Document:

<PAGE>   1
                                                                    EXHIBIT 4.22

                                                                  EXECUTION COPY

                                     AVIRON

                                    INDENTURE

                          DATED AS OF FEBRUARY 7, 2001

                                  HSBC BANK USA

                                     TRUSTEE

<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                 PAGE
                                                                                                 ----
<S>                                                                                              <C>
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE.......................................       1

        Section 1.1.  Definitions...........................................................       1
        Section 1.2.  Other Definitions.....................................................       6
        Section 1.3.  Incorporation by Reference of Trust Indenture Act.....................       7
        Section 1.4.  Rules of Construction.................................................       7

ARTICLE II. THE SECURITIES..................................................................       8

        Section 2.1.  Issuable in Series....................................................       8
        Section 2.2.  Establishment of Terms of Series of Securities........................       8
        Section 2.3.  Execution and Authentication..........................................      10
        Section 2.4.  Registrar and Paying Agent............................................      11
        Section 2.5.  Paying Agent to Hold Money in Trust...................................      12
        Section 2.6.  Securityholder Lists..................................................      13
        Section 2.7.  Transfer and Exchange.................................................      13
        Section 2.8.  Mutilated, Destroyed, Lost and Stolen Securities......................      13
        Section 2.9.  Outstanding Securities................................................      14
        Section 2.10. Treasury Securities...................................................      14
        Section 2.11. Temporary Securities..................................................      15
        Section 2.12. Cancellation..........................................................      15
        Section 2.13. Defaulted Interest....................................................      15
        Section 2.14. Global Securities.....................................................      15
        Section 2.15. CUSIP Numbers.........................................................      17

ARTICLE III. REDEMPTION.....................................................................      17

        Section 3.1.  Notice to Trustee.....................................................      17
        Section 3.2.  Selection of Securities to be Redeemed................................      17
        Section 3.3.  Notice of Redemption..................................................      17
        Section 3.4.  Effect of Notice of Redemption........................................      18
        Section 3.5.  Deposit of Redemption Price...........................................      18
        Section 3.6.  Securities Redeemed in Part...........................................      18

ARTICLE IV. COVENANTS.......................................................................      19

        Section 4.1.  Payment of Principal and Interest.....................................      19
        Section 4.2.  SEC Reports...........................................................      19
        Section 4.3.  Compliance Certificate................................................      19
        Section 4.4.  Stay, Extension and Usury Laws........................................      19
        Section 4.5.  Corporate Existence...................................................      20
        Section 4.6.  Taxes.................................................................      20
</TABLE>

                                       i

<PAGE>   3

<TABLE>
<S>                                                                                              <C>
ARTICLE V. SUCCESSORS.......................................................................      20

        Section 5.1.  When Company May Merge, Etc...........................................      20
        Section 5.2.  Successor Corporation Substituted.....................................      21

ARTICLE VI. DEFAULTS AND REMEDIES...........................................................      21

        Section 6.1.  Events of Default.....................................................      21
        Section 6.2.  Acceleration of Maturity; Rescission and Annulment....................      22
        Section 6.3.  Collection of Indebtedness and Suits for Enforcement by Trustee.......      23
        Section 6.4.  Trustee May File Proofs of Claim......................................      24
        Section 6.5.  Trustee May Enforce Claims Without Possession of Securities...........      25
        Section 6.6.  Application of Money Collected........................................      25
        Section 6.7.  Limitation on Suits...................................................      25
        Section 6.8.  Unconditional Right of Holders to Receive Principal and
                      Interest..............................................................      26
        Section 6.9.  Restoration of Rights and Remedies....................................      26
        Section 6.10. Rights and Remedies Cumulative........................................      27
        Section 6.11. Delay or Omission Not Waiver..........................................      27
        Section 6.12. Control by Holders....................................................      27
        Section 6.13. Waiver of Past Defaults...............................................      27
        Section 6.14. Undertaking for Costs.................................................      28

ARTICLE VII. TRUSTEE........................................................................      28

        Section 7.1.  Duties of Trustee.....................................................      28
        Section 7.2.  Rights of Trustee.....................................................      29
        Section 7.3.  Individual Rights of Trustee..........................................      30
        Section 7.4.  Trustee's Disclaimer..................................................      30
        Section 7.5.  Notice of Defaults....................................................      30
        Section 7.6.  Reports by Trustee to Holders.........................................      31
        Section 7.7.  Compensation and Indemnity............................................      31
        Section 7.8.  Replacement of Trustee................................................      32
        Section 7.9.  Successor Trustee by Merger, etc......................................      33
        Section 7.10. Eligibility; Disqualification.........................................      33
        Section 7.11. Preferential Collection of Claims Against Company.....................      33

ARTICLE VIII. SATISFACTION AND DISCHARGE; DEFEASANCE........................................      33

        Section 8.1.  Satisfaction and Discharge of Indenture...............................      33
        Section 8.2.  Application of Trust Funds; Indemnification...........................      34
        Section 8.3.  Legal Defeasance of Securities of any Series..........................      35
        Section 8.4.  Covenant Defeasance...................................................      37
        Section 8.5.  Repayment to Company..................................................      38
        Section 8.6.  Reinstatement.........................................................      38

ARTICLE IX. AMENDMENTS AND WAIVERS..........................................................      39

        Section 9.1.  Without Consent of Holders............................................      39
</TABLE>

                                       ii

<PAGE>   4
<TABLE>
<S>                                                                                              <C>
        Section 9.2.  With Consent of Holders...............................................      39
        Section 9.3.  Limitations...........................................................      40
        Section 9.4.  Compliance with Trust Indenture Act...................................      40
        Section 9.5.  Revocation and Effect of Consents.....................................      40
        Section 9.6.  Notation on or Exchange of Securities.................................      41
        Section 9.7.  Trustee Protected.....................................................      41

ARTICLE X. MISCELLANEOUS....................................................................      41

        Section 10.1. Trust Indenture Act Controls..........................................      41
        Section 10.2. Notices...............................................................      41
        Section 10.3. Communication by Holders with Other Holders...........................      42
        Section 10.4. Certificate and Opinion as to Conditions Precedent....................      42
        Section 10.5. Statements Required in Certificate or Opinion.........................      43
        Section 10.6. Rules by Trustee and Agents...........................................      43
        Section 10.7. Legal Holidays........................................................      43
        Section 10.8. No Recourse Against Others............................................      43
        Section 10.9. Counterparts..........................................................      43
        Section 10.10.Governing Laws........................................................      44
        Section 10.11.No Adverse Interpretation of Other Agreements.........................      44
        Section 10.12.Successors............................................................      44
        Section 10.13.Severability..........................................................      44
        Section 10.14.Table of Contents, Headings, Etc......................................      44
        Section 10.15.Securities in a Foreign Currency or in ECU............................      44
        Section 10.16.Judgment Currency.....................................................      45

ARTICLE XI. SINKING FUNDS...................................................................      46

        Section 11.1. Applicability of Article..............................................      46
        Section 11.2. Satisfaction of Sinking Fund Payments with Securities.................      46
        Section 11.3. Redemption of Securities for Sinking Fund.............................      47

ARTICLE XII. SUBORDINATION OF SECURITIES....................................................      47

        Section 12.1. Agreement of Subordination............................................      47
        Section 12.2. Payments to Holders...................................................      47
        Section 12.3. Subrogation of Securities.............................................      50
        Section 12.4. Authorization to Effect Subordination.................................      51
        Section 12.5. Notice to Trustee.....................................................      52
        Section 12.6. Trustee's Relation to Senior Indebtedness.............................      53
        Section 12.7. No Impairment of Subordination........................................      53
        Section 12.8. Article Applicable to Paying Agents...................................      53
        Section 12.9. Senior Indebtedness Entitled to Rely..................................      53
</TABLE>

                                      iii

<PAGE>   5
                                     AVIRON

         Reconciliation and tie between Trust Indenture Act of 1939 and
                     Indenture, dated as of February 7, 2001

<TABLE>
<S>                                                                    <C>
     Section 310(a)(1)  ..........................................     7.10
                (a)(2)  ..........................................     7.10
                (a)(3)  ..........................................     Not Applicable
                (a)(4)  ..........................................     Not Applicable
                (a)(5)  ..........................................     7.10
                   (b)  ..........................................     7.10
        Section 311(a)  ..........................................     7.11
                   (b)  ..........................................     7.11
                   (c)  ..........................................     Not Applicable
        Section 312(a)  ..........................................     2.6
                   (b)  ..........................................     10.3
                   (c)  ..........................................     10.3
        Section 313(a)  ..........................................     7.6
                (b)(1)  ..........................................     7.6
                (b)(2)  ..........................................     7.6
                (c)(1)  ..........................................     7.6
                   (d)  ..........................................     7.6
        Section 314(a)  ..........................................     4.2, 10.5
                   (b)  ..........................................     Not Applicable
                (c)(1)  ..........................................     10.4
                (c)(2)  ..........................................     10.4
                (c)(3)  ..........................................     Not Applicable
                   (d)  ..........................................     Not Applicable
                   (e)  ..........................................     10.5
                   (f)  ..........................................     Not Applicable
        Section 315(a)  ..........................................     7.1
                   (b)  ..........................................     7.5
                   (c)  ..........................................     7.1
                   (d)  ..........................................     7.1
                   (e)  ..........................................     6.14
        Section 316(a)  ..........................................     2.10
             (a)(1)(A)  ..........................................     6.12
             (a)(1)(B)  ..........................................     6.13
                   (b)  ..........................................     6.8
     Section 317(a)(1)  ..........................................     6.3
                (a)(2)  ..........................................     6.4
                   (b)  ..........................................     2.5
        Section 318(a)  ..........................................     10.1
</TABLE>

--------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.

                                       iv

<PAGE>   6
               Indenture dated as of February 7, 2001 between Aviron, a Delaware
corporation ("Company"), and HSBC Bank USA, a New York banking corporation
("Trustee").

               Each party agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Securities issued
under this Indenture.

                                   ARTICLE I.
                   DEFINITIONS AND INCORPORATION BY REFERENCE

        Section 1.1. Definitions.

               "Additional Amounts" means any additional amounts which are
required hereby or by any Security, under circumstances specified herein or
therein, to be paid by the Company in respect of certain taxes imposed on
Holders specified therein and which are owing to such Holders.

               "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" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person, whether through the
ownership of voting securities or by agreement or otherwise.

               "Agent" means any Registrar, Paying Agent, Service Agent or
authenticating agent.

               "Authorized Newspaper" means a newspaper in an official language
of the country of publication customarily published at least once a day for at
least five days in each calendar week and of general circulation in the place in
connection with which the term is used. If it shall be impractical to make any
publication of any notice required hereby in an Authorized Newspaper, any
publication or other notice in lieu thereof that is made or given by the Trustee
shall constitute a sufficient publication of such notice.

               "Bearer" means anyone in possession from time to time of a Bearer
Security.

               "Bearer Security" means any Security, including any interest
coupon appertaining thereto, that does not provide for the identification of the
Holder thereof.

               "Board of Directors" means the Board of Directors of the Company
or any duly authorized committee thereof.

               "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been adopted by the
Board of Directors or pursuant to authorization by the Board of Directors and to
be in full force and effect on the date of the certificate, and delivered to the
Trustee.

                                       1

<PAGE>   7
               "Business Day" means, unless otherwise provided by Board
Resolution, Officers' Certificate or supplemental indenture hereto for a
particular Series, any day except a Saturday, Sunday or a legal holiday in The
City of New York or the City of San Francisco on which banking institutions are
authorized or required by law, regulation or executive order to close.

               "Company" means the party named as such above until a successor
replaces it and thereafter means the successor.

               "Company Order" means a written order signed in the name of the
Company by two Officers, one of whom must be the Company's chief executive
officer, chief financial officer or principal accounting officer.

               "Company Request" means a written request signed in the name of
the Company by its Chairman of the Board, a President or a Vice President, and
by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.

               "Corporate Trust Office" means the office of the Trustee at which
at any particular time its corporate trust business shall be principally
administered, which office is, on the date of this Indenture, located at 140
Broadway, 12th Floor, New York, New York 10005.

               "Debt" of any person as of any date means, without duplication,
all indebtedness of such person in respect of borrowed money, including all
interest, fees and expenses owed in respect thereto (whether or not the recourse
of the lender is to the whole of the assets of such person or only to a portion
thereof), or evidenced by bonds, notes, debentures or similar instruments.

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

               "Depository" means, with respect to the Securities of any Series
issuable or issued in whole or in part in the form of one or more Global
Securities, the person designated as Depository for such Series by the Company,
which Depository shall be a clearing agency registered under the Exchange Act;
and if at any time there is more than one such person, "Depository" as used with
respect to the Securities of any Series shall mean the Depository with respect
to the Securities of such Series.

               "Designated Senior Indebtedness" means any of our senior
indebtedness that expressly provides that it is "designated senior indebtedness"
for purposes of this Indenture (provided that the instrument, agreement or other
document creating or evidencing such Senior Indebtedness may place limitations
and conditions on the right of such Senior Indebtedness to exercise the rights
of Designated Senior Indebtedness).

               "Discount Security" means any Security that provides for an
amount less than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.2.

                                       2

<PAGE>   8
               "Dollars" means the currency of The United States of America.

               "ECU" means the European Currency Unit as determined by the
Commission of the European Union.

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

               "Foreign Currency" means any currency or currency unit issued by
a government other than the government of The United States of America.

               "Foreign Government Obligations" means with respect to Securities
of any Series that are denominated in a Foreign Currency, (i) direct obligations
of the government that issued or caused to be issued such currency for the
payment of which obligations its full faith and credit is pledged or (ii)
obligations of a person controlled or supervised by or acting as an agency or
instrumentality of such government the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by such
government, which, in either case under clauses (i) or (ii), are not callable or
redeemable at the option of the issuer thereof.

               "Global Security" or "Global Securities" means a Security or
Securities, as the case may be, in the form established pursuant to Section 2.2
evidencing all or part of a Series of Securities, issued to the Depository for
such Series or its nominee, and registered in the name of such Depository or
nominee.

               "Holder" or "Securityholder" means a person in whose name a
Security is registered or the holder of a Bearer Security.

               "indebtedness" means, with respect to any person, and without
duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such person for borrowed money (including obligations of the
Company in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such person or to only a portion
thereof) (other than any account payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the
obtaining of materials or services), (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such person with respect to letters of
credit, bank guarantees or bankers' acceptances, (c) all obligations and
liabilities (contingent or otherwise) in respect of leases of such person
required, in conformity with generally accepted accounting principles, to be
accounted for as capitalized lease obligations on the balance sheet of such
person and all obligations and other liabilities (contingent or otherwise) under
any lease or related document (including a purchase agreement) in connection
with the lease of real property which provides that such person is contractually
obligated to purchase or cause a third party to purchase the leased property and
thereby guarantee a minimum residual value of the leased property to the lessor
and the obligations of such person under such lease or related document to

                                       3

<PAGE>   9
purchase or to cause a third party to purchase such leased property, (d) all
obligations of such person (contingent or otherwise) with respect to an interest
rate or other swap, cap or collar agreement or other similar instrument or
agreement or foreign currency hedge, exchange, purchase or similar instrument or
agreement, (e) all direct or indirect guaranties or similar agreements by such
person in respect of, and obligations or liabilities (contingent or otherwise)
of such person to purchase or otherwise acquire or otherwise assure a creditor
against loss in respect of indebtedness, obligations or liabilities of another
person of the kind described in clauses (a) through (d), (f) any indebtedness or
other obligations described in clauses (a) through (e) secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held by
such person, regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such person and (g) any and all refinancings,
replacements, deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any indebtedness, obligation or liability of
the kind described in clauses (a) through (f).

               "Indenture" means this Indenture as amended from time to time and
shall include the form and terms of particular Series of Securities established
as contemplated hereunder.

               "interest" with respect to any Discount Security which by its
terms bears interest only after Maturity, means interest payable after Maturity.

               "Maturity," when used with respect to any Security or installment
of principal thereof, means the date on which the principal of such Security or
such 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, notice of option to elect repayment or otherwise.

               "Officer" means the Chairman of the Board, any President, any
Vice-President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.

               "Officers' Certificate" means a certificate signed by two
Officers, one of whom must be the Company's principal executive officer,
principal financial officer or principal accounting officer, which certificate
shall contain the statements provided for in Section 10.5.

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

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

                                       4

<PAGE>   10
               "principal" of a Security means the principal of the Security
plus, when appropriate, the premium, if any, on, and any Additional Amounts in
respect of, the Security.

               "Representative" means the (a) indenture trustee or other
trustee, agent or representative for any Senior Indebtedness or (b) with respect
to any Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued pursuant to
an agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.

               "Responsible Officer" means any officer of the Trustee with
direct responsibility for the administration of the Indenture and also means,
with respect to a particular corporate trust matter, any other officer to whom
any corporate trust matter is referred because of his or her knowledge of and
familiarity with a particular subject.

               "SEC" means the Securities and Exchange Commission.

               "Securities" means the debentures, notes or other debt
instruments of the Company of any Series authenticated and delivered under this
Indenture.

               "Senior Indebtedness" means the principal, premium, if any,
interest, including any interest accruing after bankruptcy, and rent or
termination payment on or other amounts due on our current or future
Indebtedness, whether created, incurred, assumed, guaranteed or in effect
guaranteed by us, including any deferrals, renewals, extensions, refundings,
amendments, modifications or supplements to the above. However, Senior
Indebtedness does not include: (i) Indebtedness that expressly provides that it
shall not be senior in right of payment to the Securities or expressly provides
that it is on the same basis or junior to the Securities; (ii) our indebtedness
to any of our majority-owned subsidiaries; and (iii) the Securities.

               "Series" or "Series of Securities" means each series of
debentures, notes or other debt instruments of the Company created pursuant to
Sections 2.1 and 2.2 hereof.

               "Significant Subsidiary" means (i) any direct or indirect
Subsidiary of the Company that would be a "significant subsidiary" as defined in
Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities
Act of 1933, as amended, as such regulation is in effect on the date hereof, or
(ii) any group of direct or indirect Subsidiaries of the Company that, taken
together as a group, would be a "significant subsidiary" as defined in Article
1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act of
1933, as amended, as such regulation is in effect on the date hereof.

               "Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such

                                       5

<PAGE>   11
Security as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.

               "Subsidiary" of any specified person means any corporation of
which at least a majority of the outstanding stock having by the terms thereof
ordinary voting power for the election of directors of such corporation
(irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time directly or indirectly owned by
such person, or by one or more other Subsidiaries, or by such person and one or
more other Subsidiaries.

               "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Sections 77aaa-77bbbb) as in effect on the date of this Indenture; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "TIA" means, to the extent required by any such amendment, the Trust
Indenture Act as so amended.

               "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 Securities of any Series shall mean the Trustee with respect to
Securities of that Series.

               "U.S. Government Obligations" means securities which are (i)
direct obligations of The United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of The United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by The United States of America, and which in the case of (i)
and (ii) are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation evidenced by such depository receipt.

