Document:

<PAGE>

                                                                   EXHIBIT 10.87

                    SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

         This Second Amendment (this "First Amendment") is dated effective July
1, 2003 by and among Kramont Operating Partnership, L.P., a Delaware limited
partnership (the "Company"), Kramont Realty Trust, a Maryland real estate
investment trust ("Kramont") and George S. Demuth ("Executive").

                                   BACKGROUND

         WHEREAS, the parties hereto entered into an Employment Agreement
effective as of July 1, 2001, as amended by First Amendment dated July 1, 2002,
(herein referred to as "Employment Agreement"), wherein the parties agreed to
the terms and conditions of Executive's employment with the Company; and

         WHEREAS, the parties hereto desire to further amend certain of the
terms and conditions of the Employment Agreement.

         NOW THEREFORE, in consideration of the mutual promises and covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:

         1.       All capitalized terms used herein, but not otherwise defined,
shall have the meanings ascribed in the Employment Agreement.

         2.       Paragraph 4 (a) of the Employment Agreement is hereby amended
to show that the Base Salary of Executive is increased to $206,000.00, effective
July 1, 2003.

         3.       Paragraph 5 (c) of the Employment Agreement is hereby amended
to show that in accordance with the Kramont 2000 Incentive Plan, the Company
hereby grants the Executive 5,981 restricted shares of common stock under the
terms and conditions contained in a share grant letter agreement (the "Share
Grant Agreement"), the form of which is attached hereto and made a part hereof
as Exhibit "A". Simultaneous with the execution of this Second Amendment,
Executive agrees to execute and deliver to the Company the Share Grant
Agreement.

         4.       This Second Amendment and the Employment Agreement represent
the entire understanding between the parties and supercede all other oral or
written agreements between the parties. The Employment Agreement, as amended by
this Second Amendment, is hereby ratified and confirmed and remains in full
force and effect.

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Second Amendment as of the date and year first above written.

                                    KRAMONT OPERATING PARTNERSHIP, L.P.

                                    By: ________________________________________
                                        Louis P. Meshon, Sr.
                                        President

                                    KRAMONT REALTY TRUST

                                    By: ________________________________________
                                        Louis P. Meshon, Sr.
                                        President

                                    Executive

                                    By: ________________________________________
                                        George S. Demuth<PAGE>

                                                                   EXHIBIT 10.88

                    THIRD AMENDMENT TO EMPLOYMENT AGREEMENT

         This Third Amendment (this "Third Amendment") is dated effective July
1, 2003 by and among Kramont Operating Partnership, L.P., a Delaware limited
partnership (the "Company"), Kramont Realty Trust, a Maryland real estate
investment trust ("Kramont") and Etta M. Strehle ("Executive").

                                   BACKGROUND

         WHEREAS, the parties hereto entered into an Employment Agreement the
dated June 28, 2000, as amended by First Amendment dated July 1, 2001 and Second
Amendment dated July 1, 2002 (herein referred to as "Employment Agreement")
wherein the parties agreed to the terms and conditions of Executive's employment
with the Company; and

         WHEREAS, the parties hereto desire to further amend certain of the
terms and conditions of the Employment Agreement.

         NOW THEREFORE, in consideration of the mutual promises and covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:

         1.       All capitalized terms used herein, but not otherwise defined,
shall have the meanings ascribed in the Employment Agreement.

         2.       Subject to the provisions contained in Paragraph 3 of the
Employment Agreement, the Term of Employment is hereby extended to June 30, 2004
(the "Extended Term of Employment").

         3.       During the Extended Term of Employment, Executive's Base
Salary shall be $159,650.00 payable in equal bi-weekly installments in
accordance with the Company's normal payroll practices.

         4.       Subject to the provisions contained in Paragraph 5 of the
Employment Agreement, it is agreed and understood that that Executive shall be
entitled to three (3) weeks of vacation.

         5.       In accordance with the Kramont 2000 Incentive Plan, the
Company hereby grants the Executive 1,794 restricted shares of common stock
under the terms and conditions contained in a share grant letter agreement (the
"Share Grant Agreement"), the form of which is attached hereto and made a part
hereof as Exhibit "A". Simultaneous with the execution of this Third Amendment,
Executive agrees to execute and deliver to the Company the Share Grant
Agreement.

<PAGE>

         6.       This Third Amendment and the Employment Agreement represent
the entire understanding between the parties and supercede all other oral or
written agreements between the parties. The Employment Agreement, as amended by
this Third Amendment, is hereby ratified and confirmed and remains in full force
and effect.

         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Third Amendment as of the date and year first above written.

                                    KRAMONT OPERATING PARTNERSHIP, L.P.

                                    By: ________________________________________
                                        Louis P. Meshon, Sr.
                                        President

                                    KRAMONT REALTY TRUST

                                    By: ________________________________________
                                        Louis P. Meshon, Sr.
                                        President

                                    Executive

                                    By: ________________________________________
                                        Etta M. Strehle<PAGE>

                                                                    EXHIBIT 4.10

                           SAFEGUARD SCIENTIFICS, INC.

                                       To

                      WACHOVIA BANK, NATIONAL ASSOCIATION,
                                   as Trustee

                                    INDENTURE

                                   Dated as of

                                February 18, 2004

                  2.625% CONVERTIBLE SENIOR DEBENTURES DUE 2024

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                  PAGE
                                                                                                  ----
<S>                                                                                               <C>
                                               ARTICLE 1
                                              DEFINITIONS

Section 1.01.  Definitions.....................................................................     2

                                               ARTICLE 2
                 ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF DEBENTURES

Section 2.01.  Designation Amount And Issue Of Debentures......................................    11
Section 2.02.  Form of Debentures..............................................................    11
Section 2.03.  Date And Denomination Of Debentures; Payments Of Interest.......................    12
Section 2.04.  Execution of Debentures.........................................................    14
Section 2.05.  Exchange and Registration of Transfer of Debentures; Restrictions on
         Transfer..............................................................................    14
Section 2.06.  Mutilated, Destroyed, Lost or Stolen Debentures.................................    20
Section 2.07.  Temporary Debentures............................................................    22
Section 2.08.  Cancellation of Debentures......................................................    22
Section 2.09.  CUSIP Numbers...................................................................    22

                                               ARTICLE 3
                                REDEMPTION AND REPURCHASE OF DEBENTURES

Section 3.01.  Redemption of Debentures........................................................    23
Section 3.02.  Notice of Optional Redemption; Selection of Debentures..........................    23
Section 3.03.  Payment of Debentures Called For Redemption by the Company......................    25
Section 3.04.  Conversion Arrangement on Call for Redemption...................................    26
Section 3.05.  Repurchase at Option of Holders Upon a Designated Event.........................    27
Section 3.06.  Repurchase of Debentures by the Company at Option of the Holder.................    30
Section 3.07.  Company Repurchase Notice.......................................................    31
Section 3.08.  Effect of Repurchase Notice.....................................................    33
Section 3.09.  Deposit of Purchase Price.......................................................    33
Section 3.10.  Debentures Repurchased in Part..................................................    34
Section 3.11.  Repayment to the Company........................................................    34
Section 3.12.  Acceleration; Payments To Debentureholders......................................    34
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                                <C>
                                               ARTICLE 4
                                               [RESERVED]

                                               ARTICLE 5
                                               [RESERVED]

                                               ARTICLE 6
                                  PARTICULAR COVENANTS OF THE COMPANY

Section 6.01.  Payment of Principal and Interest...............................................    35
Section 6.02.  Maintenance of Office or Agency.................................................    35
Section 6.03.  Appointments to Fill Vacancies in Trustee's Office..............................    36
Section 6.04.  Provisions as to Paying Agent...................................................    36
Section 6.05.  Existence.......................................................................    37
Section 6.06.  [Reserved]......................................................................    37
Section 6.07.  [Reserved]......................................................................    37
Section 6.08.  Rule 144A Information Requirement...............................................    37
Section 6.09.  Stay, Extension and Usury Laws..................................................    38
Section 6.10.  Compliance Certificate..........................................................    38
Section 6.11.  Liquidated Damages Notice.......................................................    39

                                               ARTICLE 7
                   DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

Section 7.01.  Debentureholders' Lists.........................................................    39
Section 7.02.  Preservation And Disclosure Of Lists............................................    39
Section 7.03.  Reports By Trustee..............................................................    40
Section 7.04.  Reports by Company..............................................................    40

                                               ARTICLE 8
                  REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON AN EVENT OF DEFAULT

Section 8.01.  Events Of Default...............................................................    41
Section 8.02.  Payments of Debentures on Default; Suit Therefor................................    43
Section 8.03.  Application of Monies Collected By Trustee......................................    45
Section 8.04.  Proceedings by Debentureholder..................................................    46
Section 8.05.  Proceedings By Trustee..........................................................    47
Section 8.06.  Remedies Cumulative And Continuing..............................................    47
Section 8.07.  Direction of Proceedings and Waiver of Defaults By Majority of
         Debentureholders......................................................................    47
Section 8.08.  Notice of Defaults..............................................................    48
Section 8.09.  Undertaking To Pay Costs........................................................    48
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                                <C>
                                               ARTICLE 9
                                              THE TRUSTEE

Section 9.01.  Duties and Responsibilities of Trustee..........................................    49
Section 9.02.  Reliance on Documents, Opinions, Etc............................................    50
Section 9.03.  No Responsibility For Recitals, Etc.............................................    52
Section 9.04.  Trustee, Paying Agents, Conversion Agents or Registrar May Own Debentures.......    52
Section 9.05.  Monies to Be Held in Trust......................................................    52
Section 9.06.  Compensation and Expenses of Trustee............................................    52
Section 9.07.  Officers' Certificate As Evidence...............................................    53
Section 9.08.  Conflicting Interests of Trustee................................................    53
Section 9.09.  Eligibility of Trustee..........................................................    53
Section 9.10.  Resignation or Removal of Trustee...............................................    54
Section 9.11.  Acceptance by Successor Trustee.................................................    55
Section 9.12.  Succession By Merger............................................................    56
Section 9.13.  Preferential Collection of Claims...............................................    57

                                               ARTICLE 10
                                          THE DEBENTUREHOLDERS

Section 10.01.  Action By Debentureholders.....................................................    57
Section 10.02.  Proof of Execution by Debentureholders.........................................    57
Section 10.03.  Who Are Deemed Absolute Owners.................................................    57
Section 10.04.  Company-owned Debentures Disregarded...........................................    58
Section 10.05.  Revocation Of Consents, Future Holders Bound...................................    58

                                               ARTICLE 11
                                      MEETINGS OF DEBENTUREHOLDERS

Section 11.01.  Purpose Of Meetings............................................................    59
Section 11.02.  Call Of Meetings By Trustee....................................................    59
Section 11.03.  Call Of Meetings By Company Or Debentureholders................................    60
Section 11.04.  Qualifications For Voting......................................................    60
Section 11.05.  Regulations....................................................................    60
Section 11.06.  Voting.........................................................................    61
Section 11.07.  No Delay Of Rights By Meeting..................................................    61

                                               ARTICLE 12
                                        SUPPLEMENTAL INDENTURES

Section 12.01.  Supplemental Indentures Without Consent of Debentureholders....................    61
Section 12.02.  Supplemental Indenture With Consent Of Debentureholders........................    63
Section 12.03.  Effect Of Supplemental Indenture...............................................    64
</TABLE>

                                      iii
<PAGE>

<TABLE>
<S>                                                                                                <C>
Section 12.04.  Notation On Debentures.........................................................    65
Section 12.05.  Evidence Of Compliance Of Supplemental Indenture To Be Furnished To
         Trustee...............................................................................    65

                                               ARTICLE 13
                   USE OF PROCEEDS UPON SALES OF INTERESTS IN NON-STRATEGIC COMPANIES

Section 13.01.  Use Of Proceeds Upon Sales Of Interests In Non-strategic Companies.............    65
Section 13.02.  Release Of Pledged Treasury Securities.........................................    66
Section 13.03.  Good Faith Determination.......................................................    67
Section 13.04.  Book Value Of Non-strategic Companies..........................................    67
Section 13.05.  Notice of Triggering Sale......................................................    67

                                               ARTICLE 14
                           CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

Section 14.01.  Company May Consolidate On Certain Terms.......................................    68
Section 14.02.  Successor To Be Substituted....................................................    69
Section 14.03.  Opinion Of Counsel To Be Given Trustee.........................................    70

                                               ARTICLE 15
                                SATISFACTION AND DISCHARGE OF INDENTURE

Section 15.01.  Discharge Of Indenture.........................................................    70
Section 15.02.  Deposited Monies To Be Held In Trust By Trustee................................    71
Section 15.03.  Paying Agent To Repay Monies Held..............................................    71
Section 15.04.  Return Of Unclaimed Monies.....................................................    71
Section 15.05.  Reinstatement..................................................................    72

                                               ARTICLE 16
                    IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS

Section 16.01.  Indenture And Debentures Solely Corporate Obligations..........................    72

                                               ARTICLE 17
                                        CONVERSION OF DEBENTURES

Section 17.01.  Right To Convert...............................................................    72
Section 17.02.  Conversion Procedures..........................................................    75
Section 17.03.  Cash Payments in Lieu of Fractional Shares.....................................    77
Section 17.04.  Conversion Rate................................................................    77
Section 17.05.  Adjustment Of Conversion Rate..................................................    78
Section 17.06.  Effect Of Reclassification, Consolidation, Merger or Sale......................    89
Section 17.07.  Taxes On Shares Issued.........................................................    90
</TABLE>

                                       iv
<PAGE>
<TABLE>
<S>                                                                                               <C>
Section 17.08.  Reservation of Shares, Shares to Be Fully Paid; Compliance With
         Governmental Requirements; Listing of Common Stock....................................    90
Section 17.09.  Responsibility Of Trustee......................................................    91
Section 17.10.  Notice To Holders Prior To Certain Actions.....................................    92
Section 17.11.  Shareholder Rights Plans.......................................................    93
Section 17.12.  Issuer Determination Final.....................................................    93

                                               ARTICLE 18
                                        MISCELLANEOUS PROVISIONS

Section 18.01.  Provisions Binding On Company's Successors.....................................    94
Section 18.02.  Official Acts By Successor Corporation.........................................    94
Section 18.03.  Addresses For Notices, Etc.....................................................    94
Section 18.04.  Governing Law..................................................................    95
Section 18.05.  Evidence Of Compliance With Conditions Precedent, Certificates To Trustee......    95
Section 18.06.  Legal Holidays.................................................................    95
Section 18.07.  Trust Indenture Act............................................................    95
Section 18.08.  No Security Interest Created...................................................    96
Section 18.09.  Benefits Of Indenture..........................................................    96
Section 18.10.  Authenticating Agent...........................................................    96
Section 18.11.  Execution In Counterparts......................................................    97
Section 18.12.  Severability...................................................................    97
Section 18.13.  Table of Contents, Headings, Etc...............................................    97

Exhibit A     Form of Debenture                                                                   A-1
</TABLE>

                                       v
<PAGE>

                                    INDENTURE

         INDENTURE dated as of February 18, 2004, between Safeguard Scientifics,
Inc., a Pennsylvania corporation (hereinafter called the "COMPANY"), having its
principal office at 800 The Safeguard Building, 435 Devon Park Drive, Wayne, PA
19087, and Wachovia Bank, National Association, as trustee hereunder
(hereinafter called the "TRUSTEE").

                                   WITNESSETH:

         WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 2.625% Convertible Senior Debentures Due 2024
(hereinafter called the "DEBENTURES"), in an aggregate principal amount not to
exceed $125,000,000 (or $150,000,000 if the Initial Purchaser exercises the
option granted to it pursuant to Section 2 of the Purchase Agreement) and, to
provide the terms and conditions upon which the Debentures are to be
authenticated, issued and delivered, the Company has duly authorized the
execution and delivery of this Indenture; and

         WHEREAS, the Debentures, the certificate of authentication to be borne
by the Debentures, a form of assignment, a form of option to elect repurchase
upon a Designated Event, a form of repurchase notice and a form of conversion
notice to be borne by the Debentures are to be substantially in the forms
hereinafter provided for; and

         WHEREAS, all acts and things necessary to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute this Indenture a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Debentures have in
all respects been duly authorized,

         NOW, THEREFORE, THIS INDENTURE WITNESSETH:

         That in order to declare the terms and conditions upon which the
Debentures are, and are to be, authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of the
Debentures by the holders thereof, the Company covenants and agrees with the
Trustee for the equal and proportionate benefit of the respective holders from
time to time of the Debentures (except as otherwise provided below), as follows:

<PAGE>

                                    ARTICLE 1
                                   DEFINITIONS

         Section 1.01 . Definitions. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. All
other terms used in this Indenture that are defined in the Trust Indenture Act
or that are by reference therein defined in the Securities Act (except as herein
otherwise expressly provided or unless the context otherwise requires) shall
have the meanings assigned to such terms in the Trust Indenture Act and in the
Securities Act as in force at the date of the execution of this Indenture. The
words "HEREIN", "HEREOF", "HEREUNDER" and 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 include the plural as well as the
singular.

         "ADJUSTMENT EVENT" has the meaning specified in Section 17.05(m).

         "AGENT MEMBERS" has the meaning specified in Section 2.05(b)(v).

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

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

         "BUSINESS DAY" means any day except a Saturday, Sunday or legal holiday
on which banking institutions in The City of New York or Charlotte, NC are
authorized or obligated by law, regulation or executive order to close.

         "CLOSING SALE PRICE" of the shares of Common Stock on any date means
the closing sale price per share (or if no closing sale price is reported, the
average of the closing bid and ask prices or, if more than one in either case,
the average of the average closing bid and the average closing ask prices) on
such date as reported in composite transactions for the principal United States
securities exchange on which shares of Common Stock are traded or, if the shares
of Common Stock are not listed on a United States national or regional
securities exchange, as reported by the National Association of Securities
Dealers Automated Quotation System or, if neither, by the National Quotation
Bureau

                                       2
<PAGE>

Incorporated. In the absence of such a quotation, the Company shall be entitled
to determine the Closing Sale Price on the basis it considers appropriate.

         "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 of this Indenture such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.

         "COMMON STOCK" means any stock of any class of the Company that has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and that is not subject to redemption by the Company. Subject to the provisions
of Section 17.06, however, shares issuable on conversion of Debentures shall
include only shares of the class designated as common stock of the Company at
the date of this Indenture (namely, the Common Stock, par value $0.10) or shares
of any class or classes resulting from any reclassification or reclassifications
thereof and that have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and that are not subject to redemption by the Company;
provided that if at any time there shall be more than one such resulting class,
the shares of each such class then so issuable on conversion shall be
substantially in the proportion that 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.

         "COMPANY" means the corporation named as the "COMPANY" in the first
paragraph of this Indenture, and, subject to the provisions of Article 14 and
Section 17.06, shall include its successors and assigns.

         "COMPANY REPURCHASE NOTICE" has the meaning specified in Section
3.07(b).

         "COMPANY REPURCHASE NOTICE DATE" has the meaning specified in Section
3.07(b).

         "CONTINUING DIRECTOR" means a director who either was a member of the
Board of Directors on February 11, 2004 or who becomes a member of the Board of
Directors subsequent to that date and whose appointment, election or nomination
for election by the shareholders of the Company is duly approved by a majority
of the Continuing Directors on the Board of Directors at the time of such
approval, either by a specific vote or by approval of the proxy statement issued
by the Company on behalf of the Board of Directors in which such individual is
named as nominee for director.

                                       3
<PAGE>

         "CONVERSION DATE" has the meaning set forth in Section 17.02.

         "CONVERSION PRICE" as of any day will equal $1,000 divided by the
Conversion Rate as of such date and rounded to the nearest cent. The Conversion
Price shall initially be $7.2174 per share of Common Stock.

         "CONVERSION RATE" has the meaning specified in Section 17.04.

         "CORPORATE TRUST OFFICE" or other similar term, means the designated
office of the Trustee at which at any particular time its corporate trust
business as it relates to this Indenture shall be administered, which office is,
at the date as of which this Indenture is dated, located at 1525 West W.T.
Harris Blvd., Charlotte, NC 28288.

         "CURRENT MARKET PRICE" has the meaning specified in Section 17.05(i).

         "CUSTODIAN" means Wachovia Bank, National Association, as custodian
with respect to the Debentures in global form, or any successor entity thereto.

         "DEBENTURE" or "DEBENTURES" means any Debenture or Debentures, as the
case may be, authenticated and delivered under this Indenture, including any
Global Debenture.

         "DEBENTURE REGISTER" has the meaning specified in Section 2.05.

         "DEBENTURE REGISTRAR" has the meaning specified in Section 2.05.

         "DEBENTUREHOLDER" or "HOLDER" as applied to any Debenture, or other
similar terms (but excluding the term "BENEFICIAL HOLDER"), means any Person in
whose name at the time a particular Debenture is registered on the Debenture
Registrar's books.

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

         "DEFAULTED INTEREST" has the meaning specified in Section 2.03.

         "DEPOSITARY" means, the clearing agency registered under the Exchange
Act that is designated to act as the Depositary for the Global Debentures. The
Depository Trust Company shall be the initial Depositary, until a successor
shall have been appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, "DEPOSITARY" shall mean or include such
successor.

         "DESIGNATED EVENT" means a Fundamental Change or a Termination of
Trading.

                                       4
<PAGE>

         "DESIGNATED EVENT EXPIRATION TIME" has the meaning specified in Section
3.05(b).

         "DESIGNATED EVENT NOTICE" has the meaning specified in Section 3.05(b).

         "DESIGNATED EVENT REPURCHASE DATE" has the meaning specified in Section
3.05(a).

         "DETERMINATION DATE" has the meaning specified in Section 17.05(m).

         "DIRECTED SHARE SUBSCRIPTION PROGRAM" means a program whereby all
shareholders of the Company are entitled to purchase a portion of the shares
offered by a Partnership Company in that Partnership Company's initial public
offering.

         "DISTRIBUTED PROPERTY" has the meaning specified in Section 17.05(d).

         "EVENT OF DEFAULT" means any event specified in Section 8.01 as an
Event of Default.

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

         "EX-DIVIDEND TIME" has the meaning specified in Section 17.01(b).

         "EXEMPT SALE" has the meaning specified in Section 14.01(c).

         "EXPIRATION TIME" has the meaning specified in Section 17.05(f).

         "FAIR MARKET VALUE" has the meaning specified in Section 17.05(i).

         "FISCAL QUARTER" means, with respect to the Company, its first, second,
third and fourth quarters ending on March 31, June 30, September 30 and December
31, respectively.

         "FUNDAMENTAL CHANGE" means the occurrence of any of:

                  (i)      any transaction or event (whether by means of an
         exchange offer, liquidation, tender offer, consolidation, merger,
         combination, reclassification, recapitalization or otherwise) in
         connection with which all or substantially all of the Common Stock is
         exchanged for, converted into, acquired for or constitutes solely the
         right to receive consideration that is not all or substantially all
         common stock that is (or, upon consummation of or immediately following
         such transaction or event, which will be) (x) listed on a United States
         national securities exchange or (y) approved

                                       5
<PAGE>

         for quotation on the Nasdaq National Market or any similar United
         States system of automated dissemination of quotations of securities
         prices.

                  (ii)     a "person" or "group" within the meaning of Section
         13(d) of the Exchange Act other than the Company, a Subsidiary of the
         Company or the employee benefit plans of the Company or the
         Subsidiaries of the Company, files a Schedule TO or any other schedule,
         form or report under the Exchange Act disclosing that such person or
         group has become the "beneficial owner," as defined in Rule 13d-3 under
         the Exchange Act, of more than 50% of the total voting power of all
         shares of the Company's capital stock that are entitled to vote
         generally in the election of directors; or

                  (iii)    Continuing Directors cease to constitute at least a
         majority of the Board of Directors.

         "GLOBAL DEBENTURE" has the meaning specified in Section 2.02.

         "INDEBTEDNESS" means, with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such Person for borrowed money (including obligations of the
Person in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such Person or to only a portion
thereof), other than any account payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the
obtaining of materials or services; (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers' acceptances; (c) any indebtedness or other
obligations described in clause (a) or (b) secured by any mortgage, pledge, lien
or other encumbrance existing on property that is owned or held by such Person,
regardless of whether the indebtedness or other obligation secured thereby shall
have been assumed by such Person; and (d) any and all deferrals, renewals,
extensions and refundings of, or amendments, modifications or supplements to,
any indebtedness, obligation or liability of the kind described in clauses (a)
through (c).

         "INDENTURE" means this instrument as originally executed or, if amended
or supplemented as herein provided, as so amended or supplemented.

         "INITIAL PURCHASER" means Wachovia Capital Markets, LLC.

                                       6
<PAGE>

         "INTEREST" means, when used with reference to the Debentures, any
interest payable under the terms of the Debentures and Liquidated Damages, if
any, payable under the terms of the Registration Rights Agreement.

         "IPO RIGHTS" has the meaning specified in Section 17.05(g).

         "IPO RIGHTS ADJUSTMENT DATE" has the meaning specified in Section
17.05(g).

         "LIQUIDATED DAMAGES" has the meaning specified for "LIQUIDATED DAMAGES
AMOUNT" in Section 2(e) of the Registration Rights Agreement.

         "LIQUIDATED DAMAGES NOTICE" has the meaning specified in Section 6.11.

         "MEASUREMENT PERIOD" has the meaning specified in Section 17.01(a)(ii).

         "NON-ELECTING SHARE" has the meaning specified in Section 17.06.

         "NON-STRATEGIC COMPANIES" means eMerge Interactive, Inc., Mobility
Technologies, Inc., Neuronyx, Inc., NexTone Communications, Inc., Pacific Title
and Art Studio, Inc., QuestOne Decision Life Sciences Corporation, REALTIME
MEDIA, Ventaira Pharmaceuticals, Inc. and CompuCom Systems, Inc.

         "NOTICE DATE" means the date of mailing of the notice of redemption
pursuant to Section 3.02.

         "OFFICERS' CERTIFICATE", when used with respect to the Company, means a
certificate signed by the Chairman of the Board, the Chief Executive Officer,
the President, any Managing Director or any Vice President (whether or not
designated by a number or numbers or word or words added before or after the
title "VICE PRESIDENT") and the Treasurer or any Assistant Treasurer, or the
Secretary or Assistant Secretary of the Company.

