Document:

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                                                                     EXHIBIT 4.2
                                                                     -----------

                             SONIC INNOVATIONS, INC.

                                 2000 STOCK PLAN

                  (Amended and restated as of January 1, 2002)

     1.   Purposes of the Plan. The purposes of this 2000 Stock Plan are:
          --------------------

          .    to attract and retain the best available personnel for positions
               of substantial responsibility,

          .    to provide additional incentive to Service Providers, and

          .    to promote the success of the Company's business.

          Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant.  Stock Purchase Rights may also be granted under the Plan.

     2.   Definitions.  As used herein, the following definitions shall apply:
          -----------

          (a)  "Administrator" means the Board or any of its Committees as shall
                -------------
be administering the Plan, in accordance with Section 4 of the Plan.

          (b)  "Applicable Laws" means the requirements relating to the
                ---------------
administration of stock option plans under U. S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are
granted under the Plan.

          (c)  "Board" means the Board of Directors of the Company.
                -----

          (d)  "Code" means the Internal Revenue Code of 1986, as amended.
                ----

          (e)  "Committee" means a committee of Directors appointed by the Board
                ---------
in accordance with Section 4 of the Plan.

          (f)  "Common Stock" means the common stock of the Company.
                ------------

          (g)  "Company" means Sonic Innovations, Inc., a Delaware corporation.
                -------

          (h)  "Director" means a member of the Board.
                --------

          (i)  "Disability" means total and permanent disability as defined in
                ----------
Section 22(e)(3) of the Code.

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          (j)  "Employee" means any person employed by the Company or any Parent
                --------
or Subsidiary of the Company. A Service Provider shall not cease to be an
Employee in the case of (i) any leave of absence approved by the Company or (ii)
transfers between locations of the Company or between the Company, its Parent,
any Subsidiary, or any successor. For purposes of Incentive Stock Options, if
reemployment upon expiration of a leave of absence approved by the Company is
not guaranteed, on the 91st day of such leave any Incentive Stock Option shall
cease to be treated as an Incentive Stock Option and shall be treated as a
Nonstatutory Stock Option.

          (k)  "Exchange Act" means the Securities Exchange Act of 1934, as
                ------------
amended.

          (l)  "Fair Market Value" means, as of any date, the value of Common
                -----------------
Stock determined as follows:

               (i)   If the Common Stock is listed on any established stock
exchange  or a national market system, its Fair Market Value shall be the
closing sales  price for such stock (or the closing bid, if no sales were
reported) as quoted  on such exchange or system for the last market trading day
prior to the time of determination;

               (ii)  If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination; or

               (iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

          (m)  "Incentive Stock Option" means an Option intended to qualify as
                ----------------------
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

          (n)  "Inside Director" means a Director who is an Employee.
                ---------------

          (o)  "Nonstatutory Stock Option" means an Option not intended to
                -------------------------
qualify as an Incentive Stock Option.

          (p)  "Officer" means a person who is an officer of the Company within
                -------
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

          (q)  "Option" means a stock option granted pursuant to the Plan.
                ------

          (r)  "Optioned Stock" means the Common Stock subject to an Option or
                --------------
Stock Purchase Right.

          (s)  "Option Agreement" means an agreement between the Company and an
                ----------------
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.

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          (t)  "Optionee" means the holder of an outstanding Option or Stock
                --------
Purchase Right granted under the Plan.

          (u)  "Outside Director" means a Director who is not an Employee.
                ----------------

          (v)  "Parent" means a "parent corporation," whether now or hereafter
                ------
existing, as defined in Section 424(e) of the Code.

          (w)  "Plan" means this 2000 Stock Plan.
                ----

          (x)  "Restricted Stock" means shares of Common Stock acquired pursuant
                ----------------
 to a grant of Stock Purchase Rights under Section 11 of the Plan.

          (y)  "Restricted Stock Purchase Agreement" means a written agreement
                -----------------------------------
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right.

          (z)  "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
                ----------
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

          (aa) "Section 16(b) " means Section 16(b) of the Exchange Act.
                -------------

          (bb) "Service Provider" means an Employee, Director or any provider of
                ----------------
 service to the Company.

          (cc) "Share" means a share of the Common Stock, as adjusted in
                -----
accordance with Section 14 of the Plan.

          (dd) "Stock Purchase Right" means the right to purchase Common Stock
                --------------------
pursuant to Section 11 of the Plan.

          (ee) "Subsidiary" means a "subsidiary corporation", whether now or
                ----------
hereafter existing, as defined in Section 424(f) of the Code.

     3.   Stock Subject to the Plan.  Subject to the provisions of Section 14 of
          -------------------------
the Plan, the maximum aggregate number of Shares that may be optioned and sold
under the Plan shall be 3,015,962 plus an annual increase to be added on each
January 1st equal to the lesser of (i) 789,474 Shares, (ii) 5% of the
outstanding shares on that date, or (iii) a lesser amount of Shares as
determined by the Board. The Shares may be authorized, but unissued, or
reacquired Common Stock.

          If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an option
exchange program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Stock Purchase Right, shall not
be returned to the Plan and shall not become available for future distribution
under the Plan, except that

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if Shares of Restricted Stock are repurchased by the Company at their original
purchase price, such Shares shall become available for future grant under the
Plan.

     4.   Administration of the Plan.
          --------------------------

          (a)  Procedure.
               ---------

               (i)   Multiple Administrative Bodies.  Different Committees with
                     ------------------------------
respect to different groups of Service Providers may administer the Plan.

               (ii)  Section 162(m). To the extent that the Administrator
                     -------------
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.

               (iii) Rule 16b-3.  To the extent desirable to qualify
                     ----------
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated
hereunder shall be structured to satisfy the requirements for exemption under
Rule 16b-3.

               (iv)  Other Administration.  Other than as provided above, the
                     --------------------
Plan shall be administered by (A) the Board or (B) a Committee, which committee
shall be constituted to satisfy Applicable Laws.

          (b)  Powers of the Administrator.  Subject to the provisions of the
               ---------------------------
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:

               (i)   to determine the Fair Market Value;

               (ii)  to select the Service Providers to whom Options and Stock
Purchase Rights may be granted hereunder;

               (iii) to determine the number of shares of Common Stock to be
covered by each Option and Stock Purchase Right granted hereunder;

               (iv)  to approve forms of agreement for use under the Plan;

               (v)   to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any Option or Stock Purchase Right granted
hereunder. Such terms and conditions include, but are not limited to, the
exercise price, the time or times when Options or Stock Purchase Rights may be
exercised (which may be based on performance criteria), any vesting acceleration
or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Option or Stock Purchase Right or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;

               (vi)  to reduce the exercise price of any Option or Stock
Purchase Right to the then current Fair Market Value if the Fair Market Value of
the Common Stock covered by such

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Option or Stock Purchase Right shall have declined since the date the Option or
Stock Purchase Right was granted;

               (vii)  to institute an option exchange program whereby
outstanding Options are surrendered in exchange for Options with a lower
exercise price;

               (viii) to construe and interpret the terms of the Plan and
Options and Stock Purchase Rights granted pursuant to the Plan;

               (ix)   to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

               (x)    to modify or amend each Option or Stock Purchase Right
(subject to Section 16(c) of the Plan), including the discretionary authority to
extend the post-termination exercisability period of Options longer than is
otherwise provided for in the Plan;

               (xi)   to allow Optionees to satisfy withholding tax obligations
by electing to have the Company withhold from the Shares to be issued upon
exercise of an Option or Stock Purchase Right that number of Shares having a
Fair Market Value equal to the amount required to be withheld;

               (xii)   to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option or Stock
Purchase Right previously granted by the Administrator;

               (xiii) to make all other determinations deemed necessary or
advisable for administering the Plan.

          (c)  Effect of Administrator's Decision.  The Administrator's
               ----------------------------------
decisions, determinations and interpretations shall be final and binding on all
holders of Options or Stock Purchase Rights.

     5.   Eligibility.  Nonstatutory Stock Options and Stock Purchase Rights
          -----------
may be granted to Service Providers. Incentive Stock Options may be granted only
to Employees.

     6.   Limitations.
          -----------

          (a)  Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted.

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          (b) Neither the Plan nor any Option or Stock Purchase Right shall
confer upon an Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they interfere in
any way with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.

          (c) The following limitations shall apply to grants of Options:

               (i)   No Service Provider shall be granted, in any fiscal year of
the Company, Options to purchase more than 500,000 Shares.

               (ii)  In connection with his or her initial service, an Employee
may be granted Options to purchase up to an additional 500,000 Shares, which
shall not count against the limit set forth in subsection (i) above.

               (iii) The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company's capitalization as
described in Section 14.

               (iv)  If an Option is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 14), the cancelled Option will be counted against the
limits set forth in subsections (i) and (ii) above. For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.

     7. Term of Plan. Subject to Section 20 of the Plan, the Plan shall become
        ------------
effective upon its adoption by the Board.  It shall continue in effect for a
term of ten (10) years unless terminated earlier under Section 16 of the Plan.

     8. Term of Option. The term of each Option shall be stated in the Option
        --------------
Agreement.  In the case of an Incentive Stock Option, the term shall be ten (10)
years from the date of grant or such shorter term as may be provided in the
Option Agreement.  Moreover, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of grant or such
shorter term as may be provided in the Option Agreement.

     9. Option Exercise Price and Consideration.
        ---------------------------------------

          (a) Exercise Price. The per share exercise price for the Shares to be
              --------------
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

               (i)  In the case of an Incentive Stock Option

                    (A)  granted to an Employee who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any Parent
or Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.

<PAGE>

                    (B)  granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.

               (ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.

               (iii)  Notwithstanding the foregoing, Options may be granted with
a per Share exercise price of less than 100% of the Fair Market Value per Share
on the date of grant pursuant to a merger or other corporate transaction.

          (b)  Waiting Period and Exercise Dates.  At the time an Option is
               ---------------------------------
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions that must be satisfied before the
Option may be exercised.

          (c)  Form of Consideration.  The Administrator shall determine the
               ---------------------
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:

               (i)    cash;

               (ii)   check;

               (iii)  promissory note;

               (iv)   other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;

               (v)    consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;

               (vi)   a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;

               (vii)  any combination of the foregoing methods of payment; or

               (viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.

<PAGE>

     10.  Exercise of Option.
          ------------------

          (a)  Procedure for Exercise; Rights as a Shareholder.  Any Option
               -----------------------------------------------
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. Unless the Administrator provides otherwise,
vesting of Options will be suspended during any unpaid leave of absence.

               An Option shall be deemed exercised when the Company receives:
(i) written or electronic notice of exercise (in accordance with the Option
Agreement) from the person entitled to exercise the Option, and (ii) full
payment for the Shares with respect to which the Option is exercised. Full
payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. Shares issued
upon exercise of an Option shall be issued in the name of the Optionee or, if
requested by the Optionee, in the name of the Optionee and his or her spouse.
Until the Shares are issued (as evidenced by the appropriate entry on the books
of the Company or of a duly authorized transfer agent of the Company), no right
to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the Shares are issued, except as
provided in Section 14 of the Plan.

               Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised. No
option may be exercised after the expiration of the term as set forth in the
Option Agreement. Unvested Shares at the date of termination, Disability, or
death shall revert to the Plan. If, after termination, Disability, or death, the
Optionee's Options are not exercised within the timeframe specified herein, the
unexercised Shares shall revert to the Plan.

          (b)  Termination of Relationship as a Service Provider.  If an
               -------------------------------------------------
Optionee ceases to be a Service Provider, other than upon the Optionee's death
or Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination. In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for three (3) months
following the Optionee's termination.

          (c)  Disability of Optionee.  If an Optionee ceases to be a Service \
               ----------------------
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of termination. In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for twelve (12) months following the Optionee's Disability.

          (d)  Death of Optionee.  If an Optionee dies while a Service Provider,
               -----------------
the Option may be exercised within such period of time as is specified in the
Option Agreement by the Optionee's estate or by a person who acquires the right
to exercise the Option by bequest or inheritance, but only to the extent that
the Option is vested on the date of death. In the absence of a

<PAGE>

specified time in the Option Agreement, the Option shall remain exercisable for
twelve (12) months following the Optionee's death. The Option may be exercised
by the executor or administrator of the Optionee's estate or, if none, by the
person(s) entitled to exercise the Option under the Optionee's will or the laws
of descent or distribution.

          (e)  Buyout Provisions.  The Administrator may at any time offer to
               -----------------
buy out for a payment in cash or Shares an Option previously granted based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.

     11.  Stock Purchase Rights.
          ---------------------

          (a)  Rights to Purchase. After the Administrator determines that it
               ------------------
will offer Stock Purchase Rights under the Plan, it shall advise the offeree in
writing or electronically, of the terms, conditions and restrictions related to
the offer, including the number of Shares that the offeree shall be entitled to
purchase, the price to be paid, and the time within which the offeree must
accept such offer. The offer shall be accepted by execution of a Restricted
Stock Purchase Agreement in the form determined by the Administrator.

          (b)  Repurchase Option.  Unless the Administrator determines
               -----------------
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.

          (c)  Other Provisions.  The Restricted Stock Purchase Agreement shall
               ----------------
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.

          (d)  Rights as a Shareholder.  Once the Stock Purchase Right is
               -----------------------
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 14
of the Plan.

     12.  Non-Transferability of Options and Stock Purchase Rights.  Unless
          --------------------------------------------------------
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.  If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.

     13.  Formula Option Grants to Outside Directors.  All grants of Options to
          ------------------------------------------
Outside Directors pursuant to this Section shall be automatic and
nondiscretionary and shall be made strictly in accordance with the following
provisions:

<PAGE>

          (a)  All Options granted pursuant to this Section shall be
Nonstatutory Stock Options and, except as otherwise provided herein, shall be
subject to the other terms and conditions of the Plan.

          (b)  No person shall have any discretion to select which Outside
Directors shall be granted Options under this Section or to determine the number
of Shares to be covered by such Options.

          (c)  Each person who first becomes an Outside Director following
October 18, 2001 shall be automatically granted an Option to purchase 15,000
Shares (the "First Option") on the date on which such person first becomes an
Outside Director, whether through election by the stockholders of the Company or
appointment by the Board to fill a vacancy; provided, however, that an Inside
Director who ceases to be an Inside Director but who remains a Director shall
not receive a First Option.

          (d)  Each Outside Director shall be automatically granted an Option to
purchase 6,000 Shares (a "Subsequent Option") on the date of each annual meeting
of the stockholders of the Company occuring after the end of the Company's
fiscal year 2001, if as of such date, he or she shall have served on the Board
for at least the preceding six (6) months.

          (e)  The terms of each Option granted pursuant to this Section shall
be as follows:

               (i)    the term of the Option shall be ten (10) years.

               (ii)   the exercise price per Share shall be 100% of the Fair
Market Value per Share on the date of grant of the Option.

               (iii)  subject to Section 14 hereof, the First Option shall vest
and become exercisable as to 1/3 of the Shares subject to the Option on the
first anniversary of its date of grant, as to 1/3 of the Shares subject to the
Option on the second anniversary of its date of grant and as to the remaining
1/3 of the Shares subject to the Option on the third anniversary of its grant,
provided that the Optionee continues to serve as a Director on such dates.

               (iv)   subject to Section 14 hereof, the Subsequent Option shall
vest and become exercisable as to 100% of the Shares subject to the Option on
the anniversary of its date of grant, provided that the Optionee continues to
serve as a Director on such date.

     14.  Adjustments Upon Changes in Capitalization, Dissolution, Merger or
          ------------------------------------------------------------------
Asset Sale.
----------

          (a)  Changes in Capitalization.  Subject to any required action by the
               -------------------------
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Purchase Right, the number of shares of Common
Stock that have been authorized for issuance under the Plan but as to which no
Options or Stock Purchase Rights have yet been granted or that have been
returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, the number of Shares that may be added annually to the Plan
pursuant to Section 3(c), the number of Shares that may be granted pursuant to
the automatic grant provisions of Section 13 and the number of shares of Common
Stock as well as the price per share of Common Stock covered by

<PAGE>

each such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.

          (b) Dissolution or Liquidation. In the event of the proposed
              --------------------------
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until ten (10) days prior to such
transaction as to all of the Shares covered thereby, including Shares as to
which the Option would not otherwise be exercisable. In addition, the
Administrator may provide that any Company repurchase option applicable to any
Shares purchased upon exercise of an Option or Stock Purchase Right shall lapse
as to all such Shares, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not been
previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.

          (c) Merger or Asset Sale. In the event of a merger of the Company with
              --------------------
or into another corporation, or the sale of substantially all of the assets of
the Company, each outstanding Option and Stock Purchase Right shall be assumed
or an equivalent option or right substituted by the successor corporation or its
Parent. With respect to Options granted to an Outside Director pursuant to
Section 13 that are assumed or substituted for, if following such assumption or
substitution the Optionee's status as a Director or a director of the successor
corporation, as applicable, is terminated other than upon a voluntary
resignation by the Optionee, then the Optionee shall fully vest in and have the
right to exercise such Options as to all of the Optioned Stock, including Shares
as to which it would not otherwise be vested or exercisable. In the event that
the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Shares, including
Shares which would not otherwise be vested or exercisable. If an Option or Stock
Purchase Right becomes fully vested and exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Administrator shall
notify the Optionee in writing or electronically that the Option or Stock
Purchase Right shall be fully vested and exercisable for a period of fifteen
(15) days from the date of such notice, and the Option or Stock Purchase Right
shall terminate upon the expiration of such period. For the purposes of this
paragraph, the Option or Stock Purchase Right shall be considered assumed if,
following the merger or sale of assets, the option or right confers the right to
purchase or receive the consideration (whether stock, cash, or other securities
or property) received in the merger or sale of assets by holders of Common Stock
on the effective date of the transaction provided, however, that if such
consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of

<PAGE>

the successor corporation, provide for the consideration to be received upon the
exercise of the Option or Stock Purchase Right, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.

     15. Date of Grant. The date of grant of an Option or Stock Purchase Right
         -------------
shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of such grant.

     16. Amendment and Termination of the Plan.
         -------------------------------------

          (a) Amendment and Termination. The Board may at any time amend, alter,
              -------------------------
suspend or terminate the Plan.

          (b) Shareholder Approval. The Company shall obtain shareholder
              --------------------
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

          (c) Effect of Amendment or Termination. No amendment, alteration,
              ----------------------------------
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.

     17. Conditions Upon Issuance of Shares.
         ----------------------------------

          (a) Legal Compliance. Shares shall not be issued pursuant to the
              ----------------
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock Purchase Right and the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

          (b) Investment Representations. As a condition to the exercise of an
              --------------------------
Option or Stock Purchase Right, the Company may require the person exercising
such Option or Stock Purchase Right to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required.

     18. Inability to Obtain Authority. The inability of the Company to obtain
         -----------------------------
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

<PAGE>

     19. Reservation of Shares. The Company, during the term of this Plan, will
         ---------------------
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

     20. Shareholder Approval. The Plan shall be subject to approval by the
         --------------------
shareholders of the Company within twelve (12) months after the date the Plan is
adopted.  Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.<PAGE>

                                                                    Exhibit 4.1

                                    INDENTURE

                          Dated as of December 18, 2001

               1-3/4% Convertible Debentures due December 15, 2021

                                      AMONG

                           GTECH HOLDINGS CORPORATION,
                                    As Issuer

                               GTECH CORPORATION,
                       GTECH RHODE ISLAND CORPORATION and
                        GTECH LATIN AMERICA CORPORATION,
                                  As Guarantors

                                       AND

                              THE BANK OF NEW YORK,
                                   As Trustee

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page

                                  ARTICLE I
                  DEFINITIONS AND INCORPORATION BY REFERENCE

<S>            <C>                                                            <C>
Section 1.1    Definitions.....................................................1
Section 1.2    Other Definitions...............................................6
Section 1.3    Incorporation by Reference of Trust Indenture Act...............7
Section 1.4    Rules of Construction...........................................7
Section 1.5    Acts of Holders.................................................7

                                     ARTICLE II
                                   THE SECURITIES

Section 2.1    Form and Dating.................................................8
Section 2.2    Execution and Authentication...................................10
Section 2.3    Registrar, Paying Agent, Conversion Agent and Bid
                 Solicitation Agent...........................................10
Section 2.4    Paying Agent to Hold Money in Trust............................11
Section 2.5    Securityholder Lists...........................................11
Section 2.6    Transfer and Exchange..........................................11
Section 2.7    Replacement Securities.........................................12
Section 2.8    Outstanding Securities; Determinations of Holders' Action......13
Section 2.9    Temporary Securities...........................................14
Section 2.10   Cancellation...................................................14
Section 2.11   Persons Deemed Owners..........................................14
Section 2.12   Global Securities..............................................15
Section 2.13   CUSIP Numbers..................................................17

                                     ARTICLE III
                              REDEMPTION AND PURCHASES

Section 3.1    Right to Redeem; Notices to Trustee............................17
Section 3.2    Selection of Debentures to Be Redeemed.........................18
Section 3.3    Notice of Redemption...........................................18
Section 3.4    Effect of Notice of Redemption.................................19
Section 3.5    Deposit of Redemption Price....................................19
Section 3.6    Debentures Redeemed in Part....................................19
Section 3.7    Purchase of Debentures at Option of the Holder.................19
Section 3.8    Purchase of Debentures at Option of the Holder upon Change
                in Control....................................................25
Section 3.9    Effect of Purchase Notice or Change in Control Purchase
               Notice; Withdrawal of Purchase Notice or Change in Control
               Purchase Notice................................................29
Section 3.10   Deposit of Purchase Price or Change in Control
                 Purchase Price...............................................30
Section 3.11   Debentures Purchased in Part...................................30
Section 3.12   Covenant to Comply with Securities Laws upon Purchase
                 of Debentures................................................30
Section 3.13   Repayment to the Company or Any Guarantor......................31
</TABLE>

                                       i
<PAGE>

<TABLE>
<CAPTION>
                                     ARTICLE IV
                                      COVENANTS

<S>            <C>                                                            <C>
Section 4.1    Payment of Debentures..........................................31
Section 4.2    SEC and Other Reports..........................................31
Section 4.3    Compliance Certificate.........................................32
Section 4.4    Further Instruments and Acts...................................32
Section 4.5    Maintenance of Office or Agency................................32
Section 4.6    Delivery of Certain Information................................33
Section 4.7    Tax Treatment of Debentures....................................33
Section 4.8    Additional Interest............................................33

                                      ARTICLE V
                                SUCCESSOR CORPORATION

Section 5.1    When Company or Any Guarantor May Merge or Transfer Assets.....33

                                     ARTICLE VI
                                DEFAULTS AND REMEDIES

Section 6.1    Events of Default..............................................35
Section 6.2    Acceleration...................................................36
Section 6.3    Other Remedies.................................................37
Section 6.4    Waiver of Past Defaults........................................37
Section 6.5    Control by Majority............................................37
Section 6.6    Limitation on Suits............................................37
Section 6.7    Rights of Holders to Receive Payment...........................38
Section 6.8    Collection Suit by Trustee.....................................38
Section 6.9    Trustee May File Proofs of Claim...............................38
Section 6.10   Priorities.....................................................39
Section 6.11   Undertaking for Costs..........................................39
Section 6.12   Waiver of Stay, Extension or Usury Laws........................40

                                     ARTICLE VII
                                       TRUSTEE

Section 7.1    Duties of Trustee..............................................40
Section 7.2    Rights of Trustee..............................................41
Section 7.3    Individual Rights of Trustee...................................43
Section 7.4    Trustee's Disclaimer...........................................43
Section 7.5    Notice of Defaults.............................................43
Section 7.6    Reports by Trustee to Holders..................................43
Section 7.7    Compensation and Indemnity.....................................43
Section 7.8    Replacement of Trustee.........................................44
Section 7.9    Successor Trustee by Merger....................................45
Section 7.10   Eligibility; Disqualification..................................45
Section 7.11   Preferential Collection of Claims Against Company..............45
</TABLE>

                                       ii
<PAGE>

<TABLE>
<CAPTION>
                                    ARTICLE VIII
                               DISCHARGE OF INDENTURE

<S>            <C>                                                            <C>
Section 8.1    Discharge of Liability on Securities...........................46
Section 8.2    Repayment to the Company or Guarantor..........................46

                                     ARTICLE IX
                                     AMENDMENTS

Section 9.1    Without Consent of Holders.....................................46
Section 9.2    With Consent of Holders........................................47
Section 9.3    Compliance with Trust Indenture Act............................47
Section 9.4    Revocation and Effect of Consents, Waivers and Actions.........48
Section 9.5    Notation on or Exchange of Securities..........................48
Section 9.6    Trustee to Sign Supplemental Indentures........................48
Section 9.7    Effect of Supplemental Indentures..............................48

                                      ARTICLE X
                                     CONVERSIONS

Section 10.1    Conversion Privilege..........................................48
Section 10.2    Conversion Procedure; Conversion Price; Fractional
                 Shares.......................................................50
Section 10.3    Adjustments of Conversion Price for Common Stock..............51
Section 10.4    Consolidation or Merger of the Company........................61
Section 10.5    Notice of Adjustment..........................................62
Section 10.6    Notice in Certain Events......................................62
Section 10.7    Company to Reserve Stock; Registration; Listing...............63
Section 10.8    Taxes on Conversion...........................................63
Section 10.9    Conversion After Record Date..................................64
Section 10.10   Company Determination Final...................................64
Section 10.11   Responsibility of Trustee for Conversion Provisions...........64
Section 10.12   Unconditional Right of Holders to Convert.....................64

                                     ARTICLE XI
                                     GUARANTEES

Section 11.1    Agreement to Guarantee........................................65
Section 11.2    Execution and Delivery of Guarantees..........................65
Section 11.3    No Recourse Against Others....................................66
Section 11.4    Future Guarantees.............................................67
Section 11.5    Release of Guarantees.........................................67

                                     ARTICLE XII
                                    MISCELLANEOUS

Section 12.1    Trust Indenture Act Controls..................................67
Section 12.2    Notices.......................................................67
Section 12.3    Communication by Holders with Other Holders...................68
</TABLE>

                                      iii
<PAGE>

<TABLE>
<S>             <C>                                                           <C>
Section 12.4    Certificate and Opinion as to Conditions Precedent............69
Section 12.5    Statements Required in Certificate or Opinion.................69
Section 12.6    Separability Clause...........................................69
Section 12.7    Rules by Trustee, Paying Agent, Conversion Agent and
                   Registrar..................................................69
Section 12.8    Legal Holidays................................................69
Section 12.9    Governing Law.................................................69
Section 12.10   No Recourse Against Others....................................70
Section 12.11   Successors....................................................70
Section 12.12   Multiple Originals............................................70
Section 12.13   Waiver of Jury Trial..........................................70

EXHIBITS

EXHIBIT A:    Form of Security...............................................A-1
EXHIBIT B:    Transfer Certificate...........................................B-1
EXHIBIT C:    Form of Supplemental Indenture.................................C-1
</TABLE>

                                       iv
<PAGE>

            INDENTURE dated as of December 18, 2001 among GTECH HOLDINGS
CORPORATION, a Delaware corporation (the "Company"), GTECH CORPORATION, a
Delaware corporation, GTECH RHODE ISLAND CORPORATION, a Rhode Island
corporation, and GTECH LATIN AMERICA CORPORATION, a Delaware corporation, as
guarantors (each, a "Guarantor"), and THE BANK OF NEW YORK, a New York banking
corporation, as trustee (the "Trustee").

            Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of the Company's 1-3/4%
Convertible Debentures due December 15, 2021 ("Debentures"):

Article I
                  DEFINITIONS AND INCORPORATION BY REFERENCE

         Section 1.1     Definitions.

         "Additional Interest" means additional interest payable to holders of
Registrable Securities (as defined in the Registration Rights Agreement) if the
Company and the Guarantors default in the registration of any Shelf Registration
Statement, as specified in the Registration Rights Agreement.

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

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

         "Board Resolution" means a copy of one or more resolutions, certified
by an Officer of the Company to have been duly adopted or consented to by the
applicable Board of Directors and to be in full force and effect, and delivered
to the Trustee.

         "Business Day" means, with respect to any Security, a weekday that in
the City of New York is not a day on which banking institutions are authorized
or obligated by law or regulation to close.

         "Capital Stock" for any corporation means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) stock issued by that
corporation.

         "Certificated Securities" means Securities that are in the form of the
Securities attached hereto as Exhibit A-2.

<PAGE>

         "Common Stock" shall mean shares of the Company's Common Stock, $0.01
par value per share, or any other shares of Capital Stock of the Company into
which the Common Stock shall be reclassified or changed.

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

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

         "Conversion Date" means, with respect to any Holder, the first Business
Day on which the Holder has satisfied all the requirements to convert its
Debentures.

         "Corporate Trust Office" means the principal office of the Trustee in
New York, New York, which office at the date hereof is located at 101 Barclay
Street, Floor 21 West, New York, New York 10286, Attention: Corporate Trust
Administration, or such other address as the Trustee may designate from time to
time by notice to the Holders and the Company, or the principal corporate trust
office of any successor Trustee (or such other address as a successor Trustee
may designate from time to time by notice to the Holders and the Company).

         "Credit Agreement" means the bank revolving credit agreement, dated
June 22, 2001, among GTECH Corporation, as borrower, the Company and the other
Guarantors, as guarantors, and the several lenders parties thereto, as such
Credit Agreement is amended, modified or supplemented from time to time in
accordance with the terms thereof.

         "Debentures" means any of the Company's 1-3/4% Convertible Debentures
due December 15, 2021, as amended or supplemented from time to time, issued
under this Indenture.

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

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as in effect from time to
time.

         "Global Securities" means Securities that are in the form of the
Securities attached hereto as Exhibit A-1, and to the extent that such
Securities are required to bear the Legend required by Section 2.6, such
Securities will be in the form of a Rule 144A Global Security.

         "Guarantees" means the guarantees of the Guarantors as endorsed on each
Security authenticated and delivered pursuant to this Indenture and shall
include the Guarantees set forth in Article 11 of this Indenture and all other
obligations and covenants of the Guarantors contained in this Indenture and the
Debentures.

         "Guarantors" means (i) each of the parties named as a "Guarantor" in
the first paragraph of this Indenture and (ii) each Person who becomes a
Guarantor pursuant to Section

                                       2
<PAGE>

11.4 of this Indenture, in each case until a successor replaces it pursuant to
the applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent such
successor or successors.

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

         "Indebtedness" means, without duplication, the principal or face amount
of (i) all obligations for borrowed money, (ii) all obligations evidenced by
debentures, notes or other similar instruments, (iii) all obligations in respect
of letters of credit or bankers acceptances or similar instruments (or
reimbursement obligations with respect thereto), (iv) all obligations to pay the
deferred purchase price of property or services, except trade accounts payable
arising in the ordinary course of business, (v) all obligations as lessee which
are capitalized in accordance with generally accepted accounting principles, and
(vi) all Indebtedness of others guaranteed by the Company or any Guarantor, as
the case may be, or any of its Subsidiaries or for which the Company or any
Guarantor, as applicable, or any of its Subsidiaries is legally responsible or
liable (whether by agreement to purchase indebtedness of, or to supply funds or
to invest in, others).

         "Indenture" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.

         "Interest Payment Date" means June 15 and December 15 of each year.

         "Legend" means the legend labeled as such and that is set forth in
Exhibits A-1 and A-2 hereto.

         "Non-Recourse Indebtedness" means Indebtedness upon the enforcement of
which recourse may be had by the holder(s) thereof only to (i) in respect of the
Company, identified assets of the Company or any Subsidiary and not to the
Company or any Subsidiary personally and (ii) in respect of a Guarantor,
identified assets of such Guarantor or any Subsidiary and not to such Guarantor
or any Subsidiary personally.

         "Officer" means the Chairman of the Board of Directors, the Chief
Executive Officer, the President, any Executive Vice President, any Senior Vice
President, any Vice President, the Chief Financial Officer, the Treasurer or the
Secretary, or any Assistant Treasurer or Secretary of the Company or a
Guarantor, as applicable.

         "Officers' Certificate" means a written certificate containing the
information specified in Sections 12.4 and 12.5, signed in the name of the
Company or the applicable Guarantor, as the case may be, by any two Officers,
and delivered to the Trustee. An Officers' Certificate given pursuant to Section
4.3 shall be signed by an authorized financial or accounting Officer of the
Company or the applicable Guarantor, as the case may be, but need not contain
the information specified in Sections 12.4 and 12.5.

                                       3
<PAGE>

         "Opinion of Counsel" means a written opinion containing the information
specified in Sections 12.4 and 12.5, from legal counsel who is acceptable to the
Trustee. The counsel may be an employee of, or counsel to, the Company or any
Guarantor.

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

         "Principal Amount" or "principal amount" of a Debenture means the
Principal Amount as set forth on the face of the Debenture.

         "Purchase Agreement" means the Purchase Agreement, dated December 12,
2001, among the Company, the Guarantors and the initial purchasers named
therein.

         "Redemption Date" or "redemption date" shall mean the date specified
for redemption of the Securities in accordance with the terms of the Securities
and this Indenture.

         "Redemption Price" or "redemption price," when used with respect to any
Debenture to be redeemed, means the price fixed for such redemption pursuant to
Article 3 of this Indenture and paragraph 5 of the Debentures.

         "Registration Rights Agreement" means the Registration Rights
Agreement, dated as of December 18, 2001, among the Company, the Guarantors and
the initial purchasers named therein, as such agreement may be amended, modified
or supplemented from time to time.

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

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

         "Rule 144A Global Security" means a permanent Global Security in the
form of the Security attached hereto as Exhibit A-1 that is deposited with and
registered in the name of the Depositary, representing Securities sold in
reliance on Rule 144A.

         "Sale Price" of a security on any date of determination means:

                  (i) the closing sale price (or, if no closing sale price is
         reported, the last reported sale price) of a security (regular way) on
         the New York Stock Exchange on that date;

                                       4
<PAGE>

                  (ii) if that security is not listed on the New York Stock
         Exchange on that date, the closing sale price as reported in the
         composite transactions for the principal U.S. securities exchange on
         which that security is listed;

                  (iii) if that security is not so listed on a U.S. national or
         regional securities exchange, the closing sale price as reported by the
         Nasdaq National Market;

                  (iv) if that security is not so reported, the last price
         quoted by Interactive Data Corporation for that security or, if
         Interactive Data Corporation is not quoting such price, a similar
         quotation service selected by us; or

                  (v) if that security is not so quoted, the average of the
         mid-point of the last bid and ask prices for that security from at
         least two dealers recognized as market-makers for that security.

         "SEC" means the Securities and Exchange Commission.

         "Securities" means the Debentures and the Guarantees.

         "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.

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

         "Stated Maturity" means December 15, 2021.

         "Subsidiary" means any person of which at least a majority of the
outstanding Voting Stock shall at the time directly or indirectly be owned or
controlled by, (i) with respect to the Company, the Company or by one or more
Subsidiaries or by the Company and one or more Subsidiaries, and (ii) with
respect to any Guarantor, such Guarantor or by one or more Subsidiaries or by
such Guarantor and one or more Subsidiaries.

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

         "Trading Day" means any day on which the securities exchange or
quotation system which is used to determine the Sale Price of the applicable
security is open for trading or quotation, or if the applicable security is not
so listed or quoted, any Business Day.

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

         "Voting Stock" of a person means Capital Stock of such person of the
class or classes pursuant to which the holders thereof have the general voting
power under ordinary

                                       5
<PAGE>

circumstances to elect the board of directors, managers or trustees of such
person (irrespective of whether or not at the time Capital Stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency).

         Section 1.2      Other Definitions.

<TABLE>
<CAPTION>
Term:                                        Defined in Section:

<S>                                          <C>
"Act".....................................   1.5(a)
"Agent Members"...........................   2.12(e)
"Associate"...............................   3.8(a)
"beneficial owner"........................   3.8(a)
"Bid Solicitation Agent"..................   2.3
"Change in Control".......................   3.8(a)
"Change in Control Purchase Date".........   3.8(a)
"Change in Control Purchase Notice".......   3.8(c)
"Change in Control Purchase Price"........   3.8(a)
"Company Notice"..........................   3.7(e)
"Company Notice Date".....................   3.7(e)
"Conversion Agent"........................   2.3
"Conversion Price"........................   10.3
"Current Market Price"....................   10.3(g)
"distributed assets"......................   10.3(d)
"Depositary"..............................   2.1(a)
"DTC".....................................   2.1(a)
"Event of Default"........................   6.1
"Excess Amount"...........................   10.3(f)
" "ex" date"..............................   10.3(g)
"Ex-Dividend Time" .......................   10.1(b)
"Expiration Time:.........................   10.3(f)
"Fair Market Value".......................   10.3(g)
"Legal Holiday"...........................   12.8
"Market Price.............................   3.7(d)
"Non-Electing Share"......................   10.4
"Notice of Default".......................   6.1
"Paying Agent"............................   2.3
"Purchase Date"...........................   3.7(a)
"Purchase Notice".........................   3.7(a)
"Purchase Price"..........................   3.7(a)
"QIB".....................................   2.1(a)
"Record Date".............................   10.3(g)
"Reference Period"........................   10.3(d)
"Register"................................   2.3
"Registrar"...............................   2.3
"Rule 144A Information"...................   4.6
"Spin-off"................................   10.3(d)
"transfer"................................   2.12(d)
"Trigger Event"...........................   10.3(d)
</TABLE>

                                        6
<PAGE>

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

            "Commission" means the SEC.

            "indenture securities" means the Securities.

            "indenture security holder" means a Securityholder.

            "indenture to be qualified" means this Indenture.

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

            "obligor" on the Debentures means the Company or any other obligor
      on the Debentures and on the Guarantees means any Guarantor or any other
      obligor on the Guarantees.

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

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

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

                  (2) an accounting term not otherwise defined has the meaning
         assigned to it in accordance with generally accepted accounting
         principles in the United States as in effect from time to time;

                  (3) "or" is not exclusive;

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

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

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

                                        7
<PAGE>

instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee, the Company and the
Guarantors, if made in the manner provided in this Section.

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

         (c) The ownership of Securities shall be proved by the Register.

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

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

                                   Article II
                                 THE SECURITIES

         Section 2.1      Form and Dating. The Securities and the Trustee's
certificate of authentication shall be substantially in the forms set forth on
Exhibits A-1 and A-2, which are a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule or
usage. The Company shall provide any such notations, legends or

                                       8
<PAGE>
endorsements to the Trustee in writing. Each Security shall be dated the date
of its authentication.

         (a) Rule 144A Global Securities. Securities offered and sold within the
United States to qualified institutional buyers as defined in Rule 144A ("QIBs")
in reliance on Rule 144A shall be issued initially in the form of a Rule 144A
Global Security, which shall be deposited with the Trustee at its Corporate
Trust Office, as custodian for the Depositary and registered in the name of The
Depository Trust Company ("DTC") or the nominee thereof (such depositary, or any
successor thereto, and any such nominee being hereinafter referred to as the
"Depositary"), duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Rule 144A Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary as hereinafter provided.

         (b) Global Securities in General. Each Global Security shall represent
such of the outstanding Securities as shall be specified therein and each shall
provide that it shall represent the aggregate amount of outstanding Securities
from time to time endorsed thereon and that the aggregate amount of outstanding
Securities represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges, redemptions and conversions.

         Any adjustment of the aggregate principal amount of a Global Security
to reflect the amount of any increase or decrease in the amount of outstanding
Securities represented thereby shall be made by the Trustee in accordance with
instructions given by the Holder thereof as required by Section 2.6(a) hereof
and shall be made on the records of the Trustee and the Depositary.

         (c) Book-Entry Provisions. The Company shall execute, the Guarantors
shall endorse and the Trustee shall, in accordance with this Section 2.1(c),
authenticate and deliver initially one or more Global Securities that (i) shall
be registered in the name of the Depositary, (ii) shall be delivered by the
Trustee to the Depositary or pursuant to the Depositary's instructions and (iii)
shall bear legends substantially to the following effect:

                  "UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
         REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO GTECH HOLDINGS
         CORPORATION (THE "COMPANY") OR ITS AGENT FOR REGISTRATION OF TRANSFER,
         EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
         NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
         AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY
         PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
         REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
         COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
         OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
         HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL
         SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF THE DEPOSITORY
         TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
         TRANSFERS

                                       9
<PAGE>

         OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
         IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE
         INDENTURE REFERRED TO ON THE REVERSE HEREOF."

         Section 2.2      Execution and Authentication. The Securities (with the
Guarantees endorsed thereon) shall be executed on behalf of the Company by any
Officer, under its corporate seal reproduced thereon. The signature of the
Officer of the Company on the Securities and the Guarantors on the Guarantees
may be manual or facsimile.

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

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

         The Trustee shall authenticate and deliver Securities for original
issue in an aggregate Principal Amount of up to $175,000,000 upon a Company
Order without any further action by the Company. The aggregate Principal Amount
of Securities outstanding at any time may not exceed the amount set forth in the
foregoing sentence, except as provided in Section 2.7.

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

         Section 2.3      Registrar, Paying Agent, Conversion Agent and Bid
Solicitation Agent. The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for exchange
("Registrar"), an office or agency where Securities may be presented for
purchase or payment ("Paying Agent") and an office or agency where Securities
may be presented for conversion ("Conversion Agent"). The Company shall also
appoint a bid solicitation agent ("Bid Solicitation Agent") to act pursuant to
paragraph 1 of the Debentures. The Registrar shall keep a register ("Register")
of the Securities and of their transfer and exchange. The Company may have one
or more co-registrars, one or more additional paying agents and one or more
additional conversion agents. The term Paying Agent includes any additional
paying agent, including any named pursuant to Section 4.5. The term Conversion
Agent includes any additional conversion agent, including any named pursuant to
Section 4.5.

         The Company shall enter into an appropriate agency agreement with any
Registrar or co-registrar, Paying Agent, Conversion Agent or Bid Solicitation
Agent (other than the Trustee). The agreement shall implement the provisions of
this Indenture that relate to such agent. The Company shall notify the Trustee
of the name and address of any such agent. If the Company fails to maintain a
Registrar, Paying Agent or Conversion Agent or Bid Solicitation

                                       10
<PAGE>

Agent, the Trustee shall act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 7.7. The Company or any Subsidiary or
an Affiliate of either of them may act as Paying Agent, Registrar, Conversion
Agent or co-registrar. None of the Company or any Subsidiary or any Affiliate of
either of them may act as Bid Solicitation Agent.

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

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

         Section 2.5      Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall cause to be furnished to the Trustee as of each
interest record date and at such other times as the Trustee may request in
writing the names and addresses of Holders as they appear in the Register, and
the aggregate principal amount of Debentures held by each Holder.

         Section 2.6      Transfer and Exchange. (a) Subject to Section 2.12
hereof, upon surrender for registration of transfer of any Security, together
with a written instrument of transfer satisfactory to the Registrar duly
executed by the Securityholder or such Securityholder's attorney duly authorized
in writing, at the office or agency of the Company designated as Registrar or
co-registrar pursuant to Section 2.3, the Company shall execute, the Guarantors
shall endorse and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of any
authorized denomination or denominations, of a like aggregate Principal Amount.
The Company shall not charge a service charge for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to pay all
taxes, assessments or other governmental charges that may be imposed in
connection with the transfer or exchange of the Securities from the
Securityholder requesting such transfer or exchange.

         Subject to Section 2.12 hereof, at the option of the Holder, Securities
may be exchanged for other Securities of any authorized denomination or
denominations, of a like aggregate Principal Amount, upon surrender of the
Securities to be exchanged, together with a written instrument of transfer
satisfactory to the Registrar duly executed by the Securityholder or

                                       11
<PAGE>

such Securityholder's attorney duly authorized in writing, at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, the Guarantors shall endorse and the Trustee shall authenticate
and deliver, the Securities that the Holder making the exchange is entitled to
receive.

         The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of Securities selected for redemption (except,
in the case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or any Securities in respect of which a Purchase Notice or Change in
Control Purchase Notice has been given and not withdrawn by the Holder thereof
in accordance with the terms of this Indenture (except, in the case of
Securities to be purchased in part, the portion thereof not to be purchased) or
any Securities for a period of 15 days before the mailing of a notice of
redemption of Securities to be redeemed.

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

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

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

         (e) If Securities are issued upon the transfer, exchange or replacement
of Securities subject to restrictions on transfer and bearing the Legend, or if
a request is made to remove the Legend on a Security, the Securities so issued
shall bear the Legend, or the Legend shall not be removed, as the case may be,
unless there is delivered to the Company and the Registrar such satisfactory
evidence, which shall include an Opinion of Counsel, as may be reasonably
required by the Company and the Registrar, that neither the Legend nor the
restrictions on transfer set forth therein are required to ensure that transfers
thereof comply with the provisions of Rule 144A or Rule 144 under the Securities
Act or that such Securities are not "restricted" within the meaning of Rule 144
under the Securities Act. Upon (i) provision of such satisfactory evidence, or
(ii) notification by the Company to the Trustee and registrar of the sale of
such Security pursuant to a registration statement that is effective at the time
of such sale, the Trustee, at the written direction of the Company, shall
authenticate and deliver a Security that does not bear the Legend. If the Legend
is removed from the face of a Security and the Security is subsequently held by
an Affiliate of the Company, the Legend shall be reinstated.

         Section 2.7      Replacement Securities. If (a) any mutilated Security
is surrendered to the Trustee, or (b) the Company and the Trustee receive
evidence to their satisfaction of the destruction, loss or theft of any
Security, and there is delivered to the Company and the Trustee such security or
indemnity as may be required by them to save each of

                                       12
<PAGE>

them harmless, then, in the absence of notice to the Company or the Trustee that
such Security has been acquired by a bona fide purchaser, the Company shall
execute, the Guarantors shall endorse and, upon the Company's written request,
the Trustee shall authenticate and deliver, in exchange for any such mutilated
Security or in lieu of any such destroyed, lost or stolen Security, a new
Security of like tenor and Principal Amount, bearing a number not
contemporaneously outstanding.

         In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article 3 hereof, the Company in its discretion (but subject
to any conversion rights) may, instead of issuing a new Security, pay or
purchase such Security, as the case may be.

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

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

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

         Section 2.8      Outstanding Securities; Determinations of Holders'
Action. Securities outstanding at any time are all the Securities authenticated
by the Trustee except for those cancelled by it, those paid pursuant to Section
2.7 and those described in this Section 2.8 as not outstanding. A Security does
not cease to be outstanding because the Company or an Affiliate thereof holds
the Security; provided, however, that in determining whether the Holders of the
requisite Principal Amount of Securities have given or concurred in any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor shall be disregarded and deemed
not to be outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which a Responsible Officer of the
Trustee actually knows to be so owned shall be so disregarded. Subject to the
foregoing, only Securities outstanding at the time of such determination shall
be considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9).

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

                                       13
<PAGE>

         If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Purchase Date or a Change in
Control Purchase Date, or on Stated Maturity, money sufficient to pay amounts
owed with respect to Securities payable on that date, then immediately after
such Redemption Date, Purchase Date, Change in Control Purchase Date or Stated
Maturity, as the case may be, such Securities shall cease to be outstanding and
interest, if any, on such Securities shall cease to accrue; provided that, if
such Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made.

         If a Security is converted in accordance with Article 10, then from and
after the time of conversion on the Conversion Date, such Security shall cease
to be outstanding and interest, if any, shall cease to accrue on such Security.

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

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

         Section 2.10     Cancellation. All Securities surrendered for payment,
purchase by the Company pursuant to Article 3, conversion, redemption or
registration of transfer or exchange shall, if surrendered to any person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by
it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder that the Company may
have acquired in any manner whatsoever, and all Securities so delivered shall be
promptly cancelled by the Trustee. The Company may not issue new Securities to
replace Securities it has paid or delivered to the Trustee for cancellation or
that any Holder has converted pursuant to Article 10. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of by the Trustee in accordance
with the Trustee's customary procedure.

