Document:

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Exhibit 4.1

         THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAW. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE OFFERED, SOLD OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
REGISTRATION.

          THE HOLDER HEREOF, BY ITS ACCEPTANCE HEREOF, AGREES FOR THE BENEFIT OF
ALTIVA FINANCIAL CORPORATION (THE "COMPANY") THAT THIS NOTE MAY BE OFFERED, SOLD
OR OTHERWISE DISPOSED OF ONLY (1) TO THE COMPANY, (2) SO LONG AS THIS NOTE IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" ("QIB") AS DEFINED IN RULE 144A, THAT IS PURCHASING FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB TO WHOM NOTICE IS GIVEN THAT THE SALE OR
OTHER DISPOSITION IS BEING MADE IN RELIANCE ON RULE 144A, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), (4) TO AN "ACCREDITED INVESTOR," AS DEFINED IN RULE 501 UNDER
THE SECURITIES ACT ("ACCREDITED INVESTOR"), THAT IS ACQUIRING THIS NOTE FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER ACCREDITED INVESTOR FOR INVESTMENT
PURPOSES AND NOT FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, IF A
SIGNED CERTIFICATION LETTER (A FORM OF WHICH MAY BE OBTAINED FROM THE COMPANY)
IS DELIVERED BY THE TRANSFEREE TO THE COMPANY, (5) AS OTHERWISE PROVIDED IN THE
AGREEMENT (AS DEFINED BELOW) OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, AND IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, PROVIDED THAT,
NOTWITHSTANDING THE FOREGOING, SO LONG AS CERTAIN OF THE COLLATERAL FOR THIS
NOTE MAY BE HELD ONLY BY A QIB, AS REASONABLY DETERMINED BY THE COMPANY (THE
"COLLATERAL RESTRICTION"), THIS NOTE MAY BE OFFERED, SOLD OR OTHERWISE DISPOSED
OF ONLY PURSUANT TO CLAUSES (1) OR (2) ABOVE. BY PURCHASING THIS NOTE, THE
HOLDER HEREOF AGREES AND REPRESENTS FOR THE BENEFIT OF THE COMPANY THAT (A) IT
IS (1) A QIB WITHIN THE MEANING OF RULE 144A OR (2) IN THE EVENT THAT THE
COLLATERAL RESTRICTION IS NO LONGER IN EFFECT, AN ACCREDITED INVESTOR ACQUIRING
THIS NOTE FOR INVESTMENT PURPOSES FOR ITS OWN ACCOUNT

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OR THE ACCOUNT OF ANOTHER ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT
FOR DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT AND (B) IT WILL NOTIFY ANY
PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE.

         THIS AGREEMENT IS SUBJECT TO THE TERMS OF THE AMENDED AND RESTATED
SECURED CONVERTIBLE SENIOR NOTE PURCHASE AGREEMENT, DATED FOR REFERENCE PURPOSES
ONLY AS OF FEBRUARY 29, 2000, BETWEEN THE COMPANY AND VALUE PARTNERS, LTD. (AS
AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE "AGREEMENT").
COPIES OF THE AGREEMENT MAY BE OBTAINED FROM THE COMPANY.

         THIS AGREEMENT IS SUBJECT TO THE TERMS AND CONDITIONS OF THE
INTERCREDITOR AND COLLATERAL SHARING AGREEMENT, DATED AS OF FEBRUARY 29, 2000,
BY AND AMONG THE COMPANY, VALUE PARTNERS, LTD., AS ORIGINAL PURCHASER OF CERTAIN
12% SECURED CONVERTIBLE SENIOR NOTES DUE 2006 ISSUED BY THE COMPANY, AND U.S.
TRUST COMPANY OF TEXAS, N.A., AS COLLATERAL AGENT FOR THE HOLDERS FROM TIME TO
TIME OF SUCH CONVERTIBLE NOTES AND THE HOLDERS FROM TIME TO TIME OF THE 12%
SECURED CONVERTIBLE SENIOR NOTES DUE 2006 ISSUED PURSUANT TO THE EXCHANGE
AGREEMENT, AS DEFINED HEREIN (AS AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED
FROM TIME TO TIME, THE "INTERCREDITOR AGREEMENT"). COPIES OF THE INTERCREDITOR
AGREEMENT MAY BE OBTAINED FROM THE COMPANY.

                          ALTIVA FINANCIAL CORPORATION
                              AMENDED AND RESTATED
                  12% SECURED CONVERTIBLE SENIOR NOTE DUE 2006

No.1

                                                                     $14,000,000

         Altiva Financial Corporation (together with its permitted successors
and assigns hereunder, the "Company"), a corporation duly organized and validly
existing under the laws of the State of Delaware, for value received, hereby
promises to pay Value Partners, LTD, 4514 Cole Avenue, Suite 808, Dallas, Texas
75205 or registered assigns, the principal sum of

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$14,000,000 in such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts, no later than 12:00 noon, Eastern Time, on June 15, 2006 (the "Maturity
Date") (or earlier to the extent provided in Article V hereof), and to pay
interest thereon semi-annually as provided herein in like coin or currency, at
the rate per annum of 12%, subject to adjustment as provided herein, such
payments to be made without presentation or surrender of this Note or the making
of any notation thereon, except that any Note paid or prepaid in full shall,
after such payment or prepayment in full, be surrendered to be Company at its
principal office for cancellation.

                                    ARTICLE I

                                   DEFINITIONS

         For all purposes hereof, except as otherwise expressly provided or
unless the context otherwise requires, the terms defined in this Article have
the meanings assigned to them in this Article and include the plural as well as
the singular.

         "Acquisition" means any transaction, or any series of related
transactions, consummated on or after the Issue Date, by which the Company or
any of its Subsidiaries (i) acquires any going business or all or substantially
all of the assets of any firm, corporation or limited liability company, or
division thereof, whether through purchase of assets, merger or otherwise, or
(ii) directly or indirectly acquires (in one transaction or in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the Outstanding
ownership interests of a partnership or a limited liability company.

         "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing, provided, however, that for purposes of this definition none of Value
Partners, T. Rowe Price Recovery Fund and Lutheran Brotherhood High Yield Fund
shall be deemed to be an Affiliate of the Company.

         "Agreement" has the meaning set forth in Section 2.1 hereof.

         "Beneficial Owners" means the beneficial owners of the Notes identified
in the registry of Beneficial Owners maintained by the Company pursuant to
Section 2.3.

         "Board of Directors" means either the Board of Directors of the Company
or any committee of such Board duly authorized to act for it hereunder.

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         "Business Day" means any day other than (i) a Saturday or Sunday or
(ii) a day on which banking institutions in the City of Atlanta, Georgia or New
York, New York are authorized or required by law or executive order to remain
closed.

         "Capital Stock" in any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents or
interests in (however designated) capital stock in such Person, including, with
respect to a corporation or limited liability company, Preferred Stock and other
corporate stock and, with respect to a partnership, including limited liability
partnerships, partnership interests, whether general or limited, and any rights
(other than debt securities convertible into corporate stock, partnership
interests or other capital stock), warrants or options exchangeable for or
convertible into such corporate stock, partnership interests or other capital
stock.

         "Capitalized Lease Obligation" means indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP; the amount of such indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.

         "Closing Price" has the meaning set forth in Section 7.5(i).

         "Collateral Agent" means U.S. Trust Company of New York, and its
successors and assigns.

         "Collateral Documents" means any agreement entered into by the Company,
any Subsidiary of the Company or any other Person to provide collateral or
security for the repayment of the Notes and the Exchange Notes or to Guarantee
the Notes and the Exchange Notes, including without limitation the Security
Agreement, the Exchange Note Indenture, the Exchange Note Security Agreements
and the Intercreditor Agreement, in each case as defined in the Agreement.

         "Commission" means the Securities and Exchange Commission, as from time
to time constituted.

         "Common Stock" means the common stock, par value $0.01 per share, of
the Company.

         "Company" has the meaning set forth in the first paragraph hereof.

         "Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i)
provision for taxes based on income or profits of such Person and its
Subsidiaries for such period, to the extent that such provision for taxes was
included in computing such Consolidated Net Income, plus (ii) consolidated
interest expense of such Person and its Subsidiaries for such period, whether
paid or accrued and whether or not capitalized (including, without limitation,
amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital

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Lease Obligations, commissions, discounts and other fees and charges incurred in
respect of letters of credit or bankers' acceptance financings, and net payments
(if any) pursuant to Hedging Obligations), to the extent that any such expense
was deducted in computing such Consolidated Net Income, plus (iii) depreciation
and amortization (including amortization of goodwill and other intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash expenses (excluding any such non-cash expenses to the
extent that it represents an accrual of or reserve for cash expenses in any
future period or amortization of a prepaid cash expense that was paid in a prior
period) of such Person and its Subsidiaries for such period to the extent that
such depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income, minus (v) non-cash revenues increasing
such Consolidated Net Income for such period, including without limitation
non-cash income recorded in connection with the ownership of mortgage-related
securities (excluding any non-cash income to the extent it represents an accrual
of cash revenues in any future period), in each case, on a consolidated basis
and determined in accordance with GAAP. Notwithstanding the foregoing, the
provision for taxes based on the income or profits of, and the depreciation and
amortization and other non-cash charges of, a Subsidiary of a Person shall be
added to Consolidated Net Income to compute Consolidated Cash Flow only to the
extent (and in the same proportion) that the Net Income of such Subsidiary was
included in calculating the Consolidated Net Income of such Person and only if a
corresponding amount would be permitted at the date of termination to be
dividended to the Company by such Subsidiary without prior approval of any
Person (that has not been obtained), pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Subsidiary or its stockholders;
provided that any contingent restriction contained in any thereof shall not be
deemed to prevent any such dividend until the applicable contingency shall have
occurred.

         "Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income of any Person that is not a Subsidiary or that
is accounted for by the equity method of accounting shall be included only to
the extent of the amount of dividends or distributions paid in cash (or to the
extent converted into cash) to the referent Person or a Wholly-Owned Subsidiary
thereof, (ii) the Net Income of any Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by that
Subsidiary of its Net Income is not at the date of determination permitted
without prior approval of any Person (that has not been obtained) or, directly
or indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary or its stockholders unless waived; provided that
any contingent restriction contained in any thereof shall not be deemed to
prevent any such dividend until the applicable contingency shall have occurred,
(iii) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded, (iv) the cumulative effect of a change in accounting principles shall
be excluded and (v) any net after-tax extraordinary gains or losses shall be
excluded.

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         "Consolidated Net Worth" of a Person means as of the date of
determination all amounts that would be included under stockholders' equity on a
consolidated balance sheet of the Person and its Subsidiaries determined in
accordance with GAAP.

         "Consolidated Tangible Net Worth" of a Person means as of the date of
determination all amounts that would be included under stockholders' equity on a
consolidated balance sheet of the Person and its Subsidiaries determined in
accordance with GAAP less an amount equal to the consolidated intangible assets
of the Person and its Subsidiaries determined in accordance with GAAP.

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

         "Disqualified Capital Stock" means any Capital Stock which, by its
terms (or by the terms of any security into which it is convertible or
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part on, or prior to, or is
exchangeable for debt securities of the Company or its Subsidiaries prior to,
the Stated Maturity of principal of the Notes, provided that only the amount of
such Capital Stock that matures or is redeemable prior to the Stated Maturity of
principal of the Notes shall be deemed to be Disqualified Capital Stock.

         "Eligible Collateral" means any asset or property of the Company other
than the Note Security.

         "Event of Default" means any event specified in Section 5.1.

         "Excess Spread" means (i) with respect to a "pool" of Receivables that
has been sold to a trust or other Person in a securitization, the excess of (a)
the weighted average coupon on each pool of Receivables sold over (b) the sum of
the pass-through interest rate plus a normal servicing fee, a trustee fee, an
insurance fee and an estimate of annual future credit losses related to such
assets, in each case calculated in accordance with any applicable GAAP, and (ii)
with respect to Receivables that have been sold to a Person in a whole loan
sale, the cash flow of the Company and its Subsidiaries from such Receivables,
net of, to the extent applicable, a normal servicing fee, a trustee fee, an
insurance fee and an estimate of annual future credit losses related to such
assets, in each case calculated in accordance with any applicable GAAP.

         "Excess Spread Receivables" of a Person means the contractual or
certified right to Excess Spread capitalized on such Person's consolidated
balance sheet (the amount of which shall be the present value of the Excess
Spread, calculated in accordance with GAAP, net of any allowance for losses on
loans sold with recourse or other liability allocable thereto, to the extent not
otherwise reflected in such amount). Excess Spread Receivables (a) include
mortgage-related securities backed by Receivables sold by the Company or any
Subsidiary and (b) do not include any servicing rights.

         "Exchange" has the meaning set forth in the Agreement.

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

         "Exchange Agreement" means the agreement between the Company and the
holders of the Company's 12 1/2% Subordinated Notes due 2001 providing for the
Exchange, as amended, supplemented or otherwise modified from time to time.

         "Exchange Notes" means the 12% Secured Convertible Notes due 2006
issued to holders of the Subordinated Notes upon consummation of the Exchange.

         "Exchange Note Obligations" means all present and future liabilities,
obligations and indebtedness of the Company, any of its Subsidiaries or any
other obligor owing to any holder of Exchange Notes under or in connection with
the Exchange Agreement, the Exchange Notes and the Collateral Documents,
including without limitation obligations in respect of (i) principal, premium,
if any, and interest on the Exchange Notes, (ii) reimbursement of costs, fees,
taxes or other items and (iii) indemnification and related obligations.

         "Fixed Charges" means, with respect to the Company and its Subsidiaries
for any period, the sum, without duplication, of:

                  (i) the consolidated interest expense of the Company and its
         Subsidiaries for such period, whether paid or accrued, including,
         without limitation, amortization of debt issuance costs and original
         issue discount, non-cash interest payments, the interest component of
         any deferred payment obligations, the interest component of all
         payments associated with Capitalized Lease Obligations, commissions,
         discounts and other fees and charges incurred in respect of letter of
         credit or bankers' acceptance financings, and net of the effect of all
         payments made or received pursuant to Hedging Obligations; plus

                  (ii) the consolidated interest of the Company and its
         Subsidiaries that was capitalized during such period; plus

                  (iii) any interest expense on Indebtedness of another Person
         that is Guaranteed by the Company or one of its Subsidiaries or secured
         by a Lien on assets of the Company or one of its Subsidiaries, whether
         or not such Guarantee or Lien is called upon; plus

                  (iv) the product of (a) all dividends, whether paid or accrued
         and whether or not in cash, on any series of Preferred Stock of the
         Company or any of its Subsidiaries, other than dividends on Capital
         Stock payable solely in Capital Stock of the Company (other than
         Disqualified Capital Stock) or to the Company or a Subsidiary of the
         Company, times (b) a fraction, the numerator of which is one and the
         denominator of which is one minus the then current combined federal,
         state and local statutory tax rate of the Company and its Subsidiaries,
         expressed as a decimal, in each case, on a consolidated basis and in
         accordance with GAAP.

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         "Fixed Charge Coverage Ratio" means with respect to the Company and its
Subsidiaries for any period, the ratio of the Consolidated Cash Flow of the
Company for such period to the Fixed Charges of the Company and its Subsidiaries
for such period. In the event that the Company or any of its Subsidiaries
Incurs, repays, repurchases or redeems any Indebtedness subsequent to the
commencement of the period for which the Fixed Charge Coverage Ratio is being
calculated and on or prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"),
then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect
to such Incurrence, repayment, repurchase or redemption of Indebtedness, and, if
applicable, the use of the proceeds therefrom to repay other Indebtedness as if
the same had occurred at the beginning of the applicable four-quarter reference
period.

         "GAAP" means generally accepted accounting principles as in effect from
time to time, consistently applied.

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

         "Guarantor" means any Person Guaranteeing any Indebtedness or other
obligation.

         "Hedging Obligations" means with respect to any Person, the obligations
of such Person under (i) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements with respect to Indebtedness that
is permitted by the terms of the Notes and (ii) other agreements or arrangements
designed to protect such Person against fluctuations in interest rates or the
value of foreign currencies purchased or received by such Person in the ordinary
course of business.

         "Holder" means a Person in whose name a Note is registered on the Note
Register.

         "Incur" means issue, assume, Guarantee, incur or otherwise become
liable for. The term "Incurrence" when used as a noun shall have a corresponding
meaning. The accretion of principal of a non-interest bearing or other discount
security shall be deemed the Incurrence of Indebtedness.

         "Indebtedness" means, with respect to any Person on any date of
determination (without duplication): (i) the principal of and premium, if any,
in respect of (A) indebtedness of such

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Person for money borrowed, (B) indebtedness evidenced by notes, debentures,
bonds or other similar instruments for the payment of which such Person is
responsible or liable; (ii) all Capital Lease Obligations of such Person; (iii)
all obligations of such Person issued or assumed as the deferred purchase price
of property, all conditional sale obligations of such Person and all obligations
of such Person under any title retention agreement (including any such
obligations under repurchase agreements), but excluding trade accounts payable
and expense accruals arising in the ordinary course of business; (iv) all
obligations of such Person for the reimbursement of any obligor on any letter of
credit, banker's acceptance or similar credit transaction; (v) the amount of all
obligations of such Person with respect to the redemption, repayment or other
repurchase of any Disqualified Stock or, in the case of a Subsidiary of such
Person, any Preferred Stock (vi) all obligations of the type referred to in
clauses (i) through (v) of other Persons and all dividends of other Persons the
payment of which, in either case, such Person is responsible or liable, directly
or indirectly, as obligor, Guarantor or otherwise, including by means of any
Guarantee; (vii) all obligations of the type referred to in clauses (i) through
(vi) of other Persons secured by any Lien on any property or asset of such
Person, and (viii) to the extent not otherwise included in this definition,
Hedging Obligations of such Person. The amount of Indebtedness of any Person at
any date shall be the outstanding balance at such date of all unconditional
obligations, as described above, and the amount of any Indebtedness under clause
(vi) of this definition for which such Person is responsible or liable, directly
or indirectly, including by way of any Guarantee. Notwithstanding the foregoing,
any securities issued in a securitization by a Securitization Subsidiary formed
by or on behalf of a Person and to which Receivables have been sold or otherwise
transferred by or on behalf of such Person or its Subsidiaries shall not be
treated as Indebtedness of such Person or its Subsidiaries, regardless whether
such securities are treated as indebtedness for tax purposes, provided that (1)
neither the Company nor any of its Subsidiaries (other than the Securitization
Subsidiary) (a) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), except for credit
support in the form of "over-collateralization" of the senior certificates
issued in, or subordination of or recourse to all or a portion of Excess Spread
Receivables attributable to, such securitization, in each case to the extent of
the book value of such Excess Spread Receivables, or (b) is directly or
indirectly liable (as a guarantor or otherwise) for such securities, and (2) no
default with respect to such securities would permit (upon notice, lapse of time
or both) any holder of any other Indebtedness of the Company or any of its
Subsidiaries to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its Stated Maturity.

         "Indenture" means the Indenture between the Company and U.S. Trust
Company of Texas, N.A., as trustee for the holders of the Exchange Notes, as
amended, supplemented or otherwise modified from time to time.

         "Intercreditor Agreement" has the meaning set forth in the Agreement.

         "Interest Payment Date" has the meaning set forth in Section 2.2
hereof.

         "Interest Rate" means 12% per annum, subject to increase as specified
in the third and fourth paragraphs of Section 2.2 hereof.

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         "Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.

         "IO Securities" means a security representing an undivided interest in
all or a portion of the interest payments due on a pool of Receivables which
back the mortgage-related security to which the IO Securities relate.

         "Issue Date" means February 29, 2000.

         "Junior Indebtedness" means any Indebtedness of the Company
subordinated in right of payment of either principal, premium (if any) or
interest thereon to the Notes.

         "Liens" means any mortgage, charge, pledge, lien (statutory or
otherwise), security interest, hypothecation, assignment for security, claim, or
preference or priority or other encumbrance (whether or not filed, recorded or
otherwise perfected under applicable law) upon or with respect to any asset or
property owned by a Person.

         "Liquid Assets" means: (i) cash; (ii) any of the following instruments
that have a remaining term to maturity not in excess of 90 days from the
determination date: (a) repurchase agreements on obligations of, or are
guaranteed as to timely receipt of principal and interest by, the United States
or any agency or instrumentality thereof when such obligations are backed by the
full faith and credit of the United States, provided that the party agreeing to
repurchase such obligations is a primary dealer in U.S. Government securities,
(b) federal funds and deposit accounts, including but not limited to
certificates of deposit, time deposits and bankers' acceptances of any U.S.
depository institution or trust company incorporated under the laws of the
United States or any state thereof, provided that the debt of such depository
institution or trust company at the date of acquisition thereof has been rated
by Standard & Poor's Corporation in the highest short-term rating category or
has an equivalent rating from another nationally-recognized rating agency, or
(c) commercial paper of any corporation incorporated under the laws of the
United States or any state thereof that on the date of acquisition is rated
investment grade by Standard & Poor's Corporation or has an equivalent rating
from another nationally-recognized rating agency; (iii) any debt instrument
which is an obligation of, or is guaranteed as to the receipt of principal and
interest by, the United States, its agencies or any U.S. Government sponsored
enterprise and (iv) the amount of unused credit available to the Company in the
form of Permitted Warehouse Indebtedness under lines of such Indebtedness in
existence on the determination date which may be secured by existing net loans
or other Receivables held for sale by the Company on the determination date.

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         "Liquidated Damages" shall have the meaning set forth in the
Registration Rights Agreement.

         "Mark-to-Market Adjustments" shall have the meaning set forth in
Section 4.12(a)(1).

         "Material Adverse Effect" has the meaning set forth in the Agreement.

         "Maturity Date" has the meaning set forth in the first paragraph
hereof.

         "MCI" means The Money Centre, Inc., a North Carolina corporation.

         "Net Income" means, with respect to any Person, the net income (loss)
of such Person, determined in accordance with GAAP and before any reduction in
respect of Preferred Stock dividends.

         "Notes" has the meaning set forth in Section 2.1, provided that upon
consummation of the Exchange the Notes and the Exchange Notes shall be
considered as a single class of Pari Passu Indebtedness of the Company.
Notwithstanding any provision to the contrary contained in this Note, except as
expressly provided herein, references herein to actions by the Holders of the
Notes shall in all cases include the holders of the Exchange Notes, such holders
acting together as the holders of a single class of securities of the Company.

         "Note Obligations" means all present and future liabilities,
obligations and Indebtedness of the Company, any of its Subsidiaries or any
other obligor owing to any Holder under or in connection with the Agreement, or
any Related Agreement, including without limitation obligations in respect of
(i) principal, premium, if any, and interest on the Notes, (ii) reimbursement of
costs, fees, taxes or other items and (iii) indemnification and related
obligations.

         "Note Register" has the meaning set forth in Section 2.3.

         "Note Security" means all assets now or from time to time after the
Issue Date subjected to a security interest or other charge (or intended to be
so subjected pursuant to the Agreement or any Related Agreement) to secure the
payment or performance of any of the Note Obligations.

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

         "Officer's Certificate" means, unless otherwise specified herein, a
certificate signed by two Officers, one of whom must be the Chairman of the
Board, the President, the Chief Executive Officer or the Chief Financial Officer
of the Company.

         "Outstanding," (i) when used as of any particular time with reference
to the Notes, means all of the Notes theretofore issued by the Company and
outstanding, which shall not include (x) the Notes theretofore canceled by the
Company or surrendered to the Company for cancellation, and (y) the Notes for
the transfer or exchange of or in lieu of or in substitution for which other

                                       11
<PAGE>   12

Notes shall have been delivered by the Company pursuant to the Notes, and (ii)
when used as of any particular time with reference to the Exchange Notes, shall
have the meaning set forth in the Indenture. In determining whether the
registered holders of the requisite aggregate principal amount of Notes and
Exchange Notes have concurred in any demand, request, direction, consent, or
waiver under the Notes, Notes which are owned or held by or for the account of
the Company, or by any other obligor on the Notes, or by any Affiliate of the
Company or any other obligor on the Notes, shall be disregarded and deemed not
to be Outstanding for the purpose of any such determination. Notes so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee shall have the exclusive right to vote such Notes and is not a Person
which is an Affiliate of the Company or any other obligor on the Notes.

         "Pari Passu Indebtedness" means any Indebtedness of the Company that is
pari passu in right of payment of principal, premium (if any) and interest
thereon to the Notes.

         "Permitted Indebtedness" means:

                  (i)      Permitted Warehouse Indebtedness of the Company and
         its Subsidiaries, provided that to the extent any such Indebtedness
         ceases to constitute Permitted Warehouse Indebtedness of the Company or
         a Subsidiary, such event shall be deemed to constitute the Incurrence
         of such Indebtedness (and any related Guarantees, but without
         duplication) by the Company or such Subsidiary, as the case may be;

                  (ii)     the Note Obligations and the Exchange Note
         Obligations;

                  (iii)    Indebtedness of the Company or a Subsidiary
         Outstanding on the Issue Date;

                  (iv)     Hedging Obligations;

                  (v)      Capital Lease Obligations, mortgage financings or
         purchase money obligations, in each case incurred for the purpose of
         financing all or any part of the purchase price, lease or cost of
         construction or improvement of property, plant or equipment used in the
         business of the Company or such Subsidiary, in an aggregate principal
         amount not to exceed $3.0 million at any time outstanding;

                  (vi)     intercompany Indebtedness between or among the
         Company and any Subsidiary, provided, however, that (i) if the Company
         is the obligor on such Indebtedness, such Indebtedness is expressly
         subordinated to the prior payment in full in cash of all Note
         Obligations and (ii) (A) any subsequent issuance or transfer of Capital
         Stock that results in any such Indebtedness being held by a Person
         other than the Company or a Subsidiary and (B) any sale or other
         transfer of any such Indebtedness to a Person that is not either the
         Company or a Subsidiary shall be deemed, in each case, to constitute an
         Incurrence of such Indebtedness by the Company or such Subsidiary, as
         the case may be; and

                                       12
<PAGE>   13

                  (vii)    Permitted Refinancing Indebtedness in exchange for,
         or the net proceeds of which are used to refund, refinance or replace
         Indebtedness Incurred pursuant to Section 4.13(a) or clause (iii) or
         (v) above.

         "Permitted Liens" means, with respect to the Company and any
Subsidiary:

                  (i)      Liens for taxes, assessments or governmental charges
         or levies on the assets or property of the Company or any Subsidiary if
         the same shall not at the time be delinquent or thereafter can be paid
         without penalty, or are being contested in good faith and by
         appropriate proceedings and for which adequate reserves in accordance
         with GAAP shall have been set aside on its books;

                  (ii)     Liens imposed by law, such as carriers',
         warehousemen's and mechanics' liens and other similar liens arising in
         the ordinary course of business which secure payment of obligations not
         more than 60 days past due;

                  (iii)    Liens arising out of pledges or deposits under
         worker's compensation laws, unemployment insurance, old age pensions or
         other social security or retirement benefits, or similar legislation;

                  (iv)     Utility easements, building restrictions and such
         other encumbrances or charges against real property as are of a nature
         generally existing with respect to properties of a similar character
         and which do not in any material way affect the marketability of the
         same or interfere with the use thereof in the business of the Company
         or its Subsidiaries;

                  (v)      Liens securing Permitted Indebtedness;

                  (vi)     Liens with respect to IO Securities, Residual
         Certificates or excess servicing rights arising from the documents
         creating and governing such securities, certificates and rights as a
         result of the subordinate nature of such assets to other senior
         interests created and governed by such documents; and

                  (vii)    Liens on the Capital Stock of, or the assets or
         property of, a Subsidiary acquired by the Company in existence at the
         time of such acquisition provided that (a) such Liens are not created,
         incurred or assumed in connection with, or in contemplation of, such
         acquisition and (b) such Liens do not extend to assets or property
         owned by the Company or any other Subsidiary.

         "Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund
Indebtedness of the Company or any of its Subsidiaries, provided that (i) the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if

                                       13
<PAGE>   14

applicable), plus accrued interest on, the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of reasonable expenses
incurred in connection therewith, including premiums paid, if any, to the
holders thereof); (ii) such Permitted Refinancing Indebtedness has a final
maturity date at or later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; (iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment to
the Notes, such Permitted Refinancing Indebtedness has a final maturity date
later than 91 days after the final maturity date of, and is subordinated in
right of payment to, the Notes on terms at least as favorable to the Holders as
those contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; and (iv) such Indebtedness
is incurred either by the Company or by the Subsidiary which is the obligor on
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.

         "Permitted Warehouse Indebtedness" means Indebtedness of any Person
under any warehouse line of credit, loan repurchase agreement or similar
facility or under any commercial paper program (a) that is incurred for the
purpose of funding the origination or purchase of Receivables that are intended
to be sold to investors and are eligible to be recorded as held for sale on the
consolidated balance sheet of such Person in accordance with GAAP and are so
recorded, (b) that in the case of any warehouse line of credit or similar
facility is, or, in the case of any commercial paper program, the letters of
credit or revolving credit facility providing credit enhancement or liquidity
backup for such commercial paper program are, secured by Receivables or
securities backed by such receivables or any combination thereof owned by such
Person, (c) the outstanding amount of which shall not exceed 100% of the
aggregate principal amount of the Receivables and/or securities backed by such
receivables securing such Indebtedness and (d) that has not been outstanding in
excess of 360 days.

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

         "Preferred Stock" means, with respect to any Person, any Capital Stock
of any class or classes (however designated) which is preferred as to the
payment of dividends or distributions, or as to the distribution of assets upon
any voluntary or involuntary liquidation or dissolution of such Person, over
Capital Stock of any other class in such Person.

         "Receivables" means loans, leases and other credit receivables commonly
financed by companies in the mortgage lending or consumer finance business in
the United States which are purchased or originated by the Company or any
Subsidiary of the Company in the ordinary course of business.

         "Record Date" means, with respect to any Interest Payment Date, the
June 1 or December 1 preceding an Interest Payment Date of June 15 and December
15, respectively.

                                       14
<PAGE>   15

         "Redemption Date," when used with respect to any Note to be redeemed,
means the date fixed for such redemption by or pursuant to the provisions of the
Note.

         "Redemption Price," when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to the provisions of the
Note.

         "Related Agreements" means the Notes and the Collateral Documents.

         "Repurchase Event" has the meaning set forth in Section 8.3.

         "Repurchase Price," when used with respect to any Note to be
repurchased, means the price at which it is to be repurchased pursuant to the
terms of the Notes.

         "Registration Rights Agreement" has the meaning set forth in the
Agreement.

         "Residual Certificate" means a security (whether identified as a
certificate, instrument or interest) representing the residual interest in a
real estate mortgage investment conduit or other entity formed by the Company or
a Subsidiary and in which the Company or a Subsidiary has retained a residual
interest which is only payable on a fully subordinated basis after all regular
interests in and/or debt issued by such entity has been fully repaid.

         "Restricted Payment" means

                  (i) the declaration, payment or setting apart of any funds for
         the payment of any dividend on, or making of any distribution to
         holders of, the Capital Stock of the Company or any Subsidiary of the
         Company (including, without limitation, any payment in connection with
         any merger or consolidation involving the Company or any of its
         Subsidiaries) or make any payment or distribution to or for the benefit
         of the direct or indirect holders of the Capital Stock of the Company
         or any Subsidiary of the Company (other than (a) dividends or
         distributions payable in its Capital Stock (other than Disqualified
         Capital Stock) and (b) dividends or distributions payable to the
         Company or a Subsidiary of the Company (and if such Subsidiary is not a
         Wholly-Owned Subsidiary, to its other holders of Capital Stock on a pro
         rata basis);

                  (ii) the purchase, redemption or other acquisition or
         retirement for value, directly or indirectly, of any Capital Stock of
         the Company or any Subsidiary of the Company (other than any such
         Capital Stock owned by the Company or any of its Subsidiaries and other
         than the acquisition of Capital Stock in Subsidiaries solely in
         exchange for Capital Stock (other than Disqualified Capital Stock ) of
         the Company); or

                  (iii) the making of any principal payments on, or repurchase,
         redemption, defeasance, retirement or other acquisition for value,
         directly or indirectly, of any Junior Indebtedness or Pari Passu
         Indebtedness, prior to the Stated Maturity of principal or

                                       15
<PAGE>   16

         scheduled redemption or defeasance of, or any scheduled sinking fund
         payment on, such Junior Indebtedness or Pari Passu Indebtedness.

         Notwithstanding the above, a Restricted Payment shall not include: (A)
any future payments required to be made to the former shareholders of MCI
pursuant to the Stock Purchase Agreement, dated as of July 15, 1999, by and
among Rodney D. Atkinson, Charles R. Cunningham, Stuart A. Lewis, John Richard
Love, Stephen L. Walker, MCI and the Company; or (B) the repurchase, redemption,
defeasance, retirement or other acquisition for value directly or indirectly of
the Notes in accordance with the terms of the Notes (including without
limitation Section 4.20 hereof).

         "SEC" means the Securities and Exchange Commission and any successor
thereto.

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

         "Securitization Subsidiary" means a Subsidiary of the Company formed in
connection with a securitization of Receivables (i) all the Capital Stock of
which (other than directors' qualifying shares and shares held by other Persons
to the extent such shares are required by applicable law to be held by a Person
other than the Company or a Subsidiary) is owned by the Company or one or more
of its Subsidiaries, (ii) that has no assets other than Excess Spread
Receivables created in such securitization, (iii) that conducts no business
other than holding such Excess Spread Receivables, and (iv) that has no
Indebtedness (other than short-term Indebtedness to the Company or any
Wholly-Owned Subsidiary attributable to the purchase by such Subsidiary from the
Company or such Wholly-Owned Subsidiary of such Receivables, which Indebtedness
is paid in full upon closing of such securitization).

         "Significant Subsidiary" means, with respect to any Person, any
Subsidiary which is a "significant subsidiary" (as defined in Article 1, Rule
1-02 of Regulation S-X, promulgated pursuant to the Securities Act) of such
Person.

         "Stated Maturity" when used with respect to any Indebtedness
(including, without limitation, the Notes) means the dates specified in the
instrument governing such Indebtedness as the fixed dates on which any principal
amount of such Indebtedness is due and payable (including, without limitation,
by reason of any required redemption, purchase, defeasance or sinking fund
payment) and, when used with respect to any installment of interest on
Indebtedness, means the date on which such installment is due and payable.

         "Stockholder Approvals" means the approval of the stockholders of the
Company, pursuant to Section 5.1 of the Agreement, of (i) the issuance of Common
Stock upon conversion of the Notes in their entirety and (ii) the issuance of
Common Stock upon conversion of the Exchange Notes in accordance with their
terms.

                                       16
<PAGE>   17

         "Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more Subsidiaries of such Person (or a combination thereof) and
(ii) any partnership (a) the sole general partner or managing general partner of
which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are such Person or one or more Subsidiaries of such Person (or
any combination thereof).

         "Substantial Portion" means, with respect to the assets of the Company
and its Subsidiaries, assets which (i) represent more than 10% of the
consolidated assets of the Company and its Subsidiaries as would be shown in the
consolidated financial statements of the Company and its Subsidiaries as at the
beginning of the twelve-month period ending with the month in which such
determination is made, or (ii) is responsible for more than 10% of the
Consolidated Net Income of the Company and its Subsidiaries as reflected in the
financial statements referred to in clause (i) above.

         "Supermajority Covenants" has the meaning set forth in Section 4.25.

         "Value Partners" means Value Partners, Ltd., a Texas limited
partnership.

         "Trading Day" has the meaning set forth in Section 7.5(i).

         "Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at Stated Maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.

         "Wholly-Owned Subsidiary" means a Subsidiary all of the Capital Stock
of which is owned by the Company or another Wholly-Owned Subsidiary.

                                   ARTICLE II

                                ISSUANCE OF NOTES

SECTION 2.1 DESIGNATION AND AMOUNT OF NOTES; RANKING.

         This Note is one of a duly authorized issue of notes of the Company,
designated as its Amended and Restated 12% Secured Convertible Senior Notes due
2006 (herein called the "Notes") in the maximum aggregate principal amount of
$14,000,000 issued pursuant to an

                                       17
<PAGE>   18

Amended and Restated Secured Convertible Senior Note Purchase Agreement, dated
for reference purposes only as of February 29, 2000, by and among Altiva
Financial Corporation and the purchaser listed on the signature page thereto (as
amended, supplemented or otherwise modified from time to time, the "Agreement"),
to which all the terms of this Note are subject.

         The Notes constitute senior obligations of the Company and shall not be
subordinated in right or priority of payment to any existing or future
Indebtedness of the Company.

SECTION 2.2. DATE AND DENOMINATION OF NOTES; PAYMENTS OF INTEREST AND PRINCIPAL.

         The Notes shall be issuable in registered form without coupons in
denominations of $1,000 principal amount and any integral multiple thereof.

         Subject to adjustment pursuant to the penultimate sentence of this
paragraph and the next two paragraphs of this Section 2.2, interest shall accrue
at the Interest Rate on (i) $7,000,000 principal amount of the Notes (the "First
Notes") from August 31, 1999, (ii) $250,000 principal amount of the Notes (the
"Second Notes") from December 13, 1999, (iii) $750,000 principal amount of the
Notes from December 31, 1999, (iv) $1,000,000 principal amount of the Notes
(together with the Notes in clause (III), the "Third Notes" ) from January 5,
2000 , (v) $700,000 principal amount of Notes (the "Fourth Notes") from February
2, 2000, (vi) $300,000 principal amount of Notes from February 11, 2000 and
(vii) the total Outstanding principal amount of the Notes from February 29,
2000. Interest on the Notes shall be payable by the Company in cash to Holders
(i) from the most recent date to which interest has been paid or, if no interest
has been paid, from August 31, 1999, on June 15 and December 15 of each year
(each an "Interest Payment Date"), commencing on June 15, 2001, and (ii) on the
Maturity Date (or earlier to the extent provided in Article V hereof) to the
extent accrued but theretofore unpaid. In addition to the foregoing, pursuant to
the term of the First Notes, the Second Notes and the Third Notes, the Interest
Rate on the Notes shall be increased by 1% per annum for the period from
February 15 through the date immediately preceding the date of receipt of the
Stockholder Approvals, and pursuant to the terms of the Fourth Notes, the
Interest Rate on the Notes shall be increased by 1% per annum for the period
from February 29, 2000 through the date immediately preceding the date of
receipt of the Stockholder Approvals. Interest on the Notes shall be computed on
the basis of a 360-day year comprised of twelve 30-day months.

         In the event that the Company is obligated to pay Liquidated Damages to
Holders, the Interest Rate shall be increased for the period during which the
Company is obligated to pay Liquidated Damages by the amount of such Liquidated
Damages and all references herein to interest shall include Liquidated Damages,
if any. The Company shall promptly notify each Holder at its address as it
appears on the Note Register in the event that the Company is obligated to pay
Liquidated Damages to Holders.

