Form of Registration Rights Agreement

Exhibit F...................................Form of Irrevocable Transfer Agent Instructions

Exhibit G...................................Form of Company Counsel Opinion
</Table><PAGE>

                             BELL MICROPRODUCTS INC.
                                    AS ISSUER

                                       AND

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

                                   AS TRUSTEE

                                    INDENTURE

<PAGE>

                              CROSS-REFERENCE TABLE

<Table>
<Caption>
TRUST INDENTURE ACT
 SECTION                                                      INDENTURE SECTION
-------------------                                           -----------------
<S>                                                           <C>
310 (a)                                                       7.10
    (b)                                                       7.10
    (c)                                                       N.A.
311 (a)                                                       7.11
    (b)                                                       7.11
    (c)                                                       N.A.
312 (a)                                                       5.01
    (b)                                                       5.02
    (c)                                                       5.02
313 (a)                                                       5.03
    (b)                                                       5.03
    (c)                                                       13.03
    (d)                                                       5.03
314 (a)                                                       4.05
    (b)                                                       N.A.
    (c)(1)                                                    13.05
    (c)(2)                                                    13.05
    (c)(3)                                                    N.A.
    (d)                                                       N.A.
    (e)                                                       13.05
    (f)                                                       N.A.
315 (a)                                                       7.01
    (b)                                                       6.07 & 13.03
    (c)                                                       7.01
    (d)                                                       7.01
    (e)                                                       6.08
316 (a) (last sentence)                                       1.01
    (a)(1)(A)                                                 6.06
    (a)(1)(B)                                                 6.06
    (a)(2)                                                    9.01(d)
    (b)                                                       6.04
    (c)                                                       5.04
317 (a)(1)                                                    6.02
    (a)(2)                                                    6.02
    (b)                                                       4.04
318 (a)                                                       13.07
</Table>

----------
N.A. means Not Applicable
NOTE: This Cross-Reference table shall not, for any purpose, be deemed part of
this Indenture.

                                       2
<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                            PAGE
                                                                                                            ----
<S>                                                                                                         <C>
                                    ARTICLE I
                   DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01.   Definitions                                                                                   7
Section 1.02.   Other Definitions                                                                            11
Section 1.03.   Incorporation by Reference of Trust Indenture Act                                            12
Section 1.04.   Rules of Construction                                                                        12

                                   ARTICLE II
                                 DEBT SECURITIES

Section 2.01.   Forms Generally                                                                              12
Section 2.02.   Form of Trustee's Certificate of Authentication                                              12
Section 2.03.   Principal Amount; Issuable in Series                                                         13
Section 2.04.   Execution of Debt Securities                                                                 15
Section 2.05.   Authentication and Delivery of Debt Securities                                               15
Section 2.06.   Denomination of Debt Securities                                                              17
Section 2.07.   Registration of Transfer and Exchange.                                                       17
Section 2.08.   Temporary Debt Securities                                                                    18
Section 2.09.   Mutilated, Destroyed, Lost or Stolen Debt Securities                                         18
Section 2.10.   Cancellation of Surrendered Debt Securities                                                  19
Section 2.11.   Provisions of the Indenture and Debt Securities for the Sole
                Benefit of the Parties and the Holders                                                       19
Section 2.12.   Payment of Interest; Interest Rights Preserved.                                              20
Section 2.13.   Securities Denominated in Dollars                                                            20
Section 2.14.   Wire Transfers                                                                               20
Section 2.15.   Securities Issuable in the Form of a Global Security                                         20
Section 2.16.   Medium Term Securities                                                                       22
Section 2.17.   Defaulted Interest                                                                           23
Section 2.18.   CUSIP and Corresponding "ISIN" Numbers                                                       23

                                   ARTICLE III
                          REDEMPTION OF DEBT SECURITIES

Section 3.01.   Applicability of Article                                                                     24
Section 3.02.   Notice of Redemption; Selection of Debt Securities                                           24
Section 3.03.   Payment of Debt Securities Called for Redemption                                             25
Section 3.04.   Mandatory and Optional Sinking Funds                                                         25
Section 3.05.   Redemption of Debt Securities for Sinking Fund                                               26
</Table>

                                       3
<PAGE>

<Table>
<Caption>
                                                                                                            PAGE
                                                                                                            ----
<S>                                                                                                         <C>
                                   ARTICLE IV
                       PARTICULAR COVENANTS OF THE COMPANY

Section 4.01.   Payment of Principal of, and Premium, If Any, and Interest on, Debt Securities               27
Section 4.02.   Maintenance of Offices or Agencies for Registration of Transfer, Exchange and
                Payment of Debt Securities                                                                   27
Section 4.03.   Appointment to Fill a Vacancy in the Office of Trustee                                       28
Section 4.04.   Duties of Paying Agents, etc                                                                 28
Section 4.05.   SEC Reports; Financial Statements                                                            29
Section 4.06.   Compliance Certificate                                                                       29
Section 4.07.   Further Instruments and Acts                                                                 29
Section 4.08.   Existence                                                                                    29
Section 4.09.   Maintenance of Properties                                                                    30
Section 4.10.   Payment of Taxes and Other Claims                                                            30
Section 4.11.   Waiver of Certain Covenants                                                                  30
Section 4.12.   Waiver of Stay, Extension or Usury Laws                                                      30

                                    ARTICLE V
                    HOLDERS' LISTS AND REPORTS BY THE TRUSTEE

Section 5.01.   Company to Furnish Trustee Information as to Names and Addresses of Holders;
                Preservation of Information                                                                  30
Section 5.02.   Communications to Holders                                                                    31
Section 5.03.   Reports by Trustee                                                                           31
Section 5.04.   Record Dates for Action by Holders                                                           31

                                   ARTICLE VI
                          REMEDIES OF THE TRUSTEE AND HOLDERS IN EVENT OF DEFAULT

Section 6.01.   Events of Default                                                                            32
Section 6.02.   Collection of Debt by Trustee, etc.                                                          33
Section 6.03.   Application of Moneys Collected by Trustee                                                   34
Section 6.04.   Limitation on Suits by Holders                                                               35
Section 6.05.   Remedies Cumulative; Delay or Omission in Exercise of Rights Not a Waiver of Default         35
Section 6.06.   Rights of Holders of Majority in Principal Amount of Debt Securities to Direct
                Trustee and to Waive Default                                                                 36
Section 6.07.   Trustee to Give Notice of Defaults Known to It, but May Withhold Such Notice in
                Certain Circumstances                                                                        36
Section 6.08.   Requirement of an Undertaking to Pay Costs in Certain Suits under the Indenture or
                Against the Trustee                                                                          36

                                   ARTICLE VII
                             CONCERNING THE TRUSTEE

Section 7.01.   Certain Duties and Responsibilities                                                          37
</Table>

                                       4
<PAGE>

<Table>
<Caption>
                                                                                                            PAGE
                                                                                                            ----
<S>                                                                                                         <C>
Section 7.02.   Certain Rights of Trustee                                                                    38
Section 7.03.   Trustee Not Liable for Recitals in Indenture or in Debt Securities                           39
Section 7.04.   Trustee, Paying Agent or Registrar May Own Debt Securities                                   39
Section 7.05.   Moneys Received by Trustee to Be Held in Trust                                               39
Section 7.06.   Compensation and Reimbursement                                                               39
Section 7.07.   Right of Trustee to Rely on an Officers' Certificate Where No Other Evidence
                Specifically Prescribed                                                                      40
Section 7.08.   Separate Trustee; Replacement of Trustee                                                     40
Section 7.09.   Successor Trustee by Merger                                                                  41
Section 7.10.   Eligibility; Disqualification                                                                42
Section 7.11.   Preferential Collection of Claims Against Company                                            42
Section 7.12.   Compliance with Tax Laws                                                                     42

                                  ARTICLE VIII
                             CONCERNING THE HOLDERS

Section 8.01.     Evidence of Action by Holders                                                              42
Section 8.02.     Proof of Execution of Instruments and of Holding of Debt Securities                        42
Section 8.03.     Who May Be Deemed Owner of Debt Securities                                                 42
Section 8.04.     Instruments Executed by Holders Bind Future Holders                                        43

                                   ARTICLE IX
                             SUPPLEMENTAL INDENTURES

Section 9.01.     Purposes for Which Supplemental Indenture May Be Entered into Without
                  Consent of Holders                                                                         43
Section 9.02.     Modification of Indenture with Consent of Holders of Debt Securities                       45
Section 9.03.     Effect of Supplemental Indentures                                                          46
Section 9.04.     Debt Securities May Bear Notation of Changes by Supplemental Indentures                    46

                                    ARTICLE X
                    CONSOLIDATION, MERGER, SALE OR CONVEYANCE

Section 10.01.    Consolidations and Mergers of the Company                                                  46
Section 10.02.    Rights and Duties of Successor Company                                                     46

                                   ARTICLE XI
                          SATISFACTION AND DISCHARGE OF
                     INDENTURE; DEFEASANCE; UNCLAIMED MONEYS

Section 11.01.    Applicability of Article                                                                   47
Section 11.02.    Satisfaction and Discharge of Indenture; Defeasance.                                       47
Section 11.03.    Conditions of Defeasance                                                                   48
</Table>

                                       5
<PAGE>

<Table>
<Caption>
                                                                                                            PAGE
                                                                                                            ----
<S>                                                                                                         <C>
Section 11.04.    Application of Trust Money                                                                 49
Section 11.05.    Repayment to Company                                                                       49
Section 11.06.    Indemnity for U.S. Government Obligations                                                  49
Section 11.07.    Reinstatement                                                                              49

                                   ARTICLE XII
                                   [RESERVED]

                                  ARTICLE XIII
                            MISCELLANEOUS PROVISIONS

Section 13.01.    Successors and Assigns of Company Bound by Indenture                                       49
Section 13.02.    Acts of Board, Committee or Officer of Successor Company Valid                             50
Section 13.03.    Required Notices or Demands                                                                50
Section 13.04.    Indenture and Debt Securities to Be Construed in Accordance with the Laws of
                  the State of California                                                                    51
Section 13.05.    Officers' Certificate and Opinion of Counsel to Be Furnished upon Application or
                  Demand by the Company                                                                      51
Section 13.06.    Payments Due on Legal Holidays                                                             51
Section 13.07.    Provisions Required by TIA to Control                                                      51
Section 13.08.    Computation of Interest on Debt Securities                                                 51
Section 13.09.    Rules by Trustee, Paying Agent and Registrar                                               52
Section 13.10.    Severability                                                                               52
Section 13.11.    Effect of Headings                                                                         52
Section 13.12.    Indenture May Be Executed in Counterparts                                                  52
</Table>

                                       6
<PAGE>

                                    INDENTURE

         THIS INDENTURE dated as of _________________, 2003 is between Bell
Microproducts Inc., a California corporation (the "Company"), and
______________________, a ______________________, as trustee (the "Trustee").

                             RECITALS OF THE COMPANY

         WHEREAS, the Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance from time to time of its debentures,
notes, bonds or other evidences of indebtedness, to be issued in one or more
series and unlimited as to aggregate principal amount (herein called the "Debt
Securities"), all as in this Indenture provided.

         WHEREAS, all things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.

         NOW, THEREFORE, THIS INDENTURE WITNESSETH:

         That in order to declare the terms and conditions upon which the Debt
Securities are to be authenticated, issued and delivered, and in consideration
of the premises, and of the purchase and acceptance of the Debt Securities by
the Holders thereof, the Company and the Trustee covenant and agree with each
other, for the benefit of the respective Holders from time to time of the Debt
Securities, as follows:

                                    AGREEMENT

                                    ARTICLE I
                   DEFINITIONS AND INCORPORATION BY REFERENCE

         SECTION 1.01. 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 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. The Trustee may request and may conclusively rely upon an Officers'
Certificate to determine whether any Person is an Affiliate of any specified
Person.

         "Agent" means any Registrar or paying agent.

         "Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.

         "Board of Directors" means the Board of Directors of Company or any
authorized committee of the Board of Directors of the Company or any directors
and/or officers of the Company to whom such Board of Directors or such committee
shall have duly delegated its authority to act hereunder.

         "Business Day" means any day other than a Legal Holiday.

         The term "capital stock" of any Person means and includes any and all
shares, rights to purchase, warrants or options (whether or not currently
exercisable), participations or other equivalents of or interests in (however
designated) the equity (which includes, but is not limited to, common stock,

                                       7
<PAGE>

preferred stock and partnership and joint venture interests) of such Person
(excluding any debt securities that are convertible into, or exchangeable for,
such equity).

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

         "Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by the Chairman of the Board,
the President or a Vice President of the Company, and by the Treasurer, an
Assistant Treasurer, the Controller, an Assistant Controller, the Secretary or
an Assistant Secretary of the Company, and delivered to the Trustee.

         "Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.

         "Debt" of any Person at any date means any obligation created or
assumed by such Person for the repayment of borrowed money and any guarantee
thereof.

         "Debt Security" or "Debt Securities" has the meaning stated in the
first recital of this Indenture and more particularly means any debt security or
debt securities, as the case may be of any series authenticated and delivered
under this Indenture.

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

         "Depositary" means, unless otherwise specified by the Company pursuant
to either Section 2.03 or 2.15, with respect to Debt Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, The Depository Trust Company, New York, New York, or any successor
thereto registered as a clearing agency under the Exchange Act or other
applicable statute or regulations.

         "Dollar" or "$" means such currency of the United States as at the time
of payment is legal tender for the payment of public and private debts.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor statute.

         "Floating Rate Security" means a Debt Security that provides for the
payment of interest at a variable rate determined periodically by reference to
an interest rate index specified pursuant to Section 2.03.

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

         "Global Security" means with respect to any series of Debt Securities
issued hereunder, a Debt Security which is executed by the Company and
authenticated and delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction, all in accordance with this Indenture and any
Indentures supplemental hereto, or resolution of the Board of Directors and set
forth in an Officers' Certificate, which shall be registered in the name of the
Depositary or its nominee and which shall represent, and shall be denominated in
an amount equal to the aggregate principal amount of, all the Outstanding Debt
Securities of such series or any portion thereof, in either case having the same
terms,

                                       8
<PAGE>

including, without limitation, the same original issue date, date or dates on
which principal is due and interest rate or method of determining interest.

         The term "guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Debt or other obligation of
any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (a) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or other obligation of such other Person
(whether arising by virtue of partnership arrangements, or by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, or
to maintain financial statement conditions or otherwise) or (b) entered into for
purposes of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided, however, that the term
"guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "guarantee" used as a verb has a
corresponding meaning.

         "Holder," "Holder of Debt Securities" or other similar terms means, a
Person in whose name a Debt Security is registered in the Debt Security Register
(as defined in Section 2.07(a)).

         "Indenture" means this instrument as originally executed, or, if
amended or supplemented as herein provided, as so amended or supplemented and
shall include the form and terms of particular series of Debt Securities as
contemplated hereunder, whether or not a supplemental Indenture is entered into
with respect thereto.

         "Issue Date" means, with respect to a series of Debt Securities, the
date of original issuance of such series.