         Section 2.11     Persons Deemed Owners. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such

                                       14
<PAGE>

Security for the purpose of receiving payment of the Principal Amount of the
Security or the payment of any Redemption Price, Purchase Price or Change in
Control Purchase Price in respect thereof, and accrued interest and Additional
Interest thereon, for the purpose of conversion and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the Company,
the Trustee and any of their respective agents shall be affected by notice to
the contrary.

         Section 2.12     Global Securities. (a) A Global Security may not be
transferred, in whole or in part, to any Person other than the Depositary or a
nominee or any successor thereof, and no such transfer to any such other Person
may be registered; provided that the foregoing shall not prohibit any transfer
of a Security that is issued in exchange for a Global Security but is not itself
a Global Security. No transfer of a Security to any Person shall be effective
under this Indenture or the Securities unless and until such Security has been
registered in the name of such Person. Notwithstanding any other provisions of
this Indenture or the Securities, transfers of a Global Security, in whole or in
part, shall be made only in accordance with Section 2.6 and this Section 2.12.

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

         (c) The restrictions imposed by the Legend upon the transferability of
any Security shall cease and terminate when such Security has been sold pursuant
to an effective registration statement under the Securities Act or transferred
in compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Security for exchange to the Registrar in accordance with the
provisions of this Section 2.12 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144 (including Rule 144(k)) or any successor provision, by an opinion
of counsel having substantial experience in practice under the Securities Act
and otherwise reasonably acceptable to the Company, addressed to the Company and
in form acceptable to the Company, to the effect that the transfer of such
Security has been made in compliance with Rule 144 or such successor provision),
be exchanged for a new Security, of like tenor and aggregate Principal Amount,
which shall not bear the restrictive Legend. The Company shall inform the
Trustee of the effective date of any registration statement registering the
Securities under the Securities Act. The Trustee shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
aforementioned opinion of counsel or registration statement.

                                       15
<PAGE>

         (d) As used in the preceding two paragraphs of this Section 2.12, the
term "transfer" encompasses any sale, pledge, transfer, hypothecation or other
disposition of any Security.

         (e) The provisions of clauses (1), (2), (3) and (4) below shall apply
only to Global Securities:

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

                  (2) Securities issued in exchange for a Global Security or any
         portion thereof shall be issued in definitive, fully registered form,
         without interest coupons, shall have an aggregate Principal Amount
         equal to that of such Global Security or portion thereof to be so
         exchanged, shall be registered in such names and be in such authorized
         denominations as the Depositary shall designate and shall bear the
         applicable legends provided for herein. Any Global Security to be
         exchanged in whole shall be surrendered by the Depositary to the
         Trustee, as Registrar. With regard to any Global Security to be
         exchanged in part, either such Global Security shall be so surrendered
         for exchange or, if the Trustee is acting as custodian for the
         Depositary or its nominee with respect to such Global Security, the
         Principal Amount thereof shall be reduced, by an amount equal to the
         portion thereof to be so exchanged, by means of an appropriate
         adjustment made on the records of the Trustee. Upon any such surrender
         or adjustment, the Trustee shall authenticate and deliver the Security
         issuable on such exchange to or upon the order of the Depositary or an
         authorized representative thereof.

                  (3) Subject to the provisions of clause (5) below, the
         registered Holder may grant proxies and otherwise authorize any Person,
         including Agent Members (as defined below) and persons that may hold
         interests through Agent Members, to take any action which a Holder is
         entitled to take under this Indenture or the Securities.

                                       16
<PAGE>

                  (4) In the event of the occurrence of any of the events
         specified in clause (1) above, the Company will promptly make available
         to the Trustee a reasonable supply of Certificated Securities in
         definitive, fully registered form, without interest coupons.

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

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

                                  ARTICLE III
                            REDEMPTION AND PURCHASES

         Section 3.1      Right to Redeem; Notices to Trustee. (a) Optional
Redemption. Subject to the rights of Holders set forth in Section 3.7 and
Section 10.1(a)(3), at any time on or after December 15, 2006, the Company may,
at its option, redeem the Debentures in accordance with the provisions of
paragraph 5 of the Debentures and at the Redemption Price specified in paragraph
5 of the Debentures, together with accrued interest up to but not including the
Redemption Date and Additional Interest, if any, thereon; provided that if the
Redemption Date is on or after an interest record date but on or prior to the
related Interest Payment Date, interest will be payable to the Holders in whose
names the Debentures are registered at the close of business on the relevant
record date for payment of such interest.

         (b)   Notice to Trustee. If the Company elects to redeem Debentures
pursuant to this Section 3.1, it shall notify the Trustee in writing of the
Redemption Date, the Principal Amount of Debentures to be redeemed and the
Redemption Price.

                                       17
<PAGE>

The Company shall give the notice to the Trustee provided for in this Section
3.1(b) by a Company Order at least 20 days before the Redemption Date (unless a
shorter notice shall be satisfactory to the Trustee).

         Section 3.2      Selection of Debentures to Be Redeemed. If less than
all the Debentures are to be redeemed, unless the procedures of the Depositary
provide otherwise, the Trustee shall select the Debentures to be redeemed on a
pro rata basis (so long as such method is not prohibited by the rules of any
stock exchange on which the Debentures are then listed). The Trustee shall make
the selection at least 15 days but not more than 60 days before the Redemption
Date from outstanding Debentures not previously called for redemption. The
Trustee may select for redemption portions of the Principal Amount of Debentures
that have denominations larger than $1,000.

         Debentures and portions of them the Trustee selects shall be in
Principal Amounts of $1,000 or an integral multiple of $1,000. Provisions of
this Indenture that apply to Debentures called for redemption also apply to
portions of Debentures called for redemption. The Trustee shall notify the
Company promptly of the Debentures or portions of Debentures to be redeemed.

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

         Section 3.3      Notice of Redemption. At least 15 days but not more
than 60 days before a Redemption Date, the Company shall mail a notice of
redemption by first-class mail, postage prepaid, to each Holder of Debentures to
be redeemed.

         The notice shall identify the Debentures to be redeemed and shall
state:

         (1) the Redemption Date;

         (2) the Redemption Price;

         (3) the Conversion Price;

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

         (5) that Debentures called for redemption may be converted at any time
before the close of business on the date that is two Business Days prior to the
Redemption Date;

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

         (7) that Debentures called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price therefor, together with accrued
interest and Additional Interest, if any;

                                       18
<PAGE>

         (8) if fewer than all the outstanding Debentures are to be redeemed,
the certificate numbers, if any, and Principal Amounts of the particular
Debentures to be redeemed;

         (9) that, unless the Company defaults in making payment of such
Redemption Price, interest on Debentures called for redemption will cease to
accrue on and after the Redemption Date; and

         (10) the CUSIP number of the Debentures.

         At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense, provided that the
Company makes such request at least three Business Days prior to the date by
which such notice of redemption must be given to Holders in accordance with this
Section 3.3.

         Section 3.4      Effect of Notice of Redemption. Once notice of
redemption is given, Debentures called for redemption become due and payable on
the Redemption Date and at the Redemption Price stated in the notice, except for
Debentures which are converted in accordance with the terms of this Indenture.
Upon surrender to the Paying Agent, such Debentures shall be paid at the
Redemption Price stated in the notice, together with accrued interest up to but
not including the Redemption Date and Additional Interest, if any, thereon.

         Section 3.5      Deposit of Redemption Price. Prior to 10:00 a.m. (New
York City time) on the Redemption Date, the Company shall deposit with the
Paying Agent (or if the Company or a Subsidiary or an Affiliate of either of
them is the Paying Agent, shall segregate and hold in trust) money sufficient to
pay the Redemption Price of all Debentures to be redeemed on that date, together
with accrued interest up to but not including the Redemption Date and Additional
Interest, if any, thereon, other than Debentures or portions of Debentures
called for redemption that on or prior thereto have been delivered by the
Company to the Trustee for cancellation or have been converted. The Paying Agent
shall as promptly as practicable return to the Company any money not required
for that purpose because of conversion of Debentures pursuant to Article 10. If
such money is then held by the Company in trust and is not required for such
purpose it shall be discharged from such trust.

         Section 3.6      Debentures Redeemed in Part. Upon surrender of a
Debenture that is redeemed in part, the Company shall execute and the Trustee
shall authenticate and deliver to the Holder a new Debenture in an authorized
denomination equal in Principal Amount to the unredeemed portion of the
Debenture surrendered.

         Section 3.7      Purchase of Debentures at Option of the Holder. (a)
General. Debentures shall be purchased by the Company in accordance with the
provisions of paragraph 6 of the Debentures as of December 15, 2004, December
15, 2006. December 15, 2011 and December 15, 2016 (each, a "Purchase Date") at a
purchase price per Debenture equal to 100% of the aggregate Principal Amount of
the Debenture (the "Purchase Price"), together with accrued interest up to but
not including the Purchase Date and Additional Interest, if any, thereon;
provided that if the Purchase Date is on or after an interest record date but on
or prior to

                                       19
<PAGE>

the related Interest Payment Date, interest will be payable to the Holders in
whose names the Debentures are registered at the close of business on the
relevant record date.

         Purchases of Debentures hereunder shall be made, at the option of the
Holder thereof, upon:

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

                           (A) the certificate number of the Debenture which the
                  Holder will deliver to be purchased;

                           (B) the portion of the Principal Amount of the
                  Debenture which the Holder will deliver to be purchased, which
                  portion must be in principal amounts at maturity of $1,000 or
                  an integral multiple thereof;

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

                           (D) that if the Company elects pursuant to Section
                  3.7(b) to pay the Purchase Price on such Purchase Date, in
                  whole or in part, in shares of Common Stock, but such portion
                  of the Purchase Price to be paid in Common Stock is ultimately
                  to be paid in cash because any condition in Section 3.7(d) is
                  not satisfied, such Holder elects (i) to withdraw such
                  Purchase Notice as to some or all of the Debentures to which
                  it relates (stating the Principal Amount and certificate
                  numbers of the securities as to which such withdrawal shall
                  relate), or (ii) to receive cash in respect of the Purchase
                  Price for all or portions of Debentures subject to such
                  Purchase Notice; and

                  (2) delivery of such Debenture prior to, on or after the
         Purchase Date (together with all necessary endorsements) to the Paying
         Agent at the offices of the Paying Agent or to the office or agency
         referred to in Section 4.5, such delivery being a condition to receipt
         by the Holder of the Purchase Price therefor, together with all accrued
         interest and Additional Interest, if any; provided, however, that such
         Purchase Price, together with all accrued interest and Additional
         Interest, if any, shall be so paid pursuant to this Section 3.7 only if
         the Debenture so delivered shall conform in all respect to the
         description thereof in the related Purchase Notice.

         If a Holder in such Holder's Purchase Notice and in any written notice
of withdrawal delivered by such Holder pursuant to the terms of Section 3.9,
fails to indicate such Holder's choice with respect to the election set forth in
clause (D) of Section 3.7(a)(1) above, such Holder shall be deemed to have
elected to receive cash in respect of the Purchase Price otherwise payable in
Common Stock.

                                       20
<PAGE>

         The Company shall purchase from the Holder thereof, pursuant to this
Section 3.7, a portion of a Debenture if the Principal Amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Debenture also apply to the purchase of such
portion of such Debenture.

         Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.7 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Purchase Date and the
time of delivery of the Debenture.

         Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Purchase Notice contemplated by this Section 3.7(a)
shall have the right to withdraw such Purchase Notice at any time prior to the
close of business on the Business Day prior to the Purchase Date by delivery of
a written notice of withdrawal to the Paying Agent in accordance with Section
3.9.

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

         (b) Company's Right to Elect Manner of Payment of Purchase Price. The
Debentures to be purchased pursuant to Section 3.7(a) may be paid for, at the
election of the Company, in cash or Common Stock, or in any combination of cash
and Common Stock, subject to the conditions set forth in this Section 3.7. The
Company shall designate, in the notice from the Company delivered pursuant to
Section 3.7(e), whether the Company will purchase the Debentures for cash or
Common Stock, and, if a combination thereof, the percentages of the Purchase
Price of Debentures in respect of which it will pay in cash or Common Stock;
provided that the Company will pay cash for fractional interests in Common
Stock. For purposes of determining the existence of potential fractional
interests, all Debentures subject to purchase by the Company held by a Holder
shall be considered together (no matter how many separate certificates are to be
presented). Any Holder who has elected to have Debentures purchased pursuant to
this Section 3.7 shall receive the same percentage of cash or Common Stock in
payment of the Purchase Price for such Debentures as all Holders making such
election with respect to a particular Purchase Date, except (i) as provided in
Section 3.7(d) with regard to the payment of cash in lieu of fractional shares
of Common Stock and (ii) in the event that the Company is unable to purchase the
Debentures of a Holder or Holders for Common Stock because of a failure to
satisfy, prior to the close of business on the Business Day immediately
preceding the Purchase Date, any condition set forth in Section 3.7(d), the
Company shall purchase the Debentures of such Holder or Holders for cash. The
Company may not change its election with respect to the consideration (or
components or percentages of components thereof) to be paid once the Company has
given notice thereof to Holders except pursuant to Section 3.7(d).

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

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

                                       21
<PAGE>

                  (2) the information required by Section 3.7(e);

                  (3) that the conditions to such manner of payment set forth in
         Section 3.7(d) have or will be complied with; and

                  (4) whether the Company desires the Trustee to give the notice
         required by Section 3.7(e).

         (c) Purchase with Cash. On each Purchase Date, at the option of the
Company, the Principal Amount of the Debentures in respect of which a Purchase
Notice pursuant to Section 3.7(a) has been given, or a specified percentage
thereof, may be purchased by the Company with cash equal to the aggregate
Purchase Price for, together with all accrued interest and any Additional
Interest on, such Debentures.

         (d) Payment by Common Stock. On each Purchase Date, at the option of
the Company, the Principal Amount of the Debentures in respect of which a
Purchase Notice pursuant to Section 3.7(a) has been given, or a specified
percentage thereof, may be purchased by the Company by the issuance of a number
of shares of Common Stock equal to the quotient obtained by dividing (i) the
amount of cash to which the Holders would have been entitled had the Company
elected to pay all or such specified percentage, as the case may be, of the
Purchase Price of such Debentures in cash by (ii) 95% of the Market Price of a
share of Common Stock, subject to the next succeeding paragraph.

         The Company will not issue a fractional share of Common Stock in
payment of the Purchase Price. Instead the Company will pay cash for the current
market value of the fractional share. The current market value of a fraction of
a share shall be determined by multiplying the Market Price by such fraction and
rounding the product to the nearest whole cent, with one-half cent being rounded
upward. It is understood that if a Holder elects to have more than one Debenture
purchased, the number of shares of Common Stock shall be based on the aggregate
amount of Debentures to be purchased.

         "Market Price" of the Common Stock means the average of the Sale Prices
of the Common Stock for the five Trading Day period ending on the third Business
Day prior to the applicable Purchase Date. If the third Business Day prior to
the applicable Purchase Date is not a Trading Day, the five Trading Day period
will end on the last Trading Day prior to such third Business Day. The Market
Price will be appropriately adjusted to take into account the occurrence, during
the period commencing on the first of such Trading Days during such five Trading
Day period and ending on such Purchase Date, of any event described in Section
10.3, subject, however, to the conditions set forth in Section 10.3.

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

                  (1) the Company's not having given notice of an election to
         pay entirely in cash and its giving of timely notice of election to
         purchase all or a specified percentage of the Debentures with Common
         Stock as provided herein;

                                       22
<PAGE>

                  (2) the registration of the shares of Common Stock to be
         issued in respect of the payment of the Purchase Price under the
         Securities Act and the Exchange Act, in each case if required;

                  (3) the listing of the Common Stock on the relevant Purchase
         Date on the NASDAQ National Market or the New York Stock Exchange or
         other national securities exchange;

                  (4) any necessary qualification or registration under
         applicable state securities law or the availability of an exemption
         from such qualification and registration; and

                  (5) the receipt by the Trustee of an Officers' Certificate and
         an Opinion of Counsel each stating that (A) the terms of the issuance
         of the Common Stock are in conformity with this Indenture and (B) the
         shares of Common Stock to be issued by the Company in payment of the
         Purchase Price in respect of Debentures have been duly authorized and,
         when issued and delivered pursuant to the terms of this Indenture in
         payment of the Purchase Price in respect of the Debentures, will be
         validly issued, fully paid and nonassessable and shall be free of any
         preemptive rights and any lien or adverse claim (provided that such
         Opinion of Counsel may state that, insofar as it relates to the absence
         of such preemptive rights, liens and adverse claims, it is given upon
         the best knowledge of such counsel), and, in the case of such Officers'
         Certificate, that conditions (1), (2), (3) and (4) above and the
         condition set forth in the second succeeding sentence in the paragraph
         below have been satisfied and, in the case of such Opinion of Counsel,
         that conditions (2), (3) and (4) above have been satisfied.

Such Officers' Certificate shall also set forth the number of shares of Common
Stock to be issued for each $1,000 Principal Amount of Debentures and the Sale
Price of a share of Common Stock on each Trading Day of the period during which
the Market Price is calculated. The Company may elect to pay in Common Stock
only if the information necessary to calculate the Market Price is reported in
The Wall Street Journal or another daily newspaper of national circulation. If
such conditions are not satisfied prior to or on the Purchase Date and the
Company elected to purchase the Debentures pursuant to this Section 3.7 through
the issuance of shares of Common Stock, the Company shall pay the entire
Purchase Price in cash.

         (e) Notice of Election. The Company shall send notices of its election
(the "Company Notice") to purchase with cash or Common Stock or any combination
thereof to the Holders (and to beneficial owners as required by applicable law)
in the manner provided in Section 12.2. The Company Notice shall be sent to the
Holders (and to beneficial owners as required by applicable law) on a date not
less than 20 Business Days prior to each Purchase Date (such date not less than
20 Business Days prior to each Purchase Date being herein referred to as the
"Company Notice Date"). Such notices shall state the manner of payment elected
and shall contain the following information:

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

                                       23
<PAGE>

                  (1) state that each Holder who elects to have Debentures
         purchased on the applicable Purchase Date will receive Common Stock
         with a Market Price determined as of a specified date prior to such
         Purchase Date in an amount equal to such specified percentage of the
         Purchase Price of the Debentures held by such Holder elected by the
         Company to be paid with Common Stock (except for any cash amount to be
         paid in lieu of fractional shares); and

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

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

                  (i) the Purchase Price and the Conversion Price;

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

                  (iii) that Debentures as to which a Purchase Notice has been
         given may be converted into Common Stock at any time prior to the close
         of business on the applicable Purchase Date if they are otherwise
         convertible in accordance with Article 10 hereof and paragraph 8 of the
         Debentures only if the applicable Purchase Notice has been withdrawn in
         accordance with the terms of this Indenture;

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

                  (v) that the Purchase Price for, and any accrued interest and
         any Additional Interest on, any Debenture as to which a Purchase Notice
         has been given and not withdrawn will be paid promptly following the
         later of the Purchase Date and the time of surrender of such Debenture
         as described in subclause (iv) above;

                  (vi) the procedures the Holder must follow to exercise rights
         under this Section 3.7 and a brief description of those rights;

                  (vii) briefly, the conversion rights of the Debentures and
         that Holders who want to convert Debentures into Common Stock must
         satisfy the requirements set forth in Article 10 hereof and paragraph 8
         of the Debenture;

                  (viii) the procedures for withdrawing a Purchase Notice
         (including for a conditional withdrawal pursuant to the terms of
         Section 3.7(a)(1)(D) or pursuant to the terms of Section 3.9);

                  (ix) that, unless the Company defaults in making payment on
         Debentures for which a Purchase Notice has been submitted, interest on
         such Debentures will cease to accrue on the Purchase Date; and

                                       24
<PAGE>

                  (x) the CUSIP number of the Debentures.

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

         Upon determination of the actual number of shares of Common Stock to be
issued for each $1,000 Principal Amount of Debentures, the Company will promptly
publish such determination in The Wall Street Journal or another daily newspaper
of national circulation and furnish the Trustee with an affidavit of
publication.

         (f) Covenants of the Company and the Guarantors. All shares of Common
Stock delivered upon purchase of the Debentures shall be duly authorized,
validly issued, fully paid and nonassessable and shall be free from preemptive
rights and free of any lien or adverse claim.

         (g) Procedure Upon Purchase. The Company shall deposit cash (in respect
of a cash purchase under Section 3.7(c) or for fractional interests, as
applicable) or shares of Common Stock, or any combination thereof, as
applicable, at the time and in the manner as provided in Section 3.10,
sufficient to pay the aggregate Purchase Price of all Debentures, plus cash in
an amount sufficient to pay all accrued interest to, but not including, the
Purchase Date and Additional Interest, if any, thereon, to be purchased pursuant
to this Section 3.7. As soon as practicable after the later of the Purchase Date
and the date such Debentures are surrendered to the Paying Agent, the Company
shall deliver to each Holder entitled to receive Common Stock through the Paying
Agent a certificate for the number of full shares of Common Stock issuable in
payment of the Purchase Price and cash in lieu of any fractional interests. The
person in whose name the certificate for Common Stock is registered shall be
treated as a holder of record of such Common Stock on the Business Day following
the related Purchase Date. Subject to Section 3.7(d), no payment or adjustment
will be made for dividends on the Common Stock the record date for which
occurred prior to the Purchase Date.

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

         Section 3.8      Purchase of Debentures at Option of the Holder upon
Change in Control. (a) If at any time the Debentures remain outstanding there
shall have occurred a Change in Control, Debentures shall be purchased by the
Company, at the option of the Holder thereof, at the purchase price specified in
paragraph 6 of the Debentures (the "Change in Control Purchase Price"), together
with accrued interest up to but not including the Change in Control Purchase
Date and Additional interest, if any, thereon, as of the date that is 45
Business Days

                                       25
<PAGE>

after the date of the notice referred to in Section 3.8(b) (the "Change in
Control Purchase Date"), subject to satisfaction by or on behalf of the Holder
of the requirements set forth in Section 3.8(c).

         A "Change in Control" shall be deemed to have occurred at such time as
either of the following events shall occur:

                  (i) There shall be consummated any share exchange,
         consolidation or merger of the Company pursuant to which the Common
         Stock would be converted into cash, securities or other property, in
         each case other than a share exchange, consolidation or merger of the
         Company in which the holders of the Common Stock immediately prior to
         the share exchange, consolidation or merger have, directly or
         indirectly, at least a majority of the total voting power in the
         aggregate of all classes of Capital Stock of the continuing or
         surviving corporation immediately after the share exchange,
         consolidation or merger; or

                  (ii) There is a report filed on Schedule 13D or TO (or any
         successor schedule, form or report) pursuant to the Exchange Act,
         disclosing that any person (for the purposes of this Section 3.8 only,
         as the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of
         the Exchange Act) has become the beneficial owner (as the term
         "beneficial owner" is defined under Rule 13d-3 or any successor rule or
         regulation promulgated under the Exchange Act) of 50% or more of the
         voting power of the Common Stock then outstanding; provided, however,
         that a person shall not be deemed beneficial owner of, or to own
         beneficially, (A) any securities tendered pursuant to a tender or
         exchange offer made by or on behalf of such person or any of such
         person's Affiliates or Associates until such tendered securities are
         accepted for purchase or exchange thereunder, or (B) any securities if
         such beneficial ownership (1) arises solely as a result of a revocable
         proxy delivered in response to a proxy or consent solicitation made
         pursuant to the applicable rules and regulations under the Exchange
         Act, and (2) is not also then reportable on Schedule 13D (or any
         successor schedule) under the Exchange Act.

                  "Associate" has the meaning ascribed to such term in Rule
         12b-2 of the General Rules and Regulations under the Exchange Act, as
         in effect on the date hereof.