         "OPINION OF COUNSEL" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or other counsel
reasonably acceptable to the Trustee.

         "OPTION TO ELECT REPURCHASE UPON A DESIGNATED EVENT" has the meaning
specified in Section 3.05(c).

         "OUTSTANDING", when used with reference to Debentures and subject to
the provisions of Section 10.04, means, as of any particular time, all
Debentures authenticated and delivered by the Trustee under this Indenture,
except:

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

                                       7
<PAGE>

         (b)      Debentures, or portions thereof, (i) for the redemption of
which monies in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or (ii) that shall
have been otherwise defeased in accordance with Article 15;

         (c)      Debentures in lieu of which, or in substitution for which,
other Debentures shall have been authenticated and delivered pursuant to the
terms of Section 2.06; and

         (d)      Debentures converted into Common Stock pursuant to Article 17
and Debentures deemed not Outstanding pursuant to Article 3.

         "PARTNERSHIP COMPANY" means an entity in which the Company either
directly or indirectly through its Subsidiaries has an equity interest.

         "PAYDOWN AMOUNT" has the meaning specified in Section 13.01(b).

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

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

         "PREDECESSOR DEBENTURE" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture, and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.06 in lieu
of a lost, destroyed or stolen Debenture shall be deemed to evidence the same
debt as the lost, destroyed or stolen Debenture that it replaces.

         "PURCHASE AGREEMENT" means the Purchase Agreement, dated as of February
11, 2004 by and between the Company and the Initial Purchaser, as amended from
time to time in accordance with its terms.

         "PURCHASED SHARES" has the meaning specified in Section 17.05(f).

         "QIB" means a "QUALIFIED INSTITUTIONAL BUYER" as defined in Rule 144A.

         "RECORD DATE" has the meaning specified in Section 17.05(i).

         "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of February 18, 2004, by and between the Company and the
Initial Purchaser, as amended from time to time in accordance with its terms.

                                       8
<PAGE>

         "REPURCHASE DATE" has the meaning specified in Section 3.06.

         "REPURCHASE NOTICE" has the meaning specified in Section 3.06.

         "RESPONSIBLE OFFICER" shall mean, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee with
direct responsibility for the administration of this Indenture and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of such person's knowledge of any familiarity
with the particular subject.

         "RESTRICTED SECURITIES" has the meaning specified in Section 2.05(c).

         "RIGHTS" has the meaning specified in Section 17.11.

         "RIGHTS IPO" means an initial public offering of the common stock of a
Partnership Company solely through the issuance of rights, by such Partnership
Company, to purchase such common stock to the shareholders of the Company.

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

         "SALE EVENT" has the meaning specified in Section 14.01(a).

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

         "SIGNIFICANT SUBSIDIARY" means, as of any date of determination, a
Subsidiary of the Company that would constitute a "SIGNIFICANT SUBSIDIARY" as
such term is defined under Rule 1-02(w) of Regulation S-X of the Commission as
in effect on the date of this Indenture.

         "SUBSCRIPTION RIGHTS ADJUSTMENT DATE" has the meaning specified in
Section 17.05(h).

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

                                       9
<PAGE>

         "TERMINATION OF TRADING" will be deemed to have occurred if the Common
Stock (or other common stock into which the Debentures are then convertible) is
neither listed for trading on a United States national or regional securities
exchange nor approved for quotation on the Nasdaq National Market or any similar
United States system of automated dissemination of quotations of securities
prices that is a successor thereto.

         "TRADING DAY" has the meaning specified in Section 17.05(i).

         "TRADING PRICE" means, on any date, the average of the secondary market
bid quotations per $1,000 principal amount of Debentures obtained by the Trustee
for $5,000,000 principal amount of Debentures at approximately 3:30 p.m., New
York City time, on such date from three independent nationally recognized
securities dealers selected by the Company; provided that if three such bids
cannot reasonably be obtained by the Trustee, but two bids are obtained, then
the average of the two bids shall be used, and if only one such bid can
reasonably be obtained by the Trustee, one bid shall be used; provided further
that if the Trustee cannot reasonably obtain at least one bid for $5,000,000
principal amount of Debentures from a nationally recognized securities dealer,
then the Trading Price per $1,000 principal amount of Debentures shall be deemed
to be less than 98% of the product of (a) the Closing Sale Price of the Common
Stock on such date and (b) the Conversion Rate on such date.

           "TREASURY PORTFOLIO" means a portfolio of U.S. Treasury securities
(or principal or interest strips thereof) that mature on or prior to each
interest payment date occurring after the deposit of the Treasury Portfolio with
the Trustee, in each case, in an amount equal to the aggregate interest payment
due on each such interest payment date (assuming that all Debentures Outstanding
on the date the Treasury Portfolio is deposited with the Trustee remain
Outstanding through March 15, 2009).

         "TRIGGER EVENT" has the meaning specified in Section 17.05(d).

         "TRIGGERING COMPANY" has the meaning specified in Section 13.01.

         "TRIGGERING SALE" has the meaning specified in Section 13.01.

         "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended, as it was in force at the date of this Indenture, except as provided in
Sections 12.03 and Section 17.06; provided that if the Trust Indenture Act of
1939 is amended after the date hereof, the term "TRUST INDENTURE ACT" shall
mean, to the extent required by such amendment, the Trust Indenture Act of 1939
as so amended.

                                       10
<PAGE>

         "TRUSTEE" means Wachovia Bank, National Association, and its successors
and any corporation resulting from or surviving any consolidation or merger to
which it or its successors may be a party and any successor trustee at the time
serving as successor trustee hereunder.

                                    ARTICLE 2
           ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF
                                   DEBENTURES

         Section 2.01. Designation Amount And Issue Of Debentures. The
Debentures shall be designated as "2.625% CONVERTIBLE SENIOR DEBENTURES DUE
2024". Debentures not to exceed the aggregate principal amount of $125,000,000
(or $150,000,000 if the Initial Purchaser exercises the option granted to it
pursuant to Section 2 of the Purchase Agreement) (except pursuant to Sections
2.05, 2.06, 3.03, 3.05 and 17.02 hereof) upon the execution of this Indenture,
or from time to time thereafter, may be executed by the Company and delivered to
the Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Debentures to or upon the written order of the Company, signed by
its Chairman of the Board, Chief Executive Officer, President, any Managing
Director or any Vice President (whether or not designated by a number or numbers
or word or words added before or after the title "VICE PRESIDENT"), the
Treasurer or any Assistant Treasurer or the Secretary or Assistant Secretary,
without any further action by the Company hereunder.

         Section 2.02. Form of Debentures. The Debentures and the Trustee's
certificate of authentication to be borne by such Debentures shall be
substantially in the form set forth in Exhibit A. The terms and provisions
contained in the form of Debenture attached as Exhibit A hereto shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.

         Any of the Debentures may have such letters, numbers or other marks of
identification and such notations, legends, endorsements or changes as the
officers executing the same may approve (execution thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions of
this Indenture, or as may be required by the Custodian, the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Debentures to
be tradable on The Portal Market or as may be required for the Debentures to be
tradable on any other market developed for trading of securities pursuant to
Rule 144A or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Debentures may be
listed, or to

                                       11
<PAGE>

conform to usage, or to indicate any special limitations or restrictions to
which any particular Debentures are subject.

         So long as the Debentures are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, or otherwise contemplated
by Section 2.05(a), all of the Debentures will be represented by one or more
Debentures in global form registered in the name of the Depositary or the
nominee of the Depositary (a "GLOBAL DEBENTURE"). The transfer and exchange of
beneficial interests in any such Global Debenture shall be effected through the
Depositary in accordance with this Indenture and the applicable procedures of
the Depositary. Except as provided in Section 2.05(a), beneficial owners of a
Global Debenture 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 Debenture.

         Any Global Debenture shall represent such of the Outstanding Debentures
as shall be specified therein and shall provide that it shall represent the
aggregate amount of Outstanding Debentures from time to time endorsed thereon
and that the aggregate amount of Outstanding Debentures represented thereby may
from time to time be increased or reduced to reflect redemptions, repurchases,
conversions, transfers or exchanges permitted hereby. Any endorsement of a
Global Debenture to reflect the amount of any increase or decrease in the amount
of Outstanding Debentures represented thereby shall be made by the Trustee or
the Custodian, at the direction of the Trustee, in such manner and upon
instructions given by the holder of such Debentures in accordance with this
Indenture. Payment of principal of and Interest on any Global Debenture shall be
made to the holder of such Debenture.

         Section 2.03. Date And Denomination Of Debentures; Payments Of
Interest. The Debentures shall be issuable in registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof. Each
Debenture shall be dated the date of its authentication and shall bear Interest
from the date specified on the face of the form of Debenture attached as Exhibit
A hereto. Interest on the Debentures shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.

         The Person in whose name any Debenture (or its Predecessor Debenture)
is registered on the Debenture Register at the close of business on any record
date with respect to any interest payment date shall be entitled to receive the
Interest payable on such interest payment date, except that the Interest payable
upon redemption or repurchase will be payable to the Person to whom principal is
payable pursuant to such redemption or repurchase (unless the redemption date or
the Repurchase Date, as the case may be, falls after a record date and on or
prior to the corresponding interest payment date, in which case the full
semi-annual payment of Interest becoming due on such interest payment date shall
be payable

                                       12
<PAGE>

to the holders of such Debentures registered as such on the corresponding record
date). Interest shall be payable at an office maintained by the Company for such
purposes in the Borough of Manhattan, City of New York, which shall initially be
an office or agency of the Trustee. The Company shall pay Interest (i) on any
Debentures in certificated form by check mailed to the address of the Person
entitled thereto as it appears in the Debenture Register (or upon written
notice, by wire transfer in immediately available funds, if such Person is
entitled to Interest on aggregate principal in excess of $2 million) or (ii) on
any Global Debenture by wire transfer of immediately available funds to the
account of the Depositary or its nominee. The term "RECORD DATE" with respect to
any interest payment date shall mean the March 1 or September 1 preceding the
applicable March 15 or September 15 interest payment date, respectively.

         Any Interest on any Debenture that is payable, but is not paid or duly
provided for, on any March 15 or September 15, pursuant to the terms set forth
herein (herein called "DEFAULTED INTEREST") shall forthwith cease to be payable
to the Debentureholder on the relevant record date by virtue of his having been
such Debentureholder, and such Defaulted Interest shall be paid by the Company,
at its election in each case, as provided in clause (1) or (2) below:

         (1)      The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Debentures (or their respective
Predecessor Debentures) are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Debenture and the date
of the proposed payment (which shall be not less than twenty-five (25) days
after the receipt by the Trustee of such notice, unless the Trustee shall
consent to an earlier date), and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit on or prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a special record date for the payment of such Defaulted
Interest that shall be not more than fifteen (15) days and not less than ten
(10) days prior to the date of the proposed payment, and not less than ten (10)
days after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such special record date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the special record date therefor to be
mailed, first-class postage prepaid, to each holder at his address as it appears
in the Debenture Register, not less than ten (10) days prior to such special
record date. Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the

                                       13
<PAGE>

Debentures (or their respective Predecessor Debentures) are registered at the
close of business on such special record date and shall no longer be payable
pursuant to the following clause (2) of this Section 2.03.

         (2)      The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange or automated quotation system on which the Debentures may be listed or
designated for issuance, and upon such notice as may be required by such
exchange or automated quotation system, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.

         Section 2.04. Execution of Debentures. The Debentures shall be signed
in the name and on behalf of the Company by the manual or facsimile signature of
its Chairman of the Board, Chief Executive Officer, President or any Vice
President (whether or not designated by a number or numbers or word or words
added before or after the title "VICE PRESIDENT"). Only such Debentures as shall
bear thereon a certificate of authentication substantially in the form set forth
on the form of Debenture attached as Exhibit A hereto, manually executed by the
Trustee (or an authenticating agent appointed by the Trustee as provided by
Section 18.10), shall be entitled to the benefits of this Indenture or be valid
or obligatory for any purpose. Such certificate by the Trustee (or such an
authenticating agent) upon any Debenture executed by the Company shall be
conclusive evidence that the Debenture so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.

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

         Section 2.05. Exchange and Registration of Transfer of Debentures;
Restrictions on Transfer. (a) The Company shall cause to be kept at the
Corporate Trust Office a register (the register maintained in such office and in
any other office or agency of the Company designated pursuant to Section 6.02
being herein sometimes collectively referred to as the "DEBENTURE REGISTER") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Debentures and of transfers of Debentures.
The Debenture Register shall be in written form or in any form capable of being

                                       14
<PAGE>

converted into written form within a reasonably prompt period of time. The
Trustee is hereby appointed "DEBENTURE REGISTRAR" for the purpose of registering
Debentures and transfers of Debentures as herein provided. The Company may
appoint one or more co-registrars in accordance with Section 6.02.

         Upon surrender for registration of transfer of any Debenture to the
Debenture Registrar or any co-registrar, and satisfaction of the requirements
for such transfer set forth in this Section 2.05, the Company shall execute, and
the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Debentures of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.

         Debentures may be exchanged for other Debentures of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Debentures to be exchanged at any such office or agency maintained by the
Company pursuant to Section 6.02. Whenever any Debentures are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Debentures that the Debentureholder making the exchange is entitled
to receive bearing registration numbers not contemporaneously Outstanding.

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

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

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

         Neither the Company nor the Trustee nor any Debenture Registrar shall
be required to exchange or register a transfer of (a) any Debentures for a
period of fifteen (15) days next preceding any selection of Debentures to be
redeemed, (b) any Debentures or portions thereof called for redemption pursuant
to Section 3.02, (c) any Debentures or portions thereof surrendered for
conversion pursuant to Article 17, (d) any Debentures or portions thereof
tendered for repurchase (and

                                       15
<PAGE>

not withdrawn) pursuant to Section 3.05 or (e) any Debentures or portions
thereof tendered for repurchase (and not withdrawn) pursuant to Section 3.06.

         (b)      The following provisions shall apply only to Global
Debentures:

                  (i)      Each Global Debenture authenticated under this
         Indenture shall be registered in the name of the Depositary or a
         nominee thereof and delivered to such Depositary or a nominee thereof
         or Custodian therefor, and each such Global Debenture shall constitute
         a single Debenture for all purposes of this Indenture.

                  (ii)     Notwithstanding any other provision in this
         Indenture, no Global Debenture may be exchanged in whole or in part for
         Debentures registered, and no transfer of a Global Debenture in whole
         or in part may be registered, in the name of any Person other than the
         Depositary or a nominee thereof unless (A) the Depositary (I) has
         notified the Company that it is unwilling or unable to continue as
         Depositary for such Global Debenture and a successor depositary has not
         been appointed by the Company within ninety (90) days or (II) has
         ceased to be a clearing agency registered under the Exchange Act and a
         successor clearing agency has not been appointed by the Company within
         ninety (90) days, (B) an Event of Default has occurred and is
         continuing or (C) the Company, in its sole discretion, notifies the
         Trustee in writing that it no longer wishes to have all the Debentures
         represented by Global Debentures. Any Global Debenture exchanged
         pursuant to clause (A) or (B) above shall be so exchanged in whole and
         not in part and any Global Debenture exchanged pursuant to clause (C)
         above may be exchanged in whole or from time to time in part as
         directed by the Company. Any Debenture issued in exchange for a Global
         Debenture or any portion thereof shall be a Global Debenture; provided
         that any such Debenture so issued that is registered in the name of a
         Person other than the Depositary or a nominee thereof shall not be a
         Global Debenture.

                  (iii)    Securities issued in exchange for a Global Debenture
         or any portion thereof pursuant to clause (ii) above shall be issued in
         definitive, fully registered form, without interest coupons, shall have
         an aggregate principal amount equal to that of such Global Debenture or
         portion thereof to be so exchanged, shall be registered in such names
         and be in such authorized denominations as the Depositary shall
         designate and shall bear any legends required hereunder. Any Global
         Debenture to be exchanged in whole shall be surrendered by the
         Depositary to the Trustee, as Debenture Registrar. With regard to any
         Global Debenture to be exchanged in part, either such Global Debenture
         shall be so surrendered for exchange or, if the Trustee is acting as
         Custodian for the Depositary or its nominee with respect to such Global
         Debenture, the principal amount

                                       16
<PAGE>

         thereof shall be reduced, by an amount equal to the portion thereof to
         be so exchanged, by means of an appropriate adjustment made on the
         records of the Trustee. Upon any such surrender or adjustment, the
         Trustee shall authenticate and make available for delivery the
         Debenture issuable on such exchange to or upon the written order of the
         Depositary or an authorized representative thereof.

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

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

                  (vi)     At such time as all interests in a Global Debenture
         have been redeemed, repurchased, converted, canceled or exchanged for
         Debentures in certificated form, such Global Debenture 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
         Global Debenture is redeemed, repurchased, converted, canceled or
         exchanged for Debentures in certificated form, the principal amount of
         such Global Debenture shall, in accordance with the standing procedures
         and instructions existing between the Depositary and the Custodian, be
         appropriately reduced, and an endorsement shall be made on such Global
         Debenture, by the Trustee or the Custodian, at the direction of the
         Trustee, to reflect such reduction.

         (c)      Every Debenture that bears or is required under this Section
2.05(c) to bear the legend set forth in this Section 2.05(c) (together with any
Common Stock issued upon conversion of the Debentures and required to bear the
legend

                                       17
<PAGE>

set forth in Section 2.05(c), collectively, the "RESTRICTED SECURITIES") shall
be subject to the restrictions on transfer set forth in this Section 2.05(c)
(including those set forth in the legend below) unless such restrictions on
transfer shall be waived by written consent of the Company, and the holder of
each such Restricted Security, by such Debenture holder's acceptance thereof,
agrees to be bound by all such restrictions on transfer. As used in Section
2.05(c) and 2.05(d), the term "TRANSFER" encompasses any sale, pledge, loan,
transfer or other disposition whatsoever of any Restricted Security or any
interest therein.

         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 evidencing such Debenture (and all securities issued in exchange
therefor or substitution thereof) and the Common Stock, if any, issued upon
conversion thereof, shall bear a legend in substantially the following form,
unless such Debenture or Common Stock has been sold pursuant to a registration
statement that has been declared effective under the Securities Act (and that
continues to be effective at the time of such transfer) or pursuant to Rule 144
under the Securities Act or any similar provision then in force, or unless
otherwise agreed by the Company in writing, with written notice thereof to the
Trustee:

         THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.

         THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") THAT IS TWO YEARS AFTER THE LATER OF THE LAST
DATE ON WHICH THE 2.625% CONVERTIBLE SENIOR DEBENTURES DUE 2024 OF SAFEGUARD
SCIENTIFICS, INC. (THE "COMPANY") WERE ORIGINALLY ISSUED AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN

                                       18
<PAGE>

RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR (D)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, SUBJECT TO THE RIGHTS OF THE COMPANY AND THE WITHIN
MENTIONED TRUSTEE PRIOR TO THE REGISTRATION OF ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (B), (C) OR (D) TO REQUIRE A DULY COMPLETED AND SIGNED
CERTIFICATE (THE FORM OF WHICH IS AVAILABLE FROM THE COMPANY OR THE TRUSTEE) AND
IN THE CASE OF CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH
OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE
OTHER SIDE OF THIS SECURITY COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.

         Any Debenture (or security issued in exchange or substitution therefor)
or such Common Stock 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 Debenture or certificates representing such shares of Common Stock for
exchange to the Debenture Registrar or transfer agent of the Common Stock in
accordance with the provisions of this Section 2.05, be exchanged for a new
Debenture or Debentures, of like tenor and aggregate principal amount, or
certificates representing a like number of shares of Common Stock that shall not
bear the restrictive legend required by this Section 2.05(c). If the Restricted
Security surrendered for exchange is represented by a Global Debenture bearing
the legend set forth in this Section 2.05(c), the principal amount of the
legended Global Debenture shall be reduced by the appropriate principal amount
and the principal amount of a Global Debenture without the legend set forth in
this Section 2.05(c) shall be increased by an equal principal amount. If a
Global Debenture without the legend set forth in this Section 2.05(c) is not
then Outstanding, the Company shall execute and the Trustee shall authenticate
and deliver an unlegended Global Debenture to the Depositary.

         (d)      Any Debenture or Common Stock issued upon the conversion of a
Debenture 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 Company or any Affiliate thereof may
not be resold

                                       19
<PAGE>

by the Company 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 that results in such Debentures or Common Stock,
as the case may be, no longer being "RESTRICTED SECURITIES" (as defined under
Rule 144).

         (e)      The Company and the Trustee shall have no responsibility or
obligation to any Agent Members or any other Person with respect to the accuracy
of the books or records, or the acts or omissions, of the Depositary or its
nominee or of any participant or member thereof, with respect to any ownership
interest in the Debentures, with respect to performance by the Depositary or any
Agent Members of their respective obligations under the rules and procedures
governing their operations or with respect to the delivery to any Agent Member
or other Person (other than the Depositary) of any notice (including any notice
of redemption) or the payment of any amount, under or with respect to such
Debentures. All notices and communications to be given to the Debentureholder
and all payments to be made to Debentureholders under the Debentures shall be
given or made only to or upon the order of the registered Debentureholders
(which shall be the Depositary or its nominee in the case of a Global
Debenture). The rights of beneficial owners in any Global Debenture shall be
exercised only through the Depositary subject to the customary procedures of the
Depositary. The Company and the Trustee may rely and shall be fully protected in
relying upon information furnished by the Depositary with respect to its Agent
Members.

         The Company and the Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Debenture (including any transfers between or
among Agent Members in any Global Indenture) other than to require delivery of
such certificates and other documentation or evidence as are expressly required
by, and to do so if and when expressly required by, the terms of this Indenture,
and to examine the same to determine substantial compliance as to form with the
express requirements hereof.

         Section 2.06. Mutilated, Destroyed, Lost or Stolen Debentures. In case
any Debenture shall become mutilated or be destroyed, lost or stolen, the
Company in its discretion may execute, and upon its written request the Trustee
or an authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Debenture, bearing a number not contemporaneously
Outstanding, in exchange and substitution for the mutilated Debenture, or in
lieu of and in substitution for the Debenture so destroyed, lost or stolen. In
every case, the applicant for a substituted Debenture shall furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of them harmless
for any loss, liability, cost or expense caused by or connected with such
substitution, and, in every case

                                       20
<PAGE>

of destruction, loss or theft, the applicant shall also furnish to the Company,
to the Trustee and, if applicable, to such authenticating agent evidence to
their satisfaction of the destruction, loss or theft of such Debenture and of
the ownership thereof.

         Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described in
the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Debenture and make available for delivery such
Debenture. Upon the issuance of any substituted Debenture, the Company may
require the payment by the holder of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in relation thereto
and any other expenses connected therewith. In case any Debenture that has
matured or is about to mature or has been called for redemption or has been
tendered for redemption upon a Designated Event (and not withdrawn) or has been
surrendered for repurchase on a Repurchase Date (and not withdrawn) or is to be
converted into Common Stock shall become mutilated or be destroyed, lost or
stolen, the Company may, instead of issuing a substitute Debenture, pay or
authorize the payment of or convert or authorize the conversion of the same
(without surrender thereof except in the case of a mutilated Debenture), as the
case may be, if the applicant for such payment or conversion shall furnish to
the Company, to the Trustee and, if applicable, to such authenticating agent
such security or indemnity as may be required by them to save each of them
harmless for any loss, liability, cost or expense caused by or in connection
with such substitution, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company, the Trustee and, if applicable, any
paying agent or conversion agent evidence to their satisfaction of the
destruction, loss or theft of such Debenture and of the ownership thereof.

         Every substitute Debenture issued pursuant to the provisions of this
Section 2.06 by virtue of the fact that any Debenture is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debenture shall be found at any
time, and shall be entitled to all the benefits of (but shall be subject to all
the limitations set forth in) this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder. To the extent permitted by
law, all Debentures shall be held and owned upon the express condition that the
foregoing provisions are exclusive with respect to the replacement or payment or
conversion or redemption or repurchase of mutilated, destroyed, lost or stolen
Debentures and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment or conversion or redemption or
repurchase of negotiable instruments or other securities without their
surrender.

                                       21
<PAGE>

         Section 2.07. Temporary Debentures. Pending the preparation of
Debentures in certificated form, the Company may execute and the Trustee or an
authenticating agent appointed by the Trustee shall, upon the written request of
the Company, authenticate and deliver temporary Debentures (printed or
lithographed). Temporary Debentures shall be issuable in any authorized
denomination, and substantially in the form of the Debentures in certificated
form, but with such omissions, insertions and variations as may be appropriate
for temporary Debentures, all as may be determined by the Company. Every such
temporary Debenture shall be executed by the Company and authenticated by the
Trustee or such authenticating agent upon the same conditions and in
substantially the same manner, and with the same effect, as the Debentures in
certificated form. Without unreasonable delay, the Company will execute and
deliver to the Trustee or such authenticating agent Debentures in certificated
form and thereupon any or all temporary Debentures may be surrendered in
exchange therefor, at each office or agency maintained by the Company pursuant
to Section 6.02 and the Trustee or such authenticating agent shall authenticate
and make available for delivery in exchange for such temporary Debentures an
equal aggregate principal amount of Debentures in certificated form. Such
exchange shall be made by the Company at its own expense and without any charge
therefor. Until so exchanged, the temporary Debentures shall in all respects be
entitled to the same benefits and subject to the same limitations under this
Indenture as Debentures in certificated form authenticated and delivered
hereunder.

         Section 2.08. Cancellation of Debentures. All Debentures surrendered
for the purpose of payment, redemption, repurchase, conversion, exchange or
registration of transfer shall, if surrendered to the Company or any paying
agent or any Debenture Registrar or any conversion agent, be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Debentures shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Trustee shall dispose of such canceled Debentures in accordance with its
customary procedures. If the Company shall acquire any of the Debentures, such
acquisition shall not operate as a redemption, repurchase or satisfaction of the
indebtedness represented by such Debentures unless and until the same are
delivered to the Trustee for cancellation.

         Section 2.09. CUSIP Numbers. The Company in issuing the Debentures 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
Debentureholders; provided that any such notice may state that no representation
is made as to the correctness of such numbers either as printed on the
Debentures or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Debentures,
and any such redemption shall not be affected by any defect in or omission of
such numbers.