        Section 1.2. Other Definitions.

<TABLE>
<CAPTION>
                                                                         DEFINED IN
        TERM                                                               SECTION
        ----                                                             ----------
<S>                                                                      <C>
        "Bankruptcy Law"                                                    6.1
        "Custodian"                                                         6.1
        "Event of Default"                                                  6.1
        "Journal"                                                          10.15
</TABLE>

                                       6

<PAGE>   12
<TABLE>
<CAPTION>
                                                                         DEFINED IN
        TERM                                                               SECTION
        ----                                                             ----------
<S>                                                                      <C>
        "Judgment Currency"                                                10.16
        "Legal Holiday"                                                     10.7
        "mandatory sinking fund payment"                                    11.1
        "Market Exchange Rate"                                             10.15
        "New York Banking Day"                                             10.16
        "optional sinking fund payment"                                     11.1
        "Paying Agent"                                                      2.4
        "Payment Blockage Notice"                                           12.2
        "Registrar"                                                         2.4
        "Required Currency"                                                10.16
        "Service Agent"                                                     2.4
        "successor person"                                                  5.1
</TABLE>

        Section 1.3. Incorporation by Reference of Trust Indenture Act.

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

               "Commission" means the SEC.

               "indenture securities" means the Securities.

               "indenture security holder" means a Securityholder.

               "indenture to be qualified" means this Indenture.

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

               "obligor" on the indenture securities means the Company and any
successor obligor upon the Securities.

               All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA and not otherwise defined herein are used herein as so defined.

        Section 1.4. Rules of Construction.

               Unless the context otherwise requires:

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

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

                                       7

<PAGE>   13
                (c) references to "generally accepted accounting principles"
        shall mean generally accepted accounting principles in effect as of the
        time when and for the period as to which such accounting principles are
        to be applied;

                (d) "or" is not exclusive;

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

                (f) provisions apply to successive events and transactions.

                                   ARTICLE II.
                                 THE SECURITIES

        Section 2.1. Issuable in Series.

               The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued in one or more Series. All Securities of a Series shall be
identical except as may be set forth in a Board Resolution, a supplemental
indenture or an Officers' Certificate detailing the adoption of the terms
thereof pursuant to the authority granted under a Board Resolution. In the case
of Securities of a Series to be issued from time to time, the Board Resolution,
Officers' Certificate or supplemental indenture may provide for the method by
which specified terms (such as interest rate, maturity date, record date or date
from which interest shall accrue) are to be determined. Securities may differ
between Series in respect of any matters, provided that all Series of Securities
shall be equally and ratably entitled to the benefits of the Indenture but all
Securities issued hereunder shall be subordinate and junior in right of payment,
to the extent and in the manner set forth in Article XII, to all Senior
Indebtedness of the Company.

        Section 2.2. Establishment of Terms of Series of Securities.

               At or prior to the issuance of any Securities within a Series,
the following shall be established (as to the Series generally, in the case of
SubSection 2.2.1 and either as to such Securities within the Series or as to the
Series generally in the case of SubSections 2.2.2 through 2.2.22) by a Board
Resolution, a supplemental indenture or an Officers' Certificate pursuant to
authority granted under a Board Resolution:

               2.2.1. the title of the Series (which shall distinguish the
Securities of that particular Series from the Securities of any other Series);

               2.2.2. the price or prices (expressed as a percentage of the
principal amount thereof) at which the Securities of the Series will be issued;

               2.2.3. any limit upon the aggregate principal amount of the
Securities of the Series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
Series pursuant to Section 2.7, 2.8, 2.11, 3.6 or 9.6);

                                       8

<PAGE>   14
               2.2.4. the date or dates on which the principal of the Securities
of the Series is payable;

               2.2.5. the rate or rates (which may be fixed or variable) per
annum or, if applicable, the method used to determine such rate or rates
(including, but not limited to, any commodity, commodity index, stock exchange
index or financial index) at which the Securities of the Series shall bear
interest, if any, the date or dates from which such interest, if any, shall
accrue, the date or dates on which such interest, if any, shall commence and be
payable and any regular record date for the interest payable on any interest
payment date;

               2.2.6. the place or places where the principal of and interest,
if any, on the Securities of the Series shall be payable, or the method of such
payment, if by wire transfer, mail or other means;

               2.2.7. if applicable, the period or periods within which, the
price or prices at which and the terms and conditions upon which the Securities
of the Series may be redeemed, in whole or in part, at the option of the
Company;

               2.2.8. the obligation, if any, of the Company to redeem or
purchase the Securities of the Series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods within
which, the price or prices at which and the terms and conditions upon which
Securities of the Series shall be redeemed or purchased, in whole or in part,
pursuant to such obligation;

               2.2.9. the dates, if any, on which and the price or prices at
which the Securities of the Series will be repurchased by the Company at the
option of the Holders thereof and other detailed terms and provisions of such
repurchase obligations;

               2.2.10. if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which the Securities of the Series shall
be issuable;

               2.2.11. the forms of the Securities of the Series in bearer or
fully registered form (and, if in fully registered form, whether the Securities
will be issuable as Global Securities);

               2.2.12. if other than the principal amount thereof, the portion
of the principal amount of the Securities of the Series that shall be payable
upon declaration of acceleration of the maturity thereof pursuant to Section
6.2;

               2.2.13. the currency of denomination of the Securities of the
Series, which may be Dollars or any Foreign Currency, including, but not limited
to, the ECU, and if such currency of denomination is a composite currency other
than the ECU, the agency or organization, if any, responsible for overseeing
such composite currency;

               2.2.14. the designation of the currency, currencies or currency
units in which payment of the principal of and interest, if any, on the
Securities of the Series will be made;

                                       9

<PAGE>   15
               2.2.15. if payments of principal of or interest, if any, on the
Securities of the Series are to be made in one or more currencies or currency
units other than that or those in which such Securities are denominated, the
manner in which the exchange rate with respect to such payments will be
determined;

               2.2.16. the manner in which the amounts of payment of principal
of or interest, if any, on the Securities of the Series will be determined, if
such amounts may be determined by reference to an index based on a currency or
currencies or by reference to a commodity, commodity index, stock exchange index
or financial index;

               2.2.17. the provisions, if any, relating to any security provided
for the Securities of the Series;

               2.2.18. if the holders of Securities of the Series may convert or
exchange the Securities into or for securities of the Issuer or of other
entities or other property, the period or periods within which, the rate or
rates at which and the terms and conditions upon which Securities of the Series
may be converted or exchanged, in whole or in part;

               2.2.19. any addition to or change in the Events of Default which
applies to any Securities of the Series and any change in the right of the
Trustee or the requisite Holders of such Securities to declare the principal
amount thereof due and payable pursuant to Section 6.2;

               2.2.20. any addition to or change in the covenants set forth in
Articles IV or V which applies to Securities of the Series;

               2.2.21. any other terms of the Securities of the Series (which
terms shall not be inconsistent with the provisions of this Indenture, except as
permitted by Section 9.1, but which may modify or delete any provision of this
Indenture insofar as it applies to such Series); and

               2.2.22. any depositories, interest rate calculation agents,
exchange rate calculation agents or other agents with respect to Securities of
such Series if other than those appointed herein.

               All Securities of any one Series need not be issued at the same
time and may be issued from time to time, consistent with the terms of this
Indenture, if so provided by or pursuant to the Board Resolution, supplemental
indenture or Officers' Certificate referred to above, and the authorized
principal amount of any Series may not be increased to provide for issuances of
additional Securities of such Series, unless otherwise provided in such Board
Resolution, supplemental indenture or Officers' Certificate.

        Section 2.3. Execution and Authentication.

               Two Officers shall sign the Securities for the Company by manual
or facsimile signature.

                                       10

<PAGE>   16
               If an Officer whose signature is on a Security no longer holds
that office at the time the Security is authenticated, the Security shall
nevertheless be valid.

               A Security shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.

               The Trustee shall at any time, and from time to time,
authenticate Securities for original issue in the principal amount provided in
the Board Resolution, supplemental indenture hereto or Officers' Certificate,
upon receipt by the Trustee of a Company Order. Such Company Order may authorize
authentication and delivery pursuant to oral or electronic instructions from the
Company or its duly authorized agent or agents, which oral instructions shall be
promptly confirmed in writing. Each Security shall be dated the date of its
authentication unless otherwise provided by a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate.

               The aggregate principal amount of Securities of any Series
outstanding at any time may not exceed any limit upon the maximum principal
amount for such Series set forth in the Board Resolution, supplemental indenture
hereto or Officers' Certificate delivered pursuant to Section 2.2, except as
provided in Section 2.8.

               Prior to the issuance of Securities of any Series, the Trustee
shall have received and (subject to Section 7.2) shall be fully protected in
relying on: (a) the Board Resolution, supplemental indenture hereto or Officers'
Certificate establishing the form of the Securities of that Series or of
Securities within that Series and the terms of the Securities of that Series or
of Securities within that Series, (b) an Officers' Certificate complying with
Section 10.4, and (c) an Opinion of Counsel complying with Section 10.4.

               The Trustee shall have the right to decline to authenticate and
deliver any Securities of such Series: (a) if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken; or (b) if the
Trustee in good faith by its board of directors or trustees, executive committee
or a trust committee of directors and/or vice-presidents shall determine that
such action would expose the Trustee to personal liability to Holders of any
then outstanding Series of Securities.

               The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.

        Section 2.4. Registrar and Paying Agent.

               The Company shall maintain, with respect to each Series of
Securities, at the place or places specified with respect to such Series
pursuant to Section 2.2, an office or agency where Securities of such Series may
be presented or surrendered for payment ("Paying Agent"), where Securities of
such Series may be surrendered for registration of

                                       11

<PAGE>   17
transfer or exchange ("Registrar") and where notices and demands to or upon the
Company in respect of the Securities of such Series and this Indenture may be
served ("Service Agent"). The Registrar shall keep a register with respect to
each Series of Securities and to their transfer and exchange. The Company will
give prompt written notice to the Trustee of the name and address, and any
change in the name or address, of each Registrar, Paying Agent or Service Agent.
If at any time the Company shall fail to maintain any such required Registrar,
Paying Agent or Service Agent or shall fail to furnish the Trustee with the name
and address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.

               The Company may also from time to time designate one or more
co-registrars, additional paying agents or additional service agents and may
from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligations to maintain a Registrar, Paying Agent and Service Agent in each
place so specified pursuant to Section 2.2 for Securities of any Series for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the name or address of any such
co-registrar, additional paying agent or additional service agent. The term
"Registrar" includes any co-registrar; the term "Paying Agent" includes any
additional paying agent; and the term "Service Agent" includes any additional
service agent.

               The Company hereby appoints the Trustee the initial Registrar,
Paying Agent and Service Agent for each Series unless another Registrar, Paying
Agent or Service Agent, as the case may be, is appointed prior to the time
Securities of that Series are first issued.

        Section 2.5. Paying Agent to Hold Money in Trust.

               Not later than 10.00 a.m. (New York City time) on each due date,
for principal, premium, if any, and interest on any Securities, the Company
shall deposit with the Paying Agent money in immediately available funds
sufficient to pay such principal, premium, if any, and interest so becoming due.
The Company shall require each Paying Agent other than the Trustee to agree in
writing that the Paying Agent will hold in trust, for the benefit of
Securityholders of any Series of Securities, or the Trustee, all money held by
the Paying Agent for the payment of principal of or interest on the Series of
Securities, and will notify the Trustee of any default by the Company in making
any such payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of Securityholders of any Series of Securities all money
held by it as Paying Agent.

                                       12

<PAGE>   18
        Section 2.6. Securityholder Lists.

               The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders of each Series of Securities and shall otherwise comply with TIA
Section 312(a). If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least ten days before each interest payment date and at such
other times as the Trustee may request in writing a list, in such form and as of
such date as the Trustee may reasonably require, of the names and addresses of
Securityholders of each Series of Securities.

        Section 2.7. Transfer and Exchange.

               Where Securities of a Series are presented to the Registrar or a
co-registrar with a request to register a transfer or to exchange them for an
equal principal amount of Securities of the same Series, the Registrar shall
register the transfer or make the exchange if its requirements for such
transactions are met. To permit registrations of transfers and exchanges, the
Trustee shall authenticate Securities at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange (except as
otherwise expressly permitted herein), but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer tax or similar
governmental charge payable upon exchanges pursuant to Sections 2.11, 3.6 or
9.6).

               Neither the Company nor the Registrar shall be required (a) to
issue, register the transfer of, or exchange Securities of any Series for the
period beginning at the opening of business fifteen days immediately preceding
the mailing of a notice of redemption of Securities of that Series selected for
redemption and ending at the close of business on the day of such mailing, or
(b) to register the transfer of or exchange Securities of any Series selected,
called or being called for redemption as a whole or the portion being redeemed
of any such Securities selected, called or being called for redemption in part.

        Section 2.8. Mutilated, Destroyed, Lost and Stolen Securities.

               If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same Series and 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 Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a protected
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and make available for delivery, in lieu of any such destroyed,
lost or stolen Security, a new Security of the same Series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.

                                       13

<PAGE>   19
               In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.

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

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

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

        Section 2.9. Outstanding Securities.

               The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest on a Global Security
effected by the Trustee in accordance with the provisions hereof and those
described in this Section as not outstanding.

               If a Security is replaced pursuant to Section 2.8, it ceases to
be outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.

               If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds on the Maturity of Securities of a Series money
sufficient to pay such Securities payable on that date, then on and after that
date such Securities of the Series cease to be outstanding and interest on them
ceases to accrue.

               A Security does not cease to be outstanding because the Company
or an Affiliate holds the Security.

               In determining whether the Holders of the requisite principal
amount of outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of a
Discount Security that shall be deemed to be outstanding for such purposes shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 6.2.

        Section 2.10. Treasury Securities.

                                       14

<PAGE>   20
               In determining whether the Holders of the required principal
amount of Securities of a Series have concurred in any request, demand,
authorization, direction, notice, consent or waiver Securities of a Series owned
by the Company or an Affiliate shall be disregarded, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such request, demand, authorization, direction, notice, consent or waiver only
Securities of a Series that the Trustee knows are so owned shall be so
disregarded.

        Section 2.11. Temporary Securities.

               Until definitive Securities are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Securities upon a
Company Order. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee upon request shall authenticate definitive
Securities of the same Series and date of maturity in exchange for temporary
Securities. Until so exchanged, temporary securities shall have the same rights
under this Indenture as the definitive Securities.

        Section 2.12. Cancellation.

               The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy such
canceled Securities (subject to the record retention requirement of the Exchange
Act) in accordance with its customary procedures, unless the Company otherwise
directs. The Company may not issue new Securities to replace Securities that it
has paid or delivered to the Trustee for cancellation.

        Section 2.13. Defaulted Interest.

               If the Company defaults in a payment of interest on a Series of
Securities, it shall pay the defaulted interest, plus, to the extent permitted
by law, any interest payable on the defaulted interest, to the persons who are
Securityholders of the Series on a subsequent special record date. The Company
shall fix the record date and payment date. At least 30 days before the record
date, the Company shall mail to the Trustee and to each Securityholder of the
Series a notice that states the record date, the payment date and the amount of
interest to be paid. The Company may pay defaulted interest in any other lawful
manner.

        Section 2.14. Global Securities.

               2.14.1. Terms of Securities. A Board Resolution, a supplemental
indenture hereto or an Officers' Certificate shall establish whether the
Securities of a Series shall be issued in whole or in part in the form of one or
more Global Securities and the Depository for such Global Security or
Securities.

                                       15

<PAGE>   21
               2.14.2. Transfer and Exchange. Notwithstanding any provisions to
the contrary contained in Section 2.7 of the Indenture and in addition thereto,
any Global Security shall be exchangeable pursuant to Section 2.7 of the
Indenture for Securities registered in the names of Holders other than the
Depository for such Security or its nominee only if (i) such Depository notifies
the Company that it is unwilling or unable to continue as Depository for such
Global Security or if at any time such Depository ceases to be a clearing agency
registered under the Exchange Act, and, in either case, the Company fails to
appoint a successor Depository within 90 days of such event, (ii) the Company
executes and delivers to the Trustee an Officers' Certificate to the effect that
such Global Security shall be so exchangeable or (iii) an Event of Default with
respect to the Securities represented by such Global Security shall have
happened and be continuing. Any Global Security that is exchangeable pursuant to
the preceding sentence shall be exchangeable for Securities registered in such
names as the Depository shall direct in writing in an aggregate principal amount
equal to the principal amount of the Global Security with like tenor and terms.

               Except as provided in this Section 2.14.2, a Global Security may
not be transferred except as a whole by the Depository with respect to such
Global Security to a nominee of such Depository, by a nominee of such Depository
to such Depository or another nominee of such Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such a successor
Depository.

               2.14.3. Legend. Unless otherwise provided pursuant to Section
2.2, any Global Security issued hereunder shall bear a legend in substantially
the following form:

               "This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depository or a nominee of the Depository. This Security is exchangeable for
Securities registered in the name of a person other than the Depository or its
nominee only in the limited circumstances described in the Indenture, and may
not be transferred except as a whole by the Depository to a nominee of the
Depository, by a nominee of the Depository to the Depository or another nominee
of the Depository or by the Depository or any such nominee to a successor
Depository or a nominee of such a successor Depository."

               2.14.4. Acts of Holders. The Depository, as a Holder, may appoint
agents and otherwise authorize participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a Holder
is entitled to give or take under the Indenture.

               2.14.5. Payments. Notwithstanding the other provisions of this
Indenture, unless otherwise specified as contemplated by Section 2.2, payment of
the principal of, premium, if any, and interest, if any, on any Global Security
shall be made to the Holder thereof.

               2.14.6. Consents, Declaration and Directions. Except as provided
in Section 2.14.5, the Company, the Trustee and any Agent shall treat a person
as the Holder of such principal amount of outstanding Securities of such Series
represented by a

                                       16

<PAGE>   22
Global Security as shall be specified in a written statement of the Depositary
with respect to such Global Security, for purposes of obtaining any consents,
declarations, waivers or directions required to be given by the Holders pursuant
to this Indenture.

        Section 2.15. CUSIP Numbers.

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

                                  ARTICLE III.
                                   REDEMPTION

        Section 3.1. Notice to Trustee.

               The Company may, with respect to any Series of Securities,
reserve the right to redeem and pay the Series of Securities or may covenant to
redeem and pay the Series of Securities or any part thereof prior to the Stated
Maturity thereof at such time and on such terms as provided for in such
Securities. If a Series of Securities is redeemable and the Company wants or is
obligated to redeem prior to the Stated Maturity thereof all or part of the
Series of Securities pursuant to the terms of such Securities, it shall notify
the Trustee of the redemption date and the principal amount of Series of
Securities to be redeemed. The Company shall give the notice at least 45 days
before the redemption date (or such shorter notice as may be acceptable to the
Trustee).

        Section 3.2. Selection of Securities to be Redeemed.