Notwithstanding the foregoing provisions of this Section 3.8, a Change in
Control shall not be deemed to have occurred:

                  (1) by virtue of the Company, any Subsidiary, any employee
         stock ownership plan or any other employee benefit plan of the Company
         or any Subsidiary, or any person holding Common Stock for or pursuant
         to the terms of any such employee benefit plan, filing or becoming
         obligated to file a report under or in response to Schedule 13D or
         Schedule TO (or any successor schedule, form or report) under the
         Exchange Act disclosing beneficial ownership by it of shares of Common
         Stock, whether in excess of 50% or otherwise;

                  (2) if the Sale Price of the Common Stock for any five Trading
         Days within:

                                       26
<PAGE>

                           (A) the period of ten consecutive Trading Days ending
                  immediately before the Change in Control, in the case of a
                  Change in Control under paragraph (i) above; or

                           (B) the period of ten consecutive Trading Days ending
                  immediately after the later of the Change in Control and the
                  public announcement of the Change in Control, in the case of a
                  Change in Control under paragraph (ii) above;

                  shall equal or exceed 105% of the Conversion Price of the
                  Debentures in effect on each such Trading Day; or

                  (3) at least 90% of the consideration in the transaction or
         transactions constituting a Change in Control consist of shares of
         Common Stock traded or to be traded immediately following such Change
         in Control on a national securities exchange or the NASDAQ National
         Market and, as a result of the transaction or transactions, the
         Debentures become convertible solely into such common stock (and any
         rights attached thereto).

         (b) Within 30 days after the occurrence of a Change in Control, the
Company shall mail a written notice of the Change in Control by first-class mail
to the Trustee and to each Holder (and to beneficial owners as required by
applicable law). The notice shall include a form of Change in Control Purchase
Notice to be completed by the Securityholder and shall state:

                  (1) briefly, the events causing a Change in Control and the
         date such Change in Control is deemed to have occurred for purposes of
         this Section 3.8;

                  (2) the date by which the Change in Control Purchase Notice
         pursuant to this Section 3.8 must be given;

                  (3) the Change in Control Purchase Date;

                  (4) the Change in Control Purchase Price;

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

                  (6) the Conversion Price and any adjustments thereto;

                  (7) that Debentures as to which a Change in Control Purchase
         Notice has been given may be converted into Common Stock at any time
         prior to the close of business on the Change in Control Purchase Date
         pursuant to Article 10 hereof only if the Change in Control Purchase
         Notice has been withdrawn in accordance with the terms of this
         Indenture;

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

                  (9) that the Change in Control Purchase Price for any
         Debenture as to which a Change in Control Purchase Notice has been duly
         given and not withdrawn will be paid

                                       27
<PAGE>

         promptly following the later of the Change in Control Purchase Date and
         the time of surrender of such Debenture as described in (8);

                  (10) the procedures the Holder must follow to exercise rights
         under this Section 3.8 and a brief description of those rights;

                  (11) briefly, the conversion rights of the Debentures;

                  (12) the procedures for withdrawing a Change in Control
         Purchase Notice;

                  (13) that, unless the Company defaults in making payment of
         such Change in Control Purchase Price, interest on Debentures
         surrendered for purchase by the Company will cease to accrue on and
         after the Change in Control Purchase Date; and

                  (14) the CUSIP number of the Debentures.

         (c) A Holder may exercise its rights specified in Section 3.8(a) upon
delivery of a written notice of purchase (a "Change in Control Purchase Notice")
to the Paying Agent at any time prior to the close of business on the fifth
business day prior to the Change in Control Purchase Date, stating:

                  (1) the certificate number of the Debenture that the Holder
         will deliver to be purchased;

                  (2) the portion of the Principal Amount of the Debenture which
         the Holder will deliver to be purchased, which portion must be $1,000
         or an integral multiple thereof; and

                  (3) that such Debenture shall be purchased pursuant to the
         terms and conditions specified in paragraph 6 of the Debentures.

         The delivery of such Debenture to the Paying Agent prior to, on or
after the Change in Control Purchase Date (together with all necessary
endorsements) at the offices of the Paying Agent shall be a condition to the
receipt by the Holder of the Change in Control Purchase Price therefor;
provided, however, that such Change in Control Purchase Price shall be so paid
pursuant to this Section 3.8 only if the Debenture so delivered to the Paying
Agent shall conform in all respects to the description thereof set forth in the
related Change in Control Purchase Notice.

         The Company shall purchase from the Holder thereof, pursuant to this
Section 3.8, a portion of a Debenture if the Principal Amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Debenture also apply to the purchase of such
portion of such Debenture.

         Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.8 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Change in Control
Purchase Date and the time of delivery of the Debenture to the Paying Agent in
accordance with this Section 3.8.

                                       28

<PAGE>
         Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Change in Control Purchase Notice contemplated by this
Section 3.8(c) shall have the right to withdraw such Change in Control Purchase
Notice at any time prior to the close of business on the Change in Control
Purchase Date by delivery of a written notice of withdrawal to the Paying Agent
in accordance with Section 3.9.

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

         Section 3.9       Effect of Purchase Notice or Change in Control
Purchase Notice; Withdrawal of Purchase Notice or Change in Control Purchase
Notice. Upon receipt by the Paying Agent of the Purchase Notice or Change in
Control Purchase Notice specified in Section 3.7(a) or Section 3.8(c), as
applicable, the Holder of the Debenture in respect of which such Purchase Notice
or Change in Control Purchase Notice, as the case may be, was given shall
(unless such Purchase Notice or Change in Control Purchase Notice is withdrawn
as specified in the following two paragraphs) thereafter be entitled to receive
solely the Purchase Price or Change in Control Purchase Price, as the case may
be, in each case together with all accrued interest to, but not including, the
Purchase Date or Change in Control Purchase Date, as the case may be, and
Additional Interest, if any, thereon, with respect to such Debenture. Such
Purchase Price or Change in Control Purchase Price, as the case may be, together
with all accrued interest to, but not including, the Purchase Date or the Change
in Control Purchase Date, as the case may be, and Additional Interest, if any,
thereon, shall be paid to such Holder, subject to receipt of funds and/or
securities by the Paying Agent, promptly following the later of (x) the Purchase
Date or the Change in Control Purchase Date, as the case may be, with respect to
such Debenture (provided the conditions in Section 3.7(a) or Section 3.8(c), as
applicable, have been satisfied) and (y) the time of delivery of such Debenture
to the Paying Agent by the Holder thereof in the manner required by Section
3.7(a) or Section 3.8(c), as applicable. Debentures in respect of which a
Purchase Notice or Change in Control Purchase Notice, as the case may be, has
been given by the Holder thereof may not be converted into shares of Common
Stock pursuant to Article 10 hereof on or after the date of the delivery of such
Purchase Notice or Change in Control Purchase Notice, as the case may be, unless
such Purchase Notice or Change in Control Purchase Notice, as the case may be,
has first been validly withdrawn as specified in the following two paragraphs.

         A Purchase Notice or Change in Control Purchase Notice, as the case may
be, may be withdrawn by means of a written notice of withdrawal delivered to the
office of the Paying Agent in accordance with the Purchase Notice or Change in
Control Purchase Notice, as the case may be, at any time prior to the close of
business on the Business Day prior to the Purchase Date or the Change in Control
Purchase Date, as the case may be, specifying:

         (1)      the certificate number, if any, of the Debenture in respect of
which such notice of withdrawal is being submitted,

         (2)      the Principal Amount of the Debenture with respect to which
such notice of withdrawal is being submitted, and

                                       29
<PAGE>
         (3)      the Principal Amount, if any, of such Debenture which remains
subject to the original Purchase Notice or Change in Control Purchase Notice, as
the case may be, and which has been or will be delivered for purchase by the
Company.

         There shall be no purchase of any Debentures pursuant to Section 3.7 or
3.8 if there has occurred (prior to, on or after, as the case may be, the
giving, by the Holders of such Debentures, of the required Purchase Notice or
Change in Control Purchase Notice, as the case may be) and is continuing an
Event of Default (other than a default in the payment of the Purchase Price or
Change in Control Purchase Price, as the case may be, with respect to such
Debentures). The Paying Agent will promptly return to the respective Holders
thereof any Debentures (x) with respect to which a Purchase Notice or Change in
Control Purchase Notice, as the case may be, has been withdrawn in compliance
with this Indenture, or (y) held by it during the continuance of an Event of
Default (other than a default in the payment of the Purchase Price or Change in
Control Purchase Price, as the case may be, with respect to such Debentures) in
which case, upon such return, the Purchase Notice or Change in Control Purchase
Notice with respect thereto shall be deemed to have been withdrawn.

         Section 3.10      Deposit of Purchase Price or Change in Control
Purchase Price. Prior to 10:00 a.m. (local time in the City of New York) on the
Business Day following the Purchase Date or the Change in Control Purchase Date,
as the case may be, the Company shall deposit with the Trustee or with the
Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either of
them is acting as the Paying Agent, shall segregate and hold in trust as
provided in Section 2.4) an amount of money (in immediately available funds if
deposited on such Business Day) and/or shares of Common Stock sufficient to pay
the aggregate Purchase Price or Change in Control Purchase Price, as the case
may be, in each case together with all accrued interest to, but not including,
the Purchase Date or Change in Control Purchase Date, as the case may be, and
Additional Interest, if any, thereon, of all the Debentures or portions thereof
which are to be purchased as of the Purchase Date or Change in Control Purchase
Date, as the case may be.

         Section 3.11      Debentures Purchased in Part. Any Certificated
Security that is to be purchased only in part shall be surrendered at the office
of the Paying Agent (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing) and the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such Debenture, without
service charge, a new Debenture or Debentures, of any authorized denomination as
requested by such Holder in aggregate Principal Amount equal to, and in exchange
for, the portion of the Principal Amount of the Debenture so surrendered which
is not purchased.

         Section 3.12      Covenant to Comply with Securities Laws upon Purchase
of Debentures. When complying with the provisions of Section 3.7 or 3.8 hereof
(provided that such offer or purchase constitutes an "issuer tender offer" for
purposes of Rule 13e-4 (which term, as used herein, includes any successor
provision thereto) under the Exchange Act at the time of such offer or
purchase), the Company shall (i) comply in all material respects with Rule 13e-4
and Rule 14e-1 under the Exchange Act, (ii) file the related Schedule TO (or any
successor schedule, form or report) under the Exchange Act, and (iii) otherwise
comply in all material

                                       30
<PAGE>
respects with all Federal and state securities laws so as to permit the rights
and obligations under Sections 3.7 and 3.8 to be exercised in the time and in
the manner specified in Sections 3.7 and 3.8.

         Section 3.13      Repayment to the Company or Any Guarantor. The
Trustee and the Paying Agent shall return to the Company or any applicable
Guarantor, as the case may be, any cash and/or shares of Common Stock that
remain unclaimed as provided in paragraph 12 of the Debentures, together with
interest or dividends, if any, thereon (subject to the provisions of Section
7.1(f)), held by them for the payment of the Purchase Price or Change in Control
Purchase Price, as the case may be, and accrued interest and Additional
Interest, if any; provided, however, that to the extent that the aggregate
amount of cash or shares of Common Stock deposited by the Company pursuant to
Section 3.10 exceeds the aggregate Purchase Price or Change in Control Purchase
Price, as the case may be, of the Debentures or portions thereof which the
Company is obligated to purchase as of the Purchase Date or Change in Control
Purchase Date, as the case may be, and accrued interest and Additional Interest,
if any, thereon, then, unless otherwise agreed in writing with the Company,
promptly after the Business Day following the Purchase Date or Change in Control
Purchase Date, as the case may be, the Trustee shall return any such excess to
the Company together with interest or dividends, if any, thereon (subject to the
provisions of Section 7.1(f)).

                                   Article IV

                                    COVENANTS

         Section 4.1       Payment of Debentures. The Company shall promptly
make all payments in respect of the Debentures on the dates and in the manner
provided in the Debentures or pursuant to this Indenture. Any amounts to be
given to the Trustee or Paying Agent shall be deposited with the Trustee or
Paying Agent by 10:00 a.m. (New York City time) by the Company. Interest
installments, Principal Amount, Redemption Price, Purchase Price, Change in
Control Purchase Price, Additional Interest, if any, and interest, if any, due
on overdue amounts shall be considered paid on the applicable date due if on
such date (or, in the case of a Purchase Price or Change in Control Purchase
Price, on the Business Day following the applicable Purchase Date or Change in
Control Purchase Date, as the case may be) the Trustee or the Paying Agent
holds, in accordance with this Indenture, money sufficient to pay all such
amounts then due.

         The Company shall, to the extent permitted by law, pay interest on
overdue amounts at the rate per annum set forth in paragraph 1 of the
Debentures, compounded semiannually, which interest shall accrue from the date
such overdue amount was originally due to the date payment of such amount,
including interest thereon, has been made or duly provided for. All such
interest shall be payable on demand. The accrual of such interest on overdue
amounts shall be in addition to the continued accrual of interest on the
Debentures.

         Section 4.2       SEC and Other Reports. The Company shall file with
the Trustee, within 15 days after it files such annual and quarterly reports,
information, documents and other reports with the SEC, copies of its annual
report and of the information, documents and other

                                       31
<PAGE>
reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) which the Company is required to file with the
SEC pursuant to Section 13 or 15(d) of the Exchange Act. In the event the
Company is at any time no longer subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, it shall continue to provide the
Trustee with reports containing substantially the same information as would have
been required to be filed with the SEC had the Company continued to have been
subject to such reporting requirements. In such event, such reports shall be
provided at the times the Company would have been required to provide reports
had it continued to have been subject to such reporting requirements.

         In addition, the Company shall comply with the other provisions of TIA
Section 314(a).

         Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).

         Section 4.3       Compliance Certificate. The Company and the
Guarantors shall deliver to the Trustee within 90 days after the end of each
fiscal year of the Company (beginning with the fiscal year ending on February
23, 2002) an Officers' Certificate, stating whether or not to the best knowledge
of the signers thereof the Company or the Guarantors are in default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and if the Company or the Guarantors shall be in default,
specifying all such defaults and the nature and status thereof of which they may
have knowledge.

         Section 4.4       Further Instruments and Acts. Upon request of the
Trustee, the Company and the Guarantors will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purposes of this Indenture.

         Section 4.5       Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, the City of New York, an office or agency
of the Trustee, Registrar, Paying Agent and Conversion Agent where Debentures
may be presented or surrendered for payment, where Debentures may be surrendered
for registration of transfer, exchange, purchase, redemption or conversion and
where notices and demands to or upon the Company or any Guarantor in respect of
the Debentures and this Indenture may be served. The Corporate Trust Office
shall initially be such office or agency for all of the aforesaid purposes. The
Company shall give prompt written notice to the Trustee of the location, and of
any change in the location, of any such office or agency (other than a change in
the location of the office of the Trustee). If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the address of the Trustee set forth in Section
12.2.

                                       32
<PAGE>
         The Company may also from time to time designate one or more other
offices or agencies where the Debentures may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York, for such purposes.

         Section 4.6       Delivery of Certain Information. At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the
request of a Holder or any beneficial owner of Debentures or holder or
beneficial owner of Common Stock delivered upon conversion thereof, the Company
will promptly furnish or cause to be furnished Rule 144A Information (as defined
below) to such Holder or any beneficial owner of Debentures or holder or
beneficial owner of Common Stock, or to a prospective purchaser of any such
security designated by any such holder, as the case may be, to the extent
required to permit compliance by such Holder or holder with Rule 144A under the
Securities Act in connection with the resale of any such security. "Rule 144A
Information" shall be such information as is specified pursuant to Rule
144A(d)(4) under the Securities Act or any successor provisions. Whether a
person is a beneficial owner shall be determined by the Company to the Company's
reasonable satisfaction.

         Section 4.7       Tax Treatment of Debentures. The Company and the
Trustee, on behalf of the Holders, agree that (i) the Debentures are contingent
payment debt instruments within the meaning of Treasury Regulation
Section1.1275-4, (ii) each Holder shall be bound by the Company's application of
the Treasury regulations to the Debentures, including the Company's
determination of the comparable yield within the meaning of Treasury Regulation
Section1.1275-4(b)(4), (iii) each Holder shall use the projected payment
schedule with respect to the Debentures provided by the Company to the Holder,
as provided in Treasury Regulation Section1.1275-4(b)(4), to determine its
interest accruals and adjustments as provided in Treasury Regulation
Section1.1275-4(b)(4)(iv), and (iv) the Company and each Holder will not take
any position on a tax return inconsistent with (i), (ii) or (iii), unless
required by applicable law.

         Section 4.8       Additional Interest. If at any time Additional
Interest becomes payable by the Company and the Guarantors pursuant to the
Registration Rights Agreement, the Company shall promptly deliver to the Trustee
a certificate to that effect and stating (i) the amount of such Additional
Interest that is payable and (ii) the date on which such Additional Interest is
payable pursuant to the terms of the Registration Rights Agreement. Unless and
until a Responsible Officer of the Trustee receives such a certificate, the
Trustee may assume without inquiry that no Additional Interest is payable. If
the Company or any Guarantor has paid Additional Interest directly to the
persons entitled to such amounts, the Company shall deliver to the Trustee a
certificate setting forth the particulars of such payment.

                                   Article V

                              SUCCESSOR CORPORATION

         Section 5.1       When Company or Any Guarantor May Merge or Transfer
Assets. Neither Company or any of the Guarantors shall consolidate with or merge
with or into any other

                                       33
<PAGE>
person or convey, transfer or lease its properties and assets substantially as
an entirety to any person, unless:

                  (a)      (1) the Company or such Guarantor, as the case may

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

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

                  (c)      the Company or such Guarantor, as applicable, shall
         have delivered to the Trustee an Officers' Certificate and an Opinion
         of Counsel, each stating that such consolidation, merger, conveyance,
         transfer or lease and, if a supplemental indenture is required in
         connection with such transaction, such supplemental indenture, comply
         with this Article 5, that all conditions precedent herein provided for
         relating to such transaction have been satisfied and the supplemental
         indenture will constitute the legally valid and binding obligation of
         such successor person, enforceable against such person in accordance
         with its terms, subject to bankruptcy, insolvency, reorganization,
         moratorium, or other laws relating to or affecting creditors' rights
         and by general principles of equity.

                  For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise) of the properties and assets of one or more
Subsidiaries (other than to the Company, any Guarantor or another Subsidiary),
which, if such assets were owned by the Company or such Guarantor, as the case
may be, would constitute all or substantially all of the properties and assets
of the Company or such Guarantor, as the case may be, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the Company
or such Guarantor, as the case may be.

                  The successor person formed by such consolidation or into
which the Company or such Guarantor, as the case may be, is merged or the
successor person to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company or such Guarantor, as the case may be, under this Indenture with the
same effect as if such successor had been named as the Company or such
Guarantor, as the case may be, herein; and thereafter, except in the case of a
lease and obligations the Company or such Guarantor, as the case may be, may
have under a supplemental indenture pursuant to Section 10.4, the Company or
such Guarantor, as the case may be, shall be discharged from all obligations and
covenants under this Indenture and the Securities. Subject to Section 9.6, the
Company, the Guarantors, the Trustee and the successor person shall enter into a
supplemental indenture to evidence the succession and substitution of such
successor person and such discharge and release of the Company.

                                       34
<PAGE>
                                   Article VI

                              DEFAULTS AND REMEDIES

                  Section 6.1      Events of Default. An "Event of Default"
occurs if:

                  (a)      the Company defaults in the payment of interest or
         Additional Interest, if any, payable on any Debenture when the same
         becomes due and payable and such default continues for a period of 30
         days;

                  (b)      the Company defaults in the payment of the Principal
         Amount, Redemption Price, Purchase Price, Change in Control Purchase
         Price on any Debenture when the same becomes due and payable at its
         Stated Maturity, upon redemption, upon declaration, when due for
         purchase by the Company or otherwise;

                  (c)      the Company or any Guarantor fails to comply with any
         of its agreements in the Securities or this Indenture (other than those
         referred to in clauses (a) and (b) above) and such failure continues
         for 90 days after receipt by the Company of a Notice of Default;

                  (d)      an event of default, as defined in any indenture or
         instrument evidencing or under which the Company or any Guarantor, on
         the date any determination shall be made under this clause (d), shall
         have outstanding at least $25,000,000 aggregate principal amount of
         Indebtedness for borrowed money (other than Non-Recourse Indebtedness),
         shall happen and be continuing and such event of default shall involve
         (x) the failure to pay the principal of or premium, if any, on such
         Indebtedness (or any part thereof) on the final maturity date thereof
         after the expiration of any applicable grace period with respect
         thereto, or (y) such Indebtedness shall have been accelerated so that
         the same shall be or become due and payable prior to the date on which
         the same would otherwise have become due and payable, and such
         acceleration shall not be rescinded or annulled within 10 Business Days
         after notice thereof shall have been given to the Company or such
         Guarantor, as applicable, by the Trustee (if such event be known to it)
         or to the Company or such Guarantor, as applicable, and the Trustee by
         the Holders of at least 25% in aggregate principal amount of all of the
         Securities at the time outstanding; provided that, if such event of
         default under such indenture or instrument shall be remedied or cured
         by the Company or such Guarantor, as applicable, or waived by the
         requisite holders of such indebtedness, then the Event of Default by
         reason thereof shall be deemed likewise to have been thereupon
         remedied, cured or waived without further action upon the part of
         either the Trustee or any of the Securityholders, and provided further,
         however, that subject to the provisions of Sections 7.1 and 7.2, the
         Trustee shall not be charged with knowledge of any such event of
         default unless written notice thereof shall have been given to the
         Trustee by the Company or such Guarantor, as applicable, by the holder
         or an agent of the holder of any such Indebtedness, by the trustee then
         acting under any indenture or other instrument under which such default
         shall have occurred, or by the Holders of not less than 25% in the
         aggregate principal amount of the Securities at the time outstanding;

                                       35
<PAGE>
                  (e)      any Guarantee shall for any reason cease to be, or
         shall for any reason be asserted in writing by such Guarantor or the
         Company not to be in full force and effect and enforceable in
         accordance with its terms, except to the extent contemplated by this
         Indenture and such Guarantee;

                  (f)      a court having jurisdiction in the premises shall
         enter a decree or order for relief in respect of the Company or any
         Guarantor in an involuntary case under any applicable bankruptcy,
         insolvency or other similar law now or hereafter in effect, or
         appointing a receiver, liquidator, assignee, custodian, trustee or
         sequestrator (or similar official) of the Company or any Guarantor or
         for any substantial part of its property or ordering the winding up or
         liquidation of its affairs and such decree or order shall remain
         unstayed and in effect for a period of 60 consecutive days; or

                  (g)      the Company or any Guarantor shall commence a
         voluntary case under any applicable bankruptcy, insolvency or other
         similar law now or hereafter in effect, or consent to the entry of an
         order for relief in an involuntary case under any such law, or consent
         to the appointment of or taking possession by a receiver, liquidator,
         assignee, custodian, trustee or sequestrator (or similar official) of
         the Company or any Guarantor or for any substantial part of its
         property or make any general assignment for the benefit of creditors.

                  A Default under clause (c), (d) or (e) above is not an Event
of Default until the Trustee notifies the Company, or the Holders of at least
25% in aggregate Principal Amount of the Debentures at the time outstanding
notify the Company, the Guarantors and the Trustee, of the Default and neither
the Company nor any of the Guarantors cures such Default (and such Default is
not waived) within the time specified in clause (c), (d) or (e) above after
actual receipt of such notice. Any such notice must specify the Default, demand
that it be remedied and state that such notice is a "Notice of Default." The
Company or any Guarantor shall deliver to the Trustee, within 30 days after it
becomes aware of the occurrence thereof, written notice of any event which with
the giving of notice or the lapse of time, or both, would become an Event of
Default under clauses (c), (d) or (e) above, its status and what action the
Company or such Guarantor, as the case may be, is taking or proposes to take
with respect thereto.