         In the event that the Company does not obtain the Stockholder Approvals
on or before March 9, 2000 (as may be extended pursuant to Section 8.3 hereof),
the Interest Rate shall increase monthly, commencing on March 9, 2000 (or as
extended), by 1% per annum, up to a maximum interest rate of 18% (exclusive of
Liquidated Damages, if any), provided that if the

                                       18
<PAGE>   19

Company subsequently obtains the Stockholder Approvals, the Interest Rate shall
revert as of the date of receipt thereof to the amount otherwise payable
hereunder and shall not thereafter reflect any increase in the Interest Rate as
a result of the requirements of this sentence. The Company shall promptly notify
each Holder at its address as it appears on the Note Register in the event that
the Company is obligated to increase the Interest Rate pursuant to the
requirements of this paragraph.

         The Person in whose name any Note is registered at the close of
business on any Record Date with respect to any Interest Payment Date (including
any Note that is converted after the Record Date and on or before the Interest
Payment Date) shall receive the interest payable on such Interest Payment Date
notwithstanding the cancellation of such Note upon any transfer, exchange or
conversion subsequent to the Record Date and on or prior to such Interest
Payment Date. Interest shall be paid by check mailed to the address of such
Person on the Note Register, provided that at the request of a Holder in writing
to the Company at least five days prior to the date set for payment of interest,
interest on such Holder's Notes shall be paid by wire transfer in immediately
available funds in accordance with the wire transfer instructions supplied by
such Holder to the Company. Payment of principal, premium, if any, and interest
due on the Maturity Date similarly shall be paid by the Company by check or, at
the request of a Holder, wire transfer.

         Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall be paid by the Company, at its election in each case, as
provided in clause (1) or (2) below.

                  (1) The Company may elect to make payment of any Defaulted
         Interest to the Persons in whose names Notes are registered at the
         close of business on a special record date for the payment of such
         Defaulted Interest, which shall be not more than 15 days and not less
         than 10 days prior to the date of the proposed payment. The Company
         shall cause notice of the proposed payment of such Defaulted Interest
         and the special record date therefor to be mailed, first-class postage
         prepaid, to each Holder at his address as it appears in the Note
         Register not less than 10 days prior to such special record date.
         Notice of the proposed payment of such Defaulted Interest and the
         special record date therefor having been so mailed, such Defaulted
         Interest shall be paid to the Persons in whose names the Notes were
         registered at the close of business on such special record date and
         shall no longer be payable pursuant to the following clause (2).

                  (2) The Company may make payment of any Defaulted Interest in
any other lawful manner.

SECTION 2.3. EXCHANGE AND REGISTRATION OF TRANSFER OF NOTES; RESTRICTIONS ON
TRANSFER.

         The Company shall cause to be kept at its executive offices a register
(the "Note Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Notes and of
transfers of Notes. The Note Register shall be

                                       19
<PAGE>   20

in written form or in any form capable of being converted into written form
within a reasonably prompt period of time.

         The Company shall also maintain a register of Beneficial Owners of the
Notes, which Beneficial Owners shall be placed thereon upon receipt by the
Company of written certification of any such Beneficial Owner as to its
beneficial ownership of a specified principal amount of the Notes accompanied by
evidence thereof reasonably satisfactory to the Company and setting forth its
address and other information which will permit the Company to communicate with
such Beneficial Owners as required herein and deem such Beneficial Owners as
registered Holders for purposes hereof. A copy of any notice sent hereunder to
Holders also shall be sent to the Beneficial Owners on the Company's registry
and any consent, request, direction, approval, objection or other instrument or
action required or permitted by the Notes to be executed or taken by any Holder
(other than a transfer or conversion of a Note) shall be fully effective if
executed or taken by the Beneficial Owner thereof on the Company's registry,
provided that, in the event of conflicting instruments executed by the
registered Holder and the Beneficial Owner, the action by the registered Holder
shall govern. The Company may presume that the Persons that is enters on the
registry of Beneficial Owners are such Beneficial Owners unless it receives
written notification to the contrary.

         Upon surrender for registration of transfer of any Note to the Company
and satisfaction of the requirements for such transfer set forth in this Section
2.4 and in the Agreement, the Company shall execute and deliver, in the name of
the designated transferee or transferees, one or more new Notes of any
authorized denominations and of a like aggregate principal amount and bearing
such restrictive legends as may be required by the Agreement.

         Subject to the requirements of the immediately succeeding paragraph,
Notes may be exchanged for other Notes of any authorized denominations and of a
like aggregate principal amount upon surrender of the Notes to be exchanged to
the Company. Whenever any Notes are so surrendered for exchange, the Company
shall execute and deliver the Notes which the Holder making the exchange is
entitled to receive bearing registration numbers not contemporaneously
Outstanding.

         Each initial Holder of the Notes shall be issued a Note with a
principal amount equal to such Holder's initial aggregate investment in the
Notes and may not exchange such Note for other Notes of any authorized
denominations and of a like aggregate principal amount unless it has a valid
business reason therefor, provided that nothing herein shall be deemed to
restrict an initial Holder from exchanging Notes for other Notes of authorized
denominations and of a like aggregate principal amount in connection with any
sale, disposition or other transfer of the Notes or any conversion of the Notes
in accordance with Article VII hereof.

         All Notes issued upon registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt and
entitled to the same benefits as the Notes surrendered upon such registration of
transfer or exchange.

                                       20
<PAGE>   21

         All Notes presented or surrendered for registration of transfer or for
exchange, redemption, repurchase or conversion shall (if so required by the
Company) be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company, and the Notes shall
be duly executed by the Holder thereof or his attorney duly authorized in
writing.

         No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax, assessment or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.

SECTION 2.4.  MUTILATED, DESTROYED, LOST OR STOLEN NOTES.

         In case any Note shall become mutilated or be destroyed, lost or
stolen, the Company in its discretion may execute and deliver a new Note,
bearing a number not contemporaneously Outstanding, in exchange and substitution
for the mutilated Note, or in lieu of and in substitution of the Note so
destroyed, lost or stolen. In every case the applicant for a substituted Note
shall furnish to the Company such indemnity as may be required by the Company to
save it harmless for any loss, liability, cost or expense caused by or connected
with such substitution, and, in every case of destruction, loss or theft, the
applicant shall furnish to the Company, evidence to its satisfaction of the
destruction, loss or theft of such Note and of the ownership thereof.

         Every substitute Note issued pursuant to the provisions of this Section
2.4 by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of and subject to all the limitations set forth
herein equally and proportionally with any and all other duly issued Notes. To
the extent permitted by law, all Notes shall be held and owned upon the express
condition that the foregoing provisions are exclusive with respect to the
replacement or payment or conversion of mutilated, destroyed, lost or stolen
Notes and shall preclude any and all other rights or remedies notwithstanding
any law or statute existing or hereafter enacted to the contrary with respect to
the replacement or payment or conversion of negotiable instruments or other
securities without their surrender.

                                   ARTICLE III

                               REDEMPTION OF NOTES

SECTION 3.1.  OPTIONAL RIGHTS TO REDEEM NOTES.

         (a) Except as provided in paragraph (b) below, the Notes are not
redeemable at the Company's option prior to June 15, 2004. Thereafter, the Notes
may be redeemed, in whole but not in part, at the option of the Company at the
Redemption Prices specified below (expressed as percentages of the principal
amount thereof), in each case, together with accrued and unpaid interest, if
any, thereon to the Redemption Date, if redeemed during the 12-month period
beginning on June 15 of the years indicated below:

                                       21
<PAGE>   22

<TABLE>
<CAPTION>

                Year                            Redemption Rate

                <S>                             <C>
                2004                                 106%

                2005                                 100%
</TABLE>

         Notwithstanding the foregoing, the Notes may be redeemed at the
Company's option prior to June 15, 2004, in whole but not in part, at a
Redemption Price equal to 100% of the principal amount thereof, together with
accrued and unpaid interest, if any, thereon to the Redemption Date, if the
Closing Price of the Common Stock equals or exceeds $5.00 per share (subject to
adjustment as provided herein, the "Redemption Trading Price") for 35
consecutive Trading Days after the Issue Date and prior to June 15, 2004.

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

         (b) Notwithstanding any provision hereof to the contrary, if it any
time the total Outstanding principal amount of the Notes shall be less than 10%
of the aggregate principal amount Outstanding on the Issue Date, the Company
may, at its option, redeem all or any part of the Notes then Outstanding at a
Redemption Price equal to the applicable amount set forth in Section 3.1(a)
hereof of the principal amount of the Notes then Outstanding, together with
accrued and unpaid interest, if any, thereon to the Redemption Date.

SECTION 3.2.  NOTICE OF OPTIONAL REDEMPTION.

         At least 30 days but not more than 90 days before a Redemption Date,
the Company shall mail or cause to be mailed a notice of optional redemption by
first-class mail to each Holder of Notes to be redeemed at such Holder's address
as it appears on the Note Register.

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

                  (1) the Redemption Date;

                  (2) the Redemption Price;

                  (3) the then current Conversion Price;

                                       22
<PAGE>   23

                  (4) that Notes called for redemption must be presented and
         surrendered to the Company to collect the Redemption Price;

                  (5) that the Notes called for redemption may be converted at
         any time before the close of business on the fifth Business Day
         immediately preceding the Redemption Date;

                  (6) that Holders who wish to convert Notes must satisfy the
         requirements in Article VII of the Notes;

                  (7) that, unless the Company defaults in making the redemption
         payment, the only remaining right of the Holder shall be to receive
         payment of the Redemption Price upon presentation and surrender to the
         Company of the Notes; and

                  (8) that interest on Notes called for redemption ceases to
         accrue on and after the Redemption Date.

SECTION 3.3. EFFECT OF NOTICE OF OPTIONAL REDEMPTION.

         Once notice of optional redemption is mailed, Notes called for
redemption become due and payable on the Redemption Date and at the Redemption
Price stated in the notice, except for Notes that are converted in accordance
with the provisions of Section 7.1. Upon presentation and surrender to the
Company, Notes called for redemption shall be paid at the Redemption Price, plus
accrued interest up to but not including the Redemption Date.

                                   ARTICLE IV

                                CERTAIN COVENANTS

SECTION 4.1. PAYMENT OF NOTES.

         The Company shall pay the principal of, premium, if any, and interest
on the Notes on the dates and in the manner provided herein. To the extent
lawful, the Company shall pay interest (including post-petition interest in any
proceeding under any bankruptcy law) on (i) overdue principal, at the rate borne
by the Notes at the time, and (ii) overdue installments of interest (without
regard to any applicable grace period) at the same rate, compounded
semi-annually.

                                       23
<PAGE>   24

SECTION 4.2. STAY, EXTENSION AND USURY LAWS.

         The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law or other
law which would prohibit or forgive the Company from paying all or any portion
of the principal of, premium, if any, or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of its obligations herein, and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefits or advantages of any such law.

SECTION 4.3. REPORTS AND CERTIFICATES.

         (a)      Whether or not required by the rules and regulations of the
SEC, so long as any Notes are Outstanding, the Company will furnish to the
Holders, within five days after the time periods specified in the SEC's rules
and regulations (including any extensions expressly permitted by such rules and
regulations):

                           (1)      all quarterly and annual information,
                  financial and other, that would be required to be contained in
                  a filing with the SEC on Forms 10-Q and 10-K (or any successor
                  forms) if the Company were required to file such forms,
                  including a "Management's Discussion and Analysis of Financial
                  Condition and Results of Operations" and an annual report on
                  the Company's consolidated financial statements by the
                  Company's independent certified public accountants; and

                           (2)      all current reports that would be required
                  to be filed with the SEC on Form 8-K (or any successor form)
                  if the Company were required to file such reports.

         (b)      For so long as any Notes are Outstanding, the Company will
furnish to the Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.

         (c)      Concurrently with the delivery of the annual report described
in Section 4.3(a)(1), the Company will deliver to each Holder at such Holder's
address as it appears on the Note Register a statement of the Company's
independent certified public accountants to the effect that they have reviewed
the Agreement and the Related Agreements and that based on their examination of
the affairs of the Company and its Subsidiaries, performed in connection with
their audit of the Company's annual financial statements, they are not aware of
the occurrence or existence of any condition or event which constitutes a
Default or an Event of Default, or, if they are aware thereof, the nature
thereof.

         (d)      Concurrently with the delivery of the annual report described
in Section 4.3(a)(1), the Company will deliver to each Holder at such Holder's
address as it appears in the Note Register, within 90 days after the end of each
fiscal year of the Company, an Officer's

                                       24
<PAGE>   25

Certificate, signed by each of the Company's Chief Executive Officer and Chief
Financial Officer, to the effect that each such officer has reviewed the
Agreement and the Related Agreements and is not aware of the occurrence or
existence of any condition or event which constitutes a Default or an Event of
Default, or, if they are aware thereof, the nature thereof and what action the
Company is taking or proposes to take with respect thereto.

         (e)      Notwithstanding any other provision hereof to the contrary,
promptly upon acquiring knowledge of any Default or Event of Default, the
Company will promptly deliver to each Holder at such Holder's address as it
appears in the Note Register an Officer's Certificate specifying such Default or
Event of Default and what action the Company is taking or proposes to take with
respect thereto.

         (f)      The Company will deliver to each Holder of at least $1.0
million aggregate principal amount of Notes who so requests at such Holder's
address as it appears in the Note Register, within 30 days after the end of each
fiscal quarter of the Company, an Officer's Certificate, signed by the Company's
Chief Executive Officer and Chief Financial Officer, which (i) sets forth in
reasonable detail the calculations which demonstrate the Company's compliance
with the financial covenants set forth in Section 4.12 (regardless whether such
covenants are in effect) and Section 4.13 (regardless whether the Company is
seeking to Incur additional Indebtedness) and (ii) to the effect that each such
officer is not aware of the occurrence or existence of any condition or event
which constitutes a Default or an Event of Default with respect to Section 4.6
or, if they are aware thereof, the nature thereof and what action the Company is
taking or proposes to take with respect thereto.

         (g)      The Company will deliver to each Holder of at least $1.0
million aggregate principal amount of Notes who so requests at such Holder's
address as it appears in the Note Register, within 30 days after the end of each
calendar month, (i) an unaudited balance sheet and income statement showing the
results of the Company's operations for such month, certified by an Officers'
Certificate which is signed by the Company's Chief Financial Officer or Chief
Accounting Officer, (ii) the amount of originations, purchases and sales of each
type of Receivable by the Company and each Subsidiary of the Company during such
month and fiscal year to date and (iii) the amount of (x) delinquent loans or
other Receivables and (y) real estate owned of the Company and each Subsidiary
of the Company at the end of such month.

SECTION 4.4 TAXES AND OTHER CHARGES.

         (a)      Each of the Company and its Subsidiaries will duly pay and
discharge, or cause to be paid and discharged, before the same becomes in
arrears, all taxes, assessments and other governmental charges imposed upon such
Person and its properties, sales or activities, or upon the income or profits
therefrom, as well as all claims for labor, materials, supplies or services
which if unpaid might by law become a Lien upon any of its assets; provided,
however, that any such tax, assessment, charge or claim need not be paid if the
validity or amount thereof shall at the time be contested in good faith by
appropriate proceedings and if such Person shall, in accordance with GAAP, have
set aside on its books adequate reserves with respect thereto; and provided,
further, that each of the Company and its Subsidiaries shall pay or bond, or
cause to be

                                       25
<PAGE>   26

paid or bonded, all such taxes, assessments, charges or other governmental
claims immediately upon the commencement of proceedings to foreclose any Lien
which may have attached as security therefor (except to the extent such
proceedings have been dismissed or stayed).

         (b)      Each of the Company and its Subsidiaries will promptly pay
when due, or in conformity with ordinary business practices, all accounts
payable incident to the operations of such Person not referred to in paragraph
(a) of this Section 4.4; provided, however, that any such Indebtedness need not
be paid if the validity or amount thereof shall at the time be contested in good
faith and if such Person shall, in accordance with GAAP, have set aside on its
books adequate reserves with respect thereto.

SECTION 4.5 CONDUCT OF BUSINESS.

         (a)      Each of the Company and its Subsidiaries (i) will carry on and
conduct its business in substantially the same manner and in substantially the
same fields of enterprise as is conducted generally from time to time by
companies in the mortgage lending business or the consumer finance business in
the United States and will not engage in any other business activities and (ii)
do all things necessary to remain duly incorporated, validly existing and in
good standing as a domestic corporation in its jurisdiction of incorporation and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted to the extent failure to do so would have, or
could reasonably be expected to have, a Material Adverse Effect.

         (b)      Each of the Company and its Subsidiaries will comply in all
material respects with all valid and applicable statutes, laws, ordinances,
zoning and building codes and other rules and regulations of the United States
of America, of the states and territories thereof and their counties,
municipalities and other subdivisions and of any foreign country or other
jurisdictions applicable to such Person, except where failure so to comply would
not, individually or in the aggregate, result in any Material Adverse Effect.

SECTION 4.6.  CORPORATE EXISTENCE.

         (a)      Subject to Article VI, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises and those of any
Subsidiary of the Company, provided, however, that the Company and any
Subsidiary of the Company shall not be required to preserve any such right or
franchise if the Board of Directors of the Company shall determine in good faith
that the preservation is no longer desirable in the conduct of the Company's
business and that the loss thereof is not, and will not be, reasonably likely to
result in any Material Adverse Effect.

         (b)      Notwithstanding anything in paragraph (a) to the contrary, the
Company will exercise its reasonable best efforts to operate MCI in a manner
that will maintain the corporate

                                       26
<PAGE>   27

existence and enterprise value of MCI, including but not limited to maintenance
of its production, administration and secondary marketing functions in a fashion
that would make its business a commercially marketable asset, which shall
include:

         (i)      the maintenance of separate books, records and accounts,
         including detailed intercompany payables and receivables accounts;

         (ii)     separate revenue generation (including loan origination and
         loan sales), collection, and credit functions;

         (iii)    separate expense allocation;

         (iv)     separate employment of employees, consultants and agents; (v)
         separate compensation of employees, consultants and agents; (vi)
         maintenance of separate licenses; (vii) maintenance of separate
         borrowing facilities, whether in MCI's own name, or as a named borrower
         under the Company facilities, including warehouse facilities;

         (viii)   separation of all material operational functions, including
         telephone systems, computer systems, etc.

         (ix)     separate corporate existence; and

         (x)      separate business leases and contracts, including as to office
         space, phone systems, copy systems, leased furniture and equipment.

         (c)      The Company will take reasonable steps to ensure that all data
and information reasonably necessary for the operation of MCI as an independent
corporation, including accounting, loan production and loan sales information,
shall be transferable to MCI promptly and without material expense upon
reasonable request by MCI. MCI shall maintain, at MCI, computer systems capable
of maintaining and processing the above and such data shall be forwarded to such
system periodically.

         (d)      The Company will ensure that all business relations with MCI,
including any services provided to MCI by the Company, are properly documented.
All contracts between MCI and the Company shall include a provision permitting
MCI to terminate such contracts without penalty, at its discretion. The Company
will take no action which it reasonably believes will result in a material
reduction in the enterprise value or marketability of MCI, provided that this
restriction shall not prohibit the Company from transferring money from MCI to
the Company in such manner as the Company determines is necessary, in its
discretion.

         (e)      The covenants in paragraphs (b) and (c) above shall cease to
be effective at such time on or after August 31, 2001 as the Company shall have
established compliance with all of the financial tests specified in Section 4.12
(a), (b) and (c).

                                       27
<PAGE>   28

SECTION 4.7. MAINTENANCE OF PROPERTIES.

         The Company and its Subsidiaries will cause all material properties
(real and personal) owned, leased or licensed in the conduct of their business
to be maintained and kept in good condition, repair and working order and
supplied with all necessary equipment and will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof and
thereto, all as in the reasonable judgment of the Board of Directors may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times while any Notes are
Outstanding, provided, however, that nothing in this Section 4.7 shall prevent
the Company and its Subsidiaries from discontinuing the maintenance of any such
properties if, in the reasonable judgment of the Board of Directors, such
discontinuance is desirable in the conduct of the Company's business and is not,
and will not be, reasonably likely to result in any Material Adverse Effect.

SECTION 4.8 INSURANCE.

         Each of the Company and its Subsidiaries will maintain with financially
sound and reputable insurers insurance against liability for hazards, risks and
liability to persons and property, to the extent, in amounts and with
deductibles at least as favorable as those generally maintained by businesses of
similar size engaged in similar activities.

SECTION 4.9. RESTRICTED PAYMENTS.

         The Company will not, and will not permit any Subsidiary to, directly
or indirectly, make any Restricted Payment.

SECTION 4.10. RESTRICTIONS ON ISSUANCE AND SALE OF CAPITAL STOCK OF
SUBSIDIARIES.

         The Company will not sell, transfer or otherwise dispose of shares of
Capital Stock of any Subsidiary of the Company or permit any Subsidiary of the
Company to issue, sell or otherwise dispose of shares of its Capital Stock
unless in either case such Subsidiary remains a Wholly-Owned Subsidiary of the
Company.

SECTION 4.11 RESTRICTIONS ON SUBSIDIARY MERGERS AND SALES OF ASSETS.

         (a)      The Company will not permit any Subsidiary to merge or
consolidate with any Person, except that a Subsidiary, other than MCI, may merge
into the Company or another Wholly-Owned Subsidiary of the Company.

         (b)      The Company will not permit any Subsidiary to sell, lease or
otherwise dispose of its assets to any other Person, except (i) sales of
Receivables in the ordinary course of business, (ii) sales of mortgage-related
securities which are issued or sponsored by the Subsidiary or an Affiliate of
the Subsidiary in the ordinary course of business or (iii) sales, leases

                                       28
<PAGE>   29

or other dispositions of its assets that, together with all other assets of the
Subsidiary previously sold, leased or disposed of (other than Receivables and
securities referred to in clauses (i) and (ii) of this sentence) in accordance
with this Section 4.11(b) during the 12-month period ending with the month in
which any such sale, lease or other disposition occurs, do not constitute a
Substantial Portion of the consolidated assets of the Company under GAAP.

SECTION 4.12. FINANCIAL COVENANTS.

         (a)      The Company will not at any time permit its Consolidated Net
Worth to be less than the sum of (1) $30.0 million plus (2) 60% of the sum of
the Company's positive Consolidated Net Income (determined in accordance with
GAAP) for each fiscal semi-annual period ending after the Issue Date, commencing
with the semi-annual period ending August 31, 2000, plus (3) 100% of the net
proceeds obtained by the Company through the issuance or sale of Capital Stock
(after the deduction of all costs of such issuance). For purposes of this
Section 4.12(a), Consolidated Net Worth shall not include (i) up to an aggregate
of $5.0 million of increases in the carrying value of the mortgage-related
securities owned by the Company as of the Issue Date (the "Issue Date
Securities") recorded by the Company under GAAP and (ii) up to an aggregate of
$5.0 million of decreases in the carrying value of the Issue Date Securities
recorded by the Company under GAAP, in each case measured from the carrying
value of the Issue Date Securities as of the month-end preceding the Closing
Date, as set forth on an Officers' Certificate delivered to Value Partners and
the Collateral Agent, and as subsequently reflected on any statement of
financial condition of the Company included in a report filed by the Company
pursuant to Section 4.3(a)(1) (the "Mark-to-Market Adjustments"). To illustrate,
if the Company decreased the carrying value of the Issue Date Securities under
GAAP as of the month-end preceding the Issue Date by $4.0 million and $3.0
million at August 31, 2000 and November 30, 2000, respectively, the Consolidated
Net Worth of the Company at November 30, 2000 for purposes of Section 4.12(a)(1)
shall be increased by $5.0 million. Similarly, if the Company increased the
carrying value of the Issue Date Securities by such respective amounts at such
respective dates, the Consolidated Net Worth of the Company at November 30, 2000
for purposes of Section 4.12(a)(1) shall be decreased by $5.0 million.

         (b)      Commencing on August 31, 2001 and thereafter, the Company will
not at any time permit the ratio of (i) the aggregate amount of consolidated
liabilities of the Company and its Subsidiaries (determined in accordance with
GAAP) to (ii) the Consolidated Net Worth of the Company and its Subsidiaries to
exceed 7.0 to 1.0.

         (c)      Commencing with the fiscal quarter ending August 31, 2001 and
as of the end of each fiscal quarter of the Company thereafter, the Company will
not permit the Fixed Charge Coverage Ratio of the Company to be less than 1.5 to
1.0 on a trailing four-quarter basis.

                                       29
<PAGE>   30

SECTION 4.13. LIMITATION ON INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
              DISQUALIFIED CAPITAL STOCK.

         (a)      The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, Incur any Indebtedness or issue any
Disqualified Capital Stock, provided, that the Company and any Subsidiary may
Incur Indebtedness, other than in the case of the Company Indebtedness as a
result of its Guarantee of the Indebtedness of any Person, including without
limitation any Subsidiary of the Company, if at the time of Incurrence no
Default or Event of Default shall have occurred and be continuing or would occur
as a consequence thereof and each of the following requirements is satisfied:

                  (i) The Fixed Charge Coverage Ratio for the Company's most
         recently ended four fiscal quarters for which internal financial
         statements are available immediately preceding the date on which such
         additional Indebtedness is Incurred would have been at least 1.6 to
         1.0, determined on a pro forma basis (including, if applicable, a pro
         forma application of the net proceeds therefrom to repay other
         Indebtedness), as if the additional Indebtedness had been Incurred at
         the beginning of such four-quarter period; and

                  (ii) the ratio of (i) the aggregate amount of consolidated
         liabilities of the Company and its Subsidiaries to (ii) the
         Consolidated Net Worth of the Company does not exceed 6.0 to 1.0,
         determined on a pro forma basis (including a pro forma application of
         the net proceeds therefrom).

         (b)      Notwithstanding paragraph (a) of this Section 4.13, the
Company and its Subsidiaries may incur Permitted Indebtedness while no Default
or Event of Default exists.

SECTION 4.14. LIENS.

         (a)      The Company will not, and will not permit any Subsidiary to,
create, assume or otherwise cause or suffer to exist or to become effective any
Lien upon any Note Security (or become contractually committed to do so), except
the following:

                  (i) Liens created under the agreements governing the
         securitization of the Receivables underlying the mortgage-related
         securities included in the Note Security;

                  (ii) Liens to secure taxes, assessments and other governmental
         charges, to the extent that payment thereof shall not at the time be
         required by Section 4.4;

                  (iii) restrictions under federal and state securities laws on
         the transfer of securities; and

                  (iv) Liens which solely secure the Note Obligations and the
         Exchange Note Obligations.

                                       30
<PAGE>   31

         (b)      The Company will not, and will not permit any Subsidiary to,
create, assume or otherwise cause or suffer to exist or become effective any
Lien upon any Eligible Collateral, other than Permitted Liens, to secure any
Indebtedness of the Company (other than the Note Obligations and the Exchange
Note Obligations), any Subsidiary of the Company or any other Person, without in
each case making effective provision whereby all Notes and Exchange Notes shall
be directly secured equally and ratably with (or prior to in the case of Liens
with respect to Junior Indebtedness) such Indebtedness.

SECTION 4.15. SUBSIDIARY GUARANTEES.

         The Company will not permit any Subsidiary of the Company, directly or
indirectly, to Guarantee or assume, or subject any of its assets to a Lien to
secure, any Pari Passu Indebtedness or Junior Indebtedness unless (i) such
Subsidiary simultaneously provides for a Guarantee of, or pledge of assets to
secure, the Note Obligations and the Exchange Note Obligations by such
Subsidiary on terms at least as favorable to the Holders as such Guarantee or
security interest in such assets is to the holders of such Pari Passu
Indebtedness or Junior Indebtedness, except that in the event of a Guarantee or
security interest in such assets with respect to (x) Pari Passu Indebtedness,
the Guarantee or security interest in such assets shall be made pari passu to
the Guarantee or security interest in such assets with respect to such Pari
Passu Indebtedness or (y) Junior Indebtedness, any such Guarantee or security
interest in such assets with respect to such Junior Indebtedness shall be
subordinated to such Subsidiary's guarantee or security interest in such assets
with respect to the Note Obligations and the Exchange Note Obligations to the
same extent as such Junior Indebtedness is subordinated to the Note Obligations
and the Exchange Note Obligations and (ii) such Subsidiary waives and agrees in
writing that it will not in any manner whatsoever claim, or take the benefit or
advantage of, any rights of reimbursement, indemnity or subrogation or any other
rights against the Company or any other Subsidiary of the Company as a result of
any payment by such Subsidiary under its guarantees.

SECTION 4.16. PAYMENT OF DIVIDENDS FROM SUBSIDIARIES.

         To the extent necessary to enable it to make payments on the Notes in
accordance with their terms, the Company shall cause dividends to be paid to it
by its Subsidiaries (whether in existence as of the date of issuance of the
Notes or thereafter formed or acquired) in amounts which are sufficient to
enable the Company to satisfy its payment obligations under the Notes (and which
shall be so used by the Company), provided that the Company shall not be
required to take any action which would result in a Subsidiary paying dividends
to the extent not permitted by applicable law and regulation and/or restrictions
existing under agreements in effect on the Issue Date if the Company receives an
opinion of counsel (in form and substance satisfactory to the registered holders
of a majority in aggregate principal amount of the Notes and the Exchange Notes,
considered as a single class, at the time Outstanding) as to the existence of
the relevant restriction no later than the applicable Interest Payment Date or
the Stated Maturity of the Notes, whether by acceleration or otherwise.

                                       31
<PAGE>   32

SECTION 4.17. LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.

         The Company will not, and will not permit any of its Subsidiaries
(whether in existence as of the date of issuance of the Notes or thereafter
formed or acquired) to, create, assume or otherwise cause or suffer to exist or
to become effective any consensual encumbrance or consensual restriction on the
ability of any such Subsidiary to:

         (a)      pay any dividends or make any other distribution to the
                  Company or any other Subsidiary on its Capital Stock or with
                  respect to any other interest or participation in, or measured
                  by, its profits;

         (b)      make payments in respect to any Indebtedness owed to the
                  Company or any other Subsidiary; or

         (c)      make loans or advances to the Company or any other Subsidiary
                  or to guarantee Indebtedness of the Company or any other
                  Subsidiary;

         other than, in the case of (a), (b) and (c),

                  (1) restrictions existing under agreements in effect on the
Issue Date;

                  (2) consensual encumbrances or consensual restrictions binding
upon any Person at the time such Person becomes a Subsidiary of the Company so
long as such encumbrances or restrictions (i) are not created, incurred or
assumed in contemplation of such Person becoming a Subsidiary and (ii) do not
encumber or restrict the Company or any other Subsidiary of the Company as set
forth in (a), (b) or (c) above.

                  (3) restrictions on the transfer of assets which are subject
to Liens; and

                  (4) restrictions existing under any agreement which refinances
or replaces any of the agreements containing the restrictions in clauses (1) and
(2), provided that the terms and conditions of any such restrictions are not
materially less favorable to the Holders than those under the agreement
evidencing or relating to the Indebtedness refinanced.

SECTION 4.18. INVESTMENTS AND ACQUISITIONS.

         The Company will not, nor will it permit any Subsidiary to, make or
suffer to exist any Investments (including, without limitation, loans and
advances to, and other Investments in, Subsidiaries), or commitments therefor,
or create any Subsidiary or become a partner in any partnership or joint
venture, or make any Acquisition of any Person, in each case whether directly or
indirectly through a transaction which may otherwise be permissible pursuant to
Section 6.1 hereof or otherwise, except:

         (i)      Short-term obligations of, or fully guaranteed by, the United
                  States of America;

                                       32
<PAGE>   33

         (ii)     Commercial paper rated A-1 or better by Standard and Poor's
                  Ratings Group or P-1 or better by Moody's Investors Service,
                  Inc.;

         (iii)    Demand deposit accounts maintained in the ordinary course of
                  business;

         (iv)     Certificates of deposit issued by and time deposits with
                  federally-insured financial institutions having capital and
                  surplus in excess of $100,000,000;

         (v)      Investments in existence on the Issue Date;

         (vi)     Investments in the ordinary course of the Company's business
                  to originate or purchase (a) Receivables (and in connection
                  with commitments to purchase the same) and (b) real estate
                  acquired by foreclosure or by deed-in-lieu thereof, whether
                  directly or indirectly through a Subsidiary formed for the
                  sole purpose of holding the same;

         (vii)    Hedging Obligations; and

         (viii)   Investments in Securitization Subsidiaries.

SECTION 4.19. LIMITATION ON INVESTMENT COMPANY STATUS.

         The Company will not take, and will not permit any Subsidiary to take,
any action, or otherwise permit to exist any circumstance, that would require
the Company or such Subsidiary to register as an "investment company" under the
Investment Company Act of 1940, as amended.

SECTION 4.20. PAYMENTS ON NOTES; REPURCHASE OF NOTES.

         (a) Except as expressly provided in the Intercreditor Agreement, the
Company will not make any payment of interest, premium, if any, or principal on
the Notes or the Exchange Notes without making a pro rata payment to all holders
of Notes and Exchange Notes.

         (b) The Company will not, and will not permit any Subsidiary or other
Affiliate of the Company to, redeem or purchase (whether in public or private
transactions) any Notes or the Exchange Notes other than pursuant to a
redemption or repurchase offer made to each holder of a Note or an Exchange Note
pro rata in accordance with the aggregate principal amount of Notes and Exchange
Notes held by such holders.

SECTION 4.21. TRANSACTIONS WITH AFFILIATES.

         Neither the Company nor any Subsidiary will enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of any
asset or the rendering of any service, with any Affiliate (other than the
Company or a Subsidiary of the Company) unless such

                                       33
<PAGE>   34

transaction (a) is otherwise not in violation of the Agreement and the Related
Agreements (including without limitation the Notes), and (b) is approved by a
majority of the disinterested members of the Board of Directors, is in the
ordinary course of its business and is upon fair and reasonable terms no less
favorable to it than it would obtain in a comparable arm's-length transaction
with a Person not an Affiliate, provided that the requirements of this clause
(b) shall not apply to (i) any transaction pursuant to agreements in effect on
the Issue Date and (ii) any transaction or series of related transactions in
which the amount involved does not exceed $250,000.

SECTION 4.22. PAYMENTS FOR CONSENT.

         The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any holder of a Note or an Exchange Note
as an inducement to any consent, waiver or amendment of any of the terms or
provisions of the Notes (other than article VII thereof) or the Exchange Notes
unless such consideration is paid to all holders of Notes and Exchange Notes
that provide such consent or so waive or agree to amend.

SECTION 4.23 BOARD OF DIRECTORS.

         (a) In the event that there is a Default or an Event of Default, the
Holders of a majority in aggregate principal amount of the Notes at the time
Outstanding shall have the right to nominate a director to the Board of
Directors of the Company, which action may be taken by the written consent of
such Holders. In the event that the Holders elect to nominate a director under
this Section, the Company shall call and hold, within 10 Business Days, a
meeting of its Board of Directors for the purpose of considering electing the
nominee of the Holders for a term expiring at the next annual meeting of
stockholders of the Company and until his or her successor is elected and
qualified. Thereafter, in the event of the election of such nominee by the Board
of Directors of the Company, and subject to the fiduciary duties of the Board of
Directors of the Company, the Company shall include such person on the list of
nominees for director presented by the Board of Directors of the Company and for
which said Board shall solicit proxies at the next annual meeting of
stockholders of the Company.

         (b) So long as it is the holder of at least $1.0 million principal
amount of Notes, Value Partners, Ltd. may designate a representative who shall
have the right to attend all regular and special meetings of the Board of
Directors of the Company. The Company shall notify such representative at least
48 hours in advance of the time and place of any meeting of the Board of
Directors of the Company.

SECTION 4.24 SOLVENCY TEST.

         Commencing on May 31, 2000, the Company will not permit the sum of the
amount of (i) the Liquid Assets owned by the Company, as of the end of each
fiscal month of the Company,

                                       34
<PAGE>   35

which are not subject to any Lien and (ii) the Consolidated Cash Flow of the
Company during the preceding three fiscal months to amount to zero or less.

SECTION 4.25 WAIVER OF CERTAIN COVENANTS.

         Except as provided in the next sentence, the Company may omit in any
particular instance to comply with any covenant or condition set forth in
Sections 4.3 to 4.24, inclusive, if before the time for such compliance the
record holders of at least a majority in principal amount of the Notes and the
Exchange Notes, considered as a single class, at the time Outstanding, shall
either waive such compliance in such instance or generally waive compliance with
such covenant or condition. Notwithstanding the foregoing, the Company may omit
in any particular instance to comply with the covenants or conditions set forth
in any of the following sections if before the time for such compliance the
registered holders of at least 70% in aggregate principal amount of the Notes
and the Exchange Notes, considered as a single class, at the time Outstanding,
shall either waive such compliance in such instance or generally waive
compliance with such covenant or condition: Section 4.5(a); Section 4.9; Section
4.11; Section 4.12(a), but only to the extent that the waiver relates to a
Consolidated Net Worth of less than $25.0 million ($20.0 million exclusive of
Mark-to-Market Adjustments, if any); Section 4.12(b), but only to the extent
that the waiver relates to an increase in the ratio set forth therein above 8.0
to 1.0; Section 4.12(c), but only to the extent that the waiver relates to a
decrease in the ratio set forth therein below 1.2 to 1.0; Section 4.13(a), but
only to the extent that the waiver relates to a decrease in the ratio set forth
in Section 4.13(a)(i) below 1.3 to 1.0 and/or an increase in the ratio set forth
in Section 4.13(a)(ii) above 7.0 to 1.0; Section 4.14; Section 4.15; Section
4.18, but only to the extent that the waiver relates to an acquisition of the
capital stock or assets of a corporation, firm or other entity which would
constitute a Significant Subsidiary of the Company; Section 4.20; and Section
4.22 (collectively, the "Supermajority Covenants"). No waiver of a covenant
pursuant to this Section 4.25 shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company in respect of any such covenant
or condition shall remain in full force and effect.

                                    ARTICLE V
                             REMEDIES OF NOTEHOLDERS
                             ON AN EVENT OF DEFAULT

SECTION 5.1. EVENTS OF DEFAULT.