               Unless otherwise indicated for a particular Series by a Board
Resolution, a supplemental indenture or an Officers' Certificate, if less than
all the Securities of a Series are to be redeemed, the Trustee shall select the
Securities of the Series to be redeemed in any manner that the Trustee deems
fair and appropriate. The Trustee shall make the selection from Securities of
the Series outstanding not previously called for redemption. The Trustee may
select for redemption portions of the principal of Securities of the Series that
have denominations larger than $1,000. Securities of the Series and portions of
them it selects shall be in amounts of $1,000 or whole multiples of $1,000 or,
with respect to Securities of any Series issuable in other denominations
pursuant to Section 2.2.10, the minimum principal denomination for each Series
and integral multiples thereof. Provisions of this Indenture that apply to
Securities of a Series called for redemption also apply to portions of
Securities of that Series called for redemption.

        Section 3.3. Notice of Redemption.

                                       17

<PAGE>   23
               Unless otherwise indicated for a particular Series by Board
Resolution, a supplemental indenture hereto or an Officers' Certificate, at
least 30 days but not more than 60 days before a redemption date, the Company
shall mail a notice of redemption by first-class mail to each Holder whose
Securities are to be redeemed and if any Bearer Securities are outstanding,
publish on one occasion a notice in an Authorized Newspaper.

               The notice shall identify the Securities of the Series to be
redeemed and shall state:

                (a) the redemption date;

                (b) the redemption price;

                (c) the name and address of the Paying Agent;

                (d) that Securities of the Series called for redemption must be
        surrendered to the Paying Agent to collect the redemption price;

                (e) that interest on Securities of the Series called for
        redemption ceases to accrue on and after the redemption date; and

                (f) any other information as may be required by the terms of the
        particular Series or the Securities of a Series being redeemed.

               At the Company's request made in writing to the Trustee not less
than forty-five (45) days prior to the date fixed for redemption, the Trustee
shall give the notice of redemption in the Company's name and at its expense.
If, however, the Company gives such notice to the Holders, it shall concurrently
deliver written notice to the Trustee stating that such notice has been given.

        Section 3.4. Effect of Notice of Redemption.

               Once notice of redemption is mailed or published as provided in
Section 3.3, Securities of a Series called for redemption become due and payable
on the redemption date and at the redemption price. A notice of redemption may
not be conditional. Upon surrender to the Paying Agent, such Securities shall be
paid at the redemption price plus accrued interest to the redemption date.

        Section 3.5. Deposit of Redemption Price.

               On or before the redemption date, the Company shall deposit with
the Paying Agent money sufficient to pay the redemption price of and accrued
interest, if any, on all Securities to be redeemed on that date.

        Section 3.6. Securities Redeemed in Part.

                                       18

<PAGE>   24
               Upon surrender of a Security that is redeemed in part, the
Trustee shall authenticate for the Holder a new Security of the same Series and
the same maturity equal in principal amount to the unredeemed portion of the
Security surrendered.

                                   ARTICLE IV.
                                    COVENANTS

        Section 4.1. Payment of Principal and Interest.

               The Company covenants and agrees for the benefit of the Holders
of each Series of Securities that it will duly and punctually pay the principal
of and interest, if any, on the Securities of that Series in accordance with the
terms of such Securities and this Indenture.

        Section 4.2. SEC Reports.

               The Company shall deliver to the Trustee within 15 days after it
files them with the SEC copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The
Company also shall comply with the other provisions of TIA Section 314(a).

        Section 4.3. Compliance Certificate.

               The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year of the Company, an Officers' Certificate stating
that a review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his knowledge the Company has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he may have knowledge).

               The Company will, so long as any of the Securities are
outstanding, deliver to the Trustee, forthwith upon becoming aware of any
Default or Event of Default, an Officers' Certificate specifying such Default or
Event of Default and what action the Company is taking or proposes to take with
respect thereto.

        Section 4.4. Stay, Extension and Usury Laws.

               The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this

                                       19

<PAGE>   25
Indenture or the Securities; and the Company (to the extent it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law and
covenants that it will not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law has been enacted.

        Section 4.5. Corporate Existence.

               Subject to Article V, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each Significant
Subsidiary in accordance with the respective organizational documents of each
Significant Subsidiary and the rights (charter and statutory), licenses and
franchises of the Company and its Significant Subsidiaries; provided, however,
that the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any Significant
Subsidiary, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries taken as a whole and that the loss thereof is not adverse in
any material respect to the Holders.

        Section 4.6. Taxes.

               The Company shall, and shall cause each of its Significant
Subsidiaries to, pay prior to delinquency all taxes, assessments and
governmental levies, except as contested in good faith and by appropriate
proceedings.

                                   ARTICLE V.
                                   SUCCESSORS

        Section 5.1. When Company May Merge, Etc.

               The Company shall not consolidate with or merge into, or convey,
transfer or lease all or substantially all of its properties and assets to, any
person (a "successor person"), and may not permit any person to merge into, or
convey, transfer or lease its properties and assets substantially as an entirety
to, the Company, unless:

                (a) the successor person (if any) is a corporation, partnership,
        trust or other entity organized and validly existing under the laws of
        any U.S. domestic jurisdiction and expressly assumes the Company's
        obligations on the Securities and under this Indenture and

                (b) immediately after giving effect to the transaction, no
        Default or Event of Default, shall have occurred and be continuing.

               The Company shall deliver to the Trustee prior to the
consummation of the proposed transaction an Officers' Certificate to the
foregoing effect and an Opinion of Counsel stating that the proposed transaction
and such supplemental indenture comply with this Indenture.

                                       20

<PAGE>   26
        Section 5.2. Successor Corporation Substituted.

               Upon any consolidation or merger, or any sale, lease, conveyance
or other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.1, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor person has been named
as the Company herein; provided, however, that the predecessor Company in the
case of a sale, lease, conveyance or other disposition shall not be released
from the obligation to pay the principal of and interest, if any, on the
Securities.

                                   ARTICLE VI.
                              DEFAULTS AND REMEDIES

        Section 6.1. Events of Default.

               "Event of Default," wherever used herein with respect to
Securities of any Series, means any one of the following events, unless in the
establishing Board Resolution, supplemental indenture or Officers' Certificate,
it is provided that such Series shall not have the benefit of said Event of
Default:

                (a) default in the payment of any interest on any Security of
        that Series when it becomes due and payable, and continuance of such
        default for a period of 30 days (unless the entire amount of such
        payment is deposited by the Company with the Trustee or with a Paying
        Agent prior to the expiration of such period of 30 days); or

                (b) default in the payment of the principal of any Security of
        that Series at its Maturity; or

                (c) default in the deposit of any sinking fund payment, when and
        as due in respect of any Security of that Series; or

                (d) default in the performance or breach of any covenant or
        warranty of the Company in this Indenture (other than a covenant or
        warranty that has been included in this Indenture solely for the benefit
        of Series of Securities other than that Series), which default continues
        uncured for a period of 60 days after there has been given, by
        registered or certified mail, to the Company by the Trustee or to the
        Company and the Trustee by the Holders of at least 25% in principal
        amount of the outstanding Securities of that Series a written notice
        specifying such default or breach and requiring it to be remedied and
        stating that such notice is a "Notice of Default" hereunder; or

                (e) the Company or any of its Significant Subsidiaries pursuant
        to or within the meaning of any Bankruptcy Law:

                    (i) commences a voluntary case,

                                       21

<PAGE>   27
                    (ii) consents to the entry of an order for relief against it
                in an involuntary case,

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

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

                    (v) generally is unable to pay its debts as the same become
                due; or

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

                    (i) is for relief against the Company or any of its
                Significant Subsidiaries in an involuntary case,

                    (ii) appoints a Custodian of the Company or any of its
                Significant Subsidiaries or for all or substantially all of its
                property, or

                    (iii) orders the liquidation of the Company or any of its
                Significant Subsidiaries, and the order or decree remains
                unstayed and in effect for 60 days; or

                (g) any other Event of Default provided with respect to
        Securities of that Series, which is specified in a Board Resolution, a
        supplemental indenture hereto or an Officers' Certificate, in accordance
        with Section 2.2.19.

               The term "Bankruptcy Law" means title 11, U.S. Code or any
similar Federal or State law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.

        Section 6.2. Acceleration of Maturity; Rescission and Annulment.

               If an Event of Default with respect to Securities of any Series
at the time outstanding occurs and is continuing (other than an Event of Default
referred to in Section 6.1(e) or (f)) then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the outstanding Securities
of that Series may declare the principal amount (or, if any Securities of that
Series are Discount Securities, such portion of the principal amount as may be
specified in the terms of such Securities) of and accrued and unpaid interest,
if any, on all of the Securities of that Series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) and accrued and unpaid interest, if any, shall become immediately due
and payable. If an Event of Default specified in Section 6.1(e) or (f) shall
occur, the principal amount (or specified amount) of and accrued and unpaid
interest, if any, on all outstanding Securities

                                       22

<PAGE>   28
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.

               At any time after such a declaration of acceleration with respect
to any Series has been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the outstanding
Securities of that Series, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:

                (a) the Company has paid or deposited with the Trustee a sum
        sufficient to pay

                    (i) all overdue interest, if any, on all Securities of that
                Series,

                    (ii) the principal of any Securities of that Series which
                have become due otherwise than by such declaration of
                acceleration and interest thereon at the rate or rates
                prescribed therefor in such Securities,

                    (iii) to the extent that payment of such interest is lawful,
                interest upon any overdue principal and overdue interest at the
                rate or rates prescribed therefor in such Securities, and

                    (iv) all sums paid or advanced by the Trustee hereunder and
                the reasonable compensation, expenses, disbursements and
                advances of the Trustee, its agents and counsel, and any other
                amounts due the Trustee under Section 7.7;

and

                (b) all Events of Default with respect to Securities of that
        Series, other than the non-payment of the principal of Securities of
        that Series which have become due solely by such declaration of
        acceleration, have been cured or waived as provided in Section 6.13.

               No such rescission shall affect any subsequent Default or impair
any right consequent thereon.

        Section 6.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.

               The Company covenants that if

                (a) default is made in the payment of any interest on any
        Security when such interest becomes due and payable and such default
        continues for a period of 30 days, or

                (b) default is made in the payment of principal of any Security
        at the Maturity thereof, or

                                       23

<PAGE>   29
                (c) default is made in the deposit of any sinking fund payment
        when and as due by the terms of a Security, then, the Company will, upon
        demand of the Trustee, pay to it, for the benefit of the Holders of such
        Securities, the whole amount then due and payable on such Securities for
        principal and interest and, to the extent that payment of such interest
        shall be legally enforceable, interest on any overdue principal or any
        overdue interest, at the rate or rates prescribed therefor in such
        Securities, and, in addition thereto, such further amount as shall be
        sufficient to cover the costs and expenses of collection, including the
        reasonable compensation, expenses, disbursements and advances of the
        Trustee, its agents and counsel.

               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
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities
and collect the moneys adjudged or deemed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon such
Securities, wherever situated.

               If an Event of Default with respect to any Securities of any
Series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such Series 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.

        Section 6.4. Trustee May File Proofs of Claim.

               In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,

                (a) to file and prove a claim for the whole amount of principal
        and interest owing and unpaid in respect of the Securities and to file
        such other papers or documents as may be necessary or advisable in order
        to have the claims of the Trustee (including any claim for the
        reasonable compensation, expenses, disbursements and advances of the
        Trustee, its agents and counsel) and of the Holders allowed in such
        judicial proceeding, and

                                       24

<PAGE>   30
                (b) to collect and receive any moneys or other property payable
        or deliverable on any such claims and to distribute the same, and any
        custodian, receiver, assignee, trustee, liquidator, sequestrator or
        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 7.7.

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

        Section 6.5. Trustee May Enforce Claims Without Possession of
Securities.

               All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities 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,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.

        Section 6.6. Application of Money Collected.

               Any money collected by the Trustee pursuant to this Article shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal or
interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:

               First: To the payment of all amounts due the Trustee under
Section 7.7; and

               Second: To the payment of the amounts then due and unpaid for
principal of and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for principal and interest, respectively; and

               Third: To the Company.

        Section 6.7. Limitation on Suits.

                                       25

<PAGE>   31
               No Holder of any Security of any Series 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

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

                (b) the Holders of not less than 25% in principal amount of the
        outstanding Securities of that Series 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 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 Holders of a
        majority in principal amount of the outstanding Securities of that
        Series;

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 such
Holders.

        Section 6.8. Unconditional Right of Holders to Receive Principal and
Interest.

               Notwithstanding any other provision in this Indenture, the Holder
of any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Security on
the Stated Maturity or Stated Maturities expressed in such Security (or, in the
case of redemption, on the redemption date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.

        Section 6.9. Restoration of Rights and Remedies.

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

                                       26

<PAGE>   32
        Section 6.10. Rights and Remedies Cumulative.

               Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.8, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

        Section 6.11. Delay or Omission Not Waiver.

               No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.

        Section 6.12. Control by Holders.

               The Holders of a majority in principal amount of the outstanding
Securities of any Series 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
Securities of such Series, 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 of the Trustee, determine
        that the proceeding so directed would involve the Trustee in personal
        liability.

        Section 6.13. Waiver of Past Defaults.

               Subject to Section 6.2, the Holders of not less than a majority
in principal amount of the outstanding Securities of any Series may on behalf of
the Holders of all the Securities of such Series waive any past Default
hereunder with respect to such Series and its consequences, except a Default in
the payment of the principal of or interest on any Security of such Series
(provided, however, that the Holders of a majority in principal amount of the
outstanding Securities of any Series may rescind an acceleration and its
consequences, including any related payment default that resulted from such

                                       27

<PAGE>   33
acceleration). Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.

        Section 6.14. Undertaking for Costs.

               All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in principal
amount of the outstanding Securities of any Series, or to any suit instituted by
any Holder for the enforcement of the payment of the principal of or interest on
any Security on or after the Stated Maturity or Stated Maturities expressed in
such Security (or, in the case of redemption, on the redemption date).

                                  ARTICLE VII.
                                     TRUSTEE

        Section 7.1. Duties of Trustee.

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

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

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

                    (ii) In the absence of bad faith on its part, the Trustee
                may conclusively rely, as to the truth of the statements and the
                correctness of the opinions expressed therein, upon Officers'
                Certificates or Opinions of Counsel furnished to the Trustee and
                conforming to the requirements of this Indenture; however, in
                the case of any such Officers' Certificates or Opinions of
                Counsel which by any provisions hereof are specifically required
                to be furnished to the Trustee, the Trustee shall examine such
                Officers' Certificates and Opinions of Counsel to determine
                whether or not they conform to the requirements of this
                Indenture.

                                       28

<PAGE>   34
                (c) The Trustee may not be relieved from liability for its own
        negligent action, its own negligent failure to act or its own willful
        misconduct, except that:

                    (i) This paragraph does not limit the effect of paragraph
                (b) of this Section.

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

                    (iii) The Trustee shall not be liable with respect to any
                action taken, suffered or omitted to be taken by it with respect
                to Securities of any Series in good faith in accordance with the
                direction of the Holders of a majority in principal amount of
                the outstanding Securities of such Series relating to the time,
                method and place of conducting any proceeding for any remedy
                available to the Trustee, or exercising any trust or power
                conferred upon the Trustee, under this Indenture with respect to
                the Securities of such Series.

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

                (e) The Trustee may refuse to perform any duty or exercise any
        right or power unless it receives indemnity satisfactory to it against
        any loss, liability or expense.

                (f) The Trustee shall not be liable for interest on any money
        received by it except as the Trustee may agree in writing with the
        Company. Money held in trust by the Trustee need not be segregated from
        other funds except to the extent required by law.

                (g) No provision of this Indenture shall require the Trustee to
        risk its own funds or otherwise incur any financial liability in the
        performance of any of its duties, or in the exercise of any of its
        rights or powers, if it shall have reasonable grounds for believing that
        repayment of such funds or adequate indemnity against such risk is not
        reasonably assured to it.

                (h) The Paying Agent, the Registrar and any authenticating agent
        shall be entitled to the protections and immunities as are set forth in
        paragraphs (a), (b) and (c) of this Section with respect to the Trustee.

        Section 7.2. Rights of Trustee.

                (a) The Trustee may rely on and shall be protected in acting or
        refraining from acting upon any document believed by it to be genuine
        and to have been signed or presented by the proper person. The Trustee
        need not investigate any fact or matter stated in the document.

                                       29

<PAGE>   35
                (b) Before the Trustee acts or refrains from acting, it may
        require an Officers' Certificate or an Opinion of Counsel. The Trustee
        shall not be liable for any action it takes or omits to take in good
        faith in reliance on such Officers' Certificate or Opinion of Counsel.

                (c) The Trustee may act through agents and shall not be
        responsible for the misconduct or negligence of any agent appointed with
        due care. No Depository shall be deemed an agent of the Trustee and the
        Trustee shall not be responsible for any act or omission by any
        Depository.

                (d) The Trustee shall not be liable for any action it takes or
        omits to take in good faith which it believes to be authorized or within
        its rights or powers.

                (e) 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.

                (f) The Trustee shall be under no obligation to exercise any of
        the rights or powers vested in it by this Indenture at the request or
        direction of any of the Holders of Securities 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.

                (g) The Trustee shall not be charged with knowledge of any
        Default or Event of Default with respect to the Securities unless either
        (i) a Responsible Officer shall have actual knowledge of such Default or
        Event of Default or (ii) written notice of such Default or Event of
        Default shall have been given to the Trustee by the Company or any
        Holder.

        Section 7.3. Individual Rights of Trustee.

               The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee is also subject to Sections 7.10
and 7.11.

        Section 7.4. Trustee's Disclaimer.

               The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, it shall not be accountable for
the Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities other than its authentication.

        Section 7.5. Notice of Defaults.

               If a Default or Event of Default occurs and is continuing with
respect to the Securities of any Series and if it is known to a Responsible
Officer of the Trustee, the

                                       30

<PAGE>   36
Trustee shall mail to each Securityholder of the Securities of that Series and,
if any Bearer Securities are outstanding, publish on one occasion in an
Authorized Newspaper, notice of a Default or Event of Default within 90 days
after it occurs or, if later, after a Responsible Officer of the Trustee has
knowledge of such Default or Event of Default. Except in the case of a Default
or Event of Default in payment of principal of or interest on any Security of
any Series, the Trustee may withhold the notice if and so long as its corporate
trust committee or a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Securityholders of
that Series.

        Section 7.6. Reports by Trustee to Holders.

               Within 60 days after May 15 in each year, the Trustee shall
transmit by mail to all Securityholders, as their names and addresses appear on
the register kept by the Registrar and, if any Bearer Securities are
outstanding, publish in an Authorized Newspaper at the expense of the Company, a
brief report dated as of such May 15, in accordance with, and to the extent
required under, TIA Section 313.

               A copy of each report at the time of its mailing to
Securityholders of any Series shall be filed with the SEC and each stock
exchange on which the Securities of that Series are listed. The Company shall
promptly notify the Trustee when Securities of any Series are listed on any
stock exchange.

