Document:

<PAGE>

                                   EXHIBIT 4.4

                                 AMENDMENT NO. 1
                                       TO
                          CONSULTING SERVICES AGREEMENT

         THIS FIRST AMENDMENT TO CONSULTING  SERVICES  AGREEMENT,  dated October
10, 2003 (the "First  Amendment"),  is by and among Cambridge  Securities  Group
(the "Consultant"), and Dtomi, Inc., a Nevada corporation (the "Client").

                                    RECITALS

         A. The  Consultant  and the Client  entered into a Consulting  Services
Agreement dated September 5, 2003, a copy of which is attached hereto as Exhibit
A (the "Agreement"),  pursuant to which the Consultant agreed to provide certain
consulting services to the Client.

         B.  Client  and  Consultant  wish to amend  Sections  2 and 6(a) of the
Agreement to extend the  duration of the  Agreement  and provide for  additional
consideration in exchange for additional consulting services.

                                    AGREEMENT

         NOW,  THEREFORE,  in  consideration  of the  foregoing,  and the mutual
agreements, representations,  warranties and covenants contained herein, and for
other  good  and  valuable   consideration   the  receipt  of  which  is  hereby
acknowledged, the parties hereto agree as follows:

A.       Section 2 of the  Agreement  shall be deleted in its entirety and shall
         read as follows:

"2.      Consideration.

Client agrees to pay Consultant,  as his fee and as  consideration  for services
provided, Six Hundred Thousand (600,000) shares of common stock of the Client."

B. Section 6(a) of the Agreement shall be deleted in its entirety and shall read
as follows:

"(a)     Term.

This  Agreement  shall  become  effective  on the  date  appearing  next  to the
signatures below and terminate Fifteen (15) months thereafter.  Unless otherwise
agreed  upon in writing by  Consultant  and  Client,  this  Agreement  shall not
automatically be renewed beyond its Term."

EXECUTED on the date first set forth above.

                                       19
<PAGE>

                        CLIENT:

                        DTOMI, INC.

                        By: _________________________
                            David M. Otto - Chairman of the Board

                        CONSULTANT:

                        CAMBRIDGE SECURITIES GROUP

                        By:
                            ----------------------------------------
                            Name: Barbara Lee - Secretary

                                       20
<PAGE>

                                    Exhibit A

                          Consulting Services Agreement

                                       21EXHIBIT 4.5

================================================================================

                                    INDENTURE

                                     BETWEEN

                                   ALLOY, INC.

                                       AND

                      DEUTSCHE BANK TRUST COMPANY AMERICAS

                                   AS TRUSTEE

                  5.375% CONVERTIBLE SENIOR DEBENTURES DUE 2023

                            DATED AS OF JULY 23, 2003

================================================================================

<PAGE>

                             CROSS REFERENCE TABLE*

<TABLE>
<CAPTION>

Trust Indenture                                                                                    Indenture
Act Section                                                                                          Section
-----------                                                                                          -------

<S>                                                                                              <C>
310(a)(1)..............................................................................                 5.11
     (a)(2)............................................................................                 5.11
     (a)(3)............................................................................                  n/a
     (a)(4)............................................................................                  n/a
     (a)(5)............................................................................                 5.11
     (b)...............................................................................            5.3; 5.11
     (c)...............................................................................                  n/a

311(a).................................................................................                 5.12
     (b)...............................................................................                 5.12
     (c)...............................................................................                  n/a

312(a).................................................................................                  2.5
     (b)...............................................................................                 13.3
     (c)...............................................................................                 13.3

313(a).................................................................................                  5.7
     (b)(1)............................................................................                  n/a
     (b)(2)............................................................................                  5.7
     (c)...............................................................................            5.7; 13.2
     (d)...............................................................................                  5.7

314(a)(1), (2), (3)....................................................................            9.4; 13.2
     (a)(4)............................................................................            9.5; 13.6
     (b)...............................................................................                  n/a
     (c)(1)............................................................................                 13.5
     (c)(2)............................................................................                 13.5
     (c)(3)............................................................................                  n/a
     (d)...............................................................................                  n/a
     (e)...............................................................................                 13.6
     (f)...............................................................................                  n/a

315(a).................................................................................               5.1(a)
     (b)...............................................................................            5.6; 13.2
     (c)...............................................................................               5.1(b)
     (d)...............................................................................               5.1(c)
     (e)...............................................................................                 4.14
</TABLE>

<PAGE>

<TABLE>

<S>                                                                                              <C>
316(a)(last sentence)..................................................................             2.9, 7.2
     (a)(1)(A).........................................................................                  4.5
     (a)(1)(B).........................................................................                  4.4
     (a)(2)............................................................................                  n/a
     (b)...............................................................................                  4.7
     (c)...............................................................................                  7.4

317(a)(1)..............................................................................                  4.8
     (a)(2)............................................................................                  4.9
     (b)...............................................................................                  2.6

318(a).................................................................................                 13.1
     (b)...............................................................................                  n/a
     (c)...............................................................................                 13.1
</TABLE>

---------------
"n/a" means not applicable.

*This Cross Reference  Table shall not, for any purpose,  be deemed to be a part
of the Indenture.

                                       3

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                     PAGE

<S>                                                                                                    <C>
ARTICLE 1            DEFINITIONS AND INCORPORATION BY REFERENCE.........................................7

         Section 1.1.          Definitions..............................................................7

         Section 1.2.          Incorporation by Reference of Trust Indenture Act.......................16

         Section 1.3.          Rules of Construction...................................................17

ARTICLE 2            THE SECURITIES....................................................................17

         Section 2.1.          Title and Terms.........................................................17

         Section 2.2.          Form of Securities......................................................19

         Section 2.3.          Global Security Legend..................................................20

         Section 2.4.          Execution, Authentication, Delivery and Dating of the Securities........21

         Section 2.5.          Registrar and Paying Agent..............................................21

         Section 2.6.          Paying Agent to Hold Assets in Trust....................................22

         Section 2.7.          General Provisions Relating to Registration, Transfer and Exchange......23

         Section 2.8.          Book-Entry Provisions for the Global Securities.........................24

         Section 2.9.          Holder Lists............................................................25

         Section 2.10.         Persons Deemed Owners...................................................25

         Section 2.11.         Mutilated, Destroyed, Lost or Stolen Securities.........................26

         Section 2.12.         Treasury Securities.....................................................27

         Section 2.13.         Temporary Securities....................................................27

         Section 2.14.         Cancellation............................................................27

         Section 2.15.         CUSIP Numbers...........................................................28

         Section 2.16.         Defaulted Interest......................................................28

ARTICLE 3            DISCHARGE OF INDENTURE............................................................28

         Section 3.1.          Discharge of Liability on Securities....................................28

         Section 3.2.          Repayment to the Company................................................29

ARTICLE 4            DEFAULTS AND REMEDIES.............................................................29

         Section 4.1.          Events of Default.......................................................29

         Section 4.2.          Acceleration of Maturity; Rescission and Annulment......................31

         Section 4.3.          Other Remedies..........................................................32
</TABLE>

                                       i

<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
                                                                                                     PAGE

<S>                                                                                                    <C>

         Section 4.4.          Waiver of Past Defaults.................................................32

         Section 4.5.          Control by Majority.....................................................33

         Section 4.6.          Limitation on Suit......................................................33

         Section 4.7.          Unconditional Rights of Holders to Receive Payment and to Convert.......34

         Section 4.8.          Collection of Indebtedness and Suits for Enforcement by the Trustee.....34

         Section 4.9.          Trustee May File Proofs of Claim........................................35

         Section 4.10.         Restoration of Rights and Remedies......................................36

         Section 4.11.         Rights and Remedies Cumulative..........................................36

         Section 4.12.         Delay or Omission Not Waiver............................................36

         Section 4.13.         Priorities..............................................................36

         Section 4.14.         Undertaking for Costs...................................................37

         Section 4.15.         Waiver of Stay or Extension Laws........................................37

ARTICLE 5            THE TRUSTEE.......................................................................37

         Section 5.1.          Certain Duties and Responsibilities.....................................37

         Section 5.2.          Certain Rights of Trustee...............................................39

         Section 5.3.          Individual Rights of Trustee............................................40

         Section 5.4.          Money Held in Trust.....................................................40

         Section 5.5.          Trustee's Disclaimer....................................................40

         Section 5.6.          Notice of Defaults......................................................41

         Section 5.7.          Reports by Trustee to Holders...........................................41

         Section 5.8.          Compensation and Indemnification........................................41

         Section 5.9.          Replacement of Trustee..................................................42

         Section 5.10.         Successor Trustee by Merger, Etc........................................43

         Section 5.11.         Corporate Trustee Required; Eligibility.................................43

         Section 5.12.         Collection of Claims Against the Company................................43

ARTICLE 6            CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE..............................44
</TABLE>

                                       ii

<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
                                                                                                     PAGE

<S>                                                                                                    <C>
         Section 6.1.          Company May Consolidate, Etc., Only on Certain Terms....................44

         Section 6.2.          Successor Corporation Substituted.......................................44

ARTICLE 7            AMENDMENTS, SUPPLEMENTS AND WAIVERS...............................................45

         Section 7.1.          Without Consent of Holders of Securities................................45

         Section 7.2.          With Consent of Holders of Securities...................................46

         Section 7.3.          Compliance with Trust Indenture Act.....................................47

         Section 7.4.          Revocation of Consents and Effect of Consents or Votes..................47

         Section 7.5.          Notation on or Exchange of Securities...................................48

         Section 7.6.          Trustee to Sign Amendment, Etc..........................................48

ARTICLE 8            MEETING OF HOLDERS OF SECURITIES..................................................48

         Section 8.1.          Purposes for Which Meetings May Be Called...............................48

         Section 8.2.          Call Notice and Place of Meetings.......................................48

         Section 8.3.          Persons Entitled to Vote at Meetings....................................49

         Section 8.4.          Quorum; Action..........................................................49

         Section 8.5.          Determination of Voting Rights; Conduct and Adjournment of Meetings.....50

         Section 8.6.          Counting Votes and Recording Action of Meetings.........................51

ARTICLE 9            COVENANTS.........................................................................51

         Section 9.1.          Payment of Principal, Redemption Price, Change of Control Purchase
                               Price and Interest......................................................51

         Section 9.2.          Maintenance of Offices or Agencies......................................51

         Section 9.3.          Corporate Existence.....................................................52

         Section 9.4.          Reports.................................................................52

         Section 9.5.          Compliance Certificate..................................................53

ARTICLE 10           REDEMPTION OF SECURITIES..........................................................53

         Section 10.1.         Optional Redemption.....................................................53

         Section 10.2.         Notice to Trustee.......................................................54

         Section 10.3.         Selection of Securities to Be Redeemed..................................54
</TABLE>

                                      iii

<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
                                                                                                     PAGE

<S>                                                                                                    <C>

         Section 10.4.         Notice of Redemption....................................................55

         Section 10.5.         Effect of Notice of Redemption..........................................55

         Section 10.6.         Deposit and Payment of Redemption Price.................................56

         Section 10.7.         Securities Redeemed in Part.............................................56

ARTICLE 11           PURCHASE AT THE OPTION OF A HOLDER UPON
                     SPECIFIC REPURCHASE DATES OR A CHANGE OF CONTROL..................................57

         Section 11.1.         Purchase Right..........................................................57

         Section 11.2.         Repurchase Event Notice.................................................58

         Section 11.3.         Delivery of Repurchase Election Form; Form of Repurchase Election
                               Form; Withdrawal of Repurchase Election Form............................59

         Section 11.4.         Exercise of Purchase Rights.............................................60

         Section 11.5.         Deposit and Payment of the Purchase Price...............................61

         Section 11.6.         Effect of Delivery of Change of Control Purchase Notice and Purchase....62

         Section 11.7.         Physical Securities Purchased in Part...................................62
         Section 11.8.         Covenant to Comply With Securities Laws Upon Purchase of Securities.....62

         Section 11.9.         Repayment to the Company................................................62

ARTICLE 12           CONVERSION OF SECURITIES..........................................................63

         Section 12.1.         Conversion Right; Expiration of Conversion Right; Conversion Price......63

         Section 12.2.         Exercise of Conversion Right............................................65

         Section 12.3.         Fractions of Shares.....................................................67

         Section 12.4.         Adjustment of Conversion Price..........................................67

         Section 12.5.         Notice of Adjustments of Conversion Price...............................77

         Section 12.6.         Notice Prior to Certain Actions.........................................78

         Section 12.7.         Company to Reserve Common Stock.........................................79

         Section 12.8.         Common Stock to be Fully Paid and Nonassessable.........................79

         Section 12.9.         Taxes on Conversions....................................................79
</TABLE>

                                       iv

<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
                                                                                                     PAGE

<S>                                                                                                    <C>

         Section 12.10.        Cancellation of Converted Securities....................................79

         Section 12.11.        Effect of Reclassification, Consolidation, Merger or Sale...............80

         Section 12.12.        Responsibility of Trustee for Conversion Provisions.....................81

ARTICLE 13           OTHER PROVISIONS OF GENERAL APPLICATION...........................................81

         Section 13.1.         Trust Indenture Act Controls............................................82

         Section 13.2.         Notices.................................................................82

         Section 13.3.         Communication by Holders with Other Holders.............................83

         Section 13.4.         Acts of Holders of Securities...........................................83

         Section 13.5.         Certificate and Opinion as to Conditions Precedent......................84

         Section 13.6.         Statements Required in Certificate or Opinion...........................84

         Section 13.7.         Effect of Headings and Table of Contents................................85

         Section 13.8.         Successors and Assigns..................................................85

         Section 13.9.         Separability Clause.....................................................85

         Section 13.10.        Benefits of Indenture...................................................85

         Section 13.11.        Governing Law...........................................................85

         Section 13.12.        Counterparts............................................................85

         Section 13.13.        Legal Holidays..........................................................86

         Section 13.14.        Recourse Against Others.................................................86

EXHIBITS

EXHIBIT A:                 Form of Global Security.....................................................A-1
EXHIBIT B:                 Form of Certificated Security...............................................B-1
EXHIBIT D:                 Form of Transfer Certificate................................................C-1
EXHIBIT D:                 Form of Conversion Notice...................................................D-1
EXHIBIT E:                 Form of Repurchase Election Form............................................E-1
</TABLE>

                                       v

<PAGE>

                  INDENTURE,  dated  as of July  23,  2003  (this  "INDENTURE"),
between ALLOY, INC., a corporation duly organized and existing under the laws of
the State of Delaware, having its principal office at 151 West 26th Street, 11th
Floor,  New York,  NY 10001 (the  "COMPANY")  and  DEUTSCHE  BANK TRUST  COMPANY
AMERICAS, a New York banking corporation, as Trustee (the "TRUSTEE"), having its
principal  corporate  trust  office at  Deutsche  Bank Trust  Company  Americas,
Corporate  Trust & Agency  Services,  60 Wall Street,  27th Floor,  New York, NY
10005.