         "Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of ________________________ or at a Place of Payment
are authorized by law, regulation or executive order to remain closed. If a
payment date is a Legal Holiday at a Place of Payment, payment may be made at
that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.

         "Lien" means, with respect to any asset, any mortgage, lien, security
interest, pledge, charge or other encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law.

         "Officer" means, with respect to a Person, the Chairman of the Board,
the President, any Vice President (whether unmodified or prefaced by "Senior,"
"Assistant" or any other designation), the Treasurer, any Assistant Treasurer,
Controller, Secretary, or any Assistant Secretary of such Person.

         "Officers' Certificate" means a certificate signed by two Officers of
the Company, one of whom must be the Company's chief executive officer, chief
financial officer or chief accounting officer.

         "Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.

         "Original Issue Discount Debt Security" means any Debt Security that
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant to
Section 6.01.

                                       9
<PAGE>

         "Outstanding," when used with respect to any series of Debt Securities,
means, as of the date of determination, all Debt Securities of that series
theretofore authenticated and delivered under this Indenture, except:

         (a)      Debt Securities of that series theretofore canceled by the
                  Trustee or delivered to the Trustee for cancellation;

         (b)      Debt Securities of that series for whose payment or redemption
                  money in the necessary amount has been theretofore deposited
                  with the Trustee or any paying agent (other than the Company)
                  in trust or set aside and segregated in trust by the Company
                  (if the Company shall act as its own paying agent) for the
                  Holders of such Debt Securities; provided, that, if such Debt
                  Securities are to be redeemed, notice of such redemption has
                  been duly given pursuant to this Indenture or provision
                  therefor satisfactory to the Trustee has been made; and

         (c)      Debt Securities of that series which have been paid pursuant
                  to Section 2.09 or in exchange for or in lieu of which other
                  Debt Securities have been authenticated and delivered pursuant
                  to this Indenture, other than any such Debt Securities in
                  respect of which there shall have been presented to the
                  Trustee proof satisfactory to it that such Debt Securities are
                  held by a bona fide purchaser in whose hands such Debt
                  Securities are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Debt Securities of any series have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Debt Securities owned by the Company or any other obligor upon the Debt
Securities or any Affiliate of the Company or of 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 or waiver, only Debt Securities which
a Trust Officer actually knows to be so owned shall be so disregarded. Debt
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Debt Securities and that the
pledgee is not the Company or any other obligor upon the Debt Securities or an
Affiliate of the Company or of such other obligor. In determining whether the
Holders of the requisite principal amount of Outstanding Debt Securities have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, the principal amount of an Original Issue Discount Debt Security that
shall be deemed to be Outstanding for such purposes shall be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the maturity thereof
pursuant to Section 6.01.

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

         "Redemption Date," when used with respect to any Debt Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

         "SEC" means the Securities and Exchange Commission.

         "Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).

                                       10
<PAGE>

         "Subsidiary" means, with respect to any Person,

         (1)      any other Person of which more than 50% of the total voting
                  power of capital interests (without regard to any contingency
                  to vote in the election of directors, managers, trustees, or
                  equivalent persons), at the time of such determination, is
                  owned or controlled, directly or indirectly, by such Person or
                  one or more of the Subsidiaries of such Person;

         (2)      in the case of a partnership, any Person of which more than
                  50% of the partners' capital interests (considering all
                  partners' capital interests as a single class), at the time of
                  such determination, is owned or controlled, directly or
                  indirectly, by such Person or one or more of the Subsidiaries
                  of such Person; or

         (3)      any other Person in which such Person or one or more of the
                  Subsidiaries of such Person have the power to control, by
                  contract or otherwise, the board of directors, managers,
                  trustees or equivalent governing body of, or otherwise
                  control, such other Person.

         "TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
Sections 77aaa-77bbbb), as in effect on the date of this Indenture as originally
executed and, to the extent required by law, as amended.

         "Trustee" initially means _____________ _____________ ____________ and
any other Person or Persons appointed as such from time to time pursuant to
Section 7.08, and, subject to the provisions of Article VII, includes its or
their successors and assigns. If at any time there is more than one such Person,
"Trustee" as used with respect to the Debt Securities of any series shall mean
the Trustee with respect to the Debt Securities of that series.

         "Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters.

         "United States" means the United States of America (including the
states thereof and the District of Columbia), its territories, its possessions
and other areas subject to its jurisdiction.

         "U.S. Government Obligations" means direct obligations of the United
States of America, obligations on which the payment of principal and interest is
fully guaranteed by the United States of America or obligations or guarantees
for the payment of which the full faith and credit of the United States of
America is pledged.

         "Yield to Maturity" means the yield to maturity, calculated at the time
of issuance of a series of Debt Securities, or, if applicable, at the most
recent redetermination of interest on such series and calculated in accordance
with accepted financial practice.

         SECTION 1.02. OTHER DEFINITIONS.

<Table>
<Caption>
                        TERM                            DEFINED IN SECTION
                        ----                            ------------------
<S>                                                     <C>
              "Debt Security Register"                         2.07
                "Defaulted Interest"                           2.17
                 "Event of Default"                            6.01
                 "Place of Payment"                            2.03
                    "Registrar"                                2.07
                "Successor Company"                           10.01
</Table>

                                       11
<PAGE>

         SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.

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

         SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise
requires:

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

         (e) provisions apply to successive events and transactions; and

         (f) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be shown
on a balance sheet of the issuer dated such date prepared in accordance with
GAAP.

                                   ARTICLE II
                                 DEBT SECURITIES

         SECTION 2.01. FORMS GENERALLY. The Debt Securities of each series shall
be in substantially the form established without the approval of any Holder by
or pursuant to a resolution of the Board of Directors or in one or more
Indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as the Company
may deem appropriate (and, if not contained in a supplemental Indenture entered
into in accordance with Article IX, as are not prohibited by the provisions of
this Indenture) or as may be required or appropriate to comply with any law or
with any rules made pursuant thereto or with any rules of any securities
exchange on which such series of Debt Securities may be listed, or to conform to
general usage, or as may, consistently herewith, be determined by the officers
executing such Debt Securities as evidenced by their execution of the Debt
Securities.

         The definitive Debt Securities of each series shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Debt Securities,
as evidenced by their execution of such Debt Securities.

         SECTION 2.02. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
Trustee's certificate of authentication on all Debt Securities authenticated by
the Trustee shall be in substantially the following form:

                                       12
<PAGE>

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Debt Securities of the series designated therein
referred to in the within-mentioned Indenture.

                                                       ------------------------
                                                       As Trustee

                                                       By:
                                                           --------------------
                                                           Authorized Signatory

         SECTION 2.03. PRINCIPAL AMOUNT; ISSUABLE IN SERIES. The aggregate
principal amount of Debt Securities which may be issued, executed,
authenticated, delivered and outstanding under this Indenture is unlimited.

         The Debt Securities may be issued in one or more series in fully
registered form. There shall be established, without the approval of any
Holders, in or pursuant to a resolution of the Board of Directors and set forth
in an Officers' Certificate, or established in one or more Indentures
supplemental hereto, prior to the issuance of Debt Securities of any series any
or all of the following:

         (a) the title of the Debt Securities of the series (which shall
distinguish the Debt Securities of the series from all other Debt Securities);

         (b) any limit upon the aggregate principal amount of the Debt
Securities of the series which may be authenticated and delivered under this
Indenture (except for Debt Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Debt
Securities of the series pursuant to this Article II);

         (c) the date or dates on which the principal of and premium, if any, on
the Debt Securities of the series are payable;

         (d) the rate or rates (which may be fixed or variable) at which the
Debt Securities of the series shall bear interest, if any, or the method of
determining such rate or rates, the date or dates from which such interest shall
accrue, the interest payment dates on which such interest shall be payable, or
the method by which such date will be determined, the record dates for the
determination of Holders thereof to whom such interest is payable; and the basis
upon which interest will be calculated if other than that of a 360-day year of
twelve thirty-day months;

         (e) the place or places, if any, in addition to or instead of the
corporate trust office of the Trustee, where the principal of, and premium, if
any, and interest on, Debt Securities of the series shall be payable ("Place of
Payment");

         (f) the price or prices at which, the period or periods within which
and the terms and conditions upon which Debt Securities of the series may be
redeemed, in whole or in part, at the option of the Company or otherwise;

         (g) the terms, if any, upon which the Debt Securities of the series may
be convertible into or exchanged for capital stock (which may be represented by
depositary shares), other Debt Securities or

                                       13
<PAGE>

warrants for capital stock or Debt or other securities of any kind of the
Company or any other obligor and the terms and conditions upon which such
conversion or exchange shall be effected, including the initial conversion or
exchange price or rate, the conversion or exchange period and any other
provision in addition to or in lieu of those described herein;

         (h) the obligation, if any, of the Company to redeem, purchase or repay
Debt Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof, and the price or prices at
which and the period or periods within which and the terms and conditions upon
which Debt Securities of the series shall be redeemed, purchased or repaid, in
whole or in part, pursuant to such obligations;

         (i) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Debt Securities of the series shall be
issuable;

         (j) if the amount of principal of or any premium or interest on Debt
Securities of the series may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts will be determined;

         (k) if the principal amount payable at the Stated Maturity of Debt
Securities of the series will not be determinable as of any one or more dates
prior to such Stated Maturity, the amount which will be deemed to be such
principal amount as of any such date for any purpose, including the principal
amount thereof which will be due and payable upon any maturity other than the
Stated Maturity or which will be deemed to be Outstanding as of any such date
(or, in any such case, the manner in which such deemed principal amount is to be
determined);

         (l) any changes or additions to Article XI, including the addition of
additional covenants that may be subject to the covenant defeasance option
pursuant to Section 11.02(b);

         (m) if the Debt Securities of the series are entitled to the benefits
of any guarantees by any of the Subsidiaries of the Company;

         (n) if other than the principal amount thereof, the portion of the
principal amount of Debt Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.01 or
provable in bankruptcy pursuant to Section 6.02;

         (o) the terms, if any, of the transfer, mortgage, pledge or assignment
as security for the Debt Securities of the series of any properties, assets,
moneys, proceeds, securities or other collateral, including whether certain
provisions of the TIA are applicable and any corresponding changes to provisions
of this Indenture as currently in effect;

         (p) any addition to or change in the Events of Default with respect to
the Debt Securities of the series and any change in the right of the Trustee or
the Holders to declare the principal of, and premium and interest on, such Debt
Securities due and payable;

         (q) if the Debt Securities of the series shall be issued in whole or in
part in the form of a Global Security or Securities, the terms and conditions,
if any, upon which such Global Security or Securities may be exchanged in whole
or in part for other individual Debt Securities in definitive registered form;
and the Depositary for such Global Security or Securities and the form of any
legend or legends to be borne by any such Global Security or Securities in
addition to or in lieu of the legend referred to in Section 2.15(a);

                                       14
<PAGE>

         (r) any trustees, authenticating or paying agents, transfer agents or
registrars;

         (s) the applicability of, and any addition to or change in the
covenants and definitions currently set forth in this Indenture or in the terms
currently set forth in Article X, including conditioning any merger, conveyance,
transfer or lease permitted by Article X upon the satisfaction of any Debt
coverage standard by the Company and Successor Company (as defined in Article
X);

         (t) with regard to Debt Securities of the series that do not bear
interest, the dates for certain required reports to the Trustee; and

         (u) any other terms of the Debt Securities of the series (which terms
shall not be prohibited by the provisions of this Indenture).

         All Debt Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to such resolution of the Board of Directors and as set forth in such Officers'
Certificate or in any such Indenture supplemental hereto.

         SECTION 2.04. EXECUTION OF DEBT SECURITIES. The Debt Securities shall
be signed on behalf of the Company by the Chairman of the Board, the President
or a Vice President of the Company and, if the seal of the Company is reproduced
thereon, it shall be attested by its Secretary, an Assistant Secretary, a
Treasurer or an Assistant Treasurer. Such signatures upon the Debt Securities
may be the manual or facsimile signatures of the present or any future such
authorized officers and may be imprinted or otherwise reproduced on the Debt
Securities. The seal of the Company, if any, may be in the form of a facsimile
thereof and may be impressed, affixed, imprinted or otherwise reproduced on the
Debt Securities.

         Only such Debt Securities as shall bear thereon a certificate of
authentication substantially in the form hereinbefore recited, signed manually
by the Trustee, shall be entitled to the benefits of this Indenture or be valid
or obligatory for any purpose. Such certificate by the Trustee upon any Debt
Security executed by the Company shall be conclusive evidence that the Debt
Security so authenticated has been duly authenticated and delivered hereunder.

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

         SECTION 2.05. AUTHENTICATION AND DELIVERY OF DEBT SECURITIES. At any
time and from time to time after the execution and delivery of this Indenture,
the Company may deliver to the Trustee for authentication Debt Securities of any
series executed by the Company, and the Trustee shall thereupon authenticate and
deliver said Debt Securities to or upon a Company Order. In authenticating such
Debt Securities, and accepting the additional responsibilities under this
Indenture in relation to such Debt Securities, the Trustee shall be entitled to
receive, and (subject to Section 7.01) shall be fully protected in relying upon:

                                       15
<PAGE>

         (a) a copy of any resolution or resolutions of the Board of Directors,
certified by the Secretary or Assistant Secretary of the Company, authorizing
the terms of issuance of any series of Debt Securities;

         (b) an executed supplemental Indenture, if any;

         (c) an Officers' Certificate; and

         (d) an Opinion of Counsel prepared in accordance with Section 13.05
which shall also state:

                  (i) that the form of such Debt Securities has been established
by or pursuant to a resolution of the Board of Directors or by a supplemental
Indenture as permitted by Section 2.01 in conformity with the provisions of this
Indenture;

                  (ii) that the terms of such Debt Securities have been
established by or pursuant to a resolution of the Board of Directors or by a
supplemental Indenture as permitted by Section 2.03 in conformity with the
provisions of this Indenture;

                  (iii) that such Debt Securities, when authenticated and
delivered by the Trustee and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company, enforceable in accordance with their
terms except as the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally and rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability;

                  (iv) that the Company has the corporate power to issue such
Debt Securities and has duly taken all necessary corporate action with respect
to such issuance;

                  (v) that the issuance of such Debt Securities will not
contravene the organizational documents of the Company or result in any material
violation of any of the terms or provisions of any law or regulation or of any
material indenture, mortgage or other agreement known to such counsel by which
the Company is bound;

                  (vi) that authentication and delivery of such Debt Securities
and the execution and delivery of any supplemental Indenture will not violate
the terms of this Indenture; and

                  (vii) such other matters as the Trustee may reasonably
request.

         Such Opinion of Counsel need express no opinion as to whether a court
in the United States would render a money judgment in a currency other than that
of the United States.

         The Trustee shall have the right to decline to authenticate and deliver
any Debt Securities under this Section 2.05 if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken or if the Trustee
in good faith by its board of directors or trustees, executive committee or a
trust committee of directors, trustees or officers (or any combination thereof)
shall determine that such action would expose the Trustee to personal liability
to existing Holders.

