Document:

EXHIBIT 4.1

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                              E*TRADE GROUP, INC.

                                      and

                         The Bank of New York, Trustee

                                   INDENTURE

                            Dated as of May 29, 2001

                          Subordinated Debt Securities

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                               TABLE OF CONTENTS

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                                                                            PAGE
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                                   ARTICLE 1
                                  DEFINITIONS

SECTION 1.01.  Certain Terms Defined...........................................1

                                   ARTICLE 2
                                   SECURITIES

SECTION 2.01.  Forms Generally.................................................6
SECTION 2.02.  Form of Trustee's Certification of Authentication...............6
SECTION 2.03.  Amount Unlimited; Issuable in Series............................6
SECTION 2.04.  Authentication and Delivery of Securities.......................8
SECTION 2.05.  Execution of Securities........................................10
SECTION 2.06.  Certificate of Authentication..................................10
SECTION 2.07.  Denomination and Date of Securities; Payments of Interest......10
SECTION 2.08.  Registration, Transfer and Exchange............................11
SECTION 2.09.  Mutilated, Defaced, Destroyed, Lost and Stolen Securities......12
SECTION 2.10.  Cancellation of Securities; Destruction Thereof................13
SECTION 2.11.  Temporary Securities...........................................14
SECTION 2.12.  CUSIP Numbers..................................................14

                                   ARTICLE 3
                    COVENANTS OF THE ISSUER AND THE TRUSTEE

SECTION 3.01.  Payment of Principal and Interest..............................14
SECTION 3.02.  Offices for Payments, etc......................................15
SECTION 3.03.  Appointment to Fill a Vacancy in Office of Trustee.............15
SECTION 3.04.  Paying Agents..................................................15
SECTION 3.05.  Certificate of the Issuer......................................16
SECTION 3.06.  Securityholders Lists..........................................16
SECTION 3.07.  Reports by the Trustee.........................................17
SECTION 3.08.  Reports by Issuer..............................................17

                                   ARTICLE 4
            REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF
                                    DEFAULT

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SECTION 4.01.  Event of Default Defined; Acceleration of Maturity;
                  Waiver of Default...........................................17
SECTION 4.02.  Collection of Indebtedness by Trustee; Trustee May Prove
                  Debt........................................................21
SECTION 4.03.  Application of Proceeds........................................23
SECTION 4.04.  Suits for Enforcement..........................................24
SECTION 4.05.  Restoration of Rights on Abandonment of Proceedings............24
SECTION 4.06.  Limitations on Suits by Securityholder.........................25
SECTION 4.07.  Unconditional Right of Securityholders to Institute Certain
                  Suits.......................................................25
SECTION 4.08.  Powers and Remedies Cumulative; Delay or Omission Not
                  Waiver of Default...........................................26
SECTION 4.09.  Control by Securityholders.....................................26
SECTION 4.10.  Waiver of Past Defaults by Majority of Holders.................27
SECTION 4.11.  Trustee to Give Notice of Default, But May Withhold in
                  Certain Circumstances.......................................27
SECTION 4.12.  Right of Court to Require Filing of Undertaking to Pay
                  Costs.......................................................27

                                   ARTICLE 5
                             CONCERNING THE TRUSTEE

SECTION 5.01.  Duties and Responsibilities of the Trustee; During Default;
                  Prior to Default............................................28
SECTION 5.02.  Certain Rights of the Trustee..................................29
SECTION 5.03.  Trustee Not Responsible for Recitals, Disposition of
                  Securities or Application of Proceeds Thereof...............31
SECTION 5.04.  Trustee and Agents May Hold Securities; Collections, etc.......31
SECTION 5.05.  Moneys Held by Trustee.........................................31
SECTION 5.06.  Compensation and Indemnification of Trustee and Its
                  Prior Claim.................................................32
SECTION 5.07.  Right of Trustee to Rely on Officers' Certificate, etc.........33
SECTION 5.08.  Persons Eligible for Appointment as Trustee....................33
SECTION 5.09.  Resignation and Removal; Appointment of Successor
                  Trustee.....................................................33
SECTION 5.10.  Acceptance of Appointment by Successor.........................35
SECTION 5.11.  Merger, Conversion, Consolidation or Succession to
                  Business of Trustee.........................................36
SECTION 5.12.  Indentures Not Creating Potential Conflicting Interests for
                  the Trustee.................................................36

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                                   ARTICLE 6
                         CONCERNING THE SECURITYHOLDERS

SECTION 6.01.  Evidence of Action Taken by Securityholders....................37
SECTION 6.02.  Proof of Execution of Instruments and of Holding of
                  Securities; Record Date.....................................37
SECTION 6.03.  Holders to be Treated as Owners................................37
SECTION 6.04.  Securities Owned by Issuer Deemed Not Outstanding..............38
SECTION 6.05.  Right of Revocation of Action Taken............................38

                                   ARTICLE 7
                            SUPPLEMENTAL INDENTURES

SECTION 7.01.  Supplemental Indentures Without Consent of
                  Securityholders.............................................39
SECTION 7.02.  Supplemental Indentures With Consent of Securityholders........40
SECTION 7.03.  Effect of Supplemental Indenture...............................42
SECTION 7.04.  Documents to Be Given to Trustee...............................42
SECTION 7.05.  Notation on Securities in Respect of Supplemental
                  Indentures..................................................42

                                   ARTICLE 8
                   CONSOLIDATION, MERGER, SALE OR CONVEYANCE

SECTION 8.01.  Issuer May Consolidate, etc., on Certain Terms.................42
SECTION 8.02.  Surviving Person Substituted...................................43
SECTION 8.03.  Opinion of Counsel to Trustee..................................44

                                   ARTICLE 9
               SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED
                                     MONEYS

SECTION 9.01.  Satisfaction and Discharge of Indenture........................44
SECTION 9.02.  Application by Trustee of Funds Deposited for Payment of
                  Securities..................................................45
SECTION 9.03.  Repayment of Moneys Held by Paying Agent.......................45
SECTION 9.04.  Return of Moneys Held by Trustee and Paying Agent
                  Unclaimed for Three Years...................................45
SECTION 9.05.  Reinstatement..................................................46

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                                   ARTICLE 10
                            MISCELLANEOUS PROVISIONS

SECTION 10.01.  Incorporators, Stockholders, Officers and Directors of
                  Issuer Exempt from Individual Liability.....................46
SECTION 10.02.  Provisions of Indenture for the Sole Benefit of Parties
                  and Securityholders.........................................47
SECTION 10.03.  Successors and Assigns of Issuer Bound by Indenture...........47
SECTION 10.04.  Notices and Demands on Issuer, Trustee and
                  Securityholders.............................................47
SECTION 10.05.  Officers' Certificates and Opinions of Counsel;
                  Statements to Be Contained Therein..........................48
SECTION 10.06.  Payments Due on Saturdays, Sundays and Holidays...............49
SECTION 10.07.  Conflict of Any Provision of Indenture with Trust
                  Indenture Act of 1939.......................................49
SECTION 10.08.  New York Law to Govern........................................49
SECTION 10.09.  Counterparts..................................................49
SECTION 10.10.  Effect of Headings............................................49

                                           ARTICLE 11
                           REDEMPTION OF SECURITIES AND SINKING FUNDS

SECTION 11.01.  Applicability of Article......................................50
SECTION 11.02.  Notice of Redemption; Partial Redemptions.....................50
SECTION 11.03.  Payment of Securities Called for Redemption...................51
SECTION 11.04.  Exclusion of Certain Securities from Eligibility for
                  Selection for Redemption....................................52
SECTION 11.05.  Mandatory and Optional Sinking Funds..........................52

                                           ARTICLE 12
                                   SUBORDINATION OF SECURITIES

SECTION 12.01.  Agreement of Subordination....................................55
SECTION 12.02.  Payments to Securityholders...................................55
SECTION 12.03.  Subrogation of Securities.....................................57
SECTION 12.04.  Authorization by Securityholders..............................58
SECTION 12.05.  Notice to Trustee.............................................59
SECTION 12.06.  Trustee's Relation to Senior Indebtedness.....................60
SECTION 12.07.  No Impairment of Subordination................................60
SECTION 12.08.  Rights of Trustee.............................................60

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     THIS INDENTURE, dated as of May 29, 2001, between E*TRADE GROUP, INC., a
Delaware corporation (the "Issuer"), and The Bank of New York, a New York
banking corporation, as trustee (the "Trustee"),

                              W I T N E S S E T H:

     WHEREAS, the Issuer has duly authorized the issue from time to time of its
unsecured subordinated debentures, notes or other evidences of indebtedness to
be issued in one or more series (the "Securities") up to such principal amount
or amounts as may from time to time be authorized in accordance with the terms
of this Indenture and to provide, among other things, for the authentication,
delivery and administration thereof;

     WHEREAS, the Issuer has duly authorized the execution and delivery of this
Indenture; and

     WHEREAS, all things necessary to make this Indenture a valid indenture and
agreement according to its terms have been done;

     NOW, THEREFORE:

     In consideration of the premises and the purchases of the Securities by
the holders thereof, the Issuer and the Trustee mutually covenant and agree for
the equal and proportionate benefit of the respective holders from time to time
of the Securities as follows:

                                   ARTICLE 1
                                  DEFINITIONS

     SECTION 1.01. Certain Terms Defined. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section. All other terms
used in this Indenture that are defined in the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act of 1939") or the definitions of which in the
Securities Act of 1933, as amended (the "Securities Act") are referred to in
the Trust Indenture Act of 1939, including terms defined therein by reference
to the Securities Act (except as herein otherwise expressly provided or unless
the context otherwise clearly requires), shall have the meanings assigned to
such terms in said Trust

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Indenture Act and in said Securities Act as in force at the date of this
Indenture. All accounting terms used herein and not expressly defined shall
have the meanings assigned to such terms in accordance with generally accepted
accounting principles, and the term "generally accepted accounting principles"
means such accounting principles as are generally accepted in the United States
of America at the time of any computation. The words "herein", "hereof" and
"hereunder" and other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or other subdivision. The
terms defined in this Article have the meanings assigned to them in this
Article and include the plural as well as the singular.

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

     "Business Day" means, with respect to any Security, a day that in the city
(or in any of the cities, if more than one) in which amounts are payable, as
specified in the form of such Security, is not a day on which banking
institutions are authorized by law or regulation to close.

     "Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution and delivery of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act of 1939,
then the body performing such duties on such date.

     "Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 101 Barclay Street, 21W, New York, New York
10286, Attention: Corporate Trust Administration, or such other address as the
Trustee may designate from time to time by notice to the Holders and the
Issuer.

     "Event of Default" means any event or condition specified as such in
Section 4.01.

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

     "Holder", "holder of Securities", "Securityholder" or other similar terms
mean the registered holder of any Security.

     "Indenture" means this instrument as originally executed and delivered or,
if amended or supplemented as herein provided, as so amended or

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supplemented or both, and shall include the forms and terms of particular
series of Securities established as contemplated hereunder.

     "Issuer" means E*TRADE Group, Inc., a Delaware corporation, and, subject
to Article 8, its successors and assigns.

     "Officers' Certificate" means a certificate signed by both (a) the
chairman of the Board of Directors or any vice chairman of the Board of
Directors or the chief executive officer or the chief financial officer or the
president or any vice president and (b) by the treasurer or any assistant
treasurer or the secretary or any assistant secretary of the Issuer and
delivered to the Trustee. Each such certificate shall comply with Section 314
of the Trust Indenture Act of 1939 and include the statements provided for in
Section 10.05.

     "Opinion of Counsel" means an opinion in writing signed by legal counsel
who may be an employee of or counsel to the Issuer or of the Trustee and who
shall be satisfactory to the Trustee. Each such opinion shall comply with
Section 314 of the Trust Indenture Act of 1939 and include the statements
provided for in Section 10.05, if and to the extent required hereby.

     "Original Issue Discount Security" means any Security that provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof pursuant to Section 4.01.

     "Outstanding", when used with reference to Securities, shall, subject to
the provisions of Section 6.04, mean, as of any particular time, all Securities
authenticated and delivered by the Trustee under this Indenture, except:

          (a) Securities theretofore canceled by the Trustee or delivered to
     the Trustee for cancellation;

          (b) Securities, or portions thereof, for the payment or redemption of
     which moneys in the necessary amount shall have been deposited in trust
     with the Trustee or with any paying agent (other than the Issuer) or shall
     have been set aside, segregated and held in trust by the Issuer for the
     holders of such Securities (if the Issuer shall act as its own paying
     agent), provided that if such Securities, or portions thereof, are to be
     redeemed prior to the maturity thereof, notice of such redemption shall
     have been given as herein provided, or provision satisfactory to the
     Trustee shall have been made for giving such notice; and

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          (c) Securities in substitution for which other Securities shall have
     been authenticated and delivered, or which shall have been paid, pursuant
     to the terms of Section 2.09 (except with respect to any such Security as
     to which proof satisfactory to the Trustee is presented that such Security
     is held by a person in whose hands such Security is a legal, valid and
     binding obligation of the Issuer).

     In determining whether the Holders of the requisite principal amount of
Outstanding Securities of any or all series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of an Original Issue 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 4.01.

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

     "Responsible Officer" when used with respect to the Trustee means any
officer in the corporate trust department of the Trustee, including any vice
president, assistant secretary, assistant treasurer, any trust officer, any
assistant vice president or any other officer or assistant officer of the
Trustee customarily performing functions similar to those performed by the
persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his knowledge of and familiarity
with the particular subject.

     "Security" or "Securities" has the meaning stated in the first recital of
this Indenture, or, as the case may be, Securities that have been authenticated
and delivered under this Indenture.

     "Senior Indebtedness" means the principal, premium, if any, and interest
on and any other payment due pursuant to any of the following, whether
outstanding at the date hereof or hereafter incurred or created:

     (a) all indebtedness of the Issuer for money borrowed (including any
indebtedness secured by a mortgage, conditional sales contract or other lien
which is (i) given to secure all or part of the purchase price of property
subject thereto, whether given to the vendor of such property or to another or
(ii) existing on property at the time of acquisition thereof);

     (b) all indebtedness of the Issuer evidenced by notes, debentures, bonds
or other securities sold by the Issuer for money;

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     (c) all lease obligations of the Issuer which are capitalized on the books
of the Issuer in accordance with generally accepted accounting principles;

     (d) all indebtedness of others of the kinds described in either of the
preceding clauses (a) or (b) and all lease obligations of others of the kind
described in the preceding clause (c) assumed by or guaranteed in any manner by
the Issuer or in effect guaranteed by the Issuer through an agreement to
purchase, contingent or otherwise; and

     (e) all renewals, extensions or refundings of indebtedness of the kinds
described in any of the preceding clauses (a), (b) and (d) and all renewals or
extensions of lease obligations of the kinds described in either of the
preceding clauses (c) and (d);

unless, in the case of any particular indebtedness, lease, renewal, extension
or refunding, the instrument or lease creating or evidencing the same or the
assumption or guarantee of the same expressly provides that such indebtedness,
lease, renewal, extension or refunding is junior to or is not superior in right
of payment to the Securities; provided that Senior Indebtedness shall not
include (i) any indebtedness of any kind of the Issuer to any subsidiary of the
Issuer, a majority of the voting stock of which is owned, directly or
indirectly, by the Issuer, (ii) indebtedness for trade payables or constituting
the deferred purchase price of assets or services incurred in the ordinary
course of business, (iii) the Securities or (iv) securities issued under the
Indenture dated as of February 1, 2000 between the Issuer and The Bank of New
York, as trustee.

     "Significant Subsidiary" means, with respect to any person, a "significant
subsidiary" of such person as such term is defined in Rule 1-02 of Regulation
S-X under the Exchange Act, except that references to income from continuing
operations are changed to revenues.

     "Trustee" means the Person identified as "Trustee" in the first paragraph
hereof and, subject to the provisions of Article 5, shall also include any
successor trustee.

     "Trust Indenture Act of 1939" means the Trust Indenture Act of 1939 as in
force at the date as of which this Indenture was originally executed.

     "vice president" when used with respect to the Issuer or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title of "vice president".

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

                                   ARTICLE 2
                                   SECURITIES

     SECTION 2.01. Forms Generally. The Securities of each series shall be
substantially in such form (not inconsistent with this Indenture) as shall be
established by or pursuant to a resolution of the Board of Directors or in one
or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have imprinted or otherwise reproduced
thereon such legend or legends, not inconsistent with the provisions of this
Indenture, as may be required to comply with any law or with any rules or
regulations pursuant thereto, or with any rules of any securities exchange or
to conform to general usage, all as may be determined by the officers executing
such Securities, as evidenced by their execution of the Securities.

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

     SECTION 2.02. Form of Trustee's Certification of Authentication. The
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:

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

                                            THE BANK OF NEW YORK,
                                                  as Trustee

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

     SECTION 2.03. Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.

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     The Securities may be issued in one or more series. There shall be
established in or pursuant to a resolution of the Board of Directors and set
forth in an Officers' Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series,

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

          (b) any limit upon the aggregate principal amount of the Securities
     of the series (other than 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 2.08, 2.09, 2.11 or 11.03)
     that may be authenticated and delivered under this Indenture;

          (c) the date or dates on which the principal of the Securities of the
     series is payable;

          (d) the rate or rates at which the Securities of the series shall
     bear interest, if any, or the method by which such rate shall be
     determined, the date or dates from which such interest shall accrue, the
     interest payment dates on which such interest shall be payable and the
     record dates for the determination of Holders to whom interest is payable;

          (e) the place or places where the principal of and any interest on
     Securities of the series shall be payable (if other than as provided in
     Section 3.02);

          (f) the price or prices at which, the period or periods within which
     and the terms and conditions upon which Securities of the series may be
     redeemed, in whole or in part, at the option of the Issuer, pursuant to
     any sinking fund or otherwise;

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

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

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          (i) if other than the principal amount thereof, the portion of the
     principal amount of Securities of the series which shall be payable upon
     declaration of acceleration of the maturity thereof pursuant to Section
     4.01 or provable in bankruptcy pursuant to Section 4.02;

          (j) any other terms of the series (which terms shall not be
     inconsistent with the provisions of this Indenture); and

          (k) any trustees, authenticating or paying agents, transfer agents or
     registrars or any other agents with respect to the Securities of such
     series.

     All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to
such resolution of the Board of Directors or in an indenture supplemental
hereto.

     SECTION 2.04. Authentication and Delivery of Securities. At any time and
from time to time after the execution and delivery of this Indenture, the
Issuer may deliver Securities of any series executed by the Issuer to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver such Securities to or upon the written order of the Issuer, signed by
both (a) the chairman of its Board of Directors, or any vice chairman of its
Board of Directors, or its chief executive officer or its chief financial
officer, or its president or any vice president and (b) its treasurer or any
assistant treasurer or its secretary or any assistant secretary, without any
further action by the Issuer. In authenticating such Securities and accepting
the additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to Section
5.01) shall be fully protected in relying upon:

          (a) a copy of any resolution or resolutions of the Board of Directors
     relating to such series, in each case certified by the Secretary or an
     Assistant Secretary of the Issuer;

          (b) an executed supplemental indenture, if any;

          (c) an Officers' Certificate setting forth the form and terms of the
     Securities as required pursuant to Section 2.01 and 2.03, respectively and
     prepared in accordance with Section 10.05;

          (d) an Opinion of Counsel, prepared in accordance with Section 10.05,
     to the effect that

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          (i) that the form or forms and terms of such Securities have been
     established by or pursuant to a resolution of the Board of Directors or by
     a supplemental indenture as permitted by Section 2.01 and 2.03 in
     conformity with the provisions of this Indenture;

          (ii) that the Indenture has been duly authorized, executed and
     delivered by the Issuer and constitutes a valid and legally binding
     obligation of the Issuer enforceable against the Issuer in accordance with
     its terms, except that the enforcement thereof may be subject to (A)
     bankruptcy, insolvency, reorganization, moratorium or other similar laws
     now or hereafter in effect relating to creditors' rights generally and (B)
     general principles of equity and the discretion of the court before which
     any proceeding therefor may be brought;

          (iii) that such Securities have been duly authorized and, when
     executed and authenticated by the Trustee and issued by the Issuer in the
     manner and subject to any conditions specified in such Opinion of Counsel,
     will be valid and binding obligations of the Issuer, enforceable against
     the Issuer in accordance with their terms, subject to (A) bankruptcy,
     insolvency, reorganization, moratorium or other similar laws now or
     hereafter in effect relating to creditors' rights generally and (B)
     general principles of equity and the discretion of the court before which
     any proceeding therefor may be brought;

          (iv) that the Issuer is not and, after giving effect to the offering
     and sale of such Securities and the application of the proceeds thereof as
     described in the offering memorandum or registration statement with
     respect to such offering and sale, will not be required to register as an
     "investment company" as such term is defined in the Investment Company Act
     of 1940, as amended; and

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

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

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     SECTION 2.05. Execution of Securities. The Securities shall be signed on
behalf of the Issuer by both (a) the chairman of its Board of Directors or any
vice chairman of its Board of Directors or its chief executive officer or its
chief operating officer or its chief financial officer or its president or any
vice president and (b) attested to by its treasurer or any assistant treasurer
or its secretary or any assistant secretary. Such signatures may be the manual
or facsimile signatures of the present or any future such officers.
Typographical and other minor errors or defects in any such reproduction of any
such signature shall not affect the validity or enforceability of any Security
that has been duly authenticated and delivered by the Trustee.

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

     SECTION 2.06. Certificate of Authentication. Only such Securities as shall
bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized officers, shall be entitled to the benefits of this Indenture or
be valid or obligatory for any purpose. Such certificate by the Trustee upon
any Security executed by the Issuer shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder
and that the Holder is entitled to the benefits of this Indenture.