                                       22
<PAGE>

The Company will promptly notify the Trustee of any change in the "CUSIP"
numbers.

                                    ARTICLE 3
                     REDEMPTION AND REPURCHASE OF DEBENTURES

         Section 3.01. Redemption of Debentures. The Company may not redeem any
Debentures prior to March 20, 2009. On or after March 20, 2009 but prior to
March 20, 2011, the Company shall have the option to redeem some or all of the
Debentures, but only if the Closing Sale Price of the Common Stock for twenty
(20) Trading Days within a period of thirty (30) consecutive Trading Days ending
on the Trading Day before the Company provides the notice required by Section
3.02 hereof exceeds 140% of the Conversion Price in effect on each such Trading
Day. On or after March 20, 2011, and prior to maturity, the Debentures may be
redeemed at any time or from time to time at the option of the Company, in whole
or in part, without regard to the Closing Sale Price of the Common Stock. Upon
any redemption pursuant to this Section 3.01, the Company shall provide the
notice required by Section 3.02 hereof and shall pay a redemption price in cash
equal to 100% of the principal amount of the Debentures being redeemed, together
with accrued and unpaid Interest to, but excluding, the date fixed for
redemption; provided that if the date fixed for redemption falls after a record
date and on or prior to the corresponding interest payment date, then the
Interest payable on such interest payment date shall be paid to the holders of
record of the Debentures on the applicable record date instead of the holders
surrendering the Debentures for redemption.

         Section 3.02. Notice of Optional Redemption; Selection of Debentures.
In case the Company shall desire to exercise the right to redeem all or, as the
case may be, any part of the Debentures pursuant to Section 3.01, it shall fix a
date for redemption and it or, at its written request received by the Trustee
not fewer than forty-five (45) days prior (or such shorter period of time as may
be acceptable to the Trustee) to the date fixed for redemption, the Trustee in
the name of and at the expense of the Company, shall mail or cause to be mailed
a notice of such redemption not fewer than thirty (30) nor more than sixty (60)
days prior to the redemption date to each holder of Debentures so to be redeemed
as a whole or in part at its last address as the same appears on the Debenture
Register; provided that if the Company shall give such notice, it shall also
give written notice of the redemption date to the Trustee. Such mailing shall be
by first class mail. The notice, if mailed in the manner herein provided, shall
be conclusively presumed to have been duly given, whether or not the holder
receives such notice. In any case, failure to give such notice by mail or any
defect in the notice to the holder of any Debenture designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Debenture.

                                       23
<PAGE>

Concurrently with the mailing of any such notice of redemption, the Company
shall issue a press release announcing such redemption, the form and content of
which press release shall be determined by the Company in its sole discretion.
The failure to issue any such press release or any defect therein shall not
affect the validity of the redemption notice or any of the proceedings for the
redemption of any Debenture called for redemption.

         Each such notice of redemption shall specify the aggregate principal
amount of Debentures to be redeemed, the CUSIP number or numbers of the
Debentures being redeemed, the date fixed for redemption (which shall be a
Business Day), the redemption price at which Debentures are to be redeemed, the
place or places of payment, that payment will be made upon presentation and
surrender of such Debentures, that Interest accrued and unpaid to the date fixed
for redemption will be paid as specified in said notice, and that on and after
said date Interest thereon or on the portion thereof to be redeemed will cease
to accrue. Such notice shall also state the current Conversion Rate and the date
on which the right to convert such Debentures or portions thereof into Common
Stock will expire. If fewer than all the Debentures are to be redeemed, the
notice of redemption shall identify the Debentures to be redeemed (including
CUSIP numbers, if any). In case any Debenture is to be redeemed in part only,
the notice of redemption shall state the portion of the principal amount thereof
to be redeemed and shall state that, on and after the redemption date, upon
surrender of such Debenture, a new Debenture or Debentures in principal amount
equal to the unredeemed portion thereof will be issued.

         On or prior to the redemption date specified in the notice of
redemption given as provided in this Section 3.02, the Company will deposit with
the Trustee or with one or more paying agents (or, if the Company is acting as
its own paying agent, set aside, segregate and hold in trust as provided in
Section 6.04) an amount of money in immediately available funds sufficient to
redeem on the redemption date all the Debentures (or portions thereof) so called
for redemption (other than those theretofore surrendered for conversion into
Common Stock) at the appropriate redemption price, together with accrued and
unpaid Interest to, but excluding, the redemption date; provided that if such
payment is made on the redemption 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.
The Company shall be entitled to retain any interest, yield or gain on amounts
deposited with the Trustee or any paying agent pursuant to this Section 3.02 in
excess of amounts required hereunder to pay the redemption price and accrued and
unpaid Interest to, but excluding, the redemption date. If any Debenture called
for redemption is converted pursuant hereto prior to such redemption date, any
money deposited with the Trustee or any paying agent or so segregated and held
in trust for the redemption of such Debenture shall be paid to the Company upon
its written request, or, if then held by the Company, shall be discharged from
such trust. Whenever any Debentures are to be redeemed, the Company will give
the Trustee

                                       24
<PAGE>

written notice in the form of an Officers' Certificate not fewer than forty-five
(45) days (or such shorter period of time as may be acceptable to the Trustee)
prior to the redemption date as to the aggregate principal amount of Debentures
to be redeemed.

         If less than all of the Outstanding Debentures are to be redeemed, the
Trustee shall select the Debentures or portions thereof of the Global Debenture
or the Debentures in certificated form to be redeemed (in principal amounts of
$1,000 or multiples thereof) by lot, on a pro rata basis or by another method
the Trustee deems fair and appropriate. If any Debenture selected for partial
redemption is submitted for conversion in part after such selection, the portion
of such Debenture submitted for conversion shall be deemed (so far as may be
possible) to be the portion to be selected for redemption. The Debentures (or
portions thereof) so selected shall be deemed duly selected for redemption for
all purposes hereof, notwithstanding that any such Debenture is submitted for
conversion in part before the mailing of the notice of redemption.

         Upon any redemption of less than all of the Outstanding Debentures, the
Company and the Trustee may (but need not), solely for purposes of determining
the pro rata allocation among such Debentures as are unconverted and Outstanding
at the time of redemption, treat as Outstanding any Debentures surrendered for
conversion during the period of fifteen (15) days next preceding the mailing of
a notice of redemption and may (but need not) treat as Outstanding any Debenture
authenticated and delivered during such period in exchange for the unconverted
portion of any Debenture converted in part during such period.

         Section 3.03. Payment of Debentures Called For Redemption by the
Company. If notice of redemption has been given as provided in Section 3.02, the
Debentures or portion of Debentures with respect to which such notice has been
given shall, unless converted into Common Stock pursuant to the terms hereof,
become due and payable on the date fixed for redemption and at the place or
places stated in such notice at the applicable redemption price, together with
Interest accrued and unpaid to (but excluding) the redemption date, and on and
after said date (unless the Company shall default in the payment of such
Debentures at the redemption price, together with Interest accrued to said date)
Interest on the Debentures or portion of Debentures so called for redemption
shall cease to accrue and, after the close of business on the Business Day
immediately preceding the redemption date (unless the Company shall default in
the payment of such Debentures at the redemption price, together with Interest
accrued to said date) such Debentures shall cease to be convertible into Common
Stock and, except as provided in Section 9.05 and Section 15.04, to be entitled
to any benefit or security under this Indenture, and the holders thereof shall
have no right in respect of such Debentures except the right to receive the
redemption price thereof and accrued and unpaid Interest to (but excluding) the
redemption date. On presentation and surrender of such Debentures at a place of
payment in said

                                       25
<PAGE>

notice specified, the said Debentures or the specified portions thereof shall be
paid and redeemed by the Company at the applicable redemption price, together
with Interest accrued and unpaid thereon to, but excluding, the redemption date.

         Upon presentation of any Debenture redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for delivery
to the holder thereof, at the expense of the Company, a new Debenture or
Debentures, of authorized denominations, in principal amount equal to the
unredeemed portion of the Debentures so presented.

         Notwithstanding the foregoing, the Trustee shall not redeem any
Debentures or mail any notice of redemption during the continuance of a default
in payment of Interest on the Debentures. If any Debenture 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 redemption date at a
rate equal to 1% per annum plus the rate borne by the Debenture and such
Debenture shall remain convertible into Common Stock until the principal and
Interest shall have been paid or duly provided for.

         Section 3.04. Conversion Arrangement on Call for Redemption. In
connection with any redemption of Debentures, the Company may arrange for the
purchase and conversion of any Debentures by an agreement with one or more
investment banks or other purchasers to purchase such Debentures by paying to
the Trustee in trust for the Debentureholders, on or before the date fixed for
redemption, an amount not less than the applicable redemption price, together
with Interest accrued and unpaid to, but excluding, the date fixed for
redemption, of such Debentures. Notwithstanding anything to the contrary
contained in this Article 3, the obligation of the Company to pay the redemption
price of such Debentures, together with Interest accrued and unpaid 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 Debentures not duly surrendered for
conversion by the holders thereof may, at the option of the Company, be deemed,
to the fullest extent permitted by law, acquired by such purchasers from such
holders and (notwithstanding anything to the contrary contained in Article 17)
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 Debentures shall be extended through such time), subject to payment of
the above amount as aforesaid. At the direction of the Company, the Trustee
shall hold and dispose of any such amount paid to it in the same manner as it
would monies deposited with it by the Company for the redemption of Debentures.
Without the Trustee's prior written consent, no arrangement between the Company
and such purchasers for the purchase and conversion of any Debentures shall
increase or otherwise affect any

                                       26
<PAGE>

of the powers, duties, responsibilities or obligations of the Trustee as set
forth in this Indenture.

         Section 3.05. Repurchase at Option of Holders Upon a Designated Event.
(a) If there shall occur a Designated Event at any time prior to maturity of the
Debentures, then each Debentureholder shall have the right, at such holder's
option, to require the Company to repurchase all of such holder's Debentures, or
any portion thereof that is a multiple of $1,000 principal amount, on a date
designated by the Company (the "DESIGNATED EVENT REPURCHASE DATE") that is not
less than twenty (20) nor more than thirty-five (35) Business Days after the
date of the Designated Event Notice (as defined in Section 3.05(b)) for such
Designated 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 and unpaid Interest to, but excluding, the
Designated Event Repurchase Date; provided that if such Designated Event
Repurchase Date falls after a record date and on or prior the corresponding
interest payment date, then the Interest payable on such interest payment date
shall be paid to the holders of record of the Debentures on the applicable
record date instead of the holders surrendering the Debentures for repurchase.

         (b)      On or before the 20th day after the occurrence of a Designated
Event, the Company or at its written request (which must be received by the
Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree in
writing to a shorter period), the Trustee, in the name of and at the expense of
the Company, shall mail or cause to be mailed to all holders of record on the
date of the Designated Event a notice (the "DESIGNATED EVENT NOTICE") of the
occurrence of such Designated 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 the first paragraph of Section 3.02
(without regard for the time limits set forth therein). If the Company shall
give such notice, the Company shall also deliver a copy of the Designated Event
Company Notice to the Trustee at such time as it is mailed to Debentureholders.
Concurrently with the mailing of any Designated Event Notice, the Company shall
issue a press release announcing such Designated Event referred to in the
Designated Event Notice, the form and content of which press release shall be
determined by the Company in its sole discretion. The failure to issue any such
press release or any defect therein shall not affect the validity of the
Designated Event Notice or any proceedings for the repurchase of any Debenture
that any Debentureholder may elect to have the Company repurchase as provided in
this Section 3.05.

         Each Designated Event Notice shall specify the circumstances
constituting the Designated Event, the Designated Event Repurchase Date, the
price at which the Company shall be obligated to repurchase Debentures, that the
holder must exercise the repurchase right on or prior to 5:00 p.m., New York
City time, on the

                                       27
<PAGE>

Designated Event Repurchase Date (the "DESIGNATED EVENT EXPIRATION TIME"), that
the holder shall have the right to withdraw any Debentures surrendered prior to
the Designated Event Expiration Time, if the Debentures are then convertible,
that Debentures as to which an Option to Elect Repurchase Upon a Designated
Event has been given may be converted only if the Option to Elect Repurchase
Upon a Designated Event is withdrawn in accordance with the terms of this
Indenture, a description of the procedure that a Debentureholder must follow to
exercise such repurchase right and to withdraw any surrendered Debentures, the
place or places where the holder is to surrender such holder's Debentures, the
amount of Interest accrued and unpaid on each Debenture to the Designated Event
Repurchase Date and the CUSIP number or numbers of the Debentures (if then
generally in use).

         No failure of the Company to give the foregoing notices and no defect
therein shall limit the Debentureholders' repurchase rights or affect the
validity of the proceedings for the repurchase of the Debentures pursuant to
this Section 3.05.

         (c)      Repurchases of Debentures under this Section 3.05 shall be
made, at the option of the holder thereof, upon:

                  (i)      delivery to the Trustee (or other paying agent
         appointed by the Company) by a holder of a duly completed and executed
         notice (the "OPTION TO ELECT REPURCHASE UPON A DESIGNATED EVENT") in
         the form set forth on the reverse of the Debenture prior to the
         Designated Event Expiration Time; and

                  (ii)     delivery or book-entry transfer of the Debentures to
         the Trustee (or other paying agent appointed by the Company) at any
         time simultaneous with or after delivery of the Option to Elect
         Repurchase Upon a Designated Event (together with all necessary
         endorsements) at the Corporate Trust Office of the Trustee (or other
         paying agent appointed by the Company) in the Borough of Manhattan as
         provided in Section 6.02, such delivery being a condition to receipt by
         the holder of the repurchase price therefor; provided that such
         repurchase price shall be so paid pursuant to this Section 3.05 only if
         the Debenture so delivered to the Trustee (or other paying agent
         appointed by the Company) shall conform in all respects to the
         description thereof in the related Option to Elect Repurchase Upon a
         Designated Event.

         The Company shall purchase from the holder thereof, pursuant to this
Section 3.05, a portion of a Debenture, if the principal amount of such portion
is $1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply
to the purchase of all of a Debenture also apply to the purchase of such portion
of such Debenture.

                                       28
<PAGE>

         Upon presentation of any Debenture repurchased in part only, the
Company shall execute and, upon the Company's written direction to the Trustee,
the Trustee shall authenticate and make available for delivery to the holder
thereof, at the expense of the Company, a new Debenture or Debentures, of
authorized denominations, in aggregate principal amount equal to the unredeemed
portion of the Debentures presented.

         Notwithstanding anything herein to the contrary, any holder delivering
to the Trustee (or other paying agent appointed by the Company) the Option to
Elect Repurchase Upon a Designated Event contemplated by this Section 3.05 shall
have the right to withdraw such Option to Elect Repurchase Upon a Designated
Event at any time prior to the Designated Event Expiration Time by delivery of a
written notice of withdrawal to the Trustee (or other paying agent appointed by
the Company) in accordance with Section 3.05(d) below.

         The Trustee (or other paying agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Option to Elect
Repurchase Upon a Designated Event or written notice of withdrawal thereof.

         For a Debenture, other than a Global Debenture to be so repurchased at
the option of the holder, the Company must receive at the office or agency of
the Company maintained for that purpose or, at the option of such holder, the
Corporate Trust Office, such Debenture with the form entitled "OPTION TO ELECT
REPURCHASE UPON A DESIGNATED EVENT" on the reverse thereof duly completed,
together with such Debentures duly endorsed for transfer, on or before the
Designated Event Expiration Time. All questions as to the validity, eligibility
(including time of receipt) and acceptance of any Debenture for repurchase shall
be determined by the Company, whose determination shall be final and binding
absent manifest error.

         (d)      An Option to Elect Repurchase Upon a Designated Event may be
withdrawn by means of a written notice of withdrawal delivered to the office of
the Trustee (or other paying agent appointed by the Company) in accordance with
the Option to Elect Repurchase Upon a Designated Event at any time prior to the
Designated Event Expiration Time, specifying:

                  (i)      the certificate number, if any, of the Debenture in
         respect of which such notice of withdrawal is being submitted, or the
         appropriate Depositary information if the Debenture in respect of which
         such notice of withdrawal is being submitted is represented by a Global
         Debenture,

                  (ii)     the principal amount of the Debenture with respect to
         which such notice of withdrawal is being submitted, and

                                       29
<PAGE>

                  (iii)    the principal amount, if any, of such Debenture that
         remains subject to the original Option to Elect Repurchase Upon a
         Designated Event and that has been or will be delivered for purchase by
         the Company.

         (e)      On or prior to the Designated Event Repurchase Date, the
Company shall deposit with the Trustee or with one or more paying agents (or, if
the Company is acting as its own paying agent, set aside, segregate and hold in
trust as provided in Section 6.04) an amount of money sufficient to repurchase
on the Designated Event Repurchase Date all the Debentures to be repurchased on
such date at the appropriate repurchase price, together with accrued and unpaid
Interest to, but excluding, the Designated Event Repurchase Date; provided that
if such payment is made on the Designated Event Repurchase Date it must be
received by the Trustee or paying agent, as the case may be, by 10:00 a.m. New
York City time, on such date. Payment for Debentures surrendered for repurchase
(and not withdrawn) prior to the Designated Event Expiration Time will be made
promptly (but in no event more than five (5) Business Days) following the later
of (x) Designated Event Repurchase Date, and (y) the time of book-entry transfer
or delivery of the Debenture surrendered for repurchase, by (i) mailing checks
for the amount payable to the holders of such Debentures entitled thereto as
they shall appear in the Debenture Register or (ii) on any Global Debenture by
wire transfer of immediately available funds to the account of the Depositary or
its nominee.

         If on the Business Day following the Designated Event Repurchase Date
the Trustee (or other paying agent appointed by the Company) holds money
sufficient to repurchase all the Debentures or portions thereof that are to be
purchased as of the Designated Event Repurchase Date, then as of the Designated
Event Repurchase Date (i) the Debentures will cease to be Outstanding, (ii)
Interest on the Debentures will cease to accrue, and (iii) all other rights of
the holders of such Debentures will terminate, whether or not book-entry
transfer of the Debentures has been made or the Debentures have been delivered
to the Trustee or paying agent, other than the right to receive the repurchase
price upon delivery of the Debentures.

         (f)      [Reserved.]

         (g)      The Company will comply with the provisions of Rule 13e-4 and
any other tender offer rules under the Exchange Act to the extent then
applicable in connection with the repurchase rights of the holders of Debentures
in the event of a Designated Event.

         Section 3.06. Repurchase of Debentures by the Company at Option of the
Holder. Debentures shall be purchased by the Company pursuant to the terms of
the Debentures at the option of the holder on each of March 21, 2011, March 20,
2014, and March 20, 2019 (each a "REPURCHASE DATE"), at a purchase price of

                                       30
<PAGE>

100% of the principal amount, plus any accrued and unpaid Interest to, but
excluding, the Repurchase Date. Repurchases of Debentures under this Section
3.06 shall be made, at the option of the holder thereof, upon:

         (a)      delivery to the Trustee (or other paying agent appointed by
the Company) by a holder of a duly completed notice (the "REPURCHASE NOTICE") in
the form set forth on the reverse of the Debenture during the period beginning
at any time from the opening of business on the date that is twenty (20)
Business Days prior to the Repurchase Date until the close of business on the
Repurchase Date; and

         (b)      delivery or book-entry transfer of the Debentures to the
Trustee (or other paying agent appointed by the Company) at any time after
delivery of the Repurchase Notice (together with all necessary endorsements) at
the Corporate Trust Office of the Trustee (or other paying agent appointed by
the Company) in the Borough of Manhattan as provided in Section 6.02, such
delivery being a condition to receipt by the holder of the purchase price
therefor; provided that such purchase price shall be so paid pursuant to this
Section 3.06 only if the Debenture so delivered to the Trustee (or other paying
agent appointed by the Company) shall conform in all respects to the description
thereof in the related Repurchase Notice.

         The Company shall purchase from the holder thereof, pursuant to this
Section 3.06, a portion of a Debenture, if the principal amount of such portion
is $1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply
to the purchase of all of a Debenture also apply to the purchase of such portion
of such Debenture.

         Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.06 shall be consummated by the delivery of the consideration to
be received by the holder promptly following the later of the Repurchase Date
and the time of the book-entry transfer or delivery of the Debenture.

         Notwithstanding anything herein to the contrary, any holder delivering
to the Trustee (or other paying agent appointed by the Company) the Repurchase
Notice contemplated by this Section 3.06 shall have the right to withdraw such
Repurchase Notice at any time prior to 5:00 p.m., New York City time, on the
Repurchase Date by delivery of a written notice of withdrawal to the Trustee (or
other paying agent appointed by the Company) in accordance with Section 3.08.

         The Trustee (or other paying agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Repurchase Notice or
written notice of withdrawal thereof.

         Section 3.07. Company Repurchase Notice.

                                       31
<PAGE>

         (a)      The Debentures to be repurchased on the Repurchase Date
pursuant to Section 3.06 will be paid for in cash.

         At least three (3) Business Days before the Company Repurchase Notice
Date, the Company shall deliver an Officers' Certificate to the Trustee
specifying:

                  (i)      the information required by Section 3.07(b) in the
         Company Repurchase Notice, and

                  (ii)     whether the Company desires the Trustee to give the
         Company Repurchase Notice required by Section 3.07(b).

         (b)      In connection with any repurchase of Debentures, the Company
shall, no less than twenty (20) Business Days prior to the Repurchase Date (the
"COMPANY REPURCHASE NOTICE DATE"), give notice to holders at their addresses
shown in the Debenture Register setting forth information specified in this
Section 3.07(b) (the "COMPANY REPURCHASE NOTICE"). The Company will also give
notice to beneficial owners as required by applicable law.

         The Company Repurchase Notice shall:

                  (1)      state the repurchase price and the Repurchase Date to
         which the Company Repurchase Notice relates;

                  (2)      include a form of Repurchase Notice;

                  (3)      state the name and address of the Trustee (or other
         paying agent or conversion agent appointed by the Company);

                  (4)      state that Debentures must be surrendered to the
         Trustee (or other paying agent appointed by the Company) to collect the
         purchase price;

                  (5)      if the Debentures are then convertible, state that
         Debentures as to which a Repurchase Notice has been given may be
         converted only if the Repurchase Notice is withdrawn in accordance with
         the terms of this Indenture; and

                  (6)      state the CUSIP number of the Debentures.

The Company Repurchase Notice may be given by the Company or, at the Company's
request, the Trustee shall give such Company Repurchase Notice in the Company's
name and at the Company's expense.

         (c)      The Company will comply with the provisions of Rule 13e-4,
Rule 14e-1 and any other tender offer rules under the Exchange Act and file a
Schedule

                                       32
<PAGE>

TO or any other required schedule or form under the Exchange Act to the extent
applicable in connection with the repurchase rights of the holders of
Debentures.

         Section 3.08. Effect of Repurchase Notice. Upon receipt by the Trustee
(or other paying agent appointed by the Company) of the Repurchase Notice
specified in Section 3.06, the holder of the Debenture in respect of which such
Repurchase Notice was given shall (unless such Repurchase Notice is validly
withdrawn) thereafter be entitled to receive solely the purchase price with
respect to such Debenture. Such purchase price shall be paid to such holder,
subject to receipt of funds and/or Debentures by the Trustee (or other paying
agent appointed by the Company), promptly following the later of (x) the
Repurchase Date with respect to such Debenture (provided the holder has
satisfied the conditions in Section 3.06) and (y) the time of delivery of such
Debenture to the Trustee (or other paying agent appointed by the Company) by the
holder thereof in the manner required by Section 3.06. Debentures in respect of
which a Repurchase Notice has been given by the holder thereof may not be
converted pursuant to Article 17 hereof on or after the date of the delivery of
such Repurchase Notice unless such Repurchase Notice has first been validly
withdrawn.

         A Repurchase Notice may be withdrawn by means of a written notice of
withdrawal delivered to the office of the Trustee (or other paying agent
appointed by the Company) in accordance with the Repurchase Notice at any time
prior to 5:00 p.m., New York City time, on the Repurchase Date, specifying:

         (a)      the certificate number, if any, of the Debenture in respect of
which such notice of withdrawal is being submitted, or the appropriate
Depositary information if the Debenture in respect of which such notice of
withdrawal is being submitted is represented by a Global Debenture,

         (b)      the principal amount of the Debenture with respect to which
such notice of withdrawal is being submitted, and

         (c)      the principal amount, if any, of such Debenture that remains
subject to the original Repurchase Notice and that has been or will be delivered
for purchase by the Company.

         Section 3.09. Deposit of Purchase Price. (a) On or prior to the
Repurchase Date, the Company will deposit with the Trustee or with one or more
paying agents (or, if the Company is acting as its own paying agent, set aside,
segregate and hold in trust as provided in Section 6.04) an amount of money
sufficient to pay the aggregate purchase price of all the Debentures or portions
thereof that are to be purchased as of the Repurchase Date; provided that if
such payment is made on the Repurchase Date it must be received by the Trustee
or

                                       33
<PAGE>

paying agent, as the case may be, by 10:00 a.m. New York City time, on such
date.

         (b)      If on the Business Day following the Repurchase Date the
Trustee or other paying agent appointed by the Company, or the Company if the
Company is acting as the paying agent, holds cash sufficient to pay the
aggregate purchase price of all the Debentures, or portions thereof that are to
be purchased as of the Repurchase Date, then as of the Repurchase Date (i) the
Debentures will cease to be Outstanding, (ii) Interest on the Debentures will
cease to accrue, and (iii) all other rights of the holders of such Debentures
will terminate, whether or not book-entry transfer of the Debentures has been
made or the Debentures have been delivered to the Trustee or paying agent, other
than the right to receive the repurchase price upon delivery of the Debentures.

         Section 3.10. Debentures Repurchased in Part. Upon presentation of any
Debenture repurchased only in part, the Company shall execute and the Trustee
shall authenticate and make available for delivery to the holder thereof, at the
expense of the Company, a new Debenture or Debentures, of any authorized
denomination, in aggregate principal amount equal to the unrepurchased portion
of the Debentures presented.