         The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Debt Securities of any series. Unless limited by
the terms of such appointment, an authenticating agent may authenticate Debt
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating

                                       16
<PAGE>

agent has the same rights as any Registrar, paying agent or agent for service of
notices and demands. Unless otherwise provided in the form of Debt Security for
any series, each Debt Security shall be dated the date of its authentication.

         SECTION 2.06. DENOMINATION OF DEBT SECURITIES. Unless otherwise
provided in the form of Debt Security for any series, the Debt Securities of
each series shall be issuable only as fully registered Debt Securities in such
Dollar denominations as shall be specified or contemplated by Section 2.03. In
the absence of any such specification with respect to the Debt Securities of any
series, the Debt Securities of such series shall be issuable in denominations of
$1,000 and any integral multiple thereof.

         SECTION 2.07. REGISTRATION OF TRANSFER AND EXCHANGE.

         (a) The Company shall keep or cause to be kept a register for each
series of Debt Securities issued hereunder (hereinafter collectively referred to
as the "Debt Security Register"), in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of all Debt Securities and the transfer of Debt Securities as in this Article II
provided. At all reasonable times the Debt Security Register shall be open for
inspection by the Trustee. Subject to Section 2.15, upon due presentment for
registration of transfer of any Debt Security at any office or agency to be
maintained by the Company in accordance with the provisions of Section 4.02, the
Company shall execute and the Trustee shall authenticate and deliver in the name
of the transferee or transferees a new Debt Security or Debt Securities of
authorized denominations for a like aggregate principal amount. In no event may
Debt Securities be issued as, or exchanged for, bearer securities.

         Unless and until otherwise determined by the Company by resolution of
the Board of Directors, the Debt Security Register shall be kept at the
principal corporate trust office of the Trustee and, for this purpose, the
Trustee shall be designated "Registrar."

         Debt Securities of any series (other than a Global Security, except as
set forth below) may be exchanged for a like aggregate principal amount of Debt
Securities of the same series of other authorized denominations. Subject to
Section 2.15, Debt Securities to be exchanged shall be surrendered at the office
or agency to be maintained by the Company as provided in Section 4.02, and the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor the Debt Security or Debt Securities which the Holder making the
exchange shall be entitled to receive.

         (b) All Debt Securities presented or surrendered for registration of
transfer, exchange or payment shall (if so required by the Company, the Trustee
or the Registrar) be duly endorsed or be accompanied by a written instrument or
instruments of transfer, in form satisfactory to the Company, the Trustee and
the Registrar, duly executed by the Holder or his attorney duly authorized in
writing.

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

         No service charge shall be made for any exchange or registration of
transfer of Debt Securities (except as provided by Section 2.09), but the
Company may require payment of a sum sufficient to cover any tax, fee,
assessment or other governmental charge that may be imposed in relation thereto,
other than those expressly provided in this Indenture to be made at the
Company's own expense or without expense or without charge to the Holders.

         The Company shall not be required (i) to issue, register the transfer
of or exchange any Debt Securities for a period of 15 days next preceding any
mailing of notice of redemption of Debt Securities

                                       17
<PAGE>

of such series or (ii) to register the transfer of or exchange any Debt
Securities selected, called or being called for redemption.

         Prior to the due presentation for registration of transfer of any Debt
Security, the Company, the Trustee, any paying agent or any Registrar may deem
and treat the Person in whose name a Debt Security is registered as the absolute
owner of such Debt Security for the purpose of receiving payment of or on
account of the principal of, and premium, if any, and (subject to Section 2.12)
interest on, such Debt Security and for all other purposes whatsoever, whether
or not such Debt Security is overdue, and none of the Company, the Trustee, any
paying agent or any Registrar shall be affected by notice to the contrary.

         None of the Company, the Trustee, any agent of the Trustee, any paying
agent or any Registrar will have any responsibility or liability for (i) any
aspect of the records relating to, or payments made on account of, beneficial
ownership interests of a Global Security, (ii) maintaining, supervising or
reviewing any records relating to such beneficial ownership interests, (iii) any
failure of the Depositary for such Global Security to process any notices to
Holders required or permitted hereunder, (iv) any selection of beneficial
ownership interests to be redeemed in connection with any redemption hereunder,
or (v) any other action taken by such Depositary for or on behalf of the owners
of such beneficial interests.

         SECTION 2.08. TEMPORARY DEBT SECURITIES. Pending the preparation of
definitive Debt Securities of any series, the Company may execute and the
Trustee shall authenticate and deliver temporary Debt Securities (printed,
lithographed, photocopied, typewritten or otherwise produced) of any authorized
denomination, and substantially in the form of the definitive Debt Securities in
lieu of which they are issued, in registered form with such omissions,
insertions and variations as may be appropriate for temporary Debt Securities,
all as may be determined by the Company with the concurrence of the Trustee.
Temporary Debt Securities may contain such reference to any provisions of this
Indenture as may be appropriate. Every temporary Debt Security shall be executed
by the Company and be authenticated by the Trustee upon the same conditions and
in substantially the same manner, and with like effect, as the definitive Debt
Securities.

         If temporary Debt Securities of any series are issued, the Company will
cause definitive Debt Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Debt Securities of such
series, the temporary Debt Securities of such series shall be exchangeable for
definitive Debt Securities of such series upon surrender of the temporary Debt
Securities of such series at the office or agency of the Company at a Place of
Payment for such series, without charge to the Holder thereof, except as
provided in Section 2.07 in connection with a transfer. Upon surrender for
cancellation of any one or more temporary Debt Securities of any series, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Debt Securities of the same
series of authorized denominations and of like tenor. Until so exchanged,
temporary Debt Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Debt Securities of such series.

         Upon any exchange of a portion of a temporary Global Security for a
definitive Global Security or for the individual Debt Securities represented
thereby pursuant to Section 2.07 or this Section 2.08, the temporary Global
Security shall be endorsed by the Trustee to reflect the reduction of the
principal amount evidenced thereby, whereupon the principal amount of such
temporary Global Security shall be reduced for all purposes by the amount to be
exchanged and endorsed.

         SECTION 2.09. MUTILATED, DESTROYED, LOST OR STOLEN DEBT SECURITIES. If
(a) any mutilated Debt Security is surrendered to the Trustee at its corporate
trust office or (b) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Debt Security, and there
is delivered to the Company and the Trustee such security or indemnity as may be
required by them to save

                                       18
<PAGE>

each of them and any paying agent harmless, and neither the Company nor the
Trustee receives notice that such Debt Security has been acquired by a bona fide
purchaser, then the Company shall execute and, upon a Company Order, the Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Debt Security, a new Debt Security of the
same series of like tenor, form, terms and principal amount, bearing a number
not contemporaneously Outstanding. Upon the issuance of any substituted Debt
Security, the Company or the Trustee may require the payment of a sum sufficient
to cover any tax, fee, assessment or other governmental charge that may be
imposed in relation thereto and any other expenses connected therewith. In case
any Debt Security which has matured or is about to mature or which has been
called for redemption shall become mutilated or be destroyed, lost or stolen,
the Company may, instead of issuing a substituted Debt Security, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated Debt Security) if the applicant for such payment shall furnish
the Company and the Trustee with such security or indemnity as either may
require to save it harmless from all risk, however remote, and, in case of
destruction, loss or theft, evidence to the satisfaction of the Company and the
Trustee of the destruction, loss or theft of such Debt Security and of the
ownership thereof.

         Every substituted Debt Security of any series issued pursuant to the
provisions of this Section 2.09 by virtue of the fact that any Debt Security is
destroyed, lost or stolen shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Debt
Security shall be found at any time, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Debt
Securities of that series duly issued hereunder. All Debt Securities shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Debt Securities, and shall preclude any and all other rights or
remedies, notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.

         SECTION 2.10. CANCELLATION OF SURRENDERED DEBT SECURITIES. All Debt
Securities surrendered for payment, redemption, registration of transfer or
exchange shall, if surrendered to the Company or any paying agent or a
Registrar, be delivered to the Trustee for cancellation by it, or if surrendered
to the Trustee, shall be canceled by it, and no Debt Securities shall be issued
in lieu thereof except as expressly permitted by any of the provisions of this
Indenture. All canceled Debt Securities held by the Trustee shall be destroyed
(subject to the record retention requirements of the Exchange Act) and, upon
request, a certification of their destruction shall be delivered to the Company.
On request of the Company, the Trustee shall deliver to the Company canceled
Debt Securities held by the Trustee. If the Company shall acquire any of the
Debt Securities, however, such acquisition shall not operate as a redemption or
satisfaction of the Debt represented thereby unless and until the same are
delivered or surrendered to the Trustee for cancellation. The Company may not
issue new Debt Securities to replace Debt Securities it has redeemed, paid or
delivered to the Trustee for cancellation.

         SECTION 2.11. PROVISIONS OF THE INDENTURE AND DEBT SECURITIES FOR THE
SOLE BENEFIT OF THE PARTIES AND THE HOLDERS. Nothing in this Indenture or in the
Debt Securities, expressed or implied, shall give or be construed to give to any
Person, other than the parties hereto, any other Persons indemnified pursuant to
Section 7.06, the Holders or any Registrar or paying agent, any legal or
equitable right, remedy or claim under or in respect of this Indenture, or under
any covenant, condition or provision herein contained; all its covenants,
conditions and provisions being for the sole benefit of the parties hereto, any
such indemnified Persons, the Holders and any Registrar and paying agents.

                                       19
<PAGE>

         SECTION 2.12. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.

         (a) Interest on any Debt Security that is payable and is punctually
paid or duly provided for on any interest payment date shall be paid to the
Person in whose name such Debt Security is registered at the close of business
on the regular record date for such interest notwithstanding the cancellation of
such Debt Security upon any transfer or exchange subsequent to the regular
record date. Payment of interest on Debt Securities shall be made at the
corporate trust office of the Trustee (except as otherwise specified pursuant to
Section 2.03), or at the option of the Company, by check mailed to the address
of the Person entitled thereto as such address shall appear in the Debt Security
Register or, if provided pursuant to Section 2.03 and in accordance with
arrangements satisfactory to the Trustee, at the option of the Holder by wire
transfer to an account designated by the Holder.

         (b) Subject to the foregoing provisions of this Section 2.12 and
Section 2.17, each Debt Security of a particular series delivered under this
Indenture upon registration of transfer of or in exchange for or in lieu of any
other Debt Security of the same series shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Debt
Security.

         SECTION 2.13. SECURITIES DENOMINATED IN DOLLARS. Except as otherwise
specified pursuant to Section 2.03 for Debt Securities of any series, payment of
the principal of, and premium, if any, and interest on, Debt Securities of such
series will be made in Dollars.

         SECTION 2.14. WIRE TRANSFERS. Notwithstanding any other provision to
the contrary in this Indenture, the Company may make any payment of moneys
required to be deposited with the Trustee on account of principal of, or
premium, if any, or interest on, the Debt Securities (whether pursuant to
optional or mandatory redemption payments, interest payments or otherwise) by
wire transfer in immediately available funds to an account designated by the
Trustee before           , California time, on the date such moneys are to be
paid to the Holders of the Debt Securities in accordance with the terms hereof.

         SECTION 2.15. SECURITIES ISSUABLE IN THE FORM OF A GLOBAL SECURITY.

         (a) If the Company shall establish pursuant to Sections 2.01 and 2.03
that the Debt Securities of a particular series are to be issued in whole or in
part in the form of one or more Global Securities, then the Company shall
execute and the Trustee or its agent shall, in accordance with Section 2.05,
authenticate and deliver, such Global Security or Securities, which shall
represent, and shall be denominated in an amount equal to the aggregate
principal amount of, the Outstanding Debt Securities of such series to be
represented by such Global Security or Securities, or such portion thereof as
the Company shall specify in an Officers' Certificate, shall be registered in
the name of the Depositary for such Global Security or Securities or its
nominee, shall be delivered by the Trustee or its agent to the Depositary or
pursuant to the Depositary's instruction and shall bear a legend substantially
to the following effect:

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

                                       20
<PAGE>

OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.

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

or such other legend as may then be required by the Depositary for such Global
Security or Securities.

         (b) Notwithstanding any other provision of this Section 2.15 or of
Section 2.07 to the contrary, and subject to the provisions of paragraph (c)
below, unless the terms of a Global Security expressly permit such Global
Security to be exchanged in whole or in part for definitive Debt Securities in
registered form, a Global Security may be transferred, in whole but not in part
and in the manner provided in Section 2.07, only by the Depositary to a nominee
of the Depositary for such Global Security, or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary, or by the Depositary or a
nominee of the Depositary to a successor Depositary for such Global Security
selected or approved by the Company, or to a nominee of such successor
Depositary.

         (c) (i) If at any time the Depositary for a Global Security or
Securities notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Security or Securities or if at any time the
Depositary for the Debt Securities for such series shall no longer be eligible
or in good standing under the Exchange Act or other applicable statute, rule or
regulation, the Company shall appoint a successor Depositary with respect to
such Global Security or Securities. If a successor Depositary for such Global
Security or Securities is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such ineligibility, the Company
shall execute, and the Trustee or its agent, upon receipt of a Company Order for
the authentication and delivery of such individual Debt Securities of such
series in exchange for such Global Security or Securities, will authenticate and
deliver, individual Debt Securities of such series of like tenor and terms in
definitive form in an aggregate principal amount equal to the principal amount
of the Global Security or Securities in exchange for such Global Security or
Securities.

                  (ii) The Company may at any time and in its sole discretion
determine that the Debt Securities of any series or portion thereof issued or
issuable in the form of one or more Global Securities shall no longer be
represented by such Global Security or Securities. In such event the Company
will execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of individual Debt Securities of such series in
exchange in whole or in part for such Global Security or Securities, will
authenticate and deliver individual Debt Securities of such series of like tenor
and terms in definitive form in an aggregate principal amount equal to the
principal amount of such series or portion thereof in exchange for such Global
Security or Securities.

                  (iii) If specified by the Company pursuant to Sections 2.01
and 2.03 with respect to Debt Securities issued or issuable in the form of a
Global Security, the Depositary for such Global Security may surrender such
Global Security in exchange in whole or in part for individual Debt Securities
of such series of like tenor and terms in definitive form on such terms as are
acceptable to the Company, the Trustee and such Depositary. Thereupon the
Company shall execute, and the Trustee or its agent upon receipt of a Company
Order for the authentication and delivery of definitive Debt Securities of such
series shall authenticate and deliver, without service charge, to each Person
specified by such Depositary a new Debt Security or Securities of the same
series of like tenor and terms and of any authorized denomination as requested
by such Person in aggregate principal amount equal to and in

                                       21
<PAGE>

exchange for such Person's beneficial interest in the Global Security; and to
such Depositary a new Global Security of like tenor and terms and in an
authorized denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal amount of
Debt Securities delivered to Holders thereof.