        Section 7.7. Compensation and Indemnity.

               The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel.

               The Company shall indemnify the Trustee (including the cost of
defending itself) against any loss, liability or expense incurred by it except
as set forth in the next paragraph in the performance of its duties under this
Indenture as Trustee or Agent. The Trustee shall notify the Company promptly of
any claim for which it may seek indemnity. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld. This indemnification shall
apply to officers, directors, employees, shareholders and agents of the Trustee.

               The Company need not reimburse any expense or indemnify against
any loss or liability incurred by the Trustee or by any officer, director,
employee, shareholder or agent of the Trustee through negligence or bad faith.

               To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities of any Series on all money or
property held or

                                       31

<PAGE>   37
collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities of that Series.

               When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1(e) or (f) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.

               The provisions of this Section 7.7 shall survive the resignation
or removal of the Trustee and the termination of this Indenture.

        Section 7.8. Replacement of Trustee.

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

               The Trustee may resign with respect to the Securities of one or
more Series by so notifying the Company. The Holders of a majority in principal
amount of the Securities of any Series may remove the Trustee with respect to
that Series by so notifying the Trustee and the Company. The Company may remove
the Trustee with respect to Securities of one or more Series if:

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

                (b) the Trustee is adjudged a bankrupt or an insolvent or an
        order for relief is entered with respect to the Trustee under any
        Bankruptcy Law;

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

                (d) the Trustee becomes incapable of acting.

               If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Securities may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.

               If a successor Trustee with respect to the Securities of any one
or more Series does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company or the Holders of at
least 10% in principal amount of the Securities of the applicable Series may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.

               If the Trustee with respect to the Securities of any one or more
Series fails to comply with Section 7.10, any Securityholder of the applicable
Series may petition any

                                       32

<PAGE>   38
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.

               A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee subject to the lien provided for in Section 7.7, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
with respect to each Series of Securities for which it is acting as Trustee
under this Indenture. A successor Trustee shall mail a notice of its succession
to each Securityholder of each such Series and, if any Bearer Securities are
outstanding, publish such notice on one occasion in an Authorized Newspaper.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the
Company's obligations under Section 7.7 hereof shall continue for the benefit of
the retiring trustee with respect to expenses and liabilities incurred by it
prior to such replacement.

        Section 7.9. Successor Trustee by Merger, etc.

               If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.

        Section 7.10. Eligibility; Disqualification.

               This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee shall always
have a combined capital and surplus of at least $25,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply with
TIA Section 310(b).

        Section 7.11. Preferential Collection of Claims Against Company.

               The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.

                                  ARTICLE VIII.
                     SATISFACTION AND DISCHARGE; DEFEASANCE

        Section 8.1. Satisfaction and Discharge of Indenture.

               This Indenture shall upon Company Order cease to be of further
effect (except as hereinafter provided in this Section 8.1), and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when

                (a) either

                                       33

<PAGE>   39
                    (i) all Securities theretofore authenticated and delivered
                (other than Securities that have been destroyed, lost or stolen
                and that have been replaced or paid) have been delivered to the
                Trustee for cancellation; or

                    (ii) all such Securities not theretofore delivered to the
                Trustee for cancellation

                         (1) have become due and payable, or

                         (2) will become due and payable at their Stated
                    Maturity within one year, or

                         (3) are to be called for redemption within one year
                    under arrangements satisfactory to the Trustee for the
                    giving of notice of redemption by the Trustee in the name,
                    and at the expense, of the Company, or

                         (4) are deemed paid and discharged pursuant to Section
                    8.3, as applicable;

and the Company, in the case of (1), (2) or (3) above, has deposited or caused
to be deposited with the Trustee as trust funds in trust an amount sufficient
for the purpose of paying and discharging the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and interest to the date of such deposit (in the case of Securities
which have become due and payable on or prior to the date of such deposit) or to
the Stated Maturity or redemption date, as the case may be;

                (b) the Company has paid or caused to be paid all other sums
        payable hereunder by the Company; and

                (c) the Company has delivered to the Trustee an Officers'
        Certificate and an Opinion of Counsel, each stating that all conditions
        precedent herein provided for relating to the satisfaction and discharge
        of this Indenture have been complied with.

               Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 7.7, and, if money
shall have been deposited with the Trustee pursuant to clause (a) of this
Section, the provisions of Sections 2.4, 2.7, 2.8, 8.1 8.2 and 8.5 shall
survive.

        Section 8.2. Application of Trust Funds; Indemnification.

                (a) Subject to the provisions of Section 8.5, all money
        deposited with the Trustee pursuant to Section 8.1, all money and U.S.
        Government Obligations or Foreign Government Obligations deposited with
        the Trustee pursuant to Section 8.3 or 8.4 and all money received by the
        Trustee in respect of U.S. Government Obligations or Foreign Government
        Obligations deposited with the Trustee pursuant to Section 8.3 or 8.4,
        shall be held in trust and applied by it, in

                                       34

<PAGE>   40
        accordance with the provisions of the Securities and this Indenture, to
        the payment, either directly or through any Paying Agent (including the
        Company acting as its own Paying Agent) as the Trustee may determine, to
        the persons entitled thereto, of the principal and interest for whose
        payment such money has been deposited with or received by the Trustee or
        to make mandatory sinking fund payments or analogous payments as
        contemplated by Sections 8.3 or 8.4.

                (b) The Company shall pay and shall indemnify the Trustee
        against any tax, fee or other charge imposed on or assessed against U.S.
        Government Obligations or Foreign Government Obligations deposited
        pursuant to Sections 8.3 or 8.4 or the interest and principal received
        in respect of such obligations other than any payable by or on behalf of
        Holders.

                (c) The Trustee shall deliver or pay to the Company from time to
        time upon Company Request any U.S. Government Obligations or Foreign
        Government Obligations or money held by it as provided in Sections 8.3
        or 8.4 which, in the opinion of a nationally recognized firm of
        independent certified public accountants expressed in a written
        certification thereof delivered to the Trustee, are then in excess of
        the amount thereof which then would have been required to be deposited
        for the purpose for which such U.S. Government Obligations or Foreign
        Government Obligations or money were deposited or received. This
        provision shall not authorize the sale by the Trustee of any U.S.
        Government Obligations or Foreign Government Obligations held under this
        Indenture.

        Section 8.3. Legal Defeasance of Securities of any Series.

               Unless this Section 8.3 is otherwise specified, pursuant to
Section 2.2.21, to be inapplicable to Securities of any Series, the Company
shall be deemed to have paid and discharged the entire indebtedness on all the
outstanding Securities of such Series on the 91st day after the date of the
deposit referred to in subparagraph (d) hereof, and the provisions of this
Indenture, as it relates to such outstanding Securities of such Series, shall no
longer be in effect (and the Trustee, at the expense of the Company, shall, at
Company Request, execute proper instruments acknowledging the same), except as
to:

                (a) the rights of Holders of Securities of such Series to
        receive, from the trust funds described in subparagraph (d) hereof, (i)
        payment of the principal of and each installment of principal of and
        interest on the outstanding Securities of such Series on the Stated
        Maturity of such principal or installment of principal or interest and
        (ii) the benefit of any mandatory sinking fund payments applicable to
        the Securities of such Series on the day on which such payments are due
        and payable in accordance with the terms of this Indenture and the
        Securities of such Series;

                (b) the provisions of Sections 2.4, 2.7, 2.8, 8.2, 8.3 and 8.5;
        and

                (c) the rights, powers, trust and immunities of the Trustee
        hereunder;

                                       35

<PAGE>   41
provided that, the following conditions shall have been satisfied:

                (d) the Company shall have deposited or caused to be deposited
        irrevocably with the Trustee as trust funds in trust for the purpose of
        making the following payments, specifically pledged as security for and
        dedicated solely to the benefit of the Holders of such Securities (i) in
        the case of Securities of such Series denominated in Dollars, cash in
        Dollars (or such other money or currencies as shall then be legal tender
        in the United States) and/or U.S. Government Obligations, or (ii) in the
        case of Securities of such Series denominated in a Foreign Currency
        (other than a composite currency), money and/or Foreign Government
        Obligations, which through the payment of interest and principal in
        respect thereof, in accordance with their terms, will provide (and
        without reinvestment and assuming no tax liability will be imposed on
        such Trustee), not later than one day before the due date of any payment
        of money, an amount in cash, sufficient, in the opinion of a nationally
        recognized firm of independent public accountants expressed in a written
        certification thereof delivered to the Trustee, to pay and discharge
        each installment of principal (including mandatory sinking fund or
        analogous payments) of and interest, if any, on all the Securities of
        such Series on the dates such installments of interest or principal are
        due;

                (e) such deposit will not result in a breach or violation of, or
        constitute a default under, this Indenture or any other agreement or
        instrument to which the Company is a party or by which it is bound;

                (f) no Default or Event of Default with respect to the
        Securities of such Series shall have occurred and be continuing on the
        date of such deposit or during the period ending on the 91st day after
        such date;

                (g) the Company shall have delivered to the Trustee an Officers'
        Certificate and an Opinion of Counsel to the effect that (i) the Company
        has received from, or there has been published by, the Internal Revenue
        Service a ruling, or (ii) since the date of execution 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 Securities of such Series
        will not recognize income, gain or loss for Federal income tax purposes
        as a result of such deposit, defeasance and discharge and will be
        subject to Federal income tax on the same amount and in the same manner
        and at the same times as would have been the case if such deposit,
        defeasance and discharge had not occurred;

                (h) the Company 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 of the Securities of such Series
        over any other creditors of the company or with the intent of defeating,
        hindering, delaying or defrauding any other creditors of the Company;

                                       36

<PAGE>   42
                (i) such deposit shall not result in the trust arising from such
        deposit constituting an investment company (as defined in the Investment
        Company Act of 1940, as amended), or such trust shall be qualified under
        such Act or exempt from regulation thereunder; and

                (j) the Company shall have delivered to the Trustee an Officers'
        Certificate and an Opinion of Counsel, each stating that all conditions
        precedent provided for relating to the defeasance contemplated by this
        Section have been complied with.

        Section 8.4. Covenant Defeasance.

               Unless this Section 8.4 is otherwise specified pursuant to
Section 2.2.21 to be inapplicable to Securities of any Series, on and after the
91st day after the date of the deposit referred to in subparagraph (a) hereof,
the Company may omit to comply with any term, provision or condition set forth
under Sections 4.2, 4.3, 4.4, 4.5, 4.6, and 5.1 as well as any additional
covenants contained in a supplemental indenture hereto for a particular Series
of Securities or a Board Resolution or an Officers' Certificate delivered
pursuant to Section 2.2.21 (and the failure to comply with any such covenants
shall not constitute a Default or Event of Default under Section 6.1) and the
occurrence of any event described in clause (e) of Section 6.1 shall not
constitute a Default or Event of Default hereunder, with respect to the
Securities of such Series, provided that the following conditions shall have
been satisfied:

                (a) With reference to this Section 8.4, the Company has
        deposited or caused to be irrevocably deposited (except as provided in
        Section 8.2(c)) with the Trustee as trust funds in trust, specifically
        pledged as security for, and dedicated solely to, the benefit of the
        Holders of such Securities (i) in the case of Securities of such Series
        denominated in Dollars, cash in Dollars (or such other money or
        currencies as shall then be legal tender in the United States) and/or
        U.S. Government Obligations, or (ii) in the case of Securities of such
        Series denominated in a Foreign Currency (other than a composite
        currency), money and/or Foreign Government Obligations, which through
        the payment of interest and principal in respect thereof, in accordance
        with their terms, will provide (and without reinvestment and assuming no
        tax liability will be imposed on such Trustee), not later than one day
        before the due date of any payment of money, an amount in cash,
        sufficient, in the opinion of a nationally recognized firm of
        independent certified public accountants expressed in a written
        certification thereof delivered to the Trustee, to pay principal and
        interest, if any, on and any mandatory sinking fund in respect of the
        Securities of such Series on the dates such installments of interest or
        principal are due;

                (b) Such deposit will not result in a breach or violation of, or
        constitute a default under, this Indenture or any other agreement or
        instrument to which the Company is a party or by which it is bound;

                                       37

<PAGE>   43
                (c) No Default or Event of Default with respect to the
        Securities of such Series shall have occurred and be continuing on the
        date of such deposit or during the period ending on the 91st day after
        such date;

                (d) the Company shall have delivered to the Trustee an Opinion
        of Counsel confirming that Holders of the Securities of such Series will
        not recognize income, gain or loss for federal income tax purposes as a
        result of such deposit and 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 deposit and defeasance had not
        occurred;

                (e) the Company shall have delivered to the Trustee an Officers'
        Certificate stating the deposit was not made by the Company with the
        intent of preferring the Holders of the Securities of such Series over
        any other creditors of the Company or with the intent of defeating,
        hindering, delaying or defrauding any other creditors of the Company;
        and

                (f) The Company shall have delivered to the Trustee an Officers'
        Certificate and an Opinion of Counsel, each stating that all conditions
        precedent herein provided for relating to the defeasance contemplated by
        this Section have been complied with.

        Section 8.5. Repayment to Company.

               The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal and interest that
remains unclaimed for two years. After that, Securityholders entitled to the
money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person.

        Section 8.6. Reinstatement.

               If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Sections 8.1, 8.3 or 8.4, as the
case may be, by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.1, 8.3 or 8.4, as the case may be,
until such time as the Trustee or Paying Agent is permitted to apply all such
money or U.S. Government Obligations in accordance with Section 8.1, 8.3 or 8.4,
as the case may be; provided, however, that if the Company makes any payment of
principal of, premium, if any, or interest on any Securities because of
reinstatement of its obligations, the Company shall be subrogated to the rights
of the holders of such Securities to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.

                                       38

<PAGE>   44
                                   ARTICLE IX.
                             AMENDMENTS AND WAIVERS

        Section 9.1. Without Consent of Holders.

               The Company and the Trustee may amend or supplement this
Indenture or the Securities of one or more Series without the consent of any
Securityholder:

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

                (b) to comply with Article V;

                (c) to provide for uncertificated Securities in addition to or
        in place of certificated Securities;

                (d) to make any change that does not adversely affect the rights
        of any Securityholder;

                (e) to provide for the issuance of and establish the form and
        terms and conditions of Securities of any Series as permitted by this
        Indenture;

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

                (g) to comply with requirements of the SEC in order to effect or
        maintain the qualification of this Indenture under the TIA.

        Section 9.2. With Consent of Holders.

               The Company and the Trustee may enter into a supplemental
indenture with the written consent of the Holders of at least a majority in
principal amount of the outstanding Securities of each Series affected by such
supplemental indenture (including consents obtained in connection with a tender
offer or exchange offer for the Securities of such Series), for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying in
any manner the rights of the Securityholders of each such Series. Except as
provided in Section 6.13, the Holders of at least a majority in principal amount
of the outstanding Securities of each Series affected by such waiver by notice
to the Trustee (including consents obtained in connection with a tender offer or
exchange offer for the Securities of such Series) may waive compliance by the
Company with any provision of this Indenture or the Securities with respect to
such Series.

               It shall not be necessary for the consent of the Holders of
Securities under this Section 9.2 to approve the particular form of any proposed
supplemental indenture or waiver, but it shall be sufficient if such consent
approves the substance thereof. After a

                                       39

<PAGE>   45
supplemental indenture or waiver under this Section becomes effective, the
Company shall mail to the Holders of Securities affected thereby and, if any
Bearer Securities affected thereby are outstanding, publish on one occasion in
an Authorized Newspaper, a notice briefly describing the supplemental indenture
or waiver. Any failure by the Company to mail or publish such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture or waiver.

        Section 9.3. Limitations.

               Without the consent of each Securityholder affected, an amendment
or waiver may not:

                (a) change the amount of Securities whose Holders must consent
        to an amendment, supplement or waiver;

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

                (c) reduce the principal or change the Stated Maturity of any
        Security or reduce the amount of, or postpone the date fixed for, the
        payment of any sinking fund or analogous obligation;

                (d) reduce the principal amount of Discount Securities payable
        upon acceleration of the maturity thereof;

                (e) waive a Default or Event of Default in the payment of the
        principal of or interest, if any, on any Security (except a rescission
        of acceleration of the Securities of any Series by the Holders of at
        least a majority in principal amount of the outstanding Securities of
        such Series and a waiver of the payment default that resulted from such
        acceleration);

                (f) make the principal of or interest, if any, on any Security
        payable in any currency other than that stated in the Security;

                (g) make any change in Sections 6.8, 6.13, 9.3 (this sentence),
        10.15 or 10.16;

                (h) waive a redemption payment with respect to any Security or
        change any of the provisions with respect to the redemption of any
        Securities; or

                (i) impair the right to convert the Securities into Common
        Stock, subject to the terms set forth in the Indenture.

        Section 9.4. Compliance with Trust Indenture Act.

               Every amendment to this Indenture or the Securities of one or
more Series shall be set forth in a supplemental indenture hereto that complies
with the TIA as then in effect.

                                       40

<PAGE>   46
        Section 9.5. Revocation and Effect of Consents.

               Until an amendment or waiver becomes effective, a consent to it
by a Holder of a Security is a continuing consent by the Holder and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security, even if notation of the consent is not
made on any Security. However, any such Holder or subsequent Holder may revoke
the consent as to his Security or portion of a Security if the Trustee receives
the notice of revocation before the date the amendment or waiver becomes
effective.

               Any amendment or waiver once effective shall bind every
Securityholder of each Series affected by such amendment or waiver unless it is
of the type described in any of clauses (a) through (g) of Section 9.3. In that
case, the amendment or waiver shall bind each Holder of a Security who has
consented to it and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security.

        Section 9.6. Notation on or Exchange of Securities.

               The Trustee may place an appropriate notation about an amendment
or waiver on any Security of any Series thereafter authenticated. The Company in
exchange for Securities of that Series may issue and the Trustee shall
authenticate upon request new Securities of that Series that reflect the
amendment or waiver.

        Section 9.7. Trustee Protected.

               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 be entitled to receive,
and (subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee shall sign all
supplemental indentures, except that the Trustee need not sign any supplemental
indenture that adversely affects its rights, duties or immunities under this
Indenture or otherwise.

                                   ARTICLE X.
                                  MISCELLANEOUS

        Section 10.1. Trust Indenture Act Controls.

               If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required or deemed to be included in
this Indenture by the TIA, such required or deemed provision shall control.

        Section 10.2. Notices.

               Any notice or communication by the Company or the Trustee to the
other is duly given if in writing and delivered in person or mailed by
first-class mail:

                                       41

<PAGE>   47
if to the Company:

Aviron
297 North Bernardo Avenue
Mountain View, CA 94043
Attention: General Counsel

if to the Trustee:

HSBC Bank USA
140 Broadway, 12th Floor
New York, New York 10005
Attention: Issuer Services

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

               Any notice or communication to a Securityholder shall be mailed
by first-class mail to his address shown on the register kept by the Registrar
and, if any Bearer Securities are outstanding, published in an Authorized
Newspaper. Failure to mail a notice or communication to a Securityholder of any
Series or any defect in it shall not affect its sufficiency with respect to
other Securityholders of that or any other Series.