         Section 3.11. Repayment to the Company. The Trustee (or other paying
agent appointed by the Company) shall return to the Company any cash that
remains unclaimed as provided in Section 12 of the Debentures, together with
Interest, if any, thereon, held by them for the payment of the repurchase price;
provided that to the extent that the aggregate amount of cash deposited by the
Company pursuant to Section 3.02, Section 3.05 and Section 3.09 exceeds the
aggregate redemption price or purchase price, as the case may be, of the
Debentures or portions thereof that the Company is obligated to redeem or
purchase as of the redemption date, the Designated Event Repurchase Date or the
Repurchase Date, as the case may be, then, unless otherwise agreed in writing
with the Company, promptly after the Business Day following the redemption date,
the Designated Event Repurchase Date or the Repurchase Date, as the case may be,
the Trustee shall return any such excess to the Company together with interest,
if any, thereon.

         Section 3.12. Acceleration; Payments To Debentureholders. In the event
of the acceleration of the Debentures because of an Event of Default, no payment
or distribution shall be made to the Trustee or any holder of Debentures in
respect of the principal of or Interest on the Debentures called for redemption
in accordance with Section 3.02 or the Debentures submitted for repurchase in
accordance with Section 3.05 or Section 3.06, as the case may be, as provided in
this Indenture, until such acceleration is rescinded in accordance with the
terms of this Indenture.

                                       34
<PAGE>

                                   ARTICLE 4
                                   [RESERVED]

                                   ARTICLE 5
                                   [RESERVED]

                                   ARTICLE 6
                       PARTICULAR COVENANTS OF THE COMPANY

         Section 6.01. Payment of Principal and Interest. The Company covenants
and agrees that it will duly and punctually pay or cause to be paid the
principal of (including the redemption price upon redemption or the repurchase
price upon repurchase, in each case pursuant to Article 3), and Interest, on
each of the Debentures at the places, at the respective times and in the manner
provided herein and in the Debentures.

         Section 6.02. Maintenance of Office or Agency. The Company will
maintain an office or agency in the Borough of Manhattan, the City of New York,
where the Debentures may be surrendered for registration of transfer or exchange
or for presentation for payment or for conversion, redemption or repurchase and
where notices and demands to or upon the Company in respect of the Debentures
and this Indenture may be served. The Company will give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency not designated or appointed by the Trustee. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office or the
corporate trust office of the Trustee in The Borough of Manhattan, which office
is located at: Wachovia Bank, National Association, Attention: Corporate Trust
Administration, One Penn Plaza, Suite 1414, New York, NY 10119.

         The Company may also from time to time designate co-registrars and one
or more offices or agencies where the Debentures may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations. The Company will give prompt written notice of any such
designation or rescission and of any change in the location of any such other
office or agency.

         The Company hereby initially designates the Trustee as paying agent,
Debenture Registrar, Custodian and conversion agent and each of the Corporate
Trust Office and the office of agency of the Trustee in The Borough of

                                       35
<PAGE>

Manhattan, shall be considered as one such office or agency of the Company for
each of the aforesaid purposes.

         So long as the Trustee is the Debenture Registrar, the Trustee agrees
to mail, or cause to be mailed, the notices set forth in Section 9.10(a) and the
third paragraph of Section 9.11. If co-registrars have been appointed in
accordance with this Section, the Trustee shall mail such notices only to the
Company and the holders of Debentures it can identify from its records.

         Section 6.03. Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 9.10, a Trustee, so that there
shall at all times be a Trustee hereunder.

         Section 6.04. Provisions as to Paying Agent. (a) If the Company shall
appoint a paying agent other than the Trustee, or if the Trustee shall appoint
such a paying agent, the Company 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 6.04:

                  (1)      that it will hold all sums held by it as such agent
         for the payment of the principal of or Interest on the Debentures
         (whether such sums have been paid to it by the Company or by any other
         obligor on the Debentures) in trust for the benefit of the holders of
         the Debentures;

                  (2)      that it will give the Trustee notice of any failure
         by the Company (or by any other obligor on the Debentures) to make any
         payment of the principal of or Interest on the Debentures when the same
         shall be due and payable; and

                  (3)      that at any time during the continuance of an Event
         of Default, upon request of the Trustee, it will forthwith pay to the
         Trustee all sums so held in trust.

         The Company shall, on or before each due date of the principal of or
Interest on the Debentures, deposit with the paying agent a sum (in funds that
are immediately available on the due date for such payment) sufficient to pay
such principal or Interest, and (unless such paying agent is the Trustee) the
Company will promptly notify the Trustee of any failure to take such action;
provided that if such deposit is made on the due date, such deposit shall be
received by the paying agent by 10:00 a.m. New York City time, on such date.

         (b)      If the Company shall act as its own paying agent, it will, on
or before each due date of the principal of or Interest on the Debentures, set
aside, segregate and hold in trust for the benefit of the holders of the
Debentures a sum

                                       36
<PAGE>

sufficient to pay such principal or Interest so becoming due and will promptly
notify the Trustee of any failure to take such action and of any failure by the
Company (or any other obligor under the Debentures) to make any payment of the
principal of or Interest on the Debentures when the same shall become due and
payable.

         (c)      Anything in this Section 6.04 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any paying agent hereunder
as required by this Section 6.04, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any paying agent
to the Trustee, the Company or such paying agent shall be released from all
further liability with respect to such sums.

         (d)      Anything in this Section 6.04 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 6.04 is subject
to Sections 15.03 and 15.04.

         The Trustee shall not be responsible for the actions of any other
paying agents (including the Company if acting as its own paying agent) and
shall have no control of any funds held by such other paying agents.

         Section 6.05. Existence. Subject to Article 14, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided that the
Company shall not be required to preserve any such right if the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and that the loss thereof is not disadvantageous in
any material respect to the Debentureholders.

         Section 6.06. [Reserved].

         Section 6.07. [Reserved].

         Section 6.08. 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 Company
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 holder of Debentures or any Common Stock issued upon conversion
thereof that continue to be Restricted Securities in connection with any sale
thereof and any prospective purchaser of Debentures or such Common Stock
designated by such holder or beneficial holder, the information required
pursuant to Rule 144A(d)(4) under the Securities Act upon the written request of
any

                                       37
<PAGE>

holder or beneficial holder of the Debentures or such Common Stock and it will
take such further action as any holder or beneficial holder of such Debentures
or such Common Stock may reasonably request, all to the extent required from
time to time to enable such holder or beneficial holder to sell its Debentures
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 written request of any holder or any beneficial
holder of the Debentures or such Common Stock, the Company will deliver to such
holder a written statement as to whether it has complied with such requirements.

         Section 6.09. Stay, Extension and Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law that would prohibit or forgive
the Company from paying all or any portion of the principal of or Interest on
the Debentures as contemplated herein, wherever enacted, now or at any time
hereafter in force, or that may affect the covenants or the performance of this
Indenture and the Company (to the extent it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not,
by resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.

         Section 6.10. Compliance Certificate. The Company shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Company, a certificate signed by either the principal executive officer,
principal financial officer or principal accounting officer of the Company,
stating whether or not to the best knowledge of the signer thereof the Company
is in default in the performance and observance of any of the terms, provisions
and conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and the status thereof of
which the signer may have knowledge.

         The Company will deliver to the Trustee, forthwith upon becoming aware
of (i) any default in the performance or observance of any covenant, agreement
or condition contained in this Indenture, or (ii) any Event of Default, an
Officers' Certificate specifying with particularity such default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.

         Any notice required to be given under this Section 6.10 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust Office.

                                       38
<PAGE>

         Section 6.11. Liquidated Damages Notice. In the event that the Company
is required to pay Liquidated Damages to holders of Debentures pursuant to the
Registration Rights Agreement, the Company will provide written notice
("LIQUIDATED DAMAGES NOTICE") to the Trustee of its obligation to pay Liquidated
Damages no later than fifteen (15) days prior to the proposed payment date for
the Liquidated Damages, and the Liquidated Damages Notice shall set forth the
amount of Liquidated Damages to be paid by the Company on such payment date. The
Trustee shall not at any time be under any duty or responsibility to any holder
of Debentures to determine the Liquidated Damages, or with respect to the
nature, extent or calculation of the amount of Liquidated Damages when made, or
with respect to the method employed in such calculation of the Liquidated
Damages.

                                   ARTICLE 7
       DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

         Section 7.01. Debentureholders' Lists. The Company covenants and
agrees that it will furnish or cause to be furnished to the Trustee,
semiannually, not more than fifteen (15) days after each March 1 and September 1
in each year beginning with September 1, 2004, and at such other times as the
Trustee may request in writing, within thirty (30) days after receipt by the
Company of any such request (or such lesser time as the Trustee may reasonably
request in order to enable it to timely provide any notice to be provided by it
hereunder), a list in such form as the Trustee may reasonably require of the
names and addresses of the holders of Debentures as of a date not more than
fifteen (15) days (or such other date as the Trustee may reasonably request in
order to so provide any such notices) prior to the time such information is
furnished, except that no such list need be furnished by the Company to the
Trustee so long as the Trustee is acting as the sole Debenture Registrar.

         Section 7.02. Preservation And Disclosure Of Lists. (a) The Trustee
shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Debentures contained
in the most recent list furnished to it as provided in Section 7.01 or
maintained by the Trustee in its capacity as Debenture Registrar or co-registrar
in respect of the Debentures, if so acting. The Trustee may destroy any list
furnished to it as provided in Section 7.01 upon receipt of a new list so
furnished.

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

                                       39
<PAGE>

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

         Section 7.03. Reports By Trustee. (a) Within sixty (60) days after
September 15 of each year commencing with the year 2004, the Trustee shall
transmit to holders of Debentures such reports dated as of September 15 of the
year in which such reports are made concerning the Trustee and its actions under
this Indenture as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant thereto. In the event that no events
have occurred under the applicable sections of the Trust Indenture Act the
Trustee shall be under no duty or obligation to provide such reports.

         (b)      A copy of such report shall, at the time of such transmission
to holders of Debentures, be filed by the Trustee with each stock exchange and
automated quotation system upon which the Debentures are listed and with the
Company. The Company will promptly notify the Trustee in writing when the
Debentures are listed on any stock exchange or automated quotation system or
delisted therefrom.

         Section 7.04. Reports by Company. The Company shall file with the
Trustee (and the Commission if at any time after the Indenture becomes qualified
under the Trust Indenture Act), and transmit, or cause the Trustee to transmit,
to holders of Debentures, 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
Debentures are governed by such Act; provided 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 Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on an Officers' Certificates).

                                       40
<PAGE>

                                    ARTICLE 8
           REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON AN EVENT OF
                                    DEFAULT

         Section 8.01. Events Of Default. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing:

         (a)      default in the payment of the principal of any of the
Debentures as and when the same shall become due and payable either at maturity
or in connection with any redemption or repurchase, by acceleration or
otherwise; or

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

         (c)      default in the Company's obligation to deliver Common Stock,
cash or other property following the exercise by the holder of the Debentures of
the right to convert such Debentures pursuant to and in accordance with Article
17 and the continuance of such default for a period of ten (10) Business Days;
or

         (d)      default in the Company's obligation to provide a Designated
Event Notice as provided in Section 3.05; or

         (e)      default in the payment of Indebtedness when due at stated
maturity or upon acceleration by the Company or any subsidiary of the Company,
all or substantially all of the outstanding voting securities of which are
owned, directly or indirectly, by the Company, where the aggregate principal
amount with respect to which the default has occurred exceeds $25 million and
such Indebtedness has not been discharged or such acceleration has not been
rescinded or annulled within a period of thirty (30) days after written notice
of such failure, requiring the Company to remedy the same, shall have been given
to the Company by the Trustee, or to the Company and the Trustee by the holders
of at least 25% in aggregate principal amount of the Debentures at the time
Outstanding determined in accordance with Section 10.04; or

         (f)      default in the payment of any final judgments aggregating in
excess of $25 million by the Company or any subsidiary of the Company, all or
substantially all of the outstanding voting securities of which are owned,
directly or indirectly, by the Company; or

                                       41
<PAGE>

         (g)      failure on the part of the Company to observe or perform any
of the covenants or agreements set forth in Article 13, and continuance of such
failure for a period of thirty (30) days; or

         (h)      failure on the part of the Company to observe or perform any
other of the covenants or agreements on the part of the Company in the
Debentures or in this Indenture (other than a covenant or agreement a default in
whose performance or whose breach is elsewhere in this Section 8.01 specifically
dealt with) continued for a period of sixty (60) days after the date on which
written notice of such failure, requiring the Company to remedy the same, shall
have been given to the Company by the Trustee, or the Company and a Responsible
Officer of the Trustee by the holders of at least twenty-five percent (25%) in
aggregate principal amount of the Debentures at the time Outstanding determined
in accordance with Section 10.04; or

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

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

then, and in each and every such case (other than an Event of Default specified
in Section 8.01(i) or 8.01(j)), unless the principal of all of the Debentures
shall have already become due and payable, either the Trustee or the holders of
not less than twenty-five percent (25%) in aggregate principal amount of the
Debentures then Outstanding hereunder determined in accordance with Section
10.04, by notice in writing to the Company (and to the Trustee if given by
Debentureholders), may declare the principal of all the Debentures and the
Interest accrued and unpaid thereon to be due and payable immediately, and upon
any such declaration the same shall become and shall be immediately due and
payable, anything in this Indenture or in the Debentures contained to the
contrary notwithstanding. If an Event of Default specified in Section 8.01(i) or
8.01(j) occurs, the principal of all the Debentures and the Interest accrued and
unpaid thereon shall be immediately

                                       42
<PAGE>

and automatically due and payable without necessity of further action. This
provision, however, is subject to the conditions that if, at any time after the
principal of the Debentures shall have been so declared due and payable, and
before any judgment or decree for the payment of the monies due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
Interest upon all Debentures and the principal of any and all Debentures that
shall have become due otherwise than by acceleration (with interest on overdue
installments of Interest (to the extent that payment of such interest is
enforceable under applicable law) and on such principal at the rate borne by the
Debentures, to the date of such payment or deposit) and amounts due to the
Trustee pursuant to Section 9.06, and if any and all defaults under this
Indenture, other than the nonpayment of principal of and accrued and unpaid
Interest on Debentures that shall have become due by acceleration, shall have
been cured or waived pursuant to Section 8.07, then and in every such case the
holders of a majority in aggregate principal amount of the Debentures then
Outstanding, by written notice to the Company and to the Trustee, may waive all
defaults or Events of Default 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 Event of Default, or shall impair any
right consequent thereon. The Company shall notify in writing a Responsible
Officer of the Trustee, promptly upon becoming aware thereof, of any Event of
Default.

         In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the holders of Debentures, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Debentures, and the Trustee
shall continue as though no such proceeding had been taken.

         Section 8.02. Payments of Debentures on Default; Suit Therefor. The
Company covenants that (a) in case default shall be made in the payment of any
installment of Interest upon any of the Debentures as and when the same shall
become due and payable, and such default shall have continued for a period of
thirty (30) days, or (b) in case default shall be made in the payment of the
principal of any of the Debentures as and when the same shall have become due
and payable, whether at maturity of the Debentures or in connection with any
redemption or repurchase, by acceleration or otherwise, then, upon demand of the
Trustee, the Company will pay to the Trustee, for the benefit of the holders of
the Debentures, the whole amount that then shall have become due and payable on
all such Debentures for principal and Interest, as the case may be, with
interest upon the overdue principal and (to the extent that payment of such
interest is enforceable under applicable law) upon the overdue installments of
Interest at the

                                       43
<PAGE>

rate borne by the Debentures, plus 1% 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, its agents, attorneys and
counsel, and all other amounts due the Trustee under Section 9.06. Until such
demand by the Trustee, the Company may pay the principal of and Interest on the
Debentures to the registered holders, whether or not the Debentures are overdue.

         In case the Company 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 actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the
Debentures and collect in the manner provided by law out of the property of the
Company or any other obligor on the Debentures wherever situated the monies
adjudged or decreed to be payable.

         In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Debentures under
Title 11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Debentures, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Debentures shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 8.02,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of principal
and Interest owing and unpaid in respect of the Debentures, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
of the Debentureholders allowed in such judicial proceedings relative to the
Company or any other obligor on the Debentures, its or their creditors, or its
or their property, and to collect and receive any monies or other property
payable or deliverable on any such claims, and to distribute the same after the
deduction of any amounts due the Trustee under Section 9.06, and to take any
other action with respect to such claims, including participating as a member of
any official committee of creditors, as it reasonably deems necessary or
advisable, and, unless prohibited by law or applicable regulations, and any
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
custodian or similar official is hereby authorized by each of the
Debentureholders to make such payments to the Trustee, and, in the event that
the Trustee shall consent to the making of such payments directly to the

                                       44
<PAGE>

Debentureholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including counsel fees and
expenses incurred by it up to the date of such distribution. To the extent that
such payment of reasonable compensation, expenses, advances and disbursements
out of the estate in any such proceedings shall be denied for any reason,
payment of the same shall be secured by a lien on, and shall be paid out of, any
and all distributions, dividends, monies, securities and other property that the
holders of the Debentures may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.

         All rights of action and of asserting claims under this Indenture, or
under any of the Debentures, may be enforced by the Trustee without the
possession of any of the Debentures, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the holders of the
Debentures.

         In any proceedings brought by the Trustee (and in 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 Debentures, and it shall not be necessary to make any holders of the
Debentures parties to any such proceedings.

         Section 8.03. Application of Monies Collected By Trustee. Any monies
collected by the Trustee pursuant to this Article 8 shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Debentures, and stamping
thereon the payment, if only partially paid, and upon surrender thereof, if
fully paid:

         FIRST: To the payment of all amounts due the Trustee under Section
9.06;

         SECOND: In case the principal of the Outstanding Debentures shall not
have become due and be unpaid, to the payment of Interest on the Debentures 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 rate borne by the Debentures,
such payments to be made ratably to the Persons entitled thereto;

         THIRD: In case the principal of the Outstanding Debentures shall have
become due, by declaration or otherwise, and be unpaid to the payment of the
whole amount then owing and unpaid upon the Debentures for principal and
Interest, with interest on the overdue principal and (to the extent that such
interest has been collected by the Trustee) upon overdue installments of
Interest at the rate

                                       45
<PAGE>

borne by the Debentures, and in case such monies shall be insufficient to pay in
full the whole amounts so due and unpaid upon the Debentures, then to the
payment of such principal and Interest without preference or priority of
principal over Interest, or of Interest over principal, or of any installment of
Interest over any other installment of Interest, or of any Debenture over any
other Debenture, ratably to the aggregate of such principal and accrued and
unpaid Interest; and

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

         Section 8.04. Proceedings by Debentureholder. No holder of any
Debenture shall have any right by virtue of or by reference to any provision of
this Indenture to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Indenture, or for the appointment of a
receiver, trustee, 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 an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than twenty-five
percent (25%) in aggregate principal amount of the Debentures then Outstanding
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable security or indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee for sixty (60) days after its receipt of such notice, request and offer
of indemnity, shall have neglected or refused to institute any such action, suit
or proceeding and no direction inconsistent with such written request shall have
been given to the Trustee during such sixty day period pursuant to Section 8.07;
it being understood and intended, and being expressly covenanted by the taker
and holder of every Debenture with every other taker and holder and the Trustee,
that no one or more holders of Debentures shall have any right in any manner
whatever by virtue of or by reference to any provision of this Indenture to
affect, disturb or prejudice the rights of any other holder of Debentures, 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
Debentures (except as otherwise provided herein). For the protection and
enforcement of this Section 8.04, each and every Debentureholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.

         Notwithstanding any other provision of this Indenture and any provision
of any Debenture, the right of any holder of any Debenture to receive payment of
the principal of (including the redemption price or repurchase price upon
redemption or repurchase pursuant to Article 3), and accrued and unpaid Interest
on such Debenture, on or after the respective due dates expressed in such
Debenture or in the event of redemption or repurchase, or to institute suit for
the

                                       46
<PAGE>

enforcement of any such payment on or after such respective dates against the
Company shall not be impaired or affected without the consent of such holder.

         Anything in this Indenture or the Debentures to the contrary
notwithstanding, the holder of any Debenture, without the consent of either the
Trustee or the holder of any other Debenture, in its own behalf and for its own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.

         Section 8.05. Proceedings By Trustee. In case of an Event of Default,
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 are
necessary to protect and enforce any of such rights, either by suit in equity or
by action at law or by proceeding 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 8.06. Remedies Cumulative And Continuing. Except as provided
in Section 2.06, all powers and remedies given by this Article 8 to the Trustee
or to the Debentureholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the holders of the Debentures, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Debentures to exercise any right
or power accruing upon any default or 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 default or any acquiescence therein, and, subject to the
provisions of Section 8.04, every power and remedy given by this Article 8 or by
law to the Trustee or to the Debentureholders may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by the
Debentureholders.

         Section 8.07. Direction of Proceedings and Waiver of Defaults By
Majority of Debentureholders. The holders of a majority in aggregate principal
amount of the Debentures at the time Outstanding determined in accordance with
Section 10.04 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; provided that (a) such direction
shall not be in conflict with any rule of law or with this Indenture, (b) the
Trustee may take any other action that is not inconsistent with such direction,
(c) the Trustee may decline to take any action that would benefit some
Debentureholder to the detriment of other Debentureholders and (d) the Trustee
may decline to take any action that would involve the Trustee in personal
liability. The holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding

                                       47
<PAGE>

determined in accordance with Section 10.04 may, on behalf of the holders of all
of the Debentures, waive any past default or Event of Default hereunder and its
consequences except (i) a default in the payment of Interest on, or the
principal of, the Debentures, (ii) a failure by the Company to convert any
Debentures into Common Stock, (iii) a default in the payment of the redemption
price pursuant to Article 3, (iv) a default in the payment of the repurchase
price pursuant to Article 3 or (v) a default in respect of a covenant or
provisions hereof that under Article 12 cannot be modified or amended without
the consent of the holders of each or all Debentures then Outstanding or
affected thereby. Upon any such waiver, the Company, the Trustee and the holders
of the Debentures shall be restored to their former positions and rights
hereunder; but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon. Whenever any default or
Event of Default hereunder shall have been waived as permitted by this Section
8.07, said default or Event of Default shall for all purposes of the Debentures
and this Indenture be deemed to have been cured and to be not continuing; but no
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon.

         Section 8.08. Notice of Defaults. The Trustee shall, within ninety
(90) days after a Responsible Officer of the Trustee has knowledge of the
occurrence of a default, mail to all Debentureholders, as the names and
addresses of such holders appear upon the Debenture Register, notice of all
defaults known to a Responsible Officer, unless such defaults shall have been
cured or waived before the giving of such notice; provided that except in the
case of default in the payment of the principal of or Interest on any of the
Debentures, the Trustee shall be protected in withholding such notice if and so
long as a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Debentureholders.

         Section 8.09. Undertaking To Pay Costs. All parties to this Indenture
agree, and each holder of any Debenture by his acceptance thereof shall be
deemed to have agreed, that any court may, in its discretion, require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided that the provisions of this
Section 8.09 (to the extent permitted by law) shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Debentureholder, or
group of Debentureholders, holding in the aggregate more than ten percent (10%)
in principal amount of the Debentures at the time Outstanding determined in
accordance with Section 10.04, or to any suit instituted by any Debentureholder
for the enforcement of the payment of the principal of or Interest on any
Debenture on or after the due date expressed in such Debenture or

                                       48
<PAGE>

to any suit for the enforcement of the right to convert any Debenture in
accordance with the provisions of Article 17.

                                    ARTICLE 9
                                   THE TRUSTEE

         Section 9.01. Duties and Responsibilities of Trustee. The Trustee,
prior to the occurrence of an Event of Default and after the curing of all
Events of Default that may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived), the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his own affairs.

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

         (a)      prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default that may have occurred:

                  (i)      the duties and obligations of the Trustee shall be
         determined solely by the express provisions of this Indenture and the
         Trust Indenture Act, 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 and the Trust Indenture Act against the
         Trustee; and

                  (ii)     in the absence of bad faith and willful misconduct on
         the part of the Trustee, the Trustee may conclusively rely as to the
         truth of the statements and the correctness of the opinions expressed
         therein, upon any certificates or opinions furnished to the Trustee and
         conforming to the requirements of this Indenture; but, in the case of
         any such certificates or opinions that by any provisions 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 Officers of the Trustee, unless the
Trustee was negligent in ascertaining the pertinent facts;

                                       49
<PAGE>

         (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 written
direction of the holders of not less than a majority in principal amount of the
Debentures at the time Outstanding determined as provided in Section 10.04
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;

         (d)      whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or affording
protection to, the Trustee shall be subject to the provisions of this Section;

         (e)      the Trustee shall not be liable in respect of any payment (as
to the correctness of amount, entitlement to receive or any other matters
relating to payment) or notice effected by the Company or any paying agent or
any records maintained by any co-registrar with respect to the Debentures;

         (f)      if any party fails to deliver a notice relating to an event
the fact of which, pursuant to this Indenture, requires notice to be sent to the
Trustee, the Trustee may conclusively rely on its failure to receive such notice
as reason to act as if no such event occurred; and

         (g)      the Trustee shall not be deemed to have knowledge of any Event
of Default hereunder unless it shall have been notified in writing of such Event
of Default by the Company or the holders of at least 10% in aggregate principal
amount of the Debentures.

         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 is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

         Section 9.02. Reliance on Documents, Opinions, Etc. Except as
otherwise provided in Section 9.01:

         (a)      the Trustee may conclusively rely and shall be protected in
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, note, coupon or other paper or
document (whether in its original or facsimile form) believed by it in good
faith to be genuine and to have been signed or presented by the proper party or
parties;

         (b)      any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers' Certificate
(unless other

                                       50
<PAGE>

evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the Secretary or an Assistant Secretary of the Company;

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

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

         (e)      the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney;

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

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

         (h)      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;

         (i)      the Trustee may request that the Company 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'

                                       51
<PAGE>

Certificate, including any person specified as so authorized in any such
certificate previously delivered and not superseded; and

         (j)      any permissive right or authority granted to the Trustee shall
not be construed as a mandatory duty.

         Section 9.03. No Responsibility For Recitals, Etc. The recitals
contained herein and in the Debentures (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Debentures. The Trustee shall not be accountable for the use or application by
the Company of any Debentures or the proceeds of any Debentures authenticated
and delivered by the Trustee in conformity with the provisions of this
Indenture.