                  Section 6.2      Acceleration. If an Event of Default (other
than an Event of Default specified in Section 6.1(f) or (g)) occurs and is
continuing, the Trustee by notice to the Company and the Guarantors, or the
Holders of at least 25% in aggregate Principal Amount of the Debentures at the
time outstanding by notice to the Company, the Guarantors and the Trustee, may
declare the Principal Amount of all the Debentures plus all accrued interest
thereon through the date of declaration to be immediately due and payable. Upon
such a declaration, such Principal Amount plus all accrued interest and
Additional Interest, if any, shall become and be immediately due and payable. If
an Event of Default specified in Section 6.1(f) or (g) occurs and is continuing,
the Principal Amount of all the Debentures plus all accrued interest and
Additional Interest, if any, thereon shall become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Securityholders. The Holders of a majority in aggregate Principal Amount of the
Debentures at the time outstanding, by notice to

                                       36
<PAGE>
the Trustee (and without notice to any other Securityholder), may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of the Principal Amount plus all accrued interest and
Additional Interest, if any, that have become due solely as a result of
acceleration and if all amounts due to the Trustee under Section 7.7 have been
paid. No such rescission shall affect any subsequent Default or impair any right
consequent thereto.

                  Section 6.3      Other Remedies. If an Event of Default occurs
and is continuing, the Trustee may pursue any available remedy to collect the
payment of the Principal Amount of all the Debentures plus all accrued interest
and Additional Interest, if any, thereon or to enforce the performance of any
provision of the Debentures or this Indenture.

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

                  Section 6.4      Waiver of Past Defaults. The Holders of a
majority in aggregate Principal Amount of the Debentures at the time
outstanding, by notice to the Trustee (and without notice to any other
Securityholder), may waive an existing Default and its consequences except (a)
an Event of Default described in Section 6.1(a) or 6.1(b), (b) a Default in
respect of a provision that under Section 9.2 cannot be amended without the
consent of each Securityholder affected or (c) a Default which constitutes a
failure to convert any Debenture in accordance with the terms of Article 10.
When a Default is waived, it is deemed cured, but no such waiver shall extend to
any subsequent or other Default or impair any consequent right. This Section 6.4
shall be in lieu of Section 316(a)1(B) of the TIA and such Section 316(a)1(B) is
hereby expressly excluded from this Indenture, as permitted by the TIA.

                  Section 6.5      Control by Majority. The Holders of a
majority in aggregate Principal Amount of the Debentures at the time outstanding
may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or of exercising any trust or power conferred on
the Trustee. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or that the Trustee determines in good
faith is unduly prejudicial to the rights of other Securityholders or would
involve the Trustee in personal liability unless the Trustee is offered
indemnity satisfactory to it. This Section 6.5 shall be in lieu of Section
316(a)1(A) of the TIA and such Section 316(a)1(A) is hereby expressly excluded
from this Indenture, as permitted by the TIA.

                  Section 6.6      Limitation on Suits. A Securityholder may not
pursue any remedy with respect to this Indenture or the Securities unless:

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

                                       37
<PAGE>
                  (b)      the Holders of at least 25% in aggregate Principal
         Amount of the Debentures at the time outstanding make a written request
         to the Trustee to pursue the remedy;

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

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

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

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

                  Section 6.7      Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of interest installments, the Principal Amount, Redemption
Price, Purchase Price, Change in Control Purchase Price, Additional Interest, if
any, or interest, if any, due on overdue amounts in respect of the Debentures
held by such Holder, on or after the respective due dates expressed in the
Debentures, and to convert the Debentures in accordance with Article 10, or to
bring suit for the enforcement of any such payment on or after such respective
dates or the right to convert, shall not be impaired or affected adversely
without the consent of such Holder.

                  Section 6.8      Collection Suit by Trustee. If an Event of
Default described in Section 6.1(a) or 6.1(b) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or any Guarantor for the whole amount owing with respect to
the Debenture and the amounts provided for in Section 7.7.

                  Section 6.9      Trustee May File Proofs of Claim. In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company, any Guarantor or any other obligor upon the
Debentures or the property of the Company, such Guarantor or of such other
obligor or their creditors, the Trustee (irrespective of whether interest
installments, the Principal Amount, Redemption Price, Purchase Price, Change in
Control Purchase Price, Additional Interest, if any, or interest, if any, due on
overdue amounts in respect of the Debentures shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company or such Guarantor for the
payment of any such amount) shall be entitled and empowered, by intervention in
such proceeding or otherwise,

                  (a)      to file and prove a claim for any accrued and unpaid
         interest installments, the whole amount of the Principal Amount,
         Redemption Price, Purchase Price, Change in Control Purchase Price,
         Additional Interest or interest, if any, due on overdue amounts in
         respect of the Debentures, 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

                                       38
<PAGE>
         the reasonable compensation, expenses, disbursements and advances of
         the Trustee, its agents and counsel or any other amounts due the
         Trustee under Section 7.7) and of the Holders allowed in such judicial
         proceeding; and

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7.

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

                  Section 6.10     Priorities. If the Trustee collects any money
pursuant to this Article 6, it shall pay out the money in the following order:

                  First: to the Trustee for amounts due under Section 7.7;

                  Second: to Securityholders for amounts due and unpaid on the
         Debentures for any accrued and unpaid interest installments, the
         Principal Amount, Redemption Price, Purchase Price, Change in Control
         Purchase Price, Additional Interest, if any, or interest, if any, due
         on overdue amounts in respect of the Debentures, as the case may be,
         ratably, without preference or priority of any kind, according to such
         amounts due and payable on the Debentures; and

                  Third: the balance, if any, to the Company or, to the extent
         the Trustee collects any amount pursuant to the Guarantees from any
         Guarantor, to such Guarantor, as applicable.

                  The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section 6.10. At least 15 days
before such record date, the Trustee shall mail to each Securityholder, the
Company and any Guarantor from whom the Trustee collected any money pursuant to
this Article 6 a notice that states the record date, the payment date and the
amount to be paid.

                  Section 6.11     Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant (other than the Trustee)
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant. This
Section 6.11 does not apply to a suit by the Trustee,

                                       39
<PAGE>
a suit by a Holder pursuant to Section 6.6 or a suit by Holders of more than 10%
in aggregate Principal Amount of the Debentures at the time outstanding. This
Section 6.11 shall be in lieu of Section 315(e) of the TIA and such Section
315(e) is hereby expressly excluded from this Indenture, as permitted by the
TIA.

                  Section 6.12     Waiver of Stay, Extension or Usury Laws. Each
of the Company and the Guarantors covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury or other law wherever enacted, now or at any time hereafter in
force, which would prohibit or forgive the Company or such Guarantor, as the
case may be, from paying all or any portion of any interest installment, the
Principal Amount, Redemption Price, Purchase Price, Change in Control Purchase
Price, Additional Interest or interest, if any, due on overdue amounts in
respect of the Debentures, as contemplated herein, or which may affect the
covenants or the performance of this Indenture; and the Company and such
Guarantor (in each case, to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.

                                  ARTICLE VII

                                     TRUSTEE

                  Section 7.1      Duties of Trustee. (a) If an Event of Default
has occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs.

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

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

                  (2)      in the absence of bad faith on its part, the Trustee
         may conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon certificates or
         opinions furnished to the Trustee and conforming to the requirements of
         this Indenture, but in case of any such certificates or opinions which
         by any provision hereof are specifically required to be furnished to
         the Trustee, the Trustee shall examine the certificates and opinions to
         determine whether or not they conform to the requirements of this
         Indenture, but need not confirm or investigate the accuracy of
         mathematical calculations or other facts stated therein. This Section
         7.1(b) shall be in lieu of Section 3.15(a) of the TIA and such Section
         315(a) is hereby expressly excluded from this Indenture, as permitted
         by the TIA.

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

                                       40
<PAGE>
                  (1)      this paragraph (c) does not limit the effect of
         paragraph (b) of this Section 7.1;

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

                  (3)      the Trustee shall not be liable with respect to any
         action it takes or omits to take in good faith in accordance with a
         direction received by it pursuant to Section 6.5.

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

                  (d)      Every provision of this Indenture that in any way
         relates to the Trustee is subject to paragraphs (a), (b), (c) and (e)
         of this Section 7.1.

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

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

                  Section 7.2      Rights of Trustee. Subject to its duties and
responsibilities under the TIA,

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

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

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

                                       41
<PAGE>
                  (d)      The Trustee shall not be liable for any action taken,
         suffered, or omitted to be taken by it in good faith which it believes
         to be authorized or within its rights or powers conferred under this
         Indenture;

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

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

                  (g)      any request or direction of the Company mentioned
         herein shall be sufficiently evidenced by a Company Request or Company
         Order and any resolution of the Board of Directors may be sufficiently
         evidenced by a Board Resolution;

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

                  (i)      the Trustee shall not be deemed to have notice of any
         Default or Event of Default unless a Responsible Officer of the Trustee
         has actual knowledge thereof or unless written notice of any event
         which is in fact such a default is received by the Trustee at the
         Corporate Trust Office of the Trustee, and such notice references the
         Securities and this Indenture;

                  (j)      the rights, privileges, protections, immunities and
         benefits given to the Trustee, including its right to be indemnified,
         are extended to, and shall be enforceable by, the Trustee in each of
         its capacities hereunder, and to each agent, custodian and other Person
         employed to act hereunder; and

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

                                       42
<PAGE>
                  Section 7.3      Individual Rights of Trustee. The Trustee in
its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or its Affiliates with the
same rights it would have if it were not Trustee. Any Paying Agent, Registrar,
Conversion Agent or co-registrar may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.

                  Section 7.4      Trustee's Disclaimer. The Trustee makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use or application of
the proceeds from the Securities, it shall not be responsible for any statement
in the registration statement for the Securities under the Securities Act or in
any offering document for the Securities, the Indenture or the Securities (other
than its certificate of authentication), or the determination as to which
beneficial owners are entitled to receive any notices hereunder.

                  Section 7.5      Notice of Defaults. If a Default occurs and
if it is known to the Trustee, the Trustee shall give to each Securityholder
notice of the Default within 90 days after it occurs or, if later, within 15
days after it is known to the Trustee, unless such Default shall have been cured
or waived before the giving of such notice. Notwithstanding the preceding
sentence, except in the case of a Default described in Sections 6.1(a) and
6.1(b), the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of Securityholders. The second sentence of this Section 7.5 shall
be in lieu of the proviso to Section 315(b) of the TIA and such proviso is
hereby expressly excluded from this Indenture, as permitted by the TIA. The
Trustee shall not be deemed to have knowledge of a Default unless a Responsible
Officer of the Trustee has received written notice of such Default.

                  Section  7.6     Reports by Trustee to Holders. Within 60 days
after each May 15 beginning with the May 15 following the date of this
Indenture, the Trustee shall mail to each Securityholder a brief report dated as
of such May 15 that complies with TIA Section 313(a), if required by such
Section 313(a). The Trustee also shall comply with TIA Section 313(b).

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

                  Section 7.7      Compensation and Indemnity. The Company
agrees:

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

                  (b)      to reimburse the Trustee upon its request for all
         reasonable out-of-pocket expenses, disbursements and advances incurred
         or made by the Trustee in accordance with any provision of this
         Indenture (including the reasonable compensation and the

                                       43
<PAGE>
         expenses, advances and disbursements of its agents and counsel), except
         any such expense, disbursement or advance as may be attributable to its
         negligence, bad faith or willful misconduct; and

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

                  To secure the Company's payment obligations in this Section
7.7, the Trustee shall have a lien prior to the Securities on all money or
property held or collected by the Trustee, except that held in trust to pay
interest installments, the Principal Amount, Redemption Price, Purchase Price,
Change in Control Purchase Price, Additional Interest or interest, if any, due
on overdue amounts, as the case may be, in respect of any Debentures.

                  The Company's payment obligations pursuant to this Section 7.7
shall survive the discharge of this Indenture and the resignation or removal of
the Trustee. When the Trustee incurs expenses after the occurrence of a Default
specified in Section 6.1(f), the expenses, including the reasonable charges and
expenses of its counsel, are intended to constitute expenses of administration
under any bankruptcy law.

                  Section 7.8      Replacement of Trustee. A resignation or
removal of the Trustee and appointment of a successor Trustee shall become
effective only upon the successor Trustee's acceptance of appointment as
provided in this Section 7.8.

                  The Trustee may resign by so notifying the Company at least 30
days prior to the date of the proposed resignation. The Holders of a majority in
aggregate Principal Amount of the Debentures at the time outstanding may remove
the Trustee by so notifying the Trustee and the Company in writing. The Company
may at any time prior to the occurrence and continuation of an Event of Default
remove the Trustee by Company Order given at least 30 days prior to the date of
the proposed removal.

                  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 receiver or public officer takes charge of the
         Trustee or its property; or

                  (d)      the Trustee otherwise becomes incapable of acting.

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

                  A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company satisfactory in form and
substance to the retiring Trustee and the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Securityholders. The retiring Trustee shall promptly transfer all property held
by it as Trustee to the successor Trustee, subject to the lien provided for in
Section 7.7.

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

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

                  The Company shall give notice of any resignation and any
removal of the Trustee and each appointment of a successor Trustee to all
Securityholders. Each notice shall include the name of the successor Trustee and
the address of its Corporate Trust Office.

                  Section 7.9      Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets (including the administration of the
trust created by this Indenture) to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.

                  Section 7.10     Eligibility; Disqualification. The Trustee
shall at all times satisfy the requirements of TIA Sections 310(a)(1) and
310(b). The Trustee (or its parent holding company) shall have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. Nothing herein contained shall prevent the
Trustee from filing with the SEC the application referred to in the penultimate
paragraph of TIA Section 310(b).

                  Section 7.11     Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.

                                       45
<PAGE>
                                  ARTICLE VIII

                             DISCHARGE OF INDENTURE

                  Section 8.1      Discharge of Liability on Securities. When
(i) the Company delivers to the Trustee all outstanding Securities (other than
Securities replaced pursuant to Section 2.7) for cancellation or (ii) all
outstanding Securities have become due and payable and the Company or any
Guarantor deposits with the Trustee cash sufficient to pay all amounts due and
owing on all outstanding Securities (other than Securities replaced pursuant to
Section 2.7), and if in either case the Company or any Guarantor pays all other
sums payable hereunder by the Company, then this Indenture shall, subject to
Section 7.7, cease to be of further effect. The Trustee shall join in the
execution of a document prepared by the Company acknowledging satisfaction and
discharge of this Indenture on demand of the Company accompanied by an Officers'
Certificate and Opinion of Counsel and at the cost and expense of the Company.

                  Section 8.2      Repayment to the Company or Guarantor. The
Trustee and the Paying Agent shall return to the Company or any Guarantor, as
the case may be, upon written request any money or securities held by them for
the payment of any amount with respect to the Securities that remains unclaimed
for two years, subject to applicable unclaimed property law. After return to the
Company or such Guarantor, as applicable, Holders entitled to the money or
securities must look to the Company and the Guarantors for payment as general
creditors unless an applicable abandoned property law designates another person
and the Trustee and the Paying Agent shall have no further liability to the
Securityholders with respect to such money or securities for that period
commencing after the return thereof.

                                   ARTICLE IX

                                   AMENDMENTS

                  Section 9.1      Without Consent of Holders. The Company, the
Guarantors and the Trustee may amend this Indenture or the Securities without
the consent of any Securityholder, so long as such changes, other than those in
clause (b), do not materially and adversely affect the interests of the
Securityholder:

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

                  (b)      to comply with Article 5 or Section 10.4;

                  (c)      to secure the obligations of the Company under the
         Securities and this Indenture;

                  (d)      to add to the covenants of the Company or any
         Guarantor for the benefit of the Securityholders or to surrender any
         right or power conferred upon the Company or any Guarantor;

                  (e)      to make any change necessary for the registration of
         the Securities under the Securities Act or to comply with the TIA, or
         any amendment thereto, or to comply

                                       46
<PAGE>
         with any requirement of the SEC in connection with the qualification of
         the Indenture under the TIA; or

                           (f)      to add one or more additional Guarantors in
         respect of the Guarantees.

                  Section 9.2      With Consent of Holders. With the written
consent of the Holders of at least a majority in aggregate Principal Amount of
the Securities at the time outstanding, the Company, the Guarantors and the
Trustee may amend this Indenture or the Securities. However, without the consent
of each Securityholder affected, an amendment to this Indenture or the
Securities may not:

                  (a)      change the record or payment dates for interest
         installments, or reduce the rate of interest referred to in paragraph 1
         of the Debentures, or extend the time for payment of interest on any
         Debenture;

                  (b)      reduce the Principal Amount or change the Stated
         Maturity of any Debenture;

                  (c)      reduce the Redemption Price, Purchase Price or Change
         in Control Purchase Price of any Debenture;

                  (d)      make any Debenture payable in money or securities
         other than that stated in the Debenture;

                  (e)      make any change in Section 6.4, Section 6.7 or this
         Section 9.2, except to increase any percentage set forth therein;

                  (f)      make any change that adversely affects the right to
         convert any Debenture;

                  (g)      make any change that adversely affects the right to
         require the Company to purchase the Debentures in accordance with the
         terms thereof and this Indenture;

                  (h)      impair the right to institute suit for enforcement of
         any payment with respect to, or conversion of, the Debentures; or

                  (i)      modify the Guarantees in a manner adverse to Holders
         of the Securities.

                  It shall not be necessary for the consent of the Holders under
this Section 9.2 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof.

                  After an amendment under this Section 9.2 becomes effective,
the Company shall mail to each Holder a notice briefly describing the amendment.

                  Section 9.3      Compliance with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall comply with the
TIA.

                                       47
<PAGE>
                  Section 9.4      Revocation and Effect of Consents, Waivers
and Actions. Until an amendment, waiver or other action by Holders becomes
effective, a consent thereto by a Holder of a Security hereunder is a continuing
consent by the Holder and every subsequent Holder of that Security or portion of
the Security that evidences the same obligation as the consenting Holder's
Security, even if notation of the consent, waiver or action is not made on the
Security. However, any such Holder or subsequent Holder may revoke the consent,
waiver or action as to such Holder's Security or portion of the Security if the
Trustee receives the notice of revocation before the date the amendment, waiver
or action becomes effective. After an amendment, waiver or action becomes
effective, it shall bind every Securityholder.

                  Section 9.5      Notation on or Exchange of Securities.
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article 9 may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Securities
so modified as to conform, in the opinion of the Trustee and the Board of
Directors of the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for outstanding Securities.

                  Section 9.6      Trustee to Sign Supplemental Indentures. The
Trustee shall sign any supplemental indenture authorized pursuant to this
Article 9 if the amendment contained therein does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign such supplemental indenture. In signing such
supplemental indenture the Trustee shall receive, and (subject to the provisions
of Section 7.1) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that such amendment is authorized
or permitted by this Indenture.

                  Section 9.7      Effect of Supplemental Indentures. Upon the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.

                                    ARTICLE X

                                   CONVERSIONS

                  Section 10.1     Conversion Privilege. (a) Subject to and upon
compliance with the provisions of this Article, at the option of the Holder, any
Debenture or any portion of the principal amount thereof which is an integral
multiple of $1,000 may be converted at the principal amount thereof, or of such
portion thereof, into duly authorized, fully paid and nonassessable shares of
Common Stock, at the Conversion Price, determined as hereinafter provided, in
effect at the time of conversion:

                  (1)      on any Business Day if the Sale Price of the Common
         Stock for at least 20 Trading Days in the 30 consecutive Trading Day
         period ending on and including the

                                       48
<PAGE>
         Trading Day before the date of surrender for conversion is more than
         120% of the Conversion Price in effect on such preceding Trading Day;

                  (2)      during any period in which (i) the credit ratings
         assigned to the Debentures by either Moody's Investors Service, Inc. or
         Standard & Poor's Rating Services is lower than Ba1 or BB,
         respectively, or (ii) the credit rating assigned to the Debentures is
         suspended or withdrawn by either rating agency;

                  (3)      if the Company has called the Debentures for
         redemption; or

                  (4)      upon the occurrence of the corporate transactions
         specified in paragraph (b) of this Section 10.1.

                  The Company shall determine on a daily basis whether the
Debentures shall be convertible as a result of the occurrence of an event
specified in clause (1) above and, if the Debentures shall be so convertible,
the Company shall promptly deliver to the Trustee written notice thereof.
Whenever the Debentures shall become convertible pursuant to Section 10.1, the
Company or, at the Company's written request, the Trustee in the name and at the
expense of the Company, shall notify the Holders of the event triggering such
convertibility in the manner provided in Section 12.2, and the Company shall
also publicly announce such information and publish it on the Company's website.
Any notice so given shall be conclusively presumed to have been duly given,
whether or not the Holder receives such notice.

                  (b)      In addition, in the event that:

                  (1)      (A) the Company elects to distribute to all holders
         of its shares of Common Stock rights or warrants entitling them (for a
         period expiring within 60 days after the Record Date of such
         distribution) to subscribe for or purchase shares of Common Stock, at a
         price per share less than the Sale Price of the Common Stock on the
         Trading Day immediately preceding the announcement of such
         distribution, (B) the Company elects to distribute to all holders of
         its shares of Common Stock cash or other assets, debt securities or
         rights or warrants to purchase its securities, where the Fair Market
         Value (as determined by the Board of Directors) of such distribution
         per share of Common Stock exceeds 10% of the Sale Price of a share of
         Common Stock on the Trading Day immediately preceding the date of
         declaration of such distribution, or (C) a Change in Control occurs but
         Holders of Debentures do not have the right to require the Company to
         purchase their Debentures as a result of such Change in Control because
         either (i) the Sale Price of the Common Stock for specified periods (as
         described in the definition of Change in Control) exceeds the levels
         specified in the definition of Change in Control or (ii) the
         consideration received in such Change in Control consists of Capital
         Stock that is freely tradeable and the Debentures become convertible
         into that Capital Stock as specified in the definition of Change in
         Control, then, in each case, the Debentures may be surrendered for
         conversion at any time on or after the date that the Company gives
         notice to the Holders of such right, which shall be not less than 20
         days prior to the Ex-Dividend Time (as defined below) for such
         distribution, in the case of (A) or (B), or within 30 days after the
         occurrence of the Change in Control, in the case of (C), until either
         (x) the earlier of the close of business on the Business Day
         immediately

                                       49
<PAGE>
         preceding the Ex-Dividend Time and the date the Company announces that
         such distribution will not take place, in the case of (A) or (B), or
         (y) 30 days after the Company's delivery of the Change in Control
         Purchase Notice, in the case of (C); or

                  (2)      the Company is party to a consolidation, merger,
         binding share exchange or transfer or lease of all or substantially all
         of its assets pursuant to which the shares of Common Stock would be
         converted into, or into the right to receive, cash, securities or other
         property as set forth in Section 10.4 hereof, then the Debentures may
         be surrendered for conversion at any time from and after the date which
         is 15 days prior to the date announced by the Company as the
         anticipated effective time of such transaction until 15 days after the
         actual effective date of such transaction.

                  "Ex-Dividend Time" means, with respect to any issuance or
         distribution on shares of Common Stock, the first date on which the
         shares of Common Stock trade regular way on the principal securities
         market on which the shares of Common Stock are then traded without the
         right to receive such issuances or distribution.

                  Section 10.2     Conversion Procedure; Conversion Price;
Fractional Shares. (a) Each Debenture shall be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares (calculated to the
nearest 1/100th of a share) of Common Stock. The Debentures will be converted
into shares of Common Stock at the Conversion Price therefor. No payment or
adjustment shall be made in respect of dividends on the Common Stock or accrued
interest on a converted Debenture, except as described in this Article 10. The
Company shall not issue any fraction of a share of Common Stock in connection
with any conversion of Debentures, but instead shall, subject to Section 10.3(k)
hereof, make a cash payment (calculated to the nearest cent) equal to such
fraction multiplied by the Sale Price of the Common Stock on the last Trading
Day prior to the Conversion Date. Notwithstanding the foregoing, a Debenture in
respect of which a Holder has delivered a Company Notice exercising such
Holder's option to require the Company to repurchase such Debenture may be
converted only if such notice of exercise is withdrawn in accordance with
Section 3.9 hereof.

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

                  Before any such conversion, a Holder also shall pay all funds
required, if any, relating to interest on the Debentures, as provided in Section
10.9, and all taxes or duties, if any, as provided in Section 10.8.