               If a notice or communication is mailed or published in the manner
provided above, within the time prescribed, it is duly given, whether or not the
Securityholder receives it.

               If the Company mails a notice or communication to
Securityholders, it shall mail a copy to the Trustee and each Agent at the same
time.

        Section 10.3. Communication by Holders with Other Holders.

               Securityholders of any Series may communicate pursuant to TIA
Section 312(b) with other Securityholders of that Series or any other Series
with respect to their rights under this Indenture or the Securities of that
Series or all Series. The Company, the Trustee, the Registrar and anyone else
shall have the protection of TIA Section 312(c).

        Section 10.4. Certificate and Opinion as to Conditions Precedent.

               Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:

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

                                       42

<PAGE>   48
                (b) an Opinion of Counsel stating that, in the opinion of such
        counsel, all such conditions precedent have been complied with.

        Section 10.5. Statements Required in Certificate or Opinion.

               Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:

                (a) a statement that the person making such certificate or
        opinion has read such covenant or condition;

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

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

                (d) a statement as to whether or not, in the opinion of such
        person, such condition or covenant has been complied with.

        Section 10.6. Rules by Trustee and Agents.

               The Trustee may make reasonable rules for action by or a meeting
of Securityholders of one or more Series. Any Agent may make reasonable rules
and set reasonable requirements for its functions.

        Section 10.7. Legal Holidays.

               Unless otherwise provided by Board Resolution, Officers'
Certificate or supplemental indenture for a particular Series, a "Legal Holiday"
is any day that is not a Business Day. If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening
period.

        Section 10.8. No Recourse Against Others.

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

                                       43

<PAGE>   49
        Section 10.9. Counterparts.

               This Indenture may be executed in any number of counterparts and
by the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

        Section 10.10. Governing Laws.

               THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN
SUCH STATE, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

        Section 10.11. No Adverse Interpretation of Other Agreements.

               This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.

        Section 10.12. Successors.

               All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.

        Section 10.13. Severability.

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

        Section 10.14. Table of Contents, Headings, Etc.

               The Table of Contents, Cross Reference Table, and headings of the
Articles and Sections of this Indenture 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.

        Section 10.15. Securities in a Foreign Currency or in ECU.

               Unless otherwise specified in a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate delivered pursuant to Section 2.2
of this Indenture with respect to a particular Series of Securities, whenever
for purposes of this Indenture any action may be taken by the Holders of a
specified percentage in aggregate principal amount of Securities of all Series
or all Series affected by a particular action at the time outstanding and, at
such time, there are outstanding Securities of any Series which are denominated
in a coin or currency other than Dollars (including ECUs), then

                                       44

<PAGE>   50
the principal amount of Securities of such Series which shall be deemed to be
outstanding for the purpose of taking such action shall be that amount of
Dollars that could be obtained for such amount at the Market Exchange Rate at
such time. For purposes of this Section 10.15, "Market Exchange Rate" shall mean
the noon Dollar buying rate in New York City for cable transfers of that
currency as published by the Federal Reserve Bank of New York; provided,
however, in the case of ECUs, Market Exchange Rate shall mean the rate of
exchange determined by the Commission of the European Union (or any successor
thereto) as published in the Official Journal of the European Union (such
publication or any successor publication, the "Journal"). If such Market
Exchange Rate is not available for any reason with respect to such currency, the
Trustee shall use, in its sole discretion and without liability on its part,
such quotation of the Federal Reserve Bank of New York or, in the case of ECUs,
the rate of exchange as published in the Journal, as of the most recent
available date, or quotations or, in the case of ECUs, rates of exchange from
one or more major banks in The City of New York or in the country of issue of
the currency in question or, in the case of ECUs, in Luxembourg or such other
quotations or, in the case of ECUs, rates of exchange as the Trustee, upon
consultation with the Company, shall deem appropriate. The provisions of this
paragraph shall apply in determining the equivalent principal amount in respect
of Securities of a Series denominated in currency other than Dollars in
connection with any action taken by Holders of Securities pursuant to the terms
of this Indenture.

               All decisions and determinations of the Trustee regarding the
Market Exchange Rate or any alternative determination provided for in the
preceding paragraph shall be in its sole discretion and shall, in the absence of
manifest error, be conclusive to the extent permitted by law for all purposes
and irrevocably binding upon the Company and all Holders.

        Section 10.16. Judgment Currency.

               The Company agrees, to the fullest extent that it may effectively
do so under applicable law, that (a) if for the purpose of obtaining judgment in
any court it is necessary to convert the sum due in respect of the principal of
or interest or other amount on the Securities of any Series (the "Required
Currency") into a currency in which a judgment will be rendered (the "Judgment
Currency"), the rate of exchange used shall be the rate at which in accordance
with normal banking procedures the Trustee could purchase in The City of New
York the Required Currency with the Judgment Currency on the day on which final
unappealable judgment is entered, unless such day is not a New York Banking Day,
then, the rate of exchange used shall be the rate at which in accordance with
normal banking procedures the Trustee could purchase in The City of New York the
Required Currency with the Judgment Currency on the New York Banking Day
preceding the day on which final unappealable judgment is entered and (b) its
obligations under this Indenture to make payments in the Required Currency (i)
shall not be discharged or satisfied by any tender, any recovery pursuant to any
judgment (whether or not entered in accordance with subSection (a)), in any
currency other than the Required Currency, except to the extent that such tender
or recovery shall result in the actual receipt, by the payee, of the full amount
of the Required Currency expressed to be payable in respect of such payments,
(ii) shall be enforceable as an alternative or

                                       45

<PAGE>   51
additional cause of action for the purpose of recovering in the Required
Currency the amount, if any, by which such actual receipt shall fall short of
the full amount of the Required Currency so expressed to be payable, and (iii)
shall not be affected by judgment being obtained for any other sum due under
this Indenture. For purposes of the foregoing, "New York Banking Day" means any
day except a Saturday, Sunday or a legal holiday in The City of New York on
which banking institutions are authorized or required by law, regulation or
executive order to close.

                                   ARTICLE XI.
                                  SINKING FUNDS

        Section 11.1. Applicability of Article.

               The provisions of this Article shall be applicable to any sinking
fund for the retirement of the Securities of a Series, except as otherwise
permitted or required by any form of Security of such Series issued pursuant to
this Indenture.

               The minimum amount of any sinking fund payment provided for by
the terms of the Securities of any Series is herein referred to as a "mandatory
sinking fund payment" and any other amount provided for by the terms of
Securities of such Series is herein referred to as an "optional sinking fund
payment." If provided for by the terms of Securities of any Series, the cash
amount of any sinking fund payment may be subject to reduction as provided in
Section 11.2. Each sinking fund payment shall be applied to the redemption of
Securities of any Series as provided for by the terms of the Securities of such
Series.

        Section 11.2. Satisfaction of Sinking Fund Payments with Securities.

               The Company may, in satisfaction of all or any part of any
sinking fund payment with respect to the Securities of any Series to be made
pursuant to the terms of such Securities (1) deliver outstanding Securities of
such Series to which such sinking fund payment is applicable (other than any of
such Securities previously called for mandatory sinking fund redemption) and (2)
apply as credit Securities of such Series to which such sinking fund payment is
applicable and which have been redeemed either at the election of the Company
pursuant to the terms of such Series of Securities (except pursuant to any
mandatory sinking fund) or through the application of permitted optional sinking
fund payments or other optional redemptions pursuant to the terms of such
Securities, provided that such Securities have not been previously so credited.
Such Securities shall be received by the Trustee, together with an Officers'
Certificate with respect thereto, not later than 15 days prior to the date on
which the Trustee begins the process of selecting Securities for redemption, and
shall be credited for such purpose by the Trustee at the price specified in such
Securities for redemption through operation of the sinking fund and the amount
of such sinking fund payment shall be reduced accordingly. If as a result of the
delivery or credit of Securities in lieu of cash payments pursuant to this
Section 11.2, the principal amount of Securities of such Series to be redeemed
in order to exhaust the aforesaid cash payment shall be less than $100,000, the
Trustee need not call Securities of such Series for redemption, except upon
receipt of a

                                       46

<PAGE>   52
Company Order that such action be taken, and such cash payment shall be held by
the Trustee or a Paying Agent and applied to the next succeeding sinking fund
payment, provided, however, that the Trustee or such Paying Agent shall from
time to time upon receipt of a Company Order pay over and deliver to the Company
any cash payment so being held by the Trustee or such Paying Agent upon delivery
by the Company to the Trustee of Securities of that Series purchased by the
Company having an unpaid principal amount equal to the cash payment required to
be released to the Company.

        Section 11.3. Redemption of Securities for Sinking Fund.

               Not less than 45 days (unless otherwise indicated in the Board
Resolution, supplemental indenture hereto or Officers' Certificate in respect of
a particular Series of Securities) prior to each sinking fund payment date for
any Series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that Series pursuant to the terms of that Series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that Series pursuant to Section 11.2, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 30 days (unless otherwise indicated in the Board Resolution,
Officers' Certificate or supplemental indenture in respect of a particular
Series of Securities) before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 3.2 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 3.3. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 3.4, 3.5 and 3.6.

                                  ARTICLE XII.
                           SUBORDINATION OF SECURITIES

        Section 12.1. Agreement of Subordination.

               The Company covenants and agrees, and each Holder of Securities
issued hereunder by his acceptance thereof likewise covenants and agrees, that
all Securities shall be issued subject to the provisions of this Article XII;
and each Person holding any Security, whether upon original issue or upon
transfer, assignment or exchange thereof, accepts and agrees to be bound by such
provisions.

               The payment of the principal of, premium, if any, and interest on
all Securities (including, but not limited to, the redemption price with respect
to the Securities called for redemption in accordance with Article 3 as provided
in the Indenture) issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and subject in right of payment to the
prior payment in full of all Senior Indebtedness, whether outstanding at the
date of this Indenture or thereafter incurred.

                                       47

<PAGE>   53
               No provision of this Article XII shall prevent the occurrence of
any default or Event of Default hereunder.

        Section 12.2. Payments to Holders.

               No payment shall be made with respect to the principal of, or
premium, if any, or interest on the Securities (including, but not limited to,
the redemption price with respect to the Securities to be called for redemption
in accordance with Article III as provided in the Indenture), except payments
and distributions made by the Trustee as permitted by the first or second
paragraph of Section 12.5, if:

                    (i) a default in the payment of principal, premium,
                interest, rent or other obligations due on any Senior
                Indebtedness occurs and is continuing (or, in the case of Senior
                Indebtedness for which there is a period of grace, in the event
                of such a default that continues beyond the period of grace, if
                any, specified in the instrument or lease evidencing such Senior
                Indebtedness), unless and until such default shall have been
                cured or waived or shall have ceased to exist; or

                    (ii) a default, other than a payment default, on a
                Designated Senior Indebtedness occurs and is continuing that
                then permits holders of such Designated Senior Indebtedness to
                accelerate its maturity and the Trustee receives a notice of the
                default (a "Payment Blockage Notice") from a Representative or
                the Company.

               If the Trustee receives any Payment Blockage Notice pursuant to
clause (ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section unless and until (A) at least 365 days shall have
elapsed since the initial effectiveness of the immediately prior Payment
Blockage Notice, and (B) all scheduled payments of principal, premium, if any,
and interest on the Securities that have come due have been paid in full in
cash. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice.

               The Company may and shall resume payments on and distributions in
respect of the Securities upon the earlier of:

               (1) the date upon which the default is cured or waived or ceases
to exist, or

               (2) in the case of a default referred to in clause (ii) above,
179 days pass after notice is received if the maturity of such Designated Senior
Indebtedness has not been accelerated, unless this Article XII otherwise
prohibits the payment or distribution at the time of such payment or
distribution.

               Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company,

                                       48

<PAGE>   54
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due or to become due upon all Senior Indebtedness
shall first be paid in full in cash or other payment satisfactory to the holders
of such Senior Indebtedness, or payment thereof in accordance with its terms
provided for in cash or other payment satisfactory to the holders of such Senior
Indebtedness, before any payment is made on account of the principal of,
premium, if any, or interest on the Securities (except payments made pursuant to
Article VI from monies deposited with the Trustee pursuant thereto prior to
commencement of proceedings for such dissolution, winding-up, liquidation or
reorganization); and upon any such dissolution or winding-up or liquidation or
reorganization of the Company or bankruptcy, insolvency, receivership or other
proceeding, any payment by the Company, or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to which the
Holders of the Securities or the Trustee would be entitled, except for the
provision of this Article XII, shall (except as aforesaid) be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the Holders of the
Securities or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Indebtedness (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, or
as otherwise required by law or a court order) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, to the extent necessary to pay all
Senior Indebtedness in full, in cash or other payment satisfactory to the
holders of such Senior Indebtedness, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness, before any
payment or distribution or provision therefor is made to the Holders of the
Securities or to the Trustee.

               For purposes of this Article XII, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article XII with respect
to the Securities to the payment of all Senior Indebtedness which may at the
time be outstanding; provided that (i) the Senior Indebtedness is assumed by the
new corporation, if any, resulting from any reorganization or readjustment, and
(ii) the rights of the holders of Senior Indebtedness (other than leases which
are not assumed by the Company or the new corporation, as the case may be) are
not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article V shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 12.2
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article V.

               In the event of the acceleration of the Securities because of an
Event of Default, no payment or distribution shall be made to the Trustee or any
Holder of

                                       49

<PAGE>   55
Securities in respect of the principal of, premium, if any, or interest on the
Securities (including, but not limited to, the redemption price with respect to
the Securities called for redemption in accordance with Article 3 as provided in
the Indenture), except payments and distributions made by the Trustee as
permitted by the first or second paragraph of Section 12.5, until all Senior
Indebtedness has been paid in full in cash or other payment satisfactory to the
holders of Senior Indebtedness or such acceleration is rescinded in accordance
with the terms of this Indenture. If payment of the Securities is accelerated
because of an Event of Default, the Company shall promptly notify holders of
Senior Indebtedness of the acceleration at the address set forth in the notice
from the Agent (or successor agent) to the Trustee as being the address to which
the Trustee should send its notice pursuant to this Section 12.2, unless there
are no payment obligations of the Company thereunder and all obligations
thereunder to extend credit have been terminated or expired.

               In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing, shall be received by the
Trustee or the Holders of the Securities before all Senior Indebtedness is paid
in full in cash or other payment satisfactory to the holders of such Senior
Indebtedness, or provision is made for such payment thereof in accordance with
its terms in cash or other payment satisfactory to the holders of such Senior
Indebtedness, such payment or distribution shall be held in trust for the
benefit of and shall be paid over or delivered to the holders of Senior
Indebtedness or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, as calculated by the Company, for application to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in cash or other payment satisfactory to the holders of
such Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.

               Nothing in this Section 12.2 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.7. This Section 12.2
shall be subject to the further provisions of Section 12.5.

        Section 12.3. Subrogation of Securities.

               Subject to the payment in full of all Senior Indebtedness, the
rights of the Holders of the Securities shall be subrogated to the extent of the
payments or distributions made to the holders of such Senior Indebtedness
pursuant to the provisions of this Article XII (equally and ratably with the
holders of all indebtedness of the Company which by its express terms is
subordinated to other indebtedness of the Company to substantially the same
extent as the Securities are subordinated and is entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the principal, premium, if any, and
interest on the Securities shall be paid in full; and, for the purposes of such
subrogation, no

                                       50

<PAGE>   56
payments or distributions to the holders of the Senior Indebtedness of any cash,
property or securities to which the Holders of the Securities or the Trustee
would be entitled except for the provisions of this Article XII, and no payment
over pursuant to the provisions of this Article XII, to or for the benefit of
the holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as between the Company, its creditors other than holders of Senior
Indebtedness, and the Holders of the Securities, be deemed to be a payment by
the Company to or on account of the Senior Indebtedness; and no payments or
distributions of cash, property or securities to or for the benefit of the
Holders of the Securities pursuant to the subrogation provisions of this Article
XII, which would otherwise have been paid to the holders of Senior Indebtedness
shall be deemed to be a payment by the Company to or for the account of the
Securities. It is understood that the provisions of this Article XII are and are
intended solely for the purposes of defining the relative rights of the Holders
of the Securities, on the one hand, and the holders of the Senior Indebtedness,
on the other hand.

               Nothing contained in this Article XII or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than the holders of Senior Indebtedness, and the
Holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of (and
premium, if any) and interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Securities and creditors
of the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article XII of
the holders of Senior Indebtedness in respect of cash, property or securities of
the Company received upon the exercise of any such remedy.

               Upon any payment or distribution of assets of the Company
referred to in this Article XII, the Trustee, subject to the provisions of
Section 7.1, and the Holders of the Securities shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which such
bankruptcy, dissolution, winding-up, liquidation or reorganization proceedings
are pending, or a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or distribution,
delivered to the Trustee or to the Holders of the Securities, for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon and all other facts pertinent thereto or to
this Article XII.

        Section 12.4. Authorization to Effect Subordination.

               Each Holder of a Security by the holder's acceptance thereof
authorizes and directs the Trustee on the holder's behalf to take such action as
may be necessary or appropriate to effectuate the subordination as provided in
this Article XII and appoints the Trustee to act as the holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any

                                       51

<PAGE>   57
proceeding referred to in Section 6.3 hereof at least 30 days before the
expiration of the time to file such claim, the holders of any Senior
Indebtedness or their representatives are hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Securities.

        Section 12.5. Notice to Trustee.

               The Company shall give prompt written notice in the form of an
Officers' Certificate to a Responsible Officer of the Trustee and to any paying
agent of any fact known to the Company which would prohibit the making of any
payment of monies to or by the Trustee or any paying agent in respect of the
Securities pursuant to the provisions of this Article XII. Notwithstanding the
provisions of this Article XII or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts which
would prohibit the making of any payment of monies to or by the Trustee in
respect of the Securities pursuant to the provisions of this Article XII, unless
and until a Responsible Officer of the Trustee shall have received written
notice thereof at the Corporate Trust Office from the Company (in the form of an
Officers' Certificate) or a Representative or a holder or holders of Senior
Indebtedness or from any trustee thereof; and before the receipt of any such
written notice, the Trustee, subject to the provisions of Section 7.1, shall be
entitled in all respects to assume that no such facts exist; provided that if on
a date not fewer than two Business Days prior to the date upon which by the
terms hereof any such monies may become payable for any purpose (including,
without limitation, the payment of the principal of, or premium, if any, or
interest on any Security) the Trustee shall not have received, with respect to
such monies, the notice provided for in this Section 12.5, then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such monies and to apply the same to the purpose for which
they were received, and shall not be affected by any notice to the contrary
which may be received by it on or after such prior date.