                  (iv) In any exchange provided for in any of the preceding
three paragraphs, the Company will execute and the Trustee or its agent will
authenticate and deliver individual Debt Securities. Upon the exchange of the
entire principal amount of a Global Security for individual Debt Securities,
such Global Security shall be canceled by the Trustee or its agent. Except as
provided in the preceding paragraph, Debt Securities issued in exchange for a
Global Security pursuant to this Section 2.15 shall be registered in such names
and in such authorized denominations as the Depositary for such Global Security,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee or the Registrar. The Trustee or the Registrar shall
deliver such Debt Securities to the Persons in whose names such Debt Securities
are so registered.

                  (v) Payments in respect of the principal of and interest on
any Debt Securities issued in the form of a Global Security and registered in
the name of the Depositary or its nominee will be payable to the Depositary or
such nominee in its capacity as the registered owner of such Global Security.
The Company and the Trustee may treat the Person in whose name the Debt
Securities, including the Global Security, are registered as the owner thereof
for the purpose of receiving such payments and for any and all other purposes
whatsoever. None of the Company, the Trustee, any Registrar, the paying agent or
any agent of the Company or the Trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of the beneficial ownership interests of the Global Security by the Depositary
or its nominee or any of the Depositary's direct or indirect participants, or
for maintaining, supervising or reviewing any records of the Depositary, its
nominee or any of its direct or indirect participants relating to the beneficial
ownership interests of the Global Security, the payments to the beneficial
owners of the Global Security of amounts paid to the Depositary or its nominee,
or any other matter relating to the actions and practices of the Depositary, its
nominee or any of its direct or indirect participants. None of the Company, the
Trustee or any such agent will be liable for any delay by the Depositary, its
nominee, or any of its direct or indirect participants in identifying the
beneficial owners of the Debt Securities, and the Company and the Trustee may
conclusively rely on, and will be protected in relying on, instructions from the
Depositary or its nominee for all purposes (including with respect to the
registration and delivery, and the respective principal amounts, of the Debt
Securities to be issued).

         SECTION 2.16. MEDIUM TERM SECURITIES. Notwithstanding any contrary
provision herein, if all Debt Securities of a series are not to be originally
issued at one time, it shall not be necessary for the Company to deliver to the
Trustee an Officers' Certificate, resolutions of the Board of Directors,
supplemental Indenture, Opinion of Counsel or written order or any other
document otherwise required pursuant to Section 2.01, 2.03, 2.05 or 13.05 at or
prior to the time of authentication of each Debt Security of such series if such
documents are delivered to the Trustee or its agent at or prior to the
authentication upon original issuance of the first such Debt Security of such
series to be issued; provided, that any subsequent request by the Company to the
Trustee to authenticate Debt Securities of such series upon original issuance
shall constitute a representation and warranty by the Company that, as of the
date of such request, the statements made in the Officers' Certificate delivered
pursuant to Section 2.05 or 13.05 shall be true and correct as if made on such
date and that the Opinion of Counsel delivered at or prior to such time of
authentication of an original issuance of Debt Securities shall specifically
state that it shall relate to all subsequent issuances of Debt Securities of
such series that are identical to the Debt Securities issued in the first
issuance of Debt Securities of such series. A Company Order delivered by the
Company to the Trustee in the circumstances set forth in the preceding
paragraph, may provide that Debt Securities which are the subject thereof will
be authenticated and delivered by the Trustee or its agent on

                                       22
<PAGE>

original issue from time to time upon the telephonic or written order of Persons
designated in such written order (any such telephonic instructions to be
promptly confirmed in writing by such Person) and that such Persons are
authorized to determine, consistent with the Officers' Certificate, supplemental
Indenture or resolution of the Board of Directors relating to such written
order, such terms and conditions of such Debt Securities as are specified in
such Officers' Certificate, supplemental Indenture or such resolution.

         SECTION 2.17. DEFAULTED INTEREST. Any interest on any Debt Security of
a particular series which is payable, but is not punctually paid or duly
provided for, on the dates and in the manner provided in the Debt Securities of
such series and in this Indenture (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Holder thereof on the relevant record date
by virtue of having been such Holder, and such Defaulted Interest may be paid by
the Company, at its election in each case, as provided in clause (i) or (ii)
below:

                  (i) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Debt Securities of such series are
registered at the close of business on a special record date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each such Debt Security of such series and the date of
the proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify the
Company of such special record date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest
and the special record date therefor to be mailed, first class postage pre-paid,
to each Holder thereof at its address as it appears in the Debt Security
Register, not less than 10 days prior to such special record date. Notice of the
proposed payment of such Defaulted Interest and the special record date therefor
having been so mailed, such Defaulted Interest shall be paid to the Persons in
whose names the Debt Securities of such series are registered at the close of
business on such special record date.

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

         SECTION 2.18. CUSIP AND CORRESPONDING "ISIN" NUMBERS. The Company in
issuing the Debt Securities may use "CUSIP" and Corresponding "ISIN" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" and
corresponding "ISIN" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made
as to the accuracy of such numbers either as printed on the Debt 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 Debt 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 in writing of any change in the
"CUSIP" or "ISIN" numbers.

                                       23
<PAGE>

                                   ARTICLE III
                          REDEMPTION OF DEBT SECURITIES

         SECTION 3.01. APPLICABILITY OF ARTICLE. The provisions of this Article
shall be applicable to the Debt Securities of any series which are redeemable
before their Stated Maturity except as otherwise specified as contemplated by
Section 2.03 for Debt Securities of such series.

         SECTION 3.02. NOTICE OF REDEMPTION; SELECTION OF DEBT SECURITIES. In
case the Company shall desire to exercise the right to redeem all or, as the
case may be, any part of the Debt Securities of any series in accordance with
their terms, by resolution of the Board of Directors or a supplemental
Indenture, the Company shall fix a date for redemption and shall give notice of
such redemption at least 30 and not more than 60 days prior to the date fixed
for redemption to the Holders of Debt Securities of such series so to be
redeemed as a whole or in part, in the manner provided in Section 13.03. The
notice if given in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the Holder receives such notice. In any
case, failure to give such notice or any defect in the notice to the Holder of
any Debt Security of a series designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the redemption of any other
Debt Security of such series.

         Each such notice of redemption shall specify the (i) Redemption Date,
(ii) the redemption price at which Debt Securities of such series are to be
redeemed (or the method of calculating such redemption price), (iii) the Place
or Places of Payment that payment will be made upon presentation and surrender
of such Debt Securities, (iv) that any interest accrued to the Redemption Date
will be paid as specified in said notice, (v) that the redemption is for a
sinking fund payment (if applicable), (vi) that, unless otherwise specified in
such notice, if the Company defaults in making such redemption payment, the
paying agent is prohibited from making such payment pursuant to the terms of
this Indenture, (vii) that on and after said date any interest thereon or on the
portions thereof to be redeemed will cease to accrue, (viii) that in the case of
Original Issue Discount Securities original issue discount accrued after the
Redemption Date will cease to accrue, (ix) the provisions of the Debt Securities
of that series pursuant to which the Debt Securities of that series are being
redeemed and (x) that no representation is made as to the correctness or
accuracy of the CUSIP or ISIN number, if any, listed in such notice or printed
on the Debt Securities of that series. If less than all the Debt Securities of a
series are to be redeemed at any time the notice of redemption shall specify the
certificate numbers of the Debt Securities of that series to be redeemed. In
case any Debt Security of a series is to be redeemed in part only, the notice of
redemption shall state the portion of the principal amount thereof to be
redeemed and shall state that on and after the Redemption Date, upon surrender
of such Debt Security, a new Debt Security or Debt Securities of that series in
principal amount equal to the unredeemed portion thereof, will be issued.

         At least five days but not more than 60 days before the giving of any
notice of redemption, unless the Trustee consents to a shorter period, the
Company shall give written notice to the Trustee of the Redemption Date, the
principal amount of Debt Securities to be redeemed and the series and terms of
the Debt Securities pursuant to which such redemption will occur. Such notice
shall be accompanied by an Officers' Certificate and an Opinion of Counsel from
the Company to the effect that such redemption will comply with the conditions
herein, and such notice may be revoked at any time prior to the giving of a
notice of redemption to the Holders pursuant to this Section 3.02. If fewer than
all the Debt Securities of a series are to be redeemed, the record date relating
to such redemption shall be selected by the Company and given in writing to the
Trustee, which record date shall be not less than three days after the date of
notice to the Trustee.

         By        , California time, on the Redemption Date for any Debt
Securities, the Company shall deposit with the Trustee or with a paying agent
(or, if the Company is acting as its own paying agent, segregate and hold in
trust) an amount of money in Dollars (except as provided pursuant to Section

                                       24
<PAGE>

2.03) sufficient to pay the redemption price of such Debt Securities or any
portions thereof that are to be redeemed on that date, together with any
interest accrued to the Redemption Date.

         If less than all the Debt Securities of like tenor and terms of a
series are to be redeemed (other than pursuant to mandatory sinking fund
redemptions) the Trustee shall select, on a pro rata basis, by lot or by such
other method as in its sole discretion it shall deem appropriate and fair, the
Debt Securities of that series or portions thereof (in multiples of $1,000) to
be redeemed. In any case where more than one Debt Security of such series is
registered in the same name, the Trustee in its discretion may treat the
aggregate principal amount so registered as if it were represented by one Debt
Security of such series. The Trustee shall promptly notify the Company in
writing of the Debt Securities selected for redemption and, in the case of any
Debt Securities selected for partial redemption, the principal amount thereof to
be redeemed. If any Debt Security called for redemption shall not be so paid
upon surrender thereof on such Redemption Date, the principal, premium, if any,
and interest shall bear interest until paid from the Redemption Date at the rate
borne by the Debt Securities of that series. If less than all the Debt
Securities of unlike tenor and terms of a series are to be redeemed, the
particular Debt Securities to be redeemed shall be selected by the Company.
Provisions of this Indenture that apply to Debt Securities called for redemption
also apply to portions of Debt Securities called for redemption.

         SECTION 3.03. PAYMENT OF DEBT SECURITIES CALLED FOR REDEMPTION. If
notice of redemption has been given as provided in Section 3.02, the Debt
Securities or portions of Debt Securities of the series with respect to which
such notice has been given shall become due and payable on the date and at the
Place or Places of Payment stated in such notice at the applicable redemption
price, together with any interest accrued to the Redemption Date, and on and
after said date (unless the Company shall default in the payment of such Debt
Securities at the applicable redemption price, together with any interest
accrued to said date) any interest on the Debt Securities or portions of Debt
Securities of any series so called for redemption shall cease to accrue, and any
original issue discount in the case of Original Issue Discount Securities shall
cease to accrue. On presentation and surrender of such Debt Securities at the
Place or Places of Payment in said notice specified, the said Debt Securities or
the specified portions thereof shall be paid and redeemed by the Company at the
applicable redemption price, together with any interest accrued thereon to the
Redemption Date.

         Any Debt Security that is to be redeemed only in part shall be
surrendered at the Place of Payment with, if the Company, the Registrar or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company, the Registrar 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 deliver to the
Holder of such Debt Security without service charge, a new Debt Security or Debt
Securities of the same series, of like tenor and form, 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 Debt Security
so surrendered; except that if a Global Security is so surrendered, the Company
shall execute, and the Trustee shall authenticate and deliver to the Depositary
for such Global Security, without service charge, a new Global Security in a
denomination equal to and in exchange for the unredeemed portion of the
principal of the Global Security so surrendered. In the case of a Debt Security
providing appropriate space for such notation, at the option of the Holder
thereof, the Trustee, in lieu of delivering a new Debt Security or Debt
Securities as aforesaid, may make a notation on such Debt Security of the
payment of the redeemed portion thereof.

         SECTION 3.04. MANDATORY AND OPTIONAL SINKING FUNDS. The minimum amount
of any sinking fund payment provided for by the terms of Debt Securities of any
series, resolution of the Board of Directors or a supplemental Indenture is
herein referred to as a "mandatory sinking fund payment," and any payment in
excess of such minimum amount provided for by the terms of Debt Securities of
any

                                       25
<PAGE>

series, resolution of the Board of Directors or a supplemental Indenture is
herein referred to as an "optional sinking fund payment."

         In lieu of making all or any part of any mandatory sinking fund payment
with respect to any Debt Securities of a series in cash, the Company may at its
option (a) deliver to the Trustee Debt Securities of that series theretofore
purchased or otherwise acquired by the Company or (b) receive credit for the
principal amount of Debt Securities of that series which have been redeemed
either at the election of the Company pursuant to the terms of such Debt
Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Debt Securities, resolution or
supplemental Indenture; provided, that such Debt Securities have not been
previously so credited. Such Debt Securities shall be received and credited for
such purpose by the Trustee at the redemption price specified in such Debt
Securities, resolution or supplemental Indenture for redemption through
operation of the sinking fund and the amount of such mandatory sinking fund
payment shall be reduced accordingly.

         SECTION 3.05. REDEMPTION OF DEBT SECURITIES FOR SINKING FUND. Not less
than 60 days prior to each sinking fund payment date for any series of Debt
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, any resolution or supplemental Indenture,
the portion thereof, if any, which is to be satisfied by payment of cash and the
portion thereof, if any, which is to be satisfied by delivering and crediting
Debt Securities of that series pursuant to this Section 3.05 (which Debt
Securities, if not previously redeemed, will accompany such certificate) and
whether the Company intends to exercise its right to make any permitted optional
sinking fund payment with respect to such series. Such certificate shall also
state that no Event of Default has occurred and is continuing with respect to
such series. Such certificate shall be irrevocable and upon its delivery the
Company shall be obligated to make the cash payment or payments therein referred
to, if any, by     , California time, on the next succeeding sinking fund
payment date. Failure of the Company to deliver such certificate (or to deliver
the Debt Securities specified in this paragraph) shall not constitute a Default,
but such failure shall require that the sinking fund payment due on the next
succeeding sinking fund payment date for that series shall be paid entirely in
cash and shall be sufficient to redeem the principal amount of such Debt
Securities subject to a mandatory sinking fund payment without the option to
deliver or credit Debt Securities as provided in this Section 3.05 and without
the right to make any optional sinking fund payment, if any, with respect to
such series.

         Any sinking fund payment or payments (mandatory or optional) made in
cash plus any unused balance of any preceding sinking fund payments made in cash
which shall equal or exceed $100,000 (or a lesser sum if the Company shall so
request) with respect to the Debt Securities of any particular series shall be
applied by the Trustee on the sinking fund payment date on which such payment is
made (or, if such payment is made before a sinking fund payment date, on the
sinking fund payment date following the date of such payment) to the redemption
of such Debt Securities at the redemption price specified in such Debt
Securities, resolution or supplemental Indenture for operation of the sinking
fund together with any accrued interest to the date fixed for redemption. Any
sinking fund moneys not so applied or allocated by the Trustee to the redemption
of Debt Securities shall be added to the next cash sinking fund payment received
by the Trustee for such series and, together with such payment, shall be applied
in accordance with the provisions of this Section 3.05. Any and all sinking fund
moneys with respect to the Debt Securities of any particular series held by the
Trustee on the last sinking fund payment date with respect to Debt Securities of
such series and not held for the payment or redemption of particular Debt
Securities shall be applied by the Trustee, together with other moneys, if
necessary, to be deposited sufficient for the purpose, to the payment of the
principal of the Debt Securities of that series at its Stated Maturity.