                             RECITALS OF THE COMPANY

                  The Company has duly  authorized  the  creation of an issue of
its 5.375% Convertible Senior Debentures due 2023 (the "SECURITIES")  having the
terms, tenor, amount and other provisions hereinafter set forth, and, to provide
therefor,  the Company has duly  authorized  the  execution and delivery of this
Indenture.

                  All  things  necessary  to  make  the  Securities,   when  the
Securities  are duly  executed by the Company and  authenticated  and  delivered
hereunder and duly issued by the Company,  the valid obligations of the Company,
and to make this  Indenture a valid and binding  agreement  of the  Company,  in
accordance with their and its terms, have been done.

                   NOW, THEREFORE, THIS INDENTURE WITNESSETH:

                  For and in  consideration  of the premises and the purchase of
the  Securities  by the  Holders  (as  defined  below)  thereof,  it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders of
the Securities, as follows:

                                   ARTICLE 1

                   DEFINITIONS AND INCORPORATION BY REFERENCE

                  SECTION 1.1 DEFINITIONS.

                  For all purposes of this  Indenture  and the  Securities,  the
following terms are defined as follows:

                  "144A GLOBAL  SECURITY"  means a permanent  Global Security in
the form of the  Security  attached  hereto as Exhibit A, and that is  deposited
with the Trustee as custodian  for, and registered in the name of the Depositary
or its nominee,  representing Securities sold in reliance on Rule 144A under the
Securities Act.

                  "ACT", when used with respect to any Holder of a Security, has
the meaning specified in Section 13.4(a).

                   "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

<PAGE>

direct the  management  and  policies of such  Person,  directly or  indirectly,
whether  through the ownership of voting  securities,  by contract or otherwise;
and the terms  "controlling" and "controlled"  have meanings  correlative to the
foregoing.

                  "APPLICABLE PROCEDURES" means, with respect to any transfer or
transaction  involving a Global  Security or beneficial  interest  therein,  the
rules and procedures of the  Depositary  for such Security,  in each case to the
extent applicable to such transaction and as in effect from time to time.

                  "AGENT   MEMBER"   has  the  meaning   specified   in  Section
2.12(e)(5).

                  "BANKRUPTCY  LAW"  means  Title  11 of the  U.S.  Code  or any
similar federal or state law for the relief of
debtors.

                  "BOARD OF  DIRECTORS"  means  either the board of directors of
the Company or any committee of that board  empowered to act for it with respect
to this Indenture.

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

                  "BUSINESS  DAY" when used with respect to any Place of Payment
or Place of  Conversion,  means each Monday,  Tuesday,  Wednesday,  Thursday and
Friday which is not a day on which banking institutions in that Place of Payment
or Place of  Conversion,  as  applicable,  are authorized or obligated by law to
close.

                  "CAPITAL STOCK" means, with respect to any Person, any and all
shares,  interests,  rights to purchase,  warrants,  options,  participations or
other equivalents of or interests (however designated) in equity of such Person,
whether now outstanding or issued after the date of this  Indenture,  including,
without limitation, all common stock and preferred stock.

                  "CERTIFICATED  SECURITIES"  means  Securities  that are in the
form of the Securities attached hereto as Exhibit B.

                  "CHANGE  OF  CONTROL"  means  the  occurrence  of  any  of the
following  after  the  original  issuance  of  the  Securities  when  any of the
following has occurred:

                  (i) the  acquisition  by any  "person" or "group"  (within the
         meaning of Sections 13(d) and 14(d)(2),  respectively,  of the Exchange
         Act) deemed to be a "beneficial owner" (as defined in Rule 13d-3 of the
         Exchange Act),  directly or indirectly,  through a purchase,  merger or
         other  acquisition  transaction or series of purchase,  merger or other
         acquisition  transactions  of shares  of the  Company's  Capital  Stock
         entitling such person to exercise 50% or more of the total voting power
         of all shares of the Company's Capital Stock entitled to vote generally

                                       7
<PAGE>

         in elections of directors,  other than any  acquisition by the Company,
         any of its  Subsidiaries  or any of its employee  benefit plans (except
         that such person  shall be deemed to have  beneficial  ownership of all
         securities  that such  person has the right to  acquire,  whether  such
         right  is  currently  exercisable  or  is  exercisable  only  upon  the
         occurrence of a subsequent condition);

                  (ii) the first day on which a majority  of the  members of the
         Board of  Directors  (which for purposes of this  provision  shall mean
         only the Board of  Directors,  and not any  committee  thereof) are not
         continuing directors;

                  (iii) any  consolidation or merger of the Company with or into
         any other person (which for purposes of this definition has the meaning
         set forth in  Section  13(d)(3)  of the  Exchange  Act),  any merger of
         another person into the Company,  or any  conveyance,  transfer,  sale,
         lease  or  other  disposition  of  all  or  substantially  all  of  the
         properties and assets of the Company to another  person,  other than in
         each  case  (x)  any  transaction  (i)  that  does  not  result  in any
         reclassification,  conversion,  exchange or cancellation of outstanding
         shares of  Capital  Stock of the  Company  and (ii)  pursuant  to which
         holders  of  Capital  Stock of the  Company  immediately  prior to such
         transaction  have the entitlement to exercise,  directly or indirectly,
         50% or more of the total voting power of all shares of Capital Stock of
         the Company  entitled to vote generally in the election of directors of
         the continuing or surviving person  immediately  after such transaction
         or (y)  any  such  merger  solely  for  the  purpose  of  changing  the
         jurisdiction  of  incorporation  of  the  Company  and  resulting  in a
         reclassification,  conversion or exchange of  outstanding  Common Stock
         solely into shares of the common stock of the surviving entity;

provided, however, that a Change of Control shall not be deemed to have occurred
if the (A) Market  Price per share of the Common Stock for any five Trading Days
within the period of 10 consecutive  Trading Days ending  immediately  after the
later of the  Change of  Control  or the  public  announcement  of the Change of
Control,  in the case of a Change of Control  under  clause  (i)  above,  or the
period of 10 consecutive  Trading Days ending  immediately  before the Change of
Control,  in the case of a Change of Control  under  clause (ii) or (iii) above,
shall equal or exceed 110% of the  Conversion  Price of the Securities in effect
on each  such  Trading  Day;  or (B) at least  90% of the  consideration  in the
transaction or transactions  constituting a Change of Control consists of shares
of common  stock  traded or to be traded  immediately  following  such Change of
Control on a national  securities exchange or the Nasdaq National Market and, as
a result of the transaction or transactions,  the Securities become  convertible
solely into such common stock (and any rights attached thereto).

                   "CHANGE OF CONTROL  PURCHASE DATE" has the meaning  specified
in Section 11.1(b) hereof.

                                       8
<PAGE>

                   "COMMISSION" means the Securities and Exchange  Commission or
any successor agency.

                  "COMMON  STOCK"  means any  stock of any class of the  Company
which has no  preference  in respect of dividends  or of amounts  payable in the
event of any voluntary or involuntary liquidation,  dissolution or winding up of
the Company  and which is not subject to  redemption  by the  Company.  However,
subject to the provisions of Section 12.11 hereof, shares issuable on conversion
of the  Securities  shall include only shares of the class  designated as common
stock, par value $.01 per share, of the Company at the date of execution of this
Indenture or shares of any class or classes resulting from any  reclassification
or  reclassifications  thereof  and  which  have no  preference  in  respect  of
dividends or of amounts  payable in the event of any  voluntary  or  involuntary
liquidation,  dissolution or winding up of the Company and which are not subject
to redemption  by the Company,  provided that if at any time there shall be more
than one such  resulting  class,  the shares of each such class then so issuable
shall be  substantially  in the  proportion  which the total number of shares of
such class resulting from all such  reclassifications  bears to the total number
of shares of all such classes resulting from all such reclassifications.

                  "COMPANY" means the corporation  named as the "Company" in the
first  paragraph of this instrument  until a successor  Person shall have become
such pursuant to the  applicable  provisions of this  Indenture,  and thereafter
"Company" shall mean such successor Person.

                  "COMPANY  ORDER"  means a written  order signed in the name of
the Company by any Officer.

                  "CONTINUING  DIRECTOR" means, as of any date of determination,
any  member  of the  Board of  Directors  who:  (i) was a member of the Board of
Directors on the date of this  Indenture or (ii) was  nominated  for election or
elected to the Board of Directors  with a majority of the  continuing  directors
who were members of the Board at the time of the new  director's  nomination  or
election.

                  "CONVERSION  AGENT" means any Person authorized by the Company
to convert  Securities in accordance with Article 12. Initially,  the Conversion
Agent shall be Deutsche Bank Trust Company Americas.

                  "CONVERSION DATE" means, with respect to any Holder,  the date
on  which  such  Holder  has  satisfied  all the  requirements  to  convert  its
Securities pursuant to Section 12.2.

                  "CONVERSION PERIOD" has the meaning specified Section 12.1(b).

                  "CONVERSION  PRICE"  has  the  meaning  specified  in  Section
12.1(c).

                  "CONVERSION   RATE"  has  the  meaning  specified  in  Section
12.1(b).

                                       9
<PAGE>

                  "CONVERSION  RECORD DATE" has the meaning specified in Section
12.4(g).

                  "CONVERSION  VALUE"  has  the  meaning  specified  in  Section
12.1(b).

                  "CORPORATE TRUST OFFICE" means for purposes of presentation or
surrender  of  Securities  for  payment,  registration,  transfer,  exchange  or
conversion  or for  service of notices  or demands  upon the  Company or for any
other  purpose  of this  Indenture,  the  office of the  Trustee  located in the
Borough of Manhattan,  The City of New York at which at any particular  time its
corporate  trust  business  shall  be  administered,  which  at the date of this
Indenture is located at Deutsche Bank Trust Company Americas,  Corporate Trust &
Agency Services, 60 Wall Street, 27th Floor - Mail Stop NYC60-2710, New York, NY
10005.

                  "CORPORATION"  means  any  corporation,  association,  limited
liability company, company and business trust.

                  "CURRENT  MARKET  PRICE" has the  meaning set forth in Section
12.4(g).

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

                  "DEFAULTED  PAYMENT"  has the  meaning  specified  in  Section
4.1(a).

                   "DEPOSITARY" has the meaning set forth in Section 2.1(a).

                   "DOLLAR" or "$" means a U.S. dollar or other  equivalent unit
in such coin or  currency  of the  United  States as at the time  shall be legal
tender for the payment of public and private debts.

                  "DTC" has the meaning set forth in Section 2.1(a).

                   "EVENT OF DEFAULT" has the meaning specified in Section 4.1.

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

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

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

                  "FAIR  MARKET  VALUE"  has the  meaning  set forth in  Section
12.4(g).

                  "FISCAL  QUARTER"  means the  fiscal  quarterly  period of the
Company ending on April 30, July 31, October 31 or January 31 of each year.

                  "GAAP" has the meaning set forth in Section 1.3.

                                       10
<PAGE>

                  "GLOBAL  SECURITIES"  means Securities that are in the form of
the  Securities  attached  hereto as Exhibit A, and that are  registered  in the
Register in the name of a  Depositary  or a nominee  thereof,  and to the extent
such  Securities  are required to bear the Legend  required by Section 2.6, such
Securities will be in the form of a 144A Global Security.

                  "GUARANTEE" means any obligation,  contingent or otherwise, of
any  Person  directly  or  indirectly  guaranteeing  any  indebtedness  or other
obligation  of any other  Person and,  without  limiting the  generality  of the
foregoing, any obligation,  direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or  advance or supply  funds for the  purchase or
payment of) such  indebtedness or other obligation of such other Person (whether
arising by virtue of partnership arrangements, or by agreements to keep-well, to
purchase assets, goods,  securities or services, to take-or-pay,  or to maintain
financial  statement  conditions or otherwise) or (ii) entered into for purposes
of  assuring  in any other  manner  the  obligee of such  indebtedness  or other
obligation  of the payment  thereof or to protect such  obligee  against loss in
respect thereof (in whole or in part);  provided that the term "guarantee" shall
not include  endorsements  for  collection or deposit in the ordinary  course of
business. The term "guarantee" used as a verb has a corresponding meaning.

                  "HOLDER",  when used with respect to any  Security,  including
any Global  Security,  means the Person in whose name the Security is registered
in the Register.

                   "INDENTURE"  means this instrument as originally  executed or
as it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.

                  "INITIAL  PURCHASERS"  mean Lehman  Brothers Inc.,  CIBC World
Markets Corp., JP Morgan Securities,  Inc. and SG Cowen Securities  Corporation,
as initial purchasers, under the Purchase Agreement.

                  "INTEREST" means,  with respect to any Security,  the interest
payable on such Security based upon the Interest Rate.

                  "INTEREST PAYMENT DATE" means each of February 1 and August 1,
provided,  however,  that if any such date is not a Business  Day,  the Interest
Payment Date shall be the next succeeding Business Day.

                  "INTEREST RATE" means 5.375% per annum.

                   "ISSUE  DATE" of any  Security  means  the date on which  the
Security  was  originally  issued  or  deemed  as set  forth  on the face of the
Security.

                  "MARKET  PRICE"  of a  security  on any date of  determination
means:

                                       11
<PAGE>

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

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

                  (3) if such  security is not so listed on a the New York Stock
Exchange or a U.S. national or regional securities  exchange,  the closing sales
price as reported by the Nasdaq National Market;

                  (4) if such  security  is not so listed on the New York  Stock
Exchange,  a U.S.  national or regional stock exchange or reported on the Nasdaq
National Market,  the last price quoted by Interactive Data Corporation for such
security on such date or, if  Interactive  Data  Corporation is not quoting such
price, a similar quotation service selected by the Company;

                  (5) if such  security  is not so listed on the New York  Stock
Exchange,  a U.S.  national or regional stock exchange or reported on the Nasdaq
National Market or quoted by Interactive Data Corporation or a similar quotation
device,  the  average of the  mid-point  of the last bid and ask prices for such
security on such date from at least two dealers  recognized as market-makers for
such security selected by the Company for this purpose; or

                  (6) if none of the  foregoing  apply  to  such  security,  the
average  of the last bid and ask prices  for such  security  on such date from a
dealer engaged in the trading of convertible  securities selected by the Company
for this purpose.