               Notwithstanding anything in this Article XII to the contrary,
nothing shall prevent any payment by the Trustee to the Holders of monies
deposited with it pursuant to Section 8.1, and any such payment shall not be
subject to the provisions of Section 12.1 or 12.2.

               The Trustee, subject to the provisions of Section 7.1, shall be
entitled to rely on the delivery to it of a written notice by a Representative
or a person representing himself to be a holder of Senior Indebtedness (or a
trustee on behalf of such holder) to establish that such notice has been given
by a Representative or a holder of Senior Indebtedness or a trustee on behalf of
any such holder or holders. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any person
as a holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article XII, the Trustee may request such person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such person, the extent to which such person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such person under this Article XII, and if such
evidence is not furnished the Trustee may

                                       52

<PAGE>   58
defer any payment to such person pending judicial determination as to the right
of such person to receive such payment.

        Section 12.6. Trustee's Relation to Senior Indebtedness.

               The Trustee in its individual capacity shall be entitled to all
the rights set forth in this Article XII in respect of any Senior Indebtedness
at any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in Section 7.11 or elsewhere in this Indenture shall
deprive the Trustee of any of its rights as such holder.

               With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article XII, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 7.1, the Trustee shall not be liable to any holder of
Senior Indebtedness if it shall pay over or deliver to Holders of Securities,
the Company or any other person money or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article XII or otherwise.

        Section 12.7. No Impairment of Subordination.

               No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof which any such holder may
have or otherwise be charged with.

        Section 12.8. Article Applicable to Paying Agents.

               If at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall (unless the context otherwise requires) be
construed as extending to and including such Paying Agent within its meaning as
fully for all intents and purposes as if such Paying Agent were named in this
Article in addition to or in place of the Trustee; provided, however, that the
first paragraph of Section 12.5 shall not apply to the Company or any Affiliate
of the Company if it or such Affiliate acts as Paying Agent.

        Section 12.9. Senior Indebtedness Entitled to Rely.

               The holders of Senior Indebtedness (including, without
limitation, Designated Senior Indebtedness) shall have the right to rely upon
this Article XII, and no amendment or modification of the provisions contained
herein shall diminish the rights of such holders unless such holders shall have
agreed in writing thereto.

                                       53

<PAGE>   59
               IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the day and year first above written.

                                      AVIRON

                                      By: /s/ C. BOYD CLARKE
                                         -------------------------------
                                         Name: C. Boyd Clarke
                                         Its: Chief Executive Officer,
                                              President and Chairman

                                      HSBC BANK USA

                                      By: /s/ JAMES M. FOLEY
                                         -------------------------------
                                         Name: James M. Foley
                                         Its: Assistant Vice President<PAGE>   1
                                                                    EXHIBIT 4.23

                                     AVIRON

            $230,000,000 5 1/4% Convertible Subordinated Notes due 2008

           Officers' Certificate Pursuant to Section 2.01 of Indenture

               The undersigned officers of Aviron, a Delaware corporation (the
"Company"), pursuant to authority granted such officers pursuant to resolutions
duly adopted at a meeting of the Board of Directors of the Company on November
30, 2000 and resolutions duly adopted at a meeting of the Pricing Committee of
the Board of Directors of the Company on February 1, 2001 (collectively, the
"Resolutions"), hereby establish a series of Securities under that certain
Indenture, dated as of February 7, 2001 (the "Indenture"), between the Company
and HSBC Bank USA, as trustee ("Trustee"), which Securities are designated "5
1/4% Convertible Subordinated Notes due 2008," and hereby certify, pursuant to
Sections 2.1 and 2.2 of the Indenture, as follows:

        1.      Form of Note. Attached hereto as Exhibit A is a true and correct
copy of a specimen Note (the "Form of Note") representing the Company's 5 1/4%
Convertible Subordinated Notes due 2008 (the "Notes").

        2.      Terms of the Notes. The terms of the Notes are as follows:

        (a)     The title of the Notes to be issued as a series of Securities
                (as defined in the Indenture) under the Indenture shall be the
                "5 1/4% Convertible Subordinated Notes due 2008";

        (b)     The aggregate principal amount of the Notes that may be
                authenticated and delivered under the Indenture shall be limited
                to $230,000,000 (except for Notes authenticated and delivered
                upon registration of transfer of, or in exchange for, or in lieu
                of, other Notes pursuant to Article II and Section 9.6 of the
                Indenture);

        (c)     The Notes shall be issued at a price equal to 100% of the
                aggregate principal amount thereof;

        (d)     The principal of the Notes shall be payable on February 1, 2008;

        (e)     The Notes shall bear interest at a rate equal to 5 1/4% per
                annum; interest on the Notes shall accrue from February 7, 2001
                or from the most recent date to which interest has been paid or
                provided for, as the case may be; interest on the Notes shall be
                payable semi-annually in arrears in cash on February 1 and
                August 1 of each year until maturity commencing on August 1,
                2001; and interest on the Notes shall be payable to holders of
                record on the January 15 or July 15 immediately preceding the
                applicable interest payment date;

<PAGE>   2
        (f)     The place or places where the principal of and any interest in
                the Notes shall be payable shall be as set forth in the Notes,
                the form of which is attached hereto as Exhibit A;

        (g)     The Notes shall be subject to redemption, in whole or in part,
                at the option of the Company at any time on or after February 5,
                2004, at the redemption prices (expressed in percentages of
                principal amount) set forth below plus accrued and unpaid
                interest thereon to, but excluding, the redemption date:

<TABLE>
<CAPTION>
                                                                                 Redemption
        Period                                                                     Price
        ------                                                                   ----------
<S>                                                                              <C>
        Beginning on February 5, 2004 and ending on January 31, 2005..........    103.000%
        Beginning on February 1, 2005 and ending on January 31, 2006..........    102.250%
        Beginning on February 1, 2006 and ending on January 31, 2007..........    101.500%
        Beginning on February 1, 2007 and ending on January 31, 2008..........    100.750%
        February 1, 2008 and thereafter.......................................    100.000%
</TABLE>

                The Company may not so redeem Securities if the Company has
                failed to pay any interest on the Securities when due and such
                failure to pay is continuing. If the redemption date is an
                interest payment date, interest shall be paid to the record
                holder of the relevant record date.

        (h)     The Company shall not be obligated to redeem or purchase the
                Notes pursuant to any sinking fund or at the option of any
                holder thereof prior to maturity;

        (i)     The Company shall be convertible into shares of Common Stock,
                par value $.001 per share, of the Company at any time prior to
                maturity at an initial conversion price of $62.50 per share of
                Common Stock, subject to adjustment as described below;

        (j)     The Notes shall be issued in denominations of $1,000 and any
                integral multiple thereof;

        (k)     100% of the principal amount thereof shall be payable upon
                declaration of acceleration of the maturity thereof pursuant to
                Section 6.2 of the Indenture;

        (l)     In addition to the definitions and provisions set forth in the
                Indenture, the Notes shall include the definitions and
                provisions set forth in the Form of Note and in Sections 3, 4
                and 5 of this Officers' Certificate and, in the case of
                conflict, the definitions and provisions set forth in this
                Officers' Certificate shall control;

        (m)     The Trustee for the Notes shall be HSBC Bank USA;

        (n)     The Notes shall be issued initially in the form of a Global Note
                ("Global Note") in definitive, fully registered form without
                interest coupons in substantially the form of Exhibit A, which
                shall be deposited on behalf of the purchasers of the Notes

                                       2

<PAGE>   3
                represented thereby with the Trustee, at its principal corporate
                trust office in New York City, as custodian for the Depository,
                and registered in the name of the Depository or a nominee
                thereof, duly executed by the Company and authenticated by the
                Trustee where so provided. The aggregate principal amount of the
                Global Notes may from time to time be increased or decreased by
                adjustments made on the records of the Trustee and the
                Depository or its nominee in accordance with the Depository's
                procedures and as provided in Section 2.14 of the Indenture.
                Except as provided in Section 2.14 of the Indenture, owners of
                beneficial interest in Global Notes shall not be entitled to
                receive physical delivery of certificated Notes. The Depository
                for such Global Notes shall be The Depository Trust Company;

        (o)     The Notes shall not be secured by any collateral;

        (p)     The Notes shall not be guaranteed by any person;

        (q)     The Notes shall be general unsecured obligations of the Company
                and shall, to the extent provided in Article XII of the
                Indenture, be subordinated in right of payment to the prior
                payment in full of the Company's senior indebtedness; and

        (r)     The provisions of Section 8.3 and 8.4 of the Indenture shall be
                applicable to the Notes.

        3.      Additional Redemption Provisions. In addition to the redemption
provisions set forth in Article III of the Indenture, the Notes shall include
the following additional provisions:

        Section 3.7. Conversion Arrangement on Call for Redemption.

               In connection with any redemption of Securities, the Company may
arrange for the purchase and conversion of any Securities by an agreement with
one or more investment bankers or other purchasers to purchase such Securities
by paying to the Trustee in trust for the Holders, on or before the date fixed
for redemption, an amount not less than the applicable redemption price,
together with interest accrued to (but excluding) the date fixed for redemption,
of such Securities. Notwithstanding anything to the contrary contained in this
Article III, the obligation of the Company to pay the redemption price of such
Securities, together with interest accrued to (but excluding) the date fixed for
redemption, shall be deemed to be satisfied and discharged to the extent such
amount is so paid by such purchasers. If such an agreement is entered into, a
copy of which will be filed with the Trustee prior to the date fixed for
redemption, any Securities not duly surrendered for conversion by the Holders
thereof may, at the option of the Company, be deemed, to the fullest extent
permitted by law, acquired by such purchasers from such Holders and
(notwithstanding anything to the contrary contained in Article XIII) surrendered
by such purchasers for conversion, all as of immediately prior to the close of
business on the date fixed for redemption (and the right to convert any such
Securities shall be extended through such time), subject to payment of the above
amount as aforesaid. At the direction of the Company, the Trustee shall hold and
dispose of any such amount paid to it in the same manner as it would monies
deposited with it by the Company for the redemption of

                                       3

<PAGE>   4
Securities. Without the Trustee's prior written consent, no arrangement between
the Company and such purchasers for the purchase and conversion of any
Securities shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Trustee as set forth in this Indenture.

        Section 3.8. Redemption at Option of Holders.

               If there shall occur a Fundamental Change at any time prior to
maturity of the Securities, then each Holder shall have the right, at such
Holder's option, to require the Company to redeem all of such Holder's
Securities, or any portion thereof that is an integral multiple of $1,000
principal amount, on the date (the "Repurchase Date") that is thirty (30) days
after the date of the Company Notice (as defined below) of such Fundamental
Change (or, if such 30th day is not a Business Day, the next succeeding Business
Day) at a redemption price equal to 100% of the principal amount thereof,
together with accrued interest to (but excluding) the Repurchase Date; provided
that if such Repurchase Date is February 1 or August 1, then the interest
payable on such date shall be paid to the Holders of record of the Securities on
the next preceding January 15 or July 15, respectively. Upon presentation of any
Securities redeemed in part only, the Company shall execute and, upon the
Company's written direction to the Trustee, the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, new Securities, of
authorized denominations, in principal amount equal to the unredeemed portion of
the Securities so presented.

               On or before the tenth day after the occurrence of a Fundamental
Change, the Company, or, at its written request (which must be received by the
Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree to a
shorter period), the Trustee in the name of and at the expense of the Company,
shall mail or cause to be mailed to all Holders of record on the date of the
Fundamental Change a notice (the "Company Notice") of the occurrence of such
Fundamental Change and of the redemption right at the option of the Holders
arising as a result thereof. Such notice shall be mailed in the manner and with
the effect set forth in Sections 3.3 and 3.4 hereof (without regard for the time
limits set forth therein). If the Company shall give such notice, the Company
shall also deliver a copy of the Company Notice to the Trustee at such time as
it is mailed to Holders. Each Company Notice shall specify the circumstances
constituting the Fundamental Change, the Repurchase Date, the price at which the
Company shall be obligated to redeem Securities, that the Holder must exercise
the redemption right on or prior to the close of business on the Repurchase Date
(the "Fundamental Change Expiration Time"), that the Holder shall have the right
to withdraw any Securities surrendered prior to the Fundamental Change
Expiration Time, a description of the procedure which a Holder must follow to
exercise such redemption right and to withdraw any surrendered Securities, the
place or places where the Holder is to surrender such Holder's Securities, and
the amount of interest accrued on such Securities to the Repurchase Date.

               No failure of the Company to give the foregoing notices and no
defect therein shall limit the Holders' redemption rights or affect the validity
of the proceedings for the repurchase of the Securities pursuant to this Section
3.8.

                                       4

<PAGE>   5
               For Securities to be so repaid at the option of the Holder, the
Company must receive at the office or agency of the Company maintained for that
purpose or, at the option of such Holder, the Corporate Trust Office, such
Securities with the form entitled "Option to Elect Repayment Upon A Fundamental
Change" on the reverse thereof duly completed, together with such Securities
duly endorsed for transfer, on or before the Fundamental Change Expiration Time.
All questions as to the validity, eligibility (including time of receipt) and
acceptance of any Securities for repayment shall be determined by the Company,
whose determination shall be final and binding absent manifest error.

               On or prior to the Repurchase Date, the Company will deposit with
the Trustee or with one or more paying agents (or, if the Company is acting as
its own paying agent, set aside, segregate and hold in trust) an amount of money
sufficient to repay on the Repurchase Date all the Securities to be repaid on
such date at the appropriate redemption price, together with accrued interest to
(but excluding) the Repurchase Date; provided that if such payment is made on
the Repurchase Date it must be received by the Trustee or paying agent, as the
case may be, by 10:00 a.m. New York City time, on such date. Payment for
Securities surrendered for redemption (and not withdrawn) prior to the
Fundamental Change Expiration Time will be made promptly (but in no event more
than five (5) Business Days) following the Repurchase Date by mailing checks for
the amount payable to the Holders of such Securities entitled thereto as they
shall appear on the registry books of the Company.

               In the case of a reclassification, change, consolidation, merger,
combination, sale or conveyance to which Section 13.6 applies, in which the
Common Stock of the Company is changed or exchanged as a result into the right
to receive stock, securities or other property or assets (including cash), which
includes shares of Common Stock of the Company or 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 stock, securities or other property or assets (including cash) (as
determined by the Company, which determination shall be conclusive and binding),
then the person formed by such consolidation or resulting from such merger or
which acquires such assets, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture (accompanied by an Opinion of Counsel that such
supplemental indenture complies with the Trust Indenture Act as in force at the
date of execution of such supplemental indenture) modifying the provisions of
this Indenture relating to the right of Holders of the Securities to cause the
Company to repurchase the Securities following a Fundamental Change, including
without limitation the applicable provisions of this Section 3.8 and the
definitions of the Conversion Price, Common Stock and Fundamental Change, as
appropriate, as determined in good faith by 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 Common Stock of
the Company (in lieu of the Company and the Common Stock of the Company).

               The Company will comply with the provisions of Rule 13e-4 and any
other tender offer rules under the Exchange Act to the extent then applicable in
connection with the redemption rights of the Holders of Securities in the event
of a Fundamental Change.

                                       5

<PAGE>   6
        4.      Conversion Provisions. The Notes shall contain the following
provisions regarding conversion:

                                  "ARTICLE XIII

                            CONVERSION OF SECURITIES

        Section 13.1. Right to Convert.

               Subject to and upon compliance with the provisions of this
Indenture, each Holder shall have the right, at its option, at any time
following the original issuance of the Securities hereunder through the close of
business on the final maturity date of the Securities (except that, with respect
to any Securities or portion thereof which shall be called for redemption, such
right shall terminate, except as provided in Section 13.2 or Section 3.7, at the
close of business on the Business Day next preceding the date fixed for
redemption of such Securities or portion thereof unless the Company shall
default in payment due upon redemption thereof) to convert the principal amount
of any such Securities, 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 Securities or portion thereof
surrendered for conversion by the Conversion Price in effect at such time, by
surrender of the Securities so to be converted in whole or in part in the manner
provided, together with any required funds, in Section 13.2. Securities in
respect of which a holder is exercising its option to require redemption upon a
Fundamental Change pursuant to Section 3.8 may be converted only if such holder
withdraws its election to exercise in accordance with Section 3.8. A holder of
Securities is not entitled to any rights of a holder of Common Stock until such
holder has converted his Securities to Common Stock, and only to the extent such
Securities are deemed to have been converted to Common Stock under this Article
XIII.

        Section 13.2. Exercise of Conversion Privilege; Issuance of Common Stock
on Conversion; No Adjustment for Interest Dividends.

               In order to exercise the conversion privilege with respect to any
Securities in certificated form, the holder of any such Securities to be
converted in whole or in part shall surrender such Securities, duly endorsed, at
an office or agency maintained by the Company as set forth in the Securities,
accompanied by the funds, if any, required by the penultimate paragraph of this
Section 13.2, and shall give written notice of conversion in the form provided
on the Securities (or such other notice which is acceptable to the Company) to
the office or agency that the holder elects to convert such Securities 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 13.7. All such Securities surrendered for conversion shall, unless the
shares issuable on conversion are to be issued in the same name as the
registration of such Securities, be duly endorsed by, or be

                                       6

<PAGE>   7
accompanied by instruments of transfer in form satisfactory to the Company duly
executed by, the holder or his duly authorized attorney.

               In order to exercise the conversion privilege with respect to any
interest in Securities in global form, the Holder must complete the appropriate
instruction form for conversion pursuant to the Depository's book-entry
conversion program, deliver by book-entry delivery an interest in such
Securities in global form, furnish appropriate endorsements and transfer
documents if required by the Company or the Trustee or conversion agent, and pay
the funds, if any, required by this Section 13.2 and any transfer taxes if
required pursuant to Section 13.7.

               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 Securities (or
portion thereof) so converted), the Company shall issue and shall deliver to
such Holder at the office or agency maintained by the Company for such purpose
as set forth in the Securities, a certificate or certificates for the number of
full shares of Common Stock issuable upon the conversion of such Securities or
portion thereof in accordance with the provisions of this Article 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 13.3. In case any
Securities of a denomination greater than $1,000 shall be surrendered for
partial conversion, the Company shall execute and the Trustee shall authenticate
and deliver to the Holder of the Securities so surrendered, without charge to
him, new Securities in authorized denominations in an aggregate principal amount
equal to the unconverted portion of the surrendered Securities.

               Each conversion shall be deemed to have been effected as to any
such Securities (or portion thereof) on the date on which the requirements set
forth above in this Section 13.2 have been satisfied as to such Securities (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 record 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 Securities shall be surrendered.

               All Securities or portion thereof surrendered for conversion
during the period from the close of business on the record date for any interest
payment date to the close of business on the Business Day next preceding the
following interest payment date shall (unless such Securities or portion thereof
being converted shall have been called for redemption on a redemption date which
occurs during the period from the close of business on such record date to the
close of business on the Business Day next preceding the following interest
payment date) be accompanied by payment, in funds acceptable to the Company, of
an amount equal to the interest otherwise payable on such interest payment date
on the principal amount being converted; provided, however, that no such payment
need be made if there shall exist at the time of conversion a default in the
payment of interest on the Securities. Except as provided above in

                                       7

<PAGE>   8
this Section 13.2, no payment or other adjustment shall be made for interest
accrued on any Securities converted or for dividends on any shares issued upon
the conversion of such Securities as provided in this Article.