         Section 9.04. Trustee, Paying Agents, Conversion Agents or Registrar
May Own Debentures. The Trustee, any paying agent, any conversion agent or
Debenture Registrar, in its individual or any other capacity, may become the
owner or pledgee of Debentures with the same rights it would have if it were not
Trustee, paying agent, conversion agent or Debenture Registrar.

         Section 9.05. Monies to Be Held in Trust. Subject to the provisions of
Section 15.04, all monies received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received. Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
may be agreed in writing from time to time by the Company and the Trustee.

         Section 9.06. Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation for all services rendered by it
hereunder in any capacity (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) as mutually agreed
to from time to time in writing between the Company and the Trustee, and the
Company will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence, willful misconduct, recklessness or
bad faith. The Company also covenants to indemnify the Trustee and any
predecessor Trustee (or any officer, director or employee of the Trustee), in
any capacity under this Indenture and its agents and any authenticating agent
for, and to hold them harmless against, any and all loss, liability, damage,
claim or reasonable

                                       52
<PAGE>

expense including taxes (other than franchise taxes and taxes based on the
income of the Trustee) incurred without negligence, willful misconduct,
recklessness or bad faith on the part of the Trustee or such officers,
directors, employees and agent or authenticating agent, as the case may be, and
arising out of or in connection with the acceptance or administration of this
trust or in any other capacity hereunder, including the reasonable costs and
expenses of defending themselves against any claim (whether asserted by the
Company, any holder or any other Person) of liability in connection with the
exercise or performance of any of its or their powers or duties hereunder. If
the Company fails to compensate or indemnify the Trustee and to pay or reimburse
the Trustee for reasonable expenses, disbursements and advances under this
Section 9.06, the Trustee's claim shall be secured by a lien prior to that of
the Debentures 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
Debentures. The obligation of the Company under this Section shall survive the
satisfaction and discharge of this Indenture.

         When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
8.01(i) or Section 8.01(j) with respect to the Company occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.

         Section 9.07. Officers' Certificate As Evidence. Except as otherwise
provided in Section 9.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of bad faith or willful misconduct on the part
of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee.

         Section 9.08. Conflicting Interests of Trustee. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.

         Section 9.09. Eligibility of Trustee. There shall at all times be a
Trustee hereunder that shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes

                                       53
<PAGE>

of this Section the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 9.09, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.

         Section 9.10. Resignation or Removal of Trustee.

         (a)      The Trustee may at any time resign by giving written notice of
such resignation to the Company and to the holders of Debentures. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
trustee by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment sixty (60) days after the
mailing of such notice of resignation to the Debentureholders, the resigning
Trustee may, upon ten (10) Business Days' notice to the Company and the
Debentureholders, appoint a successor identified in such notice or may petition,
at the expense of the Company, any court of competent jurisdiction for the
appointment of a successor trustee, or, if any Debentureholder who has been a
bona fide holder of a Debenture or Debentures for at least six (6) months may,
subject to the provisions of Section 8.09, on behalf of himself and all others
similarly situated, petition any 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 Section 9.08
         after written request therefor by the Company or by any Debentureholder
         who has been a bona fide holder of a Debenture or Debentures for at
         least six (6) months; or

                  (ii)     the Trustee shall cease to be eligible in accordance
         with the provisions of Section 9.09 and shall fail to resign after
         written request therefor by the Company or by any such Debentureholder;
         or

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

then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the

                                       54
<PAGE>

Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 8.09, any Debentureholder who has been a bona fide holder
of a Debenture or Debentures for at least six (6) 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; provided that if no successor Trustee shall have been appointed and
have accepted appointment sixty (60) days after either the Company or the
Debentureholders has removed the Trustee, or the Trustee resigns, the Trustee so
removed may petition, at the expense of the Company, any court of competent
jurisdiction for an appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.

         (c)      The holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding may at any time remove the Trustee and
nominate a successor trustee that shall be deemed appointed as successor trustee
unless, within ten (10) days after notice to the Company of such nomination, the
Company objects thereto, in which case the Trustee so removed or any
Debentureholder, or if such Trustee so removed or any Debentureholder fails to
act, the Company, upon the terms and conditions and otherwise as in Section
9.10(a) provided, may petition any court of competent jurisdiction for an
appointment of a successor trustee.

         (d)      Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 9.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 9.11.

         (e)      Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 9.06 shall continue for
the benefit of the retiring Trustee.

         Section 9.11. Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 9.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amount then due it pursuant to the provisions of Section
9.06, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the

                                       55
<PAGE>

Company 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 lien upon
all property and funds held or collected by such trustee as such, except for
funds held in trust for the benefit of holders of particular Debentures, to
secure any amounts then due it pursuant to the provisions of Section 9.06.

         No successor trustee shall accept appointment as provided in this
Section 9.11 unless, at the time of such acceptance, such successor trustee
shall be qualified under the provisions of Section 9.08 and be eligible under
the provisions of Section 9.09.

         Upon acceptance of appointment by a successor trustee as provided in
this Section 9.11, the Company (or the former trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such trustee hereunder to the holders of Debentures at their addresses as they
shall appear on the Debenture Register. If the Company fails to mail such notice
within ten (10) days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Company.

         Section 9.12. Succession By Merger. 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 all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee, such
corporation shall be qualified under the provisions of Section 9.08 and eligible
under the provisions of Section 9.09.

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

                                       56
<PAGE>

         Section 9.13. Preferential Collection of Claims. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Debentures), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).

                                   ARTICLE 10
                              THE DEBENTUREHOLDERS

         Section 10.01. Action By Debentureholders. Whenever in this Indenture
it is provided that the holders of a specified percentage in aggregate principal
amount of the Debentures may take any action (including the making of any demand
or request, the giving of any notice, consent or waiver or the taking of any
other action), the fact that at the time of taking any such action, the holders
of such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by
Debentureholders in person or by agent or proxy appointed in writing, or (b) by
the record of the holders of Debentures voting in favor thereof at any meeting
of Debentureholders duly called and held in accordance with the provisions of
Article 11, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Debentureholders. Whenever the Company or the
Trustee solicits the taking of any action by the holders of the Debentures, the
Company or the Trustee may fix in advance of such solicitation, a date as the
record date for determining holders entitled to take such action. The record
date shall be not more than fifteen (15) days prior to the date of commencement
of solicitation of such action.

         Section 10.02. Proof of Execution by Debentureholders. Subject to the
provisions of Sections 9.01, 9.02 and 11.05, proof of the execution of any
instrument by a Debentureholder or its agent or proxy shall be sufficient if
made in accordance with such reasonable rules and regulations as may be
prescribed by the Trustee or in such manner as shall be satisfactory to the
Trustee. The holding of Debentures shall be proved by the registry of such
Debentures or by a certificate of the Debenture Registrar.

         The record of any Debentureholders' meeting shall be proved in the
manner provided in Section 11.06.

         Section 10.03. Who Are Deemed Absolute Owners. The Company, the
Trustee, any paying agent, any conversion agent and any Debenture Registrar may
deem the Person in whose name such Debenture shall be registered upon the
Debenture Register to be, and may treat it as, the absolute owner of such
Debenture (whether or not such Debenture shall be overdue and notwithstanding
any notation of ownership or other writing thereon made by any Person other than

                                       57
<PAGE>

the Company or any Debenture Registrar) for the purpose of receiving payment of
or on account of the principal of and Interest on such Debenture, for conversion
of such Debenture and for all other purposes; and neither the Company nor the
Trustee nor any paying agent nor any conversion agent nor any Debenture
Registrar shall be affected by any notice to the contrary. All such payments so
made to any holder for the time being, or upon his order, shall be valid, and,
to the extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for monies payable upon any such Debenture.

         Section 10.04. Company-owned Debentures Disregarded. In determining
whether the holders of the requisite aggregate principal amount of Debentures
have concurred in any direction, consent, waiver or other action under this
Indenture, Debentures that are owned by the Company or any other obligor on the
Debentures or any Affiliate of the Company or any other obligor on the
Debentures shall be disregarded and deemed not to be Outstanding for the purpose
of any such determination; provided that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, consent, waiver
or other action, only Debentures that a Responsible Officer knows are so owned
shall be so disregarded. Debentures so owned that have been pledged in good
faith may be regarded as Outstanding for the purposes of this Section 10.04 if
the pledgee shall establish to the satisfaction of the Trustee the pledgee's
right to vote such Debentures and that the pledgee is not the Company, any other
obligor on the Debentures or any Affiliate of the Company or any such other
obligor. In the case of a dispute as to such right, any decision by the Trustee
taken upon the advice of counsel shall be full protection to the Trustee. Upon
request of the Trustee, the Company shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all Debentures, if any, known by
the Company to be owned or held by or for the account of any of the above
described Persons, and, subject to Section 9.01, 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 Debentures not listed therein are Outstanding
for the purpose of any such determination.

         Section 10.05. Revocation Of Consents, Future Holders Bound. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 10.01, of the taking of any action by the holders of the percentage in
aggregate principal amount of the Debentures specified in this Indenture in
connection with such action, any holder of a Debenture that is shown by the
evidence to be included in the Debentures the holders of which have consented to
such action may, by filing written notice with the Trustee at its Corporate
Trust Office and upon proof of holding as provided in Section 10.02, revoke such
action so far as concerns such Debenture. Except as aforesaid, any such action
taken by the holder of any Debenture shall be conclusive and binding upon such
holder and upon all future holders and owners of such Debenture and of any
Debentures issued in exchange or substitution therefor, irrespective of whether
any notation in

                                       58
<PAGE>

regard thereto is made upon such Debenture or any Debenture issued in exchange
or substitution therefor.

                                   ARTICLE 11
                          MEETINGS OF DEBENTUREHOLDERS

         Section 11.01. Purpose Of Meetings. A meeting of Debentureholders may
be called at any time and from time to time pursuant to the provisions of this
Article 11 for any of the following purposes:

                  (1)      to give any notice to the Company or to the Trustee
         or to give any directions to the Trustee permitted under this
         Indenture, or to consent to the waiving of any default or Event of
         Default hereunder and its consequences, or to take any other action
         authorized to be taken by Debentureholders pursuant to any of the
         provisions of Article 8;

                  (2)      to remove the Trustee and nominate a successor
         trustee pursuant to the provisions of Article 9;

                  (3)      to consent to the execution of an indenture or
         indentures supplemental hereto pursuant to the provisions of Section
         12.02; or

                  (4)      to take any other action authorized to be taken by or
         on behalf of the holders of any specified aggregate principal amount of
         the Debentures under any other provision of this Indenture or under
         applicable law.

         Section 11.02. Call Of Meetings By Trustee. The Trustee may at any
time call a meeting of Debentureholders to take any action specified in Section
11.01, to be held at such time and at such place as the Trustee shall determine.
Notice of every meeting of the Debentureholders, setting forth the time and the
place of such meeting and in general terms the action proposed to be taken at
such meeting and the establishment of any record date pursuant to Section 10.01,
shall be mailed to holders of Debentures at their addresses as they shall appear
on the Debenture Register. Such notice shall also be mailed to the Company. Such
notices shall be mailed not less than twenty (20) nor more than ninety (90) days
prior to the date fixed for the meeting.

         Any meeting of Debentureholders shall be valid without notice if the
holders of all Debentures then Outstanding are present in person or by proxy or
if notice is waived before or after the meeting by the holders of all Debentures
Outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.

                                       59
<PAGE>

         Section 11.03. Call Of Meetings By Company Or Debentureholders. In
case at any time the Company, pursuant to a resolution of its Board of
Directors, or the holders of at least ten percent (10%) in aggregate principal
amount of the Debentures then Outstanding, shall have requested the Trustee to
call a meeting of Debentureholders, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within twenty (20) days
after receipt of such request, then the Company or such Debentureholders may
determine the time and the place for such meeting and may call such meeting to
take any action authorized in Section 11.01, by mailing notice thereof as
provided in Section 11.02.

         Section 11.04. Qualifications For Voting. To be entitled to vote at
any meeting of Debentureholders a person shall (a) be a holder of one or more
Debentures on the record date pertaining to such meeting or (b) be a person
appointed by an instrument in writing as proxy by a holder of one or more
Debentures on the record date pertaining to such meeting. The only persons who
shall be entitled to be present or to speak at any meeting of Debentureholders
shall be the persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.

         Section 11.05. Regulations. Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Debentureholders, in regard to proof of the holding
of Debentures and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.

         The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Debentureholders as provided in Section 11.03, in which case the
Company or the Debentureholders calling the meeting, as the case may be, shall
in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the holders of a
majority in principal amount of the Debentures represented at the meeting and
entitled to vote at the meeting.

         Subject to the provisions of Section 10.04, at any meeting each
Debentureholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Debentures held or represented by him; provided that no vote
shall be cast or counted at any meeting in respect of any Debenture challenged
as not Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Debentures held by him or instruments in writing as aforesaid duly
designating

                                       60
<PAGE>

him as the proxy to vote on behalf of other Debentureholders. Any meeting of
Debentureholders duly called pursuant to the provisions of Section 11.02 or
11.03 may be adjourned from time to time by the holders of a majority of the
aggregate principal amount of Debentures represented at the meeting, whether or
not constituting a quorum, and the meeting may be held as so adjourned without
further notice.

         Section 11.06. Voting. The vote upon any resolution submitted to any
meeting of Debentureholders shall be by written ballot on which shall be
subscribed the signatures of the holders of Debentures or of their
representatives by proxy and the Outstanding principal amount of the Debentures
held or represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of
Debentureholders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was mailed as provided in Section 11.02. The record
shall show the principal amount of the Debentures voting in favor of or against
any resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.

         Any record so signed and verified shall be conclusive evidence of the
matters therein stated.

         Section 11.07. No Delay Of Rights By Meeting. Nothing contained in
this Article 11 shall be deemed or construed to authorize or permit, by reason
of any call of a meeting of Debentureholders or any rights expressly or
impliedly conferred hereunder to make such call, any hindrance or delay in the
exercise of any right or rights conferred upon or reserved to the Trustee or to
the Debentureholders under any of the provisions of this Indenture or of the
Debentures.

                                   ARTICLE 12
                             SUPPLEMENTAL INDENTURES

         Section 12.01. Supplemental Indentures Without Consent of
Debentureholders. The Company, when authorized by the resolutions of the Board
of Directors, and the Trustee may, from time to time, and at any time enter

                                       61
<PAGE>

into an indenture or indentures supplemental hereto for one or more of the
following purposes:

         (a)      make provision with respect to the conversion rights of the
holders of Debentures pursuant to the requirements of Section 17.06;

         (b)      to convey, transfer, assign, mortgage or pledge to the Trustee
as security for the Debentures, any property, assets or securities;

         (c)      to evidence the succession of another Person to the Company,
or successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Company pursuant to Article 14;

         (d)      to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Debentures, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or 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 or condition, such supplemental indenture
may provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default;

         (e)      to provide for the issuance under this Indenture of Debentures
in coupon form (including Debentures registrable as to principal only) and to
provide for exchangeability of such Debentures with the Debentures issued
hereunder in fully registered form and to make all appropriate changes for such
purpose;

         (f)      to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture that 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 that shall not materially adversely
affect the interests of the holders of the Debentures;

         (g)      to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Debentures;

         (h)      to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualifications of
this Indenture

                                       62
<PAGE>

under the Trust Indenture Act, or under any similar federal statute hereafter
enacted; or

         (i)      make other changes to the Indenture or forms or terms of the
Debentures, provided no such change individually or in the aggregate with all
other such changes has or will have a material adverse effect on the interests
of the Debentureholders.

         Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.

         Any supplemental indenture authorized by the provisions of this Section
12.01 may be executed by the Company and the Trustee without the consent of the
holders of any of the Debentures at the time Outstanding, notwithstanding any of
the provisions of Section 12.02.

         Notwithstanding any other provision of the Indenture or the Debentures,
the Registration Rights Agreement and the obligation to pay Liquidated Damages
thereunder may be amended, modified or waived only in accordance with the
provisions of the Registration Rights Agreement.

         Section 12.02. Supplemental Indenture With Consent Of
Debentureholders. With the consent (evidenced as provided in Article 10) of the
holders of at least a majority in aggregate principal amount of the Debentures
at the time Outstanding, the Company, when authorized by the resolutions of the
Board of Directors, and the Trustee may, from time to time and at any time,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or any supplemental indenture or of modifying in
any manner the rights of the holders of the Debentures; provided that no such
supplemental indenture shall (i) extend the fixed maturity of any Debenture,
reduce the rate or extend the time of payment of Interest thereon, reduce the
principal amount thereof, reduce any amount payable upon redemption or
repurchase thereof, impair the right of any Debenture holder to institute suit
for the payment thereof, make the principal thereof or Interest thereon payable
in any coin or currency other than that provided in the Debentures, change the
obligation of the Company to redeem any Debenture on a redemption date in a
manner adverse to the holders of the Debentures, change the obligation of the
Company to repurchase any

                                       63
<PAGE>

Debenture upon the happening of a Designated Event in a manner adverse to the
holders of the Debentures, change the obligation of the Company to repurchase
any Debenture on a Repurchase Date in a manner adverse to the holders of the
Debentures, impair the right to convert the Debentures into Common Stock subject
to the terms set forth in the Indenture, including Section 17.06 thereof, reduce
the number of shares of Common Stock or amount of other property receivable upon
conversion of the Debentures, modify any of the provisions of Section 12.02 or
Section 8.07 thereof, except to increase any such percentage or to provide that
certain other provisions of the Indenture cannot be modified or waived without
the consent of the holder of each Debenture so affected, change any obligation
of the Company to maintain an office or agency in the places and for the
purposes set forth in Section 6.01 thereof, or reduce the quorum or voting
requirements set forth in Article 11 or (ii) reduce the aforesaid percentage of
Debentures, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of all Debentures
then Outstanding.

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

         It shall not be necessary for the consent of the Debentureholders under
this Section 12.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

         Section 12.03. Effect Of Supplemental Indenture. Any supplemental
indenture executed pursuant to the provisions of this Article 12 shall comply
with the Trust Indenture Act, as then in effect, provided that this Section
12.03 shall not require such supplemental indenture or the Trustee to be
qualified under the Trust Indenture Act prior to the time such qualification is
in fact required under the terms of the Trust Indenture Act or the Indenture has
been qualified under the Trust Indenture Act, nor shall it constitute any
admission or acknowledgment by any party to such supplemental indenture that any
such qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article 12, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations,

                                       64
<PAGE>

duties and immunities under this Indenture of the Trustee, the Company and the
holders of Debentures 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 12.04. Notation On Debentures. Debentures authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article 12 may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Debentures 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,
at the Company's expense, be prepared and executed by the Company, authenticated
by the Trustee (or an authenticating agent duly appointed by the Trustee
pursuant to Section 18.10) and delivered in exchange for the Debentures then
Outstanding, upon surrender of such Debentures then Outstanding.

         Section 12.05. Evidence Of Compliance Of Supplemental Indenture To Be
Furnished To Trustee. Prior to entering into any supplemental indenture, the
Trustee shall be provided with an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that any supplemental indenture executed pursuant
hereto complies with the requirements of this Article 12 and is otherwise
authorized or permitted by this Indenture.

                                   ARTICLE 13
       USE OF PROCEEDS UPON SALES OF INTERESTS IN NON-STRATEGIC COMPANIES

         Section 13.01. Use Of Proceeds Upon Sales Of Interests In
Non-strategic Companies. If the Company sells an interest in a Non-Strategic
Company (the "TRIGGERING COMPANY") and the aggregate book value of the interest
that is the subject of such sale (the "TRIGGERING SALE"), when added to the
aggregate book value of all interests in such Triggering Company sold in the
preceding 12 months, exceeds $50,000,000, the Company shall:

         (a)      within ten (10) Business Days after the closing of such sale,
purchase the Treasury Portfolio and deposit it with, and pledge it to, the
Trustee to secure the Company's obligation to pay Interest on the Debentures
through, and including, the March 15, 2009 interest payment date;

         (b)      apply, within 12 months of the closing of such sale, an amount
(the "PAYDOWN AMOUNT") equal to the lesser of (i) the aggregate principal amount
outstanding of the Company's 5.0% Convertible Subordinated Notes due June 15,

                                       65
<PAGE>

2006 and (ii) 50% of any remaining net cash proceeds (after the purchase of the
Treasury Portfolio) to repurchase the Company's 5.0% Convertible Subordinated
Notes due June 15, 2006; provided that if the Paydown Amount is less than
$20,000,000, but the amount specified in clause (i) above is greater than
$20,000,000, the Company shall apply an amount equal to 50% of the net cash
proceeds of all subsequent sales of interests in any Non-Strategic Company to
repurchase the Company's 5.0% Convertible Subordinated Notes due June 15, 2006
until the Company has repurchased an aggregate principal amount of such notes at
least equal to $20,000,000; provided, further, that any of the Company's 5.0%
Convertible Subordinated Notes due June 15, 2006 that the Company repurchases,
redeems or otherwise retires with shares of the Common Stock during such 12
month period will be deemed to have been repurchased with such remaining net
cash proceeds in satisfaction of the covenant set forth in this clause (b) to
the extent of such repurchase; and

         (c)      without regard to whether the Paydown Amount is less than
$20,000,000, in the case of any sale of any interest in the Triggering Company
occurring within the 12 calendar months after the Triggering Sale, apply an
amount equal to the lesser of (i) the aggregate principal amount outstanding of
the Company's 5.0% Convertible Subordinated Notes due June 15, 2006 and (ii) 50%
of the net cash proceeds from each such sale, within 12 months of the receipt of
such net cash proceeds, to repurchase the Company's 5.0% Convertible
Subordinated Notes due June 15, 2006; provided that any of the Company's 5.0%
Convertible Subordinated Notes due June 15, 2006 that the Company repurchases,
redeems or otherwise retires during any such subsequent 12 month period with
shares of the Common Stock will be deemed to have been repurchased with the net
cash proceeds of such subsequent sale in satisfaction of the covenant set forth
in this clause (c) to the extent of such repurchase.

         For purposes of clauses (b) and (c) of this Section 13.01, instruments
or securities received from the purchaser that are promptly, but in any event
within thirty (30) days of the closing, converted by the Company into cash shall
be considered net cash proceeds received at closing to the extent of the cash
actually received.

         Section 13.02. Release Of Pledged Treasury Securities. The Treasury
securities pledged pursuant to Section 13.01(a) shall be released to the extent
of (a) any Debentures or portions thereof redeemed pursuant to Section 3.02, (b)
any Debentures or portions thereof converted pursuant to Article 17, (c) any
Debentures or portions thereof repurchased pursuant to Section 3.05, (d) any
Debentures or portions thereof repurchased pursuant to Section 3.06 or (e) any
Debentures or portions thereof repurchased by the Company in open-market
transactions, in each case, after the date on which the Treasury Portfolio is
deposited with and pledged to the Trustee pursuant to Section 13.01(a).

                                       66

<PAGE>

         Section 13.03. Good Faith Determination. Any Triggering Sale made
pursuant to this Article 13 must be for Fair Market Value, as determined in good
faith by the Board of Directors.

         Section 13.04. Book Value Of Non-strategic Companies. For purposes of
any calculation described in this Article 13, book value shall be determined
based solely on the book values of the Non-Strategic Companies as reflected in
the Company's financial statements as of December 31, 2003, without regard to
any subsequent adjustment to such book values.

         Section 13.05. Notice of Triggering Sale.

         (a)      Promptly (but in any event within fifteen (15) Business Days)
following the closing of a Triggering Sale, the Company (or, at the Company's
written request received by the Trustee not fewer than five (5) Business Days
prior (or such shorter period of time as may be acceptable to the Trustee) to
the date on which such notice must be furnished, the Trustee in the name of and
at the expense of the Company) shall mail to each holder of Debentures written
notice of such sale, which notice shall include:

                  (i)      the name of the Non-Strategic Company in which an
         interest was sold;

                  (ii)     the closing date of such sale;

                  (iii)    the total net cash proceeds received by the Company
         from such sale; and

                  (iv)     the Paydown Amount relating to such sale.

         Such mailing shall be by first class mail. The notice, if mailed in the
manner herein provided, shall be conclusively presumed to have been duly given,
whether or not the holder receives such notice.

         (b)      Promptly (but in any event within fifteen (15) Business Days)
following the closing of any subsequent sale of interests in a Non-Strategic
Company, 50% of the net cash proceeds of which must be used to repurchase the
Company's 5.0% Convertible Subordinated Notes due June 15, 2006 pursuant to
either (i) the first proviso in Section 13.01(b) or (ii) Section 13.01(c), the
Company (or, at the Company's written request received by the Trustee not fewer
than five (5) Business Days prior (or such shorter period of time as may be
acceptable to the Trustee) to the date on which such notice must be furnished,
the Trustee in the name of and at the expense of the Company) shall mail to each
holder of Debentures written notice of such sale, which notice shall include:

                                       67
<PAGE>

                  (i)      the name of the Non-Strategic Company in which
         interests were sold;

                  (ii)     the closing date of such sale; and

                  (iii)    the total net cash proceeds received by the Company
         from such sale.

         Such mailing shall be by first class mail. The notice, if mailed in the
manner herein provided, shall be conclusively presumed to have been duly given,
whether or not the holder receives such notice.

         (c)      In addition, promptly (but in any event within fifteen (15)
Business Days) following any repurchase, redemption or retirement of the
Company's 5.0% Convertible Subordinated Notes due June 15, 2006, either with the
Common Stock or the net cash proceeds of any sale of an interest in a
Non-Strategic Company pursuant to Sections 13.01(b) or (c), the Company (or, at
the Company's written request received by the Trustee not fewer than five (5)
Business Days prior (or such shorter period of time as may be acceptable to the
Trustee) to the date on which such notice must be furnished, the Trustee in the
name of and at the expense of the Company) shall mail to each holder of
Debentures written notice of the date and amount of such repurchase, redemption
or retirement. Such mailing shall be by first class mail. The notice, if mailed
in the manner herein provided, shall be conclusively presumed to have been duly
given, whether or not the holder receives such notice.