                                       26
<PAGE>

         The Trustee shall select the Debt Securities to be redeemed upon such
sinking fund payment date in the manner specified in the last paragraph of
Section 3.02, and the Company shall cause notice of the redemption thereof to be
given in the manner provided in Section 3.02 except that the notice of
redemption shall also state that the Debt Securities are being redeemed by
operation of the sinking fund. Such notice having been duly given, the
redemption of such Debt Securities shall be made upon the terms and in the
manner stated in Section 3.03.

         The Trustee shall not redeem any Debt Securities of a series with
sinking fund moneys or mail any notice of redemption of such Debt Securities by
operation of the sinking fund for such series during the continuance of a
Default in payment of interest on such Debt Securities or of any Event of
Default (other than an Event of Default occurring as a consequence of this
paragraph) with respect to such Debt Securities, except that if the notice of
redemption of any such Debt Securities shall theretofore have been mailed in
accordance with the provisions hereof, the Trustee shall redeem such Debt
Securities if cash sufficient for that purpose shall be deposited with the
Trustee for that purpose in accordance with the terms of this Article III.
Except as aforesaid, any moneys in the sinking fund for such series at the time
when any such Default or Event of Default shall occur and any moneys thereafter
paid into such sinking fund shall, during the continuance of such Default or
Event of Default, be held as security for the payment of such Debt Securities;
provided, however, that in case such Default or Event of Default or Default
shall have been cured or waived as provided herein, such moneys shall thereafter
be applied on the next sinking fund payment date for such Debt Securities on
which such moneys may be applied pursuant to the provisions of this Section
3.05.

                                   ARTICLE IV
                       PARTICULAR COVENANTS OF THE COMPANY

         SECTION 4.01. PAYMENT OF PRINCIPAL OF, AND PREMIUM, IF ANY, AND
INTEREST ON, DEBT SECURITIES. The Company shall pay the principal of, premium,
if any, and interest on, each series of Debt Securities at the respective times
and places and in the manner provided in the Debt Securities or this Indenture.
Each installment of interest on the Debt Securities (other than Debt Securities
represented by a Global Security) may at the Company's option be paid by mailing
checks for such interest payable to the Person entitled thereto pursuant to
Section 2.07(a) to the address of such Person as it appears on the Debt Security
Register.

         Principal of and any premium and interest on Debt Securities of any
series shall be considered paid on the date due if, by     , California
time, on such date the Trustee or any paying agent holds in accordance with this
Indenture money sufficient to pay in Dollars all principal, premium and interest
then due.

         The Company shall pay interest on overdue principal or premium, if any,
at the rate specified therefor in the Debt Securities; and it shall pay interest
on overdue installments of interest at the same rate to the extent lawful.

         SECTION 4.02. MAINTENANCE OF OFFICES OR AGENCIES FOR REGISTRATION OF
TRANSFER, EXCHANGE AND PAYMENT OF DEBT SECURITIES. The Company will maintain in
                                              , an office or agency where any
series of Debt Securities may be presented for payment, and it shall also
maintain (in or outside                                               ) an
office or agency where any series of Debt Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Debt Securities and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such

                                       27
<PAGE>

presentations, surrenders, notices and demands may be made or served at the
office of the Trustee where its corporate trust business is principally
administered in the United States, and the Company hereby appoints the Trustee
as its agent to receive all such presentations, surrenders, notices and demands.

         The Company may also from time to time designate one or more other
offices or agencies where a series of Debt Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in
                                              , for payment purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.

         SECTION 4.03. APPOINTMENT TO FILL A VACANCY IN THE OFFICE OF TRUSTEE.
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 7.08, a Trustee, so
that there shall at all times be a Trustee hereunder with respect to each series
of Debt Securities.

         SECTION 4.04. DUTIES OF PAYING AGENTS, ETC. The Company shall cause
each paying agent, if any, other than the Trustee, to execute and deliver to the
Trustee an instrument in which such agent shall agree with the Trustee, subject
to the provisions of this Section 4.04,

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

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

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

         (b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of, and premium, if any, or interest on,
the Debt Securities of any series, set aside, segregate and hold in trust for
the benefit of the Holders of the Debt Securities of such series a sum
sufficient to pay such principal, premium, if any, or interest so becoming due.
The Company will promptly notify the Trustee of any failure by the Company to
take such action or the failure by any other obligor on such Debt Securities to
make any payment of the principal of, and premium, if any, or interest on, such
Debt Securities when the same shall be due and payable.

         (c) Anything in this Section 4.04 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by it or any paying agent, as required by
this Section 4.04, such sums to be held by the Trustee upon the same trusts as
those upon which such sums were held by the Company or such paying agent.

         (d) Whenever the Company shall have one or more paying agents with
respect to any series of Debt Securities, it will, prior to each due date of the
principal of, and premium, if any, or interest on, any Debt Securities of such
series, deposit with any such paying agent a sum sufficient to pay the
principal, premium or interest so becoming due, such sum to be held in trust for
the benefit of the Persons

                                       28
<PAGE>

entitled thereto, and (unless any such paying agent is the Trustee) the Company
will promptly notify the Trustee of its action or failure so to act.

         (e) Anything in this Section 4.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 4.04 is subject to
the provisions of Section 11.05.

         SECTION 4.05. SEC REPORTS; FINANCIAL STATEMENTS.

         (a) For so long as any series of Debt Securities is Outstanding, the
Company, within 15 days after it files the same with the SEC, shall file with
the Trustee, copies of the annual reports and 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. If the Company is
not subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall file with the Trustee within 15 days after it would have
been required to file the same with the SEC and provide Holders with such annual
reports and such information, documents and other reports comparable to what the
Company would have been required to file with the SEC had it been subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act. The Company
shall also comply with the provisions of TIA Section 314(a).

         (b) The Company may request the Trustee on behalf of the Company at the
Company's expense to mail the foregoing to Holders. In such case, the Company
shall provide the Trustee with a sufficient number of copies of all reports and
other documents and information that the Trustee may be required to deliver to
Holders under this Section.

         SECTION 4.06. COMPLIANCE CERTIFICATE.

         (a) The Company shall, so long as any series of Debt Securities is
Outstanding, deliver to the Trustee, within 120 days after the end of each
fiscal year of the Company, an Officers' Certificate stating that a review of
the activities of the Company and the Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Officer
signing such certificate, that, to the best of such Officer's knowledge, the
Company has kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and is not in default in the performance or
observance of any such covenants (or, if a Default or Event of Default shall
have occurred during such fiscal year, describing all such Defaults or Events of
Default of which such Officer may have knowledge and the status thereof). Such
Officers' Certificate shall comply with TIA Section 314(a)(4).

         (b) The Company shall, so long as any series of Debt Securities is
Outstanding, deliver to the Trustee forthwith upon any Officer becoming aware of
any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what curative action the Company proposes to
take with respect thereto.

         SECTION 4.07. FURTHER INSTRUMENTS AND ACTS. The Company will, upon
request of the Trustee, execute and deliver such further instruments and do such
further acts as may reasonably be necessary or proper to carry out more
effectually the purposes of this Indenture.

         SECTION 4.08. EXISTENCE. Except as permitted by Article X hereof, the
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and all rights (charter and
statutory) and franchises of the Company; provided, that the Company shall not
be required to preserve any such right or franchise, if the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company.

                                       29
<PAGE>

         SECTION 4.09. MAINTENANCE OF PROPERTIES. The Company shall cause all
properties used or held for use in the conduct of its business or the business
of any of its Subsidiaries to be maintained and kept in good condition, repair
and working order (reasonable wear and tear excepted) and supplied with all
necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any such property, or disposing of
it, if such discontinuance or disposal is, in the judgment of the Company,
desirable in the conduct of its business or the business of any such Subsidiary.

         SECTION 4.10. PAYMENT OF TAXES AND OTHER CLAIMS. The Company shall pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon the Company or any of its Subsidiaries or upon the income, profits
or property of the Company or any of its Subsidiaries and (b) all lawful claims
for labor, materials and supplies which, if unpaid, might by law become a Lien
upon the property of the Company or any of its Subsidiaries; provided, however,
that the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.

         SECTION 4.11. WAIVER OF CERTAIN COVENANTS. The Company may, with
respect to the Debt Securities of any series, omit in any particular instance to
comply with any covenant set forth in this Article IV (except Sections 4.01
through 4.08) or made applicable to such series pursuant to Section 2.03 if,
before or after the time for such compliance, the Holders of at least a majority
in principal amount of the Outstanding Debt Securities of each series affected,
waive such compliance in such instance with such covenant, but no such waiver
shall extend to or affect such covenant except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such shall remain in
full force and effect.

         SECTION 4.12. WAIVER OF STAY, EXTENSION OR USURY LAWS. The Company
covenants (to the extent that each may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay, extension, or usury law or other law, which would
prohibit or forgive the Company from paying all or any portion of the principal
of, premium, if any, or interest on any series of Debt Securities as
contemplated herein and by the terms of such Debt Securities, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so) of
the Company 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.

                                    ARTICLE V
                    HOLDERS' LISTS AND REPORTS BY THE TRUSTEE

         SECTION 5.01. COMPANY TO FURNISH TRUSTEE INFORMATION AS TO NAMES AND
ADDRESSES OF HOLDERS; PRESERVATION OF INFORMATION. The Company covenants and
agrees that it will furnish or cause to be furnished to the Trustee with respect
to the Debt Securities of each series:

         (a) not more than 10 days after each record date with respect to the
payment of interest, if any, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders as of such record date, and

                                       30
<PAGE>

         (b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and contents as of a date not more than 15 days prior to the time such list
is furnished;

provided, however, that so long as the Trustee shall be the Registrar, such
lists shall not be required to be furnished.

         The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders (i)
contained in the most recent list furnished to it as provided in this Section
5.01 or (ii) received by it in the capacity of paying agent or Registrar (if so
acting) hereunder.

         The Trustee may destroy any list furnished to it as provided in this
Section 5.01 upon receipt of a new list so furnished.

         SECTION 5.02. COMMUNICATIONS TO HOLDERS. Holders may communicate
pursuant to Section 312(b) of the TIA with other Holders with respect to their
rights under this Indenture or the Debt Securities. The Company, the Trustee,
the Registrar and anyone else shall have the protection of Section 312(c) of the
TIA.

         SECTION 5.03. REPORTS BY TRUSTEE. Within 60 days after each January 31,
beginning with the first January 31 following the date of this Indenture, and in
any event on or before April 1 in each year, the Trustee shall mail to Holders a
brief report dated as of such January 31 that complies with TIA Section 313 (a);
provided, however, that if no event described in TIA Section 313 (a) has
occurred within the twelve months preceding the reporting date, no report need
be transmitted. The Trustee also shall comply with TIA Section 313 (b).

         Reports pursuant to this Section 5.03 shall be transmitted by mail:

         (a) to all Holders, as the names and addresses of such Holders appear
in the Debt Security Register; and

         (b) except in the cases of reports under Section 313(b)(2) of the TIA,
to each Holder of a Debt Security of any series whose name and address appear in
the information preserved at the time by the Trustee in accordance with Section
5.01.

         A copy of each report at the time of its mailing to Holders shall be
filed with the Securities and Exchange Commission and each stock exchange (if
any) on which the Debt Securities of any series are listed. The Company agrees
to notify promptly the Trustee whenever the Debt Securities of any series become
listed on any stock exchange and of any delisting thereof.

         SECTION 5.04. RECORD DATES FOR ACTION BY HOLDERS. If the Company shall
solicit from the Holders of Debt Securities of any series any action (including
the making of any demand or request, the giving of any direction, notice,
consent or waiver or the taking of any other action), the Company may, at its
option, by resolution of the Board of Directors, fix in advance a record date
for the determination of Holders of Debt Securities entitled to take such
action, but the Company shall have no obligation to do so. Any such record date
shall be fixed at the Company's discretion. If such a record date is fixed, such
action may be sought or given before or after the record date, but only the
Holders of Debt Securities of record at the close of business on such record
date shall be deemed to be Holders of Debt Securities for the purpose of
determining whether Holders of the requisite proportion of Debt Securities of
such series

                                       31
<PAGE>

Outstanding have authorized or agreed or consented to such action, and for that
purpose the Debt Securities of such series Outstanding shall be computed as of
such record date.

                                   ARTICLE VI
             REMEDIES OF THE TRUSTEE AND HOLDERS IN EVENT OF DEFAULT

         SECTION 6.01. EVENTS OF DEFAULT. If any one or more of the following
shall have occurred and be continuing with respect to Debt Securities of any
series (each of the following, an "Event of Default"):

         (a) default in the payment of any installment of interest upon any Debt
Securities of that series as and when the same shall become due and payable, and
continuance of such default for a period of 30 days; or

         (b) default in the payment of the principal of or premium, if any, on
any Debt Securities of that series as and when the same shall become due and
payable, whether at Stated Maturity, upon redemption, by declaration, upon
required repurchase or otherwise; or

         (c) default in the payment of any sinking fund payment with respect to
any Debt Securities of that series as and when the same shall become due and
payable; or

         (d) failure on the part of the Company duly to observe or perform any
other of its covenants or agreements in the Debt Securities of that series, in
any resolution of the Board of Directors authorizing the issuance of that series
of Debt Securities, in this Indenture with respect to such series or in any
supplemental Indenture with respect to such series (other than a covenant a
default in the performance of which is elsewhere in this Section specifically
dealt with), continuing for a period of 60 days after the date on which written
notice specifying such failure and requiring the Company to remedy the same
shall have been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Debt Securities of that series at the time
Outstanding; or

         (e) the Company, pursuant to or within the meaning of any Bankruptcy
Law,

                  (i) commences a voluntary case,

                  (ii) consents to the entry of an order for relief against it
in an involuntary case,

                  (iii) consents to the appointment of a Custodian of it or for
all or substantially all of its property; or

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

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

                  (i) is for relief against the Company as debtor in an
involuntary case,

                  (ii) appoints a Custodian of the Company, or a Custodian for
all or substantially all of the property of the Company, or

                  (iii) orders the liquidation of the Company,

                                       32
<PAGE>

and the order or decree remains unstayed and in effect for 60 days; or

         (g) any other Event of Default provided with respect to Debt Securities
of that series;

then and in each and every case that an Event of Default described in clause
(a), (b), (c), (d) or (g) with respect to Debt Securities of that series at the
time Outstanding occurs and is continuing, unless the principal of, premium, if
any, and interest on all the Debt Securities of that series shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount of the Debt Securities of that series then
Outstanding hereunder, by notice in writing to the Company (and to the Trustee
if given by Holders), may declare the entire principal of (or, if the Debt
Securities of that series are Original Issue Discount Debt Securities, such
portion of the principal amount as may be specified in the terms of that
series), premium, if any, and accrued and unpaid interest on all the Debt
Securities of that series to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Debt Securities of that series contained to
the contrary notwithstanding. If an Event of Default described in clause (e) or
(f) occurs, then and in each and every such case, unless the principal of and
interest on all the Debt Securities shall have become due and payable, the
entire principal of (or, if any Debt Securities of that series are Original
Issue Discount Debt Securities, such portion of the principal amount as may be
specified in the terms of that series), premium, if any, and accrued and unpaid
interest on all the Debt Securities then Outstanding hereunder shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holders, anything in this Indenture or in the
Debt Securities contained to the contrary notwithstanding.