               Upon the conversion of an interest in Securities in global form,
the Trustee (or other conversion agent appointed by the Company), or the
Custodian at the direction of the Trustee (or other conversion agent appointed
by the Company), shall make a notation on such Securities in global form as to
the reduction in the principal amount represented thereby. The Company shall
notify the Trustee in writing of any conversions of Securities effected through
any conversion agent other than the Trustee.

        Section 13.3. Cash Payments in Lieu of Fractional Shares.

               No fractional shares of Common Stock or scrip representing
fractional shares shall be issued upon conversion of Securities. If multiple
Securities 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 Securities (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
Securities, the Company shall make an adjustment and payment therefor in cash at
the current market price thereof to the holder of Securities. The current market
price of a share of Common Stock shall be the Closing Price on the last Business
Day immediately preceding the day on which the Securities (or specified portions
thereof) are deemed to have been converted.

        Section 13.4. Conversion Price.

               The conversion price shall be as specified in the Form of Note
(herein called the "Conversion Price") attached as Exhibit A hereto, subject to
adjustment as provided in this Article XIII.

        Section 13.5. Adjustment of Conversion Price.

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

               (a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator of which shall be the sum of such
number of shares and the total number of shares constituting 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.
For purposes of this paragraph (a), the number of shares of Common Stock
outstanding shall not include shares held in the treasury of the Company. The
Company

                                       8

<PAGE>   9
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 13.5(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) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them (for a period
expiring within forty-five (45) days after the date fixed for determination of
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of Common Stock 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, the numerator of which shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for determination of
stockholders entitled to receive such rights 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 the denominator of
which shall be the number of shares of Common Stock outstanding on the date
fixed for determination of stockholders entitled to receive such rights 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) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Conversion Price
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision or
combination becomes effective.

                                       9

<PAGE>   10
               (d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of capital
stock of the Company (other than any dividends or distributions to which Section
13.5(a) applies) or evidences of its indebtedness or assets (including
securities, but excluding any rights or warrants referred to in Section 13.5(b),
and excluding any dividend or distribution (x) paid exclusively in cash or (y)
referred to in Section 13.5(a)) (any of the foregoing hereinafter in this
Section 13.5(d) called the "Distributed Securities"), then, in each such case
(unless the Company elects to reserve such Distributed Securities for
distribution to the Holders upon the conversion of the Securities so that any
such converting Holder 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 Distributed Securities which such Holder would have received if such Holder
had converted its Securities into Common Stock immediately prior to the Record
Date (as defined in Section 13.5(h)(5) for such distribution of the Distributed
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 with respect to such distribution by a fraction, the numerator
of which shall be the Current Market Price per share of the Common Stock on such
Record Date less the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive, and described in a resolution of the
Board if Directors) on the Record Date of the portion of the Distributed
Securities so distributed applicable to one share of Common Stock and the
denominator of which shall be the Current Market Price per share of the Common
Stock, 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
Distributed 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 Distributed Securities such Holder would have received had such Holder
converted all Securities 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 for purposes of this
Section 13.5(d) by reference to the actual or when issued trading market for any
securities, it must in doing so consider the prices in such market over the same
period used in computing the Current Market Price of the Common Stock.

               Under the provisions of the Company's Share Purchase Rights Plan,
dated as of October 8, 1997, between the Company and The First National Bank of
Boston (the "Rights Plan"), upon conversion of the Securities into Common Stock
to the extent that such Rights Plan is still in effect upon such conversion, the
Holders will receive, in addition to the Common Stock, the Rights described
therein (whether or not the Rights have separated at the time of conversion),
subject to certain exceptions set forth in the Rights Plan.

               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

                                       10

<PAGE>   11
of Common Stock; (ii) are not exercisable; and (iii) are also issued in respect
of future issuances of Common Stock, shall be deemed not to have been
distributed for purposes of this Section 13.5 (and no adjustment to the
Conversion Price under this Section 13.5 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 shall be made under this Section 13.5(d). If
any such right or warrant, including any such existing rights or warrants
distributed prior to the date of this Indenture, are subject to events, upon the
occurrence of which such rights or warrants become exercisable to purchase
different securities, evidences of indebtedness or other assets, then the date
of the occurrence of any and each such event shall be deemed to be the date of
distribution and record date with respect to new rights or warrants with such
rights (and a termination or expiration of the existing rights or warrants
without exercise by any of the holders thereof). In addition, in the event of
any distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Price under this Section 13.5
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 13.5(d) and Sections 13.5(a) and
(b), any dividend or distribution to which this Section 13.5(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 Conversion Price reduction required by this Section 13.5(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 13.5(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 13.5(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 13.5(a).

               (e) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding (x) any quarterly
cash dividend on the Common Stock to the extent the aggregate cash dividend per
share of Common Stock in any fiscal quarter does not exceed the greater of (A)
the amount per share of Common Stock of the next preceding

                                       11

<PAGE>   12
quarterly cash dividend on the Common Stock to the extent that such preceding
quarterly dividend did not require any adjustment of the Conversion Price
pursuant to this Section 13.5(e) (as adjusted to reflect subdivisions or
combinations of the Common Stock), and (B) 3.75% of the arithmetic average of
the Closing Price (determined as set forth in Section 13.5(h)) during the ten
Trading Days (as defined in Section 13.5(h)) immediately prior to the date of
declaration of such dividend, and (y) any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary), then, in such case, 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, the numerator of which shall be the Current Market
Price of the Common Stock on the record date less the amount of cash so
distributed (and not excluded as provided above) applicable to one share of
Common Stock and the denominator of which shall be such Current Market Price of
the Common Stock, such reduction to be effective immediately prior to the
opening of business on the day following the record date; provided, however,
that in the event the portion of the cash so distributed applicable to one share
of Common Stock is equal to or greater than the Current Market Price of the
Common Stock on the Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to receive upon
conversion the amount of cash such Holder would have received had such Holder
converted all of the Securities 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 any adjustment is
required to be made as set forth in this Section 13.5(e) as a result of a
distribution that is a quarterly dividend, such adjustment shall be based upon
the amount by which such distribution exceeds the amount of the quarterly cash
dividend permitted to be excluded pursuant hereto. If an adjustment is required
to be made as set forth in this Section 13.5(e) above as a result of a
distribution that is not a quarterly dividend, such adjustment shall be based
upon the full amount of the distribution.

               (f) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall require
the payment to stockholders of consideration per share of Common Stock 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) as
of the last time (the "Expiration Time") tenders or exchanges may be made
pursuant to such tender or exchange offer (as it may be amended) that exceeds
the Current Market Price of the Common Stock on the Trading Day next succeeding
the Expiration Time, the Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the Expiration Time by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) at the Expiration Time multiplied by the Current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator of which 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 or exchange offer) of all shares validly tendered or exchanged 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

                                       12

<PAGE>   13
number of shares of Common Stock outstanding (less any Purchased Shares) on the
Expiration Time and the Current Market Price of the Common Stock on the Trading
Day next succeeding the Expiration Time, such reduction to become effective
immediately prior to the opening of business on the day following the Expiration
Time. In the event that the Company is obligated to purchase shares pursuant to
any such tender or exchange 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 or exchange offer had not
been made.

               (g) In case of a tender or exchange offer made by a person other
than the Company or any Subsidiary for an amount which increases the offeror's
ownership of Common Stock to more than twenty-five percent (25%) of the Common
Stock outstanding and shall involve the payment by such person of consideration
per share of Common Stock 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) at the last time (the "Offer Expiration
Time") tenders or exchanges may be made pursuant to such tender or exchange
offer (as it shall have been amended) that exceeds the Current Market Price of
the Common Stock on the Trading Day next succeeding the Offer Expiration Time,
and in which, as of the Offer Expiration Time, the Board of Directors is not
recommending rejection of the offer, 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 Offer Expiration Time by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Offer Expiration Time
multiplied by the Current Market Price of the Common Stock on the Trading Day
next succeeding the Offer Expiration Time and the denominator of which 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 or exchange offer) of all shares validly
tendered or exchanged and not withdrawn as of the Offer Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to as the
"Accepted Purchased Shares") and (y) the product of the number of shares of
Common Stock outstanding (less any Accepted Purchased Shares) on the Offer
Expiration Time and the Current Market Price of the Common Stock on the Trading
Day next succeeding the Offer Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day following the
Offer Expiration Time. In the event that such person is obligated to purchase
shares pursuant to any such tender or exchange offer, but such person 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 or exchange
offer had not been made. Notwithstanding the foregoing, the adjustment described
in this Section 13.5(g) shall not be made if, as of the Offer Expiration Time,
the offering documents with respect to such offer disclose a plan or intention
to cause the Company to engage in any transaction described in Article V.

               (h) For purposes of this Section 13.5, the following terms shall
have the meaning indicated:

                                       13

<PAGE>   14
                      (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 Nasdaq National Market, or, if
such security is not listed or admitted to trading on such Nasdaq National
Market, on the principal national securities exchange or quotation system on
which such security is quoted or listed or admitted to trading, or, if not
quoted or listed or admitted to trading on any national securities exchange or
quotation system, the average of the closing bid and asked prices of such
security on the over-the-counter market on the day in question as reported by
the National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or if not so available, in such manner as furnished by any
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.

                      (2) "Current Market Price" shall, for the purposes of any
computation under subsections (b), (d), (e), (f) and (g) above relating to the
current market price per share of Common Stock at a specified date, mean the
average of the last reported sale prices for the ten (10) consecutive Trading
Days (as defined below) preceding the day before the record date (or, if
earlier, the ex-dividend date) with respect to any distribution, issuance or
other event requiring such computation.

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

               (i) The Company may make such reductions in the Conversion Price,
in addition to those required by Sections 13.5 (a), (b), (c), (d), (e), (f) or
(g), 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.

                                       14

<PAGE>   15
               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 twenty (20) days, the reduction is irrevocable during the
period and the Board of Directors shall have made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to holders of record of the
Securities a notice of the reduction at least fifteen (15) days prior to the
date the reduced Conversion Price takes effect, and such notice shall state the
reduced Conversion Price and the period during which it will be in effect.

               (j) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least one
percent (1%) in such price; provided, however, that any adjustments which by
reason of this Section 13.5(j) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article XIII shall be made by the Company and shall be made to the
nearest cent or to the nearest one-hundredth (1/100) of a share, as the case may
be. No adjustment need be made for rights to purchase Common Stock pursuant to a
Company plan for reinvestment of dividends or interest. To the extent the
Securities become convertible into cash, assets, property or securities (other
than capital stock of the Company), no adjustment need be made thereafter as to
the cash, assets, property or such securities. Interest will not accrue on the
cash.

               (k) Whenever the Conversion Price is adjusted as herein provided,
the Company shall promptly file with the Trustee and any conversion agent other
than the Trustee an Officers' Certificate setting forth the Conversion Price
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment. Unless and until a Responsible Officer of the Trustee shall
have received such Officers' Certificate, the Trustee shall not be deemed to
have knowledge of any adjustment of the Conversion Price and may assume without
inquiry that the last Conversion Price of which it has knowledge is still in
effect. Promptly after delivery of such certificate, the Company shall prepare a
notice of such adjustment of the Conversion Price setting forth the adjusted
Conversion Price and the date on which each adjustment becomes effective and
shall mail such notice of such adjustment of the Conversion Price to each Holder
of Securities at his last address appearing on the list of Securityholders
provided for in Section 2.6 of this Indenture, within twenty (20) days after
execution thereof. Failure to deliver such notice shall not affect the legality
or validity of any such adjustment.

               (1) In any case in which this Section 13.5 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 Securities converted after such record date and before the
occurrence of such event the additional shares of Common Stock issuable upon
such conversion by reason of the adjustment required by such event over and
above the Common Stock issuable upon such conversion before giving effect to
such adjustment and (ii) paying to such holder any amount in cash in lieu of any
fraction pursuant to Section 13.3.

               (m) For purposes of this Section 13.5, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall

                                       15

<PAGE>   16
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.

        Section 13.6. 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 13.5(c) applies), (ii) any
consolidation, merger or combination of the Company with another person 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 all or
substantially all of the properties and assets of the Company to any other
person 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 or the successor or
purchasing person, as the case may be, shall execute with the Trustee a
supplemental indenture (which shall comply with the Trust Indenture Act as in
force at the date of execution of such supplemental indenture) providing that
such Securities shall be convertible into the kind and amount of shares of
stock, securities or other 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 Securities (assuming, for such purposes, a sufficient number
of authorized shares of Common Stock available to convert all such Securities)
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 securities,
cash or other property receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance (provided that, if the
kind or amount of stock, securities or other 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
("nonelecting share"), then for the purposes of this Section 13.6 the kind and
amount of securities, cash or other property 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
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
XIII.

               The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances. If this Section 13.6 applies to any event or occurrence,
Section 13.5 shall not apply.

        Section 13.7. Taxes on Shares Issued.

               The issue of stock certificates on conversions of Securities
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

                                       16

<PAGE>   17
Securities 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 13.8. Reservation of Shares; Shares to be Fully Paid; Compliance
with Governmental Requirements; Listing of Common Stock.

               The Company shall provide, 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 Securities from time to
time as such Securities 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 Securities, 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 Securities will upon issue be fully paid and
non-assessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.

               The Company covenants that if any shares of Common Stock to be
provided for the purpose of conversion of Securities hereunder require
registration with or approval of any governmental authority under any federal or
state law before such shares may be validly issued upon conversion, the Company
will in good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be. The Company further covenants
that, if at any time the Common Stock shall be listed on the Nasdaq National
Market or any other national securities exchange or automated quotation system,
the Company will, if permitted by the rules of such exchange or automated
quotation system, list and keep listed, so long as the Common Stock shall be so
listed on such exchange or automated quotation system, all Common Stock issuable
upon conversion of the Securities; provided, however, that if rules of such
exchange or automated quotation system permit the Company to defer the listing
of such Common Stock until the first conversion of the Securities into Common
Stock in accordance with the provisions of this Indenture, the Company covenants
to list such Common Stock issuable upon conversion of the Securities in
accordance with the requirements of such exchange or automated quotation system
at such time.

        Section 13.9. Responsibility of Trustee.

               The Trustee and any other conversion agent shall not at any time
be under any duty or responsibility to any holder of Securities to determine the
Conversion Price or whether any facts exist which may require any adjustment of
the Conversion Price, or with respect to the nature or extent or calculation of
any such adjustment when made, or with respect to the method employed, or herein
or in any supplemental indenture provided to be employed, in making the same.
The Trustee and any other conversion agent shall not be accountable with respect
to the

                                       17

<PAGE>   18
validity or value (or the kind or amount) of any shares of Common Stock, or of
any securities or property, which may at any time be issued or delivered upon
the conversion of any Securities; and the Trustee and any other conversion agent
make no representations with respect thereto. Neither the Trustee nor any
conversion agent shall be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
securities or property or cash upon the surrender of any Securities for the
purpose of conversion or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article. Without limiting the
generality of the foregoing, neither the Trustee nor any conversion agent shall
be under any responsibility to determine the correctness of any provisions
contained in any supplemental indenture entered into pursuant to Section 13.6
relating either to the kind or amount of shares of stock or securities or
property (including cash) receivable by Holders upon the conversion of their
Securities after any event referred to in such Section 13.6 or to any adjustment
to be made with respect thereto, but, subject to the provisions of Section 8.1,
may accept as conclusive evidence of the correctness of any such provisions, and
shall be protected in relying upon, the Officers' Certificate (which the Company
shall be obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.

        Section 13.10. Notice to Holders Prior to Certain Actions.

               In case:

               (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 13.5; or

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

               (c) of any reclassification or reorganization of the Common Stock
of the Company (other than a subdivision or combination of its 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 of any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company or any Significant Subsidiary; or

               (d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company or any Significant Subsidiary;

the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Securities at his address appearing on the list of Securityholders
provided for in Section 2.6 of this Indenture, as promptly as possible but in
any event at least fifteen (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 are to be
determined, or (y) the date on which such

                                       18

<PAGE>   19
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."

        5.      Additional Definitions. In addition to the definitions set forth
in Article I of the Indenture or, where applicable, in lieu thereof, the Notes
shall include the following definitions:

               "Common Stock" means any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Company and which is not subject to redemption by the Company. Subject to the
provisions of Section 13.6, however, shares issuable on conversion of Securities
shall include only shares of the class designated as common stock of the Company
at the date of this Indenture or shares of any class or classes resulting from
any reclassification or reclassifications thereof and which have no preference
in respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and which are
not subject to redemption by the Company; provided that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.

               "Fundamental Change" means the occurrence of any transaction or
event in connection with which all or substantially all of the Common Stock
shall be exchanged for, converted into, acquired for or constitute solely the
right to receive consideration (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) which is not all or substantially all common
stock listed (or, upon consummation of or immediately following such transaction
or event, will be listed) on a United States national securities exchange or
approved for quotation on the Nasdaq National Market or any similar United
States system of automated dissemination of quotations of securities prices.

               "Officers' Certificate" means a certificate signed by two
Officers, one of whom must be the Company's principal executive officer,
principal financial officer or principal accounting officer, which certificate
shall include the statements provided for in Section 10.5.

               "Responsible Officer" means any officer of the Trustee with
direct responsibility for the administration of the Indenture and also means,
with respect to a particular corporate trust matter, any other officer to whom
any corporate trust matter is referred because of his or her knowledge of and
familiarity with a particular subject.

        6.      Board Resolutions. Attached hereto as Exhibit B are true and
correct copies of the Resolutions. The Resolutions have not been amended,
modified or rescinded and remain in full

                                       19

<PAGE>   20
force and effect, and the Resolutions are the only resolutions adopted by the
Company's Board of Directors or any committee thereof relating to the Notes and
the transactions related thereto.

               Each of the undersigned officers further states that he has read
the provisions of the Indenture setting forth the conditions precedent to the
issuance, authentication and delivery of the Notes and the definitions relating
thereto, the Resolutions authorizing the issuance of the Notes and the Form of
Notes; that the statements made in this Certificate are based upon the
examination of the provisions of such Indenture, the Resolutions and the Form of
Notes; that he has, in his opinion, made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not the
conditions precedent for the issuance, authentication and delivery of the Notes
have been complied with; and that, in his opinion, such conditions have been
complied with.

                            [Signature page follows]

                                       20

<PAGE>   21

               IN WITNESS WHEREOF, said officers have signed this certificate
this 7th day of February, 2001.