     SECTION 2.07. Denomination and Date of Securities; Payments of Interest.
The Securities shall be issuable as registered securities without coupons and
in denominations as shall be specified as contemplated by Section 2.03. In the
absence of any such specification with respect to the Securities of any series,
the Securities of such series shall be issuable in denominations of $1,000 and
any multiple thereof. The Securities shall be numbered, lettered, or otherwise
distinguished in such manner or in accordance with such plan as the officers of
the Issuer executing the same may determine with the approval of the Trustee as
evidenced by the execution and authentication thereof.

     Each Security shall be dated the date of its authentication, shall bear
interest, if any, from the date and shall be payable on the dates, in each
case, which shall be specified as contemplated by Section 2.03.

                                       10

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     The person in whose name any Security of any series is registered at the
close of business on any record date applicable to a particular series with
respect to any interest payment date for such series shall be entitled to
receive the interest, if any, payable on such interest payment date
notwithstanding any transfer or exchange of such Security subsequent to the
record date and prior to such interest payment date, except if and to the
extent the Issuer shall default in the payment of the interest due on such
interest payment date for such series, in which case such defaulted interest
shall be paid to the persons in whose names Outstanding Securities for such
series are registered at the close of business on a subsequent record date
(which shall be not less than five Business Days prior to the date of payment
of such defaulted interest) established by notice given by mail by or on behalf
of the Issuer to the holders of Securities not less than 15 days preceding such
subsequent record date. The term "record date" as used with respect to any
interest payment date (except a date for payment of defaulted interest) shall
mean the date specified as such in the terms of the Securities of any
particular series, or, if no such date is so specified, if such interest
payment date is the first day of a calendar month, the fifteenth day of the
next preceding calendar month or, if such interest payment date is the
fifteenth day of a calendar month, the first day of such calendar month,
whether or not such record date is a Business Day.

     SECTION 2.08. Registration, Transfer and Exchange. The Issuer will keep or
cause to be kept at each office or agency to be maintained for the purpose as
provided in Section 3.02 a register or registers in which, subject to such
reasonable regulations as it may prescribe, it will register, and will register
the transfer of, Securities as in this Article provided. Such register shall be
in written form in the English language or in any other form capable of being
converted into such form within a reasonable time. At all reasonable times such
register or registers shall be open for inspection by the Trustee.

     Upon due presentation for registration of transfer of any Security of any
series at any such office or agency to be maintained for the purpose as
provided in Section 3.02, the Issuer shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or transferees a new
Security or Securities of the same series in authorized denominations for a
like aggregate principal amount.

     Any Security or Securities of any series may be exchanged for a Security
or Securities of the same series in other authorized denominations, in an equal
aggregate principal amount. Securities of any series to be exchanged shall be
surrendered at any office or agency to be maintained by the Issuer for the
purpose as provided in Section 3.02, and the Issuer shall execute and the
Trustee shall authenticate and deliver in exchange therefor the Security or
Securities of the same series which the Securityholder making the exchange
shall be entitled to receive, bearing numbers not contemporaneously
outstanding.

                                       11

<PAGE>

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

     The Issuer may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any exchange
or registration of transfer of Securities. No service charge shall be made for
any such transaction.

     The Issuer shall not be required to exchange or register a transfer of (a)
any Securities of any series for a period of 15 days next preceding the first
mailing of notice of redemption of Securities of such series to be redeemed,
(b) any Securities selected, called or being called for redemption, in whole or
in part, except, in the case of any Security to be redeemed in part, the
portion thereof not so to be redeemed, (c) any Securities surrendered for
conversion or, if a portion of any Security is surrendered for conversion, such
portion surrendered for conversion, or (d) any Securities surrendered for
exercise of any right to require the Issuer to repurchase such Securities
(which has not been withdrawn), in whole or in part, except, in the case of any
Security to be repurchased in part, the portion thereof not so to be
repurchased.

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

     SECTION 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen Securities.
In case any temporary or definitive Security shall become mutilated, defaced or
be destroyed, lost or stolen, the Issuer in its discretion may execute, and
upon the written request of any officer of the Issuer, the Trustee shall
authenticate and deliver, a new Security of the same series, bearing a number
not contemporaneously outstanding, in exchange and substitution for the
mutilated or defaced Security, or in lieu of and substitution for the Security
so destroyed, lost or stolen. In every case the applicant for a substitute
Security shall furnish to the Issuer and to the Trustee and any agent of the
Issuer or the Trustee such security or indemnity as may be required by them to
indemnify and defend and to save each of them harmless and, in every case of
destruction, loss or theft, evidence to their satisfaction of the destruction,
loss or theft of such Security and of the ownership thereof.

                                       12

<PAGE>

     Upon the issuance of any substitute Security, the Issuer 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. In case any Security which
has matured or is about to mature or has been called for redemption in full
shall become mutilated or defaced or be destroyed, lost or stolen, the Issuer
may instead of issuing a substitute Security, pay or authorize the payment of
the same (without surrender thereof except in the case of a mutilated or
defaced Security), if the applicant for such payment shall furnish to the
Issuer and to the Trustee and any agent of the Issuer or the Trustee such
security or indemnity as any of them may require to save each of them harmless,
and, in every case of destruction, loss or theft, the applicant shall also
furnish to the Issuer and the Trustee and any agent of the Issuer or the
Trustee evidence to their satisfaction of the destruction, loss or theft of
such Security and of the ownership thereof.

     Every substitute Security of any series issued pursuant to the provisions
of this Section by virtue of the fact that any such Security is destroyed, lost
or stolen shall constitute an additional contractual obligation of the Issuer,
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 (but shall
be subject to all the limitations of rights set forth in) this Indenture
equally and proportionately with any and all other Securities of such series
duly authenticated and delivered hereunder. All Securities shall be held and
owned upon the express condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the replacement or payment
of mutilated, defaced or destroyed, lost or stolen Securities and shall
preclude any and all other rights or remedies notwithstanding any law or
statute existing or hereafter enacted to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.

     SECTION 2.10. Cancellation of Securities; Destruction Thereof. All
Securities surrendered for payment, redemption, conversion, registration of
transfer or exchange, or for credit against any payment in respect of a sinking
or analogous fund, if surrendered to the Issuer or any agent of the Issuer or
the Trustee, shall be delivered to the Trustee for cancellation or, if
surrendered to the Trustee, shall be canceled by it; and no Securities shall be
issued in lieu thereof except as expressly permitted by any of the provisions
of this Indenture. The Trustee shall dispose of canceled Securities held by it
in accordance with its customary procedures. If the Issuer shall acquire any of
the Securities, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless and
until the same are delivered to the Trustee for cancellation.

                                       13

<PAGE>

     SECTION 2.11. Temporary Securities. Pending the preparation of definitive
Securities for any series, the Issuer may execute and the Trustee shall
authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable as registered Securities without coupons, of any authorized
denomination, and substantially in the form of the definitive Securities of
such series but with such omissions, insertions and variations as may be
appropriate for temporary Securities, all as may be determined by the Issuer
with the concurrence of the Trustee. Temporary Securities may contain such
reference to any provisions of this Indenture as may be appropriate. Every
temporary Security shall be executed by the Issuer and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Securities. Without unreasonable delay the
Issuer shall execute and shall furnish definitive Securities of such series and
thereupon temporary Securities of such series may be surrendered in exchange
therefor without charge at each office or agency to be maintained by the Issuer
for that purpose pursuant to Section 3.02, and the Trustee shall authenticate
and deliver in exchange for such temporary Securities of such series a like
aggregate principal amount of definitive Securities of the same series of
authorized denominations. Until so exchanged, the temporary Securities of any
series shall be entitled to the same benefits under this Indenture as
definitive Securities of such series.

     SECTION 2.12. CUSIP Numbers. The Issuer 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 redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Issuer will
promptly notify the Trustee of any change in the "CUSIP" numbers.

                                   ARTICLE 3
                    COVENANTS OF THE ISSUER AND THE TRUSTEE

     SECTION 3.01. Payment of Principal and Interest. The Issuer covenants and
agrees for the benefit of each series of Securities that it will duly and
punctually pay or cause to be paid the principal of, and interest on, each of
the Securities of such series at the place or places, at the respective times
and in the manner provided in such Securities. Each installment of interest on
the Securities of any series may be paid by wire transfer for such interest
payable to or upon the

                                       14

<PAGE>

written order of the holders of Securities entitled thereto as they shall
appear on the registry books of the Issuer.

     SECTION 3.02. Offices for Payments, etc. So long as any of the Securities
of any series remain Outstanding, the Issuer will maintain in the Borough of
Manhattan, City of New York for each such series an office or agency (a) where
the Securities may be presented for payment, (b) where the Securities may be
presented for registration of transfer and for exchange as provided in this
Indenture and (c) where notices and demands to or upon the Issuer with respect
to the Securities of such series or this Indenture may be served. The Issuer
will give the Trustee written notice of the location of any such office or
agency and of any change of location thereof. Unless otherwise specified in
accordance with Section 2.03, the Issuer hereby initially designates the
Corporate Trust Office of the Trustee as the office to be maintained by it for
each such purpose. In case the Issuer shall fail to so designate or maintain
any such office or agency or shall fail to give such notice of the location or
of any change in the location thereof, presentations and demands may be made
and notices may be served at the Corporate Trust Office.

     SECTION 3.03. Appointment to Fill a Vacancy in Office of Trustee. The
Issuer shall appoint a Trustee in the manner provided in Section 5.09 whenever
necessary to avoid or fill a vacancy in the office of Trustee, so that at all
times there shall be a Trustee with respect to each series of Securities
hereunder.

     SECTION 3.04. Paying Agents. Whenever the Issuer shall appoint a paying
agent other than the Trustee with respect to the Securities of any series, it
will cause such paying agent to execute and deliver to the Trustee an
instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section, that it will

          (a) hold all sums received by it as such agent for the payment of the
     principal of or interest on the Securities of such series (whether such
     sums have been paid to it by the Issuer or by any other obligor on the
     Securities of such series) in trust for the benefit of the holders of the
     Securities of such series or of the Trustee,

          (b) give the Trustee notice of any failure by the Issuer (or by any
     other obligor on the Securities of such series) to make any payment of the
     principal of or interest on the Securities of such series when the same
     shall be due and payable, and

                                               15

<PAGE>

          (c) pay any such sums so held in trust by it to the Trustee upon the
     Trustee's written request at any time during the continuance of the
     failure referred to in clause 3.04(b) above.

     The Issuer will, on or prior to each due date of the principal of or
interest on the Securities of such series, deposit with the paying agent a sum
sufficient to pay the principal or interest so becoming due, and (unless such
paying agent is the Trustee) the Issuer will promptly notify the Trustee of any
failure to take such action.

     If the Issuer shall act as its own paying agent with respect to the
Securities of any series, it will, on or before each due date of the principal
of or interest on the Securities of such series, set aside, segregate and hold
in trust for the benefit of the holders of the Securities of such series a sum
sufficient to pay such principal or interest so becoming due. The Issuer will
promptly notify the Trustee of any failure to take such action.

     Anything in this Section to the contrary notwithstanding, the Issuer may
at any time, for the purpose of obtaining a satisfaction and discharge with
respect to one or more or all series of Securities hereunder, or for any other
reason, pay or cause to be paid to the Trustee all sums held in trust for any
such series by the Issuer or any paying agent hereunder, as required by this
Section, such sums to be held by the Trustee upon the trusts herein contained.

     Anything in this Section to the contrary notwithstanding, the agreement to
hold sums in trust as provided in this section is subject to the provisions of
Section 9.03 and 9.04.

     SECTION 3.05. Certificate of the Issuer. The Issuer will furnish to the
Trustee within 120 days after the end of each fiscal year of the Issuer
(beginning with the fiscal year ending on December 31, 2001) a brief
certificate (which need not comply with Section 10.05) from the principal
executive, financial or accounting officer of the Issuer as to his or her
knowledge of the Issuer's compliance with all conditions and covenants under
this Indenture (such compliance to be determined without regard to any period
of grace or requirement of notice provided under this Indenture).

     SECTION 3.06. Securityholders Lists. If and so long as the Trustee shall
not be the Security registrar for the Securities of any series, the Issuer will
furnish or cause to be furnished to the Trustee a list in such form as the
Trustee may reasonably require of the names and addresses of the holders of the
Securities of such series pursuant to Section 312 of the Trust Indenture Act of
1939 (a) semi-annually not more than 15 days after each record date for the
payment of

                                       16

<PAGE>

interest on such Securities, as hereinabove specified, as of such record date
and on dates to be determined pursuant to Section 2.03 for non-interest bearing
securities in each year, and (b) at such other times as the Trustee may request
in writing, within thirty days after receipt by the Issuer of any such request
as of a date not more than 15 days prior to the time such information is
furnished.

     SECTION 3.07. Reports by the Trustee. Any Trustee's report required under
Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted on or
before May 15 in each year (commencing with the year 2002), so long as any
Securities are Outstanding hereunder, and shall be dated as of a date
convenient to the Trustee no more than 60 nor less than 45 days prior thereto.

     SECTION 3.08. Reports by Issuer. The Issuer shall file with the Trustee
(and the Commission at any time after the Indenture becomes qualified under the
Trust Indenture Act), such information, documents and other reports and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at
the times and in the manner provided pursuant to such Act, whether or not the
Securities are governed by such Act; provided, however, that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within fifteen (15) days after the same is so required to be filed with
the Commission. Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Issuer's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).

                                   ARTICLE 4
            REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF
                                    DEFAULT

     SECTION 4.01. Event of Default Defined; Acceleration of Maturity; Waiver
of Default. "Event of Default" with respect to Securities of any series
wherever used herein, means each one of the following events which shall have
occurred and be continuing (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

                                       17

<PAGE>

          (a) default in the payment of any installment of interest upon any of
     the Securities of such series as and when the same shall become due and
     payable, and continuance of such default for a period of 30 days, whether
     or not such payment is prohibited by Article 12;

          (b) default in the payment of all or any part of the principal or
     premium on any of the Securities of such series as and when the same shall
     become due and payable either at maturity, upon redemption, by declaration
     or otherwise, whether or not such payment is prohibited by Article 12;

          (c) default in the payment of any sinking fund installment as and
     when the same shall become due and payable by the terms of the Securities
     of such series;

          (d) default in the performance, or breach, of any covenant of the
     Issuer in respect of the Securities of such series or in this Indenture
     (other than a covenant a default in whose performance or whose breach is
     specifically dealt with elsewhere in this Section), and continuance of
     such default or breach for a period of 60 days after there has been given,
     by registered or certified mail, to the Issuer by the Trustee or to the
     Issuer and the Trustee by the Holders of at least 25% in aggregate
     principal amount of the Outstanding Securities of such 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;

          (e) failure on the part of the Issuer or any of its Significant
     Subsidiaries to make any payment at maturity, including any applicable
     grace period, with respect to any indebtedness of, or guaranteed or
     assumed by, the Issuer or any of its Significant Subsidiaries, in a
     principal amount then outstanding in excess of $75,000,000 in the
     aggregate for all such indebtedness, and the continuance of such failure
     for a period of thirty (30) days after there shall have been given, by
     registered or certified mail, to the Issuer by the Trustee or to the
     Issuer and the Trustee by the holders of not less than 25% in aggregate
     principal amount of the Securities then outstanding, a written notice
     specifying such default and requiring the Issuer to cause such default to
     be cured or waived and stating that such notice is a "Notice of Default"
     hereunder;

          (f) default on the part of the Issuer or any of its Significant
     Subsidiaries with respect to any indebtedness of, or guaranteed or assumed
     by, the Issuer or any of its Significant Subsidiaries, which default
     results in the acceleration of indebtedness in a principal amount then
     outstanding in

                                       18

<PAGE>

     excess of $75,000,000 in the aggregate for all such indebtedness, and such
     indebtedness shall not have been discharged or such acceleration shall not
     have been rescinded or annulled for a period of thirty (30) days after
     there shall have been given, by registered or certified mail, to the
     Issuer by the Trustee or to the Issuer and the Trustee by the holders of
     not less than 25% in aggregate principal amount of the Securities then
     outstanding, a written notice specifying such default and requiring the
     Issuer to cause such default to be cured or waived or such acceleration to
     be rescinded or annulled and stating that such notice is a "Notice of
     Default" hereunder;

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

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

          (i) any other Event of Default provided in the supplemental indenture
     or resolution of the Board of Directors under which such series of
     Securities is issued or in the form of Security for such series.

If an Event of Default occurs and is continuing (other than an Event of Default
specified in Section 4.01(g) or 4.01(h) with respect to the Issuer), then, and
in each and every such case, unless the principal of all of the Securities of
such series shall have already become due and payable, either the Trustee or
the Holders of not less than 25% in aggregate principal amount of the
Securities of such series then Outstanding hereunder, by notice in writing to
the Issuer (and to the Trustee if given by Securityholders), may declare the
entire principal (or, if the Securities of such series are Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of such series) of all Securities of such series and the interest
accrued thereon, if any, to be due and payable immediately,

                                      19

<PAGE>

and upon any such declaration the same shall become immediately due and payable
without necessity of further action. If an Event of Default specified in
Section 4.01(g) or 4.01(h) occurs and is continuing with respect to the Issuer,
the principal (or, if the Securities of such series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series) of all the Securities then Outstanding hereunder and the
interest accrued thereon shall be immediately due and payable.

     The foregoing provisions, however, are subject to the condition that if,
at any time after the principal (or, if the Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms thereof) of the Securities of any series shall have been so declared due
and payable, and before any judgment or decree for the payment of the moneys
due shall have been obtained or entered as hereinafter provided, the Issuer
shall pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Securities of such series and the
principal of any and all Securities of such series which shall have become due
otherwise than by acceleration (with interest upon such principal and, to the
extent that payment of such interest is enforceable under applicable law, on
overdue installments of interest, in each case at the rate specified in the
Securities of such series or the Yield to Maturity (in the case of Original
Issue Discount Securities) specified in the Securities of such series to the
date of such payment or deposit) and such amount as shall be sufficient to
cover reasonable compensation to the Trustee, its agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances
made, by the Trustee except as a result of negligence or bad faith, and if any
and all Events of Default under this Indenture, other than the non-payment of
the principal of Securities of such series which shall have become due by
acceleration, shall have been cured, waived or otherwise remedied as provided
herein, then and in every such case the Holders of a majority in aggregate
principal amount of all the Securities of such series, voting as a separate
class, then Outstanding, by written notice to the Issuer and to the Trustee,
may waive all defaults with respect to such series and rescind and annul such
declaration and its consequences, but no such waiver or rescission and
annulment shall extend to or shall affect any subsequent default or shall
impair any right consequent thereon.

     For all purposes under this Indenture, if a portion of the principal of
any Original Issue Discount Securities shall have been accelerated and declared
due and payable pursuant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed,
for all purposes hereunder, to be such portion of the principal thereof as
shall be due and payable as a result of such acceleration, and payment of such
portion of the principal thereof as shall be due and payable as a result of
such acceleration,

                                       20

<PAGE>

together with interest, if any, thereon and all other amounts owing thereunder,
shall constitute payment in full of such Original Issue Discount Securities.

     SECTION 4.02. Collection of Indebtedness by Trustee; Trustee May Prove
Debt. The Issuer covenants that (a) in case default shall be made in the
payment of any installment of interest on any of the Securities of any series
when such interest shall have become due and payable, and such default shall
have continued for a period of 30 days or (b) in case default shall be made in
the payment of all or any part of the principal of any of the Securities of any
series when the same shall have become due and payable, whether upon maturity
of the Securities of such series or upon any redemption or by declaration or
otherwise--then upon demand of the Trustee, the Issuer will pay to the Trustee
for the benefit of the Holders of the Securities of such series the whole
amount that then shall have become due and payable on all Securities of such
series for principal or interest, as the case may be (with interest to the date
of such payment upon the overdue principal and, to the extent that payment of
such interest is enforceable under applicable law, on overdue installments of
interest at the same rate as the rate of interest or Yield to Maturity (in the
case of Original Issue Discount Securities) specified in the Securities of such
series); and in addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of collection, including reasonable compensation
to the Trustee and each predecessor Trustee, their respective agents, attorneys
and counsel, and any expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee except as a result of its
negligence or bad faith.

     Until such demand is made by the Trustee, the Issuer may pay the principal
of and interest on the Securities of any series to the registered Holders,
whether or not the principal of and interest on the Securities of such series
be overdue.

     In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any
such judgment or final decree against the Issuer or other obligor upon such
Securities and collect in the manner provided by law out of the property of the
Issuer or other obligor upon such Securities, wherever situated, the moneys
adjudged or decreed to be payable.

     In case there shall be pending proceedings relative to the Issuer or any
other obligor upon the Securities under Title 11 of the United States Code or
any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in

                                       21

<PAGE>

case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor, or in
case of any other comparable judicial proceedings relative to the Issuer or
other obligor upon the Securities of any series, or to the creditors or
property of the Issuer or such other obligor, the Trustee, irrespective of
whether the principal of any 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 pursuant to the provisions of this
Section, shall be entitled and empowered, by intervention in such proceedings
or otherwise:

          (a) to file and prove a claim or claims for the whole amount of
     principal and interest (or, if the Securities of any series are Original
     Issue Discount Securities, such portion of the principal amount as may be
     specified in the terms of such series) owing and unpaid in respect of the
     Securities of any series, and to file such other papers or documents as
     may be necessary or advisable in order to have the claims of the Trustee
     (including any claim for reasonable compensation to the Trustee and each
     predecessor Trustee, and their respective agents, attorneys and counsel,
     and for reimbursement of all expenses and liabilities incurred, and all
     advances made, by the Trustee and each predecessor Trustee, except as a
     result of negligence or bad faith) and of the Securityholders allowed in
     any judicial proceedings relative to the Issuer or other obligor upon the
     Securities of any series, or to the creditors or property of the Issuer or
     such other obligor,

          (b) unless prohibited by applicable law and regulations, to vote on
     behalf of the holders of the Securities of any series in any election of a
     trustee or a standby trustee in arrangement, reorganization, liquidation
     or other bankruptcy or insolvency proceedings or person performing similar
     functions in comparable proceedings, and

          (c) to collect and receive any moneys or other property payable or
     deliverable on any such claims, and to distribute all amounts received
     with respect to the claims of the Securityholders and of the Trustee on
     their behalf; and any trustee, receiver, or liquidator, custodian or other
     similar official is hereby authorized by each of the Securityholders to
     make payments to the Trustee, and, in the event that the Trustee shall
     consent to the making of payments directly to the Securityholders, to pay
     to the Trustee such amounts as shall be sufficient to cover reasonable
     compensation to the Trustee, each predecessor Trustee and their respective
     agents, attorneys and counsel, and all other expenses and liabilities
     incurred, and all advances made, by the Trustee and each predecessor

                                       22

<PAGE>

         Trustee except as a result of negligence or bad faith and all other
         amounts due to the Trustee or any predecessor Trustee pursuant to
         Section 5.06.

     Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any series or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar person.

     All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities or the production thereof on any trial or
other proceedings relative thereto, and any such action or proceedings
instituted by the Trustee shall be brought in its own name as trustee of an
express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Trustee, each predecessor
Trustee and their respective agents and attorneys, shall be for the ratable
benefit of the holders of the Securities in respect of which such action was
taken.

     In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the
holders of the Securities in respect to which such action was taken, and it
shall not be necessary to make any holders of such Securities parties to any
such proceedings.

     SECTION 4.03. Application of Proceeds. Any moneys collected by the Trustee
pursuant to this Article in respect of any series shall be applied in the
following order at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys on account of principal or interest, upon
presentation of the several Securities in respect of which monies have been
collected and stamping (or otherwise noting) thereon the payment, or issuing
Securities of such series in reduced principal amounts in exchange for the
presented Securities of like series if only partially paid, or upon surrender
thereof if fully paid:

          FIRST: To the payment of costs and expenses applicable to such series
     in respect of which monies have been collected, including reasonable
     compensation to the Trustee and each predecessor Trustee and their
     respective agents and attorneys and of all expenses and liabilities
     incurred, and all advances made, by the Trustee and each predecessor
     Trustee except as a result of negligence or bad faith, and all other
     amounts due to the Trustee or any predecessor Trustee pursuant to Section
     5.06;

                                       23

<PAGE>

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

          THIRD: In case the principal of the Securities of such series in
     respect of which moneys have been collected shall have become and shall be
     then due and payable, to the payment of the whole amount then owing and
     unpaid upon all the Securities of such series for principal and interest,
     with interest upon the overdue principal, and (to the extent that such
     interest has been collected by the Trustee) upon overdue installments of
     interest at the same rate as the rate of interest or Yield to Maturity (in
     the case of Original Issue Discount Securities) specified in the
     Securities of such series; and in case such moneys shall be insufficient
     to pay in full the whole amount so due and unpaid upon the Securities of
     such series, then to the payment of such principal and interest or yield
     to maturity, without preference or priority of principal over interest or
     yield to maturity, or of interest or yield to maturity over principal, or
     of any installment of interest over any other installment of interest, or
     of any Security of such series over any other Security of such series,
     ratably to the aggregate of such principal and accrued and unpaid interest
     or yield to maturity; and

          FOURTH: To the payment of the remainder, if any, to the Issuer or any
     other person lawfully entitled thereto.

     SECTION 4.04. Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.

     SECTION 4.05. Restoration of Rights on Abandonment of Proceedings. In case
the Trustee shall have proceeded to enforce any right under this Indenture

                                       24

<PAGE>

and such proceedings shall have been discontinued or abandoned for any reason,
or shall have been determined adversely to the Trustee, then and in every such
case the Issuer and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Issuer, the Trustee and the Securityholders shall continue as though no such
proceedings had been taken.

     SECTION 4.06. Limitations on Suits by Securityholder. No holder of any
Security of any series shall have any right by virtue or by availing of any
provision of this Indenture to institute any action or proceeding at law or in
equity or in bankruptcy or otherwise upon or under or with respect to this
Indenture, or for the appointment of a trustee, receiver, liquidator, custodian
or other similar official or for any other remedy hereunder, unless such Holder
previously shall have given to the Trustee written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
not less than 25% in aggregate principal amount of the Securities of such
series then Outstanding shall have made written request upon the Trustee to
institute such action or proceedings in its own name as trustee hereunder and
shall have offered to the Trustee such indemnity reasonably satisfactory to it
as it may require against the costs, expenses and liabilities to be incurred
therein or thereby and the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity shall have failed to institute any such
action or proceeding and no direction inconsistent with such written request
shall have been given to the Trustee pursuant to Section 4.09; it being
understood and intended, and being expressly covenanted by the taker and Holder
of every Security with every other taker and Holder and the Trustee, that no
one or more Holders of Securities of any series shall have any right in any
manner whatever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of any other such Holder of Securities,
or to obtain or seek to obtain priority over or preference to any other such
Holder or to enforce any right under this Indenture, except in the manner
herein provided and for the equal, ratable and common benefit of all Holders of
Securities of the applicable series. For the protection and enforcement of the
provisions of this Section, each and every Securityholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.

     SECTION 4.07. Unconditional Right of Securityholders to Institute Certain
Suits. Notwithstanding any other provision in this Indenture and any provision
of any Security, the right of any Holder of any Security to receive payment of
the principal of and interest on such Security on or after the respective due
dates expressed in such Security, or to institute suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.

                                       25

<PAGE>

     SECTION 4.08. Powers and Remedies Cumulative; Delay or Omission Not Waiver
of Default. Except as provided in Section 4.06, no right or remedy herein
conferred upon or reserved to the Trustee or to the Securityholders 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.

     No delay or omission of the Trustee or of any Securityholder to exercise
any right or power accruing upon any Event of Default occurring and continuing
as aforesaid shall impair any such right or power or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein; and, subject to
Section 4.06, every power and remedy given by this Indenture or by law to the
Trustee or to the Securityholders may be exercised from time to time, and as
often as shall be deemed expedient, by the Trustee or by the Securityholders.

     SECTION 4.09. Control by Securityholders. The Holders of a majority in
aggregate principal amount of the Securities of each series affected (with each
series voting as a separate class) at the time Outstanding shall have the right
to direct the time, method, and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee with respect to the Securities of such series by this Indenture;
provided that such direction shall not be otherwise than in accordance with law
and the provisions of this Indenture; and provided further that (subject to the
provisions of Section 5.01) the Trustee shall have the right to decline to
follow any such direction if the Trustee, being advised by counsel, shall
determine that the action or proceeding so directed may not lawfully be taken
or if the Trustee in good faith by its board of directors, the executive
committee, or a trust committee of directors or responsible officers of the
Trustee shall determine that the action or proceedings so directed would
involve the Trustee in personal liability or if the Trustee in good faith shall
so determine that the actions or forebearances specified in or pursuant to such
direction would be unduly prejudicial to the interests of Holders of the
Securities of all series so affected not joining in the giving of said
direction, it being understood that (subject to Section 5.01) the Trustee shall
have no duty to ascertain whether or not such actions or forebearances are
unduly prejudicial to such Holders.

     Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Securityholders.

                                       26

<PAGE>

     SECTION 4.10. Waiver of Past Defaults by Majority of Holders. Prior to a
declaration of the acceleration of the maturity of the Securities of any series
as provided in Section 4.01, the Holders of a majority in aggregate principal
amount of the Securities of such series at the time Outstanding (each such
series voting as a separate class) may on behalf of the Holders of all the
Securities of such series waive any past default or Event of Default, except a
default in respect of a covenant or provision hereof which cannot be modified
or amended without the consent of each Holder affected as provided in Section
7.02. In the case of any such waiver, the Issuer, the Trustee and the Holders
of the Securities of each series affected shall be restored to their former
positions and rights hereunder, respectively.

     Upon any such waiver, such default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.

     SECTION 4.11. Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances. The Trustee shall give to the Securityholders of any
series, as the names and addresses of such Holders appear on the registry
books, notice by mail of all defaults known to the Trustee which have occurred
with respect to such series, such notice to be transmitted within 90 days after
the occurrence thereof, unless such defaults shall have been cured before the
giving of such notice (the term "default" or "defaults" for the purposes of
this Section being hereby defined to mean any event or condition which is, or
with notice or lapse of time or both would become, an Event of Default);
provided that, except in the case of default in the payment of the principal of
or interest on any of the Securities of such series, or in the payment of any
sinking or purchase fund installment with respect to the Securities of such
series, the Trustee shall be protected in withholding such notice if and so
long as a trust committee of directors or trustees and/or responsible officers
of the Trustee in good faith determines that the withholding of such notice is
in the interests of the Securityholders of such series.

     SECTION 4.12. Right of Court to Require Filing of Undertaking to Pay
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

                                       27

<PAGE>

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 Trustee or to any suit
instituted by any Securityholder or group of Securityholders of any series
holding more than 10% in aggregate principal amount of the Securities of such
series, or to any suit instituted by any Securityholder for the enforcement of
the payment of the principal of or interest on any Security on or after the due
date expressed in such Security.

                                   ARTICLE 5
                             CONCERNING THE TRUSTEE

     SECTION 5.01. Duties and Responsibilities of the Trustee; During Default;
Prior to Default. With respect to the Holders of any series of Securities
issued hereunder, the Trustee, prior to the occurrence of an Event of Default
with respect to the Securities of a particular series and after the curing or
waiving of all Events of Default which may have occurred with respect to such
series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default with
respect to the Securities of a series has occurred (which has not been cured or
waived) the Trustee shall exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the circumstances in the
conduct of such person's own affairs.

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

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

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

               (ii) in the absence of bad faith on the part of the Trustee, the
          Trustee may conclusively rely, as to the truth of the statements and
          the correctness of the opinions expressed therein, upon any

                                       28

<PAGE>

          statements, certificates or opinions furnished to the Trustee and
          conforming to the requirements of this Indenture; but in the case of
          any such statements, certificates or opinions which by any provision
          hereof are specifically required to be furnished to the Trustee, the
          Trustee shall be under a duty to examine the same to determine
          whether or not they conform to the requirements of this Indenture;

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

               (c) the Trustee shall not be liable with respect to any action
          taken or omitted to be taken by it in good faith in accordance with
          the direction of the Holders pursuant to Section 4.09 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.

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

     The provisions of this Section 5.01 are in furtherance of and subject to
Sections 315 and 316 of the Trust Indenture Act of 1939.

     SECTION 5.02. Certain Rights of the Trustee. In furtherance of and subject
to the Trust Indenture Act of 1939, and subject to Section 5.01:

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

          (b) any request, direction, order or demand of the Issuer mentioned
     herein shall be sufficiently evidenced by an Officers' Certificate (unless
     other evidence in respect thereof be herein specifically

                                       29

<PAGE>

     prescribed); and any resolution of the Board of Directors may be evidenced
     to the Trustee by a copy thereof certified by the secretary or an
     assistant secretary of the Issuer;

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

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

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

          (f) prior to the occurrence of an Event of Default hereunder and
     after the curing or waiving of all Events of Default, the Trustee shall
     not be bound to make any investigation into the facts or matters stated in
     any resolution, certificate, statement, instrument, opinion, report,
     notice, request, consent, order, approval, appraisal, bond, debenture,
     note, coupon, security, or other paper or document unless requested in
     writing so to do by the Holders of not less than a majority in aggregate
     principal amount of the Securities of all series affected then
     Outstanding; provided that if the payment within a reasonable time to the
     Trustee of the costs, expenses or liabilities likely to be incurred by it
     in the making of such investigation is, in the opinion of the Trustee, not
     reasonably assured to the Trustee by the security afforded to it by the
     terms of this Indenture, the Trustee may require indemnity reasonably
     satisfactory to it against such expenses or liabilities as a condition to
     proceeding; the reasonable expenses of every such investigation shall be
     paid by the Issuer or, if paid by the Trustee or any predecessor trustee,
     shall be repaid by the Issuer upon demand;

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

                                       30

<PAGE>

          (h) the Trustee shall not be deemed to have notice of any default
     (the term "default" for the purposes of this subsection being hereby
     defined to mean any event or condition which is, or with notice or lapse
     of time or both would become, an Event of Default) or Event of Default
     unless a Responsible Officer of the Trustee has actual knowledge thereof
     or unless written notice of any event which is in fact such a default is
     received by the Trustee at the Corporate Trust Office of the Trustee, and
     such notice references the Securities and this Indenture;

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

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

     SECTION 5.03. Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee shall not be accountable for the use or application by
the Issuer of any of the Securities or of the proceeds thereof.

     SECTION 5.04. Trustee and Agents May Hold Securities; Collections, etc.
The Trustee or any agent of the Issuer or the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Securities with the same
rights it would have if it were not the Trustee or such agent and may otherwise
deal with the Issuer and receive, collect, hold and retain collections from the
Issuer with the same rights it would have if it were not the Trustee or such
agent.

     SECTION 5.05. Moneys Held by Trustee. Subject to the provisions of Section
9.04 hereof, all moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were
received, but need not be segregated from other funds except to the extent
required by

                                       31

<PAGE>

mandatory provisions of law. Neither the Trustee nor any agent of the Issuer or
the Trustee shall be under any liability for interest on any moneys received by
it hereunder.

     SECTION 5.06. Compensation and Indemnification of Trustee and Its Prior
Claim. The Issuer covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, such compensation as the Issuer and the
Trustee may agree upon in writing (which shall not be limited by any provision
of law in regard to the compensation of a trustee of an express trust) and the
Issuer covenants and agrees to pay or reimburse the Trustee and each
predecessor Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by or on behalf of it in accordance with any of
the provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all agents and other persons
not regularly in its employ) except to the extent any such expense,
disbursement or advance may arise from its negligence or bad faith. The Issuer
also covenants to indemnify the Trustee and each predecessor Trustee for, and
to hold it harmless against, any loss, damage, claims, liability or expense,
including taxes (other than taxes based upon, measured by or determined by the
income of the Trustee) arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder and the performance of
its duties hereunder, including the costs and expenses of defending itself
against or investigating any claim (whether asserted by the Issuer, any Holder
or any other person) of liability, except to the extent such loss liability or
expense is due to the negligence or bad faith of the Trustee or such
predecessor Trustee. The obligations of the Issuer under this Section to
compensate and indemnify the Trustee and each predecessor Trustee and to pay or
reimburse the Trustee and each predecessor Trustee for expenses, disbursements
and advances shall constitute additional indebtedness hereunder and shall
survive the satisfaction and discharge of this Indenture and the resignation or
removal of the Trustee. Such additional indebtedness shall be a senior claim to
that of the Securities upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the holders of
particular Securities, and the Securities are hereby subordinated to such
senior claim.

     The Trustee shall have a lien prior to the Securities as to all property
and funds held by the Trustee as such, for any amount owing it or any
predecessor Trustee pursuant to this Section 5.06, except with respect to funds
held in trust for the benefit of the Holders of particular Securities.

     When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 4.01(g) or 4.01(h), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of

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<PAGE>

administration under applicable Federal or state bankruptcy, insolvency or
other similar law.

     SECTION 5.07. Right of Trustee to Rely on Officers' Certificate, etc.
Subject to Sections 5.01 and 5.02, whenever in the administration of the trusts
of this Indenture the Trustee shall deem it necessary or desirable that a
matter be proved or established prior to taking or suffering or omitting any
action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or bad faith
on the part of the Trustee, be deemed to be conclusively proved and established
by an Officers' Certificate delivered to the Trustee, and such certificate, in
the absence of negligence or bad faith on the part of the Trustee, shall be
full warrant to the Trustee for any action taken, suffered or omitted by it
under the provisions of this Indenture upon the faith thereof.

     SECTION 5.08. Persons Eligible for Appointment as Trustee. The Trustee for
each series of Securities hereunder shall at all times be a corporation having
a combined capital and surplus of at least $50,000,000, and which is eligible
in accordance with the provisions of Section 310(a) of the Trust Indenture Act
of 1939. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of a Federal, State or District of
Columbia supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent report
of condition so published.

     SECTION 5.09. Resignation and Removal; Appointment of Successor Trustee.
(a) The Trustee, or any trustee or trustees hereafter appointed, may at any
time resign with respect to one or more or all series of Securities by giving
written notice of resignation to the Issuer and by mailing notice thereof by
first class mail to Holders of the applicable series of Securities at their
last addresses as they shall appear on the Security register. Upon receiving
such notice of resignation, the Issuer shall promptly appoint a successor
trustee or trustees with respect to the applicable series by written instrument
in duplicate, executed by authority of the Board of Directors, one copy of
which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee or trustees. If no successor trustee shall have been so
appointed with respect to any series and have accepted appointment within 30
days after the mailing of such notice of resignation, the resigning trustee may
petition any court of competent jurisdiction at the expense of the Issuer for
the appointment of a successor trustee, or any Securityholder who has been a
bona fide Holder of a Security or Securities of the applicable series for at
least six months may, subject to the provisions of Section 4.12, on behalf of
himself and all others similarly situated, petition any

                                       33

<PAGE>

such court for the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.

     (b) In case at any time any of the following shall occur:

               (i) the Trustee shall fail to comply with the provisions of
          Section 310(b) of the Trust Indenture Act of 1939 with respect to any
          series of Securities after written request therefor by the Issuer or
          by any Securityholder who has been a bona fide Holder of a Security
          or Securities of such series for at least six months; or

               (ii) the Trustee shall cease to be eligible in accordance with
          the provisions of Section 310(a) of the Trust Indenture Act of 1939
          and shall fail to resign after written request therefor by the Issuer
          or by any Securityholder; or

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

then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such series
by written instrument, in duplicate, executed by order of the Board of
Directors of the Issuer, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to
Section 315(e) of the Trust Indenture Act of 1939, any Securityholder who has
been a bona fide Holder of a Security or Securities of such series for at least
six months may on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee with respect to such series. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.

     If an instrument of acceptance by a successor Trustee shall not have been
delivered to the Trustee within 30 days after the giving of such notice of
removal, the Trustee being removed may petition, at the expense of the Issuer,
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.

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<PAGE>

     (c) The Holders of a majority in aggregate principal amount of the
Securities of each series at the time Outstanding may at any time remove the
Trustee with respect to Securities of such series and appoint a successor
trustee with respect to the Securities of such series by delivering to the
Trustee so removed, to the successor trustee so appointed and to the Issuer the
evidence provided for in Section 6.01 of the action in that regard taken by the
Securityholders.

     (d) Any resignation or removal of the Trustee with respect to any series
and any appointment of a successor trustee with respect to such series pursuant
to any of the provisions of this Section 5.09 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 5.10.

     SECTION 5.10. Acceptance of Appointment by Successor. Any successor
trustee appointed as provided in Section 5.09 shall execute and deliver to the
Issuer and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
with respect to all or any applicable series shall become effective and such
successor trustee, without any further act, deed or conveyance, shall become
vested with all rights, powers, duties and obligations with respect to such
series of its predecessor hereunder, with like effect as if originally named as
trustee for such series hereunder; but, nevertheless, on the written request of
the Issuer or of the successor trustee, upon payment of its charges then
unpaid, the trustee ceasing to act shall, subject to Section 9.04, pay over to
the successor trustee all moneys at the time held by it hereunder and shall
execute and deliver an instrument transferring to such successor trustee all
such rights, powers, duties and obligations. Upon request of any such successor
trustee, the Issuer shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor trustee all
such rights and powers. Any trustee ceasing to act shall, nevertheless, retain
a prior claim upon all property or funds held or collected by such trustee to
secure any amounts then due it pursuant to the provisions of Section 5.06.

     If a successor trustee is appointed with respect to the Securities of one
or more (but not all) series, the Issuer, the predecessor Trustee and each
successor trustee with respect to the Securities of any applicable series shall
execute and deliver an indenture supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the predecessor Trustee with respect to
the Securities of any series as to which the predecessor Trustee is not
retiring shall continue to be vested in the predecessor Trustee, and shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one trustee, it being understood that nothing herein

                                       35

<PAGE>

or in such supplemental indenture shall constitute such trustees co-trustees of
the same trust and that each such trustee shall be trustee of a trust or trusts
under separate indentures.

     Upon acceptance of appointment by any successor trustee as provided in
this Section 5.10, the Issuer shall mail notice thereof by first-class mail to
the Holders of Securities of any series for which such successor trustee is
acting as trustee at their last addresses as they shall appear in the Security
register. If the acceptance of appointment is substantially contemporaneous
with the resignation, then the notice called for by the preceding sentence may
be combined with the notice called for by Section 5.09. If the Issuer fails to
mail such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be mailed
at the expense of the Issuer.

     SECTION 5.11. Merger, Conversion, Consolidation or Succession to Business
of Trustee. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, provided that such corporation
shall be eligible under the provisions of Section 5.08, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.

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

     SECTION 5.12. Indentures Not Creating Potential Conflicting Interests for
the Trustee. The following indentures are hereby specifically described for the
purposes of Section 310(b)(1) of the Trust Indenture Act of 1939: Indenture
dated as of February 1, 2000 between the Issuer and The Bank of New York, as
trustee.

                                       36

<PAGE>

                                   ARTICLE 6
                         CONCERNING THE SECURITYHOLDERS

     SECTION 6.01. Evidence of Action Taken by Securityholders. Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by a specified percentage in
principal amount of the Securityholders of any or all series may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such specified percentage of Securityholders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee. Proof of execution of any instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Indenture and
(subject to Sections 5.01 and 5.02) conclusive in favor of the Trustee and the
Issuer, if made in the manner provided in this Article.