         The Holders of a majority in aggregate principal amount of the Debt
Securities of a particular series by written notice to the Trustee may rescind
an acceleration and its consequences if the rescission would not conflict with
any judgment or decree of a court of competent jurisdiction already rendered and
if all existing Events of Default with respect to Debt Securities of that series
have been cured or waived except nonpayment of principal, premium, if any, or
interest that has become due solely because of acceleration. Upon any such
rescission, the parties hereto shall be restored respectively to their several
positions and rights hereunder, and all rights, remedies and powers of the
parties hereto shall continue as though no such proceeding had been taken.

         SECTION 6.02. COLLECTION OF DEBT BY TRUSTEE, ETC. If an Event of
Default occurs and is continuing, the Trustee, in its own name and as trustee of
an express trust, shall be entitled and empowered to institute any action or
proceedings at law or in equity for the collection of the sums so due and unpaid
or enforce the performance of any provision of the Debt Securities of the
affected series or this Indenture, and may prosecute any such action or
proceedings to judgment or final decree, and may enforce any such judgment or
final decree against the Company or any other obligor upon the Debt Securities
of such series (and collect in the manner provided by law out of the property of
the Company or any other obligor upon the Debt Securities of such series
wherever situated the moneys adjudged or decreed to be payable).

         In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor upon the Debt Securities
of any series under Bankruptcy Law, or in case a Custodian shall have been
appointed for its property, or in case of any other similar judicial proceedings
relative to the Company or any other obligor upon the Debt Securities of any
series, its creditors or its property, the Trustee, irrespective of whether the
principal of Debt Securities of any series shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand pursuant to the provisions of this Section
6.02, shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the

                                       33
<PAGE>

whole amount of principal, premium, if any, and interest (or, if the Debt
Securities of such series are Original Issue Discount Debt Securities, such
portion of the principal amount as may be specified in the terms of such series)
owing and unpaid in respect of the Debt Securities of such series, and to file
such other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for reasonable compensation to
the Trustee, its agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the Trustee except
as a result of its negligence or bad faith) and of the Holders thereof allowed
in any such judicial proceedings relative to the Company, or any other obligor
upon the Debt Securities of such series, its creditors or its property, and to
collect and receive any moneys or other property payable or deliverable on any
such claims, and to distribute all amounts received with respect to the claims
of such Holders and of the Trustee on their behalf, and any receiver, assignee
or trustee in bankruptcy or reorganization is hereby authorized by each of such
Holders to make payments to the Trustee, and, in the event that the Trustee
shall consent to the making of payments directly to such Holders, to pay to the
Trustee such amount as shall be sufficient to cover reasonable compensation to
the Trustee, its agents, attorneys and counsel, and all other reasonable
expenses and liabilities incurred, and all advances made, by the Trustee except
as a result of its negligence or bad faith.

         All rights of action and of asserting claims under this Indenture, or
under any of the Debt Securities of any series, may be enforced by the Trustee
without the possession of any such Debt Securities, or the production thereof in
any trial or other proceedings relative thereto, and any such action or
proceedings instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment (except for any
amounts payable to the Trustee pursuant to Section 7.06) shall be for the
ratable benefit of the Holders of all the Debt Securities in respect of which
such action was taken.

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

         SECTION 6.03. APPLICATION OF MONEYS COLLECTED BY TRUSTEE. Any moneys or
other property collected by the Trustee pursuant to Section 6.02 with respect to
Debt Securities of any series shall be applied, in the order following, at the
date or dates fixed by the Trustee for the distribution of such moneys or other
property, upon presentation of the several Debt Securities of such series in
respect of which moneys or other property have been collected, and the notation
thereon of the payment, if only partially paid, and upon surrender thereof if
fully paid:

         FIRST: To the payment of all money due the Trustee pursuant to Section
7.06;

         SECOND: In case the principal of the Outstanding Debt Securities in
respect of which such moneys have been collected shall not have become due, to
the payment of interest on the Debt Securities of such series in the order of
the maturity of the installments of such interest, with interest (to the extent
that such interest has been collected by the Trustee) upon the overdue
installments of interest at the rate or Yield to Maturity (in the case of
Original Issue Discount Debt Securities) borne by the Debt Securities of such
series, such payments to be made ratably to the Persons entitled thereto,
without discrimination or preference;

         THIRD: In case the principal of the Outstanding Debt Securities in
respect of which such moneys have been collected shall have become due, by
declaration or otherwise, to the payment of the whole

                                       34
<PAGE>

amount then owing and unpaid upon the Debt Securities of such series for
principal and premium, if any, and interest, with interest on the overdue
principal and premium, if any, and (to the extent that such interest has been
collected by the Trustee) upon overdue installments of interest at the rate or
Yield to Maturity (in the case of Original Issue Discount Debt Securities) borne
by the Debt Securities of such series; and, in case such moneys shall be
insufficient to pay in full the whole amount so due and unpaid upon the Debt
Securities of such series, then to the payment of such principal and premium, if
any, and interest, without preference or priority of principal and premium, if
any, over interest, or of interest over principal and premium, if any, or of any
installment of interest over any other installment of interest, or of any Debt
Security of such series over any Debt Security of such series, ratably to the
aggregate of such principal and premium, if any, and interest; and

         FOURTH: The remainder, if any, shall be paid to the Company, its
successors or assigns, or to whomsoever may be lawfully entitled to receive the
same, or as a court of competent jurisdiction may direct.

         The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.03. At least 15 days before such record date,
the Company shall mail to each Holder and the Trustee a notice that states the
record date, the payment date and amount to be paid.

         SECTION 6.04. LIMITATION ON SUITS BY HOLDERS. No Holder of any Debt
Security of any series shall have any right by virtue or by availing of any
provision of this Indenture to institute any action or proceeding at law or in
equity or in bankruptcy or otherwise, upon or under or with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless such Holder previously shall have given to the Trustee
written notice of an Event of Default with respect to Debt Securities of that
same series and of the continuance thereof and unless the Holders of not less
than 25% in aggregate principal amount of the Outstanding Debt Securities of
that series shall have made written request upon the Trustee to institute such
action or proceedings in respect of such Event of Default in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity or security as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity or security
shall have failed to institute any such action or proceedings and no direction
inconsistent with such written request shall have been given to the Trustee
pursuant to Section 6.06; it being understood and intended, and being expressly
covenanted by the Holder of every Debt Security with every other Holder and the
Trustee, that no one or more Holders shall have any right in any manner whatever
by virtue or by availing of any provision of this Indenture to affect, disturb
or prejudice the rights of any Holders, or to obtain or seek to obtain priority
over or preference to any other such Holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all such Holders. For the protection and enforcement of the
provisions of this Section 6.04, each and every Holder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.

         Notwithstanding any other provision in this Indenture, however, the
right of any Holder of any Debt Security to receive payment of the principal of,
and premium, if any, and (subject to Section 2.12) interest on, such Debt
Security, on or after the respective due dates expressed in such Debt Security,
and to institute suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.

         SECTION 6.05. REMEDIES CUMULATIVE; DELAY OR OMISSION IN EXERCISE OF
RIGHTS NOT A WAIVER OF DEFAULT. All powers and remedies given by this Article VI
to the Trustee or to the Holders shall, to the extent permitted by law, be
deemed cumulative and not exclusive of any thereof or of any other powers and
remedies available to the Trustee or the Holders, by judicial proceedings or
otherwise,

                                       35
<PAGE>

to enforce the performance or observance of the covenants and agreements
contained in this Indenture, and no delay or omission of the Trustee or of any
Holder to exercise any right or power accruing upon any Default occurring and
continuing as aforesaid, shall impair any such right or power, or shall be
construed to be a waiver of any such Default or an acquiescence therein; and,
subject to the provisions of Section 6.04, every power and remedy given by this
Article VI or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as shall be deemed expedient, by the Trustee or by the
Holders.

         SECTION 6.06. RIGHTS OF HOLDERS OF MAJORITY IN PRINCIPAL AMOUNT OF DEBT
SECURITIES TO DIRECT TRUSTEE AND TO WAIVE DEFAULT. The Holders of not less than
a majority in aggregate principal amount of the Debt Securities of any series at
the time Outstanding shall have the right to direct the time, method, and place
of conducting any proceeding for any remedy available to the Trustee, or of
exercising any right, trust or power conferred on the Trustee, with respect to
the Debt Securities of such series; provided, however, that such direction shall
not be otherwise than in accordance with law and the provisions of this
Indenture, and that subject to the provisions of Section 7.01, the Trustee shall
have the right to decline to follow any such direction if the Trustee being
advised by counsel shall determine that the action so directed may not lawfully
be taken or is inconsistent with any provision of this Indenture, or if the
Trustee shall by a responsible officer or officers determine that the action so
directed would involve it in personal liability or would be unduly prejudicial
to Holders of Debt Securities of such series not taking part in such direction;
and provided, further, however, that nothing contained in this Indenture shall
impair the right of the Trustee to take any action deemed proper by the Trustee
and which is not inconsistent with such direction by such Holders. The Holders
of not less than a majority in aggregate principal amount of the Debt Securities
of that series at the time Outstanding may on behalf of the Holders of all the
Debt Securities of that series waive any past Default or Event of Default and
its consequences for that series, except a Default or Event of Default in the
payment of the principal of, and premium, if any, or interest on, any of the
Debt Securities and a Default or Event of Default in respect of a provision that
under Section 9.02 cannot be amended without the consent of each Holder affected
thereby. In case of any such waiver, such Default shall cease to exist, any
Event of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture, and the Company, the Trustee and the Holders of the
Debt Securities of that series shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.

         SECTION 6.07. TRUSTEE TO GIVE NOTICE OF DEFAULTS KNOWN TO IT, BUT MAY
WITHHOLD SUCH NOTICE IN CERTAIN CIRCUMSTANCES. The Trustee shall, within 90 days
after the occurrence of a Default known to it with respect to a series of Debt
Securities, give to the Holders thereof, in the manner provided in Section
13.03, notice of all Defaults with respect to such series known to the Trustee,
unless such Defaults shall have been cured or waived before the giving of such
notice; provided, that, except in the case of Default in the payment of the
principal of, or premium, if any, or interest on, any of the Debt Securities of
such series or in the making of any sinking fund payment with respect to the
Debt Securities of such series, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee,
or a committee of directors and/or responsible officers, of the Trustee in good
faith determines that the withholding of such notice is in the interests of the
Holders thereof.

         SECTION 6.08. REQUIREMENT OF AN UNDERTAKING TO PAY COSTS IN CERTAIN
SUITS UNDER THE INDENTURE OR AGAINST THE TRUSTEE. All parties to this Indenture
agree, and each Holder of any Debt Security by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit in the manner and to the extent provided in the TIA, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees and

                                       36
<PAGE>

expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section 6.08 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Holder, or group of Holders, holding
in the aggregate more than 25 percent in principal amount of the Outstanding
Debt Securities of that series or to any suit instituted by any Holder for the
enforcement of the payment of the principal of, or premium, if any, or interest
on, any Debt Security on or after the due date for such payment expressed in
such Debt Security.

                                   ARTICLE VII
                             CONCERNING THE TRUSTEE

         SECTION 7.01. CERTAIN DUTIES AND RESPONSIBILITIES. The Trustee, prior
to the occurrence of an Event of Default and after the curing or waiving of all
Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived), the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.

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

         (a) this paragraph shall not be construed to limit the effect of the
first paragraph of this Section 7.01;

         (b) prior to the occurrence of an Event of Default with respect to the
Debt Securities of a series and after the curing or waiving of all Events of
Default with respect to such series which may have occurred:

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

                  (ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture;
but in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture; but the Trustee shall examine the
evidence furnished to it pursuant to Sections 4.05 and 4.06 to determine whether
or not such evidence conforms to the requirement of this Indenture;

                  (iii) the Trustee shall not be liable for an error of judgment
made in good faith by a responsible officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and

                  (iv) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it with respect to Debt Securities of any
series in good faith in accordance with the direction of

                                       37
<PAGE>

the Holders of not less than a majority in aggregate principal amount of the
Outstanding Debt Securities of that series relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Indenture
with respect to Debt Securities of such series.

         None of the provisions of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any personal financial liability
in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

         Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.

         SECTION 7.02. CERTAIN RIGHTS OF TRUSTEE. Except as otherwise provided
in Section 7.01:

         (a) the Trustee may 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 or
other paper or document (whether in its original or facsimile form) believed by
it to be genuine and to have been signed or presented by the proper party or
parties;

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

         (c) the Trustee may consult with counsel, and the advice of such
counsel or any 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;

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

         (e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;

         (f) prior to the occurrence of an Event of Default and after the curing
of all Events of Default which may have occurred, 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, approval or other paper or document, unless requested in writing
to do so by the Holders of a majority in aggregate principal amount of the then
Outstanding Debt Securities of a series affected by such matter; provided,
however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such
investigation is not, in the opinion of the Trustee, reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such costs, expenses or
liabilities as

                                       38
<PAGE>

a condition to so proceeding, and the reasonable expense of every such
investigation shall be paid by the Company or, if paid by the Trustee, shall be
repaid by the Company upon demand;

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

         (h) if any property other than cash shall at any time be subject to a
Lien in favor of the Holders, the Trustee, if and to the extent authorized by a
receivership or bankruptcy court of competent jurisdiction or by the
supplemental instrument subjecting such property to such Lien, shall be entitled
to make advances for the purpose of preserving such property or of discharging
tax Liens or other prior Liens or encumbrances thereon;

         (i) the Trustee is not required to give any bond or surety with respect
to the performance of its duties or the exercise of its powers under this
Indenture; and

         (j) the Trustee shall have no responsibility for any information in any
offering document or other disclosure material distributed with respect to any
series of Debt Securities, and the Trustee shall have no responsibility for
compliance with any state or federal securities laws in connection with the Debt
Securities, other than the filing of any documents required to be filed by an
indenture trustee pursuant to the TIA.

         SECTION 7.03. TRUSTEE NOT LIABLE FOR RECITALS IN INDENTURE OR IN DEBT
SECURITIES. The recitals contained herein, in the Debt Securities (except the
Trustee's certificate of authentication) shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for the correctness of the
same. The Trustee makes no representations as to the validity or sufficiency of
this Indenture or of the Debt Securities of any series, except that the Trustee
represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Debt Securities and perform its obligations hereunder, and that
the statements made by it or to be made by it in a Statement of Eligibility and
Qualification on Form T-1 supplied to the Company are true and accurate. The
Trustee shall not be accountable for the use or application by the Company of
any of the Debt Securities or of the proceeds thereof.