                  "MATURITY"  means the date on which the Principal with respect
to any Security becomes due and payable as therein or herein  provided,  whether
at the Stated  Maturity or by  acceleration,  conversion,  call for  redemption,
exercise of a purchase right or otherwise.

                  "NASDAQ  NATIONAL  MARKET" means the National  Association  of
Securities Dealers Automated Quotation National Market or any successor national
securities exchange or automated  over-the-counter  trading market in the United
States.

                  "NON-ELECTING  SHARE"  has the  meaning  specified  in Section
12.11.

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

                  "OFFICERS'  CERTIFICATE" means, with respect to the Company, a
certificate  signed by both (1) the Chairman of the Board,  the Chief  Executive
Officer,  the  President or a Vice  President and (2) so long as not the same as

                                       12
<PAGE>

the officer  signing  pursuant to clause (1), the Chief Financial  Officer,  the
Treasurer,  any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Trustee.

                  "OPINION OF COUNSEL" means a written  opinion of counsel,  who
may be counsel to the Company  (and may include  directors  or  employees of the
Company) and in form and substance  acceptable to the Trustee,  which acceptance
shall not be unreasonably withheld.

                   "OUTSTANDING",  when used with respect to Securities,  means,
as of the date of determination,  all Securities  theretofore  authenticated and
delivered under this Indenture, except Securities:

                  (i)  previously  canceled by the Trustee or  delivered  to the
         Trustee for cancellation;

                  (ii) for the  payment  or  redemption  of  which  money in the
         necessary amount has been previously  deposited with the Trustee or any
         Paying  Agent  (other  than the  Company)  in trust  or set  aside  and
         segregated in trust by the Company (if the Company shall act as its own
         Paying Agent) for the Holders of such  Securities;  provided,  however,
         that if such  Securities are to be redeemed,  notice of such redemption
         has been duly given pursuant to this Indenture; and

                  (iii) which have been paid in exchange for or in lieu of other
         Securities which have been authenticated and delivered pursuant to this
         Indenture,  other than any such  Securities  in respect of which  there
         shall have been presented to the Trustee proof  satisfactory to it that
         such  Securities are held by a protected  purchaser in whose hands such
         Securities are valid obligations of the Company;

provided,  however,  that in  determining  whether the Holders of the  requisite
principal  amount of Outstanding  Securities are present at a meeting of Holders
of Securities for quorum  purposes or have consented to or voted in favor of any
request, demand, authorization, direction, notice, consent, waiver, amendment or
modification hereunder, Securities held for the account of the Company or of any
of its Affiliates shall be disregarded and deemed not to be Outstanding,  except
that in  determining  whether the Trustee  shall be  protected  in making such a
determination or relying upon any such quorum,  consent or vote, only Securities
which a Responsible  Officer of the Trustee  actually knows to be so owned shall
be so disregarded.

                  "PAYING AGENT" has the meaning specified in Section 2.3.

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

                                       13
<PAGE>

                   "PLACE OF CONVERSION"  means any city in which any Conversion
Agent is located.

                  "PLACE OF PAYMENT" means any city in which any Paying Agent is
located.

                   "PRINCIPAL"   means,  with  respect  to  any  Security,   the
principal  amount  of  that  Security,   including  the  Redemption   Price,  if
applicable,  and the Repurchase  Price,  if applicable,  payable with respect to
that Security.

                  "PURCHASE AGREEMENT" means the Purchase Agreement,  dated July
17, 2003, among the Company and the Initial Purchasers  relating to the offering
and initial sale of the Securities.

                  "PURCHASE RIGHT" has the meaning provided in Section 11.1(a).

                  "PURCHASED  SHARES" has the meaning  assigned to it in Section
12.4(f).

                  "QIBS" has the meaning set forth in Section 2.1(a).

                  "REDEMPTION  DATE",  when used with respect to any Security to
be  redeemed,  means the date fixed for such  redemption  by or pursuant to this
Indenture.

                  "REDEMPTION  PRICE", when used with respect to any Security to
be redeemed, means the price per Security at which such Security may be redeemed
pursuant to Section 10.1.

                  "REFERENCE  DEALER"  means a dealer  engaged in the trading of
convertible  securities  selected  by the Company for the purpose for which such
dealers are quoted or otherwise to which they are referred herein.

                  "REFERENCE  PERIOD"  has the  meaning  set  forth  in  Section
12.4(d).

                  "REGISTER" has the meaning specified in Section 2.3.

                  "REGISTRAR" has the meaning specified in Section 2.3.

                  "REGISTRATION  RIGHTS AGREEMENT" means the Resale Registration
Rights  Agreement,  dated as of the date  hereof  between  the  Company  and the
Initial Purchasers.

                  "REGULAR  RECORD  DATE"  for  the  Interest   payable  on  the
Securities means the January 15 and the July 15 (whether or not a Business Day),
as applicable, next preceding the corresponding Interest Payment Date.

                   "REPURCHASE  DATE"  has  the  meaning  specified  in  Section
11.1(b) hereof.

                   "REPURCHASE  ELECTION  FORM"  has the  meaning  specified  in
Section 11.2 hereof.

                                       14
<PAGE>

                  "REPURCHASE EVENT NOTICE" has the meaning specified in Section
11.2.

                  "REPURCHASE  EVENTS"  has the  meaning  specified  in  Section
11.1(b).

                  "REPURCHASE  PRICE"  has  the  meaning  specified  in  Section
11.1(a) hereof.

                  "RESPONSIBLE OFFICER",  when used with respect to the Trustee,
means any officer of the Trustee,  including any vice president,  assistant vice
president,  any treasurer,  any assistant  treasurer,  any trust officer, or any
other officer of the Trustee customarily  performing  functions similar to those
performed by any of the above designated  officers and also means,  with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred  because  of such  officer's  knowledge  of and  familiarity  with  the
particular subject.

                  "RESTRICTED  SECURITY"  means a Security  required to bear the
restrictive legend set forth in the form of Security set forth in Exhibits A and
B of this Indenture.

                  "SEC" means the Securities and Exchange Commission.

                  "SECURITIES"  has  the  meaning  ascribed  to it in the  first
paragraph under the caption "Recitals of the Company".

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

                   "SIGNIFICANT SUBSIDIARY" has the meaning assigned to it under
Rule 405 of the Securities Act.

                  "SPECIFIC  REPURCHASE  DATE" has the  meaning  assigned  to in
Section 11.1(a).

                  "SPIN-OFF" has the meaning set forth in Section 12.4(d).

                  "STATED  MATURITY"  has the meaning  assigned to it in Section
2.1(b).

                  "SUBSIDIARY"   means  a  corporation  more  than  50%  of  the
outstanding  Voting  Stock of which is owned,  directly  or  indirectly,  by the
Company or by one or more other Subsidiaries,  or by the Company and one or more
other Subsidiaries.

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

                  "TRADING DAY" means:

                                       15
<PAGE>

                  (1) if the  applicable  security  is  listed or  admitted  for
         trading  on the New York  Stock  Exchange,  a day on which the New York
         Stock Exchange is open for business;

                  (2) if that  security  is not  listed  on the New  York  Stock
         Exchange,  a day on which  trades  may be made on the  Nasdaq  National
         Market;

                  (3) if that  security  is not so listed on the New York  Stock
         Exchange and not quoted on the Nasdaq National  Market,  a day on which
         the principal  U.S.  securities  exchange on which the  securities  are
         listed is open for business; or

                  (4) if the applicable security is not so listed,  admitted for
         trading or quoted,  any day other than a Saturday  or a Sunday or a day
         on which banking  institutions  in the State of New York are authorized
         or obligated by law or executive order to close.

                   "TRIGGER EVENT" has the meaning specified in Section 12.4(d).

                  "TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this  instrument  until a successor  Trustee shall have become such
pursuant  to  the  applicable  provisions  of  this  Indenture,  and  thereafter
"Trustee" shall mean such successor Trustee.

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

                  "VOTING STOCK" means with respect to any Person, Capital Stock
of any class or kind  ordinarily  having the power to vote for the  election  of
directors,  managers  or other  voting  members  of the  governing  body of such
Person.

                  SECTION 1.2 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.

                  Whenever this Indenture  refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.

                  The  following  TIA  terms  used in this  Indenture  have  the
following meanings:

                  "INDENTURE SECURITIES" means the Securities;

                  "INDENTURE SECURITY HOLDER" means a Holder;

                  "INDENTURE TO BE QUALIFIED" means this Indenture;

                  "INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the
Trustee; and

                                       16
<PAGE>

                  "OBLIGOR"  on the  Securities  means the Company and any other
obligor on the indenture securities.

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

                  SECTION 1.3 RULES OF CONSTRUCTION.

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

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

                           (2) all accounting terms not otherwise defined herein
         have  the  meanings  assigned  to them  in  accordance  with  generally
         accepted  accounting  principles in the United States prevailing at the
         time of any relevant computation hereunder ("GAAP");

                           (3) the words "herein",  "hereof" and "hereunder" and
         other words of similar  import  refer to this  Indenture as a whole and
         not to any particular Article, Section or other subdivision;

                           (4) all references to section and article  numbers in
         this  Indenture  shall refer to sections  and articles  hereof,  unless
         otherwise specified.

                                   ARTICLE 2

                                 THE SECURITIES

                  SECTION 2.1 FORM AND DATING.

                  The Securities and the Trustee's certificate of authentication
shall be substantially in the form of Exhibits A and B, which are a part of this
Indenture.  The Securities may have notations,  legends or endorsements required
by law, stock exchange rule or usage (provided that any such notation, legend or
endorsement  required  by usage is in a form  acceptable  to the  Company).  The
Company shall provide any such notations, legends or endorsements to the Trustee
in writing.  Each Security  shall be dated the date of its  authentication.  The
Securities  shall  mature on August 1, 2023 (the "STATED  MATURITY"),  and shall
bear Interest from the Issue Date until the principal  amount thereof is paid or
made  available  for  payment,  or until such date on which the  Securities  are
converted,  redeemed or  purchased  as  provided  herein at the  Interest  Rate.
Interest shall be payable semiannually in arrears on each Interest Payment Date.

                  (a) 144A Global Securities. Securities offered and sold within
the  United  States to  qualified  institutional  buyers as defined in Rule 144A
("QIBs")  in reliance  on Rule 144A shall be issued  initially  in the form of a

                                       17
<PAGE>

144A Global Security, which shall be deposited with the Trustee at its Corporate
Trust Office,  as custodian for the Depositary (as defined below) and registered
in the name of The Depository Trust Company ("DTC") or the nominee thereof (DTC,
or any successor thereto,  and any such nominee being hereinafter referred to as
the "Depositary"), duly executed by the Company and authenticated by the Trustee
as  hereinafter  provided.  The  aggregate  principal  amount of the 144A Global
Securities may from time to time be increased or decreased by  adjustments  made
on the records of the Trustee and the Depositary as hereinafter provided.

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

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

                  (c)  Book-Entry  Provisions.  This Section  2.1(c) shall apply
only to Global  Securities  deposited with or on behalf of the  Depositary.  The
Company shall  execute and the Trustee  shall,  in accordance  with this Section
2.1(c),  authenticate and deliver  initially one or more Global  Securities that
(a) shall be registered in the name of the Depositary, (b) shall be delivered by
the Trustee to the Depositary or pursuant to the  Depositary's  instructions and
(c) shall be substantially  in the form of Exhibit A attached  hereto;  provided
that the Legend  (other  than the first and second  paragraphs  thereof)  may be
removed from such Global  Security on satisfaction of the conditions for removal
thereof specified in this Indenture.

                  (d)   Certificated   Securities.   Securities  not  issued  as
interests  in  the  Global  Securities  will  be  issued  in  certificated  form
substantially in the form of Exhibit B attached hereto; provided that the Legend
may be removed  from such  Securities  on  satisfaction  of the  conditions  for
removal thereof specified in this Indenture.

                  SECTION 2.2 EXECUTION AND AUTHENTICATION.

                  The  Securities  shall be executed on behalf of the Company by
any Officer.  The  signature of the Officer on the  Securities  may be manual or
facsimile.

                  Securities  bearing  the  manual or  facsimile  signatures  of
individuals  who were at the time of the execution of the  Securities,  Officers
shall bind the Company,  notwithstanding  that such  individuals  or any of them
have ceased to hold such  offices  prior to the  authentication  and delivery of

                                       18
<PAGE>

such  Securities or did not hold such offices at the date of  authentication  of
such Securities.

                  At any time and from  time to time  after  the  execution  and
delivery of this Indenture,  the Company may deliver Securities  executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication  and delivery of such  Securities,  and the Trustee in accordance
with such Company  Order shall  authenticate  and deliver such  Securities as in
this Indenture provided and not otherwise.  No Security shall be entitled to any
benefit under this  Indenture or be valid or obligatory  for any purpose  unless
there appears on such Security a certificate of authentication  substantially in
the form provided for herein duly executed by the Trustee by manual signature of
an  authorized  signatory,  and  such  certificate  upon any  Security  shall be
conclusive  evidence,  and the only  evidence,  that such Security has been duly
authenticated and delivered hereunder.

                  The Trustee shall  authenticate and deliver the Securities for
original issue in an aggregate  principal  amount of $65.0 million (or a maximum
of $78.0 million if the Initial Purchasers'  over-allotment  option set forth in
the Purchase  Agreement  is  exercised in full) upon one or more Company  Orders
without any further action by the Company. The aggregate principal amount of the
Securities due at the Stated  Maturity  thereof  outstanding at any time may not
exceed the amounts set forth in the foregoing sentence.

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

                  SECTION 2.3 REGISTRAR, PAYING AGENT AND CONVERSION AGENT.

                  The  Company   shall   maintain  an  office  or  agency  where
Securities  may be  presented  for  registration  of  transfer  or for  exchange
("REGISTRAR"),  an  office or  agency  where  Securities  may be  presented  for
purchase or payment  ("PAYING  AGENT") and an office or agency where  Securities
may be presented for conversion ("CONVERSION AGENT"). The Registrar shall keep a
register of the Securities  and of their transfer and exchange.  The Company may
have one or more co-registrars,  one or more additional paying agents and one or
more additional conversion agents. The term Paying Agent includes any additional
paying agent.  The term  Conversion  Agent  includes any  additional  conversion
agent.  The Company may change any Paying Agent,  Registrar or Conversion  Agent
without prior notice to any Holder.