     SECTION 6.02. Proof of Execution of Instruments and of Holding of
Securities; Record Date. Subject to Sections 5.01 and 5.02, the execution of
any instrument by a Securityholder or his agent or proxy may be proved in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Securities shall be proved by the Security register or by a
certificate of the registrar thereof. The Issuer may set a record date for
purposes of determining the identity of holders of Securities of any series
entitled to vote or consent to any action referred to in Section 6.01, which
record date may be set at any time or from time to time by notice to the
Trustee, for any date or dates (in the case of any adjournment or
reconsideration) not more than 60 days nor less than five days prior to the
proposed date of such vote or consent, and thereafter, notwithstanding any
other provisions hereof, only holders of Securities of such series of record on
such record date shall be entitled to so vote or give such consent or revoke
such vote or consent.

     SECTION 6.03. Holders to be Treated as Owners. The Issuer, the Trustee and
any agent of the Issuer or the Trustee may deem and treat the person in whose
name any Security shall be registered upon the Security register for such
series as the absolute owner of such Security (whether or not such Security
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of and, subject to the provisions of this Indenture, interest on such Security
and for all other purposes; and neither the Issuer nor the Trustee nor any
agent of the Issuer or the Trustee shall be affected by any notice to the
contrary. All such payments so made to any such person, or upon his order,
shall be valid, and, to the extent of

                                       37

<PAGE>

the sum or sums so paid, effectual to satisfy and discharge the liability for
moneys payable upon any such Security.

     SECTION 6.04. Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all series have concurred in any direction,
consent or waiver under this Indenture, Securities which are owned by the
Issuer or any other obligor on the Securities with respect to which such
determination is being made or by any person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Issuer or
any other obligor on the Securities with respect to which such determination is
being made shall be disregarded and deemed not to be Outstanding for the
purpose of any such determination, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such direction,
consent or waiver only Securities which the Trustee knows are so owned shall be
so disregarded. Securities so owned which have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Securities and
that the pledgee is not the Issuer or any other obligor upon the Securities or
any person directly or indirectly controlling or controlled by or under direct
or indirect common control with the Issuer or any other obligor on the
Securities. In case of a dispute as to such right, the advice of counsel shall
be full protection in respect of any decision made by the Trustee in accordance
with such advice. Upon request of the Trustee, the Issuer shall furnish to the
Trustee promptly an Officers' Certificate listing and identifying all
Securities, if any, known by the Issuer to be owned or held by or for the
account of any of the above-described persons; and, subject to Sections 5.01
and 5.02, the Trustee shall be entitled to accept such Officers' Certificate as
conclusive evidence of the facts therein set forth and of the fact that all
Securities not listed therein are Outstanding for the purpose of any such
determination.

     SECTION 6.05. Right of Revocation of Action Taken. At any time prior to
(but not after) the evidencing to the Trustee, as provided in Section 6.01, of
the taking of any action by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action, any Holder of a
Security the serial number of which is shown by the evidence to be included
among the serial numbers of the Securities the Holders of which have consented
to such action may, by filing written notice at the Corporate Trust Office and
upon proof of holding as provided in this Article, revoke such action so far as
concerns such Security. Except as aforesaid any such action taken by the Holder
of any Security shall be conclusive and binding upon such Holder and upon all
future Holders and owners of such Security and of any Securities issued in
exchange or substitution therefor, irrespective of whether or not any notation
in regard thereto is made

                                               38

<PAGE>

upon any such Security. Any action taken by the Holders of the percentage in
aggregate principal amount of the Securities of any or all series, as the case
may be, specified in this Indenture in connection with such action shall be
conclusively binding upon the Issuer, the Trustee and the Holders of all the
Securities affected by such action.

                                   ARTICLE 7
                            SUPPLEMENTAL INDENTURES

     SECTION 7.01. Supplemental Indentures Without Consent of Securityholders.
The Issuer, when authorized by a resolution of its Board of Directors (such
resolution to be confirmed by an Officers' Certificate of the Issuer to such
effect), and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto for one or more of the following
purposes:

          (a) to convey, transfer, assign, mortgage or pledge to the Trustee as
     security for the Securities of one or more series any property or assets;

          (b) to evidence the succession of another corporation to the Issuer,
     or successive successions, and the assumption by the successor corporation
     of the covenants, agreements and obligations of the Issuer pursuant to
     Article 8;

          (c) to add to the covenants of the Issuer such further covenants,
     restrictions, conditions or provisions as its Board of Directors and the
     Trustee shall consider to be for the protection of the Holders of
     Securities, and to make the occurrence, or the occurrence and continuance,
     of a default in any such additional covenants, restrictions, conditions or
     provisions an Event of Default permitting the enforcement of all or any of
     the several remedies provided in this Indenture as herein set forth;
     provided that in respect of any such additional covenant, restriction,
     condition or provision, such supplemental indenture may provide for a
     particular period of grace after default (which period may be shorter or
     longer than that allowed in the case of other defaults) or may provide for
     an immediate enforcement upon such an Event of Default or may limit the
     remedies available to the Trustee upon such an Event of Default or may
     limit the right of the Holders of a majority in aggregate principal amount
     of the Securities of such series to waive such an Event of Default;

                                       39

<PAGE>

          (d) to cure any ambiguity or to correct or supplement any provision
     contained herein or in any supplemental indenture which may be defective
     or inconsistent with any other provision contained herein or in any
     supplemental indenture; or to make such other provisions in regard to
     matters or questions arising under this Indenture or under any
     supplemental indenture as the Board of Directors may deem necessary or
     desirable and which shall not adversely affect the interests of any
     Holders of the Securities;

          (e) to comply with any requirements of the Commission in connection
     with the qualification of this Indenture under the Trust Indenture Act of
     1939;

          (f) to establish the form or terms of Securities of any series as
     permitted by Sections 2.01 and 2.03; and

          (g) 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, pursuant
     to the requirements of Section 5.10.

     The Trustee is hereby authorized to join with the Issuer in the execution
of any such supplemental indenture and to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise. Every amendment to or supplement
of this Indenture or the Securities shall comply with the Trust Indenture Act
of 1939 as in effect at the date of such amendment or supplement.

     Any supplemental indenture authorized by the provisions of this Section
may be executed without the consent of the Holders of any of the Securities at
the time Outstanding, notwithstanding any of the provisions of Section 7.02.

     SECTION 7.02. Supplemental Indentures With Consent of Securityholders.
With the consent (evidenced as provided in Article 6) of the Holders of not
less than a majority in aggregate principal amount of the Securities of any
series at the time Outstanding affected by such supplemental indenture (voting
as a separate class), the Issuer, when authorized by a resolution of its Board
of Directors, and the Trustee may, from time to time and at any time, enter
into an indenture or

                                               40

<PAGE>

indentures supplemental hereto 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 as it relates to such series of Securities or
of modifying in any manner the rights of the Holders of the Securities of such
series; provided that no such supplemental indenture shall (a) change the final
maturity of any Security, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or change the currency
in which the Securities are payable, or waive a payment default with respect to
the Securities, or impair or change, in any respect adverse to the
Securityholders, the right to convert the Securities into any other security,
if any, or the provisions with respect to the subordination of the Securities,
or alter or waive any provision regarding redemption thereof or reduce the
amount of the principal of an Original Issue Discount Security that would be
due and payable upon an acceleration of the maturity thereof pursuant to
Section 4.01 or the amount thereof provable in bankruptcy pursuant to Section
4.02, or impair or affect the right of any Securityholder to institute suit for
any payment thereof, in each case, without the consent of the Holder of each
Security so affected, or (b) reduce the aforesaid percentage of Securities of
any series, the consent of the Holders of which is required for any such
amendment, waiver, consent or supplemental indenture, without the consent of
the Holders of each Security so affected.

     Upon the request of the Issuer, accompanied by a copy of a resolution of
the Board of Directors certified by the secretary or an assistant secretary of
the Issuer authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Securityholders
as aforesaid and other documents, if any, required by Section 6.01, the Trustee
shall join with the Issuer in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such supplemental
indenture.

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

     Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Issuer
shall mail a notice thereof by first class mail to the Holders of Securities of
each series affected thereby at their addresses as they shall appear on the
registry books of the Issuer, setting forth in general terms the substance of
such supplemental indenture. Any failure of the Issuer to mail such notice, or
any defect therein, shall not, however, in any way impair or affect the
validity of any such supplemental indenture.

                                       41

<PAGE>

     SECTION 7.03. Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Issuer and the Holders of Securities
of each series affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and
amendments, and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.

     SECTION 7.04. Documents to Be Given to Trustee. Prior to entering into any
supplemental indenture, the Trustee shall receive an Officers' Certificate and
an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article 7 complies with the applicable provisions of
this Indenture.

     SECTION 7.05. Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear a notation in form approved by the Trustee for such series as
to any matter provided for by such supplemental indenture or as to any action
taken at any such meeting. If the Issuer or the Trustee shall so determine, new
Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Issuer,
authenticated by the Trustee and delivered in exchange for the Securities of
such series then Outstanding.

                                   ARTICLE 8
                   CONSOLIDATION, MERGER, SALE OR CONVEYANCE

     SECTION 8.01. Issuer May Consolidate, etc., on Certain Terms. The Issuer
covenants that it will not merge, consolidate or combine with or into or,
directly or indirectly, sell, assign, convey, lease, transfer or otherwise
dispose of all or substantially all of its properties and assets to any Person
or Persons, in a single transaction or series of transactions, unless (i)
either (x) the Issuer shall be the continuing Person or (y) the successor
Person or Persons which, directly or indirectly, acquires by sale, assignment,
conveyance, lease, transfer or other disposition substantially all the
properties and assets of the Issuer (the "Surviving Person") shall be a
corporation or limited liability company organized and

                                       42

<PAGE>

existing under the laws of the United States of America, any state thereof or
the District of Columbia and shall expressly assume the due and punctual
payment of the principal of and any premium and interest on all the Securities,
according to their tenor, and the due and punctual performance and observance
of all of the covenants and conditions of this Indenture to be performed or
observed by the Issuer, by supplemental indenture satisfactory to the Trustee,
executed and delivered to the Trustee by such Surviving Person, (ii)
immediately after such merger, consolidation, combination, sale, assignment,
conveyance, lease, transfer or other disposition, no default hereunder has
occurred and is continuing, and (iii) the Issuer or such Surviving Person shall
have delivered to the Trustee an Opinion of Counsel stating that such merger,
consolidation, combination, sale, assignment, conveyance, lease, transfer or
other disposition, and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture, comply with this Article.

     SECTION 8.02. Surviving Person Substituted. In case of any such merger,
consolidation or combination (if the Issuer shall not be the continuing
corporation), or such sale, assignment, conveyance, lease, transfer or other
disposition and following such an assumption by the Surviving Person, such
Surviving Person shall succeed to and be substituted for the Issuer, with the
same effect as if it had been named herein. Such Surviving Person may cause to
be signed, and may issue either in its own name or in the name of the Issuer
prior to such succession any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Issuer and delivered to the
Trustee; and, upon the order of such Surviving Person instead of the Issuer and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Securities
which previously shall have been signed and delivered by the officers of the
Issuer to the Trustee for authentication, and any Securities which such
Surviving Person thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All of the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Securities had been issued at the date of the execution
hereof.

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

     In the event of any such sale, assignment, conveyance, transfer or other
disposition (other than by way of lease), the Issuer or any Surviving Person
which shall theretofore have become such in the manner described in this
Article shall be

                                       43

<PAGE>

discharged from all obligations and covenants under this Indenture and the
Securities and may be liquidated and dissolved.

     SECTION 8.03. Opinion of Counsel to Trustee. The Trustee, subject to the
provisions of Sections 5.01 and 5.02, may receive an Opinion of Counsel,
prepared in accordance with Section 10.05, as conclusive evidence that any such
consolidation, combination, merger, sale, assignment, conveyance, lease,
transfer or other disposition, and any such assumption, and any such
liquidation or dissolution, complies with the applicable provisions of this
Indenture.

                                   ARTICLE 9
               SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED
                                     MONEYS

     SECTION 9.01. Satisfaction and Discharge of Indenture. If at any time
either (a) the Issuer shall have delivered to the Trustee for cancellation all
securities of any series theretofore authenticated (other than any Securities
of such series which shall have been destroyed, lost or stolen and which shall
have been replaced or paid as provided in Section 2.09) or (b) (i) all the
securities of such series not theretofore delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable within one year or will be redeemable within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption, and (ii) the Issuer shall have irrevocably deposited or caused to
be deposited with the Trustee as trust funds the entire amount in cash (other
than moneys repaid by the Trustee or any paying agent to the Issuer in
accordance with Section 9.04) or direct obligations of the United States of
America, backed by its full faith and credit, maturing as to principal and
interest in such amounts and at such times as will insure the availability of
cash sufficient to pay at maturity or upon redemption all Securities of such
series (other than any Securities of such series which shall have been
destroyed, lost or stolen and which shall have been replaced or paid as
provided in Section 2.09) not theretofore delivered to the Trustee for
cancellation, including principal and interest due or to become due on or prior
to such date of maturity as the case may be, and if, in either case (a) or (b)
above, the Issuer shall also pay or cause to be paid all other sums payable
hereunder by the Issuer with respect to Securities of such series, then this
Indenture shall cease to be of further effect with respect to Securities of
such series (except as to (i) rights of registration of transfer and exchange
of Securities of such series, and the Issuer's right of optional redemption, if
any, (ii) rights of conversion of Securities of such series, if any (provided
upon the surrender for conversion of any such convertible Securities, the
Issuer shall be repaid from the amounts so deposited the amounts deposited or

                                       44

<PAGE>

caused to be deposited to pay any principal and interest due or to become due
on or prior to such date of maturity, and any other sums payable hereunder by
the Issuer, with respect to such convertible Securities surrendered for
conversion), (iii) substitution of mutilated, defaced, destroyed, lost or
stolen Securities, (iv) rights of Holders to receive payments of principal
thereof and interest thereon, upon the original stated dates therefor (but not
upon acceleration), and remaining rights of the Holders to receive mandatory
sinking fund payments, if any, (v) the rights, obligations and immunities of
the Trustee hereunder and (vi) the rights of the Securityholders of such series
as beneficiaries hereof with respect to the property so deposited with the
Trustee payable to all or any of them), and the Trustee, on demand of the
Issuer accompanied by an Officers' Certificate and an Opinion of Counsel and at
the cost and expense of the Issuer, shall execute proper instruments
acknowledging such satisfaction of and discharging this Indenture with respect
to such series; provided that the rights of Holders of the Securities to
receive amounts in respect of principal of and interest on the Securities held
by them shall not be delayed longer than required by then-applicable mandatory
rules or policies of any securities exchange upon which the Securities are
listed. The Issuer agrees to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred and to compensate the Trustee for
any services thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Securities of such series.

     SECTION 9.02. Application by Trustee of Funds Deposited for Payment of
Securities. Subject to Section 9.04, all moneys deposited with the Trustee
pursuant to Section 9.01 shall be held in trust and applied by it to the
payment, either directly or through any paying agent (including the Issuer
acting as its own paying agent), to the Holders of the particular Securities of
such series for the payment or redemption of which such moneys have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest; but such money need not be segregated from other funds
except to the extent required by law. Money so held in trust shall not be
subject to the subordination provisions of Article 12.

     SECTION 9.03. Repayment of Moneys Held by Paying Agent. In connection with
the satisfaction and discharge of this Indenture with respect to Securities of
any series, all moneys then held by any paying agent under the provisions of
this Indenture with respect to such series of Securities shall, upon demand of
the Issuer, be repaid to it or paid to the Trustee and thereupon such paying
agent shall be released from all further liability with respect to such moneys.

     SECTION 9.04. Return of Moneys Held by Trustee and Paying Agent Unclaimed
for Three Years. Any moneys deposited with or paid to the Trustee or

                                       45

<PAGE>

any paying agent for the payment of the principal of or interest on any
Security of any series and not applied but remaining unclaimed for three years
after the date upon which such principal or interest shall have become due and
payable, shall, upon the written request of the Issuer and unless otherwise
required by mandatory provisions of applicable escheat or abandoned or
unclaimed property law, be repaid to the Issuer by the Trustee for such series
or such paying agent, and the Holder of the Security of such series shall,
unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property laws, thereafter look only to the Issuer for
any payment which such Holder may be entitled to collect, and all liability of
the Trustee or any paying agent with respect to such moneys shall thereupon
cease.

     SECTION 9.05. Reinstatement. If the Trustee or any paying agent is unable
to apply any money in accordance with Section 9.02 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,
then the Issuer's obligations under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to Section
9.01 until such time as the Trustee or such paying agent is permitted to apply
all such money in accordance with Section 9.02, provided that if the Issuer has
made any payment of the principal of or interest on any Securities because of
the reinstatement of its obligations, the Issuer shall be subrogated to the
rights of the Holders of such Securities to receive any such payment from the
money held by the Trustee or such paying agent.

                                   ARTICLE 10
                            MISCELLANEOUS PROVISIONS

     SECTION 10.01. Incorporators, Stockholders, Officers and Directors of
Issuer Exempt from Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had
against any incorporator, as such or against any past, present or future
stockholder, officer or director, as such, of the Issuer or of any successor,
either directly or through the Issuer or any successor, under any rule of law,
statute or constitutional provision or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Securities by the
holders thereof and as part of the consideration for the issue of the
Securities.

                                       46

<PAGE>

     SECTION 10.02. Provisions of Indenture for the Sole Benefit of Parties and
Securityholders. Nothing in this Indenture or in the Securities, expressed or
implied, shall give or be construed to give to any person, firm or corporation,
other than the parties hereto and their successors and holders of Senior
Indebtedness and the Holders of the Securities, any legal or equitable right,
remedy or claim under this Indenture or under any covenant or provision herein
contained, all such covenants and provisions being for the sole benefit of the
parties hereto and their successors and holders of Senior Indebtedness and of
the Holders of the Securities.

     SECTION 10.03. Successors and Assigns of Issuer Bound by Indenture. All
the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Issuer shall bind its successors and assigns,
whether so expressed or not.

     SECTION 10.04. Notices and Demands on Issuer, Trustee and Securityholders.
Any notice or demand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the Holders of Securities
to or on the Issuer may be given or served by being deposited postage prepaid,
first-class mail (except as otherwise specifically provided herein) addressed
(until another address of the Issuer is filed by the Issuer with the Trustee)
to E*TRADE Group, Inc., 4500 Bohannon Drive, Menlo Park, California 94025,
Attention: Leonard C. Purkis. Any notice, direction, request or demand by the
Issuer or any Securityholder to or upon the Trustee shall be deemed to have
been sufficiently given or made, for all purposes, if given or made at the
Corporate Trust Office.

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

     In case, by reason of the suspension of or irregularities in regular mail
service, it shall be impracticable to mail notice to the Issuer and
Securityholders when such notice is required to be given pursuant to any
provision of this

                                       47

<PAGE>

Indenture, then any manner of giving such notice as shall be satisfactory to
the Trustee shall be deemed to be a sufficient giving of such notice.

     SECTION 10.05. Officers' Certificates and Opinions of Counsel; Statements
to Be Contained Therein. Upon any application or demand by the Issuer to the
Trustee to take any action under any of the provisions of this Indenture, the
Issuer shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.

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

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

     Any certificate, statement or opinion of an officer of the Issuer or of
counsel may be based, insofar as it relates to accounting matters, upon a
certificate

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<PAGE>

or opinion of or representations by an accountant or firm of accountants in the
employ of the Issuer, unless such officer or counsel, as the case may be, knows
that the certificate or opinion or representations with respect to the
accounting matters upon which his certificate, statement or opinion may be
based as aforesaid are erroneous, or in the exercise of reasonable care should
know that the same are erroneous.

     Any certificate or opinion of any independent firm of public accountants
filed with the Trustee shall contain a statement that such firm is independent.

     SECTION 10.06. Payments Due on Saturdays, Sundays and Holidays. If the
date of maturity of interest on or principal of the Securities of any series or
the date fixed for redemption or repayment of any such Security shall not be a
Business Day, then payment of interest or principal need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date of maturity or the date fixed for redemption,
and no interest shall accrue for the period after such date.

     SECTION 10.07. Conflict of Any Provision of Indenture with Trust Indenture
Act of 1939. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture by
operation of Sections 310 to 317, inclusive, of the Trust Indenture Act of 1939
(an "incorporated provision"), such incorporated provision shall control.

     SECTION 10.08. New York Law to Govern. This Indenture and each Security
shall be deemed to be a contract under the laws of the State of New York, and
for all purposes shall be construed in accordance with the laws of such State,
except as may otherwise be required by mandatory provisions of law.

     SECTION 10.09. Counterparts. This Indenture may be executed in any number
of counterparts, each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.

     SECTION 10.10. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.

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<PAGE>

                                   ARTICLE 11
                   REDEMPTION OF SECURITIES AND SINKING FUNDS

     SECTION 11.01. Applicability of Article. The provisions of this Article
shall be applicable to the Securities of any series which are redeemable before
their maturity or to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 2.03 for
Securities of such series.

     SECTION 11.02. Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Securities of any series to be redeemed as a whole
or in part at the option of the Issuer shall be given by mailing notice of such
redemption by first class mail, postage prepaid, at least 30 days and not more
than 60 days prior to the date fixed for redemption to such Holders of
Securities of such series at their last addresses as they shall appear upon the
registry books. Any notice which is mailed in the manner herein provided shall
be conclusively presumed to have been duly given, whether or not the Holder
receives the notice. Failure to give notice by mail, or any defect in the
notice to the Holder of any Security of a series designated for redemption as a
whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security of such series.

     The notice of redemption to each such Holder shall specify the principal
amount of each Security of such series held by such Holder to be redeemed, the
date fixed for redemption, the redemption price, the conversion price in effect
at such time in the case of convertible Securities, the place or places of
payment, that payment will be made upon presentation and surrender of such
Securities, that such redemption is pursuant to the mandatory or optional
sinking fund, or both, if such be the case, that interest accrued to the date
fixed for redemption will be paid as specified in such notice and that on and
after said date interest thereon or on the portions thereof to be redeemed will
cease to accrue. In case any Security of a series is to be redeemed in part
only the notice of redemption shall state the portion of the principal amount
thereof to be redeemed and shall state that on and after the date fixed for
redemption, upon surrender of such Security, a new Security or Securities of
such series in principal amount equal to the unredeemed portion thereof will be
issued.