         In case one or more of the following Events of Default (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) shall have occurred and be continuing:

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

                                       35
<PAGE>   36

                  (b) default in the payment of the principal of or premium, if
         any, on any of the Notes as and when the same shall become due and
         payable at maturity of the Notes, by acceleration or otherwise, or in
         connection with any redemption pursuant to Article III; or

                  (c) failure on the part of the Company duly to observe or
         perform any other of the covenants or agreements on the part of the
         Company in the Agreement or in any of the Related Agreements or in the
         Exchange Agreement (other than a covenant or agreement a default in
         whose performance or whose breach is elsewhere in this Section 5.1
         specifically dealt with) continued for a period of 60 days after the
         date on which written notice of such failure, requiring the Company to
         remedy the same, shall have been given to the Company by the registered
         holders of at least 25% in aggregate principal amount of the Notes and
         the Exchange Notes, considered as a single class, at the time
         Outstanding; or

                  (d) failure of the Company or any Subsidiary of the Company to
         make any payment, including any applicable grace period, in respect of
         principal or interest on any Indebtedness which default shall have
         resulted in Indebtedness in an amount in excess of $1,000,000; or

                  (e) default by the Company or a Subsidiary of the Company with
         respect to any Indebtedness of the Company or such Subsidiary, which
         default results in acceleration of any such Indebtedness which is in an
         amount in excess of $1,000,000 without such Indebtedness having been
         discharged, or such acceleration having been rescinded or annulled,
         within the applicable grace period; or

                  (f) the entry by a court having jurisdiction in the premises
         of a final judgment, decree or order against the Company or any
         Subsidiary of the Company which shall require the payment by the
         Company or any Subsidiary of the Company of an amount (to the extent
         not covered by insurance) in excess of $1,000,000 and the continuance
         of any such judgment, decree or order unstayed or unsatisfied and in
         effect for a period of 60 consecutive days which is not being contested
         in good faith by appropriate judicial proceedings; or

                  (g) the Company or any Subsidiary that is a Significant
         Subsidiary of the Company shall commence a voluntary case or other
         proceeding seeking liquidation, reorganization or other relief with
         respect to itself or its debts under any bankruptcy, insolvency or
         other similar law now or hereafter in effect or seeking the appointment
         of a trustee, receiver, liquidator, custodian or other similar official
         of it or any substantial part of

its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due; or

                                       36
<PAGE>   37

                  (h) an involuntary case or other proceeding shall be commenced
         against the Company or any Subsidiary that is a Significant Subsidiary
         of the Company seeking liquidation, reorganization or other relief with
         respect to it or its debts under any bankruptcy, insolvency or other
         similar law now or hereafter in effect or seeking the appointment of a
         trustee, receiver, liquidator, custodian or other similar official of
         it or any substantial part of its property, and such involuntary case
         or other proceeding shall remain undismissed and unstayed for a period
         of 60 consecutive days; or

                  (i) failure on the part of the Company duly to observe or
         perform any of the covenants or agreements of the Company in any of the
         Collateral Documents continued for a period of 10 days after the date
         on which written notice of such failure, requiring the Company to
         remedy the same, shall have been given to the Company by the registered
         holders of at least 25% in aggregate principal amount of the Notes and
         the Exchange Notes, considered as a single class, at the time
         Outstanding; or

                  (j) any of the Collateral Documents after delivery thereof
         shall for any reason, except to the extent permitted by the terms
         thereof, cease to be in full force and effect and valid, binding and
         enforceable against the Company in all material respects in accordance
         with their terms, or cease in any material respect to create a valid
         and perfected Lien of the priority required thereby on any of the
         collateral purported to be covered thereby, or the Company shall so
         state in writing, and such default shall continue unremedied for a
         period of 10 days; or

                  (k) default by the Company with respect to any of its
         obligations contained in Article VIII hereof; or

                  (l) default by the Company with respect to any of its
         obligations contained in Section 4.24 hereof, unless waived pursuant to
         Section 5.5 hereof within 10 calendar days thereafter; or

                  (m) any annual audited financial statement of the Company is
         qualified as to going concern or similar qualifications;

then, and in each and every such case (other than an Event of Default specified
in Section 5.1(g) or (h)), unless the principal of all of the Notes shall have
already become due and payable, the registered holders of not less than 25% in
aggregate principal amount of the Notes and the Exchange Notes, considered as a
single class, then Outstanding, by notice in writing to the Company, may declare
the principal of all the Notes and the interest accrued thereon to be due and
payable immediately, without presentment, demand, protest, notice of protest or
dishonor, notice of intent to accelerate or other notice of default of any kind,
all of which are expressly waived by the Company, and upon any such declaration
the same shall become and shall be immediately due and payable, anything herein
contained to the contrary notwithstanding.

         If an Event of Default specified in Section 5.1(g) or (h) occurs, the
principal of all the Notes and the interest accrued thereon shall be immediately
and automatically due and payable

                                       37
<PAGE>   38

without presentment, demand, protest, notice of protest or dishonor, notice of
intent to accelerate or other notice of default of any kind, all of which are
expressly waived by the Company.

SECTION 5.2. PAYMENT OF NOTES ON DEFAULT; SUIT THEREFOR.

         The Company covenants that (a) in case default shall be made in the
payment of any installment of interest upon any of the Notes as and when the
same shall become due and payable, and such default shall have continued for a
period of 30 days, or (b) in case default shall be made in the payment of the
principal of or premium, if any, on any of the Notes as and when the same shall
have become due and payable, whether at maturity of the Notes or in connection
with any redemption or repurchase hereunder, by declaration or otherwise, then
the Company will pay to the Holders the whole amount that then shall have become
due and payable on the Notes for principal and premium, if any, or interest, or
both, as the case may be, with interest upon the overdue principal and premium,
if any, and (to the extent that payment of such interest is enforceable under
applicable law) upon the overdue installments of interest at the rate then borne
by the Notes and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection.

         In case the Company shall fail forthwith to pay such amounts, a Holder
shall be entitled and empowered to institute any actions or proceedings at law
or in equity for the collection of the sums so due and unpaid to it and to
exercise any of the rights or remedies provided in the Collateral Documents, and
may prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Company and collect in the
manner provided by law out of the property of the Company (including without
limitation the collateral held pursuant to the Collateral Documents) wherever
situated the monies adjudged or decreed to be payable.

         In the case there shall be pending proceedings for the bankruptcy or
for the reorganization of the Company under Title 11 of the United States Code,
or any other applicable law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official shall
have been appointed for or taken possession of the Company, the property of the
Company, or in the case of any other judicial proceedings relative to the
Company or to the creditors or property of the Company, a Holder, irrespective
of whether the principal of the Notes shall then be due and payable as herein
expressed or by declaration or otherwise, shall be entitled and empowered, by
intervention in such proceedings or otherwise, to file and prove a claim or
claims for the whole amount of principal, premium, if any, and interest owing
and unpaid in respect of the Notes, and, in case of any judicial proceedings, to
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Holders allowed in such judicial
proceedings relative to the Company or its creditors or its property, and to
collect and receive any monies or other property payable or deliverable on any
such claims.

                                       38
<PAGE>   39

SECTION 5.3. APPLICATION OF MONIES COLLECTED.

         Subject to the terms of the Intercreditor Agreement and Section 4.20
hereof, any monies collected by or on behalf of a Holder pursuant to this
Article V shall be applied in the following order:

         First, to reimbursement of expenses and indemnities provided in the
Agreement, the Exchange Agreement, the Notes, the Exchange Notes and the
Collateral Documents;

         Second, in case the principal of the Outstanding Notes shall not have
become due and be unpaid, to the payment of interest on the Notes in default in
the order of the maturity of the installments of such interest, with interest
upon the overdue installments of interest at the rate then borne by the Notes,
such payments to be made ratably to the Holders entitled thereto;

         Third, in case the principal of the Outstanding Notes shall have become
due, by declaration or otherwise, and be unpaid, to the payment of the whole
amount then owing and unpaid upon the Notes for principal and premium, if any,
and interest, with interest on the overdue principal and premium, if any, and
upon overdue payments of interest at the rate then borne by the Notes, and in
case such monies shall be insufficient to pay in full the whole amounts so due
and unpaid upon the Notes, then to the payment of such principal and premium, if
any, and interest without preference or priority of principal and premium, if
any, over interest, or of interest over principal and premium, if any, or of any
installment of interest over any other installment of interest, or of any Note
over any other Note, ratably to the aggregate of such principal and premium, if
any, and accrued and unpaid interest; and

         Fourth, to the payment of the remainder, if any, to the Company or any
other Person lawfully entitled thereto.

SECTION 5.4. REMEDIES CUMULATIVE AND CONTINUING.

         Except as provided in the last paragraph of Section 2.4, all powers and
remedies given by this Article V to a Holder shall, to the extent permitted by
law, be deemed cumulative and not exclusive of any thereof or of any other
powers and remedies available to a Holder by judicial proceedings or otherwise,
to enforce the performance or observance of the covenants and agreements
contained herein, and no delay or omission of any Holder of any of the Notes to
exercise any right or power accruing upon an Event of Default shall impair any
such right or power, or shall be construed to be a waiver of any such default or
any acquiescence therein and every power and remedy given herein, by the
Collateral Documents or by law to the Holders may be exercised from time to
time, and as often as shall be deemed expedient, by the Holders.

                                       39
<PAGE>   40

SECTION 5.5. WAIVER OF DEFAULTS BY HOLDERS.

         Except as provided in the next sentence, the registered holders of a
majority in aggregate principal amount of the Notes and the Exchange Notes,
considered as a single class, at the time Outstanding may on behalf of the
Holders of all of the Notes waive any past Default or Event of Default hereunder
and its consequences, except (i) a default in the payment of interest or
premium, if any, on, or the principal of, the Notes, (ii) a failure by the
Company to convert any Notes into Common Stock in accordance with the provisions
hereof, (iii) a default in the payment of the Redemption Price pursuant to
Article III or the Repurchase Price pursuant to Article VIII or (iv) a default
in respect of a covenant or provision hereof which under Article X cannot be
modified or amended without the consent of the Holder of each Note affected
thereby. Notwithstanding the foregoing, the record holders of at least 70% in
aggregate principal amount of the Notes and the Exchange Notes, considered as a
single class, at the time Outstanding shall be required on behalf of the Holders
of all the Notes to waive any past Default or Event of Default under any of the
Supermajority Covenants. Upon any waiver pursuant to this Section 5.5, the
Company and the Holders shall be restored to their former positions and rights
hereunder, but no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereon. Whenever any Default or
Event of Default hereunder shall have been waived as permitted by this Section
5.5, said Default or Event of Default shall for all purposes of the Notes be
deemed to have been cured and to be not continuing, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.

                                   ARTICLE VI

                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

SECTION 6.1. COMPANY MAY CONSOLIDATE ETC. ONLY ON CERTAIN TERMS.

         Subject to the provisions of Article VIII, nothing contained herein
shall prevent any consolidation or merger of the Company with or into any other
Person (whether or not affiliated with the Company), or successive
consolidations or mergers in which the Company or its successor or successors
shall be a party or parties, or shall prevent any sale, conveyance or lease (or
successive sales, conveyances or leases) of the property of the Company,
substantially as an entirety, to any other Person (whether or not affiliated
with the Company), authorized to acquire and operate the same and which, in each
case, shall be organized under the laws of the United States of America, any
state thereof or the District of Columbia, provided, that (i) upon any such
consolidation, merger, sale, conveyance or lease, if the Company is not the
surviving entity, the due and punctual payment of the Note Obligations,
including without limitation the principal of and premium, if any, and interest
on all of the Notes, according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions to be
performed by the Company under the Agreement, the Notes, the Exchange Notes, the
Collateral Documents and the Exchange Agreement shall be expressly and
unconditionally assumed, by agreement in form and substance reasonably
satisfactory to the registered holders of not less than a majority in

                                       40
<PAGE>   41

aggregate principal amount of the Notes and the Exchange Notes, considered as a
single class, at the time Outstanding, executed and delivered to such holders by
the Person (if other than the Company) formed by such consolidation, or into
which the Company shall have been merged, or by the Person which shall have
acquired or leased such property, (ii) the agreement referred to in clause (i)
shall provide for the applicable conversion rights set forth in Section 7.6 and
the applicable repurchase rights set forth in Section 8.5, (iii) immediately
after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing (iv) immediately after giving effect to such
transaction, the Company (or the surviving entity if the Company is not
continuing) would be able to incur an additional $1.00 of Indebtedness pursuant
to Section 4.13, (v) immediately after giving effect to such transaction, the
Company (or the surviving entity if the Company is not continuing) shall have a
Consolidated Tangible Net Worth equal to or greater than the Consolidated
Tangible Net Worth of the Company immediately prior to such transaction and (vi)
the Company or the Person formed by such consolidation, or into which the
Company shall have been merged, or which shall have acquired or leased such
property, as applicable, shall have delivered an Officer's Certificate to the
Holders to the effect that such consolidation, merger, sale, conveyance or lease
complies with the terms hereof and that all conditions precedent provided for
herein relating to such transaction have been complied with.

SECTION 6.2. SUCCESSOR CORPORATION TO BE SUBSTITUTED.

         In case of any such consolidation, merger, sale, conveyance or lease
referenced in Section 6.1, and upon the assumption by any Person of the due and
punctual payment of the principal of and premium, if any, and interest on all of
the Notes and the due and punctual performance of all of the covenants and
conditions to be performed by the Company under the Agreement and the Related
Agreements, in accordance with Section 6.1 such Person shall succeed to and be
substituted for the Company, with the same effect as if it had been named herein
as such. In the event of any such consolidation, merger, sale or conveyance (but
not in the event of any such lease), the Person named as the "Company" in the
first paragraph hereof or any successor which shall thereafter have become such
in the manner prescribed in this Article VI shall be released from its
liabilities as obligor and maker of the Notes and from its obligations
hereunder.

                                       41
<PAGE>   42

                                   ARTICLE VII

                               CONVERSION OF NOTES

SECTION 7.1. RIGHT TO CONVERT.

         Subject to and upon compliance with the provisions of this Article, the
Holder of any Note shall have the right, at his option, at any time before the
close of business on the last Business Day prior to the Maturity Date (except
that, with respect to any Note or portion of a Note which shall be called for
redemption, such right shall terminate, except as provided in Section 7.2, at
the close of business on the last Business Day preceding the date fixed for
redemption of such Note or portion of a Note, unless the Company shall default
in payment due upon redemption thereof), to convert the principal amount of any
such Note, or any portion of such principal amount which is $1,000 or an
integral multiple thereof, into that number of fully paid and non-assessable
shares of Common Stock (as such shares shall then be constituted) obtained by
dividing the principal amount of the Note or portion thereof surrendered for
conversion by the Conversion Price in effect at such time, by surrender of the
Note so to be converted in whole or in part in the manner provided in Section
7.2. A Holder is not entitled to any rights of a holder of Common Stock until
such Holder has converted his Notes to Common Stock, and only to the extent such
Notes are deemed to have been converted to Common Stock under this Article VII.

SECTION 7.2. EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK ON
CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS.

         In order to exercise the conversion privilege with respect to any Note,
the Holder of any such Note, to be converted in whole or in part, shall
surrender such Note, duly endorsed, to the Company, and shall give written
notice of conversion in the form provided herein (or such other notice which is
acceptable to the Company) to the Company that the Holder elects to convert such
Note or the portion thereof specified in said notice. Such notice shall also
state the name or names (with address or addresses) in which the certificate or
certificates for shares of Common Stock which shall be issuable on such
conversion shall be issued, and shall be accompanied by transfer taxes, if
required pursuant to Section 7.7. Each such Note surrendered for conversion
shall, unless the shares issuable on conversion are to be issued in the same
name as the registration of such Note, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the Holder or his duly authorized attorney.

         As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Holder (as if such transfer were a transfer of the Note or Notes (or
portion thereof) so converted), the Company shall issue and shall deliver to
such Holder a certificate or certificates for the number of full shares of
Common Stock issuable upon the conversion of such Note or portion thereof in
accordance with the provisions of this Article VII and a check or cash in
respect of any fractional interest in respect of a share of Common Stock arising
upon such conversion, as provided in Section 7.3. In case any Note of a

                                       42
<PAGE>   43

denomination greater than $1,000 shall be surrendered for partial conversion,
the Company shall execute and deliver to the Holder of the Note so surrendered,
without charge to him, a new Note or Notes in authorized denominations in an
aggregate principal amount equal to the unconverted portion of the surrendered
Note.

         Each conversion shall be deemed to have been effected as to any such
Note (or portion thereof) on the date on which the requirements set forth above
in this Section 7.2 have been satisfied as to such Note (or portion thereof),
and the Person in whose name any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become on said date the Holder of record of the shares represented thereby,
provided, however, that any such surrender on any date when the stock transfer
books of the Company shall be closed shall constitute the Person in whose name
the certificates are to be issued as the registered Holder thereof for all
purposes on the next succeeding day on which such stock transfer books are open,
but such conversion shall be at the Conversion Price in effect on the date upon
which such Note shall be surrendered.

SECTION 7.3. CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES.

         No fractional shares of Common Stock or scrip representing fractional
shares shall be issued upon conversion of Notes. If more than one Note shall be
surrendered for conversion at one time by the same Holder, the number of full
shares which shall be issuable upon conversion shall be computed on the basis of
the aggregate principal amount of the Notes (or specified portions thereof to
the extent permitted hereby) so surrendered. If any fractional share of stock
would be issuable upon the conversion of any Note or Notes, the Company shall
make an adjustment and payment therefor in cash at the current market value
thereof to the Holder of the Notes. The current market value of a share of
Common Stock shall be the Closing Price on the last Trading Day prior to the day
on which the Notes (or specified portions thereof) are deemed to have been
converted.

SECTION 7.4. CONVERSION PRICE.

         Subject to adjustment as provided in this Article VII, the conversion
price shall be $1.78 (herein called the "Conversion Price").

SECTION 7.5. ADJUSTMENT OF CONVERSION PRICE.

         The Conversion Price shall be adjusted from time to time by the Company
as follows:

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

                                       43
<PAGE>   44

constituting such dividend or other distribution, such reduction to become
effective immediately after the opening of business on the day following the
date fixed for such determination. The Company will not pay any dividend or make
any distribution on shares of Common Stock held in the treasury of the Company.
If any dividend or distribution of the type described in this Section 7.5(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)      If the Company shall issue rights or warrants to all holders
of its outstanding shares of Common Stock entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price (as defined below) on the date fixed for determination of
stockholders entitled to receive such rights or warrants, the Conversion Price
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the date fixed
for determination of stockholders entitled to receive such rights or warrants by
a fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for determination of
stockholders entitled to receive such rights and warrants plus the number of
shares which the aggregate offering price of the total number of shares so
offered would purchase at such Current Market Price, and of which the
denominator shall be the number of shares of Common Stock outstanding on the
date fixed for determination of stockholders entitled to receive such rights and
warrants plus the total number of additional shares of Common Stock offered for
subscription or purchase. Such adjustment shall be successively made whenever
any such rights and warrants are issued, and shall become effective immediately
after the opening of business on the day following the date fixed for
determination of stockholders entitled to receive such rights or warrants. To
the extent that shares of Common Stock are not delivered after the expiration of
such rights or warrants, the Conversion Price shall be readjusted to the
Conversion Price which would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made on the basis of delivery of only
the number of shares of Common Stock actually delivered. In the event that such
rights or warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such date
fixed for the determination of stockholders entitled to receive such rights or
warrants had not been fixed. In determining whether any rights or warrants
entitle the Holders to subscribe for or purchase shares of Common Stock at less
than such Current Market Price, and in determining the aggregate offering price
of such shares of Common Stock, there shall be taken into account any
consideration received by the Company for such rights or warrants, the value of
such consideration, if other than cash, to be determined by the Board of
Directors.

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

                                       44
<PAGE>   45

become effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.

         (d)      If the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock shares of any class of capital stock of the
Company (other than any dividends or distributions to which Section 7.5(a)
applies) or evidences of indebtedness or assets (including securities, but
excluding any rights or warrants referred to in Section 7.5(b), and excluding
any dividend or distribution paid exclusively in cash (any of the foregoing
hereinafter in this Section 7.5(d) called the "Securities")), then, in each such
case (unless the Company elects to reserve such Securities for distribution to
the Holders upon the conversion of the Notes so that any such Holder converting
Notes will receive upon such conversion, in addition to the shares of Common
Stock to which such Holder is entitled, the amount and kind of such Securities
which such Holder would have received if such Holder had converted its Notes
into Common Stock immediately prior to the Record Date (as defined in Section
7.5(i) for such distribution of the Securities)), the Conversion Price shall be
reduced so that the same shall be equal to the price determined by multiplying
the Conversion Price in effect on the Record Date (as defined below) with
respect to such distribution by a fraction of which the numerator shall be the
Current Market Price per share of the Common Stock on such Record Date less the
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive, and described in a resolution of the Board of Directors) on
the Record Date of the portion of the Securities so distributed applicable to
one share of Common Stock and the denominator of which shall be the Current
Market Price per share of the Common Stock, such reduction to become effective
immediately prior to the opening of business on the day following such Record
Date, provided, however, that in the event the then fair market value (as so
determined) of the portion of the Securities so distributed applicable to one
share of Common Stock is equal to or greater than the Current Market Price of
the Common Stock on the Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Holder shall have the right to
receive upon conversion the amount of Securities such Holder would have received
had such Holder converted each Note on the 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. If the Board of Directors
determines the fair market value of any distribution under and for purposes of
this Section 7.5(d) by reference to the actual or when issued trading market for
any securities, it shall in doing so consider the prices in such market over the
same period used in computing the Current Market Price of the Common Stock to
the extent possible.

         Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock, (ii) are not exercisable and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 7.5 (and no adjustment to the Conversion Price under
this Section 7.5 will be required) until the occurrence of the earliest Trigger
Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Price

                                       45
<PAGE>   46

shall be made under this Section 7.5(d). If any such rights or warrants are
subject to events upon the occurrence of which such rights or warrants become
exercisable to purchase different securities, evidences of indebtedness or other
assets, then the date of the occurrence of any and each such event shall be
deemed to be the date of distribution and record date with respect to new rights
or warrants with such rights (and a termination or expiration of the existing
rights or warrants without exercise by any of the Holders thereof). In addition,
in the event of any distribution (or deemed distribution) of rights or warrants,
or any Trigger Event or other event (of the type described in the preceding
sentence) with respect thereto that was counted for purposes of calculating a
distribution amount for which an adjustment to the Conversion Price under this
Section 7.5 was made, (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 or holders of Common Stock with respect to
such rights or warrants (assuming such holder had retained such rights or
warrants), made to all holders 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 by any holders thereof, the
Conversion Price shall be readjusted as if such rights and warrants had not been
issued.

         For purposes of this Section 7.5(d) and Sections 7.5(a) and (b), any
dividend or distribution to which this Section 7.5(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any further Conversion Price reduction required by this Section 7.5(d) with
respect to such dividend or distribution shall then be made) immediately
followed by (2) a dividend or distribution of such shares of Common Stock or
such rights or warrants (and any further Conversion Price reduction required by
Sections 7.5(a) and (b) with respect to such dividend or distribution shall then
be made), except (A) the Record Date of such dividend or distribution shall be
substituted as "the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution" and "the date fixed for such
determination" within the meaning of Sections 7.5(a) and (b), and (B) any shares
of Common Stock included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such determination"
within the meaning of Section 7.5(a).

         (e)      If the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is distributed
upon a merger or consolidation to which Section 7.6 applies or as part of a
distribution referred to in Section 7.5(d)) in an aggregate amount that,
combined together with (1) the aggregate amount of any other such distributions
to all holders of its Common Stock made exclusively in cash within the 12 months
preceding the date of payment of such distribution, and in respect of which no
adjustment pursuant to this Section 7.5(e) has been made, and (2) the aggregate
of any cash plus the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a resolution of the
Board of Directors) of consideration payable in respect of any tender offer by

                                       46
<PAGE>   47

the Company for all or any portion of the Common Stock concluded within the 12
months preceding the date of payment of such distribution, and in respect of
which no adjustment pursuant to Section 7.5(f) has been made, exceeds 10% of the
product of the Current Market Price (determined as provided in Section 7.5(i))
on the Record Date with respect to such distribution times the number of shares
of Common Stock outstanding on such date, then, and in each such case,
immediately after the close of business on such date, the Conversion Price shall
be reduced so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on such
Record Date by a fraction (i) the numerator of which shall be equal to the
Current Market Price on the Record Date less an amount equal to the quotient of
(x) the excess of such combined amount over such 10% and (y) the number of
shares of Common Stock outstanding on the Record Date and (ii) the denominator
of which shall be equal to the Current Market Price on such Record Date
provided, however, that, if the portion of the cash so distributed applicable to
one share of Common Stock is equal to or greater than the Current Market Price
of the Common Stock on the Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Holder shall have the right to
receive upon conversion the amount of cash such Holder would have received had
such Holder converted such Note immediately prior to such Record Date. If 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)      If a tender offer made by the Company or any of its
Subsidiaries for all or any portion of the Common Stock expires and such tender
offer (as amended upon the expiration thereof) requires the payment to
stockholders (based on the acceptance (up to any maximum specified in the terms
of the tender offer) of Purchased Shares (as defined below)) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a resolution
of the Board of Directors) that, combined together with (1) the aggregate of the
cash plus the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors), as of the expiration of such tender offer, of consideration payable
in respect of any other tender offers, by the Company or any of its Subsidiaries
for all or any portion of the Common Stock expiring within the 12 months
preceding the expiration of such tender offer and in respect of which no
adjustment pursuant to this Section 7.5(f) has been made and (2) the aggregate
amount of any distributions to all Holders of the Common Stock made exclusively
in cash within 12 months preceding the expiration of such tender offer and in
respect of which no adjustment pursuant to Section 7.5(e) has been made, exceeds
10% of the product of the Current Market Price (determined as provided in
Section 7.5(i)) as of the last time (the "Expiration Time") tenders could have
been made pursuant to such tender offer (as it may be amended) times the number
of shares of Common Stock outstanding (including any tendered shares) at the
Expiration Time, then, and in each such case, immediately prior to the opening
of business on the day after the date of the Expiration Time, the Conversion
Price shall be 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 of which the numerator
shall be the number of shares of Common Stock Outstanding (including any
tendered shares) at the Expiration Time multiplied by the Current Market Price
of the Common

                                       47
<PAGE>   48

Stock on the Trading Day next succeeding the Expiration Time and the denominator
shall be the sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender offer) of all shares validly
tendered and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased Shares")
and (y) the product of the number of shares of Common Stock outstanding (less
any Purchased Shares) at the Expiration Time and the Current Market Price of the
Common Stock on the Trading Day next succeeding the Expiration Time, such
reduction (if any) to become effective immediately prior to the opening of
business on the day following the Expiration Time. If the Company is obligated
to purchase shares pursuant to any such tender offer, but the Company is
permanently prevented by applicable law from effecting any such purchases or all
such purchases are rescinded, the Conversion Price shall again be adjusted to be
the Conversion Price which would then be in effect if such tender offer had not
been made. If the application of this Section 7.5(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 7.5(f).

         (g)      If the Company shall issue Common Stock or securities
convertible into, or exchangeable for, Common Stock at a price per share (or, as
applicable, having a conversion or exchange price per share) that is less than
the Current Market Price (determined as provided in Section 7.5(i)) determined
at the time of such issuance, the Conversion Price shall be adjusted so that the
holder of each Note shall be entitled to receive, upon the conversion thereof,
the number of shares of Common Stock determined by multiplying (i) the
Conversion Price on the date (the "Measurement Date") immediately prior to the
day of such issuance by (ii) a fraction, the numerator of which shall be the sum
of (1) the number of shares of Common Stock outstanding on the Measurement Date
day and (2) the number of shares of Common Stock which the aggregate
consideration receivable by the Company for the total number of shares of Common
Stock so issued (or into which the convertible securities may convert) would
purchase at such Conversion Price on the Measurement Date, and the denominator
of which shall be the sum of (x) the number of shares of Common Stock
outstanding on the Measurement Date and (y) the number of additional shares of
Common Stock so issued (or into which the convertible securities may convert).
An adjustment made pursuant to this Section 7.5(g) shall be made on the next
business day following the day on which any such issuance is made and shall be
effective retroactively to the day of such issuance immediately after the close
of business on such date. For purposes of this Section 7.5(g), the aggregate
consideration receivable by the Company in connection with the issuance of
shares of Common Stock or of securities convertible into shares of Common Stock
shall be deemed to be equal to the sum of the aggregate offering price (before
deduction of underwriting discounts or commissions and expenses payable to third
parties) of all such securities plus the minimum aggregate amount, if any,
payable upon conversion of any such convertible securities into shares of Common
Stock; provided, however, that any non-cash consideration received or receivable
by the Company shall be valued at its fair market value as of the date of the
adjustment made pursuant to this Section 7.5(g), such fair market value to be as
determined by the Company's Board of Directors (whose determination shall be
conclusive and described in a resolution of the Board of Directors).

                                       48
<PAGE>   49

         Notwithstanding any other provision of this Section 7.5(g) to the
contrary, the following shall be deemed not to have been issued for purposes of
this Section 7.5(g): (a) issuances pursuant to any bona fide plan for the
benefit of employees or directors of the Company or any Subsidiary in effect on
the date of issuance of the Notes or thereafter, (b) issuances to acquire all or
any portion of a business in an arm's-length transaction between the Company and
an unaffiliated third party, including, if applicable, issuances upon exercise
of options or warrants assumed or issued in connection with such an acquisition,
(c) issuances in a bona fide public offering pursuant to a firm commitment
underwriting or sales at the market pursuant to a continuous offering stock
program, (d) issuances pursuant to the exercise of rights or warrants, or upon
the conversion of convertible securities, which are issued and outstanding on
the date of issuance of the Notes, or which may be issued in the future at fair
value and with an exercise price or conversion price at least equal to the
Current Market Price (determined as provided in Section 7.5(i)) at the time of
issuance of such right, warrant or convertible security, (e) issuances pursuant
to a dividend reinvestment plan or other plan hereafter adopted for the
reinvestment of dividends or interest, provided, that such Common Stock is
issued at a price at least equal to 95% of the Current Market Price (determined
as provided in Section 7.5(i)) determined at the time of such issuance and (f)
issuances to which Section 7.5(a), (b) or (d) applies.

         (h)      Upon mandatory conversion of the Exchange Notes in accordance
with their terms, the Conversion Price shall be reduced to an amount which is
equal to the quotient determined by dividing the aggregate principal amount of
the Outstanding Notes by the number of Fully-Diluted Shares. For purposes of
this Section 7.5(i), Fully-Diluted Shares shall consist of the sum of (i) the
number of issued and outstanding shares of Common Stock immediately prior to
consummation of the Exchange plus (ii) the number of shares of Common Stock
issued by the Company upon mandatory conversion of the Exchange Notes plus (iii)
the number of shares of Common Stock issuable by the Company upon conversion of
the outstanding shares of the Company's Series A Convertible Preferred Stock
plus (iv) the number of shares of Common Stock issuable by the Company upon
conversion of outstanding options to acquire Common Stock granted by the Company
with an exercise price on the date of consummation of the Exchange which is
equal to or less than the Current Market Price (regardless whether such options
are then convertible in accordance with their terms).

         (i)      For purposes of this Section 7.5, the following terms shall
have the meaning indicated:

                  (1) "Closing Price" with respect to any securities on any day
         shall mean the closing sale price regular way on such day or, in case
         no such sale takes place on such day, the average of the reported
         closing bid and asked prices, regular way, in each case on the New York
         Stock Exchange, or, if such security is not listed or admitted to
         trading on such Exchange, on the principal national security exchange
         or quotation system on which such security is quoted or listed or
         admitted to trading, or, if not quoted or listed or admitted to trading
         on any national securities exchange or quotation system, the average of
         the closing bid and asked prices of such security on the
         over-the-counter market on the day in question as reported by the
         National Quotation Bureau Incorporated, or a similar

                                       49
<PAGE>   50

         generally accepted reporting service, or if not so available, in such
         manner as furnished by any New York Stock Exchange member firm selected
         from time to time by the Board of Directors for that purpose, or a
         price determined in good faith by the Board of Directors or, to the
         extent permitted by applicable law, a duly authorized committee
         thereof, whose determination shall be conclusive and described in a
         resolution of the Board of Directors or the applicable committee.

                  (2)      "Current Market Price" shall mean the average of the
         daily Closing Prices per share of Common Stock for the ten consecutive
         Trading Days immediately prior to the date in question, provided,
         however, that (1) if 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 7.5(a), (b), (c), (d), (e), (f), (g) or (h) occurs
         during such ten consecutive Trading Days, the Closing Price for each
         Trading Day prior to the "ex" date for such other event shall be
         adjusted by multiplying such Closing Price by the same fraction by
         which the Conversion Price is so required to be adjusted as a result of
         such other event, (2) if 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 7.5(a), (b),
         (c), (d), (e), (f), (g) or (h) occurs on or after the "ex" date for the
         issuance or distribution requiring such computation and prior to the
         day in question, the Closing Price for each Trading Day on and after
         the "ex" date for such other event shall be adjusted by multiplying
         such Closing 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) if 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 Closing 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
         or, to the extent permitted by applicable law, a duly authorized
         committee thereof in a manner consistent with any determination of such
         value for purposes of Section 7.5(d), (f) or (g), whose determination
         shall be conclusive and described in a resolution of the Board of
         Directors or such duly authorized committee thereof, as the case may
         be) of the evidences of 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 7.5(f) or (g), the Current Market Price of
         the Common Stock on any date shall be deemed to be the average of the
         daily Closing Prices per share of Common Stock for such day and the
         next two succeeding Trading Days, provided, however, that if the "ex"
         date for any event (other than the tender or exchange offer requiring
         such computation) that requires an adjustment to the Conversion Price
         pursuant to Section 7.5(a), (b), (c), (d), (e), (f), (g) or (h) occurs
         on or after the Expiration Time for the tender or exchange offer
         requiring such computation and prior to the day in question, the
         Closing Price for each Trading Day on and after the "ex" date for such
         other event shall be adjusted by multiplying such Closing 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"

                                       50
<PAGE>   51

         date, (1) when used with respect to any issuance or distribution, means
         the first date on which the Common Stock trades regular way on the
         relevant exchange or in the relevant market from which the Closing
         Price was obtained without the right to receive such issuance or
         distribution, (2) when used with respect to any subdivision or
         combination of shares of Common Stock, means the first date on which
         the Common Stock trades regular way on such exchange or in such market
         after the time at which such subdivision or combination becomes
         effective, and (3) when used with respect to any tender or exchange
         offer means the first date on which the Common Stock trades regular way
         on such exchange or in such market after the Expiration Time of such
         offer.

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

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

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

         (j)      The Company may make such reductions in the Conversion Price,
in addition to those required by Sections 7.5(a), (b), (c), (d), (e), (f), (g)
and (h) as the Board of Directors considers to be advisable to avoid or diminish
any income tax to Holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.

         To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time if the
period is at least 20 days, the reduction is irrevocable during the period and
the Board of Directors shall have made a determination that such reduction would
be in the best interests of the Company, which determination shall be conclusive
and described in a resolution of the Board of Directors. Whenever the Conversion
Price is reduced pursuant to the preceding sentence, the Company shall mail to
Holders a notice of the reduction at least 15 days prior to the date the reduced

                                       51
<PAGE>   52

Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.

         (k)      No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1.00% in such
price, provided, however, that any adjustments which by reason of this Section
7.5(k) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Article VIII
shall be made by the Company and shall be made to the nearest cent or to the
nearest one hundredth of a share, as the case may be.

         (l)      Whenever the Conversion Price is adjusted as herein provided,
the Company shall prepare a notice of such adjustment of the Conversion Price
setting forth the adjusted Conversion Price and the date on which each
adjustment becomes effective and shall mail notice of such adjustment of the
Conversion Price to the Holder of each Note at his last address reflected in the
Note Register. Failure to deliver such notice shall not affect the legality or
validity of any such adjustment.

         (m)      In any case in which this Section 7.5 provides that an
adjustment shall become effective immediately after a record date for an event,
the Company may defer until the occurrence of such event (i) issuing to the
Holder of any Note converted after such record date and before the occurrence of
such event the additional shares of Common Stock issuable upon such conversion
by reason of the adjustment required by such event over and above such
conversion by reason of the adjustment required by such event and above the
Common Stock issuable upon such conversion before giving effect to such
adjustment and (ii) paying to such Holder any amount in cash in lieu of any
fraction pursuant to Section 7.5.

         (n)      For purposes of this Section 7.5, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.

                                       52
<PAGE>   53
SECTION 7.6. EFFECT OF RECLASSIFICATION, CONSOLIDATION MERGER OR SALE.

         If any of the following events occur, namely (i) any reclassification
or change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 7.5(c) applies), (ii) any consolidation, merger 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 (iii) 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, then the Company and the successor or purchasing corporation, as
the case may be, shall take appropriate steps to ensure that the legal
documentation evidencing any such transaction provides, in form and substance
reasonably satisfactory to the holders of not less than a majority in aggregate
principal amount of the Notes at the time Outstanding, that the Notes shall be
convertible into the kind and amount of shares of stock and other securities or
property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance by a holder of a
number of shares of Common Stock issuable upon conversion of such Notes
immediately prior to such reclassification, change, consolidation, merger,
combination, sale or conveyance, assuming such holder of Common Stock did not
exercise his rights of election, if any, as to the kind or amount of shares of
stock and other securities or property or assets (including cash) receivable
upon such reclassification, change, consolidation, merger, combination, sale or
conveyance, provided that, if the kind or amount of shares of stock and other
securities or property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, 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 7.6 the kind and amount of shares of stock and other
securities or property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, 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 legal
documentation shall provide for adjustments which shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Article.

         The Company shall cause notice of the execution of such legal
documentation to be mailed to each Holder, at his last address reflected in the
Note Register, within 20 days after execution thereof. Failure to deliver such
notice shall not affect the legality or validity of such legal documentation.

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

         If this Section 7.6 applies to any event or occurrence, Section 7.5
shall not apply.

                                       53
<PAGE>   54

SECTION 7.7. TAXES ON SHARES ISSUED.

         The issue of stock certificates on conversions of Notes shall be made
without charge to the converting Holder for any tax in respect of the issue
thereof. The Company shall not, however, be required to pay any tax which may be
payable in respect of any transfer involved in the issue and delivery of stock
in any name other than that of the Holder of any Note converted, and the Company
shall not be required to issue or deliver any such stock certificate unless and
until the Person or Persons requesting the issue thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.

SECTION 7.8. RESERVATION OF SHARES TO BE FULLY PAID; COMPLIANCE WITH
GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK.

         The Company shall reserve, free from preemptive rights, out of its
authorized but unissued shares or shares held in treasury, sufficient shares of
Common Stock to provide for the conversion of the Notes from time to time as
such Notes are presented for conversion.

         Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.

         The Company covenants that all shares of Common Stock which may be
issued upon conversion of Notes will upon issue be fully paid and non-assessable
by the Company and free from all taxes and Liens with respect to the issue
thereof.

         The Company covenants that it will in good faith and as expeditiously
as possible comply with its obligations under the Registration Rights Agreement.

         The Company further covenants that so long as the Common Stock shall be
listed or quoted on the New York Stock Exchange, the Nasdaq Stock Market
(National Market) or any other national securities exchange the Company will, if
permitted by the rules of such exchange, list and keep listed so long as the
Common Stock shall be so listed on such market or exchange, all Common Stock
issuable upon conversion of the Notes.

SECTION 7.9. NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS.