/s/ C. BOYD CLARKE                      /s/ FRED KURLAND
-------------------------------         -------------------------------
C. Boyd Clarke.                         Fred Kurland
President                               Senior Vice President
and Chief Executive Officer             and Chief Financial Officer

<PAGE>   22
                                                                       EXHIBIT A

                                  FORM OF NOTE

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

               TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR DEPOSITORY (AS
DEFINED IN THE INDENTURE REFERRED TO HEREIN) OR SUCH SUCCESSOR'S NOMINEE AND
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO HEREIN.

                                     AVIRON

                 5 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2008

No. ___                       CUSIP NO. 053762AD2      Principal Amount: $______

               AVIRON, a Delaware corporation (the "Company"), for value
received, hereby promises to pay to CEDE & CO., as nominee of The Depository
Trust Company, or registered assigns, the principal sum of _______________
Dollars on February 1, 2008.

               Interest Payment Dates: February 1 and August 1

               Record Dates: January 15 and July 15

               Reference is made to the further provisions of this Note set
forth on the reverse hereof. Such further provisions shall for all purposes have
the same effect as though fully set forth at this place.

               This Note shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee under the Indenture referred to on the reverse hereof.

<PAGE>   23
               IN WITNESS WHEREOF, AVIRON has caused this instrument to be
signed manually or by facsimile by its duly authorized officers and has caused a
facsimile of its corporate seal to be affixed hereunto or imprinted hereon.

                                     AVIRON
[SEAL]

                                     By:
                                        ---------------------------------
                                            C. Boyd Clarke
                                            Chief Executive Officer, President
                                            and Chairman

Dated:                               By:
                                        ---------------------------------
                                            Fred Kurland
                                            Senior Vice President
                                            and Chief Financial Officer

                          CERTIFICATE OF AUTHENTICATION

               This is one of the Securities referred to in the within-mentioned
Indenture.

                                     HSBC BANK USA, as Trustee

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

<PAGE>   24
                              (REVERSE OF SECURITY)

                5 1/4 % CONVERTIBLE SUBORDINATED NOTES DUE 2008

               Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Indenture referred to below.

                1.      Interest. AVIRON, a Delaware corporation (the "Company",
which term shall include any successor thereto in accordance with the
Indenture), promises to pay interest on the principal amount hereof at the rate
per annum shown above. Interest on the Securities shall accrue from February 7,
2001 or from the most recent date to which interest has been paid or provided
for, as the case may be; interest on the Securities shall be payable
semi-annually on February 1 and August 1 of each year until maturity, or, if
such day is a Legal Holiday, on the next succeeding day that is not a Legal
Holiday (each, an "Interest Payment Date"), commencing on August 1, 2001; and
interest on the Securities shall be payable to holders of record on the January
15 or July 15 immediately preceding the applicable Interest Payment Date.
Interest will be computed on the basis of a 360-day year consisting of twelve
30-day months. If the Company defaults in a payment of interest, the Company
shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest, as provided in Section 2.13 of the Indenture.

                2.      Method of Payment. The Company will pay interest on the
Securities (except defaulted interest) to the persons who are Holders of record
in the security register of the Company (the "Security Register") of Securities
at the close of business on the January 15 or July 15 (each a "Record Date")
next preceding the Interest Payment Date, in each case even if the Securities
are cancelled solely by virtue of registration of transfer or registration of
exchange after such Record Date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. Principal of, premium, if any, and interest
on the Securities will be payable, and the Securities may be exchanged or
transferred, at the office or agency of the Company in the Borough of Manhattan,
the City of New York (which initially will be the Corporate Trust Office of the
Trustee); provided that, at the option of the Company, payment of interest may
be made by check mailed to the address of each Holder as such address appears in
the Security Register; provided, further, that, at the option of each Holder
holding an aggregate principal amount of Securities in excess of $2,000,000,
payment of interest shall be made to such Holder by wire transfer of immediately
available funds or by transfer to an account maintained by such Holder in the
United States, provided, however, that payments to the Depository will be made
by wire transfer of immediately available funds to the account of the Depository
or its nominee.

                3.      Paying Agent and Registrar. Initially, HSBC Bank USA, a
New York banking corporation (the "Trustee"), will act as Paying Agent and
Registrar. The Company may appoint and change any Paying Agent, Registrar or
co-Registrar without notice to any Holder. The Company or any of its Affiliates
may act as Paying Agent, Registrar or co-Registrar.

<PAGE>   25
                4.      Indenture. The Company issued the Securities under an
Indenture dated as of February 7, 2001 by and between the Company and the
Trustee (the "Base Indenture"), the terms of which have been established in an
Officers' Certificate, dated February 7, 2001, pursuant to Sections 2.1 and 2.2
of the Indenture (collectively, the Officers' Certificate with the Base
Indenture is referred to herein as the "Indenture"). The Securities are a series
designated as the "5 1/4% Convertible Subordinated Notes due 2008" of the
Company, limited in aggregate principal amount to $230,000,000. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (the
"TIA"). The Securities are subject to all such terms, and Holders are referred
to the Indenture and the TIA for a statement of those terms. Any conflict
between the terms of this Security and the Indenture will be governed by the
Indenture.

               The Securities are general unsecured obligations of the Company
and shall, to the extent provided in the Indenture, be subordinated in right of
payment to the prior payment in full of the Company's senior indebtedness.

                5.      Optional Redemption. The Company, at its option, may
redeem all or any part of the Securities, in whole or in part, at any time on or
after February 5, 2004, at the redemption prices (expressed in percentages of
principal amount) set forth below plus accrued and unpaid interest thereon to,
but excluding, the redemption date:

<TABLE>
<CAPTION>
                                                                                 Redemption
        Period                                                                     Price
        ------                                                                   ----------
<S>                                                                              <C>
        Beginning on February 5, 2004 and ending on January 31, 2005..........    103.000%
        Beginning on February 1, 2005 and ending on January 31, 2006..........    102.250%
        Beginning on February 1, 2006 and ending on January 31, 2007..........    101.500%
        Beginning on February 1, 2007 and ending on January 31, 2008..........    100.750%
        February 1, 2008 and thereafter.......................................    100.000%
</TABLE>

The Company may not so redeem the Securities if the Company has failed to pay
any interest on the Securities when due and such failure to pay is continuing.
If the redemption date is an Interest Payment Date, interest shall be paid to
the record Holder on the relevant record date.

                6.      Redemption at Option of Holders. If a Fundamental Change
occurs at anytime prior to maturity, the Securities will be redeemable on the
30th day after notice thereof (the "Repurchase Date") at the option of the
Holder at a redemption price equal to 100% of the principal amount thereof,
together with accrued interest to (but excluding) the Repurchase Date; provided,
however, that, if such Repurchase Date is a February 1 or August 1, the interest
payable on such date shall be paid to the holder of record of the Securities on
the next preceding Record Date. The Securities will be redeemable in multiples
of $1,000 principal amount. The Company shall mail to all Holders a notice of
the occurrence of a Fundamental Change and of the redemption right arising as a
result thereof on or before the 10th day after the occurrence of such
Fundamental Change. For Securities to be so redeemed at the option of the
Holder, the Company must receive at the office or agency of the Company
maintained for that purpose or as otherwise set forth in the Indenture and in
accordance with the terms thereof, such Securities with the form entitled
"Option to Elect Repayment Upon a Fundamental Change" on the reverse

                                        2

<PAGE>   26
hereof duly completed, together with such Securities, duly endorsed for
transfer, on or before the 30th day after the date of such notice of a
Fundamental Change.

                7.      Conversion. Subject to the provisions of the Indenture,
each Holder has the right, at its option, at any time after the original
issuance of any Securities through the close of business on the final maturity
date of the Securities, or, as to all or any portion hereof called for
redemption, prior to the close of business on the Business Day immediately
preceding the date fixed for redemption (unless the Company shall default in
payment due upon redemption thereof), to convert the principal thereof or any
portion of such principal which is $1,000 or an integral multiple thereof into
that number of shares of the Company's Common Stock (as such shares shall be
constituted at the date of conversion) obtained by dividing the principal amount
of the Securities or portion thereof to be converted by the Conversion Price of
$62.50, as may adjusted from time to time as provided in the Indenture, upon
surrender of such Securities, together with a conversion notice as provided in
the Indenture (the form entitled "Conversion Notice" on the reverse hereof), to
the Company at the office or agency of the Company maintained for that purpose
in accordance with the terms of the Indenture, or at the option of such Holder,
the Corporate Trust Office, and, unless the shares issuable on conversion are to
be issued in the same name as this Note, duly endorsed by, or accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the Holder or such Holder's duly authorized attorney. No adjustment in respect
of interest on any Securities converted or dividends on any shares issued upon
conversion thereof will be made upon any conversion except as set forth in the
next sentence. If such Securities (or portion thereof) are surrendered for
conversion during the period from the close of business on any Record Date for
the payment of interest to the close of business on the Business Day preceding
the following Interest Payment Date and either (x) have not been called for
redemption on a redemption date that occurs during such period or (y) are not to
be redeemed in connection with a Fundamental Change on a Repurchase Date that
occurs during such period, such Securities (or portion thereof being converted)
must be accompanied by an amount, in New York Clearing House funds or other
funds acceptable to the Company, equal to the interest payable on such Interest
Payment Date on the principal amount being converted; provided, however, that no
such payment shall be required if there shall exist at the time of conversion a
default in the payment of interest on the Securities. No fractional shares will
be issued upon any conversion, but an adjustment and payment in cash will be
made, as provided in the Indenture, in respect of any fraction of a share which
would otherwise be issuable upon the surrender of any Securities for conversion.
Securities in respect of which a Holder is exercising its right to require
redemption upon a Fundamental Change may be converted only if such Holder
withdraws its election to exercise such right in accordance with the terms of
the Indenture. Any Securities called for redemption, unless surrendered for
conversion by the Holders thereof on or before the close of business on the
Business Day preceding the date fixed for redemption, may be deemed to be
redeemed from such Holders for an amount equal to the applicable redemption
price, together with accrued but unpaid interest to (but excluding) the date
fixed for redemption, by one or more investment banks or other purchasers who
may agree with the Company (i) to purchase such Notes from the Holders thereof
and convert them into shares of the Company's Common Stock and (ii) to make
payment for such Notes as aforesaid to the Trustee in trust for the Holders.

                                       3

<PAGE>   27
                8.      Sinking Fund. The Securities will not be subject to the
operation of any sinking fund.

                9.      Denominations; Transfer; Exchange. The Securities are in
registered form, without coupons, in denominations of $1,000 of principal amount
and any integral multiple thereof. A Holder may transfer or exchange Securities
in accordance with the Indenture. No service charge will be made for any
registration of transfer or exchange of Securities, but the Company may require
the payment of a sum sufficient to cover any transfer tax or other similar
governmental charge payable in connection therewith, subject to and as permitted
by the Indenture.

                10.     Persons Deemed Owners. The registered Holder of this
Security may be treated as the owner of it for all purposes.

                11.     Repayment to Company. The Trustee and the Paying Agent
shall pay to the Company upon the Company's request any money held by them for
the payment of principal or interest that remains unclaimed for two years after
the date upon which such payment shall have become due. After payment to the
Company, Holders entitled to the money must look to the Company for payment as
general creditors unless an applicable abandoned property law designated another
person.

                12.     Discharge and Defeasance. Subject to certain conditions,
the Company at any time may terminate some or all of its obligations under the
Securities and the Indenture if the Company deposits with the Trustee money
and/or U.S. Government Obligations for the payment of principal and interest on
the Securities to maturity.

                13.     Defaults and Remedies. Under the Indenture, Events of
Defaults with respect to the Securities of all Series affected include (a)
failure to pay the principal of, or premium, if any, on such Securities when due
and payable; (b) failure to pay any interest on such Securities when due,
continued for 30 days; (c) failure to perform or observe any other covenants or
warranties of the Company in the Indenture, including failure to comply with the
provisions of the Indenture applicable to consolidation, merger and sale of
assets of the Company, continued for 60 days after written notice as set forth
in the Indenture; and (d) certain events of bankruptcy, insolvency or
reorganization.

               If an Event of Default with respect to the Securities of any
Series (other than an Event of Default relating to certain events of bankruptcy,
insolvency or reorganization) shall occur and be continuing, either the Trustee
or the Holders of at least 25% in principal amount of the outstanding Securities
of such Series may, by notice, as provided in the Indenture, declare the unpaid
principal amount of, and any accrued and unpaid interest on, the Securities to
be due and payable immediately. However, at any time after a declaration of
acceleration with respect to the Securities has been made and before any
judgment or decree for payment of money due has been obtained, the Holders of a
majority in principal amount of the outstanding Securities of such Series may,
under certain circumstances, rescind and annul such acceleration if all existing
Events of Default with respect to such Securities have been cured or waived
except nonpayment

                                       4

<PAGE>   28
of principal (or such lesser amount) or interest that has become due solely
because of the acceleration.

               Subject to the duty of the Trustee during an Event of Default to
act with the required standard of care, the Trustee is under no obligation to
exercise any of its rights or powers under the Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered to the
Trustee reasonable security or indemnity. Subject to certain provisions,
including those requiring security or indemnification of the Trustee, the
Holders of a majority in principal amount of the outstanding Securities 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 Securities.

                14.     Supplements, Amendments and Waivers. Subject to certain
exceptions, the Company and the Trustee may amend the Indenture or the
Securities with the written consent of the Holders of a majority in principal
amount of the then outstanding Securities. The Holders of a majority in
principal amount of the then outstanding Securities may also waive compliance in
a particular instance by the Company with any provision of the Indenture with
respect to the Securities; provided, however, that certain amendments or waivers
may not be made without the consent of each Holder of Securities affected as
provided in the Indenture.

               The Company and the Trustee may amend the Indenture or the
Securities without notice to or the consent of any Holder of Securities in
certain circumstances described in the Indenture.

               The Holders of a majority in principal amount of the outstanding
Securities, by notice to the Trustee, may waive an existing Default or Event of
Default and its consequences except a Default or Event of Default in the payment
of the principal of, or any interest on, the Securities (provided, however, that
the Holders of a majority in principal amount of the outstanding Securities may
rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration).

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

                16.     No Recourse Against Others. A past, present or future
director, officer, employee, stockholder or incorporator, as such, of the
Company or any successor corporation shall not have any liability for any
obligations of the Company under this Security or the Indenture or for any claim
based on, in respect of, or by reason of such obligations or their creation.
Each Securityholder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration of issuance of
the Securities.

                17.     Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW
YORK SHALL GOVERN THE INDENTURE AND THE SECURITIES, WITHOUT REGARD TO THE
CONFLICT OF LAWS PROVISIONS THEREOF.

                                       5

<PAGE>   29
                18.     Successors and Assigns. All covenants and agreements of
the Company in the Indenture and the Securities shall bind its successors and
assigns. All agreements of the Trustee in the Indenture shall bind its
successors.

                19.     Authentication. This Security shall not be valid until
an authorized signatory of the Trustee (or an authenticating agent) manually
signs the certificate of authentication hereon.

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

                21.     Subordination. The Securities are subordinated to all
Senior Indebtedness, which includes almost all indebtedness other than (i)
indebtedness that expressly provides that it shall not be senior in right of
payment to the Securities or expressly provides that it is on the same basis or
junior to the Securities; (ii) indebtedness of the Company to any of its
majority-owned subsidiaries; and (iii) the Securities. To the extent provided in
the Indenture, Senior Indebtedness must be paid before the Securities may be
paid. The Company agrees, and each Holder by accepting a Security consents and
agrees, to the subordination provided in the Indenture and authorizes the
Trustee to give it effect.

                22.     CUSIP Numbers. Pursuant to a recommendation promulgated
by the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Securities, and the Trustee may use
CUSIP numbers in notices as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Securities or as
contained in any notice and no reliance may be placed thereon.

               The Company will furnish to any Holder upon written request and
without charge to the Holder a copy of the Indenture. Such requests may be
addressed to:

                                            Aviron
                                            297 North Bernardo Avenue
                                            Mountain View, California 94043
                                            Attention:  Corporate Secretary

                                       6

<PAGE>   30
                                CONVERSION NOTICE

TO: AVIRON

The undersigned registered owner of this Note hereby irrevocably exercises the
option to convert this Note, or the portion hereof (which is $1,000 or an
integral multiple thereof) below designated, into shares of Common Stock of
Aviron in accordance with the terms of the Indenture referred to in this Note,
and directs that the shares issuable and deliverable upon such conversion,
together with any check in payment for fractional shares and any Notes
representing any unconverted principal amount hereof, be issued and delivered to
the registered Holder hereof unless a different name has been indicated below.
If shares or any portion of this Note not converted are to be issued in the name
of a person other than the undersigned, the undersigned will check the
appropriate box below and pay all transfer taxes payable with respect thereto.
Any amount required to be paid to the undersigned on account of interest
accompanies this Note.

Dated:
      -------------------------

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

-------------------------------
Signature(s)

Signature(s) must be guaranteed by a commercial bank or trust company or a
member firm of a major stock exchange if shares of Common Stock are to be
issued, or Notes to be delivered, other than to and in the name of the
registered Holder.

-------------------------------
Signature Guarantee

Fill in for registration of shares of Common Stock if to be issued, and Notes if
to be delivered, other than to and in the name of the registered Holder:

(Please print)

                                          Principal amount to be converted
------------------------------------     (if less than all):  $_________________
               (Name)

                                         Social Security or Other Taxpayer
------------------------------------     Identification Number _________________
             (Street Address)

------------------------------------
      (City, State and Zip Code)

<PAGE>   31
               OPTION TO ELECT REPAYMENT UPON A FUNDAMENTAL CHANGE

TO:  AVIRON

The undersigned registered owner of this Note hereby irrevocably acknowledges
receipt of a notice from Aviron (the "Company") as to the occurrence of a
Fundamental Change with respect to the Company and requests and instructs the
Company to repay the entire principal amount of this Note, or the portion
thereof (which is $1,000 or an integral multiple thereof) below designated, in
accordance with the terms of the Indenture referred to in this Note at the
redemption price, together with accrued interest to, but excluding, such date,
to the registered Holder hereof.

Dated:
      -------------------------

Signature(s)
            -------------------

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

NOTICE: The above signatures of the registered Holder(s) hereof must correspond
with the name as written upon the face of the Note in every particular without
alteration or enlargement or any change whatever.

Principal amount to be repaid
(if less than all):  $_________________________

Social Security or Other Taxpayer
Identification Number _________________________

<PAGE>   32
                                 ASSIGNMENT FORM

If you, Holder, want to assign this Note, fill in the form below and have your
signature guaranteed.

        FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ______________________________________________________________
(Please insert assignee's social security or tax ID number)____________________
_______________________________________________________________________________
_______________________________________________________________________________
          (Please print or type assignee's name, address and zip code)

the within Note and all rights thereunder, and hereby irrevocably constitute and
appoint such person attorney to transfer such Note on the books of the Company,
with full power of substitution in the premises.

 Dated:                            Your signature:
        ----------------------                    -----------------------------

NOTICE:        The signature to this assignment must correspond with the name as
               written upon the face of the within Note in every particular
               without alteration or enlargement or any change whatever.

                              Signature guarantee:

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

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