     The notice of redemption of Securities of any series to be redeemed at the
option of the Issuer shall be given by the Issuer or, at the Issuer's request,
by the Trustee in the name and at the expense of the Issuer.

     At least one Business Day prior to the redemption date specified in the
notice of redemption given as provided in this Section, the Issuer will deposit
with

                                       50

<PAGE>

the Trustee or with one or more paying agents (or, if the Issuer is acting as
its own paying agent, set aside, segregate and hold in trust as provided in
Section 3.04) an amount of money sufficient to redeem on the redemption date
all the Securities of such series so called for redemption at the appropriate
redemption price, together with accrued interest to the date fixed for
redemption. If less than all the Outstanding Securities of a series are to be
redeemed, the Issuer will deliver to the Trustee at least 70 days prior to the
date fixed for redemption an Officers' Certificate stating the aggregate
principal amount of Securities to be redeemed.

     If less than all the Securities of a series are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such series to be redeemed in whole or in part. If a portion of
the Securities of a series to be redeemed that are convertible have been
submitted by the Holder thereof for conversion, the converted portion shall be
deemed to be the portion selected for redemption. Securities may be redeemed in
part in multiples equal to the minimum authorized denomination for Securities
of such series or any multiple thereof. The Trustee shall promptly notify the
Issuer in writing of the Securities of such series selected for redemption and,
in the case of any Securities of such series selected for partial redemption,
the principal amount thereof to be redeemed. For all purposes of this
Indenture, unless the context otherwise requires, all provisions relating to
the redemption of Securities of any series shall relate, in the case of any
Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed.

     SECTION 11.03. Payment of Securities Called for Redemption. If notice of
redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date
and at the place stated in such notice at the applicable redemption price,
together with interest accrued to the date fixed for redemption, and on and
after said date (unless the Issuer shall default in the payment of such
Securities at the redemption price, together with interest accrued to said
date) interest on the Securities or portions of Securities so called for
redemption shall cease to accrue and, except as provided in Sections 5.05 and
9.04, such Securities shall cease from and after the date fixed for redemption
to be entitled to any benefit or security under this Indenture, and the Holders
thereof shall have no right in respect of such Securities except the right to
receive the redemption price thereof and unpaid interest to the date fixed for
redemption. On presentation and surrender of such Securities at a place of
payment specified in said notice, said Securities or the specified portions
thereof shall be paid and redeemed by the Issuer at the applicable redemption
price, together with interest accrued thereon to the date fixed for redemption;
provided that any semiannual payment of interest becoming due on the date fixed
for redemption shall be payable to the Holders of such Securities registered as

                                               51

<PAGE>

such on the relevant record date subject to the terms and provisions of Section
2.04 hereof.

     If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid or duly provided for,
bear interest from the date fixed for redemption at the rate of interest or
Yield to Maturity (in the case of an Original Issue Discount Security) borne by
the Security.

     Upon presentation of any Security redeemed in part only, the Issuer shall
execute and the Trustee shall authenticate and deliver to or on the order of
the Holder thereof, at the expense of the Issuer, a new Security or Securities
of such series, of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.

     SECTION 11.04. Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in a written statement signed by an authorized officer of the Issuer and
delivered to the Trustee at least 40 days prior to the last date on which
notice of redemption may be given as being owned of record and beneficially by,
and not pledged or hypothecated by either (a) the Issuer or (b) an entity
specifically identified in such written statement directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Issuer.

     SECTION 11.05. Mandatory and Optional Sinking Funds. The minimum amount of
any sinking fund payment provided for by the terms of Securities of any series
is herein referred to as a "mandatory sinking fund payment", and any payment in
excess of such minimum amount provided for by the terms of Securities of any
series is herein referred to as an "optional sinking fund payment". The date on
which a sinking fund payment is to be made is herein referred to as the
"sinking fund payment date".

     In lieu of making all or any part of any mandatory sinking fund payment
with respect to any series of Securities in cash, the Issuer may at its option
(a) deliver to the Trustee Securities of such series theretofore purchased or
otherwise acquired (except upon redemption pursuant to the mandatory sinking
fund) by the Issuer or receive credit for Securities of such series (not
previously so credited) theretofore purchased or otherwise acquired (except as
aforesaid) by the Issuer and delivered to the Trustee for cancellation pursuant
to Section 2.07, (b) receive credit for optional sinking fund payments (not
previously so credited) made pursuant to this Section, or (c) receive credit
for Securities of such series (not previously so credited) redeemed by the
Issuer through any optional redemption

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<PAGE>

provision contained in the terms of such series. Securities so delivered or
credited shall be received or credited by the Trustee at the sinking fund
redemption price specified in such Securities.

     On or before the sixtieth day next preceding each sinking fund payment
date for any series, the Issuer will deliver to the Trustee a written statement
(which need not contain the statements required by Section 10.05) signed by an
authorized officer of the Issuer (a) specifying the portion of the mandatory
sinking fund payment to be satisfied by payment of cash and the portion to be
satisfied by credit of Securities of such series, (b) stating that none of the
Securities of such series has theretofore been so credited, (c) stating that no
defaults in the payment of interest or Events of Default with respect to such
series have occurred (which have not been waived or cured) and are continuing
and (d) stating whether or not the Issuer intends to exercise its right to make
an optional sinking fund payment with respect to such series and, if so,
specifying the amount of such optional sinking fund payment which the Issuer
intends to pay on or before the next succeeding sinking fund payment date. Any
Securities of such series to be credited and required to be delivered to the
Trustee in order for the Issuer to be entitled to credit therefor as aforesaid
which have not theretofore been delivered to the Trustee shall be delivered for
cancellation pursuant to Section 2.10 to the Trustee with such written
statement (or reasonably promptly thereafter if acceptable to the Trustee).
Such written statement shall be irrevocable and upon its receipt by the Trustee
the Issuer shall become unconditionally obligated to make all the cash payments
or payments therein referred to, if any, on or before the next succeeding
sinking fund payment date. Failure of the Issuer, on or before any such
sixtieth day, to deliver such written statement and Securities specified in
this paragraph, if any, shall not constitute a default but shall constitute, on
and as of such date, the irrevocable election of the Issuer (i) that the
mandatory sinking fund payment for such series due on the next succeeding
sinking fund payment date shall be paid entirely in cash without the option to
deliver or credit Securities of such series in respect thereof and (ii) that
the Issuer will make no optional sinking fund payment with respect to such
series as provided in this Section.

     If the sinking fund payment or payments (mandatory or optional or both) to
be made in cash on the next succeeding sinking fund payment date plus any
unused balance of any preceding sinking fund payments made in cash shall exceed
$50,000 (or a lesser sum if the Issuer shall so request) with respect to the
Securities of any particular series, such cash shall be applied on the next
succeeding sinking fund payment date to the redemption of Securities of such
series at the sinking fund redemption price together with accrued interest to
the date fixed for redemption. If such amount shall be $50,000 or less and the
Issuer makes no such request then it shall be carried over until a sum in
excess of $50,000 is available. The Trustee shall select, in the manner
provided in Section

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<PAGE>

11.02, for redemption on such sinking fund payment date a sufficient principal
amount of Securities of such series to absorb said cash, as nearly as may be,
and shall (if requested in writing by the Issuer) inform the Issuer of the
serial numbers of the Securities of such series (or portions thereof) so
selected. Securities of any series which are (a) owned by the Issuer or an
entity known by the Trustee to be directly or indirectly controlling or
controlled by or under direct or indirect common control with the Issuer, as
shown by the Security register, and not known to the Trustee to have been
pledged or hypothecated by the Issuer or any such entity or (b) identified in
an Officers' Certificate at least 60 days prior to the sinking fund payment
date as being beneficially owned by, and not pledged or hypothecated by, the
Issuer or an entity directly or indirectly controlling or controlled by or
under direct or indirect common control with the Issuer shall be excluded from
Securities of such series eligible for selection for redemption. The Trustee,
in the name and at the expense of the Issuer (or the Issuer, if it shall so
request the Trustee in writing) shall cause notice of redemption of the
Securities of such series to be given in substantially the manner provided in
Section 11.02 (and with the effect provided in Section 11.03) for the
redemption of Securities of such series in part at the option of the Issuer.
The amount of any sinking fund payments not so applied or allocated to the
redemption of Securities of such series shall be added to the next cash sinking
fund payment for such series and, together with such payment, shall be applied
in accordance with the provisions of this Section. Any and all sinking fund
moneys held on the stated maturity date of the Securities of any particular
series (or earlier, if such maturity is accelerated), which are not held for
the payment or redemption of particular Securities of such series shall be
applied, together with other moneys, if necessary, sufficient for the purpose,
to the payment of the principal of, and interest on, the Securities of such
series at maturity.

     At least one Business Day before each sinking fund payment date, the
Issuer shall pay to the Trustee in cash or shall otherwise provide for the
payment of all interest accrued to the date fixed for redemption on Securities
to be redeemed on the next following sinking fund payment date.

     The Trustee shall not redeem or cause to be redeemed any Securities of a
series with sinking fund moneys or mail any notice of redemption of Securities
for such series by operation of the sinking fund during the continuance of a
default in payment of interest on such Securities or of any Event of Default
except that, where the mailing of notice of redemption of any Securities shall
theretofore have been made, the Trustee shall redeem or cause to be redeemed
such Securities, provided that it shall have received from the Issuer a sum
sufficient for such redemption. Except as aforesaid, any moneys in the sinking
fund for such series at the time when any such default or Event of Default
shall occur, and any moneys thereafter paid into the sinking fund, shall,
during the continuance of such default

                                       54

<PAGE>

or Event of Default, be deemed to have been collected under Article 4 and held
for the payment of all such Securities. In case such Event of Default shall
have been waived as provided in Section 4.09 or the default cured on or before
the sixtieth day preceding the sinking fund payment date in any year, such
moneys shall thereafter be applied on the next succeeding sinking fund payment
date in accordance with this Section to the redemption of such Securities.

                                   ARTICLE 12
                          SUBORDINATION OF SECURITIES

     SECTION 12.01. Agreement of Subordination. The Issuer 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 12; and each Securityholder, whether
upon original issue or upon transfer or assignment thereof, accepts and agrees
to be bound by such provisions.

     The payment of the principal of and interest on all Securities 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.

     No provision of this Article 12 shall prevent the occurrence of any
default or Event of Default hereunder.

     SECTION 12.02. Payments to Securityholders. In the event and during the
continuation of (a) any default in the payment of principal, premium, if any,
or interest on or any other monetary amounts due and payable on any Senior
Indebtedness, or (b) any other default having occurred concerning any Senior
Indebtedness which permits the holder or holders of any Senior Indebtedness to
accelerate the maturity of any Senior Indebtedness with notice or lapse of time
or both, and the Issuer and the Trustee receive a written notice of such
default (a "Payment Blockage Notice") from a representative of such Senior
Indebtedness or a holder of such Senior Indebtedness or the Issuer, in each
case continuing beyond the period of grace, if any, specified in the instrument
or lease evidencing such Senior Indebtedness, then, unless and until such
default shall have been cured or waived or shall have ceased to exist, no
payment shall be made by the Issuer with respect to the principal of
(including, without limitation, sinking fund payments, if any) or interest on
the Securities.

     The Issuer may and shall resume payments on the Securities (1) in the case
of a payment default, on the date upon which such default is cured or waived or

                                       55

<PAGE>

ceases to exist, and (2) in the case of a nonpayment default with respect to
Senior Indebtedness, on the earlier of the date on which the nonpayment default
is cured or waived or ceases to exist or 179 days have passed after the date on
which the applicable Payment Blockage Notice is received.

     No new period of payment blockage may be commenced pursuant to a Payment
Blockage Notice unless (A) at least 365 days shall have elapsed since the
Issuer's receipt 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, or in such other
form of payment as may be acceptable to the holders of the Securities, and the
Trustee or the requisite holders of Securities shall not have begun proceedings
to enforce the right of the holders to receive payments. No default (whether or
not such event of default is on the same issue of Senior Indebtedness) 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.

     Upon any payment by the Issuer, or distribution of assets of the Issuer of
any kind or character, whether in cash, property or securities, to creditors
upon any dissolution, winding-up, liquidation or reorganization of the Issuer,
whether voluntary or involuntary or in bankruptcy, insolvency, receivership or
other such proceedings, all amounts due or to become due upon all Senior
Indebtedness shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made on account of
the principal or interest on the Securities (except payments made pursuant to
Article 9 hereof from monies deposited with the Trustee pursuant thereto prior
to the happening of such dissolution, winding-up, liquidation or
reorganization); and, upon any such dissolution, winding-up, liquidation or
reorganization, any payment by the Issuer, or distribution of assets of the
Issuer 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 provisions of this Article 12, shall (except as aforesaid) be paid by the
Issuer 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, as
calculated by the Issuer) 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 money or money's worth, after giving effect to any concurrent payment
or distribution to or for the holders of Senior Indebtedness, before any
payment or distribution is made to the holders of the Securities or to the
Trustee.

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<PAGE>

     In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Issuer of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the holders of the Securities before all Senior Indebtedness is paid
in full, or provision is made for such payment in money in accordance with its
terms, 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 Issuer, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in money in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the holders of such Senior
Indebtedness.

     For purposes of this Article 12, the words, "cash, property or securities"
shall not be deemed to include shares of stock of the Issuer as reorganized or
readjusted, or securities of the Issuer 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 12 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 such reorganization or readjustment,
and (ii) the rights of the holders of the Senior Indebtedness (other than
leases) and of leases which are assumed are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation of
the Issuer with, or the merger of the Issuer into, another corporation or the
liquidation or dissolution of the Issuer 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 8 hereof
shall not be deemed a dissolution, winding-up, liquidation or reorganization
for the purposes of this Section 12.02 if such other corporation shall, as a
part of such consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article 8 hereof. Nothing in this Section 12.02 shall
apply to claims of, or payments to, the Trustee under or pursuant to Section
5.06.

     SECTION 12.03. 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 rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Issuer
applicable to the Senior Indebtedness until the principal of and interest on
the Securities shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or

                                       57

<PAGE>

securities to which the holders of the Securities or the Trustee would be
entitled except for the provisions of this Article 12, and no payment over
pursuant to the provisions of this Article 12, to or for the benefit of the
holders of Senior Indebtedness by holders of the Securities or the Trustee,
shall, as between the Issuer, its creditors other than holders of Senior
Indebtedness, and the holders of the Securities, be deemed to be a payment by
the Issuer to or on account of the Senior Indebtedness. It is understood that
the provisions of this Article 12 are and are intended solely for the purpose
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 12 or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as between the Issuer, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Securities, the obligation of the Issuer, which is absolute and unconditional,
to pay to the holders of the Securities the principal of 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 Issuer 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 12 of the holders of Senior Indebtedness in
respect of cash, property or securities of the Issuer received upon the
exercise of any such remedy.

     Upon any payment or distribution of assets of the Issuer referred to in
this Article 12, the Trustee, subject to the provisions of Section 5.01, 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 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 Issuer, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article 12.

     SECTION 12.04. Authorization by Securityholders. Each holder of a Security
by his acceptance thereof authorizes and directs the Trustee in his behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article 12 and appoints the Trustee his
attorney-in-fact for any and all such purposes.

                                       58

<PAGE>

     SECTION 12.05. Notice to Trustee. The Issuer shall give promptly written
notice to a Responsible Officer of the Trustee of any fact known to the Issuer
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 12.
Notwithstanding the provisions of this Article 12 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 12, unless and until a Responsible Officer of the Trustee shall
have received written notice thereof at the Corporate Trust Office of the
Trustee from the Issuer or a holder or holders of Senior Indebtedness or from
any trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 5.01, shall be entitled in all
respects to assume that no such facts exist; provided that if on a date not
fewer than three 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 interest on any Security) the
Trustee shall not have received, with respect to such monies, the notice
provided for in this Section 12.05, 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 to the contrary hereinbefore set forth, nothing
shall prevent any payment by the Issuer or the Trustee to the Securityholders
of monies in connection with a redemption of Securities if (i) notice of such
redemption has been given pursuant to Article 11 or Section 9.01 hereof prior
to the receipt by the Trustee of written notice as aforesaid, and (ii) such
notice of redemption is given not earlier than 60 days before the redemption
date.

     The Trustee conclusively shall be entitled to rely on the delivery to it
of a written notice by 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 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 12, 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 12, and if such
evidence is not furnished the Trustee may

                                       59

<PAGE>

defer any payment to such Person pending judicial determination as to the right
of such Person to receive such payment.

     SECTION 12.06. Trustee's Relation to Senior Indebtedness. The Trustee in
its individual capacity shall be entitled to all the rights set forth in this
Article 12 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 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 12, 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 the Trustee shall
not be liable to any holder of Senior Indebtedness if it shall pay over or
deliver to holders of Securities, the Issuer or any other Person money or
assets to which any holder of Senior Indebtedness shall be entitled by virtue
of this Article 12 or otherwise.

     SECTION 12.07. 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 Issuer or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Issuer with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charge with.

     SECTION 12.08. Rights of Trustee. Nothing in this Article 12 shall apply
to claims of or payments to, the Trustee pursuant to Section 5.06 or 9.04.

                                       60

<PAGE>

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

                                            E*TRADE GROUP, INC.

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

Attest:

By:
   --------------------------

                                            THE BANK OF NEW YORK

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

                                               61EXHIBIT 4.2

                              E*TRADE Group, Inc.

           $375,000,000 6.75% Convertible Subordinated Notes Due 2008

     Officers' Certificate Pursuant to Sections 2.01 and 2.03 of Indenture

     The undersigned officers of E*TRADE Group, Inc., a Delaware corporation
(the "Issuer"), pursuant to authority granted such officers pursuant to
resolutions duly adopted by the Board of Directors of the Issuer on May 18,
2001 and May 22, 2001 and resolutions duly adopted at a meeting of the Pricing
Committee of the Board of Directors of the Issuer on May 22, 2001
(collectively, the "Resolutions"), hereby establish a series of Securities
under that certain Indenture, dated as of May 29, 2001 (the "Indenture"),
between the Issuer and The Bank of New York, as trustee ("Trustee"), which
Securities are designated "6.75% Convertible Subordinated Notes due 2008" (the
"Notes"), and hereby certify, pursuant to Sections 2.01 and 2.03 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 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 "6.75%
     Convertible Subordinated Notes due 2008";

          (b) The first $375, 000,000 of the Notes shall be issued at a price
     equal to 100% of the aggregate principal amount thereof;

          (c) The principal of the Notes shall be payable on May 15, 2008;

          (d) The Notes shall bear interest at a rate equal to 6.75% per annum;
     interest on the Notes shall accrue from May 29, 2001 or from the most
     recent interest payment 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 May 15 and November 15 of each year
     until maturity commencing on November 15, 2001; and interest on the Notes
     shall be payable to holders of record on the May 1 or November 1
     immediately preceding the applicable interest payment date;

<PAGE>

          (e) 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;

          (f) The Notes shall be subject to redemption, in whole or in part, at
     the option of the Issuer at any time on or after May 20, 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:

Period                                                          Redemption Price
------                                                          ----------------
Beginning on May 20, 2004 and ending on May 14, 2005........       103.3750%
Beginning on May 15, 2005 and ending on May 14, 2006........       102.5313%
Beginning on May 15, 2006 and ending on May 14, 2007........       101.6875%
Beginning on May 15, 2007 and ending on May 14, 2008........       100.8438%

The Issuer may not so redeem Notes if the Issuer has failed to pay any interest
on the Notes 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.

          (g) Except as set forth in Section 11.07, the Issuer 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;

          (h) The Notes shall be convertible into shares of Common Stock, par
     value $.001 per share, of the Issuer at any time prior to maturity at an
     initial conversion price of $10.925 per share of Common Stock, subject to
     adjustment as described below;

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

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

          (k) In addition to the definitions and provisions set forth in the
     Indenture, the Notes shall include the definitions and provisions set
     forth in Sections 3, 4, 5, 6, 7 and 8 of this Officers' Certificate and,
     in the case of conflict, the definitions and provisions set forth in this
     Officers' Certificate shall control;

          (l) The Trustee for the Notes shall be The Bank of New York;

                                       2

<PAGE>

          (m) The Notes shall be issued initially in the form of a 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 represented thereby with the Trustee, at its
     principal corporate trust office in New York City, as custodian for the
     Depositary (the Trustee or any successor custodian for the Depositary, the
     "Custodian"), and registered in the name of the Depositary or a nominee
     thereof, duly executed by the Issuer 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 Depositary or its nominee in accordance
     with the Depositary's procedures and as provided in Section 2.13 of the
     Indenture. Except as provided in Section 2.13 of the Indenture, owners of
     beneficial interests in Global Notes shall not be entitled to receive
     physical delivery of certificated Notes.

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

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

          (p) The Notes shall be general unsecured obligations of the Issuer
     and shall, to the extent provided in Article 12 of the Indenture, be
     subordinated in right of payment to the prior payment in full of the
     Issuer's Senior Indebtedness.

     3. Global Notes. In addition to the provisions set forth in Article 2 of
the Indenture, the Indenture, with respect to the Notes only, shall include the
following additional provisions:

     SECTION 2.13. Global Notes. (a) So long as the Notes are eligible for
book-entry settlement with the Depositary, or unless otherwise required by law,
all Notes that, upon initial issuance are beneficially owned by QIBs or as a
result of a sale or transfer after initial issuance are beneficially owned by
QIBs, will be represented by one or more Notes in global form registered in the
name of the Depositary or the nominee of the Depositary (the "Global Note"),
except as otherwise specified below. The transfer and exchange of beneficial
interests in any such Global Note shall be effected through the Depositary in
accordance with this Indenture and the procedures of the Depositary. The
Trustee shall make appropriate endorsements to reflect increases or decreases
in the principal amounts of any such Global Note as set forth on the face of
the Note ("Principal Amount") to reflect any such transfers. Except as provided
below, beneficial owners of a Global Note shall not be entitled to have
certificates registered in their names, will not receive or be entitled to
receive physical delivery of certificates in definitive form and will not be
considered holders of such Global Note.