         If:

                  (a)      the Company shall declare a dividend (or any other
         distribution) on its Common Stock that would require an adjustment in
         the Conversion Price pursuant to Section 7.5, or

                                       54
<PAGE>   55

                  (b)      the Company shall authorize the granting to all or
         substantially all the holders of its Common Stock of rights or warrants
         to subscribe for or purchase any share of any class of Common Stock or
         any other rights or warrants, or

                  (c)      there is a reclassification or reorganization of the
         Common Stock (other than a subdivision or combination of outstanding
         Common Stock, or a change in par value, or from par value to no par
         value, or from no par value to par value), or a consolidation or merger
         to which the Company is a party and for which approval of any
         stockholders of the Company is required, or a sale or transfer of all
         or substantially all of the assets of the Company, or

                  (d)      there is a voluntary or involuntary dissolution,
         liquidation or winding-up of the Company,

the Company shall cause to be mailed to each Holder at his last address
reflected in the Note Register, as promptly as possible but in any event 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 such
dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights or warrants are to be determined, or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up is expected to become effective
or occur, 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, transfer, dissolution, liquidation or winding-up. Failure to give such
notice, or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.

SECTION 7.10. RESTRICTION ON CONVERSION OF NOTES.

         Notwithstanding any other provision hereof to the contrary, unless and
until the Company has obtained stockholder approval of the issuance of Common
Stock upon the conversion of the Notes in their entirety, the Notes may be
converted into a maximum of 11,027 shares (subject to adjustment as provided
below, the "Maximum Number"), which is equal to 19.99% of the number of shares
of Common Stock issued and outstanding on the date of issuance of the Notes,
less the 600,000 shares issued by the Company in connection with its acquisition
of MCI. Unless and until the Company has obtained such stockholder approval, and
subject to the $1,000 authorized denomination of the Notes set forth in Section
2.2, any individual Note may be converted pursuant to Section 7.1 into a maximum
number of shares of Common Stock equal to the amount determined by multiplying
the Maximum Number by a fraction (rounded to the nearest one-thousandth) of
which the numerator is the principal amount of the Note to be converted and the
denominator of which is the total principal amount of the Outstanding Notes, and
thereafter the remaining Notes shall not be convertible into shares of Common
Stock unless and until the Company has obtained such stockholder approval. To
illustrate, prior to obtainment of such stockholder approval, a Holder of a Note
with a principal amount of $2,000,000 may convert $15,000 principal amount of
such Note into 3,000 shares of Common Stock and the $1,985,000 principal amount
of Note or Notes to be issued by the Company to the converting Holder upon such
conversion may not be converted into shares of Common Stock unless

                                       55
<PAGE>   56

and until the Company has obtained such stockholder approval. The Maximum Number
shall be subject to appropriate adjustment by reason of a stock dividend,
split-up, merger, recapitalization, combination, subdivision, conversion,
exchange of shares, distribution on or in respect of the Common Stock or any
similar transaction, and proper provision shall be made in the agreements
governing such transaction, so that a Holder shall receive upon conversion the
number of shares of Common Stock that a Holder would have held immediately after
such event if the Notes had been converted immediately prior to such event, or
the record date therefor, as applicable.

                                  ARTICLE VIII

                   REPURCHASE OF NOTES AT OPTION OF THE HOLDER

SECTION 8.1. RIGHT TO REQUIRE REPURCHASE.

         In the event that a Repurchase Event (as hereinafter defined) shall
occur, then each Holder shall have the right, at the Holder's option, to require
the Company to repurchase, and upon the exercise of such right the Company shall
repurchase, all of such Holder's Notes, or any portion of the principal amount
thereof that is an integral multiple of $1,000 (provided that no single Note may
be repurchased in part unless the portion of the principal amount of such Note
to be Outstanding after such repurchase is equal to $1,000 or an integral
multiple of $1,000), on the date (the "Repurchase Date") that is 60 days after
the date of the Company Notice (as defined in Section 8.2) for cash at a
purchase price equal to 101% of the aggregate principal amount of such Notes in
the event that the Repurchase Event is the event specified in clause (i) of the
definition such term and 112% of the aggregate principal amount of such Notes in
the event that the Repurchase Event is an event specified in clause (ii) or
clause (iii) of the definition of such term (the "Repurchase Price"), plus
interest accrued and unpaid to, but excluding, the Repurchase Date.

         Whenever in this Note there is a reference, in any context, to the
principal of any Note as of any time, such reference shall be deemed to include
reference to the Repurchase Price payable in respect of such Note to the extent
that such Repurchase Price is, was or would be so payable at such time, and
express mention of the Repurchase Price in any provision of this Note shall not
be construed as excluding the Repurchase Price in those provisions of this Note
when such express mention is not made.

                                       56
<PAGE>   57
SECTION 8.2.  NOTICES; METHOD OF EXERCISING PURCHASE RIGHT, ETC.

         (a)      Unless the Company shall have theretofore called for
redemption all of the Outstanding Notes pursuant to Article III, on or before
the fifth day after the occurrence of a Repurchase Event, the Company shall give
to all Holders of Notes notice (the "Company Notice") of the occurrence of the
Repurchase Event and of the repurchase right set forth herein arising as a
result thereof.

         Each notice of a repurchase right shall state:

                  (1)      the Repurchase Event and the Repurchase Date,

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

                  (3)      the Repurchase Price,

                  (4)      a description of the procedure which a Holder must
         follow to exercise a repurchase right,

                  (5)      that on the Repurchase Date the Repurchase Price will
         become due and payable upon each such Note designated by the Holder to
         be repurchased, and that interest thereon shall cease to accrue on and
         after said date,

                  (6)      the Conversion Price, the date on which the right to
         convert the Notes to be repurchased will terminate and the place where
         such Notes may be surrendered for conversion, and

                  (7)      the place where such Notes are to be surrendered for
         payment of the Repurchase Price and accrued interest, if any.

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

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

         (b)      To exercise a repurchase right, a Holder shall deliver to the
Company on or before the 30th day after the date of the Company Notice (i)
written notice of the Holder's exercise of such right, which notice shall set
forth the name of the Holder, the principal amount of the Notes to be
repurchased (and, if any Note is to be repurchased in part, the portion of the
principal amount thereof to be repurchased and the name of the Person in which
the portion thereof to remain Outstanding after such repurchase is to be
registered) and a statement that an election to exercise the repurchase right is
being made thereby, and (ii) the Notes with respect to which the repurchase
right is being exercised.

                                       57
<PAGE>   58

         (c)      In the event a repurchase right shall be exercised in
accordance with the terms hereof, the Company shall pay or cause to be paid the
Repurchase Price in cash to the Holder on the Repurchase Date, together with
accrued and unpaid interest to, but excluding, the Repurchase Date payable with
respect to the Notes as to which the repurchase right has been exercised.

         (d)      If any Note (or portion thereof) surrendered for repurchase
shall not be so paid on the Repurchase Date, the principal amount of such Note
(or portion thereof, as the case may be) shall, until paid, bear interest from
the Repurchase Date at the rate per annum then currently in effect, and each
Note shall remain convertible into Common Stock until the principal of such Note
(or portion thereof, as the case may be) shall have been paid or duly provided
for.

         (e)      Any Note which is to be repurchased only in part shall be
surrendered to the Company (with, if the Company so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company duly
executed by, the Holder thereof or his attorney duly authorized in writing), and
the Company shall execute and deliver to the Holder of such Note without service
charge, a new Note or Notes, containing identical terms and conditions, each in
an authorized denomination in aggregate principal amount equal to and in
exchange for the portion of the principal of the Note so surrendered that was
not repurchased.

         (f)      Any Holder that has delivered to the Company its written
notice exercising its right to require the Company to repurchase its Notes upon
a Repurchase Event shall have the right to withdraw such notice at any time
prior to the close of business on the Repurchase Date by delivery of a written
notice of withdrawal to the Company prior to the close of business on such date.
A Note in respect of which a Holder is exercising its option to require
repurchase upon a Repurchase Event may be converted into Common Stock in
accordance with Article VII only if such Holder withdraws its notice in
accordance with the preceding sentence.

SECTION 8.3. REPURCHASE EVENT.

         A "Repurchase Event" shall be deemed to occur (i) upon the occurrence
of a Change in Control, (ii) in the event that the Company fails to obtain
either of the Stockholder Approvals on or before March 9, 2000 or (iii) in the
event that the Exchange Notes are not mandatorily converted into shares of
Common Stock in accordance with their terms on or before March 9, 2000, provided
that the date set forth in clauses (ii) and (iii) may be extended to March 31,
2000 with the consent of the registered holders of a majority of the aggregate
principal amount of the Notes and the Exchange Notes, considered as a single
class, at the time Outstanding.

                                       58
<PAGE>   59
SECTION 8.4.  CERTAIN DEFINITIONS.

         For purposes of this Article VIII,

         (a)      the term "beneficial owner" shall be determined in accordance
with Rule 13d-3 promulgated by the Commission pursuant to the Exchange Act;

         (b)      the term "Person" shall include any syndicate or group which
would be deemed to be a "Person" under Section 13(d)(3) of the Exchange Act;

         (c)      the term "controlled" shall mean ownership or control of more
than 50% of the voting power of an entity; and

         (d)      the term "Change in Control" shall mean the occurrence of any
of the following events after the Issue Date:

                  (i) any Person, other than the Company, any Subsidiary of the
         Company or any entity controlled by the foregoing, or any employee
         benefit plan of the Company or any such Subsidiary, becomes the
         beneficial owner, directly or indirectly, through a purchase or other
         acquisition transaction or series of transactions (other than a merger
         or consolidation involving the Company), of shares of capital stock of
         the Company entitling such Person to exercise in excess of 50% of the
         total voting power of all shares of Capital Stock of the Company
         entitled to vote generally in the election of directors, provided that
         a Change in Control shall not be deemed to have occurred pursuant to
         this paragraph (a) as a result of issuances of capital stock by the
         Company upon the exercise of rights or warrants, or upon conversion of
         convertible securities, which are issued and outstanding on the Issue
         Date to the holders of such rights, warrants or convertible securities
         on the date of issuance of the Notes;

                  (ii) there occurs any consolidation of the Company with, or
         merger of the Company into, any other Person, any merger of another
         Person into the Company, or any sale or transfer of the assets of the
         Company as, or substantially as, an entirety to another Person (other
         than (i) any such transaction pursuant to which the holders of the
         Common Stock immediately prior to such transaction have, directly or
         indirectly, shares of capital stock of the continuing or surviving
         corporation immediately after such transaction which entitle such
         holders to exercise in excess of 50% of the total voting power of all
         shares of capital stock of the continuing or surviving corporation
         entitled to vote generally in the election of directors and (ii) any
         merger (1) which does not result in any reclassification, conversion,
         exchange or cancellation of outstanding shares of Common Stock or (2)
         which is effected solely to change the jurisdiction of incorporation of
         the Company and results in a reclassification, conversion or exchange
         of outstanding shares of Common Stock solely into shares of Common
         Stock and separate series of Common Stock carrying substantially the
         same relative rights as the Common Stock); or

                  (iii) individuals who constituted the Board of Directors of
         the Company at the beginning of any one-year period (together with any
         other director whose election by the Board of Directors of the Company
         or whose nomination for election by the stockholders of the Company was
         approved by a vote of at least a majority of the directors then in

                                       59
<PAGE>   60

         office either who were directors at the beginning of such period or
         whose election or nomination for election was previously so approved)
         cease for any reason to constitute a majority of the directors then in
         office.

SECTION 8.5. CONSOLIDATION, MERGER, ETC.

         In the case of any reclassification, change, consolidation, merger,
combination, sale or conveyance in which the Common Stock is changed or
exchanged as a result into the right to receive shares of stock and other
securities or property or assets (including cash) which includes shares of
Common Stock or common stock of another Person that are, or upon issuance will
be, traded on a United States national securities exchange or approved for
trading on an established automated over-the-counter trading market in the
United States and such shares constitute at the time such change or exchange
becomes effective in excess of 50% of the aggregate fair market value of such
shares of stock and other securities, property and assets (including cash) (as
determined in good faith by the Board of Directors of the Company, which
determination shall be conclusive and binding), then the Person formed by such
consolidation or resulting from such merger or combination or which acquires the
properties or assets (including cash) of the Company, as the case may be, shall
execute and deliver to the Holders, at their last address reflected in the Note
Register, an amendment to the Notes, in form and substance satisfactory to the
registered holders of not less than a majority in aggregate principal amount of
the Notes and the Exchange Notes, considered as a single class, at the time
Outstanding, modifying the provisions of the Notes relating to the right of
Holders to cause the Company to repurchase the Notes following a Repurchase
Event, including without limitation the applicable provisions of this Article
VIII and the definitions of Common Stock and Change in Control, as appropriate,
and such other related definitions set forth herein as determined in good faith
by the Board of Directors of the Company (which determination shall be
conclusive and binding), to make such provisions apply to the common stock and
the issuer thereof if different from the Company and the Common Stock (in lieu
of the Company and the Common Stock).

                                   ARTICLE IX

                           CONCERNING THE NOTEHOLDERS

SECTION 9.1. ACTION BY HOLDERS.

         When herein it is provided that the registered holders of a specified
percentage in aggregate principal amount of the Notes and the Exchange Notes may
take any action (including the making of any demand or request, the giving of
any notice, consent or waiver or the taking of any other action), the fact that
at the time of taking any such action, the registered holders of such specified
percentage have joined therein may be evidenced (a) by any instrument or any
number of instruments of similar tenor executed by such registered holders in
person or by agent or proxy appointed in writing and delivered to the Company
and the Collateral Agent, which shall be available for inspection by any Holder,
or (b) by the record of such registered holders

                                       60
<PAGE>   61

voting in favor thereof at any meeting of such holders duly called and held in
accordance with the provisions hereof and applicable law, a copy of which record
shall be maintained by the Company and delivered to the Collateral Agent and be
available for inspection by any Holder, or (c) by a combination of such
instrument or instruments and any such record of such a meeting of such
registered holders. Whenever the Company solicits the taking of any action by
the record holders of the Notes and the Exchange Notes, the Company may fix in
advance of such solicitation a date as the record date for determining such
record holders entitled to take such action. The record date shall be not more
than 15 days prior to the date of commencement of solicitation of such action.

SECTION 9.2 WHO ARE DEEMED ABSOLUTE OWNERS.

         Except to the extent provided in the second paragraph of Section 2.3,
the Company may deem the Person in whose name a Note is registered on the Note
Register to be, and may treat him as, the absolute owner of such Note (whether
or not such Note shall be overdue and notwithstanding any notation of ownership
or other writing thereon) for the purpose of receiving payment of or on account
of the principal of, premium, if any, and interest on such Note, for conversion
of such Note and for all other purposes and the Company shall not be affected by
any notice to the contrary. All such payments so made to any Holder for the time
being, or upon his order, shall be valid, and, to the extent of the sum or sums
so paid, effectual to satisfy and discharge the liability for monies payable
upon such Note.

                                       61
<PAGE>   62

                                    ARTICLE X

                                 AMENDMENT, ETC.

         No provision of the Notes may be amended, modified, supplemented or
waived without notice to the Company and the written consent of the registered
holders of not less than a majority in aggregate principal amount of the Notes
and the Exchange Notes, considered as a single class, at the time Outstanding,
provided that (i) no such amendment, modification, supplement or waiver shall,
unless signed by each Holder affected hereby, (x) extend the fixed maturity of
such Note, or reduce the rate or extend the time of payment of interest thereon,
or reduce the principal amount thereof or premium, if any, thereon, or reduce
any amount payable on redemption thereof, or impair the right of any such Holder
to institute suit for the payment thereof, or make the principal thereof or
interest or premium, if any, thereon payable in any coin or currency other than
that provided herein, or change the obligation of the Company to repurchase any
Note upon the occurrence of a Repurchase Event in a manner adverse to such
Holder, or impair the right to convert the Notes into Common Stock in any
material respect, or (y) reduce the aforesaid percentage of Notes and the
Exchange Notes, considered as a single class, the record holders of which are
required to consent to any such amendment, modification, supplement or waiver;
(ii) the provisions of Article VII hereof may be amended, modified, supplemented
or waived by notice to and the written consent of the Company and the Holders of
not less than a majority in aggregate principal amount of the Notes at the time
Outstanding; (iii) the Supermajority Covenants, the second sentence of Section
4.25, the date March 31, 2000 in the proviso clause to Section 8.3 and the
provisions of this clause (iii) may be amended, modified, supplemented or waived
without notice to the Company and the written consent of the registered holders
of not less than 70% in aggregate principal amount of the Notes and the Exchange
Notes, considered as a single class, at the time Outstanding.

                                   ARTICLE XI

                     SECURITY FOR NOTES; RELATED AGREEMENTS

         The Notes shall be secured by the Collateral Documents, duly executed
by the Company and the other parties thereto for the ratable benefit of the
holders of the Notes and the Exchange Notes granting a security interest in the
collateral covered thereby, which security interest shall not be subordinate in
priority to any other Liens. The Notes are entitled to the benefits of and
subject to the limitations contained in the Agreement and the Related
Agreements, and the Holder of any Note may enforce such rights in accordance
with the terms hereof and thereof, as applicable.

                                       62
<PAGE>   63

                                   ARTICLE XII

                            MISCELLANEOUS PROVISIONS

SECTION 12.1. ASSIGNMENT; SUCCESSORS.

         A Note and the rights and obligations of the Company thereunder may not
be assigned or otherwise transferred by the Company without the prior written
consent of the Holder thereof. A Note may not be assigned or otherwise
transferred by any Holder to any Person, other than an Affiliate of such Holder,
unless the Holder has complied with the applicable requirements set forth in
Section 3.2(b) of the Agreement. This Note shall be binding upon and inure to
the benefit of the Company and the Holder and their respective permitted
successors and assigns.

SECTION 12.2. OFFICIAL ACTS BY SUCCESSOR CORPORATION.

         Any act or proceeding by any provision hereof authorized or required to
be done or performed by any board, committee or officer of the Company shall and
may be done and performed with like force and effect by the like board,
committee or officer of any corporation that shall at the time be the lawful
sole successor of the Company.

SECTION 12.3. ADDRESSES FOR NOTICES, ETC.

         All notices, demands and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, registered first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:

                  (a) if to the Holder of this Note, initially at the address
         set forth above, and thereafter at such other address, notice of which
         is given in accordance with this Section 12.3;

                  (b) if to the Issuer, initially at Altiva Financial
         Corporation,1000 Parkwood Circle, Suite 600, Atlanta, Georgia 30339,
         and thereafter at such other address, notice of which is given in
         accordance with this Section 12.3; and

                  (c) If to the Collateral Agent, initially at U.S. Trust
         Company of New York, 2001 Ross Avenue, Suite 2700, Dallas, Texas,
         75201, Attention: John C. Stohlmann, and thereafter at such other
         address, notice of which is given in accordance with this Section 12.3.

         All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being sent by certified mail, return receipt requested, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next Business Day if timely delivered to an air courier guaranteeing
overnight delivery.

                                       63
<PAGE>   64

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

SECTION 12.4. GOVERNING LAW.

         THE PARTIES HERETO ACKNOWLEDGE THAT THE TRANSACTIONS CONTEMPLATED BY
THE AGREEMENT AND THE NOTES BEAR A REASONABLE RELATION TO THE STATE OF MARYLAND
IN THAT, INTERALIA, A PARTICIPANT IN THE NOTES HAS ITS PRINCIPAL PLACE OF
BUSINESS IN THE STATE OF MARYLAND AND PART OF THE NEGOTIATIONS RELATING TO THE
ISSUANCE OF THE NOTES AND THE CLOSING OF SUCH ISSUANCE OCCURRED IN THE STATE OF
MARYLAND. THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF MARYLAND, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF
LAWS THEREOF.

SECTION 12.5. USURY.

         All agreements between the Company and the Holders, whether now
existing or hereafter arising and whether written or oral, are hereby limited so
that in no contingency, whether by reason of acceleration of the maturity of the
Notes or otherwise, shall the interest contracted for, charged, received, paid
or agreed to be paid to the Holders exceed the maximum amount permissible under
the laws of the State of Maryland (hereinafter the "Applicable Law"). If, from
any circumstance whatsoever, interest would otherwise be payable to the Holders
in excess of the maximum amount permissible under the Applicable Law, the
interest payable to the Holders shall be reduced to the maximum amount
permissible under the Applicable Law, and if from any circumstance the Holders
shall ever receive anything of value deemed interest by the Applicable Law in
excess of the maximum amount permissible under the Applicable Law, an amount
equal to the excessive interest shall be applied to the reduction of the
principal of the Notes and not to the payment of interest, or if such excessive
amount of interest exceeds the unpaid principal amount of the Notes, such excess
shall be refunded to the Company. All interest paid or agreed to be paid to the
Holders shall, to the extent permitted by the Applicable Law, be amortized,
prorated, allocated and spread throughout the full term of the Notes (including
any renewal or extension) until payment in full of the principal so that the
interest on the Notes for such full term shall not exceed the maximum amount
permissible under the Applicable Law. Each Holder expressly disavows any intent
to contract for, charge or receive interest in an amount which exceeds the
maximum amount permissible under the Applicable Law. This paragraph as well as
similar paragraphs set forth in the Agreement and the Collateral Documents shall
control all agreements between the Company and the Holders.

                                       64
<PAGE>   65
SECTION 12.6. LEGAL HOLIDAYS.

         In any case where the date of maturity of interest on or principal of
the Notes or the date fixed for redemption or repurchase of any Note will not be
a Business Day, then payment of such interest on or principal of the Notes need
not be made on such date, but may be made on the next succeeding Business Day
with the same force and effect as if made on the date of maturity or the date
fixed for redemption or repurchase, and no interest shall accrue for the period
from and after such date.

SECTION 12.7 SEVERABILITY OF PROVISIONS.

         Any provision of this Note which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability only without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.

SECTION 12.8. HEADINGS AND GENDER.

         The titles and headings of the articles and sections hereof have been
inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof. Use of a particular gender herein shall be considered to represent the
masculine, feminine or neuter gender whenever appropriate.

SECTION 12.9 BENEFITS OF NOTES.

         Except to the extent provided in the definition of the term "Notes" in
Article I hereof, nothing in the Notes, express or implied, shall give any
Person, other than the holders of the Notes, any benefit or legal or equitable
right, remedy or claim under the Notes.

                                       65
<PAGE>   66

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

Dated for References Purposes only: February 29, 2000.

                                      ALTIVA FINANCIAL CORPORATION

                                      By: /s/ Edward B. Meyercord
                                         ---------------------------------------
                                          Name: Edward B. Meyercord
                                          Title:Chairman and Chief Executive
                                                   Officer<PAGE>   1
                                                                    EXHIBIT 4.2
                                   ---------

                          ALTIVA FINANCIAL CORPORATION

                                       TO

                UNITED STATES TRUST COMPANY OF NEW YORK, TRUSTEE

                                   ---------

                      12% SECURED CONVERTIBLE SENIOR NOTES
                                    DUE 2006

                                   ---------

                                   INDENTURE

                         DATED AS OF FEBRUARY 29, 2000

                                   ---------

<PAGE>   2

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                               ----

<S>                                                                                                            <C>
ARTICLE ONE - Definitions and Other Provisions of General Application.............................................1

   Section 1.1    Definitions.....................................................................................1
   Section 1.2    Compliance Certificates and Opinions...........................................................19
   Section 1.3    Form of Documents Delivered to Trustee.........................................................19
   Section 1.4    Acts of Holders; Record Dates..................................................................20
   Section 1.5    Notices, Etc., to Trustee and Company..........................................................22
   Section 1.6    Notice to Holders; Waiver......................................................................22
   Section 1.7    Conflict with Trust Indenture Act..............................................................23
   Section 1.8    Effect of Headings and Table of Contents.......................................................22
   Section 1.9    Successors and Assigns.........................................................................23
   Section 1.10   Separability Clause............................................................................23
   Section 1.11   Benefits of Indenture..........................................................................23
   Section 1.12   Governing Law, Choice of Forum.................................................................23
   Section 1.13   Legal Holidays.................................................................................24

ARTICLE TWO - Note Forms.........................................................................................25

   Section 2.1    Forms Generally................................................................................25
   Section 2.2    Form of Face of Note...........................................................................25
   Section 2.3    Form of Reverse of Note........................................................................27
   Section 2.4    Form of Legends for Global Notes...............................................................29
   Section 2.5    Form of Trustee's Certificate of Authentication................................................29
   Section 2.6    Form of Assignment.............................................................................29

ARTICLE THREE - The Notes........................................................................................30

   Section 3.1    Global Note; Depositary........................................................................30
   Section 3.2    Amount.........................................................................................31
   Section 3.3    Denominations..................................................................................31
   Section 3.4    Execution, Authentication, Delivery and Dating.................................................31
   Section 3.5    Temporary Notes................................................................................32
   Section 3.6    Registration; Registration of Transfer and Exchange............................................32
   Section 3.7    Mutilated, Destroyed, Lost and Stolen Notes....................................................33
   Section 3.8    Payment of Interest and Principal; Additional Interest.........................................34
   Section 3.9    Persons Deemed Owners..........................................................................36
   Section 3.10   Cancellation...................................................................................36
   Section 3.11   Computation of Interest........................................................................36
</TABLE>

                                       i
<PAGE>   3

<TABLE>
<S>                                                                                                              <C>
ARTICLE FOUR - Book-Entry Provisions for Global Notes............................................................37

   Section 4.1    Applicability of Article.......................................................................37
   Section 4.2    Book-Entry Provisions For Global Note..........................................................37
   Section 4.3    Special Transfer Provisions....................................................................39

ARTICLE FIVE - Remedies of Holders on an Event of Default........................................................40

   Section 5.1    Events of Default..............................................................................40
   Section 5.2    Payment of Notes on Default; Suit Therefor.....................................................42
   Section 5.3    Application of Monies Collected................................................................44
   Section 5.4    Remedies Cumulative and Continuing.............................................................45
   Section 5.5    Waiver of Defaults by Holders..................................................................45
   Section 5.6    Limitation on Suits............................................................................45
   Section 5.7    Control by Holders.............................................................................46

ARTICLE SIX - The Trustee........................................................................................47

   Section 6.1    Certain Duties and Responsibilities............................................................47
   Section 6.2    Notice of Defaults.............................................................................47
   Section 6.3    Certain Rights of Trustee......................................................................47
   Section 6.4    Not Responsible for Recitals or Issuance of Notes..............................................48
   Section 6.5    May Hold Notes.................................................................................48
   Section 6.6    Money Held in Trust............................................................................48
   Section 6.7    Compensation and Reimbursement.................................................................49
   Section 6.8    Disqualification; Conflicting Interests........................................................49
   Section 6.9    Corporate Trustee Required; Eligibility........................................................50
   Section 6.10   Resignation and Removal; Appointment of Successor..............................................50
   Section 6.11   Acceptance of Appointment by Successor.........................................................51
   Section 6.12   Merger, Conversion, Consolidation or Succession to Business....................................52
   Section 6.13   Preferential Collection of Claims Against Company..............................................52
   Section 6.14   Appointment of Authenticating Agent............................................................52

ARTICLE SEVEN - Lists of Holders of Notes and Convertible Notes and Reports by Trustee
                and Company......................................................................................54

   Section 7.1    Company to Furnish Trustee Names and Addresses of Holders of Notes and
                  Convertible Notes..............................................................................54
   Section 7.2    Preservation of Information; Communications to Holders.........................................55
   Section 7.3    Reports by Trustee.............................................................................55
   Section 7.4    Reports by Company.............................................................................55
   Section 7.5    Provision of Reports and Other Documents to Holders of Convertible Notes.......................56

ARTICLE Eight - Amendments, Supplements and Waivers..............................................................56

   Section 8.1    Supplemental Indentures with Consent of Holders................................................56
</TABLE>

                                     -ii-
<PAGE>   4

<TABLE>
<S>                                                                                                              <C>
   Section 8.2    Execution of Supplemental Indentures...........................................................57
   Section 8.3    Effect of Supplemental Indentures..............................................................57
   Section 8.4    Conformity with Trust Indenture Act............................................................57
   Section 8.5    Reference in Notes to Supplemental Indentures..................................................57
   Section 8.6    Notice of Supplemental Indenture...............................................................57

ARTICLE NINE - Covenants.........................................................................................57

   Section 9.1    Payment of Notes...............................................................................57
   Section 9.2    Stay, Extension and Usury Laws.................................................................58
   Section 9.3    Reports and Certificates.......................................................................58
   Section 9.4    Taxes and Other Charges........................................................................59
   Section 9.5    Conduct of Business............................................................................60
   Section 9.6    Corporate Existence............................................................................60
   Section 9.7    Maintenance of Properties......................................................................62
   Section 9.8    Insurance......................................................................................62
   Section 9.9    Restricted Payments............................................................................62
   Section 9.10   Restrictions on Issuance and Sale of Sale of Capital Stock of Subsidiaries.....................62
   Section 9.11   Restrictions on Subsidiary Mergers and Sales of Assets.........................................62
   Section 9.12   Financial Covenants............................................................................63
   Section 9.13   Limitation on Incurrence of  Indebtedness and Issuance of Disqualified
                  Capital Stock..................................................................................63
   Section 9.14   Liens..........................................................................................64
   Section 9.15   Subsidiary Guarantees..........................................................................64
   Section 9.16   Payment of Dividends from Subsidiaries.........................................................65
   Section 9.17   Limitations on Dividends and Other Payment Restrictions Affecting
                  Subsidiaries...................................................................................65
   Section 9.18   Investments and Acquisitions...................................................................66
   Section 9.19   Limitation on Investment Company Status........................................................67
   Section 9.20   Payments on Notes; Repurchase of Notes.........................................................67
   Section 9.21   Transactions with Affiliates...................................................................67
   Section 9.22   Payments for Consent...........................................................................68
   Section 9.23   Solvency Test..................................................................................68
   Section 9.24   Waiver of Certain Covenants....................................................................68

ARTICLE TEN - Merger, Consolidation and Transfer of Assets.......................................................69

   Section 10.1   Company May Consolidate Etc. Only on Certain Terms.............................................69
   Section 10.2   Successor Corporation to be Substituted........................................................69

ARTICLE ELEVEN - Security for Notes; Related Agreements..........................................................70

ARTICLE TWELVE - Redemption and Repurchase of Notes..............................................................70

   Section 12.1   Optional Rights to Redeem Notes................................................................70
</TABLE>

                                     -iii-
<PAGE>   5

<TABLE>
<S>                                                                                                              <C>
   Section 12.2   Notice of Optional Redemption..................................................................71
   Section 12.3   Effect of Notice of Optional Redemption........................................................72
   Section 12.4   Right to Require Repurchase....................................................................72
   Section 12.5   Notices; Method of Exercising Purchase Right, Etc..............................................73
   Section 12.6   Repurchase Event...............................................................................74
   Section 12.7   Certain Definitions............................................................................74
   Section 12.8   Consolidation, Merger, Etc.....................................................................76

ARTICLE THIRTEEN - Defeasance and Covenant Defeasance............................................................76

   Section 13.1   Option to Effect Legal Defeasance or Covenant Defeasance.......................................76
   Section 13.2   Legal Defeasance and Discharge.................................................................76
   Section 13.3   Covenant Defeasance............................................................................77
   Section 13.4   Conditions to Legal or Covenant Defeasance.....................................................77
   Section 13.5   Deposited  Money  and  U.S.  Government  Obligations  to be Held in  Trust;
                  Other  Miscellaneous Provisions................................................................79
   Section 13.6   Repayment to Company...........................................................................79
   Section 13.7   Reinstatement..................................................................................79
   Section 13.8   Defeasance of Convertible Notes................................................................80

ARTICLE FOURTEEN - Conversion....................................................................................80

   Section 14.1   Mandatory Conversion upon Stockholder Approval.................................................80
   Section 14.2   Issuance of Common Stock on Conversion; No Adjustment for Interest or
                  Dividends......................................................................................80
   Section 14.3   Disbursement of Shares.........................................................................81
   Section 14.4   Taxes on Shares Issued.........................................................................81
   Section 14.5   Reservation of Shares to Be Fully Paid;  Compliance with  Governmental
                  Requirements;  Listing of Common Stock.........................................................82

ARTICLE FIFTEEN - Miscellaneous..................................................................................82

   Section 15.1   No Recourse Against Others.....................................................................82
   Section 15.2   Execution in Counterparts......................................................................82
   Section 15.3   Waiver of Trial by Jury........................................................................82
</TABLE>

                                     -iv-
<PAGE>   6

<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION                                                                                 INDENTURE SECTION
-----------                                                                                 -----------------
<S>      <C>                                                                                <C>
310      (a)(1).........................................................................    6.9
         (a)(2).........................................................................    6.9
         (a)(3).........................................................................    Not Applicable
         (a)(4).........................................................................    Not Applicable
         (a)(5).........................................................................    6.9
         (b)............................................................................    1.5, 6.8, 6.9, 6.10,
                                                                                            6.11
         (c)............................................................................    Not applicable
311      (a)............................................................................    6.13
         (b)............................................................................    6.13
         (c)............................................................................    Not Applicable
312      (a)............................................................................    7.1, 7.2
         (b)............................................................................    7.2
         (c)............................................................................    7.2
313      (a)............................................................................    7.3
         (b)(1).........................................................................    7.3
         (b)(2).........................................................................    7.3
         (c)............................................................................    1.6, 7.3
         (d)............................................................................    7.3
314      (a)............................................................................    1.5, 1.6, 7.4
         (b)............................................................................    Not applicable
         (c)(1).........................................................................    1.2
         (c)(2).........................................................................    1.2
         (c)(3).........................................................................    7.4
         (d)............................................................................    7.4
         (e)............................................................................    1.2
         (f)............................................................................    Not Applicable
315      (a)............................................................................    6.1
         (b)............................................................................    1.6, 6.2
         (c)............................................................................    6.1
         (d)............................................................................    6.1
         (e)............................................................................    5.14
316      (a)(last sentence).............................................................    1.1 (definition of
                                                                                            "Outstanding")
         (a)(1)(A)......................................................................    5.7
         (a)(1)(B)......................................................................    5.13
         (a)(2).........................................................................    Not Applicable
         (b)............................................................................    5.6, 8.1
         (c)............................................................................    1.4(c)
317      (a)(1).........................................................................    5.3
         (a)(2).........................................................................    5.4
         (b)............................................................................    6.6
318      (a)............................................................................    1.7
         (c)............................................................................    1.7
</TABLE>

                                      -v-
<PAGE>   7

                  INDENTURE, dated as of February 29, 2000, by and between
ALTIVA FINANCIAL CORPORATION, a corporation duly organized and existing under
the laws of the State of Delaware (herein called the "COMPANY"), having its
principal office at 1000 Parkwood Circle, Suite 600, Atlanta, Georgia 30339 and
UNITED STATES. TRUST COMPANY OF NEW YORK, a New York Banking corporation, as
Trustee (herein called the "TRUSTEE").

                            RECITALS OF THE COMPANY

                  A. The Company has duly authorized the execution and
delivery, of this Indenture to provide for the issuance of a series of its 12%
Secured Convertible Senior Notes due 2006 with an aggregate principal amount of
$19,382,000 (as amended, supplemented or otherwise modified from time to time,
the "NOTES").

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

                  NOW, THEREFORE, THIS INDENTURE WITNESSETH:

                  For and in consideration of the premises and the purchase of
the Notes by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Notes, as follows:

                                 ARTICLE ONE -

            DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

                  Section 1.1 Definitions.

                  For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:

                  (a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular,

                  (b) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;

                  (c) all accounting determinations hereunder shall be made,
and all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;

                  (d) the words "HEREIN," "HEREOF" and "HEREUNDER" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;

                                       1
<PAGE>   8

                  (e) the word "INCLUDING" is not limiting;

                  (f) references in this Indenture to any agreement, other
document or law "AS AMENDED" or "AS AMENDED FROM TIME TO TIME," or to
"AMENDMENTS" of any document or law, shall include any amendments, supplements,
replacements, renewals or other modifications from time to time, provided in
the case of modifications to documents, such modifications are permissible
under this Indenture; and

                  "ACQUISITION" means any transaction, or any series of related
transactions, consummated on or after the Issue Date, by which the Company or
any of its Subsidiaries (i) acquires any going business or all or substantially
all of the assets of any firm, corporation or limited liability company, or
division thereof, whether through purchase of assets, merger or otherwise, or
(ii) directly or indirectly acquires (in one transaction or in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the Outstanding
ownership interests of a partnership or a limited liability company.

                  "ACT" has the meaning set forth in Section 1.4 hereof.

                  "ADDED INTEREST" means any increases in the Interest Rate
pursuant to the second and third paragraphs of Section 3.8 hereunder.

                  "AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing, provided, however, that for purposes of this definition neither
Value Partners nor Lutheran Brotherhood High Yield Fund shall be deemed to be
an Affiliate of the Company.

                  "AGREEMENT" means the Exchange Agreement between the Company
and the holders of the Company's 12 1/2% Subordinated Notes due 2001 providing
for the Exchange, as amended, supplemented or otherwise modified from time to
time.

                  "BENEFICIAL OWNERS" means the beneficial owners of the Notes
identified in the registry of Beneficial Owners maintained by the Trustee
pursuant to Section 3.6 of this Indenture.

                  "BENEFICIAL OWNER REGISTRY" has the meaning set forth in
Section 3.6.

                  "BOARD OF DIRECTORS" means either the Board of Directors of
the Company or any committee of such Board duly authorized to act for it
hereunder.

                                       2
<PAGE>   9

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

                  "BUSINESS DAY" means any day other than (i) a Saturday or
Sunday or (ii) a day on which banking institutions in the City of Atlanta,
Georgia, or New York, New York are authorized or required by law or executive
order to remain closed.

                  "CAPITAL STOCK" in any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents or interests in (however designated) capital stock in such Person,
including, with respect to a corporation or limited liability company,
Preferred Stock and other corporate stock and, with respect to a partnership,
including limited liability partnerships, partnership interests, whether
general or limited, and any rights (other than debt securities convertible into
corporate stock, partnership interests or other capital stock), warrants or
options exchangeable for or convertible into such corporate stock, partnership
interests or other capital stock.

                  "CAPITALIZED LEASE OBLIGATION" means indebtedness represented
by obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP; the amount of such indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP.

                  "COLLATERAL AGENT" means United States Trust Company of New
York and its successors and assigns.

                  "COLLATERAL DOCUMENTS" means any agreement entered into by
the Company, any Subsidiary of the Company or any other Person to provide
collateral or security for the repayment of the Notes or to Guarantee the Notes
and the Convertible Notes, including without limitation this Indenture, the
Security Agreements, the Value Partners Security Agreement and the
Intercreditor Agreement, in each case as defined herein or in the Agreement.

                  "COMMISSION" means the Securities and Exchange Commission, as
from time to time constituted.

                  "COMMON STOCK" means the common stock, par value $0.01 per
share, of the Company.

                  "COMPANY" has the meaning set forth in the first paragraph
hereof.