                  The Company shall enter into an appropriate  agency  agreement
with any Registrar,  Paying Agent,  Conversion  Agent or  co-registrar  (in each
case,  if such  Registrar,  agent or  co-registrar  is a Person  other  than the
Trustee).  The agreement  shall  implement the provisions of this Indenture that
relate to such  agent.  The  Company  shall  notify the  Trustee of the name and
address of any such agent. If the Company fails to maintain a Registrar,  Paying
Agent or Conversion  Agent,  the Trustee shall act as such and shall be entitled
to appropriate compensation therefor pursuant to Section 5.8. The Company or any

                                       19
<PAGE>

Subsidiary or an Affiliate of either of them may act as Paying Agent, Registrar,
Conversion Agent or co-registrar.

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

                  SECTION  2.4  PAYING  AGENT TO HOLD  MONEY AND  SECURITIES  IN
TRUST.

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

                  SECTION 2.5 HOLDER LISTS.

                  The  Trustee  shall  preserve  in  as  current  a  form  as is
reasonably  practicable  the most recent list  available  to it of the names and
addresses of all Holders. If the Trustee is not the Registrar, the Company shall
cause to be furnished to the Trustee at least semiannually on January 1 and July
1 a listing of all Holders dated within 15 days of the date on which the list is
furnished  and at such other  times as the Trustee may request in writing a list
in such form and as of such date as the  Trustee may  reasonably  require of the
names and addresses of Holders.

                  SECTION 2.6 TRANSFER AND EXCHANGE.

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

                                       20
<PAGE>

connection  with the  transfer  or exchange  of the  Securities  from the Holder
requesting such transfer or exchange.

                  At the option of the Holder,  Securities  may be exchanged for
other  Securities of any authorized  denomination  or  denominations,  of a like
aggregate  principal  amount upon  surrender of the  Securities to be exchanged,
together  with a written  instrument of transfer  satisfactory  to the Registrar
duly  executed  by the  Holder or such  Holder's  attorney  duly  authorized  in
writing,  at such office or agency.  Whenever any  Securities are so surrendered
for exchange,  the Company shall execute, and the Trustee shall authenticate and
deliver,  the  Securities  which the Holder  making the  exchange is entitled to
receive.

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

                  Notwithstanding  any provision to the contrary herein, so long
as a Global  Security  remains  outstanding  and is held by or on  behalf of the
Depositary, (i) transfers of beneficial interests in a Global Security, in whole
or in part,  may be effected only through a book entry system  maintained by the
Holder of such Global  Security  (or its agent) in  accordance  with  Applicable
Procedures,  (ii)  ownership of a beneficial  interest in the Security  shall be
required  to be  reflected  solely in book entry and (iii)  transfers  of Global
Securities or beneficial  interests in Global  Securities  shall be made only in
accordance  with  Section 2.12 and this  Section  2.6(b).  Transfers of a Global
Security  shall be limited to transfers  of such Global  Security in whole or in
part, to the Depositary,  to nominees of the Depositary or to a successor of the
Depositary or such successor's nominee.

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

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

                  No  Registrar  shall  be  required  to make  registrations  of
transfer or exchange of Securities during any periods  designated in the text of
the Securities or in this Indenture as periods during which such registration of
transfers and exchanges need not be made.

                                       21
<PAGE>

                  If  Securities  are  issued  upon the  transfer,  exchange  or
replacement of Securities  subject to  restrictions  on transfer and bearing the
legends set forth on the forms of Security  attached  hereto as Exhibits A and B
setting forth such restrictions (collectively, the "LEGEND"), or if a request is
made to remove the Legend on a Security, the Securities so issued shall bear the
Legend, or the Legend shall not be removed,  as the case may be, unless there is
delivered to the Company and the Registrar  such  satisfactory  evidence,  which
shall include an opinion of counsel  having  substantial  experience in practice
under the  Securities  Act and otherwise  reasonably  acceptable to the Company,
addressed  to the  Company  and in form  acceptable  to the  Company,  as may be
reasonably required by the Company and the Registrar and the Trustee (if not the
same Person as the  Trustee),  that neither the Legend nor the  restrictions  on
transfer set forth therein are required to ensure that transfers  thereof comply
with the  provisions of Rule 144A or Rule 144 under the  Securities Act of 1933,
as  amended  ("Securities  Act") or that such  Securities  are not  "restricted"
within the meaning of Rule 144 under the  Securities  Act. Upon (i) provision of
such satisfactory  evidence,  or (ii) notification by the Company to the Trustee
and Registrar of the sale of such Security pursuant to a registration  statement
that is  effective  at the  time of  such  sale,  the  Trustee,  at the  written
direction of the Company,  shall  authenticate  and deliver a Security that does
not bear the Legend.  If the Legend is removed  from the face of a Security  and
the Security is subsequently held by the Company or an Affiliate of the Company,
the Legend shall be reinstated.

                  If Rule  144(k) as  promulgated  under the  Securities  Act is
amended to shorten the two-year  holding  period under Rule  144(k),  then,  the
references  in the  Legend to "TWO  YEARS",  and in the  corresponding  transfer
restrictions  described  above,  will be deemed to refer to such shorter period,
from and after receipt by the Trustee of an Officers' Certificate and an Opinion
of Counsel to that effect. As soon as practicable after the Company knows of the
effectiveness of any such amendment to shorten the two-year holding period under
Rule 144(k),  unless such changes  would  otherwise be  prohibited  by, or would
cause a violation of, the federal  securities  laws  applicable at the time, the
Company will provide to the Trustee an Officers'  Certificate  and an Opinion of
Counsel as to the  effectiveness of such amendment and the effectiveness of such
change to the restrictive legends and transfer restrictions.

                  Until the Legend on any  Restricted  Security has been removed
in  compliance  with this  Section  2.6,  all  shares of Common  Stock (or other
securities  issuable  upon  conversion  as a result  of the  provisions  of this
Indenture)  issued upon  conversion  of such  Restricted  Security  shall bear a
legend  substantially  in the form of the Legend (the "COMMON STOCK  RESTRICTIVE
LEGEND")  and shall be  subject to the same  restrictions  on  transfer  as such
Restricted  Security.  At any time following the time when the  restrictions  on
transfer set forth in the Common Stock Restrictive  Legend shall have expired in
accordance with their terms or shall have terminated  under  applicable law, the
holder  of  such  Common  Stock  may,  upon  a  surrender  of  the   certificate
representing  such Common  Stock  exchange to the  Company's  transfer  agent in
accordance with such agent's  customary  procedures  (accompanied,  in the event
that such  restrictions  on transfer have  terminated by reason of a transfer in
compliance  with Rule 144 or any successor  provision,  by an opinion of counsel

                                       22
<PAGE>

having substantial experience in practice under the Securities Act and otherwise
reasonably  acceptable  to the  Company,  addressed  to the  Company and in form
acceptable to the Company,  to the effect that the transfer of such Common Stock
has been made in  compliance  with Rule 144 or such  successor  provision),  may
receive a new certificate  representing such Common Stock, in like amount, which
shall not bear the Common Stock Restrictive Legend.

                  SECTION 2.7 REPLACEMENT SECURITIES.

                  If (a) any mutilated  Security is  surrendered to the Trustee,
or (b) the Company and the Trustee receive evidence to their satisfaction of the
destruction,  loss or theft of any  Security,  and  there  is  delivered  to the
Company and the Trustee such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Company or the
Trustee  that such  Security  has been  acquired by a bona fide  purchaser,  the
Company  shall   execute  and  upon  its  written   request  the  Trustee  shall
authenticate and deliver, in exchange for any such mutilated Security or in lieu
of any such destroyed, lost or stolen Security, a new Security of like tenor and
principal   amount,   bearing  a   certificate   number  not   contemporaneously
outstanding.

                  In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, or is about to be purchased by
the  Company  pursuant  to Article 10 or Article 11 hereof,  the  Company in its
discretion  may,  instead  of  issuing  a new  Security,  pay or  purchase  such
Security, as the case may be.

                  Upon the  issuance,  authentication  and  delivery  of any new
Securities  under this Section 2.7, the Company may require the payment of a sum
sufficient to cover any tax or other governmental  charge that may be imposed in
relation thereto and any other expenses  (including the fees and expenses of the
Trustee) connected therewith.

                  Every  new  Security  issued,   authenticated   and  delivered
pursuant to this Section 2.7 in lieu of any mutilated, destroyed, lost or stolen
Security shall constitute an original additional  contractual  obligation of the
Company,  whether or not the destroyed,  lost or stolen Security shall be at any
time  enforceable  by anyone,  and shall be  entitled  to all  benefits  of this
Indenture  equally and  proportionately  with any and all other  Securities duly
issued hereunder.

                  The  provisions  of this Section 2.7 are  exclusive  and shall
preclude (to the extent  lawful) all other  rights and remedies  with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.

                  SECTION 2.8 OUTSTANDING SECURITIES; DETERMINATIONS OF HOLDERS'
ACTION.

                  Securities  outstanding  at any  time  are all the  Securities
authenticated  by the Trustee  except for (i) those  cancelled by it, (ii) those
paid pursuant to Section 2.7, (iii) those delivered to it for  cancellation  and
(iv) those described in this Section 2.8 as not outstanding. A Security does not

                                       23
<PAGE>

cease to be  outstanding  because the Company or an Affiliate  thereof holds the
Security;  provided,  however,  that in  determining  whether the Holders of the
requisite principal amount of Securities have given or concurred in any request,
demand,  authorization,   direction,  notice,  consent,  waiver,  or  other  Act
hereunder,  Securities  owned  by the  Company  or any  other  obligor  upon the
Securities  or any  Affiliate  of the  Company  or such other  obligor  shall be
disregarded  and deemed  not to be  outstanding,  except  that,  in  determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization,  direction, notice, consent, waiver or other Act, only Securities
which a Responsible  Officer of the Trustee  actually knows to be so owned shall
be so disregarded.  Subject to the foregoing, only Securities outstanding at the
time of  such  determination  shall  be  considered  in any  such  determination
(including, without limitation, determinations pursuant to Articles 4 and 7).

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

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

                  If a Security is converted in accordance with Article 12, then
from and after the time of conversion on the date of  conversion,  such Security
shall  cease to be  outstanding  and  interest  shall  cease to  accrue  on such
Security.

                  SECTION 2.9 TEMPORARY SECURITIES.

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

                  If  temporary  Securities  are issued,  the Company will cause
definitive  Securities  to be prepared  without  unreasonable  delay.  After the
preparation  of  definitive  Securities,   the  temporary  Securities  shall  be
exchangeable   for  definitive   Securities  upon  surrender  of  the  temporary
Securities  at the office or agency of the Company  designated  for such purpose
pursuant to Section  2.3,  without  charge to the  Holder.  Upon  surrender  for
cancellation of any one or more temporary Securities,  the Company shall execute

                                       24
<PAGE>

and the Trustee  shall  authenticate  and  deliver in  exchange  therefor a like
principal amount of definitive Securities of authorized denominations.  Until so
exchanged the temporary Securities shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.

                  SECTION 2.10 CANCELLATION.

                  If the  Company  shall  acquire  any of the  Securities,  such
acquisition   shall  not  operate  as  a  redemption  or   satisfaction  of  the
indebtedness represented by such Securities unless the same are delivered to the
Trustee for cancellation.  All Securities  surrendered for payment,  purchase by
the Company  pursuant to conversion,  redemption or  registration of transfer or
exchange  shall,  if  surrendered  to any  Person  other  than the  Trustee,  be
delivered to the Trustee and shall be promptly  cancelled by it. The Company may
at any time deliver to the Trustee for  cancellation  any Securities  previously
authenticated and delivered hereunder which the Company may have acquired in any
manner  whatsoever,  and all Securities so delivered shall be promptly cancelled
by the Trustee.  The Company may not issue new Securities to replace  Securities
it has paid or delivered to the Trustee for  cancellation or that any Holder has
converted  pursuant to Article 12. No Securities  shall be authenticated in lieu
of or in exchange  for any  Securities  cancelled  as provided in this  Section,
except  as  otherwise  expressly  permitted  by this  Indenture.  All  cancelled
Securities held by the Trustee shall be disposed of by the Trustee in accordance
with the Trustee's customary procedure.

                  SECTION 2.11 PERSONS DEEMED OWNERS.

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

                  SECTION 2.12 GLOBAL SECURITIES.

                  (a)  Notwithstanding any other provisions of this Indenture or
the Securities,  (A) transfers of a Global Security,  in whole or in part, shall
be  made  only in  accordance  with  Section  2.6 and  Section  2.12(a)(i),  (B)
transfers  or exchanges  of a  beneficial  interest in a Global  Security for an
interest in the same or another  Global  Security  shall comply with Section 2.6
and Section  2.12(a)(iii)  below,  (C)  transfers of a beneficial  interest in a
Global  Security  for a  Certificated  Security  shall  comply with Section 2.6,
Section  2.12(a)(ii) below and Section  2.12(e)(1) below, and (D) transfers of a
Certificated Security shall comply with Section 2.6 and Sections 2.12(a)(iv) and
(v) below.

                                       25
<PAGE>

                           (i) Transfer of Global  Security.  A Global  Security
                  may not be  transferred,  in whole or in part,  to any  Person
                  other  than  the  Depositary  or a  nominee  or any  successor
                  thereof,  and no such transfer to any such other Person may be
                  registered;  provided  that this clause (i) shall not prohibit
                  any  transfer  of a  Certificated  Security  that is issued in
                  exchange  for a  Global  Security.  No  transfer  of a  Global
                  Security to any Person shall be effective under this Indenture
                  or the  Securities  unless  and until such  Security  has been
                  registered in the name of such Person. Nothing in this Section
                  2.12(a)(i)  shall prohibit or render  ineffective any transfer
                  of a  beneficial  interest  in a Global  Security  effected in
                  accordance with the other provisions of this Section 2.12.

                           (ii) Transfer or Exchange of a Beneficial Interest in
                  a Global  Security  for a  Beneficial  Interest in the Same or
                  Another Global Security.