                                       3

<PAGE>

     (b) So long as the Notes are eligible for book-entry settlement with the
Depositary, or unless otherwise required by law, upon any transfer of a
definitive Note to a QIB in accordance with Rule 144A, and upon receipt of the
definitive Note or Notes being so transferred, together with a certification,
substantially in the form on the reverse of the Note, from the transferor that
the transfer is being made in compliance with Rule 144A (or other evidence
satisfactory to the Trustee), the Trustee shall make an endorsement on the
Global Note to reflect an increase in the aggregate Principal Amount of the
Notes represented by such Global Note, and the Trustee shall cancel such
definitive Note or Notes in accordance with the standing instructions and
procedures of the Depositary, the aggregate Principal Amount of the Notes
represented by such Global Note to be increased accordingly; provided, however,
that no definitive Note, or portion thereof, in respect of which the Issuer or
an Affiliate of the Issuer held any beneficial interest shall be included in
such Global Note until such definitive Note is freely tradable in accordance
with Rule 144(k) under the Securities Act, provided further that the Trustee
shall issue Notes in definitive form upon any transfer of a beneficial interest
in the Global Note to the Issuer or any Affiliate of the Issuer.

     Any Note in global form may be endorsed with or have incorporated in the
text thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Custodian, by the
Depositary or by the National Association of Securities Dealers, Inc. in order
for the Notes to be tradeable on the Portal Market or as may be required for
the Notes to be tradeable on any other market developed for trading of
securities pursuant to Rule 144A or required to comply with any applicable law
or any regulation thereunder or with the rules and regulations of any
securities exchange or automated quotation system upon which the Notes may be
listed or traded or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular Notes
are subject.

     (c) Every Note that bears or is required under this Section 2.13(c) to
bear the legend set forth in this Section 2.13(c) (together with any Common
Stock issued upon conversion of the Notes and required to bear the legend set
forth in Section 2.13(d), collectively, the "Restricted Securities") shall be
subject to the restrictions on transfer set forth in this Section 2.13(c)
(including those set forth in the legend set forth below) unless such
restrictions on transfer shall be waived by written consent of the Issuer, and
the Holder of each such Restricted Security, by such Noteholder's acceptance
thereof, agrees to be bound by all such restrictions on transfer. As used in
Sections 2.13(c) and 2.13(d), the term "transfer" encompasses any sale, pledge,
loan, transfer or other disposition whatsoever of any Restricted Security.

     Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate

                                       4

<PAGE>

evidencing such Note (and all securities issued in exchange therefor or
substitution thereof, other than Common Stock, if any, issued upon conversion
thereof, which shall bear the legend set forth in Section 2.13(d), if
applicable) shall bear a legend in substantially the following form, unless
such Note has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be
effective at the time of such transfer), or unless otherwise agreed by the
Issuer in writing, with written notice thereof to the Trustee:

          This security has not been registered under the U.S. Securities Act
     of 1933, as amended (the "Securities Act"), and, accordingly, may not be
     offered or sold within the United States or to, or for the account or
     benefit of, U.S. persons, except as set forth below. By its acquisition
     hereof, the holder (1) represents that (a) it is a "qualified
     institutional buyer" (as defined in Rule 144A under the Securities Act) or
     (b) it is not a U.S. person and is acquiring this security in an offshore
     transaction in compliance with Rule 904 under the Securities Act, (2)
     agrees that it will not within two years after the original issuance of
     this security resell or otherwise transfer this security except (a) to the
     Issuer or any subsidiary thereof, (b) inside the United States to a
     qualified institutional buyer in compliance with Rule 144A under the
     Securities Act, (c) outside the United States in an offshore transaction
     in compliance with Rule 904 under the Securities Act, (d) pursuant to the
     exemption from registration provided by Rule 144 under the Securities Act
     (if available), (e) pursuant to an effective registration statement under
     the Securities Act or (f) pursuant to another available exemption from the
     registration requirements of the Securities Act and (3) agrees that it
     will give to each person to whom this security is transferred a notice
     substantially to the effect of this legend in connection with any transfer
     of this security within two years after the original issuance of this
     security. As used herein, the terms "offshore transaction," "United
     States" and "U.S. person" have the meaning given to them by Regulation S
     under the Securities Act. The indenture contains a provision requiring the
     trustee to refuse to register any transfer of this security in violation
     of the foregoing restrictions.

     Any Note (or security issued in exchange or substitution therefor) as to
which such restrictions on transfer shall have expired in accordance with their
terms or as to conditions for removal of the foregoing legend set forth therein
have been satisfied may, upon surrender of such Note for exchange to the Note
registrar in accordance with the provisions of this Section 2.13, be exchanged
for

                                       5

<PAGE>

a new Note or Notes, of like tenor and aggregate principal amount, which shall
not bear the restrictive legend required by this Section 2.13(c).

     Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in this Section 2.13(c)), a Note in global form may not be
transferred as a whole or in part except (i) by the Depositary to a nominee of
the Depositary, (ii) by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or (iii) by the Depositary or any nominee of
the Depositary to a successor Depositary or a nominee of such successor
Depositary.

     The Depositary shall be a clearing agency registered under the Exchange
Act. The Issuer initially appoints The Depository Trust Company to act as
Depositary with respect to the Notes in global form. Initially, the Global Note
shall be issued to the Depositary, registered in the name of Cede & Co., as the
nominee of the Depositary, and deposited with the Custodian for Cede & Co.

     If at any time the Depositary for a Note in global form notifies the
Issuer that it is unwilling or unable to continue as Depositary for such Note,
the Issuer may appoint a successor Depositary with respect to such Note. If a
successor Depositary is not appointed by the Issuer within ninety (90) days
after the Issuer receives such notice, the Issuer will execute, and the
Trustee, upon receipt of an Officers' Certificate for the authentication and
delivery of Notes, will authenticate and deliver, Notes in certificated form,
in aggregate principal amount equal to the principal amount of such Note in
global form, in exchange for such Note in global form.

     If a Note in certificated form is issued in exchange for any portion of a
Note in global form after the close of business at the office or agency where
such exchange occurs on any record date and before the opening of business at
such office or agency on the next succeeding interest payment date, interest
will not be payable on such interest payment date in respect of such
certificated Note, but will be payable on such interest payment date, subject
to the provisions of Section 2.07, only to the Person to whom interest in
respect of such portion of such Note in global form is payable in accordance
with the provisions of this Indenture.

     Notes in certificated form issued in exchange for all or a part of a Note
in global form pursuant to this Section 2.13 shall be registered in such names
and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and authentication, the Trustee shall
deliver such Notes in certificated form to the Persons in whose names such
Notes in certificated form are so registered.

                                       6

<PAGE>

     At such time as all interests in a Note in global form have been redeemed,
converted, canceled, exchanged for Notes in certificated form, or transferred
to a transferee who receives Notes in certificated form thereof, such Note in
global form shall, upon receipt thereof, be canceled by the Trustee in
accordance with standing procedures and instructions existing between the
Depositary and the Custodian. At any time prior to such cancellation, if any
interest in a Note in global form is exchanged for Notes in certificated form,
redeemed, converted, repurchased or canceled, or transferred to a transferee
who receives Notes in certificated form therefor or any Note in certificated
form is exchanged or transferred for part of a Note in global form, the
principal amount of such Note in global form shall, in accordance with the
standing procedures and instructions existing between the Depositary and the
Custodian, be appropriately reduced or increased, as the case may be, and an
endorsement shall be made on such Note in global form, by the Trustee or the
Custodian, at the direction of the Trustee, to reflect such reduction or
increase.

     (d) Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
stock certificate representing Common Stock issued upon conversion of any Note
shall bear a legend in substantially the following form, unless such Common
Stock has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer) or such Common Stock has been issued upon conversion of
Notes that have been transferred pursuant to a registration statement that has
been declared effective under the Securities Act, or unless otherwise agreed by
the Issuer in writing with written notice thereof to the transfer agent:

          This security has not been registered under the U.S. Securities Act
     of 1933, as amended (the "Securities Act"), and, accordingly, may not be
     offered or sold within the United States or to, or for the account or
     benefit of, U.S. persons, except as set forth below. By its acquisition
     hereof, the holder (1) represents that (a) it is a "qualified
     institutional buyer" (as defined in Rule 144A under the Securities Act) or
     (b) it is not a U.S. person and is acquiring this security in an offshore
     transaction in compliance with Rule 904 under the Securities Act, (2)
     agrees that it will not within two years after the original issuance of
     the security from which this security was converted resell or otherwise
     transfer this security except (a) to the Issuer or any subsidiary thereof,
     (b) inside the United States to a qualified institutional buyer in
     compliance with Rule 144A under the Securities Act, (c) outside the United
     States in an offshore transaction in compliance with Rule 904 under the
     Securities Act, (d) pursuant to the exemption from registration provided
     by Rule 144 under the Securities Act (if

                                       7

<PAGE>

     available), (e) pursuant to an effective registration statement under the
     Securities Act or (f) pursuant to another available exemption from the
     registration requirements of the Securities Act and (3) agrees that it
     will give to each person to whom this security is transferred a notice
     substantially to the effect of this legend in connection with any transfer
     of this security within two years after the original issuance of the
     security from which this security was converted. As used herein, the terms
     "offshore transaction," "United States" and "U.S. person" have the meaning
     given to them by Regulation S under the Securities Act. The indenture
     contains a provision requiring the trustee to refuse to register any
     transfer of this security in violation of the foregoing restrictions.

     Any such Common Stock as to which such restrictions on transfer shall have
expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.13(d).

     (e) Any Note or Common Stock issued upon the conversion or exchange of a
Note that, prior to the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor
provision), is purchased or owned by the Issuer or any Affiliate thereof may
not be resold by the Issuer or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements of the Securities Act in a transaction which results in such Notes
or Common Stock, as the case may be, no longer being "restricted securities"
(as defined under Rule 144).

     4. Additional Reports. In addition to the covenants set forth in Article 3
of the Indenture, the Indenture, with respect to the Notes only, shall include
the following provision:

     SECTION 3.09. Rule 144A Information Requirement. Within the period prior
to the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision), the Issuer
covenants and agrees that it shall, during any period in which it is not
subject to Section 13 or 15(d) under the Exchange Act, make available to any
Holder or beneficial owner of Notes or any Common Stock issued upon conversion
thereof which continue to be Restricted Securities in connection with any sale
thereof and any prospective purchaser of Notes or such Common Stock designated
by such Holder or beneficial owner, the information required pursuant to Rule
144A(d)(4) under

                                       8

<PAGE>

the Securities Act upon the request of any Holder or beneficial owner of the
Notes or such Common Stock and it will take such further action as any Holder
or beneficial owner of such Notes or such Common Stock may reasonably request,
all to the extent required from time to time to enable such Holder or
beneficial owner to sell its Notes or Common Stock without registration under
the Securities Act within the limitation of the exemption provided by Rule
144A, as such Rule may be amended from time to time. Upon the request of any
Holder or any beneficial owner of the Notes or such Common Stock, the Issuer
will deliver to such Holder a written statement as to whether it has complied
with such requirements.

     5. Additional Redemption Provisions. In addition to the redemption
provisions set forth in Article 11 of the Indenture, the Indenture, with
respect to the Notes only, shall include the following additional provisions:

     SECTION 11.06. Conversion Arrangement on Call for Redemption.

     In connection with any redemption of Notes, the Issuer may arrange for the
purchase and conversion of any Notes by an agreement with one or more
investment bankers or other purchasers to purchase such Notes 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 Notes.
Notwithstanding anything to the contrary contained in Article 13 or this
Article 11, the obligation of the Issuer to pay the redemption price of such
Notes, 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 Notes not duly surrendered for conversion by the Holders
thereof may, at the option of the Issuer, 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 13) 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
Notes shall be extended through such time), subject to payment of the above
amount as aforesaid. At the direction of the Issuer, 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 Issuer for the redemption of Notes. Without the
Trustee's prior written consent, no arrangement between the Issuer and such
purchasers for the purchase and conversion of any Notes shall increase or
otherwise affect any of the powers, duties, responsibilities or obligations of
the Trustee as set forth in this Indenture.

     SECTION 11.07. Repurchase Upon a Repurchase Event.

                                       9

<PAGE>

     (a) If there shall occur a Repurchase Event at any time prior to maturity
of the Notes, then each Holder shall have the right, at such Holder's option,
to require the Issuer to repurchase all of such Holder's Notes, or any portion
thereof that is an integral multiple of $1,000 principal amount, on the date
(the "Repurchase Date") that is no earlier than thirty (30) days and no later
than forty-five (45) days after the date of the Issuer Notice (as defined
below) of such Repurchase Event (or, if such day is not a Business Day, the
next succeeding Business Day) at a repurchase price equal to 100% of the
principal amount thereof, together with accrued interest to (but excluding) the
Repurchase Date (or, at the option of the Issuer, by delivery of Common Stock
in accordance with the provisions of Section 11.07(b)); provided that if such
Repurchase Date is May 15 or November 15, then the interest payable on such
date shall be paid to the Holders of record of the Notes on the next preceding
May 1 or November 1, respectively. Upon presentation of any Notes redeemed in
part only, the Issuer shall execute and, upon the Issuer's written direction to
the Trustee, the Trustee shall authenticate and deliver to the Holder thereof,
at the expense of the Issuer, new Notes, of authorized denominations, in
principal amount equal to the unredeemed portion of the Notes so presented.

     Unless the Issuer shall have theretofore called for redemption all of the
outstanding Notes, on or before the tenth (10th) day after the occurrence of a
Repurchase Event, the Issuer, 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 Issuer, shall mail or cause to be mailed to all Holders of record on the
date of the Repurchase Event a notice (the "Issuer Notice") of the occurrence
of such Repurchase Event and of the repurchase 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 11.02 and 11.03 hereof (without
regard for the time limits set forth therein). If the Issuer shall give such
notice, the Issuer shall also deliver a copy of the Issuer Notice to the
Trustee at such time as it is mailed to Holders. Each Issuer Notice shall
contain the following information:

     (1) the Repurchase Date,

     (2) that the Holder must exercise the repurchase right on or prior to the
close of business on the Repurchase Date (the "Repurchase Event Expiration
Time"),

     (3) the repurchase price and whether the repurchase price shall be payable
in cash or Common Stock and, if payable in Common Stock, the method of
calculating the amount of the Common Stock to be delivered upon the repurchase
as provided in Section 11.07(b),

                                       10

<PAGE>

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

     (5) the Conversion Price then in effect, the date on which the right to
convert the principal amount of the Notes to be repurchased will terminate and
the place or places where Notes may be surrendered for conversion.

     No failure of the Issuer to give the foregoing notices and no defect
therein shall limit the Holders' repurchase rights or affect the validity of
the proceedings for the repurchase of the Notes pursuant to this Section 11.07.

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

     For Global Notes to be so repaid at the option of the Holder, the Holder
must complete the appropriate instruction form for conversion pursuant to the
Depositary's book-entry conversion program, furnish appropriate endorsements
and transfer documents if required by the Issuer or the Trustee or conversion
agent, and pay the funds, if any, required by this Section 11.07.

     On or prior to the Repurchase Date, the Issuer will deposit with the
Trustee or with one or more paying agents (or, if the Issuer 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 Notes to be repaid on such
date at the repurchase 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; provided further that if the
repurchase price is to be paid in shares of Common Stock, such shares of Common
Stock are to be paid as promptly after the Repurchase Date as practicable.
Payment for Notes surrendered for repurchase (and not withdrawn) prior to the
Repurchase Event 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 Notes entitled thereto as they
shall appear on the registry books of the Issuer; provided that any payment to
the Depositary or its nominee shall be paid by wire transfer in immediately
available funds in accordance with the wire transfer instruction supplied by
the Depositary or its nominee from time to time to

                                       11

<PAGE>

the Trustee and paying agent (if different from Trustee) at least two days
prior to the Repurchase Date.

     The Issuer 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 repurchase rights of the Holders of Notes in the event of a
Repurchase Event.

     Any issuance of shares of Common Stock in respect of the repurchase price
shall be deemed to have been effected immediately prior to the close of
business on the Repurchase Date and the person or persons in whose name or
names any certificate or certificates for shares of Common Stock shall be
issuable upon such repurchase shall be deemed to have become on the Repurchase
Date the holder or holders of record of the shares represented thereby;
provided, however, that in case of any surrender for repurchase on a date when
the stock transfer books of the Issuer shall be closed, the person or persons
in whose name or names the certificate or certificates for such shares are to
be issued shall be deemed to have become the record holder or holders thereof
for all purposes at the opening of business on the next day on which such stock
transfer books are open. No payment or adjustment shall be made for dividends
or distributions on any Common Stock issued upon repurchase of any Note
declared prior to the Repurchase Date.

     No fractions of shares shall be issued upon repurchase of Notes. If more
than one Note shall be repurchased from the same Holder and the repurchase
price shall be payable in shares of Common Stock, the number of full shares
which shall be issuable upon such repurchase shall be computed on the basis of
the aggregate principal amount of the Notes so repurchased. Instead of any
fractional share of Common Stock which would otherwise be issuable on the
repurchase of any Note or Notes, the Issuer will deliver to the applicable
Holder its check for the current market value of such fractional share. The
current market value of a fraction of a share is determined by multiplying the
current market price of a full share by the fraction, and rounding the result
to the nearest cent. For purposes of this Section, the current market price of
a share of Common Stock is the Closing Price (as defined in Section 13.05(h))
of the Common Stock on the Trading Day (as defined in Section 13.05(h))
immediately preceding the Repurchase Date.

     Any issuance and delivery of certificates for shares of Common Stock on
repurchase of Notes shall be made without charge to the Holder of Notes being
repurchased for such certificates or for any tax or duty in respect of the
issuance or delivery of such certificates or the securities represented
thereby; provided, however, that the Issuer shall not be required to pay any
tax or duty which may be payable in respect of (i) income of the Holder or (ii)
any transfer involved in the issuance or delivery of certificates for shares of
Common Stock in a name other than that of the Holder of the Notes being
repurchased, and no such issuance or

                                       12

<PAGE>

delivery shall be made unless and until the person requesting such issuance or
delivery has paid to the Issuer the amount of any such tax or duty or has
established, to the satisfaction of the Issuer, that such tax or duty has been
paid.

     (b) The Issuer may elect to pay the repurchase price by delivery of shares
of Common Stock pursuant to Section 11.07 if and only if the following
conditions shall have been satisfied:

     (i) The shares of Common Stock deliverable in payment of the repurchase
price shall have a fair market value as of the Repurchase Date of not less than
the repurchase price. For purposes of this Section 11.07, the fair market value
of shares of Common Stock shall be equal to 95% of the average of the Closing
Prices (as defined in Section 13.5(h)) of the Common Stock for the five
consecutive Trading Days (as defined in Section 13.5(h)) immediately preceding
and including the third Trading Day (as defined in Section 13.5(h)) prior to
the Repurchase Date;

     (ii) The repurchase price shall be paid only in cash in the event any
shares of Common Stock to be issued upon repurchase of Notes hereunder (i)
require registration under any federal securities law before such shares may be
freely transferable without being subject to any transfer restrictions under
the Securities Act and if such registration is not completed or does not become
effective prior to the Repurchase Date, and/or (ii) require registration with
or approval of any governmental authority under any state law or any other
federal law before such shares may be validly issued and delivered upon
repurchase and if such registration is not completed or does not become
effective or such approval is not obtained prior to the Repurchase Date;

     (iii) Payment of the repurchase price may not be made in Common Stock
unless such stock is, or shall have been, or approved for quotation on the
Nasdaq National Market or listed on a national securities exchange, in either
case, prior to the Repurchase Date; and

     (iv) All shares of Common Stock which may be issued upon repurchase of the
Notes will be issued out of the Issuer's authorized but unissued Common Stock
and, will upon issue, be duly and validly issued and fully paid and
non-assessable and free of any preemptive rights.

     If all of the conditions set forth in this Section 11.07 are not satisfied
in accordance with the terms thereof, the repurchase price shall be paid by the
Issuer only in cash.

     6. Conversion Provisions. The Indenture, with respect to the Notes only,
shall contain the following provisions regarding conversion:

                                       13

<PAGE>

                                   ARTICLE 13
                              CONVERSION OF NOTES

     SECTION 13.01. 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 Notes hereunder through the close of business on the final
maturity date of the Notes (except that, with respect to any Notes or portion
thereof which shall be called for redemption, such right shall terminate,
except as provided in Section 13.02 or Section 11.06, at the close of business
on the Business Day next preceding the date fixed for redemption of such Notes
or portion thereof unless the Issuer shall default in payment due upon
redemption thereof) to convert the principal amount of any such Notes, 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 obtained by dividing the principal amount of the Notes or portion thereof
surrendered for conversion by the Conversion Price in effect at such time, by
surrender of the Notes so to be converted in whole or in part, together with
any required funds, in the manner provided in Section 13.02. A Holder of Notes
is not entitled to any rights of a holder of Common Stock until such Holder has
converted his Notes to Common Stock, and only to the extent such Notes are
deemed to have been converted to Common Stock under this Article 13. A Note
with respect to which a Holder has delivered a notice in accordance with
Section 11.07 regarding such Holder's election to require the Issuer to
repurchase such Holder's Notes following the occurrence of a Repurchase Event
may be converted in accordance with this Article 13 only if such Holder
withdraws such notice by delivering a written notice of withdrawal to the
Issuer prior to the close of business on last Business Day prior to the day
fixed for repurchase.