                  "CONSOLIDATED CASH FLOW" means, with respect to any Person
for any period, the Consolidated Net Income of such Person for such period plus
(i) provision for taxes based on income or profits of such Person and its
Subsidiaries for such period, to the extent that such provision for taxes was
included in computing such Consolidated Net Income, plus (ii) consolidated
interest expense of such Person and its Subsidiaries for such period, whether
paid or accrued and whether or not capitalized (including, without limitation,
amortization of debt

                                       3
<PAGE>   10

issuance costs and original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letters of credit
or bankers' acceptance financings, and net payments (if any) pursuant to
Hedging Obligations), to the extent that any such expense was deducted in
computing such Consolidated Net Income, plus (iii) depreciation and
amortization (including amortization of goodwill and other intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash expenses (excluding any such non-cash expenses to
the extent that it represents an accrual of or reserve for cash expenses in any
future period or amortization of a prepaid cash expense that was paid in a
prior period) of such Person and its Subsidiaries for such period to the extent
that such depreciation, amortization and other non-cash expenses were deducted
in computing such Consolidated Net Income, minus (v) non-cash revenues
increasing such Consolidated Net Income for such period, including without
limitation non-cash income recorded in connection with the ownership of
mortgage related securities (excluding any non-cash income to the extent it
represents an accrual of cash revenues in any future period), in each case, on
a consolidated basis and determined in accordance with GAAP. Notwithstanding
the foregoing, the provision for taxes based on the income or profits of, and
the depreciation and amortization and other non-cash charges of, a Subsidiary
of a Person shall be added to Consolidated Net Income to compute Consolidated
Cash Flow only to the extent (and in the same proportion) that the Net Income
of such Subsidiary was included in calculating the Consolidated Net Income of
such Person and only if a corresponding amount would be permitted at the date
of termination to be dividended to the Company by such Subsidiary without prior
approval of any Person (that has not been obtained), pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Subsidiary or
its stockholders; provided that any contingent restriction contained in any
thereof shall not be deemed to prevent any such dividend until the applicable
contingency shall have occurred.

                  "CONSOLIDATED NET INCOME" means, with respect to any Person
for any period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income of any Person that is not a
Subsidiary or that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions paid in
cash (or to the extent converted into cash) to the referent Person or a
Wholly-Owned Subsidiary thereof, (ii) the Net Income of any Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of its Net Income is not at the date of
determination permitted without prior approval of any Person (that has not been
obtained) or, directly or indirectly, by operation of the terms of its charter
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary or its stockholders
unless waived; provided that any contingent restriction contained in any
thereof shall not be deemed to prevent any such dividend until the applicable
contingency shall have occurred, (iii) the Net Income of any Person acquired in
a pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded, (iv) the cumulative effect of a change in
accounting principles shall be excluded and (v) any net after-tax extraordinary
gains or losses shall be excluded.

                                       4
<PAGE>   11

                  "CONSOLIDATED NET WORTH" of a Person means as of the date of
determination all amounts that would be included under stockholders' equity on
a consolidated balance sheet of the Person and its Subsidiaries determined in
accordance with GAAP.

                  "CONSOLIDATED TANGIBLE NET WORTH" of a Person means as of the
date of determination all amounts that would be included under stockholders'
equity on a consolidated balance sheet of the Person and its Subsidiaries
determined in accordance with GAAP less an amount equal to the consolidated
intangible assets of the Person and its Subsidiaries determined in accordance
with GAAP.

                  "CONVERTIBLE NOTE OBLIGATIONS" means all present and future
liabilities, obligations and indebtedness of the Company, any of its
Subsidiaries or any other obligor owing to any holder of Convertible Notes
under or in connection with the Value Partners Agreement, the Convertible Notes
or the Collateral Documents, including without limitation obligations in
respect of (i) principal, premium, if any, and interest on the Convertible
Notes, (ii) reimbursement of costs, fees, taxes or other items and (iii)
indemnification and related obligations.

                  "CONVERTIBLE NOTE REGISTRIES" has the meaning set forth in
Section 1.4(g).

                  "CONVERTIBLE NOTES" means the $14,000,000 principal amount of
12% Secured Convertible Senior Notes issued to Value Partners pursuant to the
Value Partners Agreement, as amended, supplemented or otherwise modified from
time to time.

                  "CORPORATE TRUST OFFICE" means with respect to the Trustee,
2001 Ross Avenue Suite 2700, Dallas, Texas, or such other office as the Trustee
or successor shall designate from time to time.

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

                  "DEFAULTED INTEREST" has the meaning specified in Section
3.8.

                  "DEFINITIVE NOTE" is defined in Section 4.3(b).

                  "DEPOSITARY" has the meaning specified in Section 3.1.

                  "DISQUALIFIED CAPITAL STOCK" means any Capital Stock which,
by its terms (or by the terms of any security into which it is convertible or
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is
redeemable at the option of the holder thereof, in whole or in part on, or
prior to, or is exchangeable for debt securities of the Company or its
Subsidiaries prior to, the Stated Maturity of principal of the Notes, provided
that only the amount of such Capital Stock that

                                       5
<PAGE>   12

matures or is redeemable prior to the Stated Maturity of principal of the Notes
shall be deemed to be Disqualified Capital Stock.

                  "ELIGIBLE COLLATERAL" means any asset or property of the
Company other than the Note Security.

                  "EVENT OF DEFAULT" means any event specified in Section 5.1.

                  "EXCESS SPREAD" means (i) with respect to a "pool" of
Receivables that has been sold to a trust or other Person in a securitization,
the excess of (a) the weighted average coupon on each pool of Receivables sold
over (b) the sum of the pass-through interest rate plus a normal servicing fee,
a trustee fee, an insurance fee and an estimate of annual future credit losses
related to such assets, in each case calculated in accordance with any
applicable GAAP, and (ii) with respect to Receivables that have been sold to a
Person in a whole loan sale, the cash flow of the Company and its Subsidiaries
from such Receivables, net of, to the extent applicable, a normal servicing
fee, a trustee fee, an insurance fee and an estimate of annual future credit
losses related to such assets, in each case calculated in accordance with any
applicable GAAP.

                  "EXCESS SPREAD RECEIVABLES" of a Person means the contractual
or certified right to Excess Spread capitalized on such Person's consolidated
balance sheet (the amount of which shall be the present value of the Excess
Spread, calculated in accordance with GAAP, net of any allowance for losses on
loans sold with recourse or other liability allocable thereto, to the extent
not otherwise reflected in such amount). Excess Spread Receivables (a) include
mortgage-related securities backed by Receivables sold by the Company or any
Subsidiary and (b) do not include any servicing rights.

                  "EXCHANGE" has the meaning set forth in the Agreement.

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

                  "FIXED CHARGES" means, with respect to the Company and its
Subsidiaries for any period, the sum, without duplication, of:

                           (i) the consolidated interest expense of the Company
                  and its Subsidiaries for such period, whether paid or
                  accrued, including, without limitation, amortization of debt
                  issuance costs and original issue discount, non-cash interest
                  payments, the interest component of any deferred payment
                  obligations, the interest component of all payments
                  associated with Capitalized Lease Obligations, commissions,
                  discounts and other fees and charges incurred in respect of
                  letter of credit or bankers' acceptance financings, and net
                  of the effect of all payments made or received pursuant to
                  Hedging Obligations; plus

                           (ii) the consolidated interest of the Company and
                  its Subsidiaries that was capitalized during such period;
                  plus

                                       6
<PAGE>   13

                           (iii) any interest expense on Indebtedness of
                  another Person that is Guaranteed by the Company or one of
                  its Subsidiaries or secured by a Lien on assets of the
                  Company or one of its Subsidiaries, whether or not such
                  Guarantee or Lien is called upon; plus

                           (iv) the product of (a) all dividends, whether paid
                  or accrued and whether or not in cash, on any series of
                  Preferred Stock of the Company or any of its Subsidiaries,
                  other than dividends on Capital Stock payable solely in
                  Capital Stock of the Company (other than Disqualified Capital
                  Stock) or to the Company or a Subsidiary of the Company,
                  times (b) a fraction, the numerator of which is one and the
                  denominator of which is one minus the then current combined
                  federal, state and local statutory tax rate of the Company
                  and its Subsidiaries, expressed as a decimal, in each case,
                  on a consolidated basis and in accordance with GAAP.

                  "FIXED CHARGE COVERAGE RATIO" means with respect to the
Company and its Subsidiaries for any period, the ratio of the Consolidated Cash
Flow of the Company for such period to the Fixed Charges of the Company and its
Subsidiaries for such period. In the event that the Company or any of its
Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness subsequent
to the commencement of the period for which the Fixed Charge Coverage Ratio is
being calculated and on or prior to the date on which the event for which the
calculation of the Fixed Charge Coverage Ratio is made (the "Calculation
Date"), then the Fixed Charge Coverage Ratio shall be calculated giving pro
forma effect to such Incurrence, repayment, repurchase or redemption of
Indebtedness, and, if applicable, the use of the proceeds therefrom to repay
other Indebtedness as if the same had occurred at the beginning of the
applicable four-quarter reference period.

                  "GAAP" means generally accepted accounting principles as in
effect from time to time, consistently applied.

                  "GLOBAL NOTE" means a Note bearing the legend prescribed in
Section 2.4 evidencing all or part of the Notes, authenticated and delivered to
the Depositary or its custodian, and registered in the name of such Depositary
or its nominee.

                  "GLOBAL NOTE HOLDER" has the meaning specified in Section
3.1.

                  "GUARANTEE" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any other Person and any obligation, direct or indirect.
contingent or otherwise, of such Person (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation of such Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in
any other manner the obligee of such Indebtedness or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided, however, that the term "GUARANTEE" shall not
include endorsements for collection or deposit in

                                       7
<PAGE>   14
the ordinary course of business. The term "GUARANTEE" used as a verb has a
corresponding meaning.

                  "GUARANTOR" means any Person Guaranteeing any Indebtedness or
other obligation.

                  "HEDGING OBLIGATIONS" means with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements with respect to
Indebtedness that is permitted by the terms of the Notes and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or the value of foreign currencies purchased or received by
such Person in the ordinary course of business.

                  "HOLDER" means a Person in whose name a Note is registered on
the Note Register.

                  "INCUR" means issue, assume, Guarantee, incur or otherwise
become liable for. The term "Incurrence" when used as a noun shall have a
corresponding meaning. The accretion of principal of a non-interest bearing or
other discount security shall be deemed the Incurrence of Indebtedness.

                  "INDEBTEDNESS" means, with respect to any Person on any date
of determination (without duplication): (i) the principal of and premium, if
any, in respect of (A) indebtedness of such Person for money borrowed, (B)
indebtedness evidenced by notes, debentures, bonds or other similar instruments
for the payment of which such Person is responsible or liable; (ii) all Capital
Lease Obligations of such Person; (iii) all obligations of such Person issued
or assumed as the deferred purchase price of property, all conditional sale
obligations of such Person and all obligations of such Person under any title
retention agreement (including any such obligations under repurchase
agreements), but excluding trade accounts payable and expense accruals arising
in the ordinary course of business; (iv) all obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction; (v) the amount of all obligations of such Person
with respect to the redemption, repayment or other repurchase of any
Disqualified Stock or, in the case of a Subsidiary of such Person, any
Preferred Stock (vi) all obligations of the type referred to in clauses (i)
through (v) of other Persons and all dividends of other Persons the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, Guarantor or otherwise, including by means of any
Guarantee; (vii) all obligations of the type referred to in clauses (i) through
(vi) of other Persons secured by any Lien on any property or asset of such
Person, and (viii) to the extent not otherwise included in this definition,
Hedging Obligations of such Person. The amount of Indebtedness of any Person at
any date shall be the outstanding balance at such date of all unconditional
obligations, as described above, and the amount of any Indebtedness under
clause (vi) of this definition for which such Person is responsible or liable,
directly or indirectly, including by way of any Guarantee. Notwithstanding the
foregoing, any securities issued in a securitization by a Securitization
Subsidiary formed by or on behalf of a Person and to which Receivables have
been sold or otherwise transferred by or on behalf of such Person or its
Subsidiaries shall not be treated as Indebtedness of such Person or its

                                       8
<PAGE>   15

Subsidiaries, regardless whether such securities are treated as indebtedness
for tax purposes, provided that (1) neither the Company nor any of its
Subsidiaries (other than the Securitization Subsidiary) (a) provides credit
support of any kind (including any undertaking, agreement or instrument that
would constitute Indebtedness), except for credit support in the form of
"over-collateralization" of the senior certificates issued in, or subordination
of or recourse to all or a portion of Excess Spread Receivables attributable
to, such securitization, in each case to the extent of the book value of such
Excess Spread Receivables, or (b) is directly or indirectly liable (as a
guarantor or otherwise) for such securities, and (2) no default with respect to
such securities would permit (upon notice, lapse of time or both) any holder of
any other Indebtedness of the Company or any of its Subsidiaries to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its Stated Maturity.

                  "INDENTURE" shall mean this Indenture by and between the
Company and the Trustee.

                  "INTERCREDITOR AGREEMENT" has the meaning set forth in the
Agreement.

                  "INTEREST RATE" means 12% per annum, subject to increase as
specified in the second and third paragraphs of Section 3.8 hereof.

                  "INTEREST PAYMENT DATE" has the meaning set forth in Section
3.8 hereof.

                  "INVESTMENT" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; and structured notes, derivative financial instruments and other
similar instruments or contracts owned by such Person.

                  "IO SECURITIES" means a security representing an undivided
interest in all or a portion of the interest payments due on a pool of
Receivables which back the mortgage-related security to which the IO Securities
relate.

                  "ISSUE DATE" means February  29, 2000.

                  "JUNIOR INDEBTEDNESS" means any Indebtedness of the Company
subordinated in right of payment of either principal, premium (if any) or
interest thereon to the Notes.

                  "LEGAL DEFEASANCE" has the meaning specified in Section 13.2.

                  "LEGAL HOLIDAY" means any Saturday, Sunday or other day on
which banks in the States of New York, Texas or Georgia are authorized or
obligated by law to be closed for business.

                                      9
<PAGE>   16

                  "LIENS" means any mortgage, charge, pledge, lien (statutory
or otherwise), security interest, hypothecation, assignment for security,
claim, or preference or priority or other encumbrance (whether or not filed,
recorded or otherwise perfected under applicable law) upon or with respect to
any asset or property owned by a Person.

                  "LIQUID ASSETS" means: (i) cash; (ii) any of the following
instruments that have a remaining term to maturity not in excess of 90 days
from the determination date: (a) repurchase agreements on obligations of, or
are guaranteed as to timely receipt of principal and interest by, the United
States or any agency or instrumentality thereof when such obligations are
backed by the full faith and credit of the United States, provided that the
party agreeing to repurchase such obligations is a primary dealer in U.S.
Government securities, (b) federal funds and deposit accounts, including but
not limited to certificates of deposit, time deposits and bankers' acceptances
of any U.S. depository institution or trust company incorporated under the laws
of the United States or any state thereof, provided that the debt of such
depository institution or trust company at the date of acquisition thereof has
been rated by Standard & Poor's Corporation in the highest short-term rating
category or has an equivalent rating from another nationally-recognized rating
agency, or (c) commercial paper of any corporation incorporated under the laws
of the United States or any state thereof that on the date of acquisition is
rated investment grade by Standard & Poor's Corporation or has an equivalent
rating from another nationally-recognized rating agency; (iii) any debt
instrument which is an obligation of, or is guaranteed as to the receipt of
principal and interest by, the United States, its agencies or any U.S.
Government sponsored enterprise and (iv) the amount of unused credit available
to the Company in the form of Permitted Warehouse Indebtedness under lines of
such Indebtedness in existence on the determination date which may be secured
by existing net loans or other Receivables held for sale by the Company on the
determination date.

                  "LIQUIDATED DAMAGES" shall have the meaning set forth in the
Registration Rights Agreement.

                  "MARK-TO-MARKET ADJUSTMENTS" shall have the meaning set forth
in Section 9.12(a)(1).

                  "MATERIAL ADVERSE EFFECT" has the meaning set forth in the
Agreement

                  "MATURITY", when used with respect to any Note, means the
date on which the principal of such Note or an installment of principal becomes
due and payable as therein or herein provided, whether at the Stated Maturity
or by declaration of acceleration, call for redemption, upon repurchase or
otherwise.

                  "MATURITY DATE" shall mean the date of Maturity specified in
a Note and such date will be the "STATED MATURITY" of the Note.

                  "MCI" means The Money Centre, Inc., a North Carolina
corporation.

                                      10
<PAGE>   17

                  "NET INCOME" means, with respect to any Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of Preferred Stock dividends.

                  "NOTES" has the meaning set forth in the Recitals, provided
that upon consummation of the Exchange the Notes and the Convertible Notes
shall be considered as a single class of Pari Passu Indebtedness of the
Company. Notwithstanding any provision to the contrary continued in this
Indenture, references herein to actions by the Holders of the Notes shall in
all cases include the holders of the Convertible Notes, such holders acting
together as the holders of a single class of securities of the Company.

                  "NOTE OBLIGATIONS" means all present and future liabilities,
obligations and Indebtedness of the Company, any of its Subsidiaries or any
other obligor owing to any Holder under or in connection with the Agreement or
any Related Agreement, including without limitation obligations in respect of
(i) principal, premium, if any, and interest on the Notes, (ii) reimbursement
of costs, fees, taxes or other items and (iii) indemnification and related
obligations.

                  "NOTE REGISTER" has the meaning set forth in Section 3.6.

                  "NOTE REGISTRAR" has the meaning specified in Section 3.6.

                  "NOTE SECURITY" means all assets now or from time to time
after the Issue Date subjected to a security interest or other charge (or
intended to be so subjected pursuant to the Agreement or any Related Agreement)
to secure the payment or performance of any of the Note Obligations.

                  "OBLIGOR" means the Company or any Guarantor.

                  "OFFICER" means the Chairman of the Board, the President, the
Chief Financial Officer, the Controller, the Secretary, any Assistant Secretary
or any Vice President of the Company.

                  "OFFICERS' CERTIFICATE" means, unless otherwise specified
herein, a certificate signed by two Officers, one of whom must be the Chairman
of the Board, the President, the Chief Executive Officer or the Chief Financial
Officer of the Company.

                  "OPINION OF COUNSEL" means a written opinion of counsel, who
may be counsel for the Obligors and who shall be acceptable to the Trustee.

                  "OUTSTANDING" when used as of any particular time with
reference to the Notes, means all of the Notes theretofore issued by the
Company and outstanding, which shall not include (x) the Notes theretofore
canceled by the Company or surrendered to the Trustee for cancellation, and (y)
the Notes for the transfer or exchange of or in lieu of or in substitution for
which other Notes shall have been delivered by the Trustee pursuant to this
Indenture, and (ii)

                                      11
<PAGE>   18

when used as of any particular time with reference to the Convertible Notes
shall have the meaning set forth in the Convertible Notes. In determining
whether the registered holders of the requisite aggregate principal amount of
Notes and Convertible Notes have concurred in any demand, request, direction,
consent, or waiver under the Notes, Notes which are owned or held by or for the
account of the Company, or by any other obligor on the Notes, or by any
Affiliate of the Company or any other obligor on the Notes, shall be
disregarded and deemed not to be Outstanding for the purpose of any such
determination. Notes so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee shall have the exclusive right to vote
such Notes and is not a Person which is an Affiliate of the Company or any
other obligor on the Notes.

                  "PARI PASSU INDEBTEDNESS" means any Indebtedness of the
Company that is pari passu in right of payment of principal, premium (if any)
and interest thereon to the Notes.

                  "PAYING AGENT" means any Person authorized by the Company to
pay the principal of or any premium or interest on any Notes on behalf of the
Company or, if the Company is acting as its own Paying Agent, the Company.

                  "PERMITTED INDEBTEDNESS" means:

                           (i) Permitted Warehouse Indebtedness of the Company
                  and its Subsidiaries, provided that to the extent any such
                  Indebtedness ceases to constitute Permitted Warehouse
                  Indebtedness of the Company or a Subsidiary, such event shall
                  be deemed to constitute the Incurrence of such Indebtedness
                  (and any related Guarantees, but without duplication) by the
                  Company or such Subsidiary, as the case may be;

                           (ii) the Note Obligations and Convertible Note
                  Obligations;

                           (iii) Indebtedness of the Company or a Subsidiary
                  outstanding on the Issue Date;

                           (iv) Hedging Obligations;

                           (v) Capital Lease Obligations, mortgage financings
                  or purchase money obligations, in each case incurred for the
                  purpose of financing all or any part of the purchase price,
                  lease or cost of construction or improvement of property,
                  plant or equipment used in the business of the Company or
                  such Subsidiary, in an aggregate principal amount not to
                  exceed $3.0 million at any time outstanding;

                           (vi) intercompany Indebtedness between or among the
                  Company and any Subsidiary, provided, however, that (i) if
                  the Company is the obligor on such Indebtedness, such
                  Indebtedness is expressly subordinated to the prior payment
                  in full in cash of all Note Obligations and (ii) (A) any
                  subsequent issuance or transfer of Capital Stock that results
                  in any such Indebtedness being held by a

                                      12
<PAGE>   19

                  Person other than the Company or a Subsidiary and (B) any
                  sale or other transfer of any such Indebtedness to a Person
                  that is not either the Company or a Subsidiary shall be
                  deemed, in each case, to constitute an Incurrence of such
                  Indebtedness by the Company or such Subsidiary, as the case
                  may be; and

                           (vii) Permitted Refinancing Indebtedness in exchange
                  for, or the net proceeds of which are used to refund,
                  refinance or replace Indebtedness Incurred pursuant to
                  Section 9.13(a) or clause (iii) or (v) above.

                  "PERMITTED LIENS" means, with respect to the Company and any
Subsidiary:

                           (i) Liens for taxes, assessments or governmental
                  charges or levies on the assets or property of the Company or
                  any Subsidiary if the same shall not at the time be
                  delinquent or thereafter can be paid without penalty, or are
                  being contested in good faith and by appropriate proceedings
                  and for which adequate reserves in accordance with GAAP shall
                  have been set aside on its books;

                           (ii) Liens imposed by law, such as carriers',
                  warehousemen's and mechanics' liens and other similar liens
                  arising in the ordinary course of business which secure
                  payment of obligations not more than 60 days past due;

                           (iii) Liens arising out of pledges or deposits under
                  worker's compensation laws, unemployment insurance, old age
                  pensions or other social security or retirement benefits, or
                  similar legislation;

                           (iv) Utility easements, building restrictions and
                  such other encumbrances or charges against real property as
                  are of a nature generally existing with respect to properties
                  of a similar character and which do not in any material way
                  affect the marketability of the same or interfere with the
                  use thereof in the business of the Company or its
                  Subsidiaries;

                           (v) Liens securing Permitted Indebtedness;

                           (vi) Liens with respect to IO Securities, Residual
                  Certificates or excess servicing rights arising from the
                  documents creating and governing such securities,
                  certificates and rights as a result of the subordinate nature
                  of such assets to other senior interests created and governed
                  by such documents; and

                           (vii) Liens on the Capital Stock of, or the assets
                  or property of, a Subsidiary acquired by the Company in
                  existence at the time of such acquisition provided that (a)
                  such Liens are not created, incurred or assumed in connection
                  with, or in contemplation of, such acquisition and (b) such
                  Liens do not extend to assets or property owned by the
                  Company or any other Subsidiary.

                  "PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness
of the Company or any of its Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend,

                                      13
<PAGE>   20

refinance, renew, replace, defease or refund Indebtedness of the Company or any
of its Subsidiaries, provided that (i) the principal amount (or accreted value,
if applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount (or accreted value, if applicable), plus accrued interest on,
the Indebtedness so extended, refinanced, renewed, replaced, defeased or
refunded (plus the amount of reasonable expenses incurred in connection
therewith, including premiums paid, if any, to the holders thereof); (ii) such
Permitted Refinancing Indebtedness has a final maturity date at or later than
the final maturity date of, and has a Weighted Average Life to Maturity equal
to or greater than the Weighted Average Life to Maturity of, the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; (iii) if
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the Notes, such Permitted
Refinancing Indebtedness has a final maturity date later than 91 days after the
final maturity date of, and is subordinated in right of payment to, the Notes
on terms at least as favorable to the Holders as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and (iv) such Indebtedness is incurred either
by the Company or by the Subsidiary which is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded.

                  "PERMITTED WAREHOUSE INDEBTEDNESS" means Indebtedness of any
Person under any warehouse line of credit, loan repurchase agreement or similar
facility or under any commercial paper program (a) that is incurred for the
purpose of funding the origination or purchase of Receivables that are intended
to be sold to investors and are eligible to be recorded as held for sale on the
consolidated balance sheet of such Person in accordance with GAAP and are so
recorded, (b) that in the case of any warehouse line of credit or similar
facility is, or, in the case of any commercial paper program, the letters of
credit or revolving credit facility providing credit enhancement or liquidity
backup for such commercial paper program are, secured by Receivables or
securities backed by such receivables or any combination thereof owned by such
Person, (c) the outstanding amount of which shall not exceed 100% of the
aggregate principal amount of the Receivables and/or securities backed by such
receivables securing such Indebtedness and (d) that has not been outstanding in
excess of 360 days.

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

                  "PLACE OF PAYMENT" means the place or places where the
principal of and any premium and interest on the Notes are payable.

                  "PREDECESSOR NOTE" of any particular Note means every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 3.7 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.

                                      14
<PAGE>   21

                  "PREFERRED STOCK" means with respect to any Person, any
Capital Stock of any class or classes (however designated) which is preferred
as to the payment of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over shares of Capital Stock of any other class in such Person.

                  "PRINCIPAL" of a Note means the principal of the Note payable
on the Note which is due or overdue or is to become due at the relevant time.

                  "QUALIFIED INSTITUTIONAL BUYER" or "QIB" has the meaning
specified in Rule 144A under the Securities Act.

                  "RECEIVABLES" means loans, leases and other credit
receivables commonly financed by companies in the mortgage lending or consumer
finance business in the United States which are purchased or originated by the
Company or any Subsidiary of the Company in the ordinary course of business.

                  "RECORD DATE" means, with respect to any Interest Payment
Date, the June 1 or December 1 preceding an Interest Payment Date of June 15
and December 15, respectively.

                  "REDEMPTION DATE," when used with respect to any Note to be
redeemed, means the date fixed for such redemption by or pursuant to the
provisions of the Note.

                  "REDEMPTION PRICE," when used with respect to any Note to be
redeemed, means the price at which it is to be redeemed pursuant to the
provisions of the Note.

                  "REGISTRATION RIGHTS AGREEMENT" has the meaning set forth in
the Agreement.

                  "RELATED AGREEMENTS" means the Notes and the Collateral
Documents.

                  "REPURCHASE EVENT" has the meaning set forth in Section 12.6.

                  "REPURCHASE PRICE," when used with respect to any Note to be
repurchased, means the price at which it is to be repurchased pursuant to the
terms of the Notes.

                  "RESIDUAL CERTIFICATE" means a security (whether identified
as a certificate, instrument or interest) representing the residual interest in
a real estate mortgage investment conduit or other entity formed by the Company
or a Subsidiary and in which the Company or a Subsidiary has retained a
residual interest which is only payable on a fully subordinated basis after all
regular interests in and/or debt issued by such entity has been fully repaid.

                  "RESPONSIBLE OFFICER", when used with respect to the Trustee,
means the chairman or any vice-chairman of the board of directors, the chairman
or any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, any
assistant vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant cashier, any
senior trust officer,

                                      15
<PAGE>   22

trust officer or assistant trust officer, the controller or any assistant
controller or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer
to whom such matter is referred because of his knowledge of and familiarity
with the particular subject.

                  "RESTRICTED PAYMENT" means

                           (i) the declaration, payment or setting apart of any
                  funds for the payment of any dividend on, or making of any
                  distribution to holders of, the Capital Stock of the Company
                  or any Subsidiary of the Company (including, without
                  limitation, any payment in connection with any merger or
                  consolidation involving the Company or any of its
                  Subsidiaries) or make any payment or distribution to or for
                  the benefit of the direct or indirect holders of the Capital
                  Stock of the Company or any Subsidiary of the Company (other
                  than (a) dividends or distributions payable in its Capital
                  Stock (other than Disqualified Capital Stock) and (b)
                  dividends or distributions payable to the Company or a
                  Subsidiary of the Company (and if such Subsidiary is not a
                  Wholly-Owned Subsidiary, to its other holders of Capital
                  Stock on a pro rata basis);

                           (ii) the purchase, redemption or other acquisition
                  or retirement for value, directly or indirectly, of any
                  Capital Stock of the Company or any Subsidiary of the Company
                  (other than any such Capital Stock owned by the Company or
                  any of its Subsidiaries and other than the acquisition of
                  Capital Stock in Subsidiaries solely in exchange for Capital
                  Stock (other than Disqualified Capital Stock ) of the
                  Company); or

                           (iii) the making of any principal payments on, or
                  repurchase, redemption, defeasance, retirement or other
                  acquisition for value, directly or indirectly, of any Junior
                  Indebtedness or Pari Passu Indebtedness, prior to the Stated
                  Maturity of principal or scheduled redemption or defeasance
                  of, or any scheduled sinking fund payment on, such Junior
                  Indebtedness or Pari Passu Indebtedness.

         Notwithstanding the above, a Restricted Payment shall not include: (A)
any future payments required to be made to the former shareholders of MCI
pursuant to the Stock Purchase Agreement, dated as of July 15, 1999, by and
among Rodney D. Atkinson, Charles R. Cunningham, Stuart A. Lewis, John Richard
Love, Stephen L. Walker, MCI and the Company; or (B) the repurchase,
redemption, defeasance, retirement or other acquisition for value directly or
indirectly of the Notes in accordance with the terms of the Indenture
(including without limitation Section 9.20 hereof).

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

                                      16
<PAGE>   23

                  "SECURITY AGREEMENTS" shall have the meaning specified in the
Agreement.

                  "SECURITIZATION SUBSIDIARY" means a Subsidiary of the Company
formed in connection with a securitization of Receivables (i) all the Capital
Stock of which (other than directors' qualifying shares and shares held by
other Persons to the extent such shares are required by applicable law to be
held by a Person other than the Company or a Subsidiary) is owned by the
Company or one or more of its Subsidiaries, (ii) that has no assets other than
Excess Spread Receivables created in such securitization, (iii) that conducts
no business other than holding such Excess Spread Receivables, and (iv) that
has no Indebtedness (other than short-term Indebtedness to the Company or any
Wholly-Owned Subsidiary attributable to the purchase by such Subsidiary from
the Company or such Wholly-Owned Subsidiary of such Receivables, which
Indebtedness is paid in full upon closing of such securitization).

                  "SERIES ISSUE DATE" means the date on which a series of Notes
is issued under this Indenture.

                  "SIGNIFICANT SUBSIDIARY" means, with respect to any Person,
any Subsidiary which is a "significant subsidiary" (as defined in Article 1,
Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act) of
such Person.

                  "SPECIAL RECORD DATE" for the payment of any Defaulted
Interest means a date fixed by the Company pursuant to Section 3.8.

                  "STATED MATURITY" shall have the meaning set forth in the
definition of "MATURITY DATE."

                  "STOCKHOLDER APPROVALS" means the approval of the
stockholders of the Company, pursuant to the Agreement, of (i) the issuance of
Common Stock upon mandatory conversion of the applicable portion of the Notes
and (ii) the issuance of Common Stock upon conversion of the Convertible Notes
in accordance with their terms.

                  "SUBSIDIARY" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or indirectly,
by such Person or one or more Subsidiaries of such Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or one or more Subsidiaries
of such Person (or any combination thereof).

                  "SUBSTANTIAL PORTION" means, with respect to the assets of
the Company and its Subsidiaries, assets which (i) represent more than 10% of
the consolidated assets of the Company and its Subsidiaries as would be shown
in the consolidated financial statements of the Company and its Subsidiaries as
at the beginning of the twelve-month period ending with the month in which such
determination is made, or (ii) is responsible for more than 10% of the
Consolidated

                                      17
<PAGE>   24

Net Income of the Company and its Subsidiaries as reflected in the financial
statements referred to in clause (i) above.

                  "SUCCESSOR COMPANY" has the meaning specified in Section
10.1.

                  "SUPERMAJORITY COVENANTS" has the meaning set forth in
Section 9.24.

                  "TRADING DAY" shall mean (x) if the applicable security is
listed or admitted for trading on the New York Stock Exchange, the Nasdaq Stock
Market (National Market) or another national security exchange, a day on which
the New York Stock Exchange, the Nasdaq Stock Market (National Market) or
another national security exchange is open for business or (y) if the
applicable security is quoted on the Nasdaq National Market, a day on which
trades may be made thereon or (z) if the applicable security is not so listed,
admitted for trading or quoted, any day other than a Saturday or Sunday or a
day on which banking institutions in the State of Georgia are authorized or
obligated by law or executive order to close.

                  "TRUSTEE" means the Person named as the "TRUSTEE" in the
first paragraph of this instrument until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture and thereafter
"TRUSTEE" shall mean or include each Person who is then a Trustee hereunder,
and if at any time there is more than one such Person. "TRUSTEE" as used with
respect to the Notes shall mean the Trustee with respect to the Notes.

                  "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939
as in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after
such date, "TRUST INDENTURE ACT" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.

                  "U.S. GOVERNMENT OBLIGATIONS" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency, or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.

                  "VALUE PARTNERS AGREEMENT" means the Amended and Restated
Secured Convertible Senior Note Purchase Agreement dated as of February 29,
2000 by and between the Company and Value Partners, Ltd., as amended,
supplemented or otherwise modified from time to time.

                  "VALUE PARTNERS SECURITY AGREEMENT" means the Amended and
Restated Pledge and Security Agreement, dated as of February 29, 2000 for
reference purposes only, between the Company and Value Partners, Ltd., as
amended, supplemented or otherwise modified from time to time to time.

                  "VICE PRESIDENT", when used with respect to the Trustee,
means any vice president (but shall not include any assistant vice president),
whether or not designated by a number or a word or words added before or after
the title "vice president."

                                      18
<PAGE>   25

                  "WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to
any Indebtedness at any date, the number of years obtained by dividing (i) the
sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payments
of principal, including payment at Stated Maturity, in respect thereof, by (b)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.

                  "WHOLLY-OWNED SUBSIDIARY" means a Subsidiary all of the
Capital Stock of which is owned by the Company or another Wholly-Owned
Subsidiary.

                  Section 1.2 Compliance Certificates and Opinions.

                  Upon any application or request by any Obligor to the Trustee
to take any action under any provision of this Indenture, the Obligor shall
furnish to the Trustee such certificates and opinions as may be required under
the Trust Indenture Act. Each such certificate or opinion shall be given in the
form of an Officers' Certificate, if to be given by an officer of the Obligor,
or an Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.

                  Every certificate or opinion (other than the Officers'
Certificate delivered under Section 10.4 hereof) with respect to compliance
with a condition or covenant provided for in this Indenture shall include:

                  (a) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions herein
relating thereto;

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

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

                  (d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with;

                  Section 1.3 Form of Documents Delivered to Trustee.

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

                                      19
<PAGE>   26

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

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

                  Section 1.4 Acts of Holders; Record Dates.

                  (a) When herein it is provided that the registered holders of
a specified percentage in aggregate principal amount of the Notes and the
Convertible Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the registered
holders of such specified percentage have joined therein may be evidenced (a)
by any instrument or any number of instruments of similar tenor executed by
such registered holders in person or by agent or proxy appointed in writing and
delivered to the Trustee, or (b) by the registered of such registered holders
voting in favor thereof at any meeting of registered holders duly called and
held in accordance with the provisions hereof and applicable law, a copy of
which shall be delivered to the Trustee, or (c) by a combination of such
instrument or instruments and any such record of such a meeting of such
registered holders. Such instrument or instruments or such record (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "ACT" of the Holders. Such Acts shall become effective upon delivery of
such instrument or instruments or such record to the Trustee. Proof of
execution of any such instrument or authentication of such record shall be
sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.

                  Without limiting the generality of the foregoing, a Holder,
including a Depositary that is a Holder of a Global Note, may make, give or
take, by a proxy or proxies, duly appointed in writing, any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
pertained in this Indenture to be made, given or taken by Holders, and a
Depositary that is a Holder of a Global Note may provide its proxy or proxies
to the beneficial owners of interest in any such Global Note.

                  (b) The fact and date of the execution by any Person of any
such instrument or writing or the authentication of any such record of a
meeting 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

                                      20
<PAGE>   27

to take acknowledgments of deeds, certifying that the individual signing such
instrument or writing or record acknowledged to him the execution thereof.
Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of authority. The fact and date of the execution of such
instrument or writing or record, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems
sufficient.

                  (c) The Company may, in the circumstances permitted by the
Trust Indenture Act, fix any day as the record date for the purpose of
determining the Holders of Notes entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote
on any action, authorized or permitted to be given or taken by Holders of
Notes. If not set by the Company prior to the first solicitation of a Holder of
Notes made by any Person in respect of any such action, or, in the case of any
such vote, prior to such vote, the record date for any such action or vote
shall be the 30th day (or, if later, the date of the most recent list of
Holders required to be provided pursuant to Section 7.1) prior to such first
solicitation or vote, as the case may be. With regard to any record date for
action to be taken by the Holders Notes, only the Holders of Notes on such date
(or their duly designated proxies) shall be entitled to give or take, or vote
on, the relevant action.

                  (d) The ownership of Notes shall be proved by the Note
Register.

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

                  (f) Without limiting the foregoing, a Holder entitled
hereunder to give or take any action hereunder with regard to any particular
Note may do so with regard to all or any part of the principal amount of such
Note or by one or more duly appointed agents each of which may do so pursuant
to such appointment with regard to all or any different part of such principal
amount.

                  (g) For purposes of actions required by this Indenture to be
taken by the record holders of the Notes and the Convertible Notes acting as a
single class or other actions required to be taken by the record holders of the
Convertible Notes hereunder (i) the Trustee shall be entitled to rely on the
registries of record and beneficial owners of the Convertible Notes maintained
by the Company pursuant to Section 2.3 of the Convertible Notes (the
"Convertible Note Registries"), copies of which shall be delivered by the
Company to the Trustee in accordance with Section 7.1(c) hereof, and shall
treat beneficial owners of Convertible Notes as record holders of Convertible
Notes to the extent provided in Section 2.3 of the Convertible Notes and (ii)
the Trustee shall be entitled to rely on the Beneficial Owner Registry, and
shall treat beneficial owners of Notes as registered holders of Notes to the
extent provided in this Section 1.4(g). A copy of any notice sent by the
Company or the Trustee hereunder to the Holders also shall be sent to each
record and beneficial owner of the Convertible Notes, as

                                      21
<PAGE>   28

reflected in the Convertible Note Registries and to each beneficial owner of
the Notes shown on the Beneficial Owner Registry. With respect to any consent,
request, direction, approval, objection or other instrument or action required
or permitted by this Indenture to be executed or taken by the Trustee, the
Trustee shall be entitled to rely on the registries of record and beneficial
owners of the Convertible Notes and the Beneficial Owner Registry and shall
treat beneficial owners of Convertible Notes as record holders of Convertible
Notes to the extent provided in Section 2.3 of the Convertible Notes and shall
treat beneficial owners of the Notes as registered owners of the Notes. Any
action so taken shall be fully effective if executed or taken by any such
holders reflected in the Convertible Note Registries and the Beneficial Note
Registry, unless the Trustee receives written notification to the contrary.