         SECTION 7.04. TRUSTEE, PAYING AGENT OR REGISTRAR MAY OWN DEBT
SECURITIES. The Trustee or any paying agent or Registrar, in its individual or
any other capacity, may become the owner or pledgee of Debt Securities and
subject to the provisions of the TIA relating to conflicts of interest and
preferential claims may otherwise deal with the Company with the same rights it
would have if it were not Trustee, paying agent or Registrar.

         SECTION 7.05. MONEYS RECEIVED BY TRUSTEE TO BE HELD IN TRUST. Subject
to the provisions of Section 11.05, all moneys received by the Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but need not be segregated from other funds except to
the extent required by law. The Trustee shall be under no liability for interest
on any moneys received by it hereunder. So long as no Event of Default shall
have occurred and be continuing, all interest allowed on any such moneys shall
be paid from time to time to the Company upon a Company Order.

         SECTION 7.06. COMPENSATION AND REIMBURSEMENT. The Company covenants and
agrees to pay in Dollars to the Trustee from time to time, and the Trustee shall
be entitled to, reasonable compensation for all services rendered by it
hereunder (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), including, without limitation,
paying agent

                                       39
<PAGE>

and Registrar, and, except as otherwise expressly provided herein, the Company
will pay or reimburse in Dollars the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents,
attorneys and counsel and of all Persons not regularly in its employ), including
without limitation, Section 6.02, except any such expense, disbursement or
advances as may arise from its negligence or bad faith. The Company also
covenants to indemnify and defend the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or bad faith
on the part of the Trustee, arising out of or in connection with the acceptance
or administration of this trust or trusts hereunder, including the reasonable
costs and expenses of defending itself against any claim of liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligations of the Company under this Section 7.06 to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional Debt hereunder and shall
survive the satisfaction and discharge of this Indenture. The Company and the
Holders agree that such additional Debt shall be secured by a Lien prior to that
of the Debt Securities upon all property and funds held or collected by the
Trustee, as such, except funds held in trust for the payment of principal of,
and premium, if any, or interest on, particular Debt Securities.

         When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(e) or (f) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.

         SECTION 7.07. RIGHT OF TRUSTEE TO RELY ON AN OFFICERS' CERTIFICATE
WHERE NO OTHER EVIDENCE SPECIFICALLY PRESCRIBED. Except as otherwise provided in
Section 7.01, whenever in the administration of the provisions of this Indenture
the Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee and such certificate, in the absence of
negligence or bad faith on the part of the Trustee, shall be full warrant to the
Trustee for any action taken, suffered or omitted by it under the provisions of
this Indenture upon the faith thereof.

         SECTION 7.08. SEPARATE TRUSTEE; REPLACEMENT OF TRUSTEE. The Company
may, but need not, appoint a separate Trustee for any one or more series of Debt
Securities. The Trustee may resign with respect to one or more or all series of
Debt Securities at any time by giving notice to the Company. The Holders of a
majority in principal amount of the Debt Securities of a particular series may
remove the Trustee for such series and only such series by so notifying the
Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:

         (a)      the Trustee fails to comply with Section 7.10;

         (b)      the Trustee is adjudged bankrupt or insolvent;

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

         (d)      the Trustee otherwise becomes incapable of acting.

         If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Debt Securities of a particular series and
such Holders do not reasonably promptly appoint a successor Trustee, or if a
vacancy exists in the office of Trustee for any reason (the Trustee in such
event being referred to herein as the retiring Trustee), the Company shall
promptly appoint a successor

                                       40
<PAGE>

Trustee. No resignation or removal of the Trustee and no appointment of a
successor Trustee shall become effective until the acceptance of appointment by
the successor Trustee in accordance with the applicable requirements of this
Section 7.08.

         A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of Debt Securities of each applicable series. The retiring
Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the Lien provided for in Section 7.06.

         If a successor Trustee does not take office within 60 days after the
retiring Trustee gives notice of resignation or is removed, the retiring Trustee
or the Holders of 25% in principal amount of the Debt Securities of any
applicable series may petition any court of competent jurisdiction for the
appointment of a successor Trustee for the Debt Securities of such series.

         If the Trustee fails to comply with Section 7.10, any Holder of Debt
Securities of any applicable series may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee for the Debt Securities of such series.

         Notwithstanding the replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.06 shall continue for the
benefit of the retiring Trustee.

         In the case of the appointment hereunder of a separate or successor
trustee with respect to the Debt Securities of one or more series, the Company,
any retiring Trustee and each successor or separate Trustee with respect to the
Debt Securities of any applicable series shall execute and deliver an Indenture
supplemental hereto (i) which shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of any retiring Trustee with respect to the Debt Securities of any series as to
which any such retiring Trustee is not retiring shall continue to be vested in
such retiring Trustee and (ii) that shall add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, it being
understood that nothing herein or in such supplemental Indenture shall
constitute such Trustees co-trustees of the same trust and that each such
separate, retiring or successor Trustee shall be Trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee.

         SECTION 7.09. 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 or banking
association, the resulting, surviving or transferee corporation or banking
association without any further act shall be the successor Trustee.

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

                                       41
<PAGE>

         SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all
times satisfy the requirements of Section 310(a) of the TIA. The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent filed annual report of condition. No obligor upon the Debt
Securities of a particular series or Person directly or indirectly controlling,
controlled by or under common control with such obligor shall serve as Trustee
for the Debt Securities of such series. The Trustee shall comply with Section
310(b) of the TIA; provided, however, that there shall be excluded from the
operation of Section 310(b)(1) of the TIA this Indenture or any indenture or
indentures under which other securities or certificates of interest or
participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in Section 310(b)(1) of the TIA are
met.

         SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee shall comply with Section 311(a) of the TIA, excluding any creditor
relationship listed in Section 311(b) of the TIA. A Trustee who has resigned or
been removed shall be subject to Section 311(a) of the TIA to the extent
indicated therein.

         SECTION 7.12. COMPLIANCE WITH TAX LAWS. The Trustee hereby agrees to
comply with all U.S. federal income tax information reporting and withholding
requirements applicable to it with respect to payments of premium (if any) and
interest on the Debt Securities, whether acting as Trustee, Registrar, paying
agent or otherwise with respect to the Debt Securities.

                                  ARTICLE VIII
                             CONCERNING THE HOLDERS

         SECTION 8.01. EVIDENCE OF ACTION BY HOLDERS. Whenever in this Indenture
it is provided that the Holders of a specified percentage in aggregate principal
amount of the Debt Securities of any or all series may take action (including
the making of any demand or request, the giving of any direction, notice,
consent or waiver or the taking of any other action) the fact that at the time
of taking any such action the Holders of such specified percentage have joined
therein may be evidenced (a) by any instrument or any number of instruments of
similar tenor executed by Holders in Person or by agent or proxy appointed in
writing, (b) by the record of the Holders voting in favor thereof at any meeting
of Holders duly called and held in accordance with the provisions of Section
5.02, (c) by a combination of such instrument or instruments and any such record
of such a meeting of Holders or (d) in the case of Debt Securities evidenced by
a Global Security, by any electronic transmission or other message, whether or
not in written format, that complies with the Depositary's applicable
procedures.

         SECTION 8.02. PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF DEBT
SECURITIES. Subject to the provisions of Sections 7.01, 7.02 and 13.09, proof of
the execution of any instrument by a Holder or his agent or proxy shall be
sufficient if made in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee. The ownership of Debt Securities of any series shall be proved by
the Debt Security Register or by a certificate of the Registrar for such series.
The Trustee may require such additional proof of any matter referred to in this
Section 8.02 as it shall deem necessary.

         SECTION 8.03. WHO MAY BE DEEMED OWNER OF DEBT SECURITIES. Prior to due
presentment for registration of transfer of any Debt Security, the Company, the
Trustee, any paying agent and any Registrar may deem and treat the Person in
whose name any Debt Security shall be registered upon the books of the Company
as the absolute owner of such Debt Security (whether or not such Debt Security
shall be registered in the name of a Depositary or shall be overdue and
notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payment of or on account of the principal of and premium,
if any, and (subject to Section 2.12) interest on such Debt Security and for all
other purposes, and neither the Company nor the Trustee nor any paying agent nor
any Registrar shall

                                       42
<PAGE>

be affected by any notice to the contrary; and all such payments so made to any
such Holder for the time being, or upon his order, shall be valid and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for moneys payable upon any such Debt Security.

         None of the Company, the Trustee, any agent of the Trustee, any paying
agent or any Registrar will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests in a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests or for any action taken
or any failure to act by a Depositary with respect to any Debt Securities
including, without limitation, any failure of the owner of a beneficial interest
in such Debt Securities to receive any payments or notices provided hereunder or
for the Depositary's selection of beneficial interests in such Debt Securities
to be redeemed.

         SECTION 8.04. INSTRUMENTS EXECUTED BY HOLDERS BIND FUTURE HOLDERS. At
any time prior to (but not after) the evidencing to the Trustee, as provided in
Section 8.01, of the taking of any action by the Holders of the percentage in
aggregate principal amount of the Debt Securities of any series specified in
this Indenture in connection with such action and subject to the following
paragraph, any Holder of a Debt Security which is shown by the evidence to be
included in the Debt Securities the Holders of which have consented to such
action may, by filing written notice with the Trustee at its corporate trust
office and upon proof of holding as provided in Section 8.02, revoke such action
so far as concerns such Debt Security. Except as aforesaid any such action taken
by the Holder of any Debt Security shall be conclusive and binding upon such
Holder and upon all future Holders and owners of such Debt Security and of any
Debt Security issued upon transfer thereof or in exchange or substitution
therefor, irrespective of whether or not any notation in regard thereto is made
upon such Debt Security or such other Debt Securities. Any action taken by the
Holders of the percentage in aggregate principal amount of the Debt Securities
of any series specified in this Indenture in connection with such action shall
be conclusively binding upon the Company, the Trustee and the Holders of all the
Debt Securities of such series.

         The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Debt Securities entitled to give their
consent or take any other action required or permitted to be taken pursuant to
this Indenture. If a record date is fixed, then notwithstanding the immediately
preceding paragraph, those Persons who were Holders of Debt Securities at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders of Debt
Securities after such record date. No such consent shall be valid or effective
for more than 120 days after such record date unless the consent of the Holders
of the percentage in aggregate principal amount of the Debt Securities of such
series specified in this Indenture shall have been received within such 120-day
period.

                                   ARTICLE IX
                             SUPPLEMENTAL INDENTURES

         SECTION 9.01. PURPOSES FOR WHICH SUPPLEMENTAL INDENTURE MAY BE ENTERED
INTO WITHOUT CONSENT OF HOLDERS. The Company, when authorized by resolutions of
the Board of Directors, and the Trustee may from time to time and at any time,
without the consent of Holders, enter into an Indenture or Indentures
supplemental hereto (which shall conform to the provisions of the TIA as in
force at the date of the execution thereof) for one or more of the following
purposes:

         (a) to evidence the succession pursuant to Article X of another Person
to the Company, or successive successions, and the assumption by the Successor
Company (as defined in Section 10.01) of the covenants, agreements and
obligations of the Company in this Indenture and in the Debt Securities;

                                       43
<PAGE>

         (b) to surrender any right or power herein conferred upon the Company,
to add to the covenants of the Company such further covenants, restrictions,
conditions or provisions for the protection of the Holders of all or any series
of Debt Securities (and if such covenants are to be for the benefit of less than
all series of Debt Securities, stating that such covenants are expressly being
included solely for the benefit of such series) as the Board of Directors shall
consider to be for the protection of the Holders of such Debt Securities, and to
make the occurrence, or the occurrence and continuance, of a Default in any of
such additional covenants, restrictions, conditions or provisions a Default or
an Event of Default permitting the enforcement of all or any of the several
remedies provided in this Indenture; provided, that in respect of any such
additional covenant, restriction, condition or provision such supplemental
Indenture may provide for a particular period of grace after Default (which
period may be shorter or longer than that allowed in the case of other Defaults)
or may provide for an immediate enforcement upon such Default or may limit the
remedies available to the Trustee upon such Default or may limit the right of
the Holders of a majority in aggregate principal amount of any or all series of
Debt Securities to waive such default;

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

         (d) to permit the qualification of this Indenture or any Indenture
supplemental hereto under the TIA as then in effect, except that nothing herein
contained shall permit or authorize the inclusion in any Indenture supplemental
hereto of the provisions referred to in Section 316(a)(2) of the TIA;

         (e) to secure any or all of the Debt Securities;

         (f) to make any change that does not adversely affect the rights under
this Indenture of any Holder;

         (g) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Debt Securities; provided,
however, that any such addition, change or elimination not otherwise permitted
under this Section 9.01 shall neither apply to any Debt Security of any series
created prior to the execution of such supplemental Indenture and entitled to
the benefit of such provision nor modify the rights of the Holder of any such
Debt Security with respect to such provision or shall become effective only when
there is no such Debt Security Outstanding;

         (h) to evidence and provide for the acceptance of appointment hereunder
by a successor or separate Trustee with respect to the Debt Securities of one or
more series and to add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee; and

         (i) to establish the form or terms of Debt Securities of any series as
permitted by Sections 2.01 and 2.03.

         The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental Indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee shall not be obligated to enter into any such supplemental
Indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.

         Any supplemental Indenture authorized by the provisions of this Section
9.01 may be executed by the Company and the Trustee without the consent of the
Holders of any of the Debt Securities at the time Outstanding, notwithstanding
any of the provisions of Section 9.02.

                                       44
<PAGE>

         SECTION 9.02. MODIFICATION OF INDENTURE WITH CONSENT OF HOLDERS OF DEBT
SECURITIES. Without notice to any Holder but with the consent (evidenced as
provided in Section 8.01) of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such supplemental Indenture (including consents obtained in
connection with a tender offer or exchange offer for any such series of Debt
Securities), the Company, when authorized by resolutions of the Board of
Directors, and the Trustee may from time to time and at any time enter into an
Indenture or Indentures supplemental hereto (which shall conform to the
provisions of the TIA as in force at the date of execution thereof) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental Indenture or of
modifying in any manner the rights of the Holders of the Debt Securities of such
series; provided, that no such supplemental Indenture, without the consent of
the Holders of each Debt Security so affected, shall:

         (a) reduce the percentage in principal amount of Debt Securities of any
series whose Holders must consent to an amendment;

         (b) reduce the rate of or extend the time for payment of interest on
any Debt Security;

         (c) reduce the principal of or extend the Stated Maturity of any Debt
Security;

         (d) reduce the premium payable upon the redemption of any Debt Security
or change the time at which any Debt Security may or shall be redeemed in
accordance with Article III;

         (e) make any Debt Security payable in currency other than the Dollar;

         (f) impair the right of any Holder to receive payment of premium, if
any, principal of and interest on such Holder's Debt Securities on or after the
due dates therefor or to institute suit for the enforcement of any payment on or
with respect to such Holder's Debt Securities;

         (g) release any security that may have been granted in respect of the
Debt Securities, other than in accordance with this Indenture; or

         (h) make any change in Section 6.06 or this Section 9.02.