     SECTION 13.02. Exercise of Conversion Privilege; Issuance of Common Stock
on Conversion; No Adjustment for Interest or Dividends.

     In order to exercise the conversion privilege with respect to any Notes in
certificated form, the Holder of any such Notes to be converted in whole or in
part shall surrender such Notes, duly endorsed, at an office or agency
maintained by the Issuer as set forth in the Notes, accompanied by the funds,
if any, required by the penultimate paragraph of this Section 13.02, and shall
give written notice of conversion in the form provided on the Notes (or such
other notice which is acceptable to the Issuer) to the office or agency that
the Holder elects to convert such Notes 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 13.07. All such
Notes surrendered for conversion shall, unless

                                       14

<PAGE>

the shares issuable on conversion are to be issued in the same name as the
registration of such Notes, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Issuer duly executed by,
the Holder or his duly authorized attorney.

     In order to exercise the conversion privilege with respect to any interest
in Notes in global form, the Holder must complete the appropriate instruction
form for conversion pursuant to the Depositary's book-entry conversion program,
furnish appropriate endorsements and transfer documents if required by the
Issuer or the Trustee or conversion agent, and pay the funds, if any, required
by this Section 13.02 and any transfer taxes if required pursuant to Section
13.07.

     As promptly as practicable after satisfaction of the requirements for
conversion set forth above (but in no event later than three (3) Business Days
after satisfaction of such requirements for conversion), 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 Notes (or portion thereof) so converted), the Issuer shall
issue and shall deliver to such Holder at the office or agency maintained by
the Issuer for such purpose as set forth in the Notes, a certificate or
certificates for the number of full shares of Common Stock issuable upon the
conversion of such Notes 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 13.03. In case any Notes of a denomination greater than $1,000 shall be
surrendered for partial conversion, the Issuer shall execute and the Trustee
shall authenticate and deliver to the Holder of the Notes so surrendered,
without charge to him, new Notes in authorized denominations in an aggregate
principal amount equal to the unconverted portion of the surrendered Notes.

     Each conversion shall be deemed to have been effected as to any such Notes
(or portion thereof) on the date on which the requirements set forth above in
this Section 13.02 have been satisfied as to such Notes (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 in case of any such surrender on any date when the
stock transfer books of the Issuer shall be closed, the person or persons in
whose name the certificate or certificates for such shares are to be issued
shall be deemed to have become the record holder thereof for all purposes on
the next 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 Notes
shall be surrendered.

     All Notes 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

                                       15

<PAGE>

close of business on the Business Day next preceding the following interest
payment date shall (unless such Notes 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 Issuer, 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 Notes. Except as provided above in this Section 13.02, no
payment or other adjustment shall be made for interest accrued on any Notes
converted or for dividends on any shares issued upon the conversion of such
Notes as provided in this Article.

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

     SECTION 13.03. Cash Payments in Lieu of Fractional Shares.

     No fractional shares of Common Stock or scrip representing fractional
shares shall be issued upon conversion of Notes. If multiple Notes shall be
surrendered for conversion at one time by the same Holder, the number of full
shares which shall be issuable upon conversion shall be computed on the basis
of the aggregate principal amount of the Notes (or specified portions thereof
to the extent permitted hereby) so surrendered. If any fractional share of
stock would be issuable upon the conversion of any Notes, the Issuer shall make
an adjustment and payment therefor in cash at the current market price thereof
to the holder of Notes. The current market price of a share of Common Stock
shall be the Closing Price (as defined in Section 13.05(h)) of the Common Stock
on the Trading Day (as defined in Section 13.05(h)) immediately preceding the
day on which the Notes (or specified portions thereof) are deemed to have been
converted.

     SECTION 13.04. 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 13.

     SECTION 13.05. Adjustment of Conversion Price.

                                       16

<PAGE>

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

          (a) In case the Issuer 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. If any dividend or
     distribution of the type described in this Section 13.05(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 Issuer 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 (or securities
     convertible into Common Stock) at a price per share (or having a
     conversion price per share) less than the Current Market Price (as defined
     below) on the date fixed for determination of stockholders entitled to
     receive such rights or warrants, the Conversion Price shall be adjusted so
     that the same shall equal the price determined by multiplying the
     Conversion Price in effect immediately prior to the date fixed for
     determination of stockholders entitled to receive such rights or warrants
     by a fraction, the numerator of which shall be the number of shares of
     Common Stock outstanding at the close of business on the date fixed for
     determination of stockholders entitled to receive such rights or warrants
     plus the number of shares which the aggregate offering price of the total
     number of shares so offered would purchase at such Current Market Price
     (or the aggregate conversion price of the convertible securities so
     offered, which shall be determined by multiplying the number of shares of
     Common Stock issuable upon conversion of such convertible securities by
     the conversion price per share of Common Stock pursuant to the terms of
     such convertible securities), and the denominator of which shall be the
     number of shares of Common Stock outstanding on the date fixed for
     determination of stockholders entitled to receive such rights or warrants
     plus the total number of additional shares of Common Stock offered for
     subscription or purchase or

                                       17

<PAGE>

     into which convertible securities so offered are convertible. Such
     adjustment shall be successively made whenever any such rights or warrants
     are issued, and shall become effective immediately after the opening of
     business on the day following the date fixed for determination of
     stockholders entitled to receive such rights or warrants. To the extent
     that shares of Common Stock (or securities convertible into Common Stock)
     are not delivered, after the expiration of such rights or warrants the
     Conversion Price shall be readjusted to the Conversion Price which would
     then be in effect had the adjustments made upon the issuance of such
     rights or warrants been made on the basis of delivery of only the number
     of shares of Common Stock actually delivered (or the number of shares of
     Common Stock issuable upon conversion of convertible securities actually
     issued). In the event that such rights or warrants are not so issued, the
     Conversion Price shall again be adjusted to be the Conversion Price which
     would then be in effect if such date fixed for the determination of
     stockholders entitled to receive such rights or warrants had not been
     fixed. In 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 Issuer for such rights or warrants or to be
     received upon exercise of such rights or warrants, the value of such
     consideration, if other than cash, to be determined 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.

          (d) In case the Issuer shall, by dividend or otherwise, distribute to
     all holders of its Common Stock shares of any class of capital stock of
     the Issuer (other than any dividends or distributions to which Section
     13.05(a) applies) or evidences of its indebtedness or assets (including
     securities, but excluding any rights or warrants referred to in Section
     13.05(b), and excluding any dividend or distribution (x) paid exclusively
     in cash or (y) referred to in Section 13.05(a)) (any of the foregoing
     hereinafter in this

                                       18

<PAGE>

     Section 13.05(d) called the "Distributed Securities"), then, in each such
     case (unless the Issuer elects to reserve such Distributed Securities for
     distribution to the Holders upon the conversion of the Notes 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 Notes into Common Stock
     immediately prior to the Record Date (as defined in Section 13.05(h)(4))
     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 good faith determination shall be conclusive, and described in a
     resolution of the Board if Directors) on the Record Date of the portion of
     the Distributed Securities so distributed applicable to one share of
     Common Stock and the denominator of which shall be the Current Market
     Price per share of the Common Stock, 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 Notes 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 13.05(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.

     In the event that the Issuer implements a stockholder rights plan, such
rights plan shall provide that upon conversion of the Notes the Holders will
receive, in addition to the Common Stock issuable upon such conversion, the
rights issued under such rights plan (notwithstanding the occurrence of an
event causing such rights to separate from the Common Stock at or prior to the
time of conversion). Any distribution of rights or warrants pursuant to a
stockholder rights plan complying with the requirements set forth in the
immediately preceding

                                       19

<PAGE>

sentence of this paragraph shall not constitute a distribution of rights or
warrants for the purposes of Section 13.05(b) or this Section 13.05(d).

     Rights or warrants distributed by the Issuer to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Issuer's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 13.05 (and no adjustment to the Conversion Price under
this Section 13.05 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 13.05(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 13.05 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 13.05(d) and Sections 13.05(a) and (b), any
dividend or distribution to which this Section 13.05(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 13.05(d) with respect
to

                                       20

<PAGE>

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
13.05(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 13.05(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 13.05(a).

          (e) In case the Issuer shall, by dividend or otherwise, distribute to
     all holders of its Common Stock cash (excluding any cash that is
     distributed upon a merger or consolidation to which Section 13.06 applies
     or as part of a distribution referred to in Section 13.05(d)), in an
     aggregate amount that, combined together with (1) the aggregate amount of
     any other such distributions to all holders of its Common Stock made
     exclusively in cash within the twelve (12) months preceding the date of
     payment of such distribution, and in respect of which no adjustment
     pursuant to this Section 13.05(e) has been made, and (2) the aggregate of
     any cash plus the fair market value (as determined by the Board of
     Directors, whose good faith determination shall be conclusive and
     described in a resolution of the Board of Directors) of consideration
     payable in respect of any tender offer by the Issuer or any of its
     subsidiaries for all or any portion of the Common Stock concluded within
     the twelve (12) months preceding the date of payment of such distribution,
     and in respect of which no adjustment pursuant to Section 13.05(f) has
     been made, exceeds 10% of the product of the Current Market Price on the
     Record Date with respect to such distribution times the number of shares
     of Common Stock outstanding on such date, then, and in each such case,
     immediately after the close of business on such date, the Conversion Price
     shall be reduced so that the same shall equal the price determined by
     multiplying the Conversion Price in effect immediately prior to the close
     of business on such Record Date by a fraction (i) the numerator of which
     shall be equal to the Current Market Price on the Record Date less an
     amount equal to the quotient of (x) the excess of such combined amount
     over such 10% and (y) the number of shares of Common Stock outstanding on
     the Record Date and (ii) the denominator of which shall be equal to the
     Current Market Price on such 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 Noteholder shall have the right to
     receive upon conversion of a Note (or any portion thereof) the amount of
     cash such

                                       21

<PAGE>

     Holder would have received had such Holder converted such Note (or portion
     thereof) immediately prior to such Record Date. In the event that such
     dividend or distribution is not so paid or made, the Conversion Price
     shall again be adjusted to be the Conversion Price which would then be in
     effect if such dividend or distribution had not been declared. Any cash
     distribution to all holders of Common Stock as to which the Issuer makes
     the election permitted by Section 13.05(n) and as to which the Issuer has
     complied with the requirements of such Section shall be treated as not
     having been made for all purposes of this Section 13.05(e)).

          (f) In case a tender offer made by the Issuer or any of its
     subsidiaries for all or any portion of the Common Stock shall expire and
     such tender offer (as amended upon the expiration thereof) shall require
     the payment to stockholders (based on the acceptance (up to any maximum
     specified in the terms of the tender offer) of Purchased Shares (as
     defined below)) of an aggregate consideration having a fair market value
     (as determined by the Board of Directors, whose good faith determination
     shall be conclusive and described in a resolution of the Board of
     Directors) that combined together with (1) the aggregate of the cash plus
     the fair market value (as determined by the Board of Directors, whose good
     faith determination shall be conclusive and described in a resolution of
     the Board of Directors), as of the expiration of such tender offer, of
     consideration payable in respect of any other tender offers, by the Issuer
     or any of its subsidiaries for all or any portion of the Common Stock
     expiring within the twelve (12) months preceding the expiration of such
     tender offer and in respect of which no adjustment pursuant to this
     Section 13.05(f) has been made and (2) the aggregate amount of any
     distributions to all holders of the Issuer's Common Stock made exclusively
     in cash within twelve (12) months preceding the expiration of such tender
     offer and in respect of which no adjustment pursuant to Section 13.05(e)
     has been made, exceeds 10% of the product of the Current Market Price as
     of the last time (the "Expiration Time") tenders could have been made
     pursuant to such tender offer (as it may be amended) times the number of
     shares of Common Stock outstanding (including any tendered shares) at the
     Expiration Time, then, and in each such case, immediately prior to the
     opening of business on the day after the date of the Expiration Time, the
     Conversion Price shall be reduced so that the same shall equal the price
     determined by multiplying the Conversion Price in effect immediately prior
     to close of business on the date of the Expiration Time by a fraction of
     which the numerator shall be the number of shares of Common Stock
     outstanding (including any tendered shares) at the Expiration Time
     multiplied by the Current Market Price of the Common Stock on the Trading
     Day next succeeding the Expiration Time and the denominator shall be the
     sum of (x) the fair market value (determined as aforesaid) of the
     aggregate consideration payable to stockholders based on the

                                       22

<PAGE>

     acceptance (up to any maximum specified in the terms of the tender offer)
     of all shares validly tendered and not withdrawn as of the Expiration Time
     (the shares deemed so accepted, up to any such maximum, being referred to
     as the "Purchased Shares") and (y) the product of the number of shares of
     Common Stock outstanding (less any Purchased Shares) at the Expiration
     Time and the Current Market Price of the Common Stock on the Trading Day
     next succeeding the Expiration Time, such reduction (if any) to become
     effective immediately prior to the opening of business on the day
     following the Expiration Time. In the event that the Issuer is obligated
     to purchase shares pursuant to any such tender offer, but the Issuer is
     permanently prevented by applicable law from effecting any such purchases
     or all such purchases are rescinded, the Conversion Price shall again be
     adjusted to be the Conversion Price which would then be in effect if such
     tender offer had not been made. If the application of this Section
     13.05(f) to any tender offer would result in an increase in the Conversion
     Price, no adjustment shall be made for such tender offer under this
     Section 13.05(f). Any cash distribution to all holders of Common Stock as
     to which the Issuer has made the election permitted by Section 13.05(n)
     and as to which the Issuer has complied with the requirements of such
     Section shall be treated as not having been made for all purposes of this
     Section 13.05(f).

          (g) In case of a tender or exchange offer made by a person other than
     the Issuer or any of its subsidiaries 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 good faith
     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 close of business
     on the date of 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) at 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

                                       23

<PAGE>

     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) at 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 13.05(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 Issuer to engage in any transaction described in
     Article 8.

          (h) For purposes of this Section 13.05, the following terms shall
     have the meaning indicated:

               (1) "Closing Price" with respect to any securities on any day
          shall mean the closing sale price, regular way, on such day or, in
          case no such sale takes place on such day, the average of the
          reported closing bid and asked prices, regular way, in each case on
          the 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 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 Closing Prices for the ten
          (10) consecutive Trading Days (as defined below) preceding the

                                       24

<PAGE>

          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 on 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 such other 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 Issuer may make such reductions in the Conversion Price, in
     addition to those required by Sections 13.05 (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.

     To the extent permitted by applicable law, the Issuer 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 Issuer, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Issuer shall mail to holders of record of the Notes a
notice of the

                                       25

<PAGE>

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 13.05(j) are not required to be made shall be
     carried forward and taken into account in any subsequent adjustment. All
     calculations under this Article 13 shall be made by the Issuer 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 an Issuer plan for reinvestment of
     dividends or interest. To the extent the Notes become convertible into
     cash, assets, property or securities (other than capital stock of the
     Issuer), 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
     Issuer 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 Issuer 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 Notes at his
     last address appearing on the list of Securityholders provided for in
     Section 3.06 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.

          (l) In any case in which this Section 13.05 provides that an
     adjustment shall become effective immediately after a Record Date for an
     event, the Issuer may defer until the occurrence of such event (i) issuing
     to the holder of any Notes 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 13.03.

                                       26

<PAGE>

          (m) For purposes of this Section 13.05, the number of shares of
     Common Stock at any time outstanding shall not include shares held in the
     treasury of the Issuer but shall include shares issuable in respect of
     scrip certificates issued in lieu of fractions of shares of Common Stock.
     The Issuer will not pay any dividend or make any distribution on shares of
     Common Stock held in the treasury of the Issuer.

          (n) In lieu of making any adjustment to the Conversion Price pursuant
     to Section 13.05(e) or 13.05(f), the Issuer may elect to reserve an amount
     of cash for distribution to the Holders of the Notes upon the conversion
     of the Notes so that any such Holder converting Notes will receive upon
     such conversion, in addition to the shares of Common Stock and other items
     to which such Holder is entitled, the full amount of cash which such
     Holder would have received if such Holder had, immediately prior to the
     Record Date for such distribution of cash, converted its Notes into Common
     Stock, together with any interest accrued with respect to such amount, in
     accordance with this Section 13.05(n). The Issuer may make such election
     by providing an Officers' Certificate to the Trustee to such effect on or
     prior to the payment date for any such distribution and depositing with
     the Trustee on or prior to such date an amount of cash equal to the
     aggregate amount the Holders of the Notes would have received if such
     Holders had, immediately prior to the Record Date for such distribution,
     converted all of the Notes into Common Stock. Any such funds so deposited
     by the Issuer with the Trustee shall be invested by the Trustee in
     marketable obligations issued or fully guaranteed by the United States
     government with a maturity not more than three (3) months from the date of
     issuance. Upon conversion of Notes by a Holder, the Holder will be
     entitled to receive, in addition to the Common Stock issuable upon
     conversion, an amount of cash equal to the amount such Holder would have
     received if such Holder had, immediately prior to the Record Date for such
     distribution, converted its Note into Common Stock, along with such
     Holder's pro rata share of any accrued interest earned as a consequence of
     the investment of such funds. Promptly after making an election pursuant
     to this Section 13.05(n), the Issuer shall give or shall cause to be given
     notice to all Noteholders of such election, which notice shall state the
     amount of cash per $1,000 principal amount of Notes such Holders shall be
     entitled to receive (excluding interest) upon conversion of the Notes as a
     consequence of the Issuer having made such election.

     SECTION 13.06. Effect of Reclassification, Consolidation, Merger or Sale.

     If any of the following events occur, namely (i) any reclassification or
change of shares of Common Stock issuable upon conversion of the Notes (other

                                       27

<PAGE>

than a change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination, or any
other change for which an adjustment is provided in Section 13.05(c), (ii) any
consolidation or merger or combination to which the Issuer is a party other
than a merger in which the Issuer is the continuing corporation and which does
not result in any reclassification of, or change (other than in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination) in outstanding shares of Common Stock,
or (iii) any sale or conveyance of all or substantially all of the properties
and assets of the Issuer 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 Issuer 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 of 1939 as in force at the date of execution of
such supplemental indenture) providing that such Notes 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 Notes (assuming, for
such purposes, a sufficient number of authorized shares of Common Stock
available to convert all such Notes) immediately prior to such
reclassification, change, consolidation, merger, combination, sale or
conveyance, assuming such holder of Common Stock did not exercise his rights of
election, if any, as to the kind or amount of 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 13.06, 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 13.

     The above provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances. If this Section 13.06 applies to any event or occurrence, Section
13.05 shall not apply.

     SECTION 13.07. Taxes on Shares Issued.

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<PAGE>

     The issue of stock certificates on conversions of Notes shall be made
without charge to the converting Holder for any tax in respect of the issue
thereof. The Issuer 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 Notes converted, and the
Issuer 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 Issuer the amount of such tax or shall have established to the
satisfaction of the Issuer that such tax has been paid.

     SECTION 13.08. Reservation of Shares; Shares to be Fully Paid; Compliance
with Governmental Requirements; Listing of Common Stock.

     The Issuer 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 Notes from time to time as
such Notes are presented for conversion.

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

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

     The Issuer covenants that if any shares of Common Stock to be provided for
the purpose of conversion of Notes 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 Issuer will in good
faith and as expeditiously as possible endeavor to secure such registration or
approval, as the case may be.

     The Issuer further covenants that, if at any time the Common Stock shall
be listed on any national securities exchange or automated quotation system,
the Issuer 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 Notes; provided, however, that if rules of such
exchange or automated quotation system permit the Issuer to defer the listing
of such Common Stock until the first conversion of the Notes into Common Stock
in accordance

                                       29

<PAGE>

with the provisions of this Indenture, the Issuer covenants to list such Common
Stock issuable upon conversion of the Notes in accordance with the requirements
of such exchange or automated quotation system at such time.

     SECTION 13.09. 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 Notes 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 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 Notes; 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 Issuer 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 Notes for the purpose
of conversion or to comply with any of the duties, responsibilities or
covenants of the Issuer 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 13.06
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
Notes after any event referred to in such Section 13.06 or to any adjustment to
be made with respect thereto, but, subject to the provisions of Section 5.01,
may accept as conclusive evidence of the correctness of any such provisions,
and shall be protected in relying upon, the Officers' Certificate (which the
Issuer 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 Issuer shall declare a dividend (or any other distribution)
     on its Common Stock that would require an adjustment in the Conversion
     Price pursuant to Section 13.05; or

          (b) the Issuer 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

                                       30

<PAGE>

          (c) of any reclassification or reorganization of the Common Stock of
     the Issuer (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 Issuer is a party and for which approval of any stockholders of
     the Issuer is required, or of the sale or transfer of all or substantially
     all of the assets of the Issuer or any of its Significant Subsidiaries; or

          (d) of the voluntary or involuntary dissolution, liquidation or
     winding up of the Issuer or any of its Significant Subsidiaries;

the Issuer shall cause to be filed with the Trustee and to be mailed to each
Holder of Notes at his address appearing on the list of Securityholders
provided for in Section 3.06 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 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.