                  Section 1.5 Notices, Etc., to Trustee and Company.

                  Except as otherwise expressly provided herein, any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given
or furnished to, or filed with,

                  (a) the Trustee by any Holder or by any Obligor shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust Office, or

                  (b) any Obligor by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the Obligor
addressed to it at the address of the Company's principal office specified in
the first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by such Obligor, Attention: George
Karfunkel, Executive Vice President.

                  Section 1.6 Notice to Holders; Waiver.

                  Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the Note
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.

                  In case by reason of the suspension of regular mail service
or by reason of any other cause it shall be impracticable to give such notice
by mail, then such notification as shall be

                                      22
<PAGE>   29

made with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder.

                  Section 1.7 Conflict with Trust Indenture Act.

                  If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.

                  Section 1.8 Effect of Headings and Table of Contents.

                  The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.

                  Section 1.9 Successors and Assigns.

                  All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.

                  Section 1.10 Separability Clause.

                  In case any provision in this Indenture or in the Notes 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 1.11 Benefits of Indenture.

                  Except to the extent provided in the definition of the term
"Notes" in Section 1.1 hereof, nothing in this Indenture or in the Notes,
express or implied, shall give any Person, other than (a) the parties hereto
and their successors hereunder and (b) the Holders, any benefit or any legal or
equitable right, remedy or claim under this Indenture.

                  Section 1.12 Governing Law, Choice of Forum.

                  (a) THIS INDENTURE AND THE NOTES WILL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

                  (b) EACH OBLIGOR HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN
IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS INDENTURE AND THE NOTES, AND IRREVOCABLY ACCEPTS FOR
ITSELF AND IN

                                      23
<PAGE>   30

RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE
AFORESAID COURTS. EACH OBLIGOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.

                  (c) Each Obligor hereby irrevocably appoints CT Corporation
System (the "PROCESS AGENT," which has consented thereto) with offices on the
date hereof at _______________________________________, as Process Agent to
receive for and on behalf of such Obligor service of process in the Borough of
Manhattan of relating to this Indenture and the Notes. SERVICE OF PROCESS IN
ANY SUIT, ACTION OR PROCEEDING AGAINST ANY OBLIGOR MAY BE MADE ON THE PROCESS
AGENT BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY ANY
OTHER METHOD OF SERVICE PROVIDED FOR UNDER APPLICABLE LAWS IN EFFECT IN THE
STATE OF NEW YORK, AND THE PROCESS AGENT IS HEREBY AUTHORIZED AND DIRECTED TO
ACCEPT SUCH SERVICE FOR AND ON BEHALF OF SUCH OBLIGOR AND TO ADMIT SERVICE WITH
RESPECT THERETO. SUCH SERVICE UPON THE PROCESS AGENT SHALL BE DEEMED EFFECTIVE
PERSONAL SERVICE ON SUCH OBLIGOR, SUFFICIENT FOR PERSONAL JURISDICTION, 10 DAYS
AFTER MAILING, AND SHALL BE LEGAL AND BINDING UPON SUCH OBLIGOR FOR ALL
PURPOSES, NOTWITHSTANDING ANY FAILURE OF THE PROCESS AGENT TO MAIL COPIES OF
SUCH LEGAL PROCESS TO SUCH OBLIGOR OR ANY FAILURE ON THE PART OF SUCH OBLIGOR
TO RECEIVE THE SAME. Each Obligor confirms that it has instructed the Process
Agent to mail to such Obligor, upon service of process being made on the
Process Agent pursuant to this Section, a copy of the summons and complaint or
other legal process served upon it, by registered mail, return receipt
requested, at such Obligor's address set forth on the signature page hereto, or
to such other address as such Obligor may notify the Process Agent in writing.
Each Obligor agrees that it will at all times maintain a process agent to
receive service of process in the Borough of Manhattan on its behalf with
respect to this Indenture and the Notes. If for any reason the Process Agent or
any successor thereto shall no longer serve as such process agent or shall have
changed its address without notification thereof to the Trustee, such Obligor,
immediately after gaining knowledge thereof, irrevocably shall appoint a
substitute process agent acceptable to the Trustee in the Borough of Manhattan
and advise the Trustee thereof.

                  (d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR
ANY HOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY OBLIGOR IN ANY OTHER
JURISDICTION.

                  Section 1.13 Legal Holidays.

                                      24
<PAGE>   31

                  In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Note shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Notes (other than a provision of the Notes which specifically states that such
provision shall apply in lieu of this Section)) payment of interest or
principal (and premium, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity, provided that no interest shall
accrue with respect to such payment for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.

                                 ARTICLE TWO -

                                   NOTE FORMS

                  Section 2.1 Forms Generally.

                  The Notes shall be in substantially the form set forth in
this Article, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the roles of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution of the Notes.

                  The Definitive Notes shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers of the Obligor executing such Notes, as evidenced
by their execution of such Notes.

                  Section 2.2 Form of Face of Note.

                          ALTIVA FINANCIAL CORPORATION

                 12% SECURED CONVERTIBLE SENIOR NOTES DUE 2006

                  NO. ____________                        $__________

                  Altiva Financial Corporation, a corporation duly organized
                  and existing under the laws of Delaware (herein called the
                  "Company", which term includes any Successor Company under
                  the Indenture hereinafter referred to), for value received,
                  hereby promises to pay to ________________, or registered
                  assigns, the principal sum of _______________ Dollars on June
                  15, 2006, and to pay interest thereon from [insert Series
                  Issue Date of the relevant series] or from the most recent
                  Interest Payment Date to which interest has been paid or duly
                  provided for, semi-annually on June 15 and December 15 in
                  each year, commencing [insert first Interest Payment Date
                  after relevant Series Issue Date], at the rate of 12%

                                      25
<PAGE>   32

                  per annum, or such other rate as prescribed by the Indenture,
                  until the principal hereof is paid or made available for
                  payment. The interest so payable, and punctually paid or duly
                  provided for, on any Interest Payment Date will, as provided
                  in such Indenture, be paid to the Person in whose name this
                  Note (or one or more Predecessor Notes) is registered at the
                  close of business on the Record Date for such interest, which
                  shall be the June 1 or December 1 (whether or not a Business
                  Day), as the case may be, next preceding such Interest
                  Payment Date. Any such interest not so punctually paid or
                  duly provided for will forthwith cease to be payable to the
                  Holder on such Record Date and may either be paid to the
                  Person in whose name this Note (or one or more Predecessor
                  Notes) is registered at the close of business on a Special
                  Record Date for the payment of such Defaulted Interest,
                  notice whereof shall be given to Holders of Notes not less
                  than 10 days prior to such Special Record Date, or be paid at
                  any time in any other lawful manner not inconsistent with the
                  requirements of any securities exchange on which the Notes
                  may be listed, and upon such notice as may be required by
                  such exchange, all as more fully provided in said Indenture.

                           The principal amount or redemption price of this
                  Note shall be payable upon presentation and surrender of this
                  Note, at the office of United States Trust Company of New
                  York, in New York, New York (such bank and any successor in
                  such capacity being referred to as the "Trustee") or at the
                  office of any other Paying Agent designated by the Company.
                  Interest shall be paid by check mailed to the address of such
                  person on the Note Register, provided that at the request of
                  a Holder in writing to the Company at least five days prior
                  to the date set for the payment of interest, interest on such
                  Holder's Notes shall be paid by wire transfer in immediately
                  available funds in accordance with the wire transfer
                  instructions supplied by such Holder to the Company. Payment
                  of principal, premium, if any and interest due on the Notes
                  on the Maturity Date similarly shall be paid by the Company
                  by check or, at the request of a Holder, wire transfer.
                  Notwithstanding the foregoing, for so long as the Depositary
                  is the exclusive registered owner of the Notes, or if the
                  Notes are not in book entry as provided in the Indenture
                  described herein, the principal amount and redemption price
                  of the Notes and the interest thereon shall be payable by
                  wire transfer in immediately available funds to the
                  Depositary without necessity of any immediate presentation
                  and surrender of the Notes pursuant to the letter of
                  representations of the Depositary or written instructions
                  from the registered owner.

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

                           Unless the certificate of authentication hereon has
                  been executed by the Trustee referred to on the reverse
                  hereof by manual signature, this Note shall not be entitled
                  to any benefit under the Indenture or be valid or obligatory,
                  for any purpose.

                                      26
<PAGE>   33

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

                  Dated:

                                          ALTIVA FINANCIAL CORPORATION

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

Attest:

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

                  Section 2.3 Form of Reverse of Note.

                  This Note is one of a duly authorized issue of securities of
the Company (herein called the "NOTES"), issued under an Indenture, dated as of
February 29, 2000 (herein called the "INDENTURE"), by and between the Company,
and United States Trust Company of New York, as Trustee (herein called the
"TRUSTEE", which term includes any successor three under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the Holders of the
Notes and of the terms upon which the Notes are, and are to be, authenticated
and delivered. This Note is one of the Notes designated on the face hereof,
limited in aggregate principal amount to $19,328,000 ($12,954,000 after giving
effect to the mandatory conversion pursuant to Article Fourteen of the
Indenture).

                  The Notes are redeemable, in whole but not in part, prior to
maturity at the option of the Company at any time and from time to time at a
redemption price (the "Redemption Price") (expressed as a percentage of
principal amount), on or after June 15, 2004 but prior to June 15, 2005, of
106% and (ii) on or after June 15, 2005, of 100%, in either case plus accrued
and unpaid interest (including Added Interest, if any) to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest (including Added Interest, if any) due on the relevant
interest payment date).

                  At issuance, the Notes that were issued to Qualified
Institutional Buyers, as such term is defined in the Securities Act of 1933 (a
"QIB"), were secured, in part, by a security interest in certain
mortgage-related securities and other assets of the Company. Notes that are
secured by such mortgage-related securities may not be transferred or pledged
to any person or entity that is not a QIB.

                                      27
<PAGE>   34

                  The Indenture contains provisions for defeasance at any time
of (a) the entire indebtedness evidenced by this Note and (b) certain
restrictive covenants, in each case upon compliance by the Company with certain
conditions set forth therein, which provisions apply to this Note.

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

                  The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Notes to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the holders of the specified aggregate principal amount of the
Notes and the Convertible Notes (set forth in the Indenture) at the time
Outstanding. The Indenture also contains provisions permitting the registered
holders of specified percentages in aggregate principal amount of the Notes and
the Convertible Notes, considered as a single class at the time Outstanding, on
behalf of the Holders of all Notes, to waive certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Note.

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

                  The Notes are issuable only in registered form without
coupons in denominations of $100 and any integral multiple thereof. As provided
in the Indenture and subject to certain limitations therein set forth, Notes
are exchangeable for a like aggregate principal amount of Notes of like tenor
of a different authorized denomination, as requested by the Holder surrendering
the same.

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

                  For notes issued to QIBs on the Issue Date and thereafter -
"This Note may not be transferred to any person or entity that is not a
Qualified Institutional Buyer as such term is defined in Rule 144A promulgated
under the Securities Act of 1933, as amended."

                  Prior to due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.

                                      28
<PAGE>   35

                  All terms used in this Note which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.

                  Section 2.4 Form of Legends for Global Notes.

                  Any Global Note authenticated and delivered hereunder shall
bear a legend in substantially the following form:

         "This Note is a Global Note within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee thereof. This Note may not be transferred to, or registered or exchanged
for Notes registered in the name of, any Person other than the Depositary or a
nominee thereof or a successor of such Depositary or a nominee of such successor
and no such transfer may be registered, except in the limited circumstances
described in the Indenture. Every Note authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, this Note shall
be a Global Note subject to the foregoing, except in such limited
circumstances."

                  For notes issued to QIBs on the Issue Date and thereafter-
"This Note may not be transferred to any person or entity that is not a
Qualified Institutional Buyer as such term is defined in Rule 144A promulgated
under the Securities Act of 1933, as amended."

                  Section 2.5 Form of Trustee's Certificate of Authentication.

                  The Trustee's certificate of authentication shall be in
substantially the, following form:

                  This is one of the Notes designated and referred to in the
within-mentioned Indenture.

                                            -----------------------------------
                                            as Trustee

                                            By
                                              ---------------------------------
                                                      Authorized Officer

                  Section 2.6 Form of Assignment.

                  Each Note shall include the following form of Assignment:

                                      29
<PAGE>   36
                                                                     EXHIBIT 4.2

                                   ASSIGNMENT

                    (TO BE EXECUTED BY THE REGISTERED HOLDER
                  IF SUCH HOLDER DESIRES TO TRANSFER THIS NOTE)

                  FOR VALUE RECEIVED _____________________ hereby sells, assigns
and transfers unto ________________________________

PLEASE INSERT SOCIAL SECURITY OR OTHER
TAX IDENTIFYING NUMBER OF TRANSFEREE

                  (PLEASE PRINT NAME AND ADDRESS OF TRANSFEREE)

this Note, together with all right, title and interest herein, and does hereby
irrevocably constitute and appoint Attorney to transfer this Note on the Note
Register, with full power of substitution.

Dated:

Signature of Holder                             Signature Guaranteed:

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

                                ARTICLE THREE -

                                    THE NOTES

                  Section 3.1       Global Note; Depositary.

                  (a)      The Notes initially will be issued in the form of one
or more Global Notes. Each Global Note will be deposited on the date of
consummation of the Exchange Offer with The Depository Trust Company or any
other depositary designated for the Notes evidenced thereby (the "DEPOSITARY"),
or the Trustee on its behalf, and registered in the name of Cede & Co. or any
other relevant Person, as nominee of the Depositary (such nominee being referred
to herein as the "GLOBAL NOTE HOLDER").

                  (b)      Notes offered and sold to QIB's shall be issued
initially in the form of two Global Notes, one in the principal amount of
$10,109,400.00 (the "QIB PERMANENT GLOBAL NOTE") and the second in the principal
amount of $5,016,495.00 (the "QIB CONVERTIBLE GLOBAL NOTE," together with the
QIB Permanent Global Note, the "QIB NOTES"), and Notes offered and sold to
persons or entities that are note QIB's ("NON-QIBS") shall be issued initially
in the form of two Global Notes, one in the principal amount of $2,436,200.00
(the "NON-QIB PERMANENT

                                       30
<PAGE>   37

GLOBAL NOTE") and the second in the principal amount of $1,209,039.00 (the
"NON-QIB CONVERTIBLE GLOBAL NOTE," together with the Non-QIB Permanent Global
Note, the "NON-QIB NOTES," and each Global Note referred to in this sentence, a
"GLOBAL NOTE").

                  Section 3.2       Amount.

                  The aggregate principal amount of Notes which may be
authenticated and delivered under this Indenture is $19,382,000.00 (Nineteen
Million Three Hundred Eighty Two Thousand Dollars and no cents), except as for
Notes authenticated and delivered pursuant to Section 3.5, 3.6, 3.7 or 4.2.

                  The Notes constitute senior obligations of the Company and
shall not be subordinated in right or priority of payment to any existing or
future Indebtedness of the Company.

                  Section 3.3       Denominations.

                  The Notes shall be issuable in registered form without coupons
in denominations of $100 and any integral multiple thereof.

                  Section 3.4       Execution, Authentication, Delivery and
                                    Dating.

                  The Notes shall be executed on behalf of each Obligor by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Notes may be manual or facsimile.

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

                  At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Notes executed by each
Obligor to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Notes, and the Trustee in accordance with
the Company Order shall authenticate and deliver such Notes.

                  Each Note shall be dated the date of its authentication.

                  No Note shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature of an Responsible Officer, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder.
Notwithstanding the foregoing, if any Note shall have been authenticated and
delivered hereunder but never issued and sold by the Company, and the Company
shall deliver such Note to the Trustee for cancellation as provided in Section
3.11, for all purposes of this Indenture such

                                       31
<PAGE>   38

Note shall be deemed never to have been authenticated and delivered hereunder
and shall never be entitled to the benefits of this Indenture.

                  Section 3.5       Temporary Notes.

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

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

                  Section 3.6       Registration; Registration of Transfer and
                                    Exchange.

                  The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office being
herein sometimes collectively referred to as the "NOTE REGISTER") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Notes and of transfers of Notes. The Trustee is
hereby appointed "Note Registrar" for the purpose of registering Notes and
transfers of Notes as herein provided.

                  The Trustee shall also maintain a register of Beneficial
Owners of the Notes (the "BENEFICIAL OWNER REGISTRY"), which Beneficial Owners
shall be placed thereon upon receipt by the Trustee of written certification of
any such Beneficial Owner as to its beneficial ownership of a specified
principal amount of the Notes accompanied by evidence thereof reasonably
satisfactory to the Trustee and setting forth its address and other information
which will permit the Trustee to communicate with such Beneficial Owners as
required herein and deem such Beneficial Owners as registered holders for
purposes hereof. A copy of any notice sent hereunder to Holders shall also be
sent to the Beneficial Owners on the Beneficial Owner Registry and any consent,
request, direction, approval, objection, or other instrument or action required
or permitted by this Indenture to be executed or taken by any Holder (other than
a transfer or conversion of a Note) shall be fully effective if executed or
taken by the Beneficial Owner thereof on the Beneficial Owner Registry, provided
that, in the event of conflicting instruments executed by the registered Holder
and the Beneficial Owner, the action by the registered Holder shall govern. The
Trustee may presume that the Persons that is enters on the

                                       32
<PAGE>   39

Beneficial Owner Registry are such Beneficial Owners unless the Trustee receives
written notification to the contrary.

                  Upon surrender for registration of transfer of any Note at the
office or agency, in a Place of Payment, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Notes of any authorized denominations and of a
like aggregate principal amount and tenor.

                  At the option of the Holder, Notes may be exchanged for other
Notes of any authorized denominations and of a like aggregate principal amount
and tenor, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Company shall execute,
and the Trustee shall authenticate and deliver, the Notes which the Holder
making the exchange is entitled to receive.

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

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

                  No service charge shall be made for any registration of
transfer or exchange of Notes, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 3.5, 3.6, 3.7 or 4.2 not involving any transfer.

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

                  Section 3.7       Mutilated, Destroyed, Lost and Stolen Notes.

                  If any mutilated Note is surrendered to the Trustee, the
Obligors shall execute and the Trustee shall authenticate and deliver in
exchange therefor a new Note of like tenor and principal amount and bearing a
number not contemporaneously Outstanding.

                  If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Note and
(ii) such indemnity as may be

                                       33
<PAGE>   40

required by them to save each of them and any agent of either of them harmless,
then, in the absence of notice to any Obligor or the Trustee that such Note has
been acquired by a bona fide purchaser, the Obligors shall execute and the
Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or
stolen Note, a new Note of like tenor and principal amount and bearing a number
not contemporaneously Outstanding.

                  In case any such mutilated, destroyed, lost or stolen Note has
become or is about to become due and payable, the Obligors in their discretion
may, instead of issuing a new Note, pay such Note.

                  Upon the issuance of any new Note 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 Note issued pursuant to this Section in lieu of any
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Obligors, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Notes 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 Notes.

                  Section 3.8       Payment of Interest and Principal;
                                    Additional Interest.

                  Interest on the Notes shall be payable by the Company in cash
to Holders (i) from the most recent date to which interest has been paid or, if
no interest has been paid, from the Issue Date, on June 15 and December 15 of
each year (each an "Interest Payment Date"), commencing on June 15, 2001, and
(ii) on the Maturity Date (or earlier to the extent provided in Article V
hereof) to the extent accrued but theretofore unpaid. Interest on the Notes
shall be computed on the basis of a 360-day year comprised of twelve 30-day
months.

                  In the event that the Company is obligated to pay Liquidated
Damages to Holders, the Interest Rate shall be increased for the period during
which the Company is obligated to pay Liquidated Damages by the amount of such
Liquidated Damages and all references herein to interest shall include
Liquidated Damages, if any. The Company shall promptly notify each Holder at its
address as it appears on the Note Register in the event that the Company is
obligated to pay Liquidated Damages to Holders.

                  In the event that the Company does not obtain the Stockholder
Approvals on or before March 9, 2000 (or as extended), the Interest Rate shall
increase monthly, commencing on March 9, 2000 (or as may be extended pursuant to
Section 12.6 hereof), by 1% per annum, up to a maximum interest rate of 18%
(exclusive of Liquidated Damages, if any), provided that if the Company
subsequently obtains the Stockholders Approvals, the Interest Rate shall revert
as of

                                       34
<PAGE>   41

the date of receipt of such approvals to the amount otherwise payable hereunder
and shall not thereafter reflect any increase in the Interest Rate as a result
of the requirements of this sentence. The Company shall promptly notify each
Holder at its address as it appears on the Note Register and the Trustee in the
event that the Company is obligated to increase the Interest Rate pursuant to
the requirements of this paragraph or in the event the interest rate shall
revert to the amount otherwise payable hereunder. The Trustee shall not be
required to investigate whether the Interest Rate is required to change pursuant
to this paragraph.

                  The Person in whose name any Note is registered at the close
of business on any Record Date with respect to any Interest Payment Date
(including any Note that is converted after the Record Date and on or before the
Interest Payment Date) shall receive the interest payable on such Interest
Payment Date notwithstanding the cancellation of such Note upon any transfer,
exchange or conversion subsequent to the Record Date and on or prior to such
Interest Payment Date. Interest shall be paid by check mailed to the address of
such Person on the Note Register, provided that at the request of a Holder in
writing to the Company at least five days prior to the date set for payment of
interest, interest on such Holder's Notes shall be paid by wire transfer in
immediately available funds in accordance with the wire transfer instructions
supplied by such Holder to the Company. Payment of principal, premium, if any,
and interest due on the Notes on the Maturity Date similarly shall be paid by
the Company by check or, at the request of a Holder, wire transfer.

                  The principal amount or redemption price of this Note shall be
payable upon presentation and surrender of this Note, at the office of the
Trustee in New York, New York or at the office of any other Paying Agent
designated by the Company. The interest on the Notes shall be payable by check
mailed on the Interest Payment Date to the Person in whose name such Note is
registered as of the Regular Record Date, at the address of such Person as shown
on the Note Register maintained by the Trustee, as Note Registrar.
Notwithstanding the foregoing, for so long as the Depositary is the exclusive
registered owner of the Notes, or if the notes are not in book entry as provided
in this Indenture, the principal amount and redemption price of the Notes and
the interest thereon shall be payable by wire transfer in immediately available
funds to the Depositary or such owners (at their request to the Company and the
Trustee in writing at least five days prior to the date set for payment of
principal, redemption price, or interest), without necessity of any immediate
presentation and surrender of the Notes pursuant to the letter of
representations of the Depositary or written instructions from the registered
owner.

                  Any interest on any Note which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall be paid by the Company, at its election in
each case, as provided in clause (1) or (2) below.

                  (1)      The Company may elect to make payment of any
         Defaulted Interest to the Persons in whose names Notes are registered
         at the close of business on a special record date (the "SPECIAL RECORD
         DATE") for the payment of such Defaulted Interest, which shall be not
         more than 15 days and not less than 10 days prior to the date of the
         proposed payment. The Company shall cause notice of the proposed
         payment of such Defaulted Interest and the special record date therefor
         to be mailed, first-class postage prepaid, to

                                       35
<PAGE>   42

         each Holder at his address as it appears in the Note Register not less
         than 10 days prior to such special record date. Notice of the proposed
         payment of such Defaulted Interest and the special record date therefor
         having been so mailed, such Defaulted Interest shall be paid to the
         Persons in whose names the Notes were registered at the close of
         business on such special record date and shall no longer be payable
         pursuant to the following clause (2).

                  (2)      The Company may make payment of any Defaulted
Interest in any other lawful manner.

                  Section 3.9       Persons Deemed Owners.

                  Prior to due presentment of a Note for registration of
transfer, the Obligors, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Note is registered as the owner of such
Note for the purpose of receiving payment of principal of and any premium and
any interest on such Note and for all other purposes whatsoever, whether or not
such Note be overdue, and neither the Obligors, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.

                  So long as the Global Note Holder is the registered owner of
any Notes, the Global Note Holder will be considered the sole Holder under this
Indenture of any Notes evidenced by the Global Note for the purposes of
receiving payment on the Notes, receiving notices, and for all other purposes
under this Indenture and the Notes. Beneficial owners of Notes evidenced by the
Global Note will not be considered the owners or Holders thereof under this
Indenture for any purpose, including with respect to the giving of any
directions, instructions or approvals to the Trustee thereunder. Neither the
Obligors nor the Trustee will have any responsibility or liability for any
aspect of the records of the Depositary or for maintaining, supervising or
reviewing any records of the Depositary relating to the Notes.

                  Section 3.10      Cancellation.

                  All Notes surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Notes previously authenticated hereunder which the Company has
not issued and sold, and all Notes so delivered shall be promptly canceled by
the Trustee. No Notes shall be authenticated in lieu of or in exchange for any
Notes canceled as provided in this Section, except as expressly permitted by
this Indenture. All canceled Notes held by the Trustee shall be disposed of in
accordance with the Trustee's regulations in accordance with the regulations
under the Exchange Act.

                                       36
<PAGE>   43
                  Section 3.11      Computation of Interest.

                  Interest on the Notes shall be computed on the basis of a
360-day year of twelve 30-day months.

                  Section 3.12      Restrictions on Transfer to Non-QIB's

                  No Global or Definitive Note that is held by a QIB on the
Issue Date may be transferred to a Non-QIB and such notes will bear a legend to
such effect.

                                 ARTICLE FOUR -

                     BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES

                  Section 4.1       Applicability of Article.

                  Each Global Note shall be subject to this Article.

                  Section 4.2       Book-Entry Provisions For Global Note.

                  (a)      Members of, or participants in, the Depositary
("AGENT MEMBERS") shall have no rights under this Indenture with respect to any
Global Note held on their behalf by the Depositary or under any Global Note, and
the Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of any Global Note for all purposes
whatsoever. Any Holder of any Global Note shall, by acceptance of such Global
Note, agree that the transfers of Interests in such Global Note may be effected
only through a book-entry system maintained by the Holder of such Global Note
(or its agent), and that ownership of an Interest in such Global Note shall be
required to be reflected in a book-entry system. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or an agent of the Company
or the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Note.

                  (b)      The Depositary must, at the time of its designation
and at all times while it serves as Depositary, be a clearing agency registered
under the Exchange Act and any other applicable statute or regulation.

                  (c)      Notwithstanding any other provision of this Section,
unless and until it is exchanged in whole or in part for individual Notes
represented thereby, a Global Note representing all or a portion of the Notes
may not be transferred except as a whole by the Depositary to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. Interests of
beneficial owners in the Global Notes (each an "INTEREST") may be transferred to
Agent Members or other beneficial owners or exchanged for Definitive Notes in
accordance with the rules and procedures of the Depositary, the provisions of
this Indenture and applicable law.

                                       37
<PAGE>   44

                  (d)      If specified by the Company pursuant to Section 3.4,
the Depositary may surrender a Global Note in exchange in whole or in part for
Definitive Notes of like tenor and terms on such terms as are acceptable to the
Company, the Trustee and the Depositary. In addition, Definitive Notes shall be
issued to all beneficial owners in exchange for their Interests in Global Notes
if (i) the Depositary for the Notes notifies the Company that the Depositary is
unwilling or unable to continue as Depositary for the Global Notes or is no
longer eligible to serve as Depositary pursuant to the terms of this Indenture
and a successor Depositary is not appointed by the Company within 90 days after
delivery of such notice; (ii) the Company, at its sole discretion, notifies the
Trustee in writing that it elects to cause the issuance of Definitive Notes
under this Indenture; or (iii) there shall have occurred and be continuing a
Default with respect to any Notes represented by the Global Notes.

                  (e)      In connection with the transfer of any Interest from
one Agent Member to another Agent Member not taking a Definitive Note, but an
Interest, the Depositary shall reflect on its books and records the date. the
name of the transferor and transferee, and the amount of the Interest
transferred.

                  (f)      In connection with the issuance to beneficial owners
of Definitive Notes in exchange for any Global Note pursuant to paragraph (c) or
(h) of this Section, such Global Note shall be deemed to be surrendered to the
Trustee for cancellation, and the Company shall execute and the Trustee upon
receipt of a Company Order for the authentication and delivery of Definitive
Notes shall authenticate and deliver, without service charge:

                           (i)      to the Depositary or to each Person
                  specified by such Depositary a new Definitive Note or
                  Definitive Notes of like tenor and terms and of any authorized
                  denomination as requested by such Person in aggregate
                  principal amount equal to and in exchange for such Person's
                  Interest in the Global Note; and

                           (ii)     to such Depositary a new Global Note of like
                  tenor and terms and in an authorized denomination equal to the
                  difference, if any, between the principal mount of the
                  surrendered Global Note and the aggregate principal amount of
                  Definitive Notes delivered to Holders thereof.

                           Except as otherwise provided in this Indenture, any
                  Note authenticated and delivered upon registration of transfer
                  of, or in exchange for, or in lieu of, any Global Note shall
                  also be a Global Note and shall bear the legend specified in
                  Section 2.4 except for any Note authenticated and delivered in
                  exchange for, or upon registration of transfer of, a Global
                  Note pursuant to the preceding sentence.

                  (g)      The Holder of any Global Note may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold Interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.

                  (h)      Upon the exchange of any Global Note in its entirety
for Definitive Notes or another Global Note, such Global Note shall be canceled
by the Trustee.

                                       38
<PAGE>   45

                  (i)      Notwithstanding anything herein to the contrary, if
at any time the Depositary for the Notes notifies the Company that it is
unwilling or unable to continue as a Depositary for the Notes or if at any time
the Depositary for the Notes shall no longer be registered or in good standing
under the Exchange Act, or other. applicable statute or regulation, the Company
shall appoint a successor Depositary with respect to the Notes. If a successor
Depositary for the Notes is not appointed by the Company within 90 days after
the Company receives such notice or becomes aware of such condition, the Company
will execute, and the Trustee, upon Company Request, will authenticate and
deliver Definitive Notes in an aggregate principal amount equal to the principal
amount of the Global Note or Global Notes representing Notes in exchange for
such Global Note or Global Notes.

                  (j)      With respect to Notes registered in the Note Register
in the name of the Depositary or its nominee, the Company and the Trustee shall
have no responsibility or obligation to any Agent Member. Without limiting the
immediately preceding sentence, the Company and the Trustee shall have no
responsibility or obligation with respect to (a) the accuracy of the records of
the Depositary or any Agent Member with respect to any ownership interest in the
Notes, (b) the delivery to any Agent Member or any other Person, other than a
Holder, as shown in the Note Register or a Beneficial Owner, of any notice with
respect to the Notes, including any notice of redemption, (c) the payment to any
Agent Member or any other Person, other than a Holder as shown in the Note
Register or a Beneficial Owner, of any amount with respect to principal of,
premium, if any, or interest or Additional Interest on, the Notes or (d) any
consent given by the Depositary as registered owner. So long as certificates for
the Notes are registered in book entry in the name of the Depositary, the
Company and the Trustee shall treat the Depositary or any successor securities
depository as, and deem the Depositary or any successor securities depository to
be, the absolute owner of the Notes, for all purposes whatsoever, including
without limitation (i) the payment of principal and interest or Liquidated
Damages on such Notes (ii) giving notice of redemption and other matters with
respect to the Notes, (iii) registering transfers with respect to the Notes and
(iv) the selection of Notes for redemption. While the Notes are in the book
entry as provided in this Section, no Person other than the Depositary or its
nominee, or any successor thereto, as nominee for the Depositary shall receive a
Note certificate with respect to any Note. Notwithstanding any other provision
of this Indenture to the contrary, so long as any of the Notes are registered in
the name of the Depositary or its nominee, all payments with respect to
principal of, premium, if any, and interest and Additional Interest on such
Notes and all notices with respect to such Notes shall be made and given,
respectively, in the manner provided in the representation letter or other
agreement with the Depositary in regard to the Notes.

                  Section 4.3       Special Transfer Provisions.

                  (a)      Transfers to QIBs. With respect to any proposed
transfer to a QIB of any Definitive Note:

                           (i)      in the case of the transfer of any
                  Definitive Note, the Note Registrar shall register the
                  transfer only upon receipt of instructions in accordance with
                  the Depositary's and the Note Registrar's procedures and only
                  if (y) the

                                       39
<PAGE>   46

transferor has delivered to the Note Registrar a certificate substantially in
the form of Annex A hereto; and

                           (ii)     With respect to all such transfers, (A) the
                  Note Registrar shall reflect on its books and records the date
                  of such transfer, (B) if the transfer affects a Global Note,
                  the Company shall execute, and the Trustee shall authenticate
                  and deliver to the Depositary, a new Global Note or Global
                  Notes in a principal amount as appropriate to reflect such
                  transfer, and (C) if the transfer is of a Definitive Note, the
                  transferred Definitive Note shall be cancelled and, if the
                  entire amount of such Definitive Note was not transferred, a
                  new Definitive Note, in the amount of the untransferred
                  portion of the original Definitive Note, shall be executed by
                  the Company, authenticated by the Trustee, and delivered to
                  such transferor.

                  (b)      The Note Registrar shall retain copies of all
letters, notices and other written communications received pursuant to Section
4.2 or this Section 4.3 in accordance with its usual procedures. The Company
shall have the right to inspect and make copies of all such letters, notices or
other written communications at any reasonable time upon the giving of
reasonable written notice to the Note Registrar.

                  Interests in a Global Note may be exchanged for a certificated
note or notes (a "DEFINITIVE NOTE"); however, no Global Note may be exchanged
for a Definitive Note prior to day next following the day on which the meeting
of stockholders at which Stockholder Approval is sought, including any
adjournments thereof.

                                 ARTICLE FIVE -

                   REMEDIES OF HOLDERS ON AN EVENT OF DEFAULT

                  Section 5.1       Events of Default.

         In case one or more of the following Events of Default (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body) shall have occurred and be continuing:

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

                  (b)      default in the payment of the principal of or
premium, if any, on any of the Notes as and when the same shall become due and
payable at maturity of the Notes, by acceleration or otherwise, or in connection
with any redemption pursuant to Article Twelve; or

                  (c)      failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part of the Company in
the Agreement or in any of the

                                       40
<PAGE>   47

Related Agreements or the Value Partners Agreement (other than a covenant or
agreement a default in whose performance or whose breach is elsewhere in this
Section 5.1 specifically dealt with) continued for a period of 60 days after the
date on which written notice of such failure, requiring the Company to remedy
the same, shall have been given to the Company by the Trustee or by the
registered holders of at least 25% in aggregate principal amount of the Notes
and the Convertible Notes, considered as a single class, at the time
Outstanding; or

                  (d)      failure of the Company or any Subsidiary of the
Company to make any payment, including any applicable grace period, in respect
of principal or interest on any Indebtedness which default shall have resulted
in Indebtedness in an amount in excess of $1,000,000; or

                  (e)      default by the Company or a Subsidiary of the Company
with respect to any Indebtedness of the Company or such Subsidiary, which
default results in acceleration of any such Indebtedness which is in an amount
in excess of $1,000,000 without such Indebtedness having been discharged, or
such acceleration having been rescinded or annulled, within the applicable grace
period; or

                  (f)      the entry by a court having jurisdiction in the
premises of a final judgment, decree or order against the Company or any
Subsidiary of the Company which shall require the payment by the Company or any
Subsidiary of the Company of an amount (to the extent not covered by insurance)
in excess of $1,000,000 and the continuance of any such judgment, decree or
order unstayed or unsatisfied and in effect for a period of 60 consecutive days
which is not being contested in good faith by appropriate judicial proceedings;
or

                  (g)      the Company or any Subsidiary that is a Significant
Subsidiary of the Company shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due; or

                  (h)      an involuntary case or other proceeding shall be
commenced against the Company or any Subsidiary that is a Significant Subsidiary
of the Company seeking liquidation, reorganization or other relief with respect
to it or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 consecutive days; or

                  (i)      failure on the part of the Company duly to observe or
perform any of the covenants or agreements of the Company in any of the
Collateral Documents continued for a period of 10 days after the date on which
written notice of such failure, requiring the Company to remedy the same, shall
have been given to the Company by the Trustee or by the registered

                                       41
<PAGE>   48

holders of at least 25% in aggregate principal amount of the Notes and the
Convertible Notes, considered as a single class, at the time Outstanding; or

                  (j)      any of the Collateral Documents after delivery
thereof shall for any reason, except to the extent permitted by the terms
thereof, cease to be in full force and effect and valid, binding and enforceable
against the Company in all material respects in accordance with their terms, or
cease in any material respect to create a valid and perfected Lien of the
priority required thereby on any of the collateral purported to be covered
thereby, or the Company shall so state in writing, and such default shall
continue unremedied for a period of 10 days; or

                  (k)      default by the Company with respect to any of its
obligations contained in Sections 12.4 through 12.8 hereof; or

                  (l)      default by the Company with respect to any of its
obligations contained in Section 9.23 hereof, unless waived pursuant to Section
5.5 hereof within 10 calendar days thereafter;

                  (m)      any annual audited financial statement of the Company
is qualified as to going concern or similar qualifications;

then, and in each and every such case (other than an Event of Default specified
in Section 5.1(g) or (h)), unless the principal of all of the Notes shall have
already become due and payable, the registered holders of not less than 25% in
aggregate principal amount of the Notes and the Convertible Notes, considered as
a single class, then Outstanding, by notice in writing to the Trustee, may
declare the principal of all the Notes and the interest accrued thereon to be
due and payable immediately, without presentment, demand, protest, notice of
protest or dishonor, notice of intent to accelerate or other notice of default
of any kind, all of which are expressly waived by the Company, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything herein contained to the contrary notwithstanding.

         If an Event of Default specified in Section 5.1(g) or (h) occurs, the
principal of all the Notes and the interest accrued thereon shall be immediately
and automatically due and payable without presentment, demand, protest, notice
of protest or dishonor, notice of intent to accelerate or other notice of
default of any kind, all of which are expressly waived by the Company.

                  Section 5.2       Payment of Notes on Default; Suit Therefor.

                  (a)      The Company covenants that (1) in case default shall
be made in the payment of any installment of interest upon any of the Notes as
and when the same shall become due and payable, and such default shall have
continued for a period of 30 days, or (2) in case default shall be made in the
payment of the principal of or premium, if any, on any of the Notes as and when
the same shall have become due and payable, whether at maturity of the Notes or
in connection with any redemption or repurchase hereunder, by declaration or
otherwise, then the Company will pay to the Holders the whole amount that then
shall have become due and payable on the Notes for principal and premium, if
any, or interest, or both, as the case may be, with interest upon the overdue
principal and premium, if any, and (to the extent that payment of such

                                       42
<PAGE>   49

interest is enforceable under applicable law) upon the overdue installments of
interest at the rate then borne by the Notes and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection.