                                   ARTICLE 14
                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

         Section 14.01. Company May Consolidate On Certain Terms. (a) Subject
to the provisions of Section 14.02, the Company shall not consolidate or merge
with or into any other Person or Persons (whether or not affiliated with the
Company), nor shall the Company or its successor or successors be a party or
parties to successive consolidations or mergers, nor shall the Company sell,
convey, transfer or lease all or substantially all the property and assets of
the Company, to any other Person (whether or not affiliated with the Company)
(such sale, conveyance, transfer or lease, a "SALE EVENT"), unless: (i) the
Company is the surviving Person, or the resulting, surviving or transferee
Person is a corporation organized and existing under the laws of the United
States of America, any state thereof or the District of Columbia; (ii) upon any
such consolidation, merger, sale, conveyance, transfer or lease, the payment of
the principal of and Interest on all of the Debentures pursuant to their terms,
and the performance and observance of all of the covenants and conditions of
this Indenture to be performed by the Company pursuant to the terms set forth
herein,

                                       68
<PAGE>

shall be expressly assumed, by supplemental indenture satisfactory in form to
the Trustee, executed and delivered to the Trustee by the Person (if other than
the Company) formed by such consolidation, or into which the Company shall have
been merged, or by the Person that shall have acquired or leased such property,
and such supplemental indenture shall provide for the applicable conversion
rights set forth in Section 17.06; and (iii) immediately after giving effect to
the transaction described above, no Event of Default, and no event that, after
notice or lapse of time or both, would become an Event of Default, shall have
happened and be continuing.

         (b)      For purposes of Section 14.01(a), the Company shall have the
option to designate any one Non-Strategic Company, such that the sale,
conveyance, transfer or lease of its interest in such Non-Strategic Company will
in no event be deemed a Sale Event (such designation to be made at the time of
such transaction).

         (c)      Promptly (but in any event within fifteen (15) Business Days)
following the closing of the transaction referred to in Section 14.01(b) (the
"EXEMPT SALE"), the Company (or, at the Company's written request received by
the Trustee not fewer than five (5) Business Days prior (or such shorter period
of time as may be acceptable to the Trustee) to the date on which such notice
must be furnished, the Trustee in the name of and at the expense of the Company)
shall mail to each holder of Debentures written notice of the designation of an
Exempt Sale. Such mailing shall be by first class mail. The notice, if mailed in
the manner herein provided, shall be conclusively presumed to have been duly
given, whether or not the holder receives such notice.

         (d)      For purposes of determining whether any transaction subsequent
to the Exempt Sale constitutes a Sale Event, the net cash proceeds of the Exempt
Sale, minus the cost of the Treasury Portfolio purchased pursuant to Section
13.01(a), shall be deemed part of the Company's property and assets.

         (e)      For the avoidance of doubt, for purposes of this Section
14.01, the net cash proceeds from the sale of Sanchez Computer Associates, Inc.
and the sale of Tangram Enterprise Solutions, Inc. shall be deemed part of the
Company's property and assets to the extent of the cash received from such
sales.

         Section 14.02. Successor To Be Substituted. In case of any such
consolidation, merger, sale, conveyance, transfer or lease and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the payment
of the principal of and Interest on all of the Debentures pursuant to their
terms and the performance of all of the covenants and conditions of this
Indenture to be performed by the Company pursuant to the terms set forth herein,
such successor Person shall succeed to and be substituted for the Company, with
the same effect

                                       69
<PAGE>

as if it had been named herein as the party of this first part. Such successor
Person thereupon may cause to be signed, and may issue either in its own name or
in the name of Safeguard Scientifics, Inc. any or all of the Debentures,
issuable hereunder that theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor Person
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver,
or cause to be authenticated and delivered, any Debentures that previously shall
have been signed and delivered by the officers of the Company to the Trustee for
authentication, and any Debentures that such successor Person thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the
Debentures so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Debentures theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Debentures had
been issued at the date of the execution hereof. In the event of any such
consolidation, merger, sale, conveyance, transfer or lease, the Person named as
the "COMPANY" in the first paragraph of this Indenture or any successor that
shall thereafter have become such in the manner prescribed in this Article 14
may be dissolved, wound up and liquidated at any time thereafter and such Person
shall be released from its liabilities as obligor and maker of the Debentures
and from its obligations under this Indenture.

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

         Section 14.03. Opinion Of Counsel To Be Given Trustee. The Trustee
shall receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or
lease and any such assumption complies with the provisions of this Article 14.

                                   ARTICLE 15
                     SATISFACTION AND DISCHARGE OF INDENTURE

         Section 15.01. Discharge Of Indenture. When (a) the Company shall
deliver to the Trustee for cancellation all Debentures theretofore authenticated
(other than any Debentures that have been destroyed, lost or stolen and in lieu
of or in substitution for which other Debentures shall have been authenticated
and delivered) and not theretofore canceled, or (b) all the Debentures not
theretofore canceled or delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Company shall deposit with the Trustee, in trust, funds sufficient to pay at
maturity or upon redemption

                                       70
<PAGE>

of all of the Debentures (other than any Debentures that shall have been
mutilated, destroyed, lost or stolen and in lieu of or in substitution for which
other Debentures shall have been authenticated and delivered) not theretofore
canceled or delivered to the Trustee for cancellation, including principal and
Interest due or to become due to such date of maturity or redemption date, as
the case may be, accompanied by a verification report, as to the sufficiency of
the deposited amount, from an independent certified accountant or other
financial professional satisfactory to the Trustee, and if the Company shall
also pay or cause to be paid all other sums payable hereunder by the Company,
then this Indenture shall cease to be of further effect (except as to (i)
remaining rights of registration of transfer, substitution and exchange and
conversion of Debentures, (ii) rights hereunder of Debentureholders to receive
payments of principal and Interest on, the Debentures and the other rights,
duties and obligations of Debentureholders, as beneficiaries hereof with respect
to the amounts, if any, so deposited with the Trustee and (iii) the rights,
obligations and immunities of the Trustee hereunder), and the Trustee, on
written demand of the Company accompanied by an Officers' Certificate and an
Opinion of Counsel as required by Section 9.02 and at the cost and expense of
the Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture; the Company, however, hereby agrees to reimburse the
Trustee for any costs or expenses thereafter reasonably and properly incurred by
the Trustee and to compensate the Trustee for any services thereafter reasonably
and properly rendered by the Trustee in connection with this Indenture or the
Debentures.

         Section 15.02. Deposited Monies To Be Held In Trust By Trustee.
Subject to Section 15.04, all monies deposited with the Trustee pursuant to
Section 15.01, shall be held in trust for the sole benefit of the
Debentureholders, and such monies shall be applied by the Trustee to the
payment, either directly or through any paying agent (including the Company if
acting as its own paying agent), to the holders of the particular Debentures for
the payment or redemption of which such monies have been deposited with the
Trustee, of all sums due and to become due thereon for principal and Interest.

         Section 15.03. Paying Agent To Repay Monies Held. Upon the
satisfaction and discharge of this Indenture, all monies then held by any paying
agent of the Debentures (other than the Trustee) shall, upon written request of
the Company, 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 monies.

         Section 15.04. Return Of Unclaimed Monies. Subject to the requirements
of applicable law, any monies deposited with or paid to the Trustee for payment
of the principal or Interest on Debentures and not applied but remaining
unclaimed by the holders of Debentures for two years after the date upon which
the principal of or Interest on such Debentures, as the case may be, shall have
become due and payable, shall be repaid to the Company by the Trustee on

                                       71
<PAGE>

demand and all liability of the Trustee shall thereupon cease with respect to
such monies; and the holder of any of the Debentures shall thereafter look only
to the Company for any payment that such holder may be entitled to collect
unless an applicable abandoned property law designates another Person.

         Section 15.05. Reinstatement. If the Trustee or the paying agent is
unable to apply any money in accordance with Section 15.02 by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, the Company's obligations under this
Indenture and the Debentures shall be revived and reinstated as though no
deposit had occurred pursuant to Section 15.01 until such time as the Trustee or
the paying agent is permitted to apply all such money in accordance with Section
15.02; provided that if the Company makes any payment of Interest on or
principal of any Debenture following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the holders of such Debentures to
receive such payment from the money held by the Trustee or paying agent.

                                   ARTICLE 16
         IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS AND DIRECTORS

         Section 16.01. Indenture And Debentures Solely Corporate Obligations.
No recourse for the payment of the principal of or Interest on any Debenture, or
for any claim based thereon or otherwise in respect thereof, and no recourse
under or upon any obligation, covenant or agreement of the Company in this
Indenture or in any supplemental indenture or in any Debenture, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, shareholder, employee, agent, officer, director or subsidiary, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company 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; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the
Debentures.

                                   ARTICLE 17
                            CONVERSION OF DEBENTURES

         Section 17.01. Right To Convert. (a) Subject to and in accordance with
the provisions of this Indenture, prior to the close of business on March 14,
2024, the holder of any Debenture shall have the right, at such holder's option,
to convert the principal amount of the Debenture, or any portion of such
principal amount that is a multiple of $1,000, into fully paid and
non-assessable shares of

                                       72
<PAGE>

Common Stock (as such shares shall then be constituted) at the Conversion Rate
in effect at such time, by surrender of the Debenture so to be converted in
whole or in part, together with any required funds, under the circumstances
described in this Section 17.01 and in the manner provided in Section 17.02. The
Debentures shall be convertible only upon the occurrence of one of the following
events:

                  (i)      during any Fiscal Quarter (but only during such
         Fiscal Quarter) commencing after June 30, 2004, if the Closing Sale
         Price of the Common Stock exceeds 120% of the Conversion Price then in
         effect for at least twenty (20) Trading Days in the thirty (30)
         consecutive Trading Day period ending on the last Trading Day of the
         immediately preceding Fiscal Quarter (it being understood for purposes
         of this Section 17.01(a)(i) that the Conversion Price in effect at the
         close of business on each of the thirty (30) consecutive Trading Days
         should be used);

                  (ii)     during the five Business Day period immediately
         following any five consecutive Trading Day period (the "MEASUREMENT
         PERIOD") in which the Trading Price per $1,000 principal amount of the
         Debentures for each day of the Measurement Period was less than 98% of
         the product of the Closing Sale Price of the Common Stock and the
         Conversion Rate then in effect; provided, however, that the Debentures
         shall not be convertible pursuant to this clause (ii) if on any Trading
         Day during the Measurement Period the Closing Sale Price of the Common
         Stock was between 100% and 120% of the then current Conversion Price;

                  (iii)    if the Debentures have been called for redemption, at
         any time on or after the date the notice of redemption has been given
         until the close of business on the Business Day immediately preceding
         the redemption date;

                  (iv)     if the Common Stock (or other common stock into which
         the Debentures are then convertible) ceases to be listed for trading on
         a U.S. national securities exchange and is not approved for trading on
         the Nasdaq National Market, at any time thereafter; or

                  (v)      as provided in Section 17.01(b).

         The Company (or other conversion agent appointed by the Company) shall
determine on a daily basis during the time period specified in Section
17.01(a)(i) whether the Debentures shall be convertible as a result of the
occurrence of an event specified in clause (i) above. Whenever the Debentures
shall become convertible pursuant to this Section 17.01, the Company or, at the
Company's request, the Trustee in the name and at the expense of the Company,
shall notify the holders of the event triggering such convertibility in the
manner provided in Section 18.03 and the Company shall also publicly

                                       73

<PAGE>

announce such information and publish it on the Company's web site. Any notice
so given shall be conclusively presumed to have been duly given, whether or not
the holder receives such notice.

         The Trustee (or other conversion agent appointed by the Company) shall
have no obligation to determine the Trading Price under Section 17.01(a)(ii)
unless the Company has requested such a determination, and the Company shall
have no obligation to make such request unless a holder provides it with
reasonable evidence that the Trading Price per $1,000 principal amount of
Debentures would be less than 98% of the product of the Closing Sale Price of
the Common Stock and the Conversion Rate then in effect. If such evidence is
provided, the Company shall instruct the Trustee (or other conversion agent) to
determine the Trading Price of the Debentures at the expense of the Company
beginning on the next Trading Day and on each successive Trading Day until the
Trading Price per $1,000 principal amount of Debentures is greater than or equal
to 98% of the product of the Closing Sale Price of the Common Stock and the
Conversion Rate then in effect; provided that the Trustee shall be under no duty
or obligation to make the calculations described in Section 17.01(a)(ii) hereof
or to determine whether the Debentures are convertible pursuant to such section.
For the avoidance of doubt, the Company shall make the calculations described in
Section 17.01(a)(ii), using the Trading Price provided by the Trustee.

         The Trustee shall be entitled at its sole discretion to consult with
the Company and to request the assistance of the Company in connection with the
Trustee's duties and obligations pursuant to Section 17.01(a)(ii) hereof
(including without limitation the determination of the Conversion Rate, the
Closing Sale Prices of the Common Stock and the Trading Price), and the Company
agrees, if requested by the Trustee, to cooperate with, and provide assistance
to, the Trustee in carrying out its duties under this Section 17.01; provided,
however, that nothing herein shall be construed to relieve the Trustee of its
duties pursuant to Section 17.01(a) hereof.

         (b)      In addition, if:

                  (i)      (A) the Company distributes to all holders of its
         Common Stock rights, warrants or options entitling them (for a period
         expiring within forty-five (45) days of the record date for the
         determination of the shareholders entitled to receive such
         distribution) to subscribe for or purchase shares of Common Stock, at a
         price per share less than the average of the Closing Sale Prices of the
         Common Stock for the ten (10) Trading Days immediately preceding, but
         not including, the declaration date for such distribution, or (B) the
         Company distributes to all holders of its Common Stock, assets, debt
         securities or rights to purchase its securities, where the Fair Market
         Value of such distribution per share of Common Stock exceeds 5% of the
         Closing Sale Price of the Common

                                       74
<PAGE>

         Stock on the Trading Day immediately preceding the declaration date for
         such distribution, then, in either case, the Debentures may be
         surrendered for conversion at any time on and after the date that the
         Company gives notice to the holders of such distribution, which shall
         be not less than twenty (20) days prior to the Ex-Dividend Time for
         such distribution, until the earlier of the close of business on the
         Business Day immediately preceding, but not including, the Ex-Dividend
         Time or the date the Company publicly announces that such distribution
         will not take place; provided that no adjustment to the Conversion Rate
         will be made nor will a holder of a Debenture be able to convert
         pursuant to this Section 17.01(b) if such holder will otherwise
         participate in such distribution without conversion; or

                  (ii)     the Company consolidates with or merges with or into
         another Person or is a party to a binding share exchange or conveys,
         transfers or sells all or substantially all of its assets in each case
         pursuant to which the Company's Common Stock is converted into cash,
         securities or other property, then the Debentures may be surrendered
         for conversion at any time from and after the date fifteen (15) days
         prior to the anticipated effective date of the transaction and ending
         on and including the date fifteen (15) days after the consummation of
         the transaction (or if such merger, consolidation or share exchange
         also constitutes a Designated Event, until the corresponding Designated
         Event Repurchase Date). The Board of Directors shall determine the
         anticipated effective date of the transaction, and such determination
         shall be conclusive and binding on the holders and shall be publicly
         announced by the Company and posted on its web site not later than two
         (2) Business Days prior to such 15th day.

         "EX-DIVIDEND TIME" means, with respect to any distribution on shares of
Common Stock, the first date on which the shares of Common Stock trade regular
way on the principal securities market on which the shares of Common Stock are
then traded without the right to receive such distribution.

         (c)      A Debenture in respect of which a holder is electing to
exercise its option to require repurchase upon a Designated Event pursuant to
Section 3.05 or repurchase pursuant to Section 3.06 may be converted only if
such holder withdraws its election in accordance with Section 3.05(b) or Section
3.08, respectively. A holder of Debentures is not entitled to any rights of a
holder of Common Stock until such holder has converted his Debentures to Common
Stock, and only to the extent such Debentures are deemed to have been converted
to Common Stock under this Article 17.

         Section 17.02. Conversion Procedures. To convert a Debenture, a holder
must (a) complete and manually sign the Conversion Notice or a facsimile of the
Conversion Notice on the back of the Debenture and deliver such notice to the

                                       75
<PAGE>

Conversion Agent, (b) surrender the Debenture to a Conversion Agent, (c) furnish
appropriate endorsements and transfer documents if required by the Registrar or
the Conversion Agent, (d) pay any transfer or similar tax, if required and (e)
if required, pay funds equal to the Interest payable on the next interest
payment date. In the case of a Global Debenture, the holder must comply with
clauses (c)-(e) in the previous sentence and the Conversion Notice shall be
completed by a DTC participant on behalf of the beneficial holder. The date,
within the time periods set forth in Section 17.01, on which the holder
satisfies all of those requirements is the "CONVERSION DATE."

         Debentures surrendered for conversion in compliance with the provisions
of this Indenture shall be deemed to have been converted immediately prior to
the close of business on the Conversion Date.

         The Company shall deliver to the holder through the Conversion Agent,
no later than the fifth Business Day following such Conversion Date, a
certificate for the number of whole shares of Common Stock issuable upon
conversion and cash in lieu of any fractional shares pursuant to Section 17.03.

         Anything herein to the contrary notwithstanding, in the case of Global
Debentures, Conversion Notices may be delivered and such Debentures may be
surrendered for conversion in accordance with the applicable procedures of the
Depositary as in effect from time to time.

         No payment or adjustment shall be made for dividends on, or other
distributions with respect to, any Common Stock except as provided in this
Article 17. On conversion of a Debenture, except for conversion during the
period from the close of business on any record date immediately preceding any
interest payment date to the close of business on the Business Day immediately
preceding such interest payment date, in which case the holder on such record
date shall receive the Interest payable on such interest payment date, that
portion of accrued and unpaid Interest on the converted Debenture attributable
to the period from the most recent interest payment date (or, if no interest
payment date has occurred, from the Issue Date) through the Conversion Date
shall not be cancelled, extinguished or forfeited, but rather shall be deemed to
be paid in full to the holder thereof through delivery of the Common Stock
(together with the cash payment, if any, in lieu of fractional shares), or cash
or a combination of cash and Common Stock in lieu thereof, in exchange for the
Debenture being converted pursuant to the provisions hereof, and the Fair Market
Value of such shares of Common Stock (together with any such cash payment in
lieu of fractional shares) shall be treated as issued, to the extent thereof,
first in exchange for accrued and unpaid Interest accrued through the Conversion
Date and the balance, if any, of such Fair Market Value of such Common Stock
(and any such cash payment) shall be treated as issued in exchange for the
principal amount of the Debenture being converted pursuant to the provisions
hereof.

                                       76
<PAGE>

         If a holder converts more than one Debenture at the same time, the
number of shares of Common Stock issuable upon the conversion shall be based on
the aggregate principal amount of Debentures converted.

         Upon surrender of a Debenture that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the holder, a
new Debenture equal in principal amount to the principal amount of the
unconverted portion of the Debenture surrendered.

         Debentures or portions thereof surrendered for conversion during the
period from the close of business on any record date immediately preceding any
interest payment date to the close of business on the Business Day immediately
preceding such interest payment date shall be accompanied by payment to the
Company or its order, in New York Clearing House funds or other funds acceptable
to the Company, of an amount equal to the Interest payable on such interest
payment date with respect to the principal amount of Debentures or portions
thereof being surrendered for conversion; provided that no such payment need be
made (1) if the Company has specified a redemption date that occurs after a
record date but on or prior to the next interest payment date, (2) if the
Company has specified a Designated Event Repurchase Date during such period or
(3) to the extent of any overdue Interest, if any overdue Interest exists on the
Conversion Date with respect to the Debentures converted.

         Section 17.03. Cash Payments in Lieu of Fractional Shares. No
fractional shares of Common Stock or scrip certificates representing fractional
shares shall be issued upon conversion of Debentures. If more than one Debenture
shall be surrendered for conversion at one time by the same holder, the number
of full shares that shall be issuable upon conversion shall be computed on the
basis of the aggregate principal amount of the Debentures (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 Debenture or Debentures,
the Company shall make an adjustment and payment therefor in cash at the current
market price thereof to the holder of Debentures. The current market price of a
share of Common Stock shall be the Closing Sale Price of the Common Stock on the
last Trading Day immediately preceding the day on which the Debentures (or
specified portions thereof) are deemed to have been converted.

         Section 17.04. Conversion Rate. Each $1,000 principal amount of the
Debentures shall be convertible into the number of shares of Common Stock
specified in the form of Debenture (herein called the "CONVERSION RATE")
attached as Exhibit A hereto, subject to adjustment as provided in this Article
17. Notwithstanding the foregoing, if on any Conversion Date, the Company is
required to pay Liquidated Damages pursuant to the Registration Rights
Agreement, the Conversion Rate on such date shall be multiplied by 1.03.

                                       77
<PAGE>

         Section 17.05. Adjustment Of Conversion Rate. The Conversion Rate
shall be adjusted from time to time (without duplication) by the Company as
follows:

         (a)      In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Rate shall be increased so that the same shall equal the
rate determined by multiplying the Conversion Rate in effect at the opening of
business on the date following the date fixed for the determination of
shareholders entitled to receive such dividend or other distribution by a
fraction,

                  (i)      the numerator of which shall be the sum of the number
         of shares of Common Stock outstanding at the close of business on the
         date fixed for the determination of shareholders entitled to receive
         such dividend or other distribution plus the total number of shares of
         Common Stock constituting such dividend or other distribution; and

                  (ii)     the denominator of which shall be the number of
         shares of Common Stock outstanding at the close of business on the date
         fixed for such determination,

such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purpose of this
paragraph (a), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company. The Company will
not pay any dividend or make any distribution on shares of Common Stock held in
the treasury of the Company. If any dividend or distribution of the type
described in this Section 17.05(a) is declared but not so paid or made, the
Conversion Rate shall again be adjusted to the Conversion Rate that would then
be in effect if such dividend or distribution had not been declared.

         (b)      In case the Company shall issue rights, options 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 shareholders entitled to receive such rights, options or
warrants) to subscribe for or purchase shares of Common Stock at a price per
share less than the average of the Closing Sale Prices of the Common Stock for
the ten (10) Trading Days immediately preceding the declaration date for such
distribution, the Conversion Rate shall be increased so that the same shall
equal the rate determined by multiplying the Conversion Rate in effect
immediately prior to the date fixed for determination of shareholders entitled
to receive such rights, options or warrants by a fraction,

                  (i)      the numerator of which shall be the number of shares
         of Common Stock outstanding at the close of business on the date fixed
         for

                                       78
<PAGE>

         determination of shareholders entitled to receive such rights, options
         or warrants plus the total number of additional shares of Common Stock
         offered for subscription or purchase, and

                  (ii)     the denominator of which shall be the sum of the
         number of shares of Common Stock outstanding at the close of business
         on the date fixed for determination of shareholders entitled to receive
         such rights, options or warrants plus the number of shares that the
         aggregate offering price of the total number of shares so offered would
         purchase at a price equal to the average of the Closing Sale Prices of
         the Common Stock for the ten (10) Trading Days immediately preceding
         the declaration date for such distribution.

         Such adjustment shall be successively made whenever any such rights,
options or warrants are issued, and shall become effective immediately after the
opening of business on the day following the date fixed for determination of
shareholders entitled to receive such rights, options or warrants. To the extent
that shares of Common Stock are not delivered after the expiration of such
rights, options or warrants, the Conversion Rate shall be readjusted to the
Conversion Rate that would then be in effect had the adjustments made upon the
issuance of such rights, options or warrants been made on the basis of delivery
of only the number of shares of Common Stock actually delivered. If such rights,
options or warrants are not so issued, the Conversion Rate shall again be
adjusted to be the Conversion Rate that would then be in effect if such date
fixed for the determination of shareholders entitled to receive such rights,
options or warrants had not been fixed. In determining whether any rights,
options or warrants entitle the holders to subscribe for or purchase shares of
Common Stock at a price less than the average of the Closing Sale Prices of the
Common Stock for the ten (10) Trading Days immediately preceding the declaration
date for such distribution, and in determining the aggregate offering price of
such shares of Common Stock, there shall be taken into account any consideration
received by the Company for such rights, options or warrants and any amount
payable on exercise or conversion thereof, 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 Rate in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately increased, and
conversely, in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately reduced, such increase or reduction,
as the case may be, to become effective immediately after the opening of
business on the day

                                       79
<PAGE>

following the day upon which such subdivision or combination becomes effective.

         (d)      In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of capital
stock of the Company or evidences of its indebtedness, property or assets
(including rights, options, warrants and other securities, but excluding any
rights, options or warrants referred to in Section 17.05(b), and excluding any
dividend or distribution (x) paid exclusively in cash or (y) referred to in
Section 17.05(a)) (any of the foregoing hereinafter in this Section 17.05(d)
called the "DISTRIBUTED PROPERTY"), then, in each such case (unless the Company
elects to reserve such Distributed Property for distribution to the
Debentureholders upon the conversion of the Debentures so that any such holder
converting Debentures 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 Property that such holder would have received if such holder
had converted its Debentures into Common Stock immediately prior to the Record
Date for such distribution of the Distributed Property) the Conversion Rate
shall be increased so that the same shall be equal to the rate determined by
multiplying the Conversion Rate in effect immediately prior to the close of
business on the Record Date with respect to such distribution by a fraction,

                  (i)      the numerator of which shall be the Current Market
         Price on such Record Date; and

                  (ii)     the denominator of which shall be the Current Market
         Price on such Record Date less the Fair Market Value (as determined by
         the Board of Directors, whose determination shall be conclusive, and
         described in a resolution of the Board of Directors) on the Record Date
         of the portion of the Distributed Property so distributed applicable to
         one share of Common Stock,

such adjustment to become effective immediately prior to the opening of business
on the day following such Record Date; provided that if the then Fair Market
Value (as so determined) of the portion of the Distributed Property so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Debentureholder shall
have the right to receive on the date of such dividend or distribution the
amount of Distributed Property such holder would have received had such holder
converted each Debenture on the Record Date. If such dividend or distribution is
not so paid or made, the Conversion Rate shall again be adjusted to be the
Conversion Rate that 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 17.05(d) by reference to
the actual or when issued trading

                                       80
<PAGE>

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 on the
applicable Record Date.