                           (x) A  beneficial  interest in a Global  Security may
                       not be transferred or exchanged for a beneficial interest
                       in another  Global Security except upon satisfaction of
                       the  requirements set  forth  below. Upon  receipt by the
                       Trustee  of  a  request  to  transfer  or  exchange  of a
                       beneficial interest in a Global Security in accordance
                       with Applicable Procedures for a beneficial interest in
                       another Global Security,together with:

                           (A)  so  long  as  the   Securities   are  Restricted
                           Securities,  certification  in the form set  forth in
                           Exhibit C;

                           (B) written  instructions  to the Trustee to make, or
                           direct  the  Registrar  to  make,  in the  case  of a
                           transfer or exchange  of a  beneficial  interest in a
                           Global Security for a beneficial  interest in another
                           Global  Security,  an  adjustment  on its  books  and
                           records  with  respect to such Global  Securities  to
                           reflect a  decrease  and  increase  in the  aggregate
                           principal  amount of the  Securities  represented  by
                           such Global Securities,  such instructions to contain
                           information  regarding the Depositary  accounts to be
                           credited with such decrease and increase; and

                           (C) if the  Company or the  Trustee so  requests,  an
                           opinion of counsel having  substantial  experience in
                           practice  under  the  Securities  Act  and  otherwise
                           reasonably  acceptable  to the Company,  addressed to
                           the Company and in form acceptable to the Company, or
                           other evidence  reasonably  satisfactory  to it as to
                           the compliance with the restrictions set forth in the
                           Legend,

                       then  the  Trustee,  (1)  shall  cause,  or  direct   the
                       Registrar  to  cause, in  accordance  with  the  standing

                                       26
<PAGE>

                       instructions   and  procedures   existing    between  the
                       Depositary  and  the Registrar,  the aggregate  principal
                       amount of the  Securities  represented by the appropriate
                       Global   Security  to  be  decreased  by  the   aggregate
                       principal  amount  that the  other  Global  Security   is
                       increased  and  (2)  in   accordance  with  the  standing
                       instructions   and   procedures   existing   between  the
                       Depositary and the Registrar  and Applicable  Procedures,
                       shall  debit  and  credit  or  cause  to  be  debited  or
                       credited,  as appropriate, to the accounts of the persons
                       specified in such instructions a beneficial  interest in
                       the   Global   Security   or   Global   Securities,   as
                       appropriate,  equal  to the  amount  of  the  beneficial
                       interests so transferred or exchanged.

                           (y) Beneficial  interests in a Global Security may be
                       transferred  to Persons  who  take  delivery  in the same
                       Global   Security  in  accordance   with  the  Applicable
                       Procedures  and, if  the Global  Security is a Restricted
                       Security,  in accordance with  the transfer  restrictions
                       set  forth  in   the   Legend.   No  written   orders  or
                       instructions  shall  be required to be  delivered  to the
                       Registrar  or the  Trustee  to effect  the   transactions
                       described in this Section 2.12(a)(ii)(y).

                           (z) Other  than  transfers  to the  Company  or to an
                       Affiliate  of the  Company,  beneficial  interests   in a
                       Global  Security  that is  not a Restricted  Security may
                       not be transferred to Person who takes  delivery  thereof
                       in the form  a beneficial  interest in a Global  Security
                       that is a Restricted Security.

                  (iii)  Transfer  or  Exchange  of a  Beneficial  Interest in a
Global Security for a Certificated  Security.  A beneficial interest in a Global
Security  may  not  be  exchanged  for  a  Certificated   Security  except  upon
satisfaction  of the  requirements  set forth  below and in  Section  2.12(e)(1)
below.  Upon receipt by the Trustee of a transfer of a beneficial  interest in a
Global  Security in accordance  with  Applicable  Procedures  for a Certificated
Security in the form satisfactory to the Trustee, together with:

                  (A) so  long  as the  Securities  are  Restricted  Securities,
                  certification in the form set forth in Exhibit C;

                  (B) written instructions to the Trustee to make, or direct the
                  Registrar to make, an adjustment on its books and records with
                  respect to such  Global  Security to reflect a decrease in the
                  aggregate  principal  amount of the Securities  represented by
                  the Global Security,  such instructions to contain information
                  regarding  the  Depositary  account to be  credited  with such
                  decrease; and

                                       27
<PAGE>

                  (C) if the Company or the Trustee so  requests,  an opinion of
                  counsel  having  substantial  experience in practice under the
                  Securities  Act and  otherwise  reasonably  acceptable  to the
                  Company,  addressed to the Company and in form  acceptable  to
                  the Company, or other evidence  reasonably  satisfactory to it
                  as to the compliance  with the  restrictions  set forth in the
                  Legend,

then the Trustee shall cause,  or direct the  Registrar to cause,  in accordance
with the standing  instructions  and procedures  existing between the Depositary
and the Registrar,  the aggregate principal amount of the Securities represented
by the Global Security to be decreased by the aggregate  principal amount of the
Certificated  Security to be issued, shall issue,  authenticate and deliver such
Certificated  Security  and shall debit or cause to be debited to the account of
the person  specified in such  instructions a beneficial  interest in the Global
Security equal to the principal amount of the Certificated Security so issued.

                  (iv) Transfer and Exchange of  Certificated  Securities.  When
         Certificated Securities are presented to the Registrar with a request:

            (y) to register the transfer of such Certificated Securities; or

            (z) to exchange such Certificated  Securities for an equal principal
amount of Certificated Securities of other authorized denominations,

the Registrar  shall  register the transfer or make the exchange as requested if
its reasonable  requirements  for such transaction are met;  provided,  however,
that the Certificated Securities surrendered for transfer or exchange:

                  (1)  shall  be  duly  endorsed  or  accompanied  by a  written
         instrument of transfer in form  reasonably  satisfactory to the Company
         and the Registrar,  duly executed by the Holder thereof or his attorney
         duly authorized in writing; and

                  (2) so long as such Securities are Restricted Securities, such
         Securities are being transferred or exchanged  pursuant to an effective
         registration  statement  under the Securities Act or pursuant to clause
         (A), (B) or (C) below, and are accompanied by the following  additional
         information and documents, as applicable:

                  (A) if such Certificated Securities are being delivered to the
            Registrar by a Holder for  registration  in the name of such Holder,
            without transfer,  a certification  from such Holder to that effect;
            or

                  (B) if such  Certificated  Securities are being transferred to
            the Company, a certification to that effect; or

                                       28
<PAGE>

                  (C) if such  Certificated  Securities  are  being  transferred
            pursuant to an exemption from  registration,  (i) a certification to
            that effect (in the form set forth in Exhibit C, if applicable)  and
            (ii) if the  Company so  requests,  an  opinion  of  counsel  having
            substantial  experience  in practice  under the  Securities  Act and
            otherwise  reasonably  acceptable  to the Company,  addressed to the
            Company and in form  acceptable  to the Company,  or other  evidence
            reasonably  satisfactory  to  it  as  to  the  compliance  with  the
            restrictions set forth in the Legend.

                  (v)  Transfer  of a  Certificated  Security  for a  Beneficial
Interest in a Global Security. A Certificated  Security may not be exchanged for
a  beneficial  interest in a Global  Security  except upon  satisfaction  of the
requirements set forth below.

                  Upon receipt by the Trustee of a Certificated  Security,  duly
endorsed  or  accompanied  by  appropriate  instruments  of  transfer,  in  form
satisfactory to the Trustee, together with:

                  (I) so  long  as the  Securities  are  Restricted  Securities,
                  certification,  in the form set forth in  Exhibit C, that such
                  Certificated  Security  is  being  transferred  to  a  QIB  in
                  accordance with Rule 144A, or to an  institutional  accredited
                  investor within the meaning of Rule 501(a)(1), (2), (3) or (7)
                  of Regulation D of the Securities Act; and

                  (II) written instructions directing the Trustee to make, or to
                  direct the  Registrar to make,  an adjustment on its books and
                  records  with  respect to such  Global  Security to reflect an
                  increase in the aggregate  principal  amount of the Securities
                  represented  by the  Global  Security,  such  instructions  to
                  contain  information  regarding the  Depositary  account to be
                  credited  with such  increase,  then the Trustee  shall cancel
                  such Certificated  Security and cause, or direct the Registrar
                  to cause,  in accordance  with the standing  instructions  and
                  procedures  existing between the Depositary and the Registrar,
                  the aggregate  principal  amount of Securities  represented by
                  the Global Security to be increased by the aggregate principal
                  amount of the Certificated Security to be exchanged, and shall
                  credit or cause to be  credited  to the  account of the Person
                  specified in such  instructions  a beneficial  interest in the
                  Global   Security  equal  to  the  principal   amount  of  the
                  Certificated  Security so cancelled.  If no Global  Securities
                  are then outstanding,  the Company shall issue and the Trustee
                  shall  authenticate,  upon written order of the Company in the
                  form of an Officers' Certificate, a new Global Security in the
                  appropriate principal amount.

                                       29
<PAGE>

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

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

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

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

         (1)      Notwithstanding  any other provisions of this Indenture or the
                  Securities,  a Global Security shall not be exchanged in whole
                  or in part for a Security registered in the name of any Person
                  other than the  Depositary  or one or more  nominees  thereof,
                  provided   that  a  Global   Security  may  be  exchanged  for
                  Securities registered in the names of any Person designated by
                  the  Depositary  in the  event  that  (i) the  Depositary  has
                  notified  the  Company  that  it is  unwilling  or  unable  to
                  continue  as  Depositary  for  such  Global  Security  or such

                                       30
<PAGE>

                  Depositary  has ceased to be a  "clearing  agency"  registered
                  under the  Exchange  Act,  and a successor  Depositary  is not
                  appointed  by the  Company  within 90 days or (ii) an Event of
                  Default has  occurred  and is  continuing  with respect to the
                  Securities.  Any Global Security  exchanged pursuant to clause
                  (i) above shall be so exchanged in whole and not in part,  and
                  any Global  Security  exchanged  pursuant to clause (ii) above
                  may be  exchanged  in  whole  or from  time to time in part as
                  directed by the  Depositary.  Any Security  issued in exchange
                  for a Global Security or any portion thereof shall be a Global
                  Security;  provided  that any such  Security so issued that is
                  registered  in the name of a Person other than the  Depositary
                  or a nominee thereof shall not be a Global Security.

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

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

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

         (5)      Neither  any members of, or  participants  in, the  Depositary
                  (collectively,  the "Agent  Members") nor any other Persons on
                  whose behalf Agent Members may act shall have any rights under
                  this Indenture with respect to any Global Security  registered

                                       31
<PAGE>

                  in the name of the Depositary or any nominee thereof, or under
                  any such Global Security,  and the Depositary or such nominee,
                  as the case may be, may be treated by the Company, the Trustee
                  and any agent of the  Company or the  Trustee as the  absolute
                  owner and  holder of such  Global  Security  for all  purposes
                  whatsoever.  Notwithstanding  the  foregoing,  nothing  herein
                  shall  prevent  the  Company,  the Trustee or any agent of the
                  Company  or the  Trustee  from  giving  effect to any  written
                  certification,  proxy or other authorization  furnished by the
                  Depositary or such nominee,  as the case may be, or impair, as
                  between the Depositary, its Agent Members and any other Person
                  on whose  behalf an Agent  Member may act,  the  operation  of
                  customary  practices of such Persons governing the exercise of
                  the rights of a holder of any Security.

                  (f) By its acceptance of any Security bearing the Legend, each
Holder of such  Security  acknowledges  the  restrictions  on  transfer  of such
Security  set forth in this  Indenture  and agrees  that it will  transfer  such
Security only as provided in this Indenture.

                  SECTION 2.13. CUSIP NUMBERS.

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

                                   ARTICLE 3

                             DISCHARGE OF INDENTURE

                  SECTION 3.1. DISCHARGE OF LIABILITY ON SECURITIES.

                  When (i) the Company  delivers to the Trustee all  outstanding
Securities  (other  than  Securities  replaced  pursuant  to  Section  2.11) for
cancellation or (ii) all  outstanding  Securities have become due and payable at
their  scheduled  maturity  within one year or all  outstanding  Securities  are
scheduled  for  redemption  within one year and the  Company  deposits  with the
Trustee  cash or, in the event of a  conversion  pursuant to Article 12,  Common
Stock, sufficient to pay all amounts due and owing on all outstanding Securities
on the date of their  scheduled  maturity or the  scheduled  date of  redemption
(other than Securities replaced pursuant to Section 2.11), and if in either case
the Company  pays all other sums payable  hereunder  by the  Company,  then this
Indenture  shall,  subject to Section 5.8,  cease to be of further  effect.  The
Trustee  shall join in the  execution  of a  document  prepared  by the  Company
acknowledging  satisfaction  and  discharge  of this  Indenture on demand of the

                                       32
<PAGE>

Company  accompanied by an Officers'  Certificate  and Opinion of Counsel and at
the cost and expense of the Company.

                  SECTION 3.2. REPAYMENT TO THE COMPANY.

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

                                   ARTICLE 4

                              DEFAULTS AND REMEDIES

                  SECTION 4.1. EVENTS OF DEFAULT.

                  An "Event of Default",  wherever used herein, means any one of
the following  events (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):

                  (a) the  Company  defaults  in the  payment  of the  Principal
amount (a  "DEFAULTED  PAYMENT") on any  Security  when the same becomes due and
payable at its Stated  Maturity,  upon  redemption  or exercise of a  repurchase
right or otherwise;

                  (b) the Company  defaults in the payment of an  installment of
Interest  on any  Security  when it becomes  due and  payable  and such  default
continues for a period of 30 days;

                  (c) the  Company  fails to perform or observe  any other term,
covenant or agreement  contained in the  Securities  or this  Indenture  and the
default  continues for a period of 60 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 Outstanding Securities;

                  (d) the  Company  defaults  under any  indebtedness  for money
borrowed  by  the  Company  or any of its  Subsidiaries  that  is a  Significant
Subsidiary  or any  group of two or more  Subsidiaries  that,  taken as a whole,
would constitute a Significant  Subsidiary,  the aggregate outstanding principal
amount of which is in an amount in excess of $15.0  million,  for a period of 30
days after  written  notice to the  Company by the Trustee or to the Company and

                                       33
<PAGE>

the  Trustee  by Holders of at least 25% in  aggregate  principal  amount of the
Outstanding Securities,  which default (i) is caused by the Company's failure to
pay when due principal or premium of or interest on such indebtedness by the end
of the applicable grace period,  if any, unless such  indebtedness is discharged
or  (ii)  results  in  the  acceleration  of  such  indebtedness   without  such
indebtedness  having been discharged or such non-payment or acceleration  having
been cured, waived, rescinded or annulled;

                  (e) the entry by a court having  jurisdiction  in the premises
of (i) a decree or order for  relief in  respect  of the  Company  or any of its
Subsidiaries  that  is a  Significant  Subsidiary  or any  group  of two or more
Subsidiaries that, taken as a whole, would constitute a Significant  Subsidiary,
in an involuntary  case or proceeding under any applicable U.S. federal or state
bankruptcy, insolvency,  reorganization or other similar law or (ii) a decree or
order  adjudging  the Company or any of its  Subsidiaries  that is a Significant
Subsidiary  or any  group of two or more  Subsidiaries  that,  taken as a whole,
would constitute a Significant Subsidiary, a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization,  arrangement, adjustment or
composition of or in respect of the Company or any of its Subsidiaries that is a
Significant Subsidiary or any group of two or more Subsidiaries that, taken as a
whole,  would  constitute a Significant  Subsidiary,  under any applicable  U.S.
federal or state law, or appointing a custodian, receiver, liquidator, assignee,
trustee,  sequestrator  or  other  similar  official  of the  Company  or of any
substantial  part of its property,  or ordering the winding up or liquidation of
its affairs,  and the  continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 60 consecutive
days; or