                  (b)      If the Company fails to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of an express
trust, may (or, at the direction of registered holders of not less than 25% of
the aggregate principal amount of the Notes and the Convertible Notes,
considered as a single class, then Outstanding, shall), in addition to any other
remedies available to it, institute a judicial proceeding for the collection of
the sums so due and unpaid and may prosecute such proceeding to judgment or
final decree, and may enforce the same against the Company or any other obligor
upon the Notes and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other obligor
upon the Notes, wherever situated. If an Event of Default with respect to Notes
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Notes by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.

                  (c)      In case of any judicial proceeding relative to the
Company (or any other Obligor upon the Notes), its property or its creditors,
the Trustee shall be entitled and empowered, by intervention in such proceeding
or otherwise, to take any and all actions authorized under the Trust Indenture
Act in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized 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 other 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 to 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 6.7.

                  (d)      No provision of this Indenture 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 Notes 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;
provided, however, the Trustee may vote on behalf of the Holders for the
election of a trustee in bankruptcy or similar official and may be a member of a
creditors' or other similar committee.

                  (e)      All rights of action and claims under this Indenture
or the Notes may be prosecuted and enforced by the Trustee without the
possession of any of the Notes or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses,

                                       43
<PAGE>   50

disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Notes in respect of which such judgment
has been recovered.

                  (f)      In the case there shall be pending proceedings for
the bankruptcy or for the reorganization of the Company under Title 11 of the
United States Code, or any other applicable law, or in case a receiver, assignee
or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar
official shall have been appointed for or taken possession of the Company, the
property of the Company, or in the case of any other judicial proceedings
relative to the Company or to the creditors or property of the Company, the
Trustee shall be entitled to and shall, irrespective of whether the principal of
the Notes shall then be due and payable as herein expressed or by declaration or
otherwise, shall be entitled and empowered, by intervention in such proceedings
or otherwise, file and prove a claim or claims for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect of the
Notes, and, in case of any judicial proceedings, to file such proofs of claim
and other papers or documents as may be necessary or advisable in order to have
the claims of the Holders allowed in such judicial proceedings relative to the
Company or its creditors or its property, and shall be entitled to collect and
receive any monies or other property payable or deliverable on any such claims.

                  Section 5.3       Application of Monies Collected.

         Subject to the terms of the Intercreditor Agreement, and Section 9.20
hereof, any monies collected by or on behalf of a Holder pursuant to this
Article V shall be applied in the following order:

         First, to reimbursement of expenses and indemnities provided in Section
6.7 of this Indenture, the Agreement, the Value Partners Agreement, the Notes,
the Convertible Notes and the Collateral Documents;

         Second, in case the principal of the Notes then Outstanding shall not
have become due and be unpaid, to the payment of interest on the Notes in
default in the order of the maturity of the installments of such interest, with
interest upon the overdue installments of interest at the rate then borne by the
Notes, such payments to be made ratably to the Holders entitled thereto;

         Third, in case the principal of the Notes then Outstanding shall have
become due, by declaration or otherwise, and be unpaid, to the payment of the
whole amount then owing and unpaid upon the Notes for principal and premium, if
any, and interest, with interest on the overdue principal and premium, if any,
and upon overdue payments of interest at the rate then borne by the Notes, and
in case such monies shall be insufficient to pay in full the whole amounts so
due and unpaid upon the Notes, then to the payment of such principal and
premium, if any, and interest without preference or priority of principal and
premium, if any, over interest, or of interest over principal and premium, if
any, or of any installment of interest over any other installment of interest,
or of any Note over any other Note, ratably to the aggregate of such principal
and premium, if any, and accrued and unpaid interest; and

                                       44
<PAGE>   51

         Fourth, to the payment of the remainder, if any, to the Company or any
other Person lawfully entitled thereto.

                  Section 5.4       Remedies Cumulative and Continuing.

         Except as provided in the last paragraph of Section 3.7, all powers and
remedies given by this Article V to a Holder shall, to the extent permitted by
law, be deemed cumulative and not exclusive of any thereof or of any other
powers and remedies available to a Holder by judicial proceedings or otherwise,
to enforce the performance or observance of the covenants and agreements
contained herein, and no delay or omission of any Holder of any of the Notes to
exercise any right or power accruing upon an Event of Default shall impair any
such right or power, or shall be construed to be a waiver of any such default or
any acquiescence therein and every power and remedy given herein, by the
Collateral Documents or by law to the Holders may be exercised from time to
time, and as often as shall be deemed expedient, by the Holders.

                  Section 5.5       Waiver of Defaults by Holders.

         Except as provided in the next sentence, the registered holders of a
majority in aggregate principal amount of the Notes and the Convertible Notes,
considered as a single class, at the time Outstanding may on behalf of the
Holders of all of the Notes waive any past Default or Event of Default hereunder
and its consequences, except (i) a default in the payment of interest or
premium, if any, on, or the principal of, the Notes, (ii) a failure by the
Company to convert any Notes into Common Stock in accordance with the provisions
hereof, (iii) a default in the payment of the Redemption Price or the Repurchase
Price pursuant to Article Twelve or (iv) a default in respect of a covenant or
provision hereof which under Article Eight cannot be modified or amended without
the consent of the Holder of each Note affected thereby. Notwithstanding the
foregoing, the registered holders of at least 70% in aggregate principal amount
of the Notes and the Convertible Notes, considered as a single class, at the
time Outstanding shall be required on behalf of the Holders of all the Notes to
waive any past Default or Event of Default under any of the Supermajority
Covenants. Upon any waiver pursuant to this Section 5.5, the Company and the
Holders shall be restored to their former positions and rights hereunder, but no
such waiver shall extend to any subsequent or other Default or Event of Default
or impair any right consequent thereon. Whenever any Default or Event of Default
hereunder shall have been waived as permitted by this Section 5.5, said Default
or Event of Default shall for all purposes of the Notes be deemed to have been
cured and to be not continuing, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.

                  Section 5.6       Limitation on Suits

                  No Holder of any Note shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless

                                       45
<PAGE>   52

                  (a)      such Holder has previously given written notice to
the Trustee of a continuing Event of Default with respect to the Notes;

                  (b)      the registered holders of not less than 25% in
aggregate principal amount of the Notes and the Convertible Notes, considered as
a single class, then Outstanding shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder,

                  (c)      such Holder or Holders have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities to
be incurred in compliance with such request;

                  (d)      the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any such
proceeding; and

                  (e)      no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the registered
holders of a majority in aggregate principal amount of the Notes and the
Convertible Notes, considered as a single class, then Outstanding;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.

                  Section 5.7       Control by Holders

                  The registered holders of a majority of the aggregate
principal amount of the Notes and the Convertible Notes, considered as a single
class, then Outstanding shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Notes, provided that

                  (a)      such direction shall not be in conflict with any rule
of law or with this Indenture,

                  (b)      the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction, and

                  (c)      subject to the provisions of Section 6.1, the Trustee
shall have the right to decline to follow any such direction if the Trustee in
good faith shall, by a Responsible Officer or Officers of the Trustee, determine
that the proceeding so directed would be unduly prejudicial to the rights of any
other Holder or would involve the Trustee in personal liability.

                                       46
<PAGE>   53

                                 ARTICLE SIX -

                                   THE TRUSTEE

                  Section 6.1       Certain Duties and Responsibilities.

                  The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Whether or not therein expressly so
provided, every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section. If an Event of Default occurs (and is not cured),
the Trustee, in the exercise of its power, must use the degree of care of a
prudent man in the conduct of his own affairs. Subject to the requirement in the
foregoing sentence, the Trustee is under no obligation to exercise any of its
rights or powers under this Indenture at the request of any Holder, unless such
Holder shall have offered to the Trustee security and indemnity satisfactory to
it against any loss, liability or expense and then only to the extent required
by the terms of this Indenture.

                  Section 6.2       Notice of Defaults.

         If a Default occurs and is continuing and is known to the Trustee, the
Trustee shall mail to each Holder notice of the Default within 60 days after it
occurs. Except in the case of a Default in the payment of principal of, premium,
if any, or interest on any Note, the Trustee may withhold notice if and so long
as a committee of its trust officers determines that withholding notice is not
opposed to the interest of the Holders. The Trustee shall not be deemed to have,
or be required to take, notice of Default or Event of Default under this
Indenture except any default under Section 5.1(a) or (b) hereof or in the event
of written notification of such Default or Event of Default by the owners of any
of the Notes, and in the absence of such notice the Trustee may conclusively
presume there is no default except as aforesaid. The Trustee may nevertheless
require the Company to furnish information regarding performance of its
obligations under this Indenture, but is not obligated or does not have a duty
to the Holders to do so.

                  Section 6.3       Certain Rights of Trustee.

                  Subject to the provisions of Section 6.1:

                  (a)      the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, 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)      any request or direction of any Obligor mentioned
herein shall be sufficiently evidenced by a Company Request or Company Order and
any resolution of the Board of Directors of any Obligor may be sufficiently
evidenced by a Board Resolution;

                                       47
<PAGE>   54

                  (c)      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, rely upon an Officers' Certificate;

                  (d)      the Trustee may consult with counsel and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;

                  (e)      the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;

                  (f)      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, and

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

                  Section 6.4       Not Responsible for Recitals or Issuance of
                                    Notes.

                  The recitals contained herein and in the Notes, except the
Trustee's certificate of authentication, shall be taken as the statements of the
Company, and the Trustee or any Authenticating Agent assumes no responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Notes. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Notes or the proceeds thereof.

                  Section 6.5       May Hold Notes.

                  The Trustee, any Authenticating Agent, any Paying Agent, any
Note Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Notes and, subject to Sections 6.8
and 6.13, may otherwise deal with the Company with the same rights it would have
if it were not Trustee, Authenticating Agent, Paying Agent, Note Registrar or
such other agent.

                                       48
<PAGE>   55
                  Section 6.6       Money Held in Trust.

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

                  Section 6.7       Compensation and Reimbursement.

                  The Company agrees:

                  (a)      to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);

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

                  (c)      to indemnify the Trustee for, and to hold it harmless
against, any loss, liability, or expense incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the reasonable costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder, and

                  (d)      when the Trustee incurs any expenses or renders any
services after the occurrence of an Event of Default specified in Section 5.1(g)
such expenses and the compensation for such services are intended to constitute
expenses of administration under the Bankruptcy Code or any similar federal or
state law for the relief of debtors.

                  As security for the performance of the obligations of the
Company under this Section, the Trustee shall have a lien prior to the Notes
upon all property and funds held or collected by the Trustee as such, except
funds (i) held in trust for the payment of principal of and interest on Notes or
(ii) held in the Trustee's capacity as Paying Agent.

                  The obligations of the Company under this Section to
compensate and indemnify the Trustee and each predecessor Trustee and to pay or
reimburse the Trustee and each predecessor Trustee for expenses, disbursements
and advances shall constitute an additional obligation hereunder and shall
survive the satisfaction and discharge of this Indenture and the resignation or
removal of the Trustee and each predecessor Trustee.

                  Section 6.8       Disqualification; Conflicting Interests.

                  If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.

                                       49
<PAGE>   56

                  Section 6.9       Corporate Trustee Required; Eligibility.

                  There shall at all times be a Trustee hereunder which shall be
a Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $100,000,000. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.

                  Section 6.10      Resignation and Removal; Appointment of
                                    Successor.

                  (a)      No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 6.11.

                  (b)      The Trustee may resign at any time with respect to
the Notes by giving written notice thereof to the Company. If the instrument of
acceptance by a successor Trustee required by Section 6.11 shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Notes.

                  (c)      The Trustee may be removed at any time with respect
to the Notes by Act of the Holders of a majority in principal amount of the
Notes then Outstanding, delivered to the Trustee and to the Company.

                  (d)      If at any time:

                           (i)      the Trustee shall fail to comply with
                  Section 6.8 after written request therefor by the Company or
                  by any Holder who has been a bona fide Holder of a Note for at
                  least six months, or

                           (ii)     the Trustee shall cease to be eligible under
                  Section 6.9 and shall fail to resign after written request
                  therefor by the Company or by any such Holder, or

                           (iii)    the Trustee shall become incapable of acting
                  or shall be adjudged a bankrupt or insolvent or a receiver of
                  the Trustee or of its property shall be appointed or any
                  public officer shall take charge or control of the Trustee or
                  of its property or affairs for the purpose of rehabilitation,
                  conservation or liquidation,

                  then, in any such case, (i) the Company by a Board Resolution
may remove the Trustee with respect to all securities, or (ii) subject to
Section 5.14, any Holder who has been a bona fide Holder of a Note for at least
six months may, on behalf of himself and all others

                                       50
<PAGE>   57

similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee with respect to all Notes and the appointment of a successor
Trustee or Trustees.

                  (e)      If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, with respect to the Notes, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the Notes and
shall comply with the applicable requirements of Section 6.11. If, within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Notes shall be appointed by Act
of the Holders of a majority in principal amount of the Notes then Outstanding
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 6.11, become the successor Trustee
with respect to the Notes and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee with respect to the Notes
shall have been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 6.1l, any Holder who has been a
bona fide Holder of a Note for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Notes.

                  (f)      The Company shall give notice of each resignation and
each removal of the Trustee with respect to the Notes and each appointment of a
successor Trustee with respect to the Notes to all Holders of Notes in the
manner provided in Section 1.6. Each notice shall include the name of the
successor Trustee with respect to the Notes and the address of its Corporate
Trust Office.

                  Section 6.11      Acceptance of Appointment by Successor.

                  (a)      In case of the appointment hereunder of a successor
Trustee with respect to the Notes, every such successor Trustee so appointed
shall execute, acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder.

                  (b)      Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts referred to in paragraph (a) of this Section.

                  (c)      No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee shall be qualified
and eligible under this Article.

                                       51
<PAGE>   58

                  Section 6.12      Merger, Conversion, Consolidation or
                                    Succession to Business.

                  Any corporation into which the Trustee may be merged or
convened or with which it may be consolidated, or any corporation resulting from
any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Notes shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes.

                  Section 6.13      Preferential Collection of Claims Against
                                    Company.

                  If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Notes), the Trustee shall be subject to
the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).

                  Section 6.14      Appointment of Authenticating Agent.

                  The Trustee may appoint an Authenticating Agent or Agents
(which may be an affiliate of the Company) with respect to the Notes which shall
be authorized to act on behalf of the Trustee to authenticate Notes issued upon
original issue and upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 3.7, and Notes so authenticated shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Notes by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any state thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $100,000,000 and
subject to supervision or examination by federal or state authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

                  Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion

                                       52
<PAGE>   59

or consolidation to which such Authenticating Agent shall be a party, or any
corporation succeeding to the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent, provided
such corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.

                  An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of Notes
with respect to which such Authenticating Agent will serve, as their names and
addresses appear in the Note Register. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.

                  Unless the Authenticating Agent has been appointed by the
Trustee at the request of the Company, the Trustee agrees to pay to each
Authenticating Agent from time to time reasonable compensation for its services
under this Section, and the Trustee shall be entitled to be reimbursed for such
payments, subject to the provisions of Section 6.7.

                  If an appointment is made pursuant to this Section, the Notes
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:

                  This is one of the Notes designated and referred to in the
within-mentioned Indenture.

                                                                   , as Trustee
                                  --------------------------------
                                  By:
                                     ------------------------------------------
                                          As Authenticating Agent

                                  By:
                                     ------------------------------------------
                                           Authorized Officer

                                       53
<PAGE>   60

                                ARTICLE SEVEN -

LISTS OF HOLDERS OF NOTES AND CONVERTIBLE NOTES AND REPORTS BY TRUSTEE AND
COMPANY

                  Section 7.1       Company to Furnish Trustee Names and
                                    Addresses of Holders of Notes and
                                    Convertible Notes.

                  (a)      The Company will furnish or cause to be furnished to
the Trustee:

                           (i)      semi-annually, not later than five Business
                  Days after each Record Date, a list, in such form as the
                  Trustee may reasonably require, of the names and addresses of
                  each of (x) the Holders of Notes and (y) the Beneficial Owners
                  as of such Record Date, and

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

                  excluding from any such list names and addresses received by
the Trustee in its capacity as Note Registrar.

                  (b)      If and whenever the Company or any Affiliate of the
Company acquires any Notes, the Company shall within 10 Business Days after such
acquisition by the Company and within 10 Business Days after the date on which
it obtains knowledge of any such acquisition by an Affiliate of the Company,
provide the Trustee with written notice of such acquisition, the aggregate
principal amount acquired (to the extent known by the Company), the Holder from
whom such Notes were acquired and the date of such acquisition.

                  (c)      The Company will furnish or cause to be furnished to
the Trustee:

                           (i)      semi-annually, not later than five Business
                  Days after each Record Date, list, in such form as the trustee
                  may reasonably require, of the names and addresses of each of
                  the record and the beneficial owners of the Convertible Notes,
                  as reflected in the Convertible Note Registries, as of such
                  Record Date; and

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

                  (d)      If and whenever the Company or any Affiliate of the
Company acquires any Convertible Notes, the Company shall within 10 Business
Days after such acquisition by the Company and within 10 Business Days after the
date on which it obtains knowledge of any such acquisition by an Affiliate of
the Company, provide the Trustee with written notice of such

                                       54
<PAGE>   61

acquisition, the aggregate principal amount acquired (to the extent known by the
Company), the holder from whom such Convertible Notes were acquired and the date
of such acquisition.

                  Section 7.2       Preservation of Information; Communications
                                    to Holders.

                  (a)      The Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 7.1 and the
names and addresses of Holders received by the Trustee in its capacity as Note
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.

                  (b)      The rights of the Holders to communicate with other
Holders with respect to their rights under this Indenture or under the Notes,
and the corresponding rights and privileges of the Trustee, shall be as provided
by the Trust Indenture Act.

                  (c)      Every Holder of Notes, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
any disclosure of information as to names and addresses of Holders made pursuant
to the Trust Indenture Act.

                  Section 7.3       Reports by Trustee.

                  (a)      The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto. To the extent that any such report is required by the Trust
Indenture Act with respect to any 12-month period, such report shall cover the
12-month period ending December 31 and shall be transmitted by the next
succeeding March 1.

                  (b)      A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Notes are listed, with the Commission and with the Company. The
Company will notify the Trustee when any Notes are listed on any stock exchange.

                  Section 7.4       Reports by Company.

                  The Company shall file with the Commission and shall furnish
to the Trustee and the Holders, within 5 days after it files them with the
Commission, copies of its annual report and the information, documents and other
reports which the Company is required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act. Notwithstanding that the Company may
not be required to remain subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, the Company shall continue to file with the
Commission and to provide to the Trustee and the Holders the annual reports and
the information, documents and other reports which are specified in Section 13
or 15(d) of the Exchange Act and applicable to a US corporation subject to such
sections, such information, documents and other reports to be filed and provided
at the times specified for the filing of such information, documents and reports

                                       55
<PAGE>   62

under such section. The Company also shall comply with the other provisions of
ss. 314(a) of the Trust Indenture Act.

                  Section 7.5       Provision of Reports and Other Documents to
                                    Holders of Convertible Notes.

         Notwithstanding any other provision of this Indenture to the contrary,
the Company and the Trustee shall provide to each record and beneficial owner of
a Convertible Note, as reflected in the Convertible Note Registries, at the same
time and in the same manner as is provided to Holders, copies of any notice,
report or other document provided to the Holders hereunder.

                                ARTICLE EIGHT -

                       AMENDMENTS, SUPPLEMENTS AND WAIVERS

                  Section 8.1       Supplemental Indentures with Consent of
                                    Holders.

                  (a)      With the written consent of the registered holders of
a majority in aggregate principal amount of the Notes and the Convertible Notes,
considered as a single class, at the time Outstanding, by Act of such registered
holders delivered to the Company and the Trustee, the Company, when authorized
by a Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating or waiving any of the provisions of this Indenture or
of modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Note affected thereby (i) extend the fixed
maturity of such Note, or reduce the rate or extend the time of payment of
interest thereon, or reduce the principal amount thereof or premium, if any,
thereon, or reduce any amount payable on redemption thereof, or impair the right
of any such Holder to institute suit for the payment thereof, or make the
principal thereof or interest or premium, if any, thereon payable in any coin or
currency other than that provided herein, or change the obligation of the
Company to repurchase any Note upon the occurrence of a Repurchase Event in a
manner adverse to such Holder, or impair the right to convert the Notes into
Common Stock in any material respect, or (ii) reduce the aforesaid percentage of
Notes and the Convertible Notes, considered as a single class, the registered
holders of which are required to consent to any such amendment, modification,
supplement or waiver; and further provided that no such supplemental indenture
shall amend, modify, supplement or waive the Supermajority Covenants, the second
sentence of Section 9.24, the date March 31, 2000 in the proviso clause to
Section 12.6 and this proviso clause without the written consent of the
registered holders of not less than 70% in aggregate principal amount of the
Notes and the Convertible Notes, considered as a single class, at the time
Outstanding.

                  (b)      It shall not be necessary for any Act of the
registered holders of the Notes and Convertible Notes under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act and such notice shall approve the substance thereof.

                                       56
<PAGE>   63

                  Section 8.2       Execution of Supplemental Indentures.

                  In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall receive, and
(subject to Section 6.1) shall be fully protected in relying upon, an Opinion of
Counsel stating that this Indenture, as amended by such supplemental indenture,
constitutes the legal, valid and binding obligation of all Obligors, enforceable
against each of them in accordance with its terms.

                  Section 8.3       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 Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby and entitled to the benefits thereof.

                  Section 8.4       Conformity with Trust Indenture Act.

                  Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in effect.

                  Section 8.5       Reference in Notes to Supplemental
                                    Indentures.

                  Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form acceptable to the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the Board
of Directors, to any such supplemental indenture may be prepared and executed by
the Obligors and authenticated and delivered by the Trustee in exchange for
Notes then Outstanding.

                  Section 8.6       Notice of Supplemental Indenture.

                  After an supplemental indenture hereunder becomes effective,
the Company shall mail to Holders a notice briefly describing such supplemental
indenture; provided, that the failure to give such notice to all Holders, or any
defect therein, will not impair or affect the validity of the supplemental
indenture.

                                 ARTICLE NINE -

                                    COVENANTS

                  Section 9.1       Payment of Notes.

                  The Company shall pay the principal of, premium, if any, and
interest on the Notes on the dates and in the manner provided herein. To the
extent lawful, the Company shall pay interest (including post-petition interest
in any proceeding under any bankruptcy law) on (i)

                                       57
<PAGE>   64

overdue principal, at the rate borne by the Notes at the time, and (ii) overdue
installments of interest (without regard to any applicable grace period) at the
same rate, compounded semi-annually.

                  Section 9.2       Stay, Extension and Usury Laws.

                  The Company covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law or other law which would prohibit or forgive the Company from paying
all or any portion of the principal of, premium, if any, or interest on the
Notes as contemplated herein, wherever enacted, now or at any time hereafter in
force, or which may affect the covenants or the performance of its obligations
herein, and the Company (to the extent it may lawfully do so) hereby expressly
waives all benefits or advantages of any such law.

                  Section 9.3       Reports and Certificates.

                  (a)      Whether or not required by the rules and regulations
of the Commission, so long as any Notes are Outstanding, the Company will
furnish to the Trustee and the Holders, within five days after the time periods
specified in the Commission's rules and regulations (including any extensions
expressly permitted by such rules and regulations):

                  (1)      all quarterly and annual information, financial and
         other, that would be required to be contained in a filing with the
         Commission on Forms 10-Q and 10-K (or any successor forms) if the
         Company were required to file such forms, including a "Management's
         Discussion and Analysis of Financial Condition and Results of
         Operations" and an annual report on the Company's consolidated
         financial statements by the Company's independent certified public
         accountants; and

                  (2)      all current reports that would be required to be
         filed with the Commission on Form 8-K (or any successor form) if the
         Company were required to file such reports.

                  (b)      For so long as any Notes are Outstanding, the Company
will furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.

                  (c)      Concurrently with the delivery of the annual report
described in Section 9.3(a)(1), the Company will deliver to each Holder at such
Holder's address as it appears on the Note Register a statement of the Company's
independent certified public accountants to the effect that they have reviewed
the Agreement and the Related Agreements and that based on their examination of
the affairs of the Company and its Subsidiaries, performed in connection with
their audit of the Company's annual financial statements, they are not aware of
the occurrence or existence of any condition or event which constitutes a
Default or an Event of Default, or, if they are aware thereof, the nature
thereof.

                  (d)      Concurrently with the delivery of the annual report
described in Section 9.3(a)(1), the Company will deliver to each Holder at such
Holder's address as it appears in the

                                       58
<PAGE>   65

Note Register, within 90 days after the end of each fiscal year of the Company,
an Officer's Certificate, signed by each of the Company's Chief Executive
Officer and Chief Financial Officer, to the effect that each such officer has
reviewed the Agreement and the Related Agreements and is not aware of the
occurrence or existence of any condition or event which constitutes a Default or
an Event of Default, or, if they are aware thereof, the nature thereof and what
action the Company is taking or proposes to take with respect thereto.

                  (e)      Notwithstanding any other provision hereof to the
contrary, promptly upon acquiring knowledge of any Default or Event of Default,
the Company will promptly deliver to each Holder at such Holder's address as it
appears in the Note Register an Officer's Certificate specifying such Default or
Event of Default and what action the Company is taking or proposes to take with
respect thereto.

                  (f)      The Company will deliver to each Holder of at least
$1.0 million aggregate principal amount of Notes who so requests at such
Holder's address as it appears in the Note Register, within 30 days after the
end of each fiscal quarter of the Company, an Officers' Certificate, signed by
the Company's Chief Executive Officer and Chief Financial Officer, which (i)
sets forth in reasonable detail the calculations which demonstrate the Company's
compliance with the financial covenants set forth in Section 9.12 (regardless
whether such covenants are in effect) and Section 9.13 (regardless whether the
Company is seeking to incur additional Indebtedness) and (ii) to the effect that
each such officer is not aware of the occurrence or existence of any condition
or event which constitute a Default or an Event of Default with respect to
Section 9.6 or, if they are aware thereof, the nature thereof and what action
the Company is taking or proposes to take with respect thereto.

                  (g)      The Company will deliver to each Holder of at least
$1.0 million aggregate principal amount of Notes who so requests at such
Holder's address as it appears in the Note Register, within 30 days after the
end of each calendar month, (i) an unaudited balance sheet and income statement
showing the results of the Company's operations for such month, certified by an
Officers' Certificate which is signed by the Company's Chief Financial Officer
or Chief Accounting Officer, (ii) the amount of originations, purchases and
sales of each type of Receivable by the Company and each Subsidiary of the
Company during such month and fiscal year to date and (iii) the amount of (x)
delinquent loans or other Receivables and (y) real estate owned of the Company
and each Subsidiary of the Company at the end of such month.

                  Section 9.4       Taxes and Other Charges.

                  (a)      Each of the Company and its Subsidiaries will duly
pay and discharge, or cause to be paid and discharged, before the same becomes
in arrears, all taxes, assessments and other governmental charges imposed upon
such Person and its properties, sales or activities, or upon the income or
profits therefrom, as well as all claims for labor, materials, supplies or
services which if unpaid might by law become a Lien upon any of its assets;
provided, however, that any such tax, assessment, charge or claim need not be
paid if the validity or amount thereof shall at the time be contested in good
faith by appropriate proceedings and if such Person shall, in accordance with
GAAP, have set aside on its books adequate reserves with respect thereto;

                                       59
<PAGE>   66

and provided, further, that each of the Company and its Subsidiaries shall pay
or bond, or cause to be paid or bonded, all such taxes, assessments, charges or
other governmental claims immediately upon the commencement of proceedings to
foreclose any Lien which may have attached as security therefor (except to the
extent such proceedings have been dismissed or stayed).

                  (b)      Each of the Company and its Subsidiaries will
promptly pay when due, or in conformity with ordinary business practices, all
accounts payable incident to the operations of such Person not referred to in
paragraph (a) of this Section 9.4; provided, however, that any such Indebtedness
need not be paid if the validity or amount thereof shall at the time be
contested in good faith and if such Person shall, in accordance with GAAP, have
set aside on its books adequate reserves with respect thereto.

                  Section 9.5       Conduct of Business.

                  (a)      Each of the Company and its Subsidiaries (i) will
carry on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as is conducted generally from time
to time by companies in the mortgage lending business or the consumer finance
business in the United States and will not engage in any other business
activities and (ii) do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation in its jurisdiction of
incorporation and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted to the extent failure to do
so would have, or could reasonably be expected to have, a Material Adverse
Effect.

                  (b)      Each of the Company and its Subsidiaries will comply
in all material respects with all valid and applicable statutes, laws,
ordinances, zoning and building codes and other rules and regulations of the
United States of America, of the states and territories thereof and their
counties, municipalities and other subdivisions and of any foreign country or
other jurisdictions applicable to such Person, except where failure so to comply
would not, individually or in the aggregate, result in any Material Adverse
Effect.

                  Section 9.6       Corporate Existence.

                  (a)      Subject to Article Ten, the Company will do or cause
to be done all things necessary to preserve and keep in full force and effect
its corporate existence, rights (charter and statutory) and franchises and those
of any Subsidiary of the Company, provided, however, that the Company and any
Subsidiary of the Company shall not be required to preserve any such right or
franchise if the Board of Directors of the Company shall determine in good faith
that the preservation is no longer desirable in the conduct of the Company's
business and that the loss thereof is not, and will not be, reasonably likely to
result in any Material Adverse Effect.

                  (b)      Notwithstanding anything in paragraph (a) to the
contrary, the Company will exercise its reasonable best efforts to operate MCI
in a manner that will maintain the corporate existence and enterprise value of
MCI, including but not limited to maintenance of its

                                       60
<PAGE>   67

production, administration and secondary marketing functions in a fashion that
would make its business a commercially marketable asset, which shall include:

                           (i)      the maintenance of separate books, records
                  and accounts, including detailed intercompany payables and
                  receivables accounts;

                           (ii)     separate revenue generation (including loan
                  origination and loan sales), collection, and credit functions;

                           (iii)    separate expense allocation;

                           (iv)     separate employment of employees,
                  consultants and agents;

                           (v)      separate compensation of employees,
                  consultants and agents;

                           (vi)     maintenance of separate licenses;

                           (vii)    maintenance of separate borrowing
                  facilities, whether in MCI's own name, or as a named borrower
                  under the Company facilities, including warehouse facilities;

                           (viii)   separation of all material operational
                  functions, including telephone systems, computer systems, etc.

                           (ix)     separate corporate existence; and

                           (x)      separate business leases and contracts,
                  including as to office space, phone systems, copy systems,
                  leased furniture and equipment.

                  (c)      The Company will take reasonable steps to ensure that
all data and information reasonably necessary for the operation of MCI as an
independent corporation, including accounting, loan production and loan sales
information, shall be transferable to MCI promptly and without material expense
upon reasonable request by MCI. MCI shall maintain, at MCI, computer systems
capable of maintaining and processing the above and such data shall be forwarded
to such system periodically.

                  (d)      The Company will ensure that all business relations
with MCI, including any services provided to MCI by the Company, are properly
documented. All contracts between MCI and the Company shall include a provision
permitting MCI to terminate such contracts without penalty, at its discretion.
The Company will take no action which it reasonably believes will result in a
material reduction in the enterprise value or marketability of MCI, provided
that this restriction shall not prohibit the Company from transferring money
from MCI to the Company in such manner as the Company determines is necessary,
in its discretion.

                  (e)      The covenants in paragraphs (b) and (c) above shall
cease to be effective at such time on or after August 31, 2001 as the Company
shall have established compliance with all of the financial tests specified in
Section 9.12 (a), (b) and (c).

                                       61
<PAGE>   68

                  Section 9.7       Maintenance of Properties.

                  The Company and its Subsidiaries will cause all material
properties (real and personal) owned, leased or licensed in the conduct of their
business to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof
and thereto, all as in the reasonable judgment of the Board of Directors may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times while any Notes are
Outstanding, provided, however, that nothing in this Section 9.7 shall prevent
the Company and its Subsidiaries from discontinuing the maintenance of any such
properties if, in the reasonable judgment of the Board of Directors, such
discontinuance is desirable in the conduct of the Company's business and is not,
and will not be, reasonably likely to result in any Material Adverse Effect.

                  Section 9.8       Insurance.

                  Each of the Company and its Subsidiaries will maintain with
financially sound and reputable insurers insurance against liability for
hazards, risks and liability to persons and property, to the extent, in amounts
and with deductibles at least as favorable as those generally maintained by
businesses of similar size engaged in similar activities.

                  Section 9.9       Restricted Payments.

                  The Company will not, and will not permit any Subsidiary to,
directly or indirectly, make any Restricted Payment.

                  Section 9.10      Restrictions on Issuance and Sale of Sale of
                                    Capital Stock of Subsidiaries.

                  The Company will not sell, transfer or otherwise dispose of
shares of Capital Stock of any Subsidiary of the Company or permit any
Subsidiary of the Company to issue, sell or otherwise dispose of shares of its
Capital Stock unless in either case such Subsidiary remains a Wholly-Owned
Subsidiary of the Company.

                  Section 9.11      Restrictions on Subsidiary Mergers and Sales
                                    of Assets.

                  (a)      The Company will not permit any Subsidiary to merge
or consolidate with any Person, except that a Subsidiary, other than MCI, may
merge into the Company or another Wholly-Owned Subsidiary of the Company.

                  (b)      The Company will not permit any Subsidiary to sell,
lease or otherwise dispose of its assets to any other Person, except (i) sales
of Receivables in the ordinary course of business, (ii) sales of
mortgage-related securities which are issued or sponsored by the Subsidiary or
an Affiliate of the Subsidiary in the ordinary course of business or (iii)
sales, leases or other dispositions of its assets that, together with all other
assets of the Subsidiary previously sold, leased or disposed of (other than
Receivables and securities referred to in clauses (i) and (ii) of

                                       62
<PAGE>   69

this sentence) in accordance with this Section 9.11(b) during the 12-month
period ending with the month in which any such sale, lease or other disposition
occurs, do not constitute a Substantial Portion of the consolidated assets of
the Company under GAAP.

                  Section 9.12      Financial Covenants.

                  (a)      The Company will not at any time permit its
Consolidated Net Worth to be less than the sum of (1) $30.0 million plus (2) 60%
of the sum of the Company's positive Consolidated Net Income (determined in
accordance with GAAP) for each fiscal semi-annual period ending after the Issue
Date, commencing with the semi-annual period ending August 31, 2000, plus (3)
100% of the net proceeds obtained by the Company through the issuance or sale of
Capital Stock (after the deduction of all costs of such issuance). For purposes
of this Section 9.12(a), Consolidated Net Worth shall not include (i) up to an
aggregate of $5.0 million of increases in the carrying value of the
mortgage-related securities owned by the Company as of the Issue Date (the
"Issue Date Securities") recorded by the Company under GAAP and (ii) up to an
aggregate of $5.0 million of decreases in the carrying value of the Issue Date
Securities recorded by the Company under GAAP, in each case measured from the
carrying value of the Issue Date Securities as of the month-end preceding the
Closing Date, as set forth on an Officers' Certificate delivered to Value
Partners and the Collateral Agent, and as subsequently reflected on any
statement of financial condition of the Company included in a report filed by
the Company pursuant to Section 9.3(a)(1) (the "Mark-to-Market Adjustments"). To
illustrate, if the Company decreased the carrying value of the Issue Date
Securities under GAAP as of the month-end preceding the Issue Date by $4.0
million and $3.0 million at August 31, 2000 and November 30, 2000, respectively,
the Consolidated Net Worth of the Company at November 30, 2000 for purposes of
Section 9.12(a)(1) shall be increased by $5.0 million. Similarly, if the Company
increased the carrying value of the Issue Date Securities by such respective
amounts at such respective dates, the Consolidated Net Worth of the Company at
November 30, 2000 for purposes of Section 9.12(a)(1) shall be decreased by $5.0
million.

                  (b)      Commencing on August 31, 2001 and thereafter, the
Company will not at any time permit the ratio of (i) the aggregate amount of
consolidated liabilities of the Company and its Subsidiaries (determined in
accordance with GAAP) to (ii) the Consolidated Net Worth of the Company and its
Subsidiaries to exceed 7.0 to 1.0.

                  (c)      Commencing with the fiscal quarter ending August 31,
2001 and as of the end of each fiscal quarter of the Company thereafter, the
Company will not permit the Fixed Charge Coverage Ratio of the Company to be
less than 1.5 to 1.0 on a trailing four-quarter basis.

                  Section 9.13      Limitation on Incurrence of  Indebtedness
                                    and Issuance of Disqualified Capital Stock.

                  (a)      The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, Incur any Indebtedness or issue any
Disqualified Capital Stock, provided, that the Company and any Subsidiary may
Incur Indebtedness, other than in the case of the Company Indebtedness as a
result of its Guarantee of the Indebtedness of any Person, including without
limitation any Subsidiary of the Company, if at the time of Incurrence no
Default or

                                       63
<PAGE>   70
                  Section 9.15      Subsidiary Guarantees.

Event of Default shall have occurred and be continuing or would occur as a
consequence thereof and each of the following requirements is satisfied:

                           (i)      The Fixed Charge Coverage Ratio for the
                  Company's most recently ended four fiscal quarters for which
                  internal financial statements are available immediately
                  preceding the date on which such additional Indebtedness is
                  Incurred would have been at least 1.6 to 1.0, determined on a
                  pro forma basis (including, if applicable, a pro forma
                  application of the net proceeds therefrom to repay other
                  Indebtedness), as if the additional Indebtedness had been
                  Incurred at the beginning of such four-quarter period; and

                           (ii)     the ratio of (i) the aggregate amount of
                  consolidated liabilities of the Company and its Subsidiaries
                  to (ii) the Consolidated Net Worth of the Company does not
                  exceed 6.0 to 1.0, determined on a pro forma basis (including
                  a pro forma application of the net proceeds therefrom).

                  (b)      Notwithstanding paragraph (a) of this Section 9.13,
the Company and its Subsidiaries may incur Permitted Indebtedness while no
Default or Event of Default exists.

                  Section 9.14      Liens.

                  (a)      The Company will not, and will not permit any
Subsidiary to, create, assume or otherwise cause or suffer to exist or to become
effective any Lien upon any Note Security (or become contractually committed to
do so), except the following:

                           (i)      liens created under the agreements governing
                  the securitization of the Receivables underlying the
                  mortgage-related securities included in the Note Security;

                           (ii)     liens to secure taxes, assessments and other
                  governmental charges, to the extent that payment thereof shall
                  not at the time be required by Section 9.4;

                           (iii)    restrictions under federal and state
                  securities laws on the transfer of securities; and

                           (iv)     liens which solely secure the Note
                  Obligations.