     7. Additional Provisions. In addition to the provisions set forth in
Article 9 of the Indenture, the Indenture, with respect to the Notes only,
shall include the following additional provisions:

     SECTION 9.06. Legal Defeasance of Notes. The Issuer shall be deemed to
have paid and discharged the entire indebtedness on all the outstanding Notes
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 the outstanding
Notes, shall no longer be in effect (and the Trustee, at the expense of the
Issuer, shall, upon written request by the Issuer, execute proper instruments
acknowledging the same), except as to:

     (a) the rights of Holders of Notes to receive, from the trust funds
described in subparagraph (d) hereof, payment of the principal of and each
installment of principal of and interest on the outstanding Notes on the
maturity of such principal or installment of principal or interest;

                                       31

<PAGE>

     (b) the provisions of Sections 2.08, 2.09, 2.11, 3.02, 9.02, 9.03 and this
9.06; and

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

     provided that, the following conditions shall have been satisfied:

     (d) the Issuer 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 Notes, 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, 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 the
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 of
and interest, if any, on all the Notes on the dates such installments of
interest or principal are due at maturity or, if the Issuer has made
irrevocable arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the Issuer's name and at the Issuer's expense,
on the applicable redemption date;

     (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 Issuer is a party or by which it is bound;

     (f) no Event of Default with respect to the Notes 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 Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel to the effect that (i) the Issuer 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 U. S. federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that, the
Holders of the Notes will not recognize income, gain or loss for U.S. federal
income tax purposes as a result of such deposit, defeasance and discharge and
will be subject to U.S. 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, and
legal defeasance had not occurred;

     (h) the Issuer shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuer with the intent
of preferring the

                                       32

<PAGE>

Holders of the Notes over any other creditors of the Issuer or with the intent
of defeating, hindering, delaying or defrauding any other creditors of the
Issuer;

     (i) the Issuer shall have delivered to the Trustee an Opinion of Counsel
to the effect that (i) the trust funds will not be subject to any rights of
holders of Senior Indebtedness and (ii) after the 91st day following the
deposit, the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally;

     (j) the legal defeasance must not cause the Trustee to have a conflicting
interest within the meaning of the Trust Indenture Act of 1939, assuming all
Notes were in default within the meaning of the Trust Indenture Act of 1939;

     (k) 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

     (l) the Issuer 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 9.07. Covenant Defeasance.

     On and after the 91st day after the date of the deposit referred to in
subparagraph (a) hereof, the Issuer may omit to comply with any term, provision
or condition set forth under Sections 3.09 and 11.07 (and the failure to comply
with any such covenants shall not constitute an Event of Default under Section
4.01) and the occurrence of any event described in clause (e) or (f) of Section
4.01 shall not constitute an Event of Default hereunder, with respect to the
Notes, provided that the following conditions shall have been satisfied:

     (a) With reference to this Section 9.07, the Issuer has 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 the Notes, 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, 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 the 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 and discharge each
installment of principal of and interest, if any, on all the Notes on the dates
such installments of interest or

                                       33

<PAGE>

principal are due at maturity or, if the Issuer has made irrevocable
arrangements satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the Issuer's name and at the Issuer's expense, on the
applicable redemption date;

     (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 Issuer is a party or by which it is bound;

     (c) no Event of Default with respect to the Notes 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 Issuer shall have delivered to the Trustee an Opinion of Counsel
confirming that Holders of the Notes will not recognize income, gain or loss
for U.S. federal income tax purposes as a result of such deposit and covenant
defeasance and will be subject to U.S. 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 covenant defeasance had not occurred;

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

     (f) the Issuer shall have delivered to the Trustee an Opinion of Counsel
to the effect that (i) the trust funds will not be subject to any rights of
holders of Senior Indebtedness and (ii) after the 91st day following the
deposit, the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally;

     (g) the defeasance must not cause the Trustee to have a conflicting
interest within the meaning of the Trust Indenture Act of 1939, assuming all
Notes were in default within the meaning of the Trust Indenture Act of 1939;

     (k) 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

     (h) the Issuer 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 covenant defeasance contemplated
by this Section have been complied with.

                                       34

<PAGE>

     8. Additional Definitions. In addition to the definitions set forth in
Article 1 of the Indenture or, where applicable, in lieu thereof, the
Indenture, with respect to the Notes only, shall include the following
definitions:

     "Change in Control" shall be deemed to have occurred when (i) any "person"
or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the "beneficial owner" (as defined in Rules 13-d3 and 13-d5
under the Exchange Act) of shares representing more than 50% of the combined
voting power of the then outstanding securities entitled to vote generally in
elections of directors of the Issuer (the "Voting Stock"); (ii) approval by
stockholders of the Issuer of any plan or proposal for the liquidation,
dissolution or winding up of the Issuer; (iii) the Issuer (A) consolidates with
or merges into any other Person or any other Person merges into the Issuer, and
in the case of any such transaction, the outstanding Common Stock of the Issuer
is changed or exchanged into other assets or securities as a result, unless the
stockholders of the Issuer immediately before such transaction own, directly or
indirectly immediately following such transaction, at least 51% of the combined
voting power of the outstanding voting securities of the corporation resulting
from such transaction in substantially the same proportion as their ownership
of the Voting Stock immediately before such transaction, or (B) conveys,
transfers or leases all or substantially all of its assets to any Person; or
(iv) any time Continuing Directors do not constitute a majority of the Board of
Directors of the Issuer (or, if applicable, a successor Person to the Issuer);
provided that a Change in Control shall not be deemed to have occurred if
either (x) the Closing Price (as defined in Section 13.05(h)(1) hereof) of the
Common Stock for any five (5) Trading Days during the ten (10) Trading Days
immediately preceding the Change in Control is at least equal to 105% of the
Conversion Price in effect on the date on which the Change in Control occurs or
(y) in the case of a merger or consolidation otherwise constituting a Change in
Control, all of the consideration (excluding cash payments for fractional
shares) in such merger or consolidation constituting the Change in Control
consists of common stock traded on a United States national securities exchange
or quoted on the Nasdaq National Market (or which will be so traded or quoted
when issued or exchanged in connection with such Change in Control) and as a
result of such transaction or transactions the Notes become convertible solely
into such common stock.

     "Common Stock" means any stock of any class of the Issuer 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 Issuer
and which is not subject to redemption by the Issuer. Subject to the provisions
of Section 13.06, however, shares issuable on conversion of Notes shall include
only shares of the class designated as common stock of the Issuer 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,

                                       35

<PAGE>

dissolution or winding up of the Issuer and which are not subject to redemption
by the Issuer; 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.

     "Continuing Director" means, at any date, a member of the Issuer's board
of directors (i) who was a member of such board on March 31, 2001 or (ii) who
was nominated or elected by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to the Issuer's board of directors was recommended or endorsed by at
least a majority of the directors who were Continuing Directors at the time of
such nomination or election or such lesser number comprising a majority of a
nominating committee if authority for such nominations or elections has been
delegated to a nominating committee whose authority and composition have been
approved by at least a majority of the directors who were Continuing Directors
at the time such committee was formed. (Under this definition, if the board of
directors of the Issuer as of the date of this Indenture were to approve a new
director or directors and then resign, no Change in Control would occur even
though the current board of directors would thereafter cease to be in office)

     "Depositary" means, with respect to the Notes issued in global form, the
Person specified in Section 2.13(c) as the Depositary with respect to such
Notes, until a successor shall have been appointed and become such pursuant to
the applicable provisions of the Indenture, and thereafter, "Depositary" shall
mean or include such successor.

     "Global Note" has the meaning set forth in Section 2.13(a).

     "interest" means, with respect to any Note, interest and Liquidated
Damages (as defined in any registration rights agreement between the Issuer and
the initial purchaser of such Notes), if any, on such Note.

     "Portal Market" means The Portal Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.

     "QIB" means a "qualified institutional buyer" as defined in Rule 144A.

     "Repurchase Event" means a Change in Control or a Termination of Trading.

     "Restricted Securities" has the meaning specified in Section 2.13(c).

                                       36

<PAGE>

     "Rule 144A" means Rule 144A as promulgated under the Securities Act.

     "Termination of Trading" shall have occurred if the Common Stock (or other
common stock into which the Notes are then convertible) is neither listed for
trading on a United States national securities exchange nor approved for
trading on the Nasdaq Stock Market or another established automated
over-the-counter trading market in the United States.

     "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.

     9. 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 force and effect, and the Resolutions are the only
resolutions adopted by the Issuer'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]

                                       37

<PAGE>

     IN WITNESS WHEREOF, said officers have signed this certificate this ___
day of May, 2001.

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

                                       38

<PAGE>

                                                        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 ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF 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.

     THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THIS SECURITY (OR, IF THIS SECURITY IS COMMON STOCK, OF THE
SECURITY CONVERTED INTO COMMON STOCK) RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO THE ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE), (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL
GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY
WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE

                                       39

<PAGE>

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

                              E*TRADE GROUP, INC.

                 6.75% Convertible Subordinated Notes Due 2008

No. 1                         CUSIP NO. 269246AC8              U.S. $325,000,000

     E*TRADE Group, Inc., a corporation duly organized and validly existing
under the laws of the State of Delaware (herein called the "Issuer", which term
includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of Three Hundred Twenty-Five Million
United States Dollars ($325,000,000) on May 15, 2008 and to pay interest on
said principal sum semi-annually on May 15 and November 15 of each year,
commencing November 15, 2001 at the rate per annum specified in the title of
this Note, accrued from the May 15 or November 15, as the case may be, next
preceding the date of this Note to which interest has been paid or duly
provided for, unless the date of this Note is a date to which interest has been
paid or duly provided for, in which case interest shall accrue from the date of
this Note, or unless no interest has been paid or duly provided for on this
Note, in which case interest shall accrue from May 29, 2001 until payment of
said principal sum has been made or duly provided for. Notwithstanding the
foregoing, if the date hereof is after any May 1 or November 1 as the case may
be, and before the following May 15 or November 15, this Note shall bear
interest from such May 15 or November 15, respectively; provided, however, that
if the Issuer shall default in the payment of interest due on such May 15 or
November 15, then this Note shall bear interest from the next preceding May 15
or November 15 to which interest has been paid or duly provided for or, if no
interest has been paid or duly provided for on this Note, from May 29, 2001.
Except as otherwise provided in the Indenture, the interest payable on this
Note pursuant to the Indenture on any May 15 or November 15 will be paid to the
person in whose name this Note (or one or more Predecessor Notes) is registered
at the close of business on the record date, which shall be the May 1 or
November 1 (whether or not a Business Day) next preceding such May 15 or
November 15, respectively; provided that any such interest not punctually paid
or duly provided for shall be payable as provided in the Indenture. Payment

                                       40

<PAGE>

of the principal of and interest accrued on this Note shall be made by check
mailed to the address of the Holder of this Note specified in the register of
Notes, or, at the option of the holder of this Note, at the Corporate Trust
Office, in such lawful money of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts;
provided further, however, that, with respect to any holder of Notes with an
aggregate principal amount in excess of $2,000,000, at the request of such
holder in writing to the Issuer, interest on such holder's Notes shall be paid
by wire transfer in immediately available funds in accordance with the written
wire transfer instruction supplied by such holder from time to time to the
Trustee and paying agent (if different from the Trustee) at least two days
prior to the applicable record date; provided that any payment to the
Depositary or its nominee shall be paid by wire transfer in immediately
available funds in accordance with the wire transfer instruction supplied by
the Depositary or its nominee from time to time to the Trustee and paying agent
(if different from Trustee) at least two days prior to the applicable record
date.

     Reference is made to the further provisions of this Note set forth on the
reverse hereof, including, without limitation, provisions subordinating the
payment of principal of and premium, if any, and interest on this Note to the
prior payment in full of all Senior Indebtedness as defined in the Indenture
and provisions giving the holder of this Note the right to convert this Note
into Common Stock of the Issuer on the terms and subject to the limitations
referred to on the reverse hereof and as more fully specified in the Indenture.
Such further provisions shall for all purposes have the same effect as though
fully set forth at this place.

     This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of said State (without regard to the conflicts of laws
provisions thereof).

     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 or a duly authorized authenticating agent under the Indenture.

                                       41

<PAGE>

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

                                            E*TRADE GROUP, INC.

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

Attest:

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

                         CERTIFICATE OF AUTHENTICATION

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

                                            THE BANK OF NEW YORK, as Trustee

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

<PAGE>

                             (REVERSE OF SECURITY)

                 6.75% 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.

     This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 6.75% Convertible Subordinated Notes due 2008 (herein called
the "Notes"), all issued or to be issued under and pursuant to an Indenture
dated as of May 29, 2001 (herein called the "Indenture"), between the Issuer
and The Bank of New York, (herein called the "Trustee"), to which Indenture and
all indentures supplemental thereto reference is hereby made for a description
of the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Issuer and the holders of the Notes.

     In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of, premium, if any, and accrued
interest on all Notes may be declared, and upon said declaration shall become,
due and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.

     The Indenture contains provisions permitting the Issuer and the Trustee in
certain limited circumstances, without the consent of the holders of the Notes,
and in other circumstances, with the consent of the holders of not less than a
majority in aggregate principal amount of the Notes at the time outstanding,
evidenced as in the Indenture provided, to execute supplemental indentures
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or modifying in
any manner the rights of the holders of the Notes; provided, however, that no
such supplemental indenture shall (i) change the final maturity of any Note, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or change the currency in which the Notes are
payable, or impair or change in any respect adverse to the Noteholders the
right to convert the Notes into any other security or modify the provisions
with respect to the subordination of the Notes, or alter or waive any provision
regarding redemption thereof, or impair or affect the right of any Noteholder
to institute suit for the payment thereof, in any case, without the consent of
the Holder of each Note so affected, or (ii) reduce the aforesaid percentage of
Notes, the holders of which are required to consent to any such supplemental
indenture, without the consent of the holders of all Notes then outstanding. It
is also provided in the Indenture that, prior to any declaration accelerating
the maturity of the Notes, the holders of a majority in aggregate principal
amount of the Notes at the time outstanding may on behalf of

<PAGE>

the holders of all of the Notes waive any past default or Event of Default
under the Indenture and its consequences except (i) a default in the payment of
interest or premium, if any, on, or the principal of, the Notes when due or
(ii) a default in respect of a covenant or provisions of the Indenture which
under Article 7 cannot be modified or amended without the consent of the
holders of all Notes then outstanding. Any such consent or waiver by the holder
of this Note (unless revoked as provided in the Indenture) shall be conclusive
and binding upon such holder and upon all future holders and owners of this
Note and any Notes which may be issued in exchange or substitution hereof,
irrespective of whether or not any notation thereof is made upon this Note or
such other Notes.

     The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, expressly subordinate and subject in right of
payment to the prior payment in full in cash or other payment satisfactory to
the holders of Senior Indebtedness of all Senior Indebtedness of the Issuer, as
defined in the Indenture, whether outstanding at the date of the Indenture or
thereafter incurred, and this Note is issued subject to the provisions of the
Indenture with respect to such subordination. Each holder of this Note, by
accepting the same, agrees to and shall be bound by such provisions and
authorizes the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the
Trustee his attorney-in-fact for such purpose.

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

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

     The Notes are issuable in registered form without coupons in denominations
of $1,000 principal amount and integral multiples thereof. At the office or
agency of the Issuer referred to on the face hereof, and in the manner and
subject to the limitations provided in the Indenture, without payment of any
service charge but with payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration or
exchange of Notes, Notes may be exchanged for a like aggregate principal amount
of Notes of other authorized denominations.

     The Notes will not be redeemable at the option of the Issuer prior to May
20, 2004. On or after such date and prior to maturity the Notes may be redeemed

<PAGE>

at the option of the Issuer as a whole, or from time to time in part, upon
mailing a notice of such redemption not less than 30 nor more than 60 days
before the date fixed for redemption to the holders of Notes at their last
registered addresses, all as provided in the Indenture, at the following
redemption prices (expressed as percentages of the principal amount), together
in each case with accrued interest, if any, to, but excluding, the date fixed
for redemption:

Period                                                          Redemption Price
------                                                          ----------------
Beginning on May 20, 2004 and ending on May 14, 2005...........     103.3750%
Beginning on May 15, 2005 and ending on May 14, 2006...........     102.5313%
Beginning on May 15, 2006 and ending on May 14, 2007...........     101.6875%
Beginning on May 15, 2007 and ending on May 14, 2008...........     100.8438%

     The Notes are not subject to redemption through the operation of any
sinking fund.

     Upon the occurrence of a Repurchase Event, the Noteholder has the right,
at such holder's option, to require the Issuer to repurchase all or any portion
of such holder's Notes on the date (the "Repurchase Date") that is no earlier
than thirty (30) days and no later than forty-five (45) days (or, if such day
is not a Business Day, the next succeeding Business Day) after notice of such
Repurchase Event at a price equal to 100% of the principal amount of the Notes
such holder elects to require the Issuer to repurchase, together in each case
with accrued interest to the date fixed for repurchase; provided that if such
repurchase date is May15 or November 15, then the interest payable on such date
shall be paid to the holder of record of the Note on the next preceding May 1
or November 1, respectively. The Issuer or, at the written request of the
Issuer, the Trustee shall mail to all holders of record of the Notes a notice
of the occurrence of a Repurchase Event and of the repurchase right arising as
a result thereof on or before the thirtieth (30th) calendar day after the
occurrence of such Repurchase Event. Payment of the repurchase price may be
made in shares of the Issuer's Common Stock under certain circumstances as
provided in Section 11.07(b) of the Indenture.

     Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time following the date of original issuance of
the Notes and prior to the close of business on May 15, 2008, (except that with
respect to any Note or portion of a Note which shall be called for redemption,
prior to the close of business on the Business Day next preceding the date
fixed for redemption) (unless the Issuer shall default in payment due upon
redemption), to convert the principal hereof or any portion of such principal
which is $1,000 or an integral multiple thereof, into that number of fully paid
and non-assessable shares of Issuer's Common Stock, as said shares shall be
constituted at the date of

<PAGE>

conversion, obtained by dividing the principal amount of this Note or portion
thereof to be converted by the conversion price of $10.925 or such conversion
price as adjusted from time to time as provided in the Indenture, upon
surrender of this Note, together with a conversion notice as provided in the
Indenture (the form entitled "Conversion Notice" on the reverse hereof), to the
Issuer at the office or agency of the Issuer maintained for that purpose in the
Borough of Manhattan, The City of New York, 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 Issuer duly executed by,
the holder or by his duly authorized attorney. No adjustment in respect of
interest or dividends will be made upon any conversion; provided, however, that
if this Note shall be surrendered for conversion during the period from the
close of business on any record date for the payment of interest through the
close of business on the Business Day next 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 Repurchase Event on a Repurchase Date that occurs during such
period, such Notes (or portion thereof being converted) must be accompanied by
an amount, in funds acceptable to the Issuer, 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 Notes. 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
Notes for conversion. Notes in respect of which a Holder is exercising its
right to require repurchase upon a Repurchase Event may be converted only if
such Holder withdraws its election to exercise such right in accordance with
the terms of the Indenture. Any Notes 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 Issuer (i) to purchase such Notes from the holders thereof
and convert them into shares of the Issuer's Common Stock and (ii) to make
payment for such Notes as aforesaid to the Trustee in trust for the holders.

     Upon due presentment for registration of transfer of this Note at the
office or agency of the Issuer in the Borough of Manhattan, The City of New
York, or at the option of the holder of this Note, at the Corporate Trust
Office, a new Note or Notes of authorized denominations for an equal aggregate
principal amount will be issued to the transferee in exchange thereof, subject
to the limitations provided

<PAGE>

in the Indenture, without charge except for any tax or other governmental
charge imposed in connection therewith.

     The Issuer, the Trustee, any authenticating agent, any paying agent, any
conversion agent and any Note registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not this Note
shall be overdue and notwithstanding any notation of ownership or other writing
hereon made by anyone other than the Issuer or any Note registrar), for the
purpose of receiving payment hereof, or on account hereof, for the conversion
hereof and for all other purposes, and neither the Issuer nor the Trustee nor
any other authenticating agent nor any paying agent nor any other conversion
agent nor any Note registrar shall be affected by any notice to the contrary.
All payments made to or upon the order of such registered holder shall, to the
extent of the sum or sums paid, satisfy and discharge liability for monies
payable on this Note.

     No recourse for the payment of the principal of or any premium or interest
on this Note, or for any claim based hereon or otherwise in respect hereof, and
no recourse under or upon any obligation, covenant or agreement of the Issuer
in the Indenture or any indenture supplemental thereto or in any Note, or
because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, employee, agent, officer, director or
subsidiary, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitution, statute or rule of law or
by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.

     Customary abbreviations may be used in the name of a Noteholder 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).

<PAGE>

                               CONVERSION NOTICE

TO:   E*TRADE Group, Inc.

      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
E*TRADE Group, Inc. 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 qualified guarantor institution with
membership in an approved signature guarantee program pursuant to Rule 17Ad- 15
under the Securities Exchange Act of 1934.

      ------------------------------
      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:

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

      --------------------------------
              (Street Address)

      --------------------------------      Social Security or Other Taxpayer
         (City, State and Zip Code)         Identification Number_______________

<PAGE>

                           OPTION TO ELECT REPAYMENT
                            UPON A REPURCHASE EVENT

TO:   E*TRADE Group, Inc.

      The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from E*TRADE Group, Inc. (the "Issuer") as to
the occurrence of a Repurchase Event with respect to the Issuer and requests
and instructs the Issuer 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 converted
      (if less than all): $
                          ------------------

      Social Security or Other Taxpayer
      Identification Number
                           -----------------

<PAGE>

                                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
Issuer, with full power of substitution in the premises.

      In connection with any transfer of the within Note occurring within
two years (or such shorter holding period required under Rule 144(k) of the
Securities Act) of the original issuance of such Note (unless such Note is
being transferred pursuant to a registration statement that has been declared
effective under the Securities Act), the undersigned confirms that such Note is
being transferred:
      [ ]   To E*TRADE, Group, Inc. or a subsidiary thereof;

      [ ]   Pursuant to and in compliance with Rule 144A under the Securities
            Act;

      [ ]   Pursuant to and in compliance with Rule 144 under the Securities
            Act; or

      [ ]   Pursuant to another available exemption from the registration
            requirements of the Securities Act;

and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Issuer as defined in Rule 144
under the Securities Act (an "Affiliate"):

      [ ]   The transferee is an Affiliate of the Issuer.

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 whatsoever.

                                        Signature guarantee:

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

<PAGE>

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

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