         A supplemental Indenture which changes or eliminates any covenant or
other provision of this Indenture which has been expressly included solely for
the benefit of one or more particular series of Debt Securities or which
modifies the rights of the Holders of Debt Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect the
rights under this Indenture of the Holders of Debt Securities of any other
series.

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

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

                                       45
<PAGE>

         After an amendment under this Section 9.02 becomes effective, the
Company shall mail to Holders of Debt Securities of each series affected thereby
a notice briefly describing such amendment. The failure to give such notice to
all such Holders, or any defect therein, shall not impair or affect the validity
of an amendment under this Section 9.02.

         SECTION 9.03. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of
any supplemental Indenture pursuant to the provisions of this Article IX, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the Holders
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental Indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.

         The Trustee, subject to the provisions of Sections 7.01 and 7.02, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such supplemental Indenture complies with the provisions of
this Article IX.

         SECTION 9.04. DEBT SECURITIES MAY BEAR NOTATION OF CHANGES BY
SUPPLEMENTAL INDENTURES. Debt Securities of any series authenticated and
delivered after the execution of any supplemental Indenture pursuant to the
provisions of this Article IX may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental Indenture. New Debt Securities of any series so modified as to
conform, in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental Indenture may
be prepared and executed by the Company, authenticated by the Trustee and
delivered in exchange for the Debt Securities of such series then Outstanding.
Failure to make the appropriate notation or to issue a new Debt Security of such
series shall not affect the validity of such amendment.

                                    ARTICLE X
                    CONSOLIDATION, MERGER, SALE OR CONVEYANCE

         SECTION 10.01. CONSOLIDATIONS AND MERGERS OF THE COMPANY. The Company
shall not consolidate or amalgamate with or merge with or into any Person, or
sell, convey, transfer, lease or otherwise dispose of all or substantially all
its assets to any Person, whether in a single transaction or a series of related
transactions, unless: (a) either (i) the Company shall be the surviving Person
in the case of a merger or (ii) the resulting, surviving or transferee Person if
other than the Company (the "Successor Company"), shall be a partnership,
limited liability company or corporation organized and existing under the laws
of the United States, any state thereof or the District of Columbia and the
Successor Company shall expressly assume, by an Indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company under this Indenture and the Debt Securities
according to their tenor; (b) immediately after giving effect to such
transaction or series of transactions (and treating any Debt which becomes an
obligation of the Successor Company or any Subsidiary of the Successor Company
as a result of such transaction or series of transactions as having been
incurred by the Successor Company or such Subsidiary at the time of such
transaction), no Default or Event of Default would occur or 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, amalgamation,
merger or disposition and such supplemental Indenture (if any) comply with this
Indenture.

         SECTION 10.02. RIGHTS AND DUTIES OF SUCCESSOR COMPANY. In case of any
consolidation, amalgamation or merger where the Company is not the continuing
Person, or disposition of all or substantially all of the assets of the Company
in accordance with Section 10.01, the Successor Company shall succeed to and be
substituted for the Company with the same effect as if it had been named herein
as

                                       46
<PAGE>

the respective party to this Indenture, and the predecessor entity shall be
released from all liabilities and obligations under this Indenture and the Debt
Securities, except that no such release will occur in the case of a lease of all
or substantially all of its assets. The Successor Company thereupon may cause to
be signed, and may issue either in its own name or in the name of the Company,
any or all the Debt Securities issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Trustee; and, upon the
order of the Successor Company, instead of the Company, and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Debt Securities which previously shall
have been signed and delivered by the officers of the Company to the Trustee for
authentication, and any Debt Securities which the Successor Company thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All the
Debt Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Debt Securities theretofore or thereafter
issued in accordance with the terms of this Indenture as though all such Debt
Securities had been issued at the date of the execution hereof.

         In case of any such consolidation, amalgamation, merger, sale or
disposition such changes in phraseology and form (but not in substance) may be
made in the Debt Securities thereafter to be issued as may be appropriate.

                                   ARTICLE XI
                          SATISFACTION AND DISCHARGE OF
                     INDENTURE; DEFEASANCE; UNCLAIMED MONEYS

         SECTION 11.01. APPLICABILITY OF ARTICLE. The provisions of this Article
XI relating to discharge or defeasance of Debt Securities shall be applicable to
each series of Debt Securities except as otherwise specified pursuant to Section
2.03 for Debt Securities of such series.

         SECTION 11.02. SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE.

         (a) If at any time the Company shall have delivered to the Trustee for
cancellation all Debt Securities of any series theretofore authenticated and
delivered (other than any Debt Securities of such series which shall have been
destroyed, lost or stolen and which shall have been replaced or paid as provided
in Section 2.09 and Debt Securities for whose payment money has theretofore been
deposited in trust and thereafter repaid to the Company as provided in Section
11.05) or all Debt Securities of such series not theretofore delivered to the
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Company shall deposit with the
Trustee as trust funds the entire amount in cash sufficient to pay at Stated
Maturity or upon redemption all Debt Securities of such series not theretofore
delivered to the Trustee for cancellation, including principal and premium, if
any, and accrued interest due or to become due at such Stated Maturity or
Redemption Date, as the case may be, and if in either case the Company shall
also pay or cause to be paid all other sums payable hereunder by the Company,
then this Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of such Debt Securities
herein expressly provided for) with respect to the Debt Securities of such
series, and the Trustee, on demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel and at the cost and expense of the
Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture with respect to the Debt Securities of such series.

         (b) Subject to Sections 11.02(c), 11.03 and 11.07, the Company at any
time may terminate, with respect to Debt Securities of a particular series, all
its obligations under the Debt Securities of such series and this Indenture with
respect to the Debt Securities of such series ("legal defeasance option") or the
operation of (x) any covenant made applicable to such Debt Securities pursuant
to Section 2.03 and

                                       47
<PAGE>

(y) Sections 4.09, 4.10 and 6.01(g) ("covenant defeasance option"). The Company
may exercise its legal defeasance option notwithstanding its prior exercise of
its covenant defeasance option.

         If the Company exercises its legal defeasance option, payment of the
Debt Securities of the defeased series may not be accelerated because of an
Event of Default. If the Company exercises its covenant defeasance option,
payment of the Debt Securities of the defeased series may not be accelerated
because of an Event of Default specified in Section 6.01(g).

         Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.

         (c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.07, 2.09, 4.02, 4.04, 5.01, 7.06, 11.05, 11.06 and
11.07 shall survive until the Debt Securities of the defeased series have been
paid in full. Thereafter, the Company's obligations in Sections 7.06, 11.05 and
11.06 shall survive.

         SECTION 11.03. CONDITIONS OF DEFEASANCE. The Company may exercise its
legal defeasance option or its covenant defeasance option with respect to Debt
Securities of a particular series only if:

         (a) the Company irrevocably deposits in trust with the Trustee money or
U.S. Government Obligations for the payment of principal of, and premium, if
any, and interest on, the Debt Securities of such series to Stated Maturity or
redemption, as the case may be;

         (b) the Company delivers to the Trustee a certificate from a nationally
recognized firm of independent accountants expressing their opinion that the
payments of principal and interest when due and without reinvestment on the
deposited U.S. Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts as will be
sufficient to pay the principal, premium, if any, and interest when due on all
the Debt Securities of such series to Stated Maturity or the Redemption Date, as
the case may be;

         (c) 91 days pass after the deposit is made and during the 91-day period
no Default specified in Section 6.01(e) or (f) with respect to the Company
occurs which is continuing at the end of the period;

         (d) no Default has occurred and is continuing on the date of such
deposit and after giving effect thereto;

         (e) the deposit does not constitute a default under any other agreement
binding on the Company;

         (f) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company Act of
1940;

         (g) in the event of the legal defeasance option, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that the Company has
received from the Internal Revenue Service a ruling, or since the date of this
Indenture there has been a change in the applicable federal income tax law, in
either case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of Debt Securities of such series will not recognize
income, gain or loss for federal income tax purposes as a result of such
defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such defeasance
had not occurred;

                                       48
<PAGE>

         (h) in the event of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of Debt Securities of such series will not recognize income, gain or
loss for federal income tax purposes as a result of such covenant defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such covenant defeasance
had not occurred; and

         (i) the Company delivers to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent to the defeasance
and discharge of the Debt Securities of such series as contemplated by this
Article XI have been complied with.

Before or after a deposit, the Company may make arrangements satisfactory to the
Trustee for the redemption of Debt Securities of such series at a future date in
accordance with Article III.

         SECTION 11.04. APPLICATION OF TRUST MONEY. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article XI. It shall apply the deposited money and the money from U.S.
Government Obligations through any paying agent and in accordance with this
Indenture to the payment of principal of, and premium, if any, and interest on,
the Debt Securities of the defeased series.

         SECTION 11.05. REPAYMENT TO COMPANY. The Trustee and any paying agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.

         Subject to any applicable abandoned property law, the Trustee and any
paying agent shall pay to the Company upon request any money held by them for
the payment of principal, premium or interest that remains unclaimed for two
years, and, thereafter, Holders entitled to such money must look to the Company
for payment as general creditors.

         SECTION 11.06. INDEMNITY FOR U.S. GOVERNMENT OBLIGATIONS. The Company
shall pay and shall indemnify the Trustee and the Holders against any tax, fee
or other charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.

         SECTION 11.07. REINSTATEMENT. If the Trustee or any paying agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article XI by reason of any legal proceeding or by reason of any order or
judgment of any court or government authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Debt Securities of the defeased series shall be revived and
reinstated as though no deposit had occurred pursuant to this Article XI until
such time as the Trustee or any paying agent is permitted to apply all such
money or U.S. Government Obligations in accordance with this Article XI.

                                   ARTICLE XII
                                   [RESERVED]

         This Article XII has been intentionally omitted.

                                  ARTICLE XIII
                            MISCELLANEOUS PROVISIONS

         SECTION 13.01. SUCCESSORS AND ASSIGNS OF COMPANY BOUND BY INDENTURE.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or in behalf of the Company or the Trustee shall bind their
respective successors and assigns, whether so expressed or not.

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<PAGE>

         SECTION 13.02. ACTS OF BOARD, COMMITTEE OR OFFICER OF SUCCESSOR COMPANY
VALID. Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any Successor Company.

         SECTION 13.03. REQUIRED NOTICES OR DEMANDS. Any notice or communication
by the Company or the Trustee to the other is duly given if in writing (in the
English language) and delivered in person or mailed by registered or certified
mail (return receipt requested), telecopier or overnight air courier
guaranteeing next day delivery, to the other's address:

         If to the Company:

         Bell Microproducts Inc.
         1941 Ringwood Avenue
         San Jose, California 95131

         Attention: Chief Financial Officer
         Telecopy No. (408) 451-1632

If to the Trustee:

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

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

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

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

         All notices and communications shall be deemed to have been duly given:
at the time delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; on the first Business
Day on or after being sent, if telecopied and the sender receives confirmation
of successful transmission; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.

         Any notice required or permitted to a Holder by the Company or the
Trustee pursuant to the provisions of this Indenture shall be deemed to be
properly mailed by being deposited postage prepaid in a post office letter box
in the United States addressed to such Holder at the address of such Holder as
shown on the Debt Security Register. Any report pursuant to Section 313 of the
TIA shall be transmitted in compliance with subsection (c) therein.

         Notwithstanding the foregoing, any notice to Holders of Floating Rate
Debt Securities regarding the determination of a periodic rate of interest, if
such notice is required pursuant to Section 2.03, shall be sufficiently given if
given in the manner specified pursuant to Section 2.03.

         In the event of suspension of regular mail service or by reason of any
other cause it shall be impracticable to give notice by mail, then such
notification as shall be given with the approval of the Trustee shall constitute
sufficient notice for every purpose hereunder.

         In the event it shall be impracticable to give notice by publication,
then such notification as shall be given with the approval of the Trustee shall
constitute sufficient notice for every purpose hereunder.

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         Failure to mail a notice or communication to a Holder or any defect in
it or any defect in any notice by publication as to a Holder shall not affect
the sufficiency of such notice with respect to other Holders. If a notice or
communication is mailed or published in the manner provided above, it is
conclusively presumed duly given.

         SECTION 13.04. INDENTURE AND DEBT SECURITIES TO BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. THIS INDENTURE AND EACH
DEBT SECURITY SHALL BE DEEMED TO BE CALIFORNIA CONTRACTS, AND FOR ALL PURPOSES
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE
WITHOUT REFERENCE TO CONFLICTS OF LAW PRINCIPLES.

         SECTION 13.05. OFFICERS' CERTIFICATE AND OPINION OF COUNSEL TO BE
FURNISHED UPON APPLICATION OR DEMAND BY THE COMPANY. Upon any application or
demand by the Company to the Trustee to take any action under any of the
provisions of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with, except that in the case of any such
application or demand as to which the furnishing of such document is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.

Each certificate or opinion provided for in this Indenture and delivered to the
Trustee with respect to compliance with a condition or covenant provided for in
this Indenture shall include (a) a statement that the Person making such
certificate or opinion 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 certificate or opinion are
based, (c) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.

         SECTION 13.06. PAYMENTS DUE ON LEGAL HOLIDAYS. In any case where the
date of maturity of interest on or principal of and premium, if any, on the Debt
Securities of a series or the date fixed for redemption or repurchase of any
Debt Security or the making of any sinking fund payment shall not be a Business
Day at any Place of Payment for the Debt Securities of such series, then payment
of interest or principal and premium, if any, or the making of such sinking fund
payment need not be made on such date at such Place of Payment, but may be made
on the next succeeding Business Day at such Place of Payment with the same force
and effect as if made on the date of maturity or the date fixed for redemption
or repurchase, and no interest shall accrue for the period after such date. If a
record date is not a Business Day, the record date shall not be affected.

         SECTION 13.07. PROVISIONS REQUIRED BY TIA TO CONTROL. If and to the
extent that any provision of this Indenture limits, qualifies or conflicts with
another provision included in this Indenture which is required to be included in
this Indenture by any of Sections 310 to 318, inclusive, of the TIA, such
required provision shall control.

         SECTION 13.08. COMPUTATION OF INTEREST ON DEBT SECURITIES. Interest, if
any, on the Debt Securities shall be computed on the basis of a 360-day year of
twelve 30-day months, except as may otherwise be provided pursuant to Section
2.03.

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         SECTION 13.09. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The
Trustee may make reasonable rules for action by or a meeting of Holders. The
Registrar and any paying agent may make reasonable rules for their functions.

         SECTION 13.10. SEVERABILITY. In case any provision in this Indenture or
the Debt 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 13.11. EFFECT OF HEADINGS. The article and section headings
herein and in the Table of Contents are for convenience only and shall not
affect the construction hereof.

         SECTION 13.12. INDENTURE MAY BE EXECUTED IN COUNTERPARTS. This
Indenture may be executed in any number of counterparts, each of which shall be
an original; but such counterparts shall together constitute but one and the
same instrument.

               [Remainder of This Page Intentionally Left Blank.]

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

                                             BELL MICROPRODUCTS INC.

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

                                             ------------------------------, as
                                             Trustee

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

                                       53

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