                                       50
<PAGE>
            If more than one Debenture shall be surrendered for conversion at
one time by the same Holder, the number of full shares of Common Stock which
shall be deliverable upon conversion shall be computed on the basis of the
aggregate principal amount of the Debentures (or specified portions thereof to
the extent permitted thereby) so surrendered. Subject to the next succeeding
sentence, the Company will, as soon as practicable thereafter, issue and deliver
at said office or place to such Holder of a Debenture, or to such Holder's
nominee or nominees, certificates for the number of full shares of Common Stock
to which such Holder shall be entitled as aforesaid, together, subject to the
last sentence of paragraph (a) above, with cash in lieu of any fraction of a
share to which such Holder would otherwise be entitled. The Company shall not be
required to deliver certificates for shares of Common Stock while the stock
transfer books for such stock or the security register are duly closed for any
purpose, but certificates for shares of Common Stock shall be issued and
delivered as soon as practicable after the opening of such books or security
register.

                  (c)      If the Company exercises its option to redeem the
Debentures pursuant to Section 3.1, a Holder may nevertheless exercise its right
to convert such Debentures in accordance with this Article 10 at any time before
the close of business on the date that is two Business Days prior to the
Redemption Date.

                  (d)      A Debenture shall be deemed to have been converted as
of the close of business on the Conversion Date, and the person or persons
entitled to receive the Common Stock issuable upon such conversion shall be
treated for all purposes as the record Holder or Holders of such Common Stock as
of the close of business on such date.

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

                  Section 10.3     Adjustments of Conversion Price for Common
Stock. The conversion price (the "Conversion Price") means the Principal Amount
of Debentures that can be exchanged for one share of Common Stock, subject to
adjustments set forth herein. The initial Conversion Price shall be that set
forth in paragraph 8 of the Debentures. The Conversion Price shall be adjusted
from time to time as follows:

                  (a)      In case the Company shall, at any time or from time
to time while any of the Debentures are outstanding, pay a dividend or make a
distribution in shares of Common Stock to all holders of its outstanding shares
of Common Stock, then the Conversion Price in effect at the opening of business
on the date following the Record Date fixed for the determination of
stockholders entitled to receive such dividend or other distribution shall be
reduced by multiplying such Conversion Price by a fraction:

                  (1)      the numerator of which shall be the number of shares
         of Common Stock outstanding at the close of business on the Record Date
         fixed for such determination; and

                                       51
<PAGE>
                  (2)      the denominator of which shall be the sum of such
         number of shares and the total number of shares constituting such
         dividend or other distribution.

                  Such reduction shall become effective immediately after the
opening of business on the day following the Record Date fixed for such
determination. If any dividend or distribution of the type described in this
Section 10.3(a) is declared but not so paid or made, the Conversion Price shall
again be adjusted to the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.

                  (b)      In case the Company shall, at any time or from time
to time while any of the Debentures are outstanding, subdivide its outstanding
shares of Common Stock into a greater number of shares of Common Stock, then the
Conversion Price in effect at the opening of business on the day following the
day upon which such subdivision becomes effective shall be proportionately
reduced, and conversely, in case the Company shall, at any time or from time to
time while any of the Debentures are outstanding, combine its outstanding shares
of Common Stock into a smaller number of shares of Common Stock, then the
Conversion Price in effect at the opening of business on the day following the
day upon which such combination becomes effective shall be proportionately
increased.

                  Such reduction or increase, as the case may be, shall become
effective immediately after the opening of business on the day following the day
upon which such subdivision or combination becomes effective.

                  (c)      In case the Company shall, at any time or from time
to time while any of the Debentures are outstanding, issue rights or warrants
(other than any rights or warrants referred to in Section 10.3(d)) to all
holders of its shares of Common Stock entitling them to subscribe for or
purchase shares of Common Stock (or securities convertible into shares of Common
Stock) at a price per share (or having a conversion price per share) less than
the Sale Price on the Business Day immediately preceding the date of the
announcement of such issuance (treating the conversion price per share of the
securities convertible into Common Stock as equal to (x) the sum of (i) the
price for a unit of the security convertible into Common Stock and (ii) any
additional consideration initially payable upon the conversion of such security
into Common Stock divided by (y) the number of shares of Common Stock initially
underlying such convertible security), then the Conversion Price shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect at the opening of business on the date after such
date of announcement by a fraction:

                  (1)      the numerator of which shall be the number of shares
         of Common Stock outstanding on the close of business on the date of
         announcement, plus the number of shares or securities which the
         aggregate offering price of the total number of shares or securities so
         offered for subscription or purchase (or the aggregate conversion price
         of the convertible securities so offered) would purchase at such Sale
         Price of the Common Stock; and

                  (2)      the denominator of which shall be the number of
         shares of Common Stock outstanding at the close of business on the date
         of announcement, plus the total

                                       52
<PAGE>
         number of additional shares of Common Stock so offered for subscription
         or purchase (or into which the convertible securities so offered are
         convertible).

                  Such adjustment shall become effective immediately after the
opening of business on the day following the date of announcement of such
issuance. To the extent that shares of Common Stock (or securities convertible
into shares of Common Stock) are not delivered pursuant to such rights or
warrants, upon the expiration or termination of such rights or warrants, the
Conversion Price shall be readjusted to the Conversion Price which would then be
in effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of the delivery of only the number of shares of Common
Stock (or securities convertible into shares of Common Stock) actually
delivered. In the event that such rights or warrants are not so issued, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if the date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed. In determining
whether any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such Sale Price, and in determining the
aggregate offering price of such shares of Common Stock, there shall be taken
into account any consideration received for such rights or warrants, the value
of such consideration if other than cash, to be determined by the Board of
Directors.

                  (d)      In case the Company shall, at any time or from time
to time while any of the Debentures are outstanding, by dividend or otherwise,
distribute to all holders of its shares of Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation and the Common Stock is not changed or
exchanged), cash, shares of its capital stock (other than any dividends or
distributions to which Section 10.3(a) applies), evidences of its Indebtedness
or other assets, including securities, but excluding (i) any rights or warrants
referred to in Section 10.3(c), (ii) dividends or distributions of stock,
securities or other property or assets (including cash) in connection with a
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance to which Section 10.4 applies and (iii)
dividends and distributions paid exclusively in cash (such capital stock,
evidence of its Indebtedness, cash, other assets or securities being distributed
hereinafter in this Section 10.3(d) called the "distributed assets"), then, in
each such case, subject to the third and fourth succeeding paragraphs and the
last sentence of this Section 10.3(d), the Conversion Price shall be reduced so
that the same shall be equal to the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on the
Record Date with respect to such distribution by a fraction:

                  (1)      the numerator of which shall be the Current Market
         Price of the Common Stock, less the Fair Market Value on such date of
         the portion of the distributed assets so distributed applicable to one
         share of Common Stock (determined on the basis of the number of shares
         of Common Stock outstanding on the record date)(determined as provided
         in Section 10.3(g)) on such date; and

                  (2)      the denominator of which shall be such Current Market
         Price.

                  Such reduction shall become effective immediately prior to the
opening of business on the day following the Record Date for such distribution.
In the event that such dividend or distribution is not so paid or made, the
Conversion Price shall again be adjusted to be

                                       53
<PAGE>
the Conversion Price which would then be in effect if such dividend or
distribution had not been declared.

                  If the Board of Directors determines the Fair Market Value of
any distribution for purposes of this Section 10.3(d) by reference to the actual
or when issued trading market for any distributed assets comprising all or part
of such distribution, it must in doing so consider the prices in such market
over the same period (the "Reference Period") used in computing the Current
Market Price pursuant to Section 10.3(g) to the extent possible, unless the
Board of Directors determines in good faith that determining the Fair Market
Value during the Reference Period would not be in the best interest of the
Holders.

                  In the event any such distribution consists of shares of
capital stock of, or similar equity interests in, one or more of the Company's
Subsidiaries (a "Spin-Off"), the Fair Market Value of the securities to be
distributed shall equal the average of the closing sale prices of such
securities on the principal securities market on which such securities are
traded for the five consecutive Trading Days commencing on and including the
sixth day of trading of those securities after the effectiveness of the
Spin-Off, and the Current Market Price shall be measured for the same period. In
the event, however, that an underwritten initial public offering of the
securities in the Spin-Off occurs simultaneously with the Spin-Off, Fair Market
Value of the securities distributed in the Spin-Off shall mean the initial
public offering price of such securities and the Current Market Price shall mean
the Sale Price for the Common Stock on the same Trading Day.

                  Rights or warrants distributed by the Company to all holders
of its shares of Common Stock entitling them to subscribe for or purchase shares
of the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events ("Trigger Event"), (i) are deemed to be transferred with such
shares of Common Stock, (ii) are not exercisable and (iii) are also issued in
respect of future issuances of shares of Common Stock shall be deemed not to
have been distributed for purposes of this Section 10.3(d) (and no adjustment to
the Conversion Price under this Section 10.3(d) will be required) until the
occurrence of the earliest Trigger Event. If such right or warrant is subject to
subsequent events, upon the occurrence of which such right or warrant shall
become exercisable to purchase different distributed assets, evidences of
indebtedness or other assets, or entitle the holder to purchase a different
number or amount of the foregoing or to purchase any of the foregoing at a
different purchase price, then the occurrence of each such event shall be deemed
to be the date of issuance and record date with respect to a new right or
warrant (and a termination or expiration of the existing right or warrant
without exercise by the holder thereof). In addition, in the event of any
distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto, that resulted in an adjustment to the Conversion Price under
this Section 10.3(d):

                  (1)      in the case of any such rights or warrants which
         shall all have been redeemed or repurchased without exercise by any
         holders thereof, the Conversion Price shall be readjusted upon such
         final redemption or repurchase to give effect to such distribution or
         Trigger Event, as the case may be, as though it were a cash
         distribution, equal to the per share redemption or repurchase price
         received by a holder of shares of Common Stock with respect to such
         rights or warrants (assuming such holder had

                                       54
<PAGE>
         retained such rights or warrants), made to all holders of shares of
         Common Stock as of the date of such redemption or repurchase; and

                  (2)      in the case of such rights or warrants which shall
         have expired or been terminated without exercise, the Conversion Price
         shall be readjusted as if such rights and warrants had never been
         issued.

                  For purposes of this Section 10.3(d) and Sections 10.3(a),
10.3(b) and 10.3(c), any dividend or distribution to which this Section 10.3(d)
is applicable that also includes (i) shares of Common Stock, (ii) a subdivision
or combination of shares of Common Stock to which Section 10.3(b) applies or
(iii) rights or warrants to subscribe for or purchase shares of Common Stock to
which Section 10.3(c) applies (or any combination thereof), shall be deemed
instead to be:

                  (1)      a dividend or distribution of the evidences of
         indebtedness, assets, shares of capital stock, rights or warrants,
         other than such shares of Common Stock, such subdivision or combination
         or such rights or warrants to which Sections 10.3(a), 10.3(b) and
         10.3(c) apply, respectively (and any Conversion Price reduction
         required by this Section 10.3(d) with respect to such dividend or
         distribution shall then be made), immediately followed by

                  (2)      a dividend or distribution of such shares of Common
         Stock, such subdivision or combination or such rights or warrants (and
         any further Conversion Price reduction required by Sections 10.3(a),
         10.3(b) and 10.3(c) with respect to such dividend or distribution shall
         then be made), except:

                           (A)      the Record Date of such dividend or
                  distribution shall be substituted as (i) "Record Date fixed
                  for the determination of stockholders entitled to receive such
                  dividend or other distribution," "Record Date fixed for such
                  determination" and "Record Date" within the meaning of Section
                  10.3(a), (ii) "the day upon which such subdivision becomes
                  effective" and "the day upon which such combination becomes
                  effective" within the meaning of Section 10.3(b), and (iii) as
                  "the date fixed for the determination of stockholders entitled
                  to receive such rights or warrants," "the Record Date fixed
                  for the determination of the stockholders entitled to receive
                  such rights or warrants" and such "Record Date" within the
                  meaning of Section 10.3(c); and

                           (B)      any shares of Common Stock included in such
                  dividend or distribution shall not be deemed "outstanding at
                  the close of business on the date fixed for such
                  determination" within the meaning of Section 10.3(a) and any
                  reduction or increase in the number of shares of Common Stock
                  resulting from such subdivision or combination shall be
                  disregarded in connection with such dividend or distribution.

                  In the event of any distribution referred to in this Section
10.3(d) in which (1) the Fair Market Value (as determined by the Board of
Directors) of such distribution applicable to one share of Common Stock
(determined as provided above) equals or exceeds the average of the Sale Prices
of the Common Stock over the ten consecutive Trading Day period ending on the

                                       55
<PAGE>
Record Date for such distribution or (2) the average of the Sale Prices of the
Common Stock over the ten consecutive Trading Day period ending on the Record
Date for such distribution exceeds the Fair Market Value of such distribution by
less than $1.00, then, in each such case, in lieu of an adjustment to the
Conversion Price, adequate provision shall be made so that each Holder shall
have the right to receive upon conversion of a Debenture, in addition to shares
of Common Stock, the kind and amount of such distribution such Holder would have
received had such Holder converted such Debenture immediately prior to the
Record Date for determining the shareholders entitled to receive the
distribution.

                  In the event of any distribution referred to in Section
10.3(c) or 10.3(d), where, in the case of a distribution described in Section
10.3(d), the Fair Market Value of such distribution per share of Common Stock
(as determined by the Board of Directors) exceeds 10% of the Sale Price of a
share of Common Stock on the Business Day immediately preceding the declaration
date for such distribution, then, if such distribution would also trigger a
conversion right under Section 10.1(b) or the Debentures are otherwise
convertible pursuant to this Article 10, the Company will be required to give
notice to the Holders of Debentures at least 20 days prior to the Ex-Dividend
Time for the distribution and, upon the giving of notice, the Debentures may be
surrendered for conversion at any time on and after the date that the Company
gives notice to the Holders of such conversion right, until the close of
business on the Business Day prior to the Ex-Dividend Time or the Company
announces that such distribution will not take place. No adjustment to the
Conversion Price or the ability of a Holder of a Debenture to convert will be
made if the Holder will otherwise participate in such distribution without
conversion.

                  (e)      In case the Company shall, at any time or from time
to time while any of the Debentures are outstanding, by dividend or otherwise,
distribute to all holders of its shares of Common Stock, cash (excluding any
cash that is distributed upon a reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance to which Section 10.4
applies or as part of a distribution referred to in Section 10.3(d)), in an
aggregate amount that, combined together with:

                  (1)      the aggregate amount of any other such distributions
         to all holders of shares of Common Stock made exclusively in cash
         within the 12 months preceding the date of payment of such
         distribution, and in respect of which no adjustment pursuant to this
         Section 10.3(e) has been made; and

                  (2)      the aggregate amount of any cash, plus the Fair
         Market Value (as determined by the Board of Directors) of consideration
         payable in respect of any tender offer by the Company or any of its
         Subsidiaries for all or any portion of the shares of Common Stock
         concluded within the 12 months preceding the date of such distribution,
         and in respect of which no adjustment pursuant to Section 10.3(f) has
         been made;

exceeds 10% of the product of the Current Market Price of the Common Stock on
the Record Date with respect to such distribution, times the number of shares of
Common Stock outstanding on such date, then, and in each such case, immediately
after the close of business on such date, the Conversion Price shall be reduced
so that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the close of business on such Record Date
by a fraction:

                                       56
<PAGE>
                  (1)      the numerator of which shall be equal to the Current
         Market Price on the Record Date, less an amount equal to the quotient
         of (x) the excess of such combined amount over such 10% and (y) the
         number of shares of Common Stock outstanding on the Record Date; and

                  (2)      the denominator of which shall be equal to the
         Current Market Price on such date.

                  However, in the event that the then Fair Market Value (as so
determined) of the portion of cash and other securities, if any, so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price on the Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to receive upon
conversion of a Debenture (or any portion thereof) the amount of cash in excess
of such 10% such Holder would have received had such Holder converted such
Debenture (or portion thereof) immediately prior to such Record Date. In the
event that such dividend or distribution is not so paid or made, the Conversion
Price shall again be adjusted to be the Conversion Price which would then be in
effect if such dividend or distribution had not been declared.

                  (f)      In case a tender offer made by the Company or any of
its Subsidiaries for all or any portion of the shares of Common Stock shall
expire and such tender offer (as amended upon the expiration thereof) shall
require the payment to stockholders (based on the acceptance (up to any maximum
specified in the terms of the tender offer) of shares tendered) of an aggregate
consideration having a Fair Market Value (as determined by the Board of
Directors) that combined together with:

                  (1)      the aggregate amount of the cash, plus the Fair
         Market Value (as determined by the Board of Directors), as of the
         expiration of such tender offer, of consideration payable in respect of
         any other tender offers, by the Company or any of its Subsidiaries for
         all or any portion of the shares of Common Stock expiring within the 12
         months preceding the expiration of such tender offer and in respect of
         which no adjustment pursuant to this Section 10.3(f) has been made; and

                  (2)      the aggregate amount of any distributions to all
         holders of shares of Common Stock made exclusively in cash within 12
         months preceding the expiration of such tender offer and in respect of
         which no adjustment pursuant to Section 10.3(e) has been made;

exceeds 10% of the product of the Current Market Price of the Common Stock as of
the last time (the "Expiration Time") tenders could have been made pursuant to
such tender offer (as it may be amended), times the number of shares of Common
Stock outstanding (including any tendered shares) on the Expiration Time (such
excess, the "Excess Amount"), then, and in each such case, immediately prior to
the opening of business on the day after the date of the Expiration Time, the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on the date of the Expiration Time by a fraction:

                                       57
<PAGE>
                  (1)      the numerator of which shall be (x) the product of
         (i) the number of shares of Common Stock outstanding (including any
         tendered shares) at the Expiration Time and (ii) the Current Market
         Price of the Common Stock at the Expiration Time, less (y) the Excess
         Amount; and

                  (2)      the denominator shall be the product of the number of
         shares of Common Stock outstanding (including any tendered shares) at
         the Expiration Time and the Current Market Price of the Common Stock at
         the Expiration Time.

                  Such reduction (if any) shall become effective immediately
prior to the opening of business on the day following the Expiration Time. In
the event that the Company is obligated to purchase shares pursuant to any such
tender offer, but the Company is permanently prevented by applicable law from
effecting any such purchases or all or a portion of such purchases are
rescinded, the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such (or such portion of the) tender
offer had not been made. If the application of this Section 10.3(f) to any
tender offer would result in an increase in the Conversion Price, no adjustment
shall be made for such tender offer under this Section 10.3(f).

                  (g)      For purposes of this Article 10, the following terms
shall have the meanings indicated:

                  "Current Market Price" on any date means the average of the
daily Sale Prices per share of Common Stock for the ten consecutive Trading Days
immediately prior to such date; provided, however, that if:

                  (1)      the "ex" date (as hereinafter defined) for any event
         (other than the issuance or distribution requiring such computation)
         that requires an adjustment to the Conversion Price pursuant to Section
         10.3(a), (b), (c), (d), (e) or (f) occurs during such ten consecutive
         Trading Days, the Sale Price for each Trading Day prior to the "ex"
         date for such other event shall be adjusted by dividing such Sale Price
         by the same fraction by which the Conversion Price is so required to be
         adjusted as a result of such other event;

                  (2)      the "ex" date for any event (other than the issuance
         or distribution requiring such computation) that requires an adjustment
         to the Conversion Price pursuant to Section 10.3(a), (b), (c), (d), (e)
         or (f) occurs on or after the "ex" date for the issuance or
         distribution requiring such computation and prior to the day in
         question, the Sale Price for each Trading Day on and after the "ex"
         date for such other event shall be adjusted by dividing such Sale Price
         by the reciprocal of the fraction by which the Conversion Price is so
         required to be adjusted as a result of such other event; and

                  (3)      the "ex" date for the issuance or distribution
         requiring such computation is prior to the day in question, after
         taking into account any adjustment required pursuant to clause (1) or
         (2) of this proviso, the Sale Price for each Trading Day on or after
         such "ex" date shall be adjusted by adding thereto the amount of any
         cash and the Fair Market Value (as determined by the Board of Directors
         in a manner consistent with any determination of such value for
         purposes of Section 10.3(d), (e) or (f)) of the evidences of

                                       58
<PAGE>
         Indebtedness, shares of capital stock or assets being distributed
         applicable to one share of Common Stock as of the close of business on
         the day before such "ex" date.

For purposes of any computation under Section 10.3(f), if the "ex" date for any
event (other than the tender offer requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 10.3(a), (b), (c), (d),
(e) or (f) occurs on or after the Expiration Time for the tender or exchange
offer requiring such computation and prior to the day in question, the Sale
Price for each Trading Day on and after the "ex" date for such other event shall
be adjusted by dividing such Sale Price by the reciprocal of the fraction by
which the Conversion Price is so required to be adjusted as a result of such
other event. For purposes of this paragraph, the term "ex" date, when used:

                  (1)      with respect to any issuance or distribution, means
         the first date on which the shares of Common Stock trade regular way on
         the relevant exchange or in the relevant market from which the Sale
         Price was obtained without the right to receive such issuance or
         distribution;

                  (2)      with respect to any subdivision or combination of
         shares of Common Stock, means the first date on which the shares of
         Common Stock trade regular way on such exchange or in such market after
         the time at which such subdivision or combination becomes effective;
         and

                  (3)      with respect to any tender or exchange offer, means
         the first date on which the shares of Common Stock trade regular way on
         such exchange or in such market after the Expiration Time of such
         offer.

Notwithstanding the foregoing, whenever successive adjustments to the Conversion
Price are called for pursuant to this Section 10.3, such adjustments shall be
made to the Current Market Price as may be necessary or appropriate to
effectuate the intent of this Section 10.3 and to avoid unjust or inequitable
results as determined in good faith by the Board of Directors.

            "Fair Market Value" shall mean the amount which a willing buyer
would pay a willing seller in an arm's length transaction (as determined by the
Board of Directors, whose determination shall be conclusive).

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

                  (h)      The Company shall be entitled to make such additional
reductions in the Conversion Price, in addition to those required by Sections
10.3(a), (b), (c), (d), (e) and (f), as shall be necessary in order that any
dividend or distribution of Common Stock, any subdivision, reclassification or
combination of shares of Common Stock or any issuance of rights or warrants

                                       59
<PAGE>
referred to above shall not be taxable to the holders of Common Stock for United
States federal income tax purposes.

                  (i)      To the extent permitted by applicable law, the
Company may, from time to time, reduce the Conversion Price by any amount for
any period of time, if such period is at least 20 days and the reduction is
irrevocable during the period. Whenever the Conversion Price is reduced pursuant
to the preceding sentence, the Company shall mail to the Trustee and each Holder
at the address of such Holder as it appears in the register of the Debentures
maintained by the Registrar, at least 15 days prior to the date the reduced
Conversion Price takes effect, a notice of the reduction stating the reduced
Conversion Price and the period during which it will be in effect.

                  (j)      In any case in which this Section 10.3 shall require
that any adjustment be made effective as of or retroactively immediately
following a Record Date, the Company may elect to defer (but only for five
Trading Days following the filing of the statement referred to in Section 10.5)
issuing to the Holder of any Debentures converted after such Record Date the
shares of Common Stock issuable upon such conversion over and above the shares
of Common Stock issuable upon such conversion on the basis of the Conversion
Price prior to adjustment; provided, however, that the Company shall deliver to
such Holder a due bill or other appropriate instrument evidencing such Holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.

                  (k)      All calculations under this Section 10.3 shall be
made to the nearest cent or one-hundredth of a share, with one-half cent and
0.005 of a share, respectively, being rounded upward. Notwithstanding any other
provision of this Section 10.3, the Company shall not be required to make any
adjustment of the Conversion Price unless such adjustment would require an
increase or decrease of at least 1% of such price. Any lesser adjustment shall
be carried forward and shall be made at the time of and together with the next
subsequent adjustment which, together with any adjustment or adjustments so
carried forward, shall amount to an increase or decrease of at least 1% in such
price. Any adjustments under this Section 10.3 shall be made successively
whenever an event requiring such an adjustment occurs.