         Notwithstanding the foregoing, if the Distributed Property distributed
by the Company to all holders of its Common Stock consist of capital stock of,
or similar equity interests in, a Subsidiary or other business unit of the
Company (unless such capital stock or similar equity interests are distributed
to the Debentureholders in such distribution as if such holders had converted
their Debentures into shares of Common Stock), the Conversion Rate shall be
increased so that the same shall be equal to the rate determined by multiplying
the Conversion Rate in effect immediately prior to the close of business on the
Record Date with respect to such distribution by a fraction,

                  (i) the numerator of which shall be the sum of (A) the average
         of the Closing Sale Prices of the Common Stock for the ten (10)
         consecutive Trading Days commencing on and including the fifth Trading
         Day after the date on which "ex-dividend trading" commences for such
         dividend or distribution on the New York Stock Exchange, the Nasdaq
         National Market or such other national or regional exchange or market
         on which such securities are then listed or quoted (the "EX-DIVIDEND
         DATE") plus (B) the average Closing Sales Prices of the securities
         distributed in respect of each share of Common Stock for the ten (10)
         consecutive Trading Days commencing on and including the fifth Trading
         Day after the Ex-Dividend Date; and

                  (ii) the denominator of which shall be the average of the
         Closing Sale Prices of the Common Stock for the ten (10) consecutive
         Trading Days commencing on and including the fifth Trading Day after
         the Ex-Dividend Date,

such adjustment to become effective immediately prior to the opening of business
on the day following such Record Date; provided that the Company may in lieu of
the foregoing adjustment make adequate provision so that each Debentureholder
shall have the right to receive on the date of such distribution the amount of
Distributed Property such holder would have received had such holder converted
each Debenture on the Record Date with respect to such distribution; and
provided further that if (x) the average of the Closing Sale Prices of the
Common Stock for the ten (10) consecutive Trading Days commencing on and
including the fifth Trading Day after the Ex-Dividend Date minus (y) the average
of the Closing Sale Prices of the securities distributed in respect of each
share Common Stock for the ten (10) consecutive Trading Days commencing on and
including the fifth Trading Day after the Ex-Dividend Date is less than $1.00,
then the adjustment provided by for by this paragraph shall not be made and in
lieu thereof the provisions of the first paragraph of this Section 17.05(d)
shall apply to such

                                       81
<PAGE>

distribution. In any case in which this paragraph is applicable, Section
17.05(a), Section 17.05(b) and the first paragraph of this Section 17.05(d)
shall not be applicable.

         Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights, options 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 17.05 (and no adjustment to the Conversion Rate under
this Section 17.05 will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights, options and warrants shall be deemed to
have been distributed and an appropriate adjustment (if any is required) to the
Conversion Rate shall be made under this Section 17.05(d). If any such right or
warrant, including any such existing rights, options or warrants distributed
prior to the date of this Indenture, are subject to events, upon the occurrence
of which such rights, options 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, options or warrants
with such rights (and a termination or expiration of the existing rights,
options or warrants without exercise by any of the holders thereof). In
addition, in the event of any distribution (or deemed distribution) of rights,
options 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 Rate
under this Section 17.05 was made, (1) in the case of any such rights, options
or warrants that shall all have been redeemed or repurchased without exercise by
any holders thereof, the Conversion Rate 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, options or warrants (assuming such holder had
retained such rights, options 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, options or warrants that shall have expired or been terminated without
exercise by any holders thereof, the Conversion Rate shall be readjusted as if
such rights, options and warrants had not been issued.

         No adjustment of the Conversion Rate shall be made pursuant to this
Section 17.05(d) in respect of rights, options or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights, options or
warrants are actually distributed, or reserved by the Company for distribution,
to holders of Debentures upon conversion by such holders of Debentures into
Common Stock.

                                       82
<PAGE>

         For purposes of this Section 17.05(d) and Section 17.05(a) and (b), any
dividend or distribution to which this Section 17.05(d) is applicable that also
includes shares of Common Stock, or rights, options 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, options or
warrants (and any Conversion Rate adjustment required by this Section 17.05(d)
with respect to such dividend or distribution shall then be made) immediately
followed by (2) a dividend or distribution of such shares of Common Stock or
such rights, options or warrants (and any further Conversion Rate adjustment
required by Sections 17.05(a) and 17.05(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
shareholders entitled to receive such dividend or other distribution", "the date
fixed for the determination of shareholders entitled to receive such rights,
options or warrants" and "the date fixed for such determination" within the
meaning of Section 17.05(a) and 17.05(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 the determination of shareholders
entitled to receive such dividend or other distribution" or "outstanding at the
close of business on the date fixed for such determination" within the meaning
of Section 17.05(a).

         The reclassification of the Common Stock into securities including
securities other than Common Stock (other than any reclassification upon an
event to which Section 17.06 applies) shall be deemed to involve (a) a
distribution of such securities other than the Common Stock to all holders of
Common Stock (and the effective date of such reclassification shall be deemed to
be the "Record Date" within the meaning of this Section 17.05(d)), and (b) a
subdivision or combination, as the case may be, of the number of shares of
Common Stock outstanding immediately prior to such reclassification into the
number of shares of Common Stock outstanding immediately thereafter (and the
effective date of such reclassification shall be deemed to be "the day upon
which such subdivision becomes effective" or "the day upon which such
combination becomes effective", as the case may be, and "the day upon which such
subdivision or combination becomes effective" within the meaning of Section
17.05(c)).

         (e)      In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any dividend or
distribution in connection with the liquidation, dissolution or winding up of
the Company, whether voluntary or involuntary), then, in such case, the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to the
close of business on such Record Date by a fraction,

                                       83
<PAGE>

                  (i)      the numerator of which shall be the Current Market
         Price on such Record Date; and

                  (ii)     the denominator of which shall be the Current Market
         Price on such Record Date less the amount of cash so distributed (and
         not excluded as provided above) applicable to one share of Common
         Stock,

such adjustment to be effective immediately prior to the opening of business on
the day following the Record Date; provided that if the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Debentureholder shall
have the right to receive on the date of such dividend or distribution the
amount of cash such holder would have received had such holder converted each
Debenture on the record date. If such dividend or distribution is not so paid or
made, the Conversion Rate shall again be adjusted to be the Conversion Rate that
would then be in effect if such dividend or distribution had not been declared.

         (f)      In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall require
the payment to shareholders of consideration per share of Common Stock having a
Fair Market Value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of Directors)
that as of the last time (the "EXPIRATION TIME") tenders or exchanges may be
made pursuant to such tender or exchange offer (as it may be amended) exceeds
the Closing Sale Price per share of Common Stock on the Trading Day next
succeeding the Expiration Time, the Conversion Rate shall be increased so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the Expiration Time by a fraction,

                  (i)      the numerator of which shall be the sum of (x) the
         Fair Market Value (determined as aforesaid) of the aggregate
         consideration payable to shareholders based on the acceptance (up to
         any maximum specified in the terms of the tender or exchange offer) of
         all shares validly tendered or exchanged and not withdrawn as of the
         Expiration Time (the shares deemed so accepted up to any such maximum,
         being referred to as the "PURCHASED SHARES") and (y) the product of the
         number of shares of Common Stock outstanding (less any Purchased
         Shares) at the Expiration Time and the Closing Sale Price per share of
         Common Stock on the Trading Day next succeeding the Expiration Time,
         and

                  (ii)     the denominator of which shall be the number of
         shares of Common Stock outstanding (including any tendered or exchanged
         shares)

                                       84
<PAGE>

         at the Expiration Time multiplied by the Closing Sale Price per share
         of Common Stock on the Trading Day next succeeding the Expiration Time,

such adjustment to become effective immediately prior to the opening of business
on the day following the Expiration Time. If the Company is obligated to
purchase shares pursuant to any such tender or exchange offer, but the Company
is permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Rate shall again be adjusted to
be the Conversion Rate that would then be in effect if such tender or exchange
offer had not been made.

         (g)      In the event a Partnership Company shall issue rights ("IPO
RIGHTS") in a Rights IPO, the Conversion Rate shall be increased so that the
same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the IPO Rights Adjustment Date by a fraction:

                  (i)      the numerator of which will be the sum of (x) the
         average of the Closing Sale Prices of the Common Stock for the last ten
         (10) Trading Days that the IPO Rights were publicly traded, plus (y)
         the quotient of (A) the average closing price of the IPO Rights on the
         last ten (10) Trading Days that the IPO Rights were publicly traded,
         divided by (B) the number of shares of Common Stock that are required,
         under the terms of the IPO Rights, to allow a holder of Common Stock to
         receive one IPO Right; and

                  (ii)     the denominator of which will be the average of the
         Closing Sale Prices of the Common Stock for the last ten (10) Trading
         Days that the IPO Rights were publicly traded,

such adjustment to become effective immediately after the close of business on
the date the Rights IPO closed (the "IPO RIGHTS ADJUSTMENT DATE"). Such
adjustment shall be successively made upon each Rights IPO, if any.

         (h)      In the event a Partnership Company shall undertake, as part of
the initial public offering of its common stock pursuant to a registration
statement filed under the Securities Act, a Directed Share Subscription Program,
the Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to the
Subscription Rights Adjustment Date by a fraction:

                  (i)      the numerator of which will be the sum of (x) the
         average of the Closing Sale Prices of the Common Stock for the first
         four (4) Trading Days on which the common stock of the Partnership
         Company that is undertaking the Directed Share Subscription Program was
         publicly traded, plus (y) (A) the difference (if any, and in each case
         only where (I) is a

                                       85
<PAGE>

         higher number than (II)) between (I) the average closing price of the
         common stock of that Partnership Company on the first four (4) Trading
         Days its common stock is publicly traded, and (II) the initial public
         offering price of its common stock, divided by (B) the number of shares
         of Common Stock required to subscribe for one share of common stock of
         that Partnership Company, and

                  (ii)     the denominator of which will be the average of the
         Closing Sale Prices of the Common Stock for the first four (4) Trading
         Days on which the common stock of the Partnership Company that is
         undertaking the Directed Share Subscription Program was publicly
         traded,

such adjustment to become effective immediately after the close of business on
the last Trading Day of the four Trading Day period described above (the
"SUBSCRIPTION RIGHTS ADJUSTMENT Date"). Such adjustment shall be successively
made upon each initial public offering that includes a Directed Share
Subscription Program, if any. If such directed share subscription rights
described in this Section 16.05(h) has been declared but not so issued, the
Conversion Rate will again be adjusted to be the Conversion Rate that would be
in effect if such issuance of directed share subscription rights had not been
declared.

         (i)      For purposes of this Section 17.05, the following terms shall
have the meaning indicated:

                  (i)      "CURRENT MARKET PRICE" shall mean the average of the
         daily Closing Sale Prices per share of Common Stock for the ten (10)
         consecutive Trading Days ending on the earlier of the day in question
         and the day before the "EX" date with respect to the issuance,
         distribution, subdivision or combination requiring such computation.
         For purpose of this paragraph, the term "EX" date, (1) when used with
         respect to any issuance or distribution, means the first date on which
         the Common Stock trades, regular way, on the relevant exchange or in
         the relevant market from which the Closing Sale Price of the Common
         Stock was obtained without the right to receive such issuance or
         distribution, and (2) when used with respect to any subdivision or
         combination of shares of Common Stock, means the first date on which
         the Common Stock trades, regular way, on such exchange or in such
         market after the time at which such subdivision or combination becomes
         effective.

         If another issuance, distribution, subdivision or combination to which
         Section 17.05 applies occurs during the period applicable for
         calculating "CURRENT MARKET PRICE" pursuant to the definition in the
         preceding paragraph, "CURRENT MARKET PRICE" shall be calculated for
         such period in a manner determined by the Board of Directors to reflect
         the impact of

                                       86
<PAGE>

         such issuance, distribution, subdivision or combination on the Closing
         Sale Price of the Common Stock during such period.

                  (ii)     "FAIR MARKET VALUE" shall mean the amount that a
         willing buyer would pay a willing seller in an arm's-length
         transaction.

                  (iii)    "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
         shareholders 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).

                  (iv)     "TRADING DAY" shall mean a day during which trading
         in securities generally occurs on the New York Stock Exchange or, if
         the Common Stock is not listed on the New York Stock Exchange, on the
         principal other national or regional securities exchange on which the
         Common Stock is then listed or, if the Common Stock is not listed on a
         national or regional securities exchange, on the Nasdaq or, if the
         Common Stock is not quoted on Nasdaq, on the principal other market on
         which the Common Stock is then traded.

         (j)      The Company may make such increases in the Conversion Rate, in
addition to those required by Section 17.05(a), (b), (c), (d), (e), (f), (g) or
(h) as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.

         To the extent permitted by applicable law, the Company from time to
time may increase the Conversion Rate by any amount for any period of time if
the period is at least twenty (20) days, the increase is irrevocable during the
period and the Board of Directors shall have made a determination that such
increase would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Rate is increased pursuant to the
preceding sentence, the Company shall mail, or cause the Trustee to mail, to
holders of record of the Debentures a notice of the increase at least fifteen
(15) days prior to the date the increased Conversion Rate takes effect, and such
notice shall state the increased Conversion Rate and the period during which it
will be in effect.

         (k)      All calculations under this Article 17 shall be made by the
Company and shall be made to the nearest cent or to the nearest one-ten
thousandth (1/10,000) of a share, as the case may be. No adjustment need be made
for rights

                                       87
<PAGE>

to purchase Common Stock pursuant to a Company plan for reinvestment of
dividends or interest or for any issuance of Common Stock or convertible or
exchangeable securities or rights to purchase Common Stock or convertible or
exchangeable securities. To the extent the Debentures become convertible into
cash, assets, property or securities (other than capital stock of the Company or
any other Person), no adjustment need be made thereafter as to the cash, assets,
property or such securities. Interest will not accrue on any cash into which the
Debentures are convertible.

         (l)      Whenever the Conversion Rate is adjusted as herein provided,
the Company shall promptly file with the Trustee and any conversion agent other
than the Trustee an Officers' Certificate setting forth the Conversion Rate
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 Rate and may assume that the
last Conversion Rate of which it has knowledge is still in effect. Promptly
after delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the date on which each adjustment becomes effective and shall mail, or cause the
Trustee to mail, such notice of such adjustment of the Conversion Rate to the
holder of each Debenture at his last address appearing on the Debenture Register
provided for in Section 2.05 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.

         (m)      In any case in which this Section 17.05 provides that an
adjustment shall become effective immediately after (1) a record date or Record
Date for an event, (2) the date fixed for the determination of shareholders
entitled to receive a dividend or distribution pursuant to Section 17.05(a), (3)
a date fixed for the determination of shareholders entitled to receive rights,
options or warrants pursuant to Section 17.05(b), (4) the Expiration Time for
any tender or exchange offer pursuant to Section 17.05(f) or (5) in the case of
Section 17.05(h), the close of business on the last Trading Day of the four
Trading Day period described in Section 17.05(h) (each a "DETERMINATION DATE"),
the Company may elect to defer until the occurrence of the applicable Adjustment
Event (as hereinafter defined) (x) issuing to the holder of any Debenture
converted after such Determination Date and before the occurrence of such
Adjustment Event, the additional shares of Common Stock or other securities
issuable upon such conversion by reason of the adjustment required by such
Adjustment Event over and above the Common Stock issuable upon such conversion
before giving effect to such adjustment and (y) paying to such holder any amount
in cash in lieu of any fraction pursuant to Section 17.03. For purposes of this
Section 17.05(m), the term "ADJUSTMENT EVENT" shall mean:

                                       88
<PAGE>

                  (i)      in any case referred to in clause (1) hereof, the
         occurrence of such event,

                  (ii)     in any case referred to in clause (2) hereof, the
         date any such dividend or distribution is paid or made,

                  (iii)    in any case referred to in clause (3) hereof, the
         date of expiration of such rights, options or warrants,

                  (iv)     in any case referred to in clause (4) hereof, the
         date a sale or exchange of Common Stock pursuant to such tender or
         exchange offer is consummated and becomes irrevocable, and

                  (v)      in any case referred to in clause (5) hereof, the
         date on which the directed share subscription rights described in
         Section 17.05(h) are issued.

         (n)      For purposes of this Section 17.05, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.

         Section 17.06. Effect Of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 17.05(c) applies), (ii) any consolidation, merger
or binding share exchange of the Company with another Person as a result of
which holders of Common Stock shall be entitled to receive stock, other
securities or other property or assets (including cash) with respect to or in
exchange for such Common Stock, or (iii) any sale or conveyance of all or
substantially all of the properties and assets of the Company to any other
Person as a result of which holders of Common Stock shall be entitled to receive
stock, other securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock, then the Company or the
successor or purchasing Person, as the case may be, shall execute with the
Trustee a supplemental indenture (which shall comply with the Trust Indenture
Act as in force at the date of execution of such supplemental indenture)
providing that each Debenture shall be convertible into the kind and amount of
shares of stock, other 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 Debentures (assuming, for such purposes,
a sufficient number of authorized shares of Common Stock are available to
convert all such Debentures) immediately prior to such reclassification, change,

                                       89
<PAGE>

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 stock, other securities or other property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance (provided that, if the kind or amount of stock,
other 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 ("NON-ELECTING SHARE"),
then for the purposes of this Section 17.06 the kind and amount of stock, other
securities or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
for each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). Such
supplemental indenture shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
17.

         The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Debentures, at its address appearing on
the Debenture Register provided for in Section 2.05 of this Indenture, within
twenty (20) days after execution thereof. Failure to deliver such notice shall
not affect the legality or validity of such supplemental indenture.

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

         If this Section 17.06 applies to any event or occurrence, Section 17.05
shall not apply.

         Section 17.07. Taxes On Shares Issued. The issue of stock certificates
on conversions of Debentures shall be made without charge to the converting
Debentureholder for any documentary, stamp or similar issue or transfer tax in
respect of the issue thereof. The Company shall not, however, be required to pay
any such tax that 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
Debenture converted, and the Company shall not be required to issue or deliver
any such stock certificate unless and until the Person or Persons requesting the
issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.

         Section 17.08. Reservation of Shares, Shares to Be Fully Paid;
Compliance With Governmental Requirements; Listing of Common Stock. The Company
shall provide, free from preemptive rights, out of its authorized but unissued
shares or shares held in treasury, sufficient shares of Common Stock to

                                       90
<PAGE>

provide for the conversion of the Debentures from time to time as such
Debentures are presented for conversion.

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

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

         The Company covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of Debentures hereunder require
registration with or approval of any governmental authority under any federal or
state law before such shares may be validly issued upon conversion, the Company
will in good faith and as expeditiously as possible, to the extent then
permitted by the rules and interpretations of the Commission (or any successor
thereto), endeavor to secure such registration or approval, as the case may be.

         The Company further covenants that, if at any time the Common Stock
shall be listed on the New York Stock Exchange or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Debenture;
provided that if the rules of such exchange or automated quotation system permit
the Company to defer the listing of such Common Stock until the first conversion
of the Debentures into Common Stock in accordance with the provisions of this
Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Debentures in accordance with the requirements of such
exchange or automated quotation system at such time.

         Section 17.09. 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 Debentures to determine the Conversion Rate or whether any facts
exist that may require any adjustment of the Conversion Rate, 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

                                       91
<PAGE>

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 Debenture; and
the Trustee and any other conversion agent make no representations with respect
thereto. Neither the Trustee nor any conversion agent shall be responsible for
any failure of the Company to issue, transfer or deliver any shares of Common
Stock or stock certificates or other securities or property or cash upon the
surrender of any Debenture for the purpose of conversion or to comply with any
of the duties, responsibilities or covenants of the Company contained in this
Article 17. 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 17.06 relating either to the kind or amount of
shares of stock or securities or property (including cash) receivable by
Debentureholders upon the conversion of their Debentures after any event
referred to in such Section 17.06 or to any adjustment to be made with respect
thereto, but, subject to the provisions of Section 9.01, may accept as
conclusive evidence of the correctness of any such provisions, and shall be
protected in relying upon, the Officers' Certificate (which the Company shall be
obligated to file with the Trustee prior to the execution of any such
supplemental indenture) with respect thereto.

         Section 17.10. Notice To Holders Prior To Certain Actions. In case:

         (a)      the Company shall declare a dividend (or any other
distribution) on its Common Stock that would require an adjustment in the
Conversion Rate pursuant to Section 17.05; or

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

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

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

         (e)      a Partnership Company issues IPO Rights in a Rights IPO; or

                                       92
<PAGE>

         (f)      a Partnership Company undertakes, as part of the initial
public offering of its common stock pursuant to a registration statement filed
under the Securities Act, a Directed Share Subscription Program;

the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Debentures at his address appearing on the Debenture Register provided
for in Section 2.05 of this Indenture, as promptly as possible but in any event
at least ten (10) 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.

         Section 17.11. Shareholder Rights Plans. There shall be no adjustment
to the Conversion Rate upon the issuance of the (the "RIGHTS") provided for in
the Company's shareholder rights agreement dated March 1, 2000, as amended, or
in any future rights plan adopted by the Company, prior to the Rights separating
from the Common Stock. If the Rights have separated from the shares of Common
Stock in accordance with the provisions of the applicable shareholder rights
agreement so that the holders of the Debentures would not be entitled to receive
any rights in respect of Common Stock issuable upon conversion of the
Debentures, the Conversion Rate will be adjusted as if the Company distributed
to all holders of Common Stock shares of the Company's capital stock, evidences
of indebtedness, property or assets (including securities but excluding rights
or warrants to purchase Common Stock issued to all holders of Common Stock,
Common Stock issued as a dividend or distribution on Common Stock and cash
distributions), subject to readjustment in the event of the expiration,
termination or redemption of the rights. In lieu of any such adjustment, the
Company may amend such applicable shareholder rights agreement, to the extent
necessary, to provide that upon conversion of the Debentures the holders will
receive, in addition to the Common Stock issuable upon such conversion, the
rights that would have attached to such Common Stock if the rights had not
become separated from the Common Stock under such applicable shareholder rights
agreement.

         Section 17.12. Issuer Determination Final. Any determination that the
Company or Board of Directors of the Company must make pursuant to Section

                                       93
<PAGE>

17.01, Section 17.02, Section 17.03, Section 17.04, Section 17.05 or Section
17.06 shall, absent manifest error, be conclusive.

                                   ARTICLE 18
                            MISCELLANEOUS PROVISIONS

         Section 18.01. Provisions Binding On Company's Successors. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.

         Section 18.02. Official Acts By Successor Corporation. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any Person that shall at the time be the lawful sole successor of the
Company.

         Section 18.03. Addresses For Notices, Etc. Any notice or demand that
by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Debentures on the Company shall be
deemed to have been sufficiently given or made, for all purposes, if given or
served by being deposited postage prepaid by registered or certified mail in a
post office letter box or sent by telecopier transmission addressed as follows:
to Safeguard Scientifics, Inc., 800 The Safeguard Building, 435 Devon Park
Drive, Wayne, PA 19087, Attention: Deirdre Blackburn. Any notice, direction,
request or demand hereunder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or served by being
deposited, postage prepaid, by registered or certified mail in a post office
letter box or sent by telecopier transmission addressed as follows: Wachovia
Bank, National Association, 123 South Broad Street, Mail Code PA 1249,
Philadelphia, PA, 19109, Attention, George J. Rayzis, Telephone: 215-670-6327,
Facsimile: 215-670-6337.

         Any notice or demand that by any provision of this Indenture is
required or permitted to be given or served by the Company may, at the Company's
written request received by the Trustee not fewer than five (5) Business Days
prior (or such shorter period of time as may be acceptable to the Trustee) to
the date on which such notice must be given or served, be given or served by the
Trustee in the name of and at the expense of the Company.

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

         Any notice or communication mailed to a Debentureholder shall be mailed
to him by first class mail, postage prepaid, at his address as it appears on the

                                       94
<PAGE>

Debenture Register and shall be sufficiently given to him if so mailed within
the time prescribed.

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

         Section 18.04. Governing Law. This Indenture and each Debenture 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 the laws of the State of New
York, without regard to conflicts of laws principles thereof.

         Section 18.05. Evidence Of Compliance With Conditions Precedent,
Certificates To Trustee. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, 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; provided, that with respect to matters of fact, an Opinion of Counsel may
rely on an Officer's Certificate or a certificate of public officials.

         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: (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion is
based; (3) 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 (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.

         Section 18.06. Legal Holidays. In any case in which the date of
maturity of Interest on or principal of the Debentures or the redemption or
repurchase date of any Debenture will not be a Business Day, then payment of
such Interest on or principal of the Debentures 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 redemption or repurchase date,
and no Interest shall accrue for the period from and after such date.

         Section 18.07. Trust Indenture Act. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act

                                       95
<PAGE>

required to be part of and to govern indentures qualified under the Trust
Indenture Act; provided that unless otherwise required by law, notwithstanding
the foregoing, this Indenture and the Debentures issued hereunder shall not be
subject to the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section
314 of the Trust Indenture Act as now in effect or as hereafter amended or
modified; provided further that this Section 18.07 shall not require this
Indenture or the Trustee to be qualified under the Trust Indenture Act prior to
the time such qualification is in fact required under the terms of the Trust
Indenture Act, nor shall it constitute any admission or acknowledgment by any
party to the Indenture that any such qualification is required prior to the time
such qualification is in fact required under the terms of the Trust Indenture
Act. If any provision hereof limits, qualifies or conflicts with another
provision hereof that is required to be included in an indenture qualified under
the Trust Indenture Act, such required provision shall control.

         Section 18.08. No Security Interest Created. Nothing in this Indenture
or in the Debentures, expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect, in any jurisdiction in which property of
the Company or its subsidiaries is located.

         Section 18.09. Benefits Of Indenture. Nothing in this Indenture or in
the Debentures, express or implied, shall give to any Person, other than the
parties hereto, any paying agent, any authenticating agent, any Debenture
Registrar and their successors hereunder and the holders of Debentures any
benefit or any legal or equitable right, remedy or claim under this Indenture.

         Section 18.10. Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Debentures in connection
with the original issuance thereof and transfers and exchanges of Debentures
hereunder, including under Sections 2.04, 2.05, 2.06, 2.07, 3.03 and 3.05, as
fully to all intents and purposes as though the authenticating agent had been
expressly authorized by this Indenture and those Sections to authenticate and
deliver Debentures. For all purposes of this Indenture, the authentication and
delivery of Debentures by the authenticating agent shall be deemed to be
authentication and delivery of such Debentures "by the Trustee" and a
certificate of authentication executed on behalf of the Trustee by an
authenticating agent shall be deemed to satisfy any requirement hereunder or in
the Debentures for the Trustee's certificate of authentication. Such
authenticating agent shall at all times be a Person eligible to serve as trustee
hereunder pursuant to Section 9.09.

         Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall

                                       96
<PAGE>

be a party, or any corporation succeeding to the corporate trust business of any
authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 18.10, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.

         Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any authenticating agent by giving written notice
of termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the duties and obligations of the former authenticating agent under this
Indenture and, upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Debentures as the names and
addresses of such holders appear on the Debenture Register.

         The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in writing
between the Company and the authenticating agent.

         The provisions of Sections 9.02, 9.03, 9.04 and 10.03 and this Section
18.10 shall be applicable to any authenticating agent.

         Section 18.11. Execution In Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.

         Section 18.12. Severability. In case any provision in this Indenture
or in the Debentures shall be invalid, illegal or unenforceable, then (to the
extent permitted by law) the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

         Wachovia Bank, National Association, hereby accepts the duties in this
Indenture declared and provided, upon the terms and conditions herein above set
forth.

         Section 18.13. Table of Contents, Headings, Etc. The table of contents
and the titles and headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.

                                       97
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.

                               SAFEGUARD SCIENTIFICS, INC.

                               By:  CHRISTOPHER J. DAVIS
                                   ______________________________________
                                   Name: Christopher J. Davis
                                   Title: Managing Director & Chief
                                          Financial Officer

                               WACHOVIA BANK, NATIONAL
                                  ASSOCIATION, as Trustee

                               By: GEORGE J. RAYZIS
                                   ______________________________________
                                   Name: George J. Rayzis
                                   Title: Vice President

<PAGE>

                                                                       EXHIBIT A

         [Include only for Global Debentures]

         [UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND
ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), 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.]

         [Include only for Debentures that are Restricted Securities]

         THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.

         THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") THAT IS TWO YEARS AFTER THE LATER OF THE LAST
DATE ON WHICH THE 2.625% CONVERTIBLE SENIOR DEBENTURES DUE 2024 OF SAFEGUARD
SCIENTIFICS, INC. (THE "COMPANY") WERE ORIGINALLY ISSUED AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY
(OR ANY PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR

                                      A-1
<PAGE>

RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT OR (D) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE RIGHTS OF THE COMPANY AND THE WITHIN MENTIONED TRUSTEE PRIOR TO THE
REGISTRATION OF ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (B), (C) OR
(D) TO REQUIRE A DULY COMPLETED AND SIGNED CERTIFICATE (THE FORM OF WHICH IS
AVAILABLE FROM THE COMPANY OR THE TRUSTEE) AND IN THE CASE OF CLAUSE (D) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.

                                      A-2
<PAGE>

                           SAFEGUARD SCIENTIFICS, INC.

                  2.625% CONVERTIBLE SENIOR DEBENTURE DUE 2024

                                                                CUSIP: 786449AF5

No. ___                                                            $____________

         Safeguard Scientifics, Inc., a corporation duly organized and validly
existing under the laws of the State of Pennsylvania (herein called the
"COMPANY", 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 its registered assigns, [the principal sum of _________________
DOLLARS] [the principal sum set forth on Schedule I hereto]1 on March 15, 2024
at the office or agency of the Company maintained for that purpose in accordance
with the terms of the Indenture, in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay Interest, semiannually on March 15 and
September 15 of each year (each, an "INTEREST PAYMENT DATE"), commencing
September 15, 2004, on said principal sum at said office or agency, in like coin
or currency, at the rate per annum of 2.625%, from the March 15 or September 15,
as the case may be, next preceding the date of this Debenture to which Interest
has been paid or duly provided for, unless the date hereof is a date to which
Interest has been paid or duly provided for, in which case from the date of this
Debenture, or unless no Interest has been paid or duly provided for on the
Debentures, in which case from February 18, 2004 until payment of said principal
sum has been made or duly provided for. Notwithstanding the foregoing, if the
date hereof is after any March 1 or September 1, as the case may be, and before
the following March 15 or September 15, this Debenture shall bear Interest from
such March 15 or September 15; provided that if the Company shall default in the
payment of Interest due on such March 15 or September 15, then this Debenture
shall bear Interest from the next preceding March 15 or September 15 to which
Interest has been paid or duly provided for or, if no Interest has been paid or
duly provided for on such Debenture, from February 18, 2004. Except as otherwise
provided in the Indenture, the Interest payable on the Debenture pursuant to the
Indenture on any March 15 or September 15 will be paid to the Person entitled
thereto as it appears in the Debenture Register at the close of business on the
record date, which shall be the March 1 or September 1 (whether or not a
Business Day) (each a "RECORD DATE") next preceding such March 15 or September
15, as provided in the Indenture; provided that any such Interest not punctually
paid or duly provided for shall be payable as provided in the Indenture. The
Company shall pay Interest (i)

------------------
         (1) For Global Notes only.

                                      A-3
<PAGE>

on any Debentures in certificated form by check mailed to the address of the
Person entitled thereto as it appears in the Debenture Register (provided that
the holder of Debentures with an aggregate principal amount in excess of
$2,000,000 shall, at the written election of such holder, be paid by wire
transfer of immediately available funds) or (ii) on any Global Debenture by wire
transfer of immediately available funds to the account of the Depositary or its
nominee.

         The Company promises to pay interest on overdue principal and (to the
extent that payment of such interest is enforceable under applicable law)
Interest at the rate of 1% per annum.

         Reference is made to the further provisions of this Debenture set forth
on the reverse hereof, including, without limitation, provisions giving the
holder of this Debenture the right to convert this Debenture into Common Stock
of the Company 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 Debenture 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 the State of New York, without regard to
conflicts of laws principles thereof.

         This Debenture 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.

                                      A-4
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Debenture to be duly
executed.

                                         SAFEGUARD SCIENTIFICS, INC.

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

                                      A-5
<PAGE>

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

     THIS IS ONE OF THE DEBENTURES DESCRIBED IN THE WITHIN-NAMED INDENTURE.

                 WACHOVIA BANK, NATIONAL ASSOCIATION, AS TRUSTEE

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

                                      , or

By: ____________________________________________
    As Authenticating Agent
    (if different from Trustee)

    By:  _______________________________________
         Authorized Signatory

                                      A-6
<PAGE>

                          FORM OF REVERSE OF DEBENTURE

                           SAFEGUARD SCIENTIFICS, INC.

                  2.625% CONVERTIBLE SENIOR DEBENTURE DUE 2024

         This Debenture is one of a duly authorized issue of Debentures of the
Company, designated as its 2.625% Convertible Senior Debentures Due 2024 (herein
called the "DEBENTURES"), limited in aggregate principal amount to $125,000,000
(up to $150,000,000 if the Initial Purchaser exercises the option granted to it
pursuant to Section 2 of the Purchase Agreement), issued and to be issued under
and pursuant to an Indenture dated as of February 18, 2004 (herein called the
"INDENTURE"), between the Company and Wachovia Bank, National Association, as
trustee (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 Company and the holders of the Debentures.

         In case an Event of Default shall have occurred and be continuing, the
principal of and accrued and unpaid Interest on all Debentures may be declared
by either the Trustee or the holders of not less than 25% in aggregate principal
amount of the Debentures then Outstanding, 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 Company and the
Trustee, with the consent of the holders of at least a majority in aggregate
principal amount of the Debentures at the time Outstanding, 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
Debentures; provided that no such supplemental indenture shall (i) extend the
fixed maturity of any Debenture, reduce the rate or extend the time of payment
of Interest thereon, reduce the principal amount thereof, reduce any amount
payable upon redemption or repurchase thereof, impair the right of any Debenture
holder to institute suit for the payment thereof, make the principal thereof or
Interest thereon payable in any coin or currency other than that provided in the
Debentures, change the obligation of the Company to redeem any Debenture on a
redemption date in a manner adverse to the holders of the Debentures, change the
obligation of the Company to repurchase any Debenture upon the happening of a
Designated Event in a manner adverse to the holders of the Debentures, change
the obligation of the Company to repurchase any Debenture on a Repurchase Date
in a manner adverse to the holders of the Debentures, impair the right to
convert the Debentures into Common Stock subject to the terms set forth in the
Indenture, including Section 17.06 thereof, reduce the number of shares of
Common Stock or amount of other

                                      A-7
<PAGE>

property receivable upon conversion of the Debentures, modify any of the
provisions of Section 12.02 or Section 8.07 thereof, except to increase any such
percentage or to provide that certain other provisions of the Indenture cannot
be modified or waived without the consent of the holder of each Debenture so
affected, change any obligation of the Company to maintain an office or agency
in the places and for the purposes set forth in Section 6.01 thereof, or reduce
the quorum or voting requirements set forth in Article 11 or (ii) reduce the
aforesaid percentage of Debentures, the holders of which are required to consent
to any such supplemental indenture, without the consent of the holders of all
Debentures then Outstanding.

         Subject to the provisions of the Indenture, the holders of a majority
in aggregate principal amount of the Debentures at the time Outstanding may on
behalf of the holders of all of the Debentures waive any past default or Event
of Default under the Indenture and its consequences except (A) a default in the
payment of Interest, or the principal of, any of the Debentures, (B) a failure
by the Company to convert any Debentures into Common Stock of the Company, (C) a
default in the payment of the redemption price pursuant to Article 3 of the
Indenture, (D) a default in the payment of the repurchase price pursuant to
Article 3 of the Indenture, or (E) a default in respect of a covenant or
provisions of the Indenture that under Article 12 of the Indenture cannot be
modified or amended without the consent of the holders of each or all Debentures
then Outstanding or affected thereby. Any such consent or waiver by the holder
of this Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Debenture and any Debentures that may be issued in exchange or
substitution hereof, irrespective of whether or not any notation thereof is made
upon this Debenture or such other Debentures.

         No provision of this Debenture or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of and Interest on this Debenture at the place, at the
respective times, at the rate and in the coin or currency herein prescribed.

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

         The Debentures are issuable in fully registered form, without coupons,
in denominations of $1,000 principal amount and any multiple of $1,000. At the
office or agency of the Company 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,
assessment or other governmental charge that may be imposed in connection with
any registration or exchange of Debentures, Debentures may be exchanged for a
like aggregate principal amount of Debentures of any other authorized
denominations.

                                      A-8
<PAGE>

         We may not redeem any Debentures before March 20, 2009. At any time on
or after March 20, 2009, but prior to March 20, 2011, the Debentures may be
redeemed at the option of the Company, in whole or in part, but only if the
Closing Sale Price of the Common Stock for twenty (20) Trading Days within a
period of thirty (30) consecutive Trading Days ending on the Trading Day before
the date the Company provides the notice of redemption exceeds 140% of the
Conversion Price. At any time on or after March 20, 2011 and prior to maturity,
the Debentures may be redeemed at any time or from time to time at the option of
the Company, in whole or in part, without regard to the Closing Sale Price of
the Common Stock. The Company may redeem the Debentures upon mailing a notice of
such redemption not less than thirty (30) days but not more than sixty (60) days
before the redemption date to the holders of Debentures at their last registered
addresses, all as provided in the Indenture, at a redemption price equal to 100%
of the principal amount of Debentures being redeemed and accrued and unpaid
interest, to, but excluding, the redemption date; provided that if the
redemption date falls after a Record Date and prior to the corresponding
Interest Payment Date, then the Interest payable on such date shall be paid to
the holder of record on the corresponding Record Date.

         The Company may not give notice of any redemption of the Debentures if
a default in the payment of Interest on the Debentures has occurred and is
continuing.

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

         If a Designated Event occurs at any time prior to maturity of the
Debentures, the Debentures may be repurchased at the option of the holders of
the Debentures on a Designated Event Repurchase Date, not less than 20 nor more
than thirty-five (35) Business Days after notice thereof, at the option of the
holder of this Debenture at a redemption price equal to 100% of the principal
amount thereof, together with accrued and unpaid Interest to (but excluding) the
redemption date; provided that if such Designated Event Repurchase Date falls
after a Record Date and on or prior the corresponding Interest Payment Date, the
Interest payable on such Interest Payment Date shall be paid to the holder of
record of this Debenture on the corresponding Record Date. The Debentures will
be redeemable in multiples of $1,000 principal amount. The Company shall mail,
or cause the Trustee to mail, to all holders of record of the Debentures a
notice of the occurrence of a Designated Event and of the repurchase right
arising as a result thereof on or before the 20th day after the occurrence of
such Designated Event. For a Debenture to be so repurchased at the option of the
holder, the Company must receive at the office or agency of the Company
maintained for that purpose in accordance with the terms of the Indenture, such
Debenture with the form entitled "OPTION TO ELECT REPURCHASE UPON A DESIGNATED
EVENT" on the

                                      A-9
<PAGE>

reverse thereof duly completed, together with such Debenture, duly endorsed for
transfer, on or before the Designated Event Expiration Time.

         Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the holder, all or any portion of
the Debentures held by such holder on March 21, 2011, March 20, 2014 and March
20, 2019 in whole multiples of $1,000 at a purchase price of 100% of the
principal amount, plus any accrued and unpaid Interest, on such Debenture up to
the Repurchase Date. To exercise such right, a holder shall deliver to the
Company such Debenture with the form entitled "REPURCHASE NOTICE" on the reverse
thereof duly completed, together with the Debenture, duly endorsed for transfer,
at any time from the opening of business on the date that is twenty (20)
Business Days prior to such Repurchase Date until the close of business on the
Repurchase Date, and shall deliver the Debentures to the Trustee (or other
paying agent appointed by the Company) as set forth in the Indenture.

         Holders have the right to withdraw any Option to Elect Repurchase Upon
a Designated Event or Repurchase Notice, as the case may be, by delivering to
the Trustee (or other paying agent appointed by the Company) a written notice of
withdrawal up to 5:00 p.m., New York City time, on the Designated Event
Repurchase Date or Repurchase Date, as the case may be, all as provided in the
Indenture.

         If cash, sufficient to pay the purchase price of all Debentures or
portions thereof to be purchased as of the Designated Event Repurchase Date or
Repurchase Date, as the case may be, is deposited with the Trustee (or other
paying agent appointed by the Company), on the Business Day following the
Designated Event Repurchase Date or Repurchase Date, as the case may be,
Interest will cease to accrue on such Debentures (or portions thereof)
immediately after such Designated Event Repurchase Date or Repurchase Date, as
the case may be, and the holder thereof shall have no other rights as such other
than the right to receive the repurchase price upon surrender of such Debenture.

         Subject to the occurrence of certain events and in compliance with the
provisions of the Indenture, prior to the final maturity date of the Debentures,
the holder hereof has the right, at its option, to convert each $1,000 principal
amount of the Debentures into 138.5540 shares of the Company's Common Stock (a
conversion price of $7.2174 per share), as such shares shall be constituted at
the date of conversion and subject to adjustment from time to time as provided
in the Indenture, upon surrender of this Debenture with the form entitled
"CONVERSION NOTICE" on the reverse thereof duly completed, to the Company at the
office or agency of the Company maintained for that purpose in accordance with
the terms of the Indenture, or at the option of such holder, the Corporate Trust
Office, and, unless the shares issuable on conversion are to be issued in the
same name as this Debenture, duly endorsed by, or accompanied by instruments of
transfer in form

                                      A-10
<PAGE>

satisfactory to the Company duly executed by, the holder or by his duly
authorized attorney. If on any Conversion Date, the Company is required to pay
Liquidated Damages pursuant to the Registration Rights Agreement, the Conversion
Rate on such date will be multiplied by 1.03. The Company will notify the holder
thereof of any event triggering the right to convert the Debentures as specified
above in accordance with the Indenture.

         No adjustment in respect of Interest on any Debenture converted or
dividends on any shares issued upon conversion of such Debenture will be made
upon any conversion except as set forth in the next sentence. If this Debenture
(or portion hereof) is surrendered for conversion during the period from the
close of business on any Record Date for the payment of Interest to the close of
business on the Business Day preceding the following Interest Payment Date and
has not been called for redemption by the Company on a redemption date that
occurs during such period, this Debenture (or portion hereof being converted)
must be accompanied by payment, in immediately available funds or other funds
acceptable to the Company, of an amount equal to the Interest otherwise payable
on such Interest Payment Date on the principal amount being converted; provided
that no such payment shall be required (1) if the Company has specified a
redemption date that is after a Record Date and prior to the next Interest
Payment Date, (2) if the Company has specified a Designated Event Repurchase
Date that is during such period or (3) to the extent of any overdue Interest, if
any overdue Interest exists at the time of conversion with respect to such
Debenture.

         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 Debenture or Debentures for conversion.

         A Debenture in respect of which a holder is exercising its right to
require repurchase upon a Designated Event or repurchase on a Repurchase Date
may be converted only if such holder withdraws its election to exercise either
such right in accordance with the terms of the Indenture.

         Any Debentures called for redemption, unless surrendered for conversion
by the holders thereof on or before the close of business on the Business Day
preceding the redemption date, may be deemed to be redeemed from the holders of
such Debentures for an amount equal to the applicable redemption price, together
with accrued but unpaid Interest to, but excluding, the date fixed for
redemption, by one or more investment banks or other purchasers who may agree
with the Company (i) to purchase such Debentures from the holders thereof and
convert them into shares of the Company's Common Stock and (ii) to make payment
for such Debentures as aforesaid to the Trustee in trust for the holders.

                                      A-11
<PAGE>

         Upon due presentment for registration of transfer of this Debenture at
the office or agency of the Company maintained for that purpose in accordance
with the terms of the Indenture, a new Debenture or Debentures of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange thereof, subject to the limitations provided in the
Indenture, without charge except for any tax, assessment or other governmental
charge imposed in connection therewith.

         The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Debenture Registrar may deem and treat the
registered holder hereof as the absolute owner of this Debenture (whether or not
this Debenture shall be overdue and notwithstanding any notation of ownership or
other writing hereon made by anyone other than the Company or any Debenture
Registrar) for the purpose of receiving payment hereof, or on account hereof,
for the conversion hereof and for all other purposes, and neither the Company
nor the Trustee nor any other authenticating agent nor any paying agent nor
other conversion agent nor any Debenture 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 Debenture.

         No recourse for the payment of the principal of or Interest on this
Debenture, or for any claim based hereon or otherwise in respect hereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
the Indenture or any supplemental indenture or in any Debenture, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, shareholder, employee, agent, officer or director or subsidiary,
as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company 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 acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.

         Terms used in this Debenture and defined in the Indenture are used
herein as therein defined.

                                      A-12
<PAGE>

                                  ABBREVIATIONS

         The following abbreviations, when used in the inscription of the face
of this Debenture, shall be construed as though they were written out in full
according to applicable laws or regulations.

<TABLE>
<S>                                                    <C>
TEN COM -  as tenants in common                        UNIF GIFT MIN ACT -___ Custodian ___
TEN ENT -  as tenant by the entireties                 (Cust)   (Minor)
JT TEN  -  as joint tenants with right of              under Uniform Gifts to Minors Act
           survivorship and not as tenants in common   ____________________________
                                                                  (State)
</TABLE>

         Additional abbreviations may also be used though not in the above list.

                                      A-13
<PAGE>

                                CONVERSION NOTICE

TO:      SAFEGUARD SCIENTIFICS, INC.
         WACHOVIA BANK, NATIONAL ASSOCIATION

         The undersigned registered owner of this Debenture hereby irrevocably
exercises the option to convert this Debenture, or the portion thereof (which is
$1,000 or a multiple thereof) below designated, into shares of Common Stock of
Safeguard Scientifics, Inc. in accordance with the terms of the Indenture
referred to in this Debenture, and directs that the shares issuable and
deliverable upon such conversion, together with any check in payment for
fractional shares and any Debentures representing any unconverted principal
amount hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. Capitalized terms used herein but not
defined shall have the meanings ascribed to such terms in the Indenture. If
shares or any portion of this Debenture not converted are to be issued in the
name of a person other than the undersigned, the undersigned will provide the
appropriate information below and pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Debenture.

Dated: ______________________

                                                   _____________________________

                                                   _____________________________
                                                   Signature(s)

                                                   Signature(s) must be
                                                   guaranteed by an "ELIGIBLE
                                                   GUARANTOR INSTITUTION"
                                                   meeting the requirements of
                                                   the Debenture Registrar,
                                                   which requirements include
                                                   membership or participation
                                                   in the Security Transfer
                                                   Agent Medallion Program
                                                   ("STAMP") or such other
                                                   "SIGNATURE GUARANTEE PROGRAM"
                                                   as may be determined by the
                                                   Debenture Registrar in
                                                   addition to, or in
                                                   substitution for, STAMP, all
                                                   in accordance with the
                                                   Securities Exchange Act of
                                                   1934, as amended.

                                                   _____________________________
                                                   Signature Guarantee

                                      A-14
<PAGE>

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

_______________________________
(Name)

_______________________________
(Street Address)

_______________________________
(City, State and Zip Code)

_______________________________
Please print name and address

Principal amount to be converted
(if less than all):

$_______________________________

Social Security or Other Taxpayer
 Identification Number:

________________________________

                                      A-15
<PAGE>

                           OPTION TO ELECT REPURCHASE
                             UPON A DESIGNATED EVENT

TO:      SAFEGUARD SCIENTIFICS, INC.
         WACHOVIA BANK, NATIONAL ASSOCIATION

         Pursuant to the terms of the Indenture and the Debentures, the
undersigned registered owner of this Debenture hereby irrevocably acknowledges
receipt of a notice from Safeguard Scientifics, Inc. (the "COMPANY") as to the
occurrence of a Designated Event with respect to the Company and requests and
instructs the Company to repurchase the entire principal amount of this
Debenture, or the portion thereof (which is $1,000 or a multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this
Debenture at the price of 100% of such entire principal amount or portion
thereof, together with accrued and unpaid interest to, but excluding, the
Designated Event Repurchase Date, to the registered holder hereof. Capitalized
terms used herein but not defined shall have the meanings ascribed to such terms
in the Indenture.

Dated: ______________________

                                                   _____________________________

                                                   _____________________________
                                                   Signature(s)

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

                                                   Debenture Certificate Number,
                                                   if applicable:_______________

                                                   Principal amount to be
                                                   repurchased (if less than
                                                   all):

                                                   _____________________________

                                                   _____________________________
                                                   Social Security or Other
                                                   Taxpayer Identification
                                                   Number

                                      A-16
<PAGE>

                                REPURCHASE NOTICE

TO:      SAFEGUARD SCIENTIFICS, INC.
         WACHOVIA BANK, NATIONAL ASSOCIATION

         Pursuant to the terms of the Indenture and the Debentures, the
undersigned registered owner of this Debenture hereby irrevocably acknowledges
receipt of a notice from Safeguard Scientifics, Inc. (the "COMPANY") regarding
the right of holders to elect to require the Company to repurchase the
Debentures and requests and instructs the Company to repurchase the entire
principal amount of this Debenture, or the portion thereof (which is $1,000 or
an integral multiple thereof) below designated, in accordance with the terms of
the Indenture at the price of 100% of such entire principal amount or portion
thereof, together with accrued and unpaid Interest to, by excluding, the
Repurchase Date, to the registered holder hereof. Capitalized terms used herein
but not defined shall have the meanings ascribed to such terms in the Indenture.
The Debentures shall be repurchased by the Company as of the Repurchase Date
pursuant to the terms and conditions specified in the Indenture.

         Dated:

         Signature(s):

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

         Debenture Certificate Number (if applicable):

         Principal amount to be repurchased (if less than all):

         Social Security or Other Taxpayer Identification Number:

                                      A-17
<PAGE>

                                   ASSIGNMENT

         For value received ______________________________hereby sell(s)
assign(s) and transfer(s) unto ___________________________________ (Please
insert social security or other Taxpayer Identification Number of assignee) the
within Debenture, and hereby irrevocably constitutes and appoints
______________________________________ attorney to transfer said Debenture on
the books of the Company, with full power of substitution in the premises.

         In connection with any transfer of the Debenture prior to the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision) (other than any transfer
pursuant to a registration statement that has been declared effective under the
Securities Act), the undersigned confirms that such Debenture is being
transferred:

         [ ]      To Safeguard Scientifics, Inc. or a subsidiary thereof; or

         [ ]      To a "QUALIFIED INSTITUTIONAL BUYER" in compliance with Rule
                  144A under the Securities Act of 1933, as amended; or

         [ ]      Pursuant to and in compliance with Rule 144 under the
                  Securities Act of 1933, as amended; or

         [ ]      Pursuant to a Registration Statement that has been declared
                  effective under the Securities Act of 1933, as amended, and
                  that continues to be effective at the time of transfer;

and unless the Debenture has been transferred to Safeguard Scientifics, Inc. or
a subsidiary thereof, the undersigned confirms that such Debenture is not being
transferred to an "AFFILIATE" of the Company as defined in Rule 144 under the
Securities Act of 1933, as amended.

         Unless one of the boxes is checked, the Trustee will refuse to register
any of the Debentures evidenced by this certificate in the name of any person
other than the registered holder thereof.

Dated: ______________________

                                                   _____________________________

                                                   _____________________________
                                                   Signature(s)

                                      A-18
<PAGE>

                                                   Signature(s) must be
                                                   guaranteed by an "ELIGIBLE
                                                   GUARANTOR INSTITUTION"
                                                   meeting the requirements of
                                                   the Debenture Registrar,
                                                   which requirements include
                                                   membership or participation
                                                   in the Security Transfer
                                                   Agent Medallion Program
                                                   ("STAMP") or such other
                                                   "SIGNATURE GUARANTEE PROGRAM"
                                                   as may be determined by the
                                                   Debenture Registrar in
                                                   addition to, or in
                                                   substitution for, STAMP, al
                                                   in accordance with the
                                                   Securities Exchange Act of
                                                   1934, as amended.

                                                   _____________________________
                                                   Signature Guarantee

NOTICE: The signature on the Conversion Notice, the Option to Elect Redemption
Upon a Designated Event, the Repurchase Notice or the Assignment must correspond
with the name as written upon the face of the Debenture in every particular
without alteration or enlargement or any change whatever.

                                      A-19
<PAGE>

                                                                      Schedule I

                   [Include Schedule I only for a Global Note]

                           SAFEGUARD SCIENTIFICS, INC.
                  2.625% Convertible Senior Debenture Due 2024

         No.____

<TABLE>
<CAPTION>
                         Notation Explaining Principal   Authorized Signature of
Date  Principal Amount          Amount Recorded            Trustee or Custodian
--------------------------------------------------------------------------------
<S>   <C>                <C>                             <C>
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
____  ________________   _____________________________   _______________________
</TABLE>

                                      A-20

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}]]