                  (b)      The Company will not, and will not permit any
Subsidiary to, create, assume or otherwise cause or suffer to exist or become
effective any Lien upon any Eligible Collateral, other than Permitted Liens, to
secure any Indebtedness of the Company (other than the Note Obligations and
Convertible Note Obligations), any Subsidiary of the Company or any other
Person, without in each case making effective provision whereby all Notes and
Convertible Notes shall be directly secured equally and ratably with (or prior
to in the case of Liens with respect to Junior Indebtedness) such Indebtedness.

                                       64
<PAGE>   71

                  Section 9.15      Subsidiary Guarantees.

                  The Company will not permit any Subsidiary of the Company,
directly or indirectly, to Guarantee or assume, or subject any of its assets to
a Lien to secure, any Pari Passu Indebtedness or Junior Indebtedness unless (i)
such Subsidiary simultaneously provides for a Guarantee of, or pledge of assets
to secure, the Note Obligations and the Convertible Note Obligations by such
Subsidiary on terms at least as favorable to the Holders as such Guarantee or
security interest in such assets is to the holders of such Pari Passu
Indebtedness or Junior Indebtedness, except that in the event of a Guarantee or
security interest in such assets with respect to (x) Pari Passu Indebtedness,
the Guarantee or security interest in such assets shall be made pari passu to
the Guarantee or security interest in such assets with respect to such Pari
Passu Indebtedness or (y) Junior Indebtedness, any such Guarantee or security
interest in such assets with respect to such Junior Indebtedness shall be
subordinated to such Subsidiary's guarantee or security interest in such assets
with respect to the Note Obligations and the Convertible Note Obligations to the
same extent as such Junior Indebtedness is subordinated to the Note Obligations
and the Convertible Note Obligations and (ii) such Subsidiary waives and agrees
in writing that it will not in any manner whatsoever claim, or take the benefit
or advantage of, any rights of reimbursement, indemnity or subrogation or any
other rights against the Company or any other Subsidiary of the Company as a
result of any payment by such Subsidiary under its guarantees.

                  Section 9.16      Payment of Dividends from Subsidiaries.

                  To the extent necessary to enable it to make payments on the
Notes in accordance with their terms, the Company shall cause dividends to be
paid to it by its Subsidiaries (whether in existence as of the date of issuance
of the Notes or thereafter formed or acquired) in amounts which are sufficient
to enable the Company to satisfy its payment obligations under the Notes (and
which shall be so used by the Company), provided that the Company shall not be
required to take any action which would result in a Subsidiary paying dividends
to the extent not permitted by applicable law and regulation and/or restrictions
existing under agreements in effect on the Issue Date if the Company receives an
opinion of counsel (in form and substance satisfactory to the registered holders
of a majority in aggregate principal amount of the Notes and the Convertible
Notes, considered as a single class, at the time Outstanding) as to the
existence of the relevant restriction no later than the applicable Interest
Payment Date or the Stated Maturity of the Notes, whether by acceleration or
otherwise.

                  Section 9.17      Limitations on Dividends and Other Payment
                                    Restrictions Affecting Subsidiaries.

                  The Company will not, and will not permit any of its
Subsidiaries (whether in existence as of the date of issuance of the Notes or
thereafter formed or acquired) to, create, assume or otherwise cause or suffer
to exist or to become effective any consensual encumbrance or consensual
restriction on the ability of any such Subsidiary to:

                  (a)      pay any dividends or make any other distribution to
the Company or any other Subsidiary on its Capital Stock or with respect to any
other interest or participation in, or measured by, its profits;

                                       65
<PAGE>   72

                  (b)      make payments in respect to any Indebtedness owed to
the Company or any other Subsidiary; or

                  (c)      make loans or advances to the Company or any other
Subsidiary or to guarantee Indebtedness of the Company or any other Subsidiary;

         other than, in the case of (a), (b) and (c),

                  (1)      restrictions existing under agreements in effect on
         the Issue Date;

                  (2)      consensual encumbrances or consensual restrictions
         binding upon any Person at the time such Person becomes a Subsidiary of
         the Company so long as such encumbrances or restrictions (i) are not
         created, incurred or assumed in contemplation of such Person becoming a
         Subsidiary and (ii) do not encumber or restrict the Company or any
         other Subsidiary of the Company as set forth in (a), (b) or (c) above.

                  (3)      restrictions on the transfer of assets which are
         subject to Liens; and

                  (4)      restrictions existing under any agreement which
         refinances or replaces any of the agreements containing the
         restrictions in clauses (1) and (2), provided that the terms and
         conditions of any such restrictions are not materially less favorable
         to the Holders than those under the agreement evidencing or relating to
         the Indebtedness refinanced.

                  Section 9.18      Investments and Acquisitions.

                  The Company will not, nor will it permit any Subsidiary to,
make or suffer to exist any Investments (including, without limitation, loans
and advances to, and other Investments in, Subsidiaries), or commitments
therefor, or create any Subsidiary or become a partner in any partnership or
joint venture, or make any Acquisition of any Person, in each case whether
directly or indirectly through a transaction which may otherwise be permissible
pursuant to Section 10.1 hereof or otherwise, except:

                           (i)      Short-term obligations of, or fully
                  guaranteed by, the United States of America;

                           (ii)     Commercial paper rated A-1 or better by
                  Standard and Poor's Ratings Group or P-1 or better by Moody's
                  Investors Service, Inc.;

                           (iii)    Demand deposit accounts maintained in the
                  ordinary course of business;

                           (iv)     Certificates of deposit issued by and time
                  deposits with federally-insured financial institutions having
                  capital and surplus in excess of $100,000,000;

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<PAGE>   73

                           (v)      Investments in existence on the Issue Date;

                           (vi)     Investments in the ordinary course of the
                  Company's business to originate or purchase (a) Receivables
                  (and in connection with commitments to purchase the same) and
                  (b) real estate acquired by foreclosure or by deed-in-lieu
                  thereof, whether directly or indirectly through a Subsidiary
                  formed for the sole purpose of holding the same;

                           (vii)    Hedging Obligations; and

                           (viii)   Investments in Securitization Subsidiaries.

                  Section 9.19      Limitation on Investment Company Status.

                  The Company will not take, and will not permit any Subsidiary
to take, any action, or otherwise permit to exist any circumstance, that would
require the Company or such Subsidiary to register as an "investment company"
under the Investment Company Act of 1940, as amended.

                  Section 9.20      Payments on Notes; Repurchase of Notes.

                  (a)      Except as expressly provided in the Intercreditor
Agreement, the Company will not make any payment of interest, premium, if any,
or principal on the Notes or the Convertible Notes without making a pro rata
payment to all holders of the Notes and Convertible Notes.

                  (b)      The Company will not, and will not permit any
Subsidiary or other Affiliate of the Company to, redeem or purchase (whether in
public or private transactions) any Notes or Convertible Notes other than
pursuant to a redemption or repurchase offer made to each holder of a Note or
Convertible Note pro rata in accordance with the aggregate principal amount of
Notes and Convertible Notes held by such holders.

                  Section 9.21      Transactions with Affiliates.

                  Neither the Company nor any Subsidiary will enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of any asset or the rendering of any service, with any Affiliate (other
than the Company or a Subsidiary of the Company) unless such transaction (a) is
otherwise not in violation of the Agreement and the Related Agreements
(including without limitation the Notes), and (b) is approved by a majority of
the disinterested members of the Board of Directors, is in the ordinary course
of its business and is upon fair and reasonable terms no less favorable to it
than it would obtain in a comparable arm's-length transaction with a Person not
an Affiliate, provided that the requirements of this clause (b) shall not apply
to (i) any transaction pursuant to agreements in effect on the Issue Date and
(ii) any transaction or series of related transactions in which the amount
involved does not exceed $250,000.

                                       67
<PAGE>   74

                  Section 9.22      Payments for Consent.

                  The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any holder of
Note or an Exchange Note as an inducement to any consent, waiver or amendment of
any of the terms or provisions of the Notes or the Convertible Notes (other than
Article Seven thereof) unless such consideration is paid to all holders of Notes
and Convertible Notes that provide such consent or so waive or agree to amend.

                  Section 9.23      Solvency Test.

                  Commencing on May 31, 2000, the Company will not permit the
sum of the amount of (i) the Liquid Assets owned by the Company, as of the end
of each fiscal month of the Company, which are not subject to any Lien and (ii)
the Consolidated Cash Flow of the Company during the preceding three fiscal
months to amount to zero or less.

                  Section 9.24      Waiver of Certain Covenants.

                  Except as provided in the next sentence, the Company may omit
in any particular instance to comply with any covenant or condition set forth in
Sections 9.3 to 9.23, inclusive, if before the time for such compliance the
registered holders of at least a majority in principal amount of the Notes and
the Convertible Notes, considered as a single class, at the time Outstanding,
shall either waive such compliance in such instance or generally waive
compliance with such covenant or condition. Notwithstanding the foregoing, the
Company may omit in any particular instance to comply with the covenants or
conditions set forth in any of the following sections if before the time for
such compliance the registered holders of at least 70% in aggregate principal
amount of the Notes and the Convertible Notes, considered as a single class, at
the time Outstanding, shall either waive such compliance in such instance or
generally waive compliance with such covenant or condition: Section 9.5(a);
Section 9.9; Section 9.11; Section 9.12(a), but only to the extent that the
waiver relates to a Consolidated Net Worth of less than $25.0 million ($20.0
million exclusive of Mark-to-Market Adjustments, if any); Section 9.12(b), but
only to the extent that the waiver relates to an increase in the ratio set forth
therein above 8.0 to 1.0; Section 9.12(c), but only to the extent that the
waiver relates to a decrease in the ratio set forth therein below 1.2 to 1.0;
Section 9.13(a), but only to the extent that the waiver relates to a decrease in
the ratio set forth in Section 9.13(a)(i) below 1.3 to 1.0 and/or an increase in
the ratio set forth in Section 9.13(a)(ii) above 7.0 to 1.0; Section 9.14;
Section 9.15; Section 9.18, but only to the extent that the waiver relates to an
acquisition of the capital stock or assets of a corporation, firm or other
entity which would constitute a Significant Subsidiary of the Company; Section
9.20; and Section 9.22 (collectively, the "Supermajority Covenants"). No waiver
of a covenant pursuant to this Section 9.25 shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company in respect of any
such covenant or condition shall remain in full force and effect.

                                       68
<PAGE>   75

                                 ARTICLE TEN -

                  MERGER, CONSOLIDATION AND TRANSFER OF ASSETS

                  Section 10.1      Company May Consolidate Etc. Only on Certain
                                    Terms.

                  Subject to the provisions of Sections 12.1 through 12.8,
nothing contained herein shall prevent any consolidation or merger of the
Company with or into any other Person (whether or not affiliated with the
Company), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance or lease (or successive sales, conveyances or leases) of the property
of the Company, substantially as an entirety, to any other Person (whether or
not affiliated with the Company), authorized to acquire and operate the same and
which, in each case, shall be organized under the laws of the United States of
America, any state thereof or the District of Columbia, provided, that (i) upon
any such consolidation, merger, sale, conveyance or lease, if the Company is not
the surviving entity, the due and punctual payment of the Notes Obligations,
including without limitation the principal of and premium, if any, and interest
on all of the Notes, according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions to be
performed by the Company under the Agreement, the Notes, the Convertible Notes,
the Collateral Documents and the Value Partners Agreement shall be expressly and
unconditionally assumed, by agreement in form and substance reasonably
satisfactory to the registered holders of not less than a majority in aggregate
principal amount of the Notes and the Convertible Notes, considered as a single
class, at the time Outstanding, executed and delivered to such holders by the
Person (if other than the Company) formed by such consolidation, or into which
the Company shall have been merged, or by the Person which shall have acquired
or leased such property, (ii) the agreement referred to in clause (i) shall
provide for the applicable conversion rights set forth in Section 7.6 of the
Convertible Notes and the applicable repurchase rights set forth in Section 12.8
hereof, (iii) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing (iv) immediately after
giving effect to such transaction, the Company (or the surviving entity if the
Company is not continuing) would be able to incur an additional $1.00 of
Indebtedness pursuant to Section 9.13, (v) immediately after giving effect to
such transaction, the Company (or the surviving entity if the Company is not
continuing) shall have a Consolidated Tangible Net Worth equal to or greater
than the Consolidated Tangible Net Worth of the Company immediately prior to
such transaction and (vi) the Company or the Person formed by such
consolidation, or into which the Company shall have been merged, or which shall
have acquired or leased such property, as applicable, shall have delivered an
Officer's Certificate to the Trustee to the effect that such consolidation,
merger, sale, conveyance or lease complies with the terms hereof and that all
conditions precedent provided for herein relating to such transaction have been
complied with.

                  Section 10.2      Successor Corporation to be Substituted.

                  In case of any such consolidation, merger, sale, conveyance or
lease referenced in Section 10.1, and upon the assumption by any Person of the
due and punctual

                                       69
<PAGE>   76

payment of the principal of and premium, if any, and interest on all of the
Notes and the due and punctual performance of all of the covenants and
conditions to be performed by the Company under the Agreement and the Related
Agreements, in accordance with Section 10.1 such Person shall succeed to and be
substituted for the Company, with the same effect as if it had been named herein
as such. In the event of any such consolidation, merger, sale or conveyance (but
not in the event of any such lease), the Person named as the "Company" in the
first paragraph hereof or any successor which shall thereafter have become such
in the manner prescribed in this Article Ten shall be released from its
liabilities as obligor and maker of the Notes and from its obligations
hereunder.

                                ARTICLE ELEVEN -

                     SECURITY FOR NOTES; RELATED AGREEMENTS

                  The Notes shall be secured by the Collateral Documents, duly
executed by the Company and the other parties thereto for the ratable benefit of
the holders of the Notes and the Convertible Notes granting a security interest
in the collateral covered thereby, which security interest shall not be
subordinate in priority to any other Liens except those expressly set forth in
the Collateral Documents. The Notes are entitled to the benefits of and subject
to the limitations contained in the Agreement and the Related Agreements, and
the Holder of any Note may enforce such rights in accordance with the terms
hereof and thereof, as applicable.

                                ARTICLE TWELVE -

                       REDEMPTION AND REPURCHASE OF NOTES

                  Section 12.1      Optional Rights to Redeem Notes.

                  (a)      Except as provided in paragraph (b) below, the Notes
are not redeemable at the Company's option prior to June 15, 2004. Thereafter,
the Notes may be redeemed, in whole but not in part, at the option of the
Company at the Redemption Prices specified below (expressed as percentages of
the principal amount thereof), in each case, together with accrued and unpaid
interest, if any, thereon to the Redemption Date, if redeemed during the
12-month period beginning on June 15 of the years indicated below:

<TABLE>
<CAPTION>
                             Year                            Redemption Rate
                             ----                            ---------------
                             <S>                             <C>
                             2004                                 106%
                             2005                                 100%
</TABLE>

                  Notwithstanding the foregoing, the Notes may be redeemed at
the Company's option prior to June 15, 2004, in whole but not in part, at a
Redemption Price equal to 100% of the principal amount thereof, together with
accrued and unpaid interest, if any, thereon to the Redemption Date, if the
Closing Price of the Common Stock equals or exceeds $5.00 per share

                                       70
<PAGE>   77

(subject to adjustment as provided herein, the "Redemption Trading Price") for
thirty five (35) consecutive Trading Days after the Issue Date and prior to June
15, 2004 provided that no Notes may be redeemed prior to the mandatory
conversion of the Notes provided for in Article Fourteen.

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

                  (b)      Notwithstanding any provision hereof to the contrary,
if it any time the total outstanding principal amount of the Notes shall be less
than 10% of the aggregate principal amount Outstanding on the Issue Date, the
Company may, at its option, redeem all or any part of the Notes then Outstanding
at a Redemption Price equal to the applicable amount set forth in Section
12.1(a) hereof of the principal amount of the Notes then Outstanding, together
with accrued and unpaid interest, if any, thereon to the Redemption Date.

                  Section 12.2      Notice of Optional Redemption.

                  At least 30 days but not more than 90 days before a Redemption
Date, the Company shall mail or cause to be mailed a notice of optional
redemption by first-class mail to each Holder of Notes to be redeemed at such
Holder's address as it appears on the Note Register.

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

                  (a)      the Redemption Date;

                  (b)      the Redemption Price;

                  (c)      that Notes called for redemption must be presented
and surrendered to the Company to collect the Redemption Price;

                  (d)      that the Notes called for redemption may be converted
at any time before the close of business on the fifth Business Day immediately
preceding the Redemption Date;

                  (e)      that, unless the Company defaults in making the
redemption payment, the only remaining right of the Holder shall be to receive
payment of the Redemption Price upon presentation and surrender to the Company
of the Notes; and

                  (f)      that interest on Notes called for redemption ceases
to accrue on and after the Redemption Date.

                                       71
<PAGE>   78

                  Section 12.3      Effect of Notice of Optional Redemption.

                  Once notice of optional redemption is mailed, Notes called for
redemption become due and payable on the Redemption Date and at the Redemption
Price. Upon presentation and surrender to the Company, Notes called for
redemption shall be paid at the Redemption Price, plus accrued interest up to
but not including the Redemption Date.

                  Section 12.4      Right to Require Repurchase.

                  In the event that a Repurchase Event (as hereinafter defined)
shall occur, then each Holder shall have the right, at the Holder's option, to
require the Company to repurchase, and upon the exercise of such right the
Company shall repurchase, all of such Holder's Notes, or any portion of the
principal amount thereof that is an integral multiple of $1,000 (provided that
no single Note may be repurchased in part unless the portion of the principal
amount of such Note to be Outstanding after such repurchase is equal to $1,000
or an integral multiple of $1,000), on the date (the "Repurchase Date") that is
60 days after the date of the Company Notice (as defined in Section 12.5) for
cash at a purchase price equal to 101% of the aggregate principal amount of such
Notes in the event that the Repurchase Event is the event specified in clause
(i) of the definition such term and 112% of the aggregate principal amount of
such Notes in the event that the Repurchase Event is an event specified in
clause (ii) or clause (iii) of the definition of such term (the "Repurchase
Price"), plus interest accrued and unpaid to, but excluding, the Repurchase
Date.

                  Whenever in this Note there is a reference, in any context, to
the principal of any Note as of any time, such reference shall be deemed to
include reference to the Repurchase Price payable in respect of such Note to the
extent that such Repurchase Price is, was or would be so payable at such time,
and express mention of the Repurchase Price in any provision of this Note shall
not be construed as excluding the Repurchase Price in those provisions of this
Note when such express mention is not made.

                                       72
<PAGE>   79

                  Section 12.5      Notices; Method of Exercising Purchase
                                    Right, Etc.

                  (a)      Unless the Company shall have theretofore called for
redemption all of the Notes then Outstanding pursuant to Article Twelve, on or
before the fifth day after the occurrence of a Repurchase Event, the Company
shall give to all Holders of Notes notice (the "Company Notice") of the
occurrence of the Repurchase Event and of the repurchase right set forth herein
arising as a result thereof.

                  Each notice of a repurchase right shall state:

                           (i)      the Repurchase Event and the Repurchase
                  Date,

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

                           (iii)    the Repurchase Price,

                           (iv)     a description of the procedure which a
                  Holder must follow to exercise a repurchase right,

                           (v)      that on the Repurchase Date the Repurchase
                  Price will become due and payable upon each such Note
                  designated by the Holder to be repurchased, and that interest
                  thereon shall cease to accrue on and after said date, and

                           (vi)     the place where such Notes are to be
                  surrendered for payment of the Repurchase Price and accrued
                  interest, if any.

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

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

                  (b)      To exercise a repurchase right, a Holder shall
deliver to the Company on or before the 30th day after the date of the Company
Notice (i) written notice of the Holder's exercise of such right, which notice
shall set forth the name of the Holder, the principal amount of the Notes to be
repurchased (and, if any Note is to be repurchased in part, the portion of the
principal amount thereof to be repurchased and the name of the Person in which
the portion thereof to remain Outstanding after such repurchase is to be
registered) and a statement that an election to exercise the repurchase right is
being made thereby, and (ii) the Notes with respect to which the repurchase
right is being exercised.

                  (c)      In the event a repurchase right shall be exercised in
accordance with the terms hereof, the Company shall pay or cause to be paid the
Repurchase Price in cash to the Holder on the Repurchase Date, together with
accrued and unpaid interest to, but excluding, the

                                       73
<PAGE>   80

Repurchase Date payable with respect to the Notes as to which the repurchase
right has been exercised.

                  (d)      If any Note (or portion thereof) surrendered for
repurchase shall not be so paid on the Repurchase Date, the principal amount of
such Note (or portion thereof, as the case may be) shall, until paid, bear
interest from the Repurchase Date at the rate per annum then currently in
effect, and each Note shall remain convertible into Common Stock until the
principal of such Note (or portion thereof, as the case may be) shall have been
paid or duly provided for.

                  (e)      Any Note which is to be repurchased only in part
shall be surrendered to the Company (with, if the Company so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company duly executed by, the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute and deliver to the Holder of such Note
without service charge, a new Note or Notes, containing identical terms and
conditions, each in an authorized denomination in aggregate principal amount
equal to and in exchange for the portion of the principal of the Note so
surrendered that was not repurchased.

                  (f)      Any Holder that has delivered to the Company its
written notice exercising its right to require the Company to repurchase its
Notes upon a Repurchase Event shall have the right to withdraw such notice at
any time prior to the close of business on the Repurchase Date by delivery of a
written notice of withdrawal to the Company prior to the close of business on
such date.

                  Section 12.6      Repurchase Event.

                  A "Repurchase Event" shall be deemed to occur (i) upon the
occurrence of a Change in Control, (ii) in the event that the Company fails to
obtain either of the Stockholder Approvals on or before March 9, 2000 or (iii)
in the event that the Notes are not mandatorily converted into shares of Common
Stock in accordance with Article Fourteen on or before March 9, 2000, provided
that the date set forth in clauses (ii) and (iii) may be extended to March 31,
2000 with the consent of the registered holders of a majority of the aggregate
principal amount of the Notes and the Convertible Notes, considered as a single
class, at the time Outstanding.

                  Section 12.7      Certain Definitions.

         For purposes of this Article Twelve,

                  (a)      the term "beneficial owner" shall be determined in
accordance with Rule 13d-3 promulgated by the Commission pursuant to the
Exchange Act;

                  (b)      the term "Person" shall include any syndicate or
group which would be deemed to be a "Person" under Section 13(d)(3) of the
Exchange Act;

                  (c)      the term "controlled" shall mean ownership or control
of more than 50% of the voting power of an entity; and

                                       74
<PAGE>   81

                  (d)      the term "Change in Control" shall mean the
occurrence of any of the following events after the Issue Date:

                           (i)      any Person, other than the Company, any
                  Subsidiary of the Company or any entity controlled by the
                  foregoing, or any employee benefit plan of the Company or any
                  such Subsidiary, becomes the beneficial owner, directly or
                  indirectly, through a purchase or other acquisition
                  transaction or series of transactions (other than a merger or
                  consolidation involving the Company), of shares of capital
                  stock of the Company entitling such Person to exercise in
                  excess of 50% of the total voting power of all shares of
                  Capital Stock of the Company entitled to vote generally in the
                  election of directors, provided that a Change in Control shall
                  not be deemed to have occurred pursuant to this paragraph (a)
                  as a result of issuances of capital stock by the Company upon
                  the exercise of rights or warrants, or upon conversion of
                  convertible securities, which are issued and outstanding on
                  the Issue Date to the holders of such rights, warrants or
                  convertible securities on the date of issuance of the Notes;

                           (ii)     there occurs any consolidation of the
                  Company with, or merger of the Company into, any other Person,
                  any merger of another Person into the Company, or any sale or
                  transfer of the assets of the Company as, or substantially as,
                  an entirety to another Person (other than (i) any such
                  transaction pursuant to which the holders of the Common Stock
                  immediately prior to such transaction have, directly or
                  indirectly, shares of capital stock of the continuing or
                  surviving corporation immediately after such transaction which
                  entitle such holders to exercise in excess of 50% of the total
                  voting power of all shares of capital stock of the continuing
                  or surviving corporation entitled to vote generally in the
                  election of directors and (ii) any merger (1) which does not
                  result in any reclassification, conversion, exchange or
                  cancellation of outstanding shares of Common Stock or (2)
                  which is effected solely to change the jurisdiction of
                  incorporation of the Company and results in a
                  reclassification, conversion or exchange of outstanding shares
                  of Common Stock solely into shares of Common Stock and
                  separate series of Common Stock carrying substantially the
                  same relative rights as the Common Stock); or

                           (iii)    individuals who constituted the Board of
                  Directors of the Company at the beginning of any one-year
                  period (together with any other director whose election by the
                  Board of Directors of the Company or whose nomination for
                  election by the stockholders of the Company was approved by a
                  vote of at least a majority of the directors then in office
                  either who were directors at the beginning of such period or
                  whose election or nomination for election was previously so
                  approved) cease for any reason to constitute a majority of the
                  directors then in office.

                                       75
<PAGE>   82

                  Section 12.8      Consolidation, Merger, Etc.

                  In the case of any reclassification, change, consolidation,
merger, combination, sale or conveyance, in which the Common Stock is changed or
exchanged as a result into the right to receive shares of stock and other
securities or property or assets (including cash) which includes shares of
Common Stock or common stock of another Person that are, or upon issuance will
be, traded on a United States national securities exchange or approved for
trading on an established automated over-the-counter trading market in the
United States and such shares constitute at the time such change or exchange
becomes effective in excess of 50% of the aggregate fair market value of such
shares of stock and other securities, property and assets (including cash) (as
determined in good faith by the Board of Directors of the Company, which
determination shall be conclusive and binding), then the Person formed by such
consolidation or resulting from such merger or combination or which acquires the
properties or assets (including cash) of the Company, as the case may be, shall
execute and deliver to the Holders, at their last address reflected in the Note
Register, an amendment to the Notes, in form and substance satisfactory to the
registered holders of not less than a majority in aggregate principal amount of
the Notes and the Convertible Notes, considered as a single class, at the time
Outstanding, and to the Trustee, modifying the provisions of the Notes relating
to the right of Holders to cause the Company to repurchase the Notes following a
Repurchase Event, including without limitation the applicable provisions of this
Article Twelve and the definitions of Common Stock and Change in Control, as
appropriate, and such other related definitions set forth herein as determined
in good faith by the Board of Directors of the Company (which determination
shall be conclusive and binding), to make such provisions apply to the common
stock and the issuer thereof if different from the Company and the Common Stock
(in lieu of the Company and the Common Stock).

                               ARTICLE THIRTEEN -

                       DEFEASANCE AND COVENANT DEFEASANCE

                  Section 13.1      Option to Effect Legal Defeasance or
                                    Covenant Defeasance.

                  The Company may, at the option of its Board of Directors
evidenced by a Board Resolution, at any time, elect to have either Section 13.2
or 13.3 be applied to all Notes then Outstanding upon compliance with the
conditions set forth below in this Article.

                  Section 13.2      Legal Defeasance and Discharge.

                  Upon the Company's exercise under Section 13.1 of the option
applicable to this Section, the Company shall, subject to the satisfaction of
the conditions set forth in Section 13.4, be deemed to have been discharged from
its obligations with respect to all Notes then Outstanding on the date the
conditions set forth below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For
this purpose, Legal Defeasance means that the Company shall be deemed to have
paid and discharged the entire Indebtedness represented by the Notes then
Outstanding, which shall thereafter be deemed to be Outstanding only for the
purposes of Section 13.5 and the

                                       76
<PAGE>   83

other Sections of this Indenture referred to in (a) and (b) below, and the
Company shall be deemed to have satisfied all its other obligations under the
Notes and this Indenture (and the Trustee, on demand of and at the expense of
the Company, shall execute proper instruments acknowledging the same), except
for the following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of Notes then Outstanding to
receive solely from the trust fund described in Section 13.4, and as more fully
set forth in such Section, payments in respect of the principal of, premium, if
any, and interest on such Notes as and when such payments are due, (b) the
Company's obligations with respect to such Notes under Articles One, Two, Three
and Four and Section 9.3, (c) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Company's obligations in connection therewith
and (d) this Article. Subject to compliance with this Article, the Company may
exercise its option under this Section notwithstanding the prior exercise of its
option under Section 13.3.

                  Section 13.3      Covenant Defeasance.

                  Upon the Company's exercise under Section 13.1 of the option
applicable to this Section, the Company shall, subject to the satisfaction of
the conditions set forth in Section 13.4, be released from its obligations under
the covenants contained in Article Nine with respect to the Notes on and after
the date the conditions set forth below are satisfied (hereinafter, "COVENANT
DEFEASANCE"), and the Notes shall thereafter be deemed not Outstanding for the
purposes of any direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed Outstanding for all other purposes hereunder (it being
understood that such Notes shall not be deemed Outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that. with respect to the
Notes then Outstanding and the Subsidiary Guarantees, the Company may omit to
comply with and shall have no liability, in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 5.1, but, except as specified above, the remainder of
this Indenture and such Notes shall be unaffected thereby. In addition, upon any
such Covenant Defeasance, the events specified in paragraphs (f), (g) (with
respect to Subsidiaries only) and (h) shall not constitute Defaults.

                  Section 13.4      Conditions to Legal or Covenant Defeasance.

                  The following shall be the conditions precedent to the
effectiveness of any Legal Defeasance or Covenant Defeasance:

                  (a)      the Company shall (i) irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders, unencumbered cash in United
States dollars, unencumbered U.S. Government Obligations, or a combination
thereof, in such amounts as will be sufficient, in a written opinion of a
nationally recognized firm of independent public accountants delivered to the
Trustee, to pay the principal of, premium, if any, and interest on the Notes
then Outstanding on the stated date for payment thereof or on the applicable
Redemption Date, as the case may be,

                                       77
<PAGE>   84

and the Company must specify whether the Notes are being defeased to maturity or
to a particular Redemption Date, and (ii) irrevocably instruct the Trustee to
apply such cash and U.S. Government Obligations to such payments with respect to
the Notes;

                  (b)      in the case of an election under Section 13.2, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the Notes
then Outstanding will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;

                  (c)      in the case of an election under Section 13.3 hereof,
the Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the Holders
of the Notes then Outstanding will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance has not
occurred;

                  (d)      no Default or Event of Default shall have occurred
and be continuing on (i) the date of such deposit (other than a Default or Event
of Default resulting from the Incurrence of Indebtedness all or a portion of the
proceeds of which will be used to defease the Notes pursuant to this Article
concurrently with such Incurrence) and (ii) insofar as Section 5.1(g) hereof is
concerned, at any time during the period ending on the 91st day after the date
of deposit (such condition not being satisfied until such 91st day);

                  (e)      such Legal Defeasance or Covenant Defeasance shall
not result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;

                  (f)      the Obligors shall have delivered to the Trustee an
Opinion of Counsel to the effect that on the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;

                  (g)      the Obligors shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders over any other creditors of the Obligors or
with the intent of defeating, hindering, delaying or defrauding any other
creditors of the Obligors; and

                  (h)      the Obligors shall have delivered to the Trustee
Officers' Certificates and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.

                                       78
<PAGE>   85

                  Section 13.5      Deposited Money and U.S. Government
                                    Obligations to be Held in Trust; Other
                                    Miscellaneous Provisions.

                  Subject to Section 13.6, all money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section, the
"TRUSTEE") pursuant to Section 13.4 in respect of the Notes then Outstanding
shall be held in trust and applied by the Trustee, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent (excluding any Obligor acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.

                  The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or U.S.
Government Obligations deposited pursuant to Section 13.4 or the principal and
interest received in respect thereof.

                  Anything in this Article to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or U.S. Government Obligations held by it as provided
in Section 13.4 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
13.4), are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

                  Section 13.6      Repayment to Company.

                  Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, premium,
if any, or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall be
paid to the Company on its request or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as a
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in The
New York Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.

                  Section 13.7      Reinstatement.

                  If the Trustee or Paying Agent is unable to apply any United
States Dollars or U.S. Government Obligations in accordance with Section 13.2 or
13.3, as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or

                                       79
<PAGE>   86

otherwise prohibiting such application, then the Obligors' obligations under
this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 13.2 or 13.3 until such time as the
Trustee or Paying Agent is permitted to apply all such money, in accordance with
Section 13.2 or 13.3, as the case may be: provided, however, that, if the
Company makes any payment of principal of, premium, if any, or interest on any
Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.

                  Section 13.8      Defeasance of Convertible Notes

                  Notwithstanding any provision of this Indenture to the
contrary, the Company may not effect legal defeasance or covenant defeasance of
the Notes unless it adequately provides for the same for all Outstanding
Convertible Notes by means which are satisfactory to the holders of a majority
of the aggregate principal amount of the Outstanding Convertible Notes.

                               ARTICLE FOURTEEN -

                                   CONVERSION

                  Section 14.1      Mandatory Conversion upon Stockholder
                                    Approval

                  Immediately upon approval by the stockholders of the Company
on or prior to March 9, 2000 (or before such other time as may be consented to
pursuant to the provisions herein) of the conversion of $6,428,000 of the
aggregate principal amount of the Notes issued pursuant to the Agreement into a
maximum of 6,428,000 shares of Common Stock, the QIB Convertible Global Note
will automatically convert into the right to receive ________ shares of Common
Stock (the "QIB SHARES") and the Non-QIB Global Note will automatically convert
into the right to receive ____________ shares of Common Stock (the "NON-QIB
SHARES"). A Holder is not entitled to any rights of a holder of Common Stock
until such Holder's Notes have converted to Common Stock, and only to the extent
such Notes are deemed to have been converted to Common Stock under this Article
Fourteen.

                  Section 14.2      Issuance of Common Stock on Conversion;
                                    No Adjustment for Interest or Dividends

                  Promptly following the automatic conversion of the aforesaid
amount of the Notes issued pursuant to this Indenture, the Company shall issue
and shall deliver to the Trustee certificates for the number of full shares of
Common Stock issuable to the Holders upon the conversion of each Holder's Note
in accordance with the provisions of this Article Fourteen and a check or cash
in respect of any fractional interest in respect of a share of Common Stock
arising upon such conversion, as provided in Section 14.3.

                                       80
<PAGE>   87

                  Each conversion shall be deemed to have been effected as to
any such Note on the date on which the requirement set forth in Section 14.1
shall have been satisfied, and the Person in whose name any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become on said date the Holder of record of the shares
represented thereby and the Holder of a principal amount of Notes which has been
proportionately reduced to reflect such conversion.. Section 14.3 Disbursement
of Shares.

                  (a)      Upon conversion of the QIB Convertible Global Note
and the Non-QIB Convertible Global Note in accordance with Section 14.1, each
Holder shall be entitled to receive such Holder's pro-rata portion of the QIB
Shares or the Non-QIB Shares (the "PRO-RATA PORTION"), as the case may be, with
any fractional share rounded down to the nearest whole share. A Holder's
Pro-Rata Portion shall be calculated as follows:

                           (i)      in the case of a QIB, (X) the principal
                  amount of Notes owned by such QIB divided by (Y) the total
                  Outstanding principal amount of the QIB Notes; and

                           (ii)     in the case of a Non-QIB, (X) the principal
                  amount of Notes owned by such Non-QIB divided by (Y) the total
                  Outstanding principal amount of the Non-QIB Notes.

                  (b)      Within two Business Days after stockholder approval
is obtained, the Company shall deposit with the Trustee for distribution to the
Holders, the number of shares of Common Stock equal to the sum of the QIB shares
and the Non-QIB shares (as adjusted to account for fractional shares as set
forth in (a) above, the "CONVERSION SHARES").

                  (c)      Upon receipt of the Conversion Shares, the Trustee
shall distribute the Conversion Shares to the Holders in accordance with the
Holders' Pro-Rata Portions as determined pursuant to Section 14.3(a) above.

                  Section 14.4      Taxes on Shares Issued.

                  The issue of stock certificates on conversions of Notes shall
be made without charge to the converting Holder for any tax in respect of the
issue thereof. The Company shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery of
stock in any name other than that of the Holder of any Note converted, and the
Company shall not be required to issue or deliver any such stock certificate
unless and until the Person or Persons requesting the issue thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.

                                       81
<PAGE>   88

                  Section 14.5      Reservation of Shares to Be Fully Paid;
                                    Compliance with Governmental Requirements;
                                    Listing of Common Stock.

                  The Company shall reserve, free from preemptive rights, out of
its authorized but unissued shares or shares held in treasury, sufficient shares
of Common Stock to provide for the conversion of the Notes.

                  The Company covenants that all shares of Common Stock which
may be issued upon conversion of Notes will upon issue be fully paid and
non-assessable by the Company and free from all taxes and Liens with respect to
the issue thereof.

                  The Company covenants that it will in good faith and as
expeditiously as possible comply with its obligations under the Registration
Rights Agreement.

                  The Company further covenants that so long as the Common Stock
shall be listed or quoted on the New York Stock Exchange, the Nasdaq Stock
Market (National Market) or any other national securities exchange the Company
will, if permitted by the rules of such exchange, list and keep listed so long
as the Common Stock shall be so listed on such market or exchange, all Common
Stock issuable upon conversion of the Notes.

                               ARTICLE FIFTEEN -

                                 MISCELLANEOUS

                  Section 15.1      No Recourse Against Others.

                  A director, officer, employee, stockholder or incorporator, as
such, of any Obligor shall not have any liability for any obligations of such
Obligor under the Notes or this Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. Each Holder by accepting
a Note waives and releases all such liability.

                  Section 15.2      Execution in Counterparts.

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

                  Section 15.3      Waiver of Trial by Jury.

                  EACH OF THE PARTIES TO THIS INDENTURE WAIVES THE RIGHT TO A
TRIAL BY JURY IN ANY ACTION UNDER THIS INDENTURE, THE NOTES OR ANY SUBSIDIARY
GUARANTEE OR ANY ACTION ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.

                                    * * * * *

                                       82
<PAGE>   89

                  IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.

                                          ALTIVA FINANCIAL CORPORATION

                                          By: /s/ Edward B. Meyercord
                                             -----------------------------------
                                             Name:  Edward B. "Champ" Meyercord
                                             Title:  Chief Executive Officer

                                               Address:  1000 Parkwood Circle
                                                         6th Floor
                                                         Atlanta, Georgia 30339

Attest:

By: /s/ J. Richard Walker
   -------------------------------
   Title: Executive Vice President
          and Chief Financial
          Officer
                                          UNITED STATES TRUST COMPANY OF NEW
                                          YORK, as Trustee

                                          By: /s/ Gerard F. Gainey
                                             -----------------------------------
                                             Name:  Gerard F. Gainey
                                             Title: Executive Vice President

Attest:

By: /s/ Margaret M. Ciesmelewski
   -------------------------------
   Title: Assistant Vice President

                                       83

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