                  (f) the commencement by the Company or any of its Subsidiaries
that is a Significant  Subsidiary or any group of two or more Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary, of a voluntary case
or proceeding under any applicable U.S. federal or state bankruptcy, insolvency,
reorganization  or other  similar law or of any other case or  proceeding  to be
adjudicated a bankrupt or insolvent, or the consent by the Company or any of its
Subsidiaries  that  is a  Significant  Subsidiary  or any  group  of two or more
Subsidiaries that, taken as a whole, would constitute a Significant  Subsidiary,
to the entry of a decree or order for relief in respect of the Company or any of
its  Subsidiaries  that is a Significant  Subsidiary or any group of two or more
Subsidiaries that, taken as a whole, would constitute a Significant  Subsidiary,
in an involuntary  case or proceeding under any applicable U.S. federal or state
bankruptcy,   insolvency,   reorganization  or  other  similar  law  or  to  the
commencement  of any  bankruptcy  or insolvency  case or proceeding  against the
Company,  or the  filing by the  Company  or any of its  Subsidiaries  that is a
Significant Subsidiary or any group of two or more Subsidiaries that, taken as a
whole,  would  constitute a Significant  Subsidiary,  of a petition or answer or
consent seeking  reorganization  or relief under any applicable U.S.  federal or
state law, or the  consent by the  Company to the filing of such  petition or to
the  appointment  of  or  the  taking  possession  by  a  custodian,   receiver,
liquidator,  assignee,  trustee,  sequestrator or other similar  official of the
Company or of any substantial part of its property, or the making by the Company
or any of its Subsidiaries that is a Significant  Subsidiary or any group of two
or more  Subsidiaries  that,  taken as a whole,  would  constitute a Significant

                                       34
<PAGE>

Subsidiary,  of an assignment for the benefit of creditors,  or the admission by
the Company or any of its Subsidiaries  that is a Significant  Subsidiary or any
group of two or more  Subsidiaries  that,  taken as a whole,  would constitute a
Significant  Subsidiary,  in writing of its inability to pay its debts generally
as they become due, or the taking of  corporate  action by the Company or any of
its  Subsidiaries  that is a Significant  Subsidiary or any group of two or more
Subsidiaries that, taken as a whole, would constitute a Significant  Subsidiary,
expressly in furtherance of any such action.

                  A  Default  under  clause  (c) or (d) above is not an Event of
Default until the Trustee  notifies the Company,  or the Holders of at least 25%
of the principal amount of the Outstanding Securities notify the Company and the
Trustee,  of the Default and the Company  does not cure such  Default  (and such
Default  is not  waived)  within the time  specified  in clause (c) or (d) above
after actual  receipt of such notice.  Any such notice must specify the Default,
demand that it be  remedied  and state that such notice is a "Notice of Default"
under this Indenture.

                  The  Trustee  shall,  within  90 days of the  occurrence  of a
Default,  give to the Holders of the Securities  notice of all uncured  Defaults
known to it and  written  notice of any event which with the giving of notice or
the lapse of time,  or both,  would  become an Event of Default,  its status and
what  action the Company is taking or  proposes  to take with  respect  thereto;
provided,  however, the Trustee shall be protected in withholding such notice if
it, in good faith, determines that the withholding of such notice is in the best
interest of such Holders,  except in the case of a Default in the payment of the
Principal of or Interest on any of the Securities when due.

                  SECTION  4.2.   ACCELERATION   OF  MATURITY;   RESCISSION  AND
ANNULMENT.

                  If an Event of Default with respect to Outstanding  Securities
(other than an Event of Default  specified in Section  4.1(e) or 4.1(f)  hereof)
occurs  and is  continuing,  the  Trustee  or the  Holders  of at  least  25% in
aggregate principal amount of the Securities, at the time outstanding by written
notice to the  Company  (or to the  Company  and the  Trustee  in the case of an
action by  Holders of  Securities),  may  declare  due and  payable  100% of the
principal  amount plus any  accrued and unpaid  Interest to the date of payment.
Upon a declaration of acceleration, such Principal amount and accrued and unpaid
Interest to the date of payment shall be immediately due and payable.

                  If an Event of Default  specified in Section 4.1(e) and 4.1(f)
occurs,  the Principal and accrued and unpaid  Interest on the Securities  shall
become and be immediately due and payable,  without any declaration or other act
on the part of the Trustee or any Holder.

                  The Holders  either (a)  through  notice to the Trustee of not
less than a  majority  of the  aggregate  principal  amount  of the  Outstanding
Securities,  or (b) by the adoption of a resolution,  at a meeting of Holders of
the  Outstanding  Securities at which a quorum is present,  by the Holders of at
least a majority of the aggregate principal amount of the Outstanding Securities
represented  at such  meeting,  may,  on  behalf  of the  Holders  of all of the
Securities,  rescind and annul an acceleration and its  consequences  (including
waiver of any defaults) if:

                                       35
<PAGE>

                  (1) all existing Events of Default,  other than the nonpayment
of a Defaulted Payment on the Securities which have become due solely because of
the acceleration, have been remedied, cured or waived, and

                  (2) the  rescission  would not  conflict  with any judgment or
decree of a court of competent jurisdiction;

provided,  however,  that in the event such declaration of acceleration has been
made based on the existence of an Event of Default under Section  4.1(d) and the
default with respect to indebtedness  for money borrowed which gave rise to such
Event of Default has been remedied,  cured or waived,  then, without any further
action by the  Holders,  such  declaration  of  acceleration  shall be rescinded
automatically  and the  consequences of such declaration  shall be annulled.  No
such rescission or annulment  shall affect any subsequent  Default or impair any
right consequent thereon.

                  SECTION 4.3. OTHER REMEDIES.

                  If an Event of Default with respect to Outstanding  Securities
occurs  and is  continuing,  the  Trustee  may pursue  any  available  remedy by
proceeding  at law or in equity to collect the payment of the  principal  amount
plus Interest and Aditional  Amounts,  if any, due and payable on the Securities
or to enforce the performance of any provision of the Securities.

                  The  Trustee  may  maintain  a  proceeding  in  which  it  may
prosecute  and enforce all rights of action and claims  under this  Indenture or
the  Securities,  even if it does not possess any of the  Securities or does not
produce any of them in the proceeding.

                  SECTION 4.4. WAIVER OF PAST DEFAULTS.

                  The  Holders,  either (a) through  the written  consent of not
less than a  majority  of the  aggregate  principal  amount  of the  Outstanding
Securities,  or (b) by the adoption of a resolution,  at a meeting of Holders of
the  Outstanding  Securities at which a quorum is present,  by the Holders of at
least a majority of the aggregate principal amount of the Outstanding Securities
represented  at such  meeting,  may,  on  behalf  of the  Holders  of all of the
Securities,  waive an existing Default or Event of Default,  except a Default or
Event of Default:

                  (1) set forth in Sections 4.1(a) and (b),  provided,  however,
that  subject to  Section  4.7,  the  Holders  of a  majority  of the  aggregate
principal  amount of the Outstanding  Securities may rescind an acceleration and
its consequences,  including any related payment Default that resulted from such
acceleration); or

                                       36
<PAGE>

                  (2) in respect of a covenant or provision hereof which,  under
Section  7.2 hereof,  cannot be  modified or amended  without the consent of the
Holders of each Security affected.

                  Upon any such waiver,  such Default shall cease to exist,  and
any Event of Default arising  therefrom shall be deemed to have been cured,  for
every purpose of this Indenture;  provided,  however,  that no such waiver shall
extend  to any  subsequent  or other  Default  or impair  any  right  consequent
thereon.

                  SECTION 4.5. CONTROL BY MAJORITY.

                  The Holders of a majority of the aggregate principal amount of
the  Outstanding  Securities  (or such  lesser  amount as shall  have acted at a
meeting  pursuant to the provisions of this  Indenture)  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. However, the Trustee may refuse to follow any direction that:

                  (1) conflicts with any law or with this Indenture;

                  (2) the Trustee  determines  may be unduly  prejudicial to the
rights of the Holders not joining therein; or

                  (3) may expose the Trustee to personal liability.

                  The Trustee  may take any other  action  deemed  proper by the
Trustee which is not inconsistent with such direction.

                  SECTION 4.6. LIMITATION ON SUIT.

                  No Holder of any  Security  shall have any right to pursue any
remedy with respect to this Indenture or the Securities (including,  instituting
any proceeding, judicial or otherwise, with respect to this Indenture or for the
appointment of a receiver or trustee) unless:

                  (1) such Holder has  previously  given  written  notice to the
Trustee of an Event of Default that is continuing;

                  (2) the Holders of at least 25% of the principal amount of the
Outstanding  Securities shall have made written request to the Trustee to pursue
the remedy;

                  (3)  such  Holder  or  Holders  have  offered  to the  Trustee
indemnity  satisfactory  to it  against  any  costs,  expenses  and  liabilities
incurred in complying with such request;

                                       37
<PAGE>

                  (4) the  Trustee  has failed to comply with the request for 60
days after its receipt of such notice, request and offer of indemnity; and

                  (5) during such 60-day period, no direction  inconsistent with
such written  request has been given to the Trustee by the Holders of a majority
of the aggregate principal amount of the Outstanding  Securities (or such amount
as shall have acted at a meeting pursuant to the provisions of this Indenture);

provided, however, that no one or more of such Holders may use this Indenture to
prejudice the rights of another Holder or to obtain  preference or priority over
another Holder.

                  SECTION  4.7.  UNCONDITIONAL  RIGHTS  OF  HOLDERS  TO  RECEIVE
PAYMENT AND TO CONVERT.

                  Notwithstanding  any other  provision in this  Indenture,  the
Holder  of  any   Security   shall  have  the  right,   which  is  absolute  and
unconditional, to receive payment of the Principal on and Interest in respect of
the Securities  held by such Holder,  on or after the  respective due dates,  to
convert the  Securities in  accordance  with Article 12 or to bring suit for the
enforcement of any such payment on or after such  respective  dates or the right
to convert,  and such rights shall not be impaired or affected adversely without
the consent of such Holder.

                  SECTION  4.8.   COLLECTION  OF  INDEBTEDNESS   AND  SUITS  FOR
ENFORCEMENT BY THE TRUSTEE.

                  The Company covenants that if:

                  (1) a Default or Event of  Default  is made in the  payment of
Interest on any  Security  when such  Interest  becomes due and payable and such
Default or Event of Default continues for a period of 30 days; or

                  (2) a Default or Event of  Default  is made in the  payment of
the  Principal  on any  Security  when the same  becomes  due and payable at its
Stated  Maturity,  upon  redemption  or  exercise  of the  repurchase  right  or
otherwise,

                  then the Company will, upon demand of the Trustee,  pay to it,
for the benefit of the Holders of such Securities, the entire Principal then due
and payable (as expressed  therein or as a result of any  acceleration  effected
pursuant to Section 4.2 hereof) on such  Securities for any such amounts and, to
the extent legally  enforceable,  Interest on such Securities,  and, in addition
thereto,  such  further  amount  as shall be  sufficient  to cover the costs and
expenses  of  collection,  including  the  reasonable  compensation,   expenses,
disbursements and advances of the Trustee, its agents and counsel.

                                       38
<PAGE>

                  If the Company fails to pay such amounts  forthwith  upon such
demand,  the Trustee,  in its own name and as trustee of an express  trust,  may
institute  a  judicial  proceeding  for the  collection  of the  sums so due and
unpaid,  may  prosecute  such  proceeding  to judgment  or final  decree and may
enforce the same against the Company and collect the monies  adjudged or decreed
to be payable in the manner  provided by law out of the property of the Company,
wherever situated.

                  If an Event of Default occurs and is  continuing,  the Trustee
may in its  discretion  proceed to protect and enforce its rights and the rights
of the Holders of Securities by such  appropriate  judicial  proceedings  as the
Trustee  shall deem most  effectual  to protect  and  enforce  any such  rights,
whether  for the  specific  enforcement  of any  covenant or  agreement  in this
Indenture or in aid of the exercise of any power granted  herein,  or to enforce
any other proper remedy.

                  SECTION 4.9. TRUSTEE MAY FILE PROOFS OF CLAIM.

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

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

                  (2) to collect and receive any monies,  Common  Stock or other
property payable or deliverable on any such claim and to distribute the same,

and any custodian,  receiver,  assignee,  trustee,  liquidator,  sequestrator or
other similar official in any such judicial  proceedings is hereby authorized by
each Holder of Securities to make such payments to the Trustee and, in the event
that the Trustee shall  consent to the making of such  payments  directly to the
Holders  of  Securities,  to pay to the  Trustee  any  amount  due to it for the
reasonable  compensation,  expenses,  disbursements and advances of the Trustee,
its agents and counsel and any other amounts due the Trustee under Section 5.8.

                  Nothing  contained  herein  shall be deemed to  authorize  the
Trustee to authorize  or consent to or accept,  or adopt on behalf of any Holder
of  a  Security,  any  plan  of  reorganization,   arrangement,   adjustment  or
composition  affecting the  Securities or the rights of any Holder thereof or to

                                       39
<PAGE>

authorize  the  Trustee  to vote in  respect  of the  claim of any  Holder  of a
Security in any such proceeding.

                  SECTION 4.10. RESTORATION OF RIGHTS AND REMEDIES.

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

                  SECTION 4.11. RIGHTS AND REMEDIES CUMULATIVE.

                  Except as otherwise  provided with respect to the  replacement
or  payment  of  mutilated,  destroyed,  lost or stolen  Securities  in the last
paragraph of Section 2.7, no right or remedy conferred in this Indenture upon or
reserved  to the  Trustee or to the  Holders of  Securities  is  intended  to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent  permitted by law, be cumulative and in addition to every other right and
remedy given  hereunder or hereafter  existing at law or in equity or otherwise.
The  assertion or  employment  of any right or remedy  hereunder,  or otherwise,
shall  not  prevent  the  concurrent   assertion  or  employment  of  any  other
appropriate right or remedy.

                  SECTION 4.12. DELAY OR OMISSION NOT WAIVER.

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

                  SECTION 4.13. PRIORITIES.