                  (l)      In the event that at any time, as a result of an
adjustment made pursuant to this Section 10.3, the Holder of any Debentures
thereafter surrendered for conversion shall become entitled to receive any
shares of stock of the Company other than shares of Common Stock into which the
Debentures originally were convertible, the conversion price of such other
shares so receivable upon conversion of any such Debentures shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock contained in
subparagraphs (a) through (k) of this Section 10.3, and the provisions of
Sections 10.1, 10.2 and 10.4 through 10.9 with respect to the Common Stock shall
apply on like or similar terms to any such other shares and the determination of
the Board of Directors as to any such adjustment shall be conclusive.

                  (m)      No adjustment shall be made pursuant to this Section
10.3 (i) if the effect thereof would be to reduce the Conversion Price below the
par value (if any) of the Common Stock or (ii) if the Holders of the Debentures
may participate in the transaction that would otherwise give rise to an
adjustment pursuant to this Section 10.3.

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<PAGE>
                  Section 10.4      Consolidation or Merger of the Company. If
any of the following events occurs, namely:

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

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

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

the Company or the successor or purchasing corporation, as the case may be,
shall execute with the Trustee a supplemental indenture (which shall comply with
the Trust Indenture Act as in force at the date of execution of such
supplemental indenture, if such supplemental indenture is then required to so
comply) providing that such Debentures shall be convertible into the kind and
amount of shares of stock and other securities or property or assets (including
cash) which such Holder would have been entitled to receive upon such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance had such Debentures 'been converted into Common
Stock immediately prior to such reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance assuming such holder
of Common Stock did not exercise its rights of election, if any, as to the kind
or amount of securities, cash or other property receivable upon such merger,
consolidation, statutory share exchange, sale or conveyance (provided, that if
the kind or amount of securities, cash or other property receivable upon such
merger, consolidation, statutory share exchange, sale or conveyance is not the
same for each share of Common Stock in respect of which such rights of election
shall not have been exercised ("Non-Electing Share"), then for the purposes of
this Section 10.4, the kind and amount of securities, cash or other property
receivable upon such merger, consolidation, statutory share exchange, sale or
conveyance for each Non-Electing Share shall be deemed to be the kind and amount
so receivable per share by a plurality of the Non-Electing Shares). Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
10. If, in the case of any such reclassification, change, merger, consolidation,
statutory share exchange, combination, sale or conveyance, the stock or other
securities and assets receivable thereupon by a holder of Common Stock includes
shares of stock or other securities and assets of a corporation other than the
successor or purchasing corporation, as the case may be, in such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance, then such supplemental indenture shall also be
executed by such other corporation and shall contain such additional provisions
to protect the interests of the Holders of the Debentures as the Board of
Directors shall reasonably consider necessary by reason of the foregoing,
including to the extent practicable the provisions providing for the repurchase
rights set forth in Article 10 hereof.

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

                  The above provisions of this Section 10.4 shall similarly
apply to successive reclassifications, mergers, consolidations, statutory share
exchanges, combinations, sales and conveyances.

                  If this Section 10.4 applies to any event or occurrence,
Section 10.3 shall not apply.

                  Section 10.5      Notice of Adjustment. Whenever an adjustment
in the Conversion Price with respect to the Debentures is required:

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

                  (b)      a notice stating that the Conversion Price has been
         adjusted and setting forth the adjusted Conversion Price shall
         forthwith be given by the Company or, at the Company's written request,
         by the Trustee in the name and at the expense of the Company, to each
         Holder in the manner provided in Section 12.2. Any notice so given
         shall be conclusively presumed to have been duly given, whether or not
         the Holder receives such notice.

                  Section 10.6      Notice in Certain Events. In case:

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

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

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

then, in each case, the Company shall cause to be filed with the Trustee and the
Conversion Agent, and shall cause to be given, to the Holders of the Debentures
in the manner provided in Section 12.2, at least 15 days prior to the applicable
date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of any distribution or grant of rights or warrants
triggering an adjustment to the Conversion Price pursuant to this Article 10,
or, if a

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<PAGE>
record is not to be taken, the date as of which the holders of record of Common
Stock entitled to such distribution, rights or warrants are to be determined, or
(y) the date on which any reclassification, consolidation, merger, sale,
conveyance, dissolution, liquidation or winding up triggering an adjustment to
the Conversion Price pursuant to this Article 10 is expected to become
effective, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such reclassification, consolidation, merger
sale, conveyance, dissolution, liquidation or winding up.

                  Failure to give such notice or any defect therein shall not
affect the legality or validity of the proceedings described in clause (a), (b)
or (c) of this Section 10.6.

                  Section 10.7      Company to Reserve Stock; Registration;
Listing. (a) The Company shall, in accordance with the laws of the State of
Delaware, at all times reserve and keep available, free from preemptive rights,
out of a combination of its authorized but unissued shares of Common Stock or
its purchased shares of Common Stock which are then held in the treasury of the
Company, for the purpose of effecting the conversion of the Debentures, such
number of its duly authorized shares of Common Stock as shall from time to time
be sufficient to effect the conversion of all Debentures then Outstanding into
such Common Stock at any time (assuming that, at the time of the computation of
such number of shares or securities, all such Debentures would be held by a
single Holder). The Company covenants that all shares of Common Stock which may
be issued upon conversion of Debentures will upon issue be fully paid and
nonassessable and free from all liens and charges and, except as provided in
Section 10.8, taxes with respect to the issue thereof.

                  (b)      If any shares of Common Stock which would be issuable
upon conversion of Debentures hereunder require registration with or approval of
any governmental authority before such shares or securities may be issued upon
such conversion, the Company will in good faith and as expeditiously as possible
endeavor to cause such shares or securities to be duly registered or approved,
as the case may be. The Company further covenants that so long as the Common
Stock shall be listed on the New York Stock Exchange, the Company will, if
permitted by the rules of such exchange, list and keep listed all Common Stock
issuable upon conversion of the Debentures, and the Company will endeavor to
list the shares of Common Stock required to be delivered upon conversion of the
Debentures prior to such delivery upon any other national securities exchange
upon which the outstanding Common Stock is listed at the time of such delivery.

                  Section 10.8      Taxes on Conversion. The issue of stock
certificates on conversion of Debentures shall be made without charge to the
converting Holder for any documentary, stamp or similar issue or transfer taxes
in respect of the issue thereof, and the Company shall pay any and all
documentary, stamp or similar issue or transfer taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures pursuant hereto. The Company shall not, however, be required to pay
any such tax which may be payable in respect of any transfer involved in the
issue or delivery of shares of Common Stock or the portion, if any, of the
Debentures which are not so converted in a name other than that in which the
Debentures so converted were registered, and no such issue or delivery shall be
made unless and until the Person requesting such issue has paid to the Company

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<PAGE>
the amount of such tax or has established to the satisfaction of the Company
that such tax has been paid.

                  Section 10.9      Conversion After Record Date. Except as
provided below, if any Debentures are surrendered for conversion on any day
other than an Interest Payment Date, the Holder of such Debentures shall not be
entitled to receive any interest that has accrued on such Debentures since the
prior Interest Payment Date. By delivery to the Holder of the number of shares
of Common Stock or other consideration issuable upon conversion in accordance
with this Article 10, any accrued and unpaid interest on such Debentures will be
deemed to have been paid in full.

                  If any Debentures are surrendered for conversion subsequent to
the Record Date preceding an Interest Payment Date but on or prior to such
Interest Payment Date, the Holder of such Debentures at the close of business on
such Record Date shall receive the interest payable on such Debentures on such
Interest Payment Date notwithstanding the conversion thereof. However,
Debentures surrendered for conversion during the period from the close of
business on any Record Date preceding any Interest Payment Date to the opening
of business on such Interest Payment Date shall (except in the case of
Debentures which have been called for redemption on a Redemption Date within
such period) be accompanied by payment by Holders, for the account of the
Company, in New York Clearing House funds or other funds of an amount equal to
the interest payable on such Interest Payment Date on the Debentures being
surrendered for conversion. Except as provided in this Section 10.9, no
adjustments in respect of payments of interest on Debentures surrendered for
conversion or any dividends or distributions or interest on the Common Stock
issued upon conversion shall be made upon the conversion of any Debentures.

                  Section 10.10     Company Determination Final. Any
determination that the Company or the Board of Directors must make pursuant to
this Article 10 shall be conclusive if made in good faith and in accordance with
the provisions of this Article 10, absent manifest error, and set forth in a
Board Resolution.

                  Section 10.11     Responsibility of Trustee for Conversion
Provisions. The Trustee has no duty to determine when an adjustment under this
Article 10 should be made, how it should be made or what it should be. The
Trustee makes no representation as to the validity or value of any securities or
assets issued upon conversion of Debentures. The Trustee shall not be
responsible for any failure of the Company to comply with this Article 10. Each
Conversion Agent other than the Company shall have the same protection under
this Section 10.11 as the Trustee.

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

                  Section 10.12     Unconditional Right of Holders to Convert.
Notwithstanding any other provision in this Indenture, the Holder of any
Debenture shall have the right, which is absolute and unconditional, to convert
its Debenture in accordance with this Article 10 and to

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<PAGE>
bring an action for the enforcement of any such right to convert, and such
rights shall not be impaired or affected without the consent of such Holder.

                                   Article XI

                                   GUARANTEES

                  Section 11.1      Agreement to Guarantee. The Guarantors,
jointly and severally, hereby agree as follows:

                  (a)      The Guarantors fully and unconditionally guarantee to
each Holder of a Debenture authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, regardless of the validity and
enforceability of the Indenture, the Debentures or the obligations of the
Company under this Indenture or the Debentures, that:

                  (1)      the interest, Principal Amount, Redemption Price,
         Purchase Price, Change in Control Purchase Price and Additional
         Interest, if any, on the Debentures will be promptly paid in full when
         due, whether at maturity, by acceleration, redemption or otherwise, and
         interest, if any, due on overdue amounts, on the Debentures, to the
         extent lawful, and all other obligations of the Company to the Holders
         or the Trustee thereunder or under this Indenture, including the
         obligation of the Company to deliver shares of Common Stock to Holders
         upon conversion of the Securities, will be promptly paid or performed
         in full, all in accordance with the terms thereof; and

                  (2)      in case of any extension of time for payment or
         renewal of any Debenture or any of such other obligations, that the
         same will be promptly paid in full when due in accordance with the
         terms of the extension or renewal, whether at stated maturity, by
         acceleration or otherwise.

                  (b)      Notwithstanding the foregoing, in the event that the
         Guarantees would constitute or result in a violation of any applicable
         fraudulent conveyance or similar law of any relevant jurisdiction, the
         liability of the Guarantors under this Indenture shall be reduced to
         the maximum amount permissible under such fraudulent conveyance or
         similar law.

                  Section 11.2      Execution and Delivery of Guarantees. (a) To
evidence the Guarantees set forth in this Indenture, the Guarantors hereby agree
that a notation of such Guarantees shall be endorsed by an officer of each of
the Guarantors on each Debenture authenticated and delivered by the Trustee
after the date hereof.

                  (b)      Notwithstanding the foregoing, the Guarantors hereby
agree that the Guarantees set forth herein shall remain in full force and effect
notwithstanding any failure to endorse on each Debenture a notation of such
Guarantees.

                  (c)      The delivery of any Debenture by the Trustee, after
the authentication thereof under the Indenture, shall constitute due delivery of
the Guarantees set forth in this Indenture on behalf of the Guarantors.

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<PAGE>
                  (d)      The Guarantors hereby, jointly and severally, agree
that their obligations hereunder shall be unconditional, regardless of the
validity, regularity or enforceability of the Debentures or the Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Debentures with respect to any provisions of the Debentures or the
Indenture, the recovery of any judgment against the Company, any action to
enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor.

                  (e)      The Guarantors hereby waive diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that the
Guarantees made pursuant to this Indenture will not be discharged except by
complete performance of the obligations contained in the Debentures and the
Indenture.

                  (f)      If any Holder or the Trustee is required by any court
or otherwise to return to the Company or the Guarantors, or any Custodian,
Trustee, liquidator or other similar official acting in relation to either the
Company or the Guarantors, any amount paid by either to the Trustee or such
Holder, the Guarantees made pursuant to this Indenture, to the extent
theretofore discharged, shall be reinstated in full force and effect.

                  (g)      The Guarantors agree that they shall not be entitled
to any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. The Guarantors further agree that, as between the Guarantors,
on the one hand, and the Holders and the Trustee, on the other hand:

                  (1)      the maturity of the obligations guaranteed hereby may
         be accelerated as provided in Article 6 of the Indenture for the
         purposes of the Guarantees made pursuant to this Indenture,
         notwithstanding any stay, injunction or other prohibition preventing
         such acceleration in respect of the obligations guaranteed hereby;

                  (2)      in the event of any declaration of acceleration of
         such obligations as provided in Article 6 of the Indenture, such
         obligations (whether or not due and payable) shall forthwith become due
         and payable by the Guarantors for the purpose of the Guarantees made
         pursuant to this Indenture; and

                  (3)      the Guarantors shall have the right to seek
         contribution from any other non-paying Guarantor so long as the
         exercise of such right does not impair the rights of the Holders or the
         Trustee under the Guarantees made pursuant to this Indenture.

                  Section 11.3      No Recourse Against Others. No past, present
or future director, officer, employee, incorporator, stockholder or agent of the
Guarantors, as such, shall have any liability for any obligations of the Company
or any Guarantor under the Debentures, any Guarantees, this Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of the Debentures by accepting a Debenture waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Debentures. Such waiver may not be effective
to waive liabilities under the federal securities laws and it is the view of the
SEC that such a waiver is against public policy.

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<PAGE>
                  Section 11.4      Future Guarantees. The Company shall cause
each Subsidiary which becomes a guarantor under the Credit Agreement after the
date of this Indenture to promptly execute and deliver to (a) the Trustee, (i) a
Guarantee substantially in the form of the Supplemental Indenture attached as
Exhibit C hereto pursuant to which such Subsidiary shall fully and
unconditionally guarantee, on a joint and several basis, the full and prompt
payment of the interest, Principal Amount, Redemption Price, Purchase Price,
Change in Control Purchase Price and Additional Interest, if any, with respect
to the Debentures and (ii) an Opinion of Counsel stating that the supplemental
indenture is a legally binding and valid obligation of the Subsidiary,
enforceable against the Subsidiary in accordance with its terms subject to
bankruptcy, insolvency, reorganization, moratorium, or other laws relating to or
affecting creditors' rights and by general principles of equity, and (b) the
Holders, an acknowledgement that such Subsidiary shall become a party to the
Registration Rights Agreement.

                  Section 11.5      Release of Guarantees. Notwithstanding
anything in this Article 11 to the contrary, concurrently with the payment or
performance in full of (i) all amounts due and owing on all outstanding
Securities and (ii) all other obligations of the Company under this Indenture,
the Guarantors shall be released from and relieved from their obligations under
this Article 11. Upon the delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that the transaction giving
rise to the release of the Guarantees was made by the Company in accordance with
the provisions of this Indenture and the Securities, the Trustee shall execute
any documents reasonably required in order to evidence the release of the
Guarantors from their obligations under the Guarantees. If any of the
obligations of the Company are revived and reinstated after the termination of
the Guarantees, then all of the obligations of the Guarantors under the
Guarantees shall be revived and reinstated as if such Guarantees had not been
terminated until such time as all the amounts due and owing on all outstanding
Securities are paid in full, and each Guarantor shall enter into an amendment to
the Guarantees, reasonably satisfactory to the Trustee, evidencing such revival
and reinstatement.

                                   Article XII

                                  MISCELLANEOUS

                  Section 12.1      Trust Indenture Act Controls. If any
provision of this Indenture limits, qualifies, or conflicts with another
provision which is required to be included in this Indenture by the TIA, the
required provision shall control.

                  Section 12.2      Notices. Any request, demand, authorization,
notice, waiver, consent or communication shall be in writing and delivered in
person or mailed by first-class mail, postage prepaid, addressed as follows or
transmitted by facsimile transmission (confirmed by guaranteed overnight
courier) to the following facsimile numbers:

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<PAGE>
                 if to the Company or any Guarantor, to:

                 GTECH Holdings Corporation
                 55 Technology Way
                 West Greenwich, Rhode Island 02817
                 Attention: General Counsel
                 Facsimile No.: (401) 392-0391

                 with a copy to:

                 Edwards & Angell, LLP
                 2800 Financial Plaza
                 Providence, Rhode Island 02903
                 Attention: Laura N. Wilkinson, Esq.
                 Facsimile No.: (401) 276-6611

                 if to the Trustee, to:

                 The Bank of New York
                 101 Barclay Street, Floor 21 West
                 New York, New York 10286
                 Attention: Corporate Trust Administration
                 Facsimile No.: (212) 896-7298

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

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

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

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

                  Section 12.3      Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent and any other applicable Person shall have the protection of
TIA Section 312(c).

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<PAGE>
                  Section 12.4      Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:

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

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

                  Section 12.5      Statements Required in Certificate or
Opinion. Each Officers' Certificate or Opinion of Counsel with respect to
compliance with a covenant or condition provided for in this Indenture shall
include:

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

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

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

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

                  Section 12.6      Separability Clause. In case any provision
in this Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

                  Section 12.7      Rules by Trustee, Paying Agent, Conversion
Agent and Registrar. The Trustee may make reasonable rules for action by, or a
meeting of, Securityholders. The Registrar, the Conversion Agent and the Paying
Agent may make reasonable rules for their functions.

                  Section 12.8      Legal Holidays. A "Legal Holiday" is any day
other than a Business Day. If any specified date (including a date for giving
notice) is a Legal Holiday, the action shall be taken on the next succeeding day
that is not a Legal Holiday, and, if the action to be taken on such date is a
payment in respect of the Securities, no interest, if any, shall accrue for the
intervening period.

                  Section 12.9      Governing Law. THE LAWS OF THE STATE OF NEW
YORK SHALL GOVERN THIS INDENTURE AND THE SECURITIES.

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<PAGE>
                  Section 12.10     No Recourse Against Others. A director,
officer, employee or stockholder, as such, of the Company shall not have any
liability for any obligations of the Company under the Debentures or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Debenture, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Debentures.

                  Section 12.11     Successors. All agreements of the Company
and the Guarantors in this Indenture and the Securities shall bind their
respective successors. All agreements of the Trustee in this Indenture shall
bind its successor.

                  Section 12.12     Multiple Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough to
prove this Indenture.

                  Section 12.13     Waiver of Jury Trial. Each of the Company,
the Guarantors and the Trustee hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Indenture, the Securities or the
transactions contemplated hereby.

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

                              GTECH HOLDINGS CORPORATION

                              By:_____________________________
                                 Name:
                                 Title:

                              GTECH CORPORATION

                              By:_____________________________
                                 Name:
                                 Title:

                              GTECH RHODE ISLAND CORPORATION

                              By:_____________________________
                                 Name:
                                 Title:

                              GTECH LATIN AMERICA CORPORATION

                              By:_____________________________
                                 Name:
                                 Title:

                              THE BANK OF NEW YORK,
                              as Trustee

                              By:_____________________________
                                 Name:
                                 Title:

                                       71

<PAGE>
                                   EXHIBIT A-1

                        [FORM OF FACE OF GLOBAL SECURITY]

                  FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE
CODE, THE ISSUE PRICE OF EACH SECURITY IS $1,000 PER $1,000 OF PRINCIPAL AMOUNT,
THE ISSUE DATE IS DECEMBER 18, 2001 AND THE YIELD TO MATURITY FOR PURPOSES OF
ACCRUING ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES
IS 7.13% PER ANNUM. THIS SECURITY IS ISSUED WITH AN INDETERMINATE AMOUNT OF
ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. U.S.
HOLDERS OF THIS SECURITY MAY OBTAIN THE PROJECTED PAYMENT SCHEDULE FOR THIS
SECURITY BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: GTECH HOLDINGS
CORPORATION, 55 TECHNOLOGY WAY, WEST GREENWICH, RHODE ISLAND 02817, ATTENTION:
TREASURER.

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

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

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

                  THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY, AND THE COMMON STOCK
DELIVERABLE UPON CONVERSION OF THIS SECURITY OR UPON PURCHASE OF THIS SECURITY
BY THE COMPANY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY

                                     A-1-1
<PAGE>
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

                  THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (III) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT IN EACH OF CASES (I) THROUGH
(III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.

                           GTECH HOLDINGS CORPORATION

               1-3/4% Convertible Debentures due December 15, 2021

No.: ______________________               CUSIP:  __________________

Issue Date:  _____________                Principal Amount:  $_____________

         GTECH HOLDINGS CORPORATION, a Delaware corporation, promises to pay to
Cede & Co. or registered assigns, the Principal Amount of ______________________
dollars ($_____________), on December 15, 2021, subject to the further
provisions of this Debenture set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set forth at this
place. This Debenture is convertible as specified on the other side of this
Debenture.

         Interest Payment Dates: June 15 and December 15, commencing June 15,
2002

         Record Dates: June 1 and December 1, commencing June 1, 2002

                                     A-1-2
<PAGE>
                  IN WITNESS WHEREOF, the Company has caused this Debenture to
be signed by its duly authorized officer.

Dated:   _____________              GTECH HOLDINGS CORPORATION

                                    By: __________________________________
                                        Name:
                                        Title:

                                     A-1-3
<PAGE>
                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

By: __________________________________
           Authorized Signatory

Dated:

                                     A-1-4
<PAGE>
                       [FORM OF REVERSE SIDE OF DEBENTURE]

                           GTECH HOLDINGS CORPORATION

               1-3/4% Convertible Debentures due December 15, 2021

1.  Interest.

                  This Debenture shall accrue interest at an initial rate of
1-3/4% per annum. The Company promises to pay interest on the Debenture in cash
semiannually on each June 15 and December 15, commencing June 15, 2002, to
Holders of record on the immediately preceding June 1 and December 1,
respectively. Interest on the Debentures will accrue from the most recent date
to which interest has been paid or provided for, or if no interest has been paid
or provided for, from December 18, 2001, until the Principal Amount is paid or
duly made available for payment. Notwithstanding the foregoing, during any
six-month period from December 15 to June 14 and from June 15 to December 14,
commencing with the six-month period beginning December 15, 2006, if the average
Debenture Price for the five Trading Days ending on the second Trading Day
immediately preceding the relevant six-month period equals 120% or more of the
initial issue price of such Debenture, the interest rate on this Debenture shall
be automatically reset, and this Debenture shall accrue interest, from such
reset date to but not including the next succeeding reset date until the
Principal Amount is paid or duly made available for payment, at a rate per annum
equal to the interest rate payable on the date 120 days prior to such reset date
on 5-year U.S. Treasury Notes minus 254 basis points; provided, however, that in
no event will the interest rate on this Debenture be reset below 1.75% per annum
or above 2.50% per annum.

                  "Debenture Price", on any date of determination, means the
average of the secondary market bid quotations per $1,000 Principal Amount of
Debenture obtained by the bid solicitation agent for $10 million principal
amount of Debentures at approximately 4:00 p.m., New York City time, on such
determination date from three securities dealers in The City of New York (none
of which shall be an Affiliate of the Company); provided, however, that if:

                  (a) at least three such bids are not obtained by the Bid
         Solicitation Agent, or

                  (b) in the Company's reasonable judgment, the bid quotations
         are not indicative of the secondary market value of the Debentures on
         such determination date,

then the Debenture Price for such determination date shall equal the average of
the secondary market quotations per Debenture obtained by the Bid Solicitation
Agent from at least two unaffiliated securities dealers selected by the Company.

                  Upon determination that Holders will be entitled to receive
contingent interest which may become payable during a relevant six-month period,
on or prior to the first day of such six-month period, the Company shall issue a
press release and publish such information on its website or through such other
similar public medium, if any, as the Company may use at that time.

                                     A-1-5
<PAGE>
                  Any change in the interest rate pursuant to the preceding
sentence shall not have any effect on any other provision of the Indenture or
this Security. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. The Company will pay interest on any overdue Principal
Amount at the interest rate borne by the Securities at the time such interest on
the overdue Principal Amount accrues, compounded semiannually, and it shall pay
interest on overdue installments of interest and Additional Interest, if any
(without regard to any applicable grace period), at the same interest rate
compounded semiannually.