                  Any money  collected  by the Trustee  pursuant to this Article
shall be  applied  in the  following  order,  at the date or dates  fixed by the
Trustee:

                  FIRST:  to the payment of all amounts due to the Trustee under
Section 5.8;

                  SECOND:   to  Holders  for  amounts  due  and  unpaid  on  the
Securities  for the  Principal  or  Interest  as  applicable,  ratably,  without
preference or priority of any kind, according to such amounts due and payable on
the Securities; and

                                       40
<PAGE>

                  THIRD: any remaining amounts shall be repaid to the Company.

                  The Trustee may fix a special record date and payment date for
any payment to Holders  pursuant to this Section  4.13.  At least 15 days before
such special  record date, the Trustee shall mail to each Holder and the Company
a notice that states the special record date, the payment date and the amount to
be paid.

                  SECTION 4.14. UNDERTAKING FOR COSTS.

                  All parties to this  Indenture  agree,  and each Holder of any
Security by such  Holder's  acceptance  thereof  shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken,  suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an  undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs,  including  reasonable
attorneys' fees,  against any party litigant in such suit,  having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit instituted by the
Trustee,  to any suit instituted by any Holder, or group of Holders,  holding in
the aggregate more than 10% of the aggregate principal amount of the Outstanding
Securitiesf,  or to any suit  instituted  by any Holder of any  Security for the
enforcement of (i) payments  pursuant to Section 4.7, (ii) repurchase  rights in
accordance with Article 11 or (iii) conversion rights in accordance with Article
12.  This  Section  4.14 shall be in lieu of Section  315(e) of the TIA and such
Section 315(e) is hereby expressly excluded from this Indenture, as permitted by
the TIA.

                  SECTION 4.15. WAIVER OF STAY OR EXTENSION LAWS.

                  The Company  covenants  (to the extent that it may lawfully do
so)  that it will  not at any time  insist  upon,  or  plead,  or in any  manner
whatsoever  claim to take the benefit or advantage of, any stay or extension law
wherever  enacted,  now or at any time hereafter in force,  which may affect the
covenants or the performance of this  Indenture;  and the Company (to the extent
that it may lawfully do so) hereby  expressly waives all benefit or advantage of
any such  law and  covenants  that it will  not  hinder,  delay  or  impede  the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.

                                   ARTICLE 5

                                   THE TRUSTEE

                  SECTION 5.1. CERTAIN DUTIES AND RESPONSIBILITIES.

                  (a) Except during the continuance of an Event of Default,

                                       41
<PAGE>

                  (1) The  Trustee  undertakes  to perform  such duties and only
such duties as are  specifically  set forth in this Indenture or the TIA, and no
implied  covenants or obligations  shall be read into this Indenture against the
Trustee; and

                  (2) In the  absence of bad faith on its part,  the Trustee may
conclusively  rely, as to the truth of the statements and the correctness of the
opinions  expressed  therein,  upon  certificates  or opinions  furnished to the
Trustee and conforming to the requirements of this Indenture; provided, however,
that in the case of any such  certificates  or opinions  which by any  provision
hereof are  specifically  required to be furnished  to the Trustee,  the Trustee
shall examine the certificates or opinions to determine whether or not, on their
face,  they  conform  to the  requirements  to  this  Indenture  (but  need  not
investigate or confirm the accuracy of any facts stated therein).

                  (b)  In  case  an  Event  of  Default   actually  known  to  a
Responsible  Officer of the Trustee has occurred and is continuing,  the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same  degree of care and skill in their  exercise,  as a prudent  person
would  exercise or use under the  circumstances  in the conduct of such person's
own affairs.

                  (c) 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:

                  (1) This  paragraph  (c) shall not be  construed  to limit the
effect of paragraph (a) of this Section 5.1;

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

                  (3) 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 a direction
received by it of the Holders of a majority of the aggregate principal amount of
the  Outstanding  Securities  (or such  lesser  amount as shall  have acted at a
meeting  pursuant to the  provisions  of this  Indenture)  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  herein  expressly  so  provided,  every
provision of this  Indenture  relating to the conduct or affecting the liability
of or affording  protection to the Trustee shall be subject to the provisions of
this Section 5.1.

                  (e) No provision of this  Indenture  shall require the Trustee
to  expend  or risk its own  funds  or  otherwise  incur  any  liability  in the
performance  of any of its duties  hereunder,  or in the  exercise of any of its
rights or powers.  The Trustee  may refuse to perform  any duty or exercise  any
right or power  unless  it  receives  indemnity  reasonably  satisfactory  to it

                                       42
<PAGE>

against any loss,  liability,  cost or expense  (including,  without limitation,
reasonable fees and expenses of counsel).

                  (f) The Trustee  shall not be obligated to pay interest on any
money or other assets received by it unless otherwise agreed in writing with the
Company.  Assets held in trust by the Trustee need not be segregated  from other
funds except to the extent required by law.

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

                  (h) The  Trustee  shall not be deemed to have notice or actual
knowledge of any Event of Default  unless a  Responsible  Officer of the Trustee
has actual  knowledge  thereof or unless written notice of any event which is in
fact a Default is received by the Trustee  pursuant to Section 13.2 hereof,  and
such notice references the Securities and this Indenture.

                  (i)  The  rights,  privileges,   protections,  immunities  and
benefits given to the Trustee  hereunder,  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  Paying  Agent,
authenticating agent, Conversion Agent or Registrar acting hereunder.

                  (j) 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'  Certificate,  including any person specified as so authorized
in any such certificate previously delivered and not superseded.

                  SECTION 5.2. CERTAIN RIGHTS OF TRUSTEE.

                  Subject to the provisions of Section 5.1 hereof and subject to
Section 315(a) through (d) of the TIA:

                  (1) The Trustee may conclusively rely on any document believed
by it to be genuine and to have been signed or presented  by the proper  person.
The Trustee need not investigate any fact or matter stated in the document.

                                       43
<PAGE>

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

                  (3) The Trustee may act through attorneys and agents and shall
not be  responsible  for the  misconduct  or negligence of any attorney or agent
appointed with due care.

                  (4) The  Trustee  shall not be liable for any action  taken or
omitted to be taken by it in good faith which it believed  to be  authorized  or
within the discretion or rights or powers  conferred upon it by this  Indenture,
unless the Trustee's conduct constitutes negligence.

                  (5) The Trustee may consult with counsel of its  selection and
the advice of such counsel as to matters of law or legal interpretation shall be
full and complete  authorization  and protection in respect of any action taken,
omitted or suffered by it  hereunder  in good faith and in  accordance  with the
advice or opinion of such counsel.

                  (6) Unless otherwise  specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.

                  (7)  The  permissive  rights  of  the  Trustee  to  do  things
enumerated  in  this  Indenture  shall  not be  construed  as a duty  unless  so
specified herein.

                  SECTION 5.3. INDIVIDUAL RIGHTS OF TRUSTEE.

                  The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities  and may  otherwise  deal with the Company or
any  Affiliate  of the Company with the same rights it would have if it were not
Trustee.  However,  in the  event  that the  Trustee  acquires  any  conflicting
interest  (as such term is  defined  in  Section  310(b)  of the  TIA),  it must
eliminate such conflict  within 90 days,  apply to the Commission for permission
to continue as trustee (to the extent permitted under Section 310(b) of the TIA)
or resign. Any agent may do the same with like rights and duties. The Trustee is
also subject to Sections 5.11 and 5.12 hereof.

                  SECTION 5.4. MONEY HELD IN TRUST.

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

                                       44
<PAGE>

                  SECTION 5.5. TRUSTEE'S DISCLAIMER.

                  The recitals  contained  herein and in the Securities  (except
for those in the certificate of authentication) shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity, sufficiency or priority
of this Indenture or of the Securities. The Trustee shall not be accountable for
the use or application by the Company of Securities or the proceeds thereof.

                  SECTION 5.6. NOTICE OF DEFAULTS.

                  Within 90 days after the occurrence of any Default or Event of
Default  hereunder  of which a  Responsible  Officer of the Trustee has received
written notice, the Trustee shall give notice to Holders, unless such Default or
Event of  Default  shall have been cured or  waived;  provided,  however,  that,
except in the case of a Default or Event of Default described in Sections 4.1(a)
or (b), the Trustee shall be protected in withholding such notice if and so long
as  Responsible  Officers  of the  Trustee  in good  faith  determine  that  the
withholding  of such  notice  is in the  interest  of the  Holders.  The  second
sentence of this  Section 5.6 shall be in lieu of the proviso to Section  315(b)
of the TIA and such proviso is hereby expressly excluded from this Indenture, as
permitted  by the TIA.  The Trustee  shall not be deemed to have  knowledge of a
Default unless a Responsible  Officer of the Trustee has received written notice
of such Default.

                  SECTION 5.7. REPORTS BY TRUSTEE TO HOLDERS.

                  The Trustee shall transmit to Holders such reports  concerning
the Trustee and its actions  under this  Indenture as may be required by Section
313 of the TIA at the times and in the manner provided by the TIA.

                  A copy of each  report at the time of its  mailing  to Holders
shall be filed with the SEC, if required,  and each stock  exchange,  if any, on
which the Securities and the Common Stock are listed. The Company shall promptly
notify the Trustee when the  Securities or the Common Stock become listed on any
stock exchange.

                  SECTION 5.8. COMPENSATION AND INDEMNIFICATION.

                  The Company  covenants  and agrees to pay to the Trustee  from
time to time, and the Trustee shall be entitled to, such  compensation as agreed
to in writing by the Trustee and the Company  (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
and the Company  covenants  and agrees to pay or reimburse  the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made
by or on behalf of it in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all agents and other persons not regularly in its employ), except
to the  extent  that any such  expense,  disbursement  or  advance is due to its
negligence or bad faith. When the Trustee incurs expenses or renders services in
connection  with an Event of Default  specified  in Section  4.1,  the  expenses
(including  the  reasonable  charges  and  expenses  of  its  counsel)  and  the

                                       45
<PAGE>

compensation   for  the  services  are  intended  to   constitute   expenses  of
administration under any bankruptcy law. The Company also covenants to indemnify
the Trustee and its officers,  directors,  employees and agents for, and to hold
such Persons harmless against,  any loss, liability or expense incurred by them,
arising out of or in connection  with the acceptance or  administration  of this
Indenture or the trusts hereunder or the performance of their duties  hereunder,
including   the  costs  and   expenses  of  defending   themselves   against  or
investigating any claim of liability in the premises,  except to the extent that
any such  loss,  liability  or  expense  was due to the  negligence  or  willful
misconduct of such Persons.  The  obligations  of the Company under this Section
5.8 to  compensate  and  indemnify  the  Trustee  and its  officers,  directors,
employees  and  agents  and to pay  or  reimburse  such  Persons  for  expenses,
disbursements and advances shall constitute  additional  indebtedness  hereunder
and shall  survive the  satisfaction  and  discharge  of this  Indenture  or the
earlier  resignation  or removal of the Trustee.  Such  additional  indebtedness
shall be a lien prior to that of the Securities upon all property and funds held
or collected by the Trustee as such,  except funds held in trust for the benefit
of  the  Holders  of  particular  Securities,  and  the  Securities  are  hereby
subordinated  to such senior  claim.  "Trustee" for purposes of this Section 5.8
shall  include any  predecessor  Trustee,  in its  capacity as Trustee,  but the
negligence   or  willful   misconduct  of  any  Trustee  shall  not  affect  the
indemnification of any other Trustee.

                  SECTION 5.9. REPLACEMENT OF TRUSTEE.

                  A resignation  or removal of the Trustee and  appointment of a
successor  Trustee  shall become  effective  only upon the  successor  Trustee's
acceptance of appointment as provided in this Section 5.9.

                  The Trustee may resign and be discharged from the trust hereby
created by so  notifying  the  Company  in  writing.  The  Holders of at least a
majority  of the  principal  amount of  Outstanding  Securities  may  remove the
Trustee by so notifying the Trustee and the Company in writing. The Company must
remove the Trustee if:

                  (i) the Trustee  fails to comply with  Section  5.11 hereof or
Section 310 of the TIA;

                  (ii) the Trustee becomes incapable of acting;

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

                  (iv) a Custodian or public officer takes charge of the Trustee
or its property.

                  If the Trustee resigns or is removed or if a vacancy exists in
the office of the Trustee for any reason,  the Company shall promptly  appoint a
successor  Trustee.  The  Trustee  shall be  entitled to payment of its fees and
reimbursement of its expenses while acting as Trustee. Within one year after the
successor  Trustee  takes  office,  the  Holders of at least a  majority  of the

                                       46
<PAGE>

aggregate  principal  amount of  Outstanding  Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.

                  Any Holder may petition  any court of  competent  jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee if the
Trustee fails to comply with Section 5.11.

                  If an instrument  of  acceptance by a successor  Trustee shall
not have been  delivered to the Trustee  within 30 days after the giving of such
notice  of  resignation  or  removal,  the  resigning  or  removed  Trustee,  as
applicable,  may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee.

                  A successor Trustee shall deliver a written  acceptance of its
appointment  to  the  retiring  Trustee  and  to  the  Company.   Thereupon  the
resignation or removal of the retiring Trustee shall become  effective,  and the
successor  Trustee  shall have all the rights,  powers and duties of the Trustee
under  this  Indenture.  The  Company  shall  issue a  notice  of the  successor
Trustee's  succession to the Holders.  Upon payment of its charges, the retiring
Trustee  shall  promptly  transfer  all  property  held by it as  Trustee to the
successor  Trustee,  subject  nevertheless to its lien, if any,  provided for in
Section 5.8 hereof.  Notwithstanding replacement of the Trustee pursuant to this
Section 5.9 hereof,  the  Company's  obligations  under Section 5.8 hereof shall
continue  for the benefit of the  retiring  Trustee  with  respect to  expenses,
losses and liabilities incurred by it prior to such replacement.

                  SECTION 5.10. SUCCESSOR TRUSTEE BY MERGER, ETC.

                  Subject to Section  5.11 hereof,  if the Trustee  consolidates
with,  merges or converts  into,  or transfers all or  substantially  all of its
corporate   trust   business  to,  another   corporation  or  national   banking
association, the successor entity without any further act shall be the successor
Trustee as to the Securities.

                  SECTION 5.11. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

                  The Trustee  shall at all times  satisfy the  requirements  of
Section  310(a)(1),  (2) and (5) of the TIA. The Trustee shall at all times have
(or, in the case of a corporation included in a bank holding company system, the
related bank holding  company shall at all times have),  a combined  capital and
surplus of at least $50 million as set forth in its (or its related bank holding
company's)  most recent  published  annual report of  condition.  The Trustee is
subject to Section 310(b) of the TIA.