2.  Method of Payment.

                  The Company will pay interest on this Debenture (except
defaulted interest) to the Person who is the registered Holder of this Debenture
at the close of business on June 1 or December 1, as the case may be, next
preceding the related Interest Payment Date. Subject to the terms and conditions
of the Indenture, the Company will make payments in respect of the Redemption
Price, Purchase Price, Change in Control Purchase Price and the Principal Amount
at Stated Maturity, as the case may be, to the Holder who surrenders a Debenture
to a Paying Agent to collect such payments in respect of the Debenture. The
Company will pay cash amounts in money of the United States that at the time of
payment is legal tender for payment of public and private debts. However, the
Company may pay interest, the Redemption Price, Purchase Price, Change in
Control Purchase Price, Additional Interest, if any, and the Principal Amount at
Stated Maturity, as the case may be, by check or wire payable in such money;
provided, however, that a Holder holding Debentures with an aggregate Principal
Amount in excess of $2,000,000 will be paid by wire transfer in immediately
available funds at the election of such Holder. The Company may mail an interest
check to the Holder's registered address. Notwithstanding the foregoing, so long
as this Debenture is registered in the name of a Depositary or its nominee, all
payments hereon shall be made by wire transfer of immediately available funds to
the account of the Depositary or its nominee.

3.  Paying Agent, Conversion Agent, Bid Solicitation Agent and Registrar.

                  Initially, The Bank of New York (the "Trustee") will act as
Paying Agent, Conversion Agent, Registrar and bid solicitation agent. The
Company may appoint and change any Paying Agent, Conversion Agent, Registrar or
Bid Solicitation Agent without notice, other than notice to the Trustee;
provided that the Company will maintain at least one Paying Agent in the State
of New York, City of New York, Borough of Manhattan, which shall initially be an
office or agency of the Trustee. The Company or any of its Subsidiaries or any
of their Affiliates may act as Paying Agent, Conversion Agent or Registrar. None
of the Company or any of its Subsidiaries or any of their Affiliates shall act
as Bid Solicitation Agent.

4.  Indenture.

                  The Company issued the Debentures under an Indenture dated as
of December 18, 2001 (the "Indenture"), among the Company, the Guarantors and
the Trustee. The terms of the Debentures include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as in effect from time to time (the "TIA"). Capitalized terms used herein
and not defined herein have the meanings ascribed

                                     A-1-6
<PAGE>
thereto in the Indenture. The Debentures are subject to all such terms, and
Securityholders are referred to the Indenture and the TIA for a statement of
those terms.

                  The Debentures are general unsecured obligations of the
Company limited to $175,000,000 aggregate Principal Amount (subject to Section
2.2 of the Indenture). The Indenture does not limit other indebtedness of the
Company, secured or unsecured.

5.  Redemption at the Option of the Company.

                  No sinking fund is provided for the Debentures. The Debentures
are not redeemable prior to December 15, 2006. Beginning on December 15, 2006
and during the periods thereafter to maturity, subject to the terms and
conditions of the Indenture, the Debentures are redeemable as a whole, or from
time to time in part, in any integral multiple of $1,000, at any time at the
option of the Company at the Redemption Price equal to 100% of the Principal
Amount of the Debentures, together with accrued and unpaid interest up to but
not including the Redemption Date and Additional Interest, if any, thereon;
provided that, if the Redemption Date is on or after an interest record date but
on or prior to the related Interest Payment Date, interest will be payable to
the Holders in whose names the Debentures are registered at the close of
business on the relevant record date.

6.  Purchase by the Company at the Option of the Holder.

                  Subject to the terms and conditions of the Indenture, the
Company shall become obligated to purchase, at the option of the Holder, all or
any portion of the Debentures held by such Holder, in any integral multiple of
$1,000, on December 15, 2004, December 15, 2006, December 15, 2011 and December
15, 2016 (each, a "Purchase Date") at a Purchase Price (the "Purchase Price")
per Debenture equal to 100% of the aggregate Principal Amount of the Debenture,
together with accrued and unpaid interest up to but not including the Purchase
Date and Additional Interest, if any, thereon (provided that, if the Purchase
Date is on or after an interest record date but on or prior to the related
Interest Payment Date, interest will be payable to the Holders in whose names
the Debentures are registered at the close of business on the relevant record
date) upon delivery of a Purchase Notice containing the information set forth in
the Indenture, at any time from the opening of business on the date that is 20
Business Days prior to such Purchase Date until the close of business on the
fifth Business Day prior to such Purchase Date, and upon delivery of the
Debentures to the Paying Agent by the Holder as set forth in the Indenture.

                  The Company may choose to pay the Purchase Price in cash,
shares of Common Stock or a combination of both, as provided in, and subject to
the terms and conditions of, the Indenture.

                  At the option of the Holder and subject to the terms and
conditions of the Indenture, the Company shall become obligated to purchase the
Debentures held by such Holder 45 Business Days after the occurrence of a Change
in Control of the Company for a Change in Control Purchase Price equal to 100%
of the Principal Amount thereof plus accrued and unpaid interest up to but not
including the Change in Control Purchase Date and Additional Interest, if any,
thereon. The Change in Control Purchase Price shall be paid in cash.

                                     A-1-7
<PAGE>
                  Holders have the right to withdraw any Purchase Notice or
Change in Control Purchase Notice, as the case may be, by delivering to the
Paying Agent a written notice of withdrawal in accordance with the provisions of
the Indenture.

                  If cash or, subject to the terms and conditions of the
Indenture, shares of Common Stock sufficient to pay the Purchase Price or Change
in Control Purchase Price, as the case may be, plus cash in an amount sufficient
to pay accrued and unpaid interest and Additional Interest, if any, of all
Debentures or portions thereof to be purchased as of the Purchase Date or the
Change in Control Purchase Date, as the case may be, is deposited with the
Paying Agent on the Business Day following the Purchase Date or the Change in
Control Purchase Date, interest ceases to accrue on such Debentures (or portions
thereof) immediately after such Purchase Date or Change in Control Purchase
Date, and the Holder thereof shall have no other rights as such other than the
right to receive the Purchase Price or Change in Control Purchase Price, as the
case may be, together with accrued interest up to, but not including, the
Purchase Date or the Change in Control Purchase Date, as the case may be, and
Additional Interest, if any, thereon, upon surrender of such Debenture.

7.  Notice of Redemption.

                  Notice of redemption pursuant to paragraph 5 of this Debenture
will be mailed at least 15 days but not more than 60 days before the Redemption
Date to each Holder of Debentures to be redeemed at the Holder's registered
address. If money sufficient to pay the Redemption Price of all Debentures (or
portions thereof) to be redeemed on the Redemption Date, together with accrued
interest up to, but not including, the Redemption Date and Additional Interest,
if any, thereon is deposited with the Paying Agent prior to or on the Redemption
Date, immediately after such Redemption Date interest ceases to accrue on such
Debentures or portions thereof. Debentures in denominations larger than $1,000
of Principal Amount may be redeemed in part but only in integral multiples of
$1,000 of Principal Amount.

8.  Conversion.

                  Subject to and in compliance with the provisions of the
Indenture, a Holder is entitled, at such Holder's option, to convert the
Holder's Debentures (or any portion of the Principal Amount thereof that is
$1,000 or an integral multiple $1,000), into fully paid and nonassessable shares
of Common Stock at the Conversion Price in effect at the time of conversion.

                  The Company will notify Holders of any event triggering the
right to convert the Debentures as specified above in accordance with the
Indenture.

                  A Debenture in respect of which a Holder has delivered a
Purchase Notice exercising the option of such Holder to require the Company to
purchase such Debenture may be converted only if such notice of exercise is
withdrawn in accordance with the terms of the Indenture.

                  The initial Conversion Price is $55.00 per share of Common
Stock, subject to adjustment in certain events described in the Indenture. The
Company from time to time may voluntarily reduce the Conversion Price.

                                     A-1-8
<PAGE>
                  To surrender a Debenture for conversion, a Holder must (1)
complete and manually sign the conversion notice below (or complete and manually
sign a facsimile of such notice) and deliver such notice to the Conversion
Agent, (2) surrender the Debenture to the Conversion Agent, (3) furnish
appropriate endorsements and transfer documents and (4) pay any transfer or
similar tax, if required.

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

                  No payment or adjustment will be made for dividends on the
shares of Common Stock, except as provided in the Indenture.

                  If the Company (i) is a party to a consolidation, merger or
binding share exchange (ii) reclassifies the Common Stock or (iii) conveys,
transfers or leases its properties and assets substantially as an entirety to
any Person, the right to convert a Debentures into shares of Common Stock may be
changed into a right to convert it into securities, cash or other assets of the
Company or such other Person.

9.  Registration Rights.

                  The holder of this Debenture is entitled to the benefits of
the Registration Rights Agreement.

10.  Denominations; Transfer; Exchange.

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

11.  Persons Deemed Owners.

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

                                     A-1-9
<PAGE>
12.  Unclaimed Money or Securities.

                  The Trustee and the Paying Agent shall return to the Company
or any applicable Guarantor, as the case may be, upon written request any money
or securities held by them for the payment of any amount with respect to the
Debentures that remains unclaimed for two years, subject to applicable unclaimed
property law. After return to the Company or such Guarantor, Holders entitled to
the money or securities must look to the Company and the Guarantors, for payment
as general creditors unless an applicable abandoned property law designates
another person.

13.  Amendment; Waiver.

                  Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount of the Securities
at the time outstanding and (ii) certain Defaults may be waived with the written
consent of the Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding. Subject to certain exceptions set forth in
the Indenture, without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities so long as such changes, other
than those in clause (ii), do not materially and adversely affect the interest
of Securityholders (i) to cure any ambiguity, omission, defect or inconsistency,
(ii) to comply with Article 5 or Section 10.4 of the Indenture, (iii) to add to
the covenants of the Company or any Guarantor for the benefit of
Securityholders, to surrender any rights or power conferred upon the Company or
any Guarantor or to secure the Company's obligations under the Securities and
this Indenture, (iv) to comply with any requirement of the SEC in connection
with the qualification of the Indenture under the TIA, or (v) to add one or more
additional guarantors in respect of the Guarantees.

14.  Defaults and Remedies.

                  Under the Indenture, Events of Default include (i) default for
30 days in payment of any interest or Additional Interest, if any, on any
Securities after receipt by the Company of a Notice of Default, (ii) default in
payment of the Principal Amount, Redemption Price, Purchase Price, Change in
Control Purchase Price, as the case may be, in respect of the Securities when
the same becomes due and payable, (iii) failure by the Company or any Guarantor
to comply with other agreements in the Indenture or the Securities and such
failure continues for 90 days after receipt of a Notice of Default under the
Indenture; (iv) default by the Company or any Guarantor in the payment at the
final maturity thereof, after the expiration of any applicable grace period, of
principal of or interest on indebtedness for money borrowed, other than
nonrecourse indebtedness, in the principal amount then outstanding of $25
million or more, or acceleration of any indebtedness in such principal amount so
that it becomes due and payable prior to the date on which it would otherwise
have become due and payable and such acceleration is not rescinded within 10
business days after notice to the Company or such Guarantor, as applicable, in
accordance with the Indenture, (v) any Guarantee ceasing to be, or the Company
or such Guarantor asserting that such Guarantee shall not be, in full force and
effect and enforceable in accordance with its terms, except to the extent
contemplated by the Indenture or such Guarantee; and (vi) certain events of
bankruptcy or insolvency.

                                     A-1-10
<PAGE>
                  Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in aggregate
Principal Amount of the Securities at the time outstanding may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Securityholders notice of any continuing Default (except a Default in payment of
amounts specified in clause (i) or (ii) above) if it determines that withholding
notice is in their interests.

15.  Trustee Dealings with the Company or Guarantor.

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

16.  No Recourse Against Others.

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

17.  Authentication.

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

18.  Abbreviations.

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

19.  Governing Law.

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

                  The Company will furnish to any Securityholder upon written
request and without charge a copy of the Indenture which has in it the text of
this Debenture in larger type. Requests may be made to:

                  GTECH Holdings Corporation
                  55 Technology Way

                                     A-1-11
<PAGE>
                  West Greenwich, Rhode Island 02817
                  Attention:  Investor Relations
                  Facsimile No.:  (401) 392-0391

                                     A-1-12
<PAGE>
                  The Guarantors (as defined in the Indenture referred to in the
Debentures upon which this notation is endorsed and each hereinafter referred to
as a "Guarantor," which term includes any successor person under the Indenture)
have fully and unconditionally guaranteed on a senior unsecured basis (such
guarantees being collectively referred to herein as the "Guarantees") (i) the
due and punctual payment of the interest, Principal Amount, Redemption Price,
Purchase Price, Change in Control Purchase Price and Additional Interest, if
any, on the Debentures, whether at maturity, by acceleration, redemption or
otherwise, and interest, if any, due on overdue amounts on the Debentures, to
the extent lawful, and the due and punctual performance of all other obligations
of the Company to the Holders or the Trustee all in accordance with the terms
set forth in Article 11 of the Indenture and (ii) in the case of any extension
of time of payment or renewal of any Debenture or any of such other obligations,
that the same will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. The Guarantees shall be joint and several obligations
of the Guarantors.

                  No stockholder, officer, director, employee or incorporator,
as such, past, present or future, of any Guarantor shall have any liability
under the Guarantees by reason of his or its status as such stockholder,
officer, director, employee or incorporator.

                  The Guarantees shall not be valid or obligatory for any
purpose until the certificate of authentication on the Debentures upon which the
Guarantees are noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized signatories.

                                     A-1-13
<PAGE>
                  IN WITNESS WHEREOF, each Guarantor has caused the Guarantees
to be signed by it duly authorized officer.

                                                GTECH CORPORATION
                                                GTECH RHODE ISLAND CORPORATION
                                                GTECH LATIN AMERICA CORPORATION

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

                                     A-1-14
<PAGE>
<TABLE>
<CAPTION>
                ASSIGNMENT FORM                                        CONVERSION NOTICE
                ---------------                                        -----------------
<S>                                                       <C>
To assign this Security, fill in the form below:          To convert this Security into Common Stock
                                                          of the Company, check the box [   ]

I or we assign and transfer this Security to              To convert only part of this Security,
_________________________                                 state the Principal Amount to be converted
_________________________                                 (which must be $1,000 or an integral
(Insert assignee's soc. sec. or tax ID no.)               multiple of $1,000):

_________________________
_________________________                                 If you want the stock certificate made out
_________________________                                 in another person's name fill in the form
(Print or type assignee's name,                           below:
address and zip code)
                                                          _________________________
                                                          _________________________
and irrevocably appoint                                   (Insert the other person's soc. sec. tax
                                                          ID no.
___________________ agent to transfer this                __________________________
Security on the books of the Company.  The                __________________________
agent may substitute another to act for him.              __________________________
                                                          __________________________
                                                          (Print or type other person's name,
                                                          address and zip code)
</TABLE>

Date:  __________ Your Signature:  _________________________________

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

Signature Guaranteed

_____________________________________
Participant in a Recognized Signature
Guarantee Medallion Program

By: _________________________________
         Authorized Signatory

                                     A-1-15
<PAGE>
                                   EXHIBIT A-2

                         [FORM OF CERTIFICATED SECURITY]

                  FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE
CODE, THE ISSUE PRICE OF EACH SECURITY IS $1,000 PER $1,000 OF PRINCIPAL AMOUNT,
THE ISSUE DATE IS DECEMBER 18, 2001 AND THE YIELD TO MATURITY FOR PURPOSES OF
ACCRUING ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES
IS 7.13% PER ANNUM. THIS SECURITY IS ISSUED WITH AN INDETERMINABLE AMOUNT OF
ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. U.S.
HOLDERS OF THIS SECURITY MAY OBTAIN THE PROJECTED PAYMENT SCHEDULE FOR THIS
SECURITY BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: GTECH HOLDINGS
CORPORATION, 55 TECHNOLOGY WAY, WEST GREENWICH, RHODE ISLAND 02817, ATTENTION:
TREASURER.

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

                  THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY AND THE COMMON STOCK
DELIVERABLE UPON CONVERSION OF THIS SECURITY OR UPON PURCHASE OF THIS SECURITY
BY THE COMPANY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A THEREUNDER.

                  THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (III) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT IN EACH OF CASES (I) THROUGH
(III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.

                                     A-2-1
<PAGE>
                           GTECH HOLDINGS CORPORATION

               1-3/4% Convertible Debentures due December 15, 2021

No.:  ____________________                    CUSIP:  __________

Issue Date:  _____________________            Principal Amount: $_____________

                  GTECH HOLDINGS CORPORATION, a Delaware corporation, promises
to pay to Cede & Co. or registered assigns, the Principal Amount of
_____________________ dollars ($_____________), on December 15, 2021, subject to
the further provisions of this Debenture set forth on the reverse hereof, which
further provisions shall for all purposes have the same effect as if set forth
at this place. This Debenture is convertible as specified on the other side of
this Debenture.

                  Interest Payment Dates: June 15 and December 15, commencing
June 15, 2001

                  Record Dates: June 1 and December 1, commencing June 1, 2002

Dated:                                      GTECH HOLDINGS CORPORATION

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

                                     A-2-2
<PAGE>
                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

By  ________________________
              Authorized Signatory

Dated:

                                     A-2-3
<PAGE>
               [FORM OF REVERSE SIDE IS IDENTICAL TO EXHIBIT A-1]

                                     A-2-4
<PAGE>
                                                                       EXHIBIT B

                              Transfer Certificate

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

         [_]      A transfer of the Surrendered Securities is made to the
                  Company or any of its subsidiaries; or

         [_]      The transfer of the Surrendered Securities complies with Rule
                  144A under the U.S. Securities Act of 1933, as amended (the
                  "Securities Act"); or

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

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

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

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

DATE:                       __________________________________
                                       Signature(s)

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

Signature Guaranteed

_____________________________________
Participant in a Recognized Signature
Guarantee Medallion Program

By: _________________________________
          Authorized Signatory

                                      B-1
<PAGE>
                                                                       EXHIBIT C

                FORM OF SUPPLEMENTAL INDENTURE TO ADD GUARANTORS

                  This Supplemental Indenture, dated as of __________ (this
"Supplemental Indenture" or "Guarantee"), among [name of future Guarantor] (the
"New Guarantor"), GTECH Holdings Corporation (together with its successors and
assigns, the "Company"), each other then existing Guarantor under the Indenture
referred to below (the "Guarantors"), and The Bank of New York, as Trustee under
the Indenture referred to below.

                              W I T N E S S E T H:

                  WHEREAS, the Company, the Guarantors and the Trustee have
heretofore executed and delivered an Indenture, dated as of December 18, 2001
(as amended, supplemented, waived or otherwise modified, the "Indenture"),
providing for the issuance of an aggregate principal amount of $175 million of
1-3/4% Convertible Debentures due December 15, 2021 of the Company (the
"Debentures");

                  WHEREAS, Section 11.4 of the Indenture provides that the
Company is required to cause each Subsidiary which becomes a guarantor under the
Credit Agreement after the date of the Indenture to execute and deliver to the
Trustee a Supplemental Indenture pursuant to which such Subsidiary will fully
and unconditionally guarantee, on a joint and several basis with the other
Guarantors, the full and prompt payment of the Principal Amount, interest,
Redemption Price, Purchase Price, Change in Control Purchase Price and
Additional Interest, if any, on the Debentures on a senior basis, and the
performance of all other obligations of the Company to the Holders and the
Trustee all in accordance with the terms set forth in Article 11 of the
Indenture;

                  WHEREAS, pursuant to Section 9.1 of the Indenture, the
Trustee, the Company and the Guarantors are authorized to execute and deliver
this Supplemental Indenture to amend the Indenture, without the consent of any
Holder;

                  NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the New Guarantor, the Company, the other Guarantors and the
Trustee mutually covenant and agree for the equal and ratable benefit of the
Holders of the Debentures as follows:

                                    ARTICLE I

                                   DEFINITIONS

                  Section 1.1 Defined Terms. As used in this Supplemental
Indenture, terms defined in the Indenture or in the preamble or recital hereto
are used herein as therein defined, except that the term "Holders" in this
Guarantee shall refer to the term "Holders" as defined in the Indenture and the
Trustee acting on behalf or for the benefit of such holders. The words "herein,"
"hereof" and "hereby" and other words of similar import used in this
Supplemental

                                      C-1
<PAGE>
Indenture refer to this Supplemental Indenture as a whole and not to any
particular section hereof.

                                   ARTICLE II

                        AGREEMENT TO BE BOUND; GUARANTEE

                  Section 2.1 Agreement to be Bound. The New Guarantor hereby
becomes a party to the Indenture as a Guarantor and as such will have all of the
rights and be subject to all of the obligations and agreements of a Guarantor
under the Indenture. The New Guarantor agrees to be bound by all of the
provisions of the Indenture applicable to a Guarantor and to perform all of the
obligations and agreements of a Guarantor under the Indenture.

                  Section 2.2 Guarantee. The New Guarantor hereby fully,
unconditionally and irrevocably guarantees, as primary obligor and not merely as
surety, jointly and severally with each other Guarantor, to each Holder of the
Debentures and the Trustee, the full and punctual payment when due, whether at
maturity, upon redemption or repurchase, by declaration of acceleration or
otherwise, of the obligations pursuant to Article 11 of the Indenture on a
senior basis and subject to the terms and conditions of the Indenture.

                                   ARTICLE III

                                  MISCELLANEOUS

                  Section 3.1 Miscellaneous. All notices and other
communications to the New Guarantor shall be given as provided in the Indenture
to the New Guarantor, at its address set forth below, with a copy to the Company
as provided in the Indenture for notices to the Company.

                  Section 3.2 Parties. Nothing expressed or mentioned herein is
intended or shall be construed to give any Person, firm or corporation, other
than the Holders and the Trustee, any legal or equitable right, remedy or claim
under or in respect of this Supplemental Indenture or the Indenture or any
provision herein or therein contained.

                  Section 3.3 Governing Laws. This Supplemental Indenture shall
be governed by the laws of the State of New York.

                  Section 3.4 Severability Clause. In case any provision in this
Supplemental Indenture 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 and such provision shall be ineffective only to the
extent of such invalidity, illegality or unenforceability.

                  Section 3.5 Ratification of Indenture; Supplemental Indenture
Part of Indenture; Trustee's Disclaimer. Except as expressly amended hereby, the
Indenture is in all respects ratified and confirmed and all the terms,
conditions and provisions thereof shall remain in full force and effect. This
Supplemental Indenture shall form a part of the Indenture for all purposes, and
every Holder of Securities heretofore or hereafter authenticated and delivered
shall

                                      C-2
<PAGE>
be bound hereby. The Trustee makes no representation or warranty as to the
validity or sufficiency of this Supplemental Indenture.

                  Section 3.6 Counterparts. The parties hereto may sign one or
more copies of this Supplemental Indenture in counterparts, all of which
together shall constitute one and the same agreement.

                  Section 3.7 Headings. The headings of the Articles and the
sections in this Guarantee are for convenience of reference only and shall not
be deemed to alter or affect the meaning or interpretation of any provisions
hereof.

                                      C-3
<PAGE>
                  IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first above written.

                                 [NEW GUARANTOR],
                                 as a Guarantor

                                 By:_______________________________________
                                    Name:
                                    Title:

                                 THE BANK OF NEW YORK, as Trustee

                                 By:_______________________________________
                                    Name:
                                    Title:

                                 GTECH HOLDINGS CORPORATION

                                 By:_______________________________________
                                    Name:
                                    Title:

                                 GTECH CORPORATION

                                 By:_______________________________________
                                    Name:
                                    Title:

                                 GTECH RHODE ISLAND CORPORATION

                                 By:_______________________________________
                                    Name:
                                    Title:

                                 GTECH LATIN AMERICA CORPORATION

                                 By:_______________________________________
                                    Name:
                                    Title:

                                      C-4

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