                  SECTION 5.12. COLLECTION OF CLAIMS AGAINST THE COMPANY.

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

                                       47
<PAGE>

                                   ARTICLE 6

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

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

                  The Company shall not consolidate with or merge into any other
Person or convey,  transfer or lease its properties and assets  substantially as
an  entirety  to any  Person,  and the  Company  shall not  permit any Person to
consolidate  with or merge into the  Company or  convey,  transfer  or lease its
properties and assets substantially as an entirety to the Company, unless:

                  (1) in the event that the Company  shall  consolidate  with or
merge into another Person or convey, transfer or lease its properties and assets
substantially  as  an  entirety  to  any  Person,  the  Person  formed  by  such
consolidation  or into which the Company is merged or the Person which  acquires
by conveyance or transfer,  or which leases,  the  properties  and assets of the
Company  substantially  as an entirety  shall be a  corporation,  organized  and
validly  existing  under the laws of the  United  States of  America,  any State
thereof or the District of Columbia;

                  (2) in the event that the Company  shall  consolidate  with or
merge into another Person or convey, transfer or lease its properties and assets
substantially  as an  entirety  to any  Person,  and the entity  surviving  such
transaction  or  transferee  entity is not the Company,  then such  surviving or
transferee entity shall expressly assume, by an indenture  supplemental  hereto,
executed and delivered to the Trustee,  in form  reasonably  satisfactory to the
Trustee, the due and punctual payment of all and any amounts when due on all the
Securities  and the  performance  of every  covenant of this  Indenture  and the
Securities on the part of the Company to be performed or observed and shall have
provided for the conversion rights provided in Article 12;

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

                  (4)  the  Company  shall  have  delivered  to the  Trustee  an
Officers'  Certificate  and an  Opinion  of  Counsel,  each  stating  that  such
consolidation,  merger,  conveyance,  transfer or lease and,  if a  supplemental
indenture is required in connection  with such  transaction,  such  supplemental
indenture,  comply with this Article and that all  conditions  precedent  herein
provided for relating to such transaction have been complied with.

                  SECTION 6.2. SUCCESSOR CORPORATION SUBSTITUTED.

                  Upon any  consolidation  or merger by the Company with or into
any other corporation or any conveyance, transfer or lease of the properties and
assets of the Company  substantially as an entirety to any Person, in accordance
with Section 6.1 hereof, the successor  corporation formed by such consolidation

                                       48
<PAGE>

or into which the  Company is merged or to which such  conveyance,  transfer  or
lease is made shall succeed to, and be  substituted  for, and may exercise every
right and power of, the Company under this  Indenture with the same effect as if
such successor corporation had been named as the Company herein. In the event of
any such conveyance or transfer,  the Company (which term shall for this purpose
mean the Person named as the "Company" in the first  paragraph of this Indenture
or any  successor  Person  which  shall  theretofore  become  such in the manner
described  in  Section  6.1  hereof),  except in the case of a lease to  another
Person,  the  predecessor  corporation  shall be relieved of all obligations and
covenants  under this  Indenture  and the  Securities  and may be dissolved  and
liquidated.

                                   ARTICLE 7

                       AMENDMENTS, SUPPLEMENTS AND WAIVERS

                  SECTION 7.1. WITHOUT CONSENT OF HOLDERS OF SECURITIES.

                  Without the consent of any Holders of Securities, the Company,
when  authorized by a Board  Resolution,  and the Trustee,  at any time and from
time to time, may amend this Indenture and the Securities to:

                  (a) add to the covenants of the Company for the benefit of the
Holders of Securities;

                  (b)  surrender  any right or power herein  conferred  upon the
Company;

                  (c) provide for conversion  rights of Holders of Securities if
any   reclassification   or  change  of  the  Company's   Common  Stock  or  any
consolidation,  merger  or sale  of all or  substantially  all of the  Company's
assets occurs;

                  (d) provide for the assumption of the Company's obligations to
the Holders of  Securities in the case of a merger,  consolidation,  conveyance,
transfer or lease pursuant to Article 6 hereof;

                  (e) reduce the Conversion Price; provided,  however, that such
reduction in the Conversion Price shall not adversely affect the interest of the
Holders of Securities  (after taking into account tax and other  consequences of
such reduction);

                  (f) comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA;

                  (g) make any changes or modifications  necessary in connection
with the registration of the Securities under the Securities Act as contemplated
in the Registration Rights Agreement,  provided that such change or modification
does not, in the good faith  opinion of the Board of Directors  and the Trustee,
adversely affect the interest of the Holders in any material respect;

                                       49
<PAGE>

                  (h) cure any ambiguity, to correct or supplement any provision
herein which may be  inconsistent  with any other  provision  herein or which is
otherwise defective,  or to make any other provisions with respect to matters or
questions  arising under this Indenture  which the Company may deem necessary or
desirable  and  which  shall not be  inconsistent  with the  provisions  of this
Indenture;  provided, however, that such action pursuant to this clause (h) does
not,  in the good faith  opinion of the Board of  Directors  of the  Company (as
evidenced by a Board Resolution),  adversely affect the interests of the Holders
of Securities in any material respect;

                  (i) add any guarantees with respect to the Securities; and

                  (j) add or modify any other provisions  herein with respect to
matters or  questions  arising  hereunder  which the Company and the Trustee may
deem necessary or desirable and which will not adversely  affect in any material
respects the interests of the Holders of Securities.

                  SECTION 7.2. WITH CONSENT OF HOLDERS OF SECURITIES.

                  Except as provided  below in this Section 7.2, this  Indenture
or the Securities may be amended, modified or supplemented, and noncompliance in
any  particular  instance with any provision of this Indenture or the Securities
may be waived,  in each case (i) with the  written  consent of the Holders of at
least a majority of the aggregate principal amount of the Outstanding Securities
or  (ii) by the  adoption  of a  resolution,  at a  meeting  of  Holders  of the
Outstanding  Securities  at which a  quorum  is  present,  by the  Holders  of a
majority  of  the  aggregate  principal  amount  of the  Outstanding  Securities
represented and voting at such meeting pursuant to Section 8.4.

                  Without the written  consent or the  affirmative  vote of each
Holder of Securities affected thereby, an amendment or waiver under this Section
7.2 may not:

                  (a) change the Stated Maturity of the principal  amount of, or
any installment of Interest on, any Security;

                  (b)  reduce  the  Principal,  Interest,  Redemption  Price  or
Repurchase Price payable on any Security;

                  (c) change the  currency of any amount owed or owing under the
Security or any interest thereon from U.S. Dollars;

                  (d)  alter  or  otherwise  modify  the  Interest  Rate  on any
Security,  or the manner of calculation  thereof,  or extend time for payment of
any Interest due and payable to the Holders of the Securities;

                  (e) impair the right of any Holder to  institute  suit for the
enforcement of any payment in or with respect to any Security;

                                       50
<PAGE>

                  (f) modify the obligation of the Company to maintain an office
or agency in The City of New York pursuant to Section 9.2;

                  (g) except as otherwise permitted herein, adversely affect the
purchase right of the Holders of the Securities as provided in Article 11 or the
right of the Holders of the  Securities  to convert any  Security as provided in
Article 12;

                  (h) modify the provisions of Article 10 in a manner adverse to
the Holders of the Securities; or

                  (i) modify any of the  provisions of this  Section,  or reduce
the  percentage  of voting  interests  required  to waive a  default,  except to
provide that certain other  provisions of this  Indenture  cannot be modified or
waived without the consent of the Holder of each Security affected thereby.

                  It shall not be necessary for any Act of Holders of Securities
under  this  Section  7.2  to  approve  the  particular  form  of  any  proposed
supplemental indenture, but it shall be sufficient if such Act shall approve the
substance thereof.

                  SECTION 7.3. COMPLIANCE WITH TRUST INDENTURE ACT.

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

                  SECTION 7.4.  REVOCATION OF CONSENTS AND EFFECT OF CONSENTS OR
VOTES.

                  Until an amendment,  supplement or waiver becomes effective, a
written  consent  to it by a Holder is a  continuing  consent  by the Holder and
every  subsequent  Holder of a Security or portion of a Security that  evidences
the same debt as the  consenting  Holder's  Security,  even if  notation  of the
consent is not made on any  Security;  provided,  however,  that unless a record
date shall  have been  established,  any such  Holder or  subsequent  Holder may
revoke the  consent as to its  Security  or portion of a Security if the Trustee
receives written notice of revocation before the date the amendment,  supplement
or waiver becomes effective.

                  An  amendment,  supplement  or  waiver  becomes  effective  on
receipt by the  Trustee of written  consents  from or  affirmative  votes by, as
applicable,  the Holders of the requisite  percentage of the aggregate principal
amount of the Outstanding Securities,  and thereafter shall bind every Holder of
Securities;  provided,  however, if the amendment,  supplement or waiver makes a
change  described  in any of the clauses (a)  through  (i) of Section  7.2,  the
amendment,  supplement or waiver shall bind only each Holder of a Security which
has consented to it or voted for it, as applicable,  and every subsequent Holder
of a Security or portion of a Security that evidences the same  indebtedness  as
the Security of the consenting or affirmatively voting Holder, as applicable.

                                       51
<PAGE>

                  SECTION 7.5. NOTATION ON OR EXCHANGE OF SECURITIES.

                  If an amendment,  supplement or waiver  changes the terms of a
Security:

                  (a) the  Trustee  may  require  the  Holder of a  Security  to
deliver such  Securities  to the Trustee,  the Trustee may place an  appropriate
notation on the Security about the changed terms and return it to the Holder and
the  Trustee  may  place an  appropriate  notation  on any  Security  thereafter
authenticated; or

                  (b) if the Company or the Trustee so  determines,  the Company
in exchange for the Security  shall issue and the Trustee shall  authenticate  a
new Security that reflects the changed terms.

                  Failure  to  make  the  appropriate  notation  or  issue a new
Security shall not affect the validity and effect of such amendment,  supplement
or waiver.

                  SECTION 7.6. TRUSTEE TO SIGN AMENDMENT, ETC.

                  The Trustee  shall sign any amendment  authorized  pursuant to
this Article 7 if the amendment  does not adversely  affect the rights,  duties,
liabilities or immunities of the Trustee. If the amendment does adversely affect
the rights,  duties,  liabilities or immunities of the Trustee,  the Trustee may
but need not sign it. In signing or  refusing to sign any  amendment  hereunder,
the Trustee shall be entitled to receive and shall be fully protected in relying
upon an Officers'  Certificate and an Opinion of Counsel as conclusive  evidence
that such  amendment is authorized  or permitted by this  Indenture and that all
conditions precedent relating thereto have been complied with.

                                   ARTICLE 8

                        MEETING OF HOLDERS OF SECURITIES

                  SECTION 8.1. PURPOSES FOR WHICH MEETINGS MAY BE CALLED.

                  A meeting of Holders of  Securities  may be called at any time
and  from  time to time  pursuant  to this  Article  to  make,  give or take any
request,  demand,  authorization,  direction,  notice,  consent, waiver or other
action  provided  by this  Indenture  to be made,  given or taken by  Holders of
Securities.

                  SECTION 8.2. CALL NOTICE AND PLACE OF MEETINGS.

                  (a) The  Trustee  may at any time call a meeting of Holders of
Securities for any purpose specified in Section 8.1, to be held at such time and
at such  place in The City of New York.  Notice of every  meeting  of Holders of
Securities,  setting forth the time and the place of such meeting and in general
terms the action  proposed to be taken at such meeting,  shall be given,  in the
manner  provided in Section 13.2,  not less than 21 nor more than 180 days prior
to the date fixed for the meeting.

                                       52
<PAGE>

                  (b) In case  at any  time  the  Company,  pursuant  to a Board
Resolution,  or the Holders of at least 10% of the aggregate principal amount of
the Outstanding Securities shall have requested the Trustee to call a meeting of
the Holders of Securities  for any purpose  specified in Section 8.1 hereof,  by
written  request  setting forth in reasonable  detail the action  proposed to be
taken at the meeting,  and the Trustee shall not have made the first publication
of the notice of such  meeting  within 21 days after  receipt of such request or
shall not thereafter proceed to cause the meeting to be held as provided herein,
then the  Company or the  Holders of  Securities  in the  amount  specified,  as
applicable,  may  determine  the time and the  place in The City of New York for
such  meeting  and may call such  meeting  for such  purposes  by giving  notice
thereof as provided in paragraph (a) of this Section 8.2.

                  SECTION 8.3. PERSONS ENTITLED TO VOTE AT MEETINGS.

                  To  be   entitled  to  vote  at  any  meeting  of  Holders  of
Securities,  a  Person  shall  be  (a) a  Holder  of  one  or  more  Outstanding
Securities, or (b) a Person appointed by an instrument in writing as proxy for a
Holder  or  Holders  of one or more  Outstanding  Securities  by such  Holder or
Holders. The only Persons who shall be entitled to be present or to speak at any
meeting of Holders  shall be the Persons  entitled  to vote at such  meeting and
their  counsel,  any  representatives  of the Trustee and its  counsel,  and any
representatives of the Company and its counsel.

                  SECTION 8.4. QUORUM; ACTION.

                  The  Persons  entitled  to vote a  majority  of the  aggregate
principal amount of the Outstanding Securities shall constitute a quorum. In the
absence  of a  quorum  within  30  minutes  of the time  appointed  for any such
meeting, the meeting shall, if convened at the request of Holders of Securities,
be  dissolved.  In any other case,  the meeting may be adjourned for a period of
not less than 10 days as  determined by the chairman of the meeting prior to the
adjournment  of such meeting.  In the absence of a quorum at any such  adjourned
meeting,  such  adjourned  meeting may be further  adjourned for a period of not
less than 10 days as  determined  by the  chairman of the  meeting  prior to the
adjournment  of  such  adjourned  meeting.  Notice  of  the  reconvening  of any
adjourned meeting shall be given as provided in Section 8.2(a), except that such
notice  need be given only once and not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned  meeting  shall  state  expressly  the  percentage  of  the  aggregate
principal amount of the Outstanding Securities which shall constitute a quorum.

                  Subject to the  foregoing,  at the  reconvening of any meeting
adjourned  for a lack of a  quorum,  the  Persons  entitled  to vote  25% of the
aggregate  principal  amount of the Outstanding  Securities  shall  constitute a
quorum for the  taking of any  action  set forth in the  notice of the  original
meeting.

                  At a meeting or an adjourned  meeting duly  reconvened  and at
which a quorum is present as aforesaid,  any resolution and all matters  (except
as limited by Section 7.2) shall be effectively  passed and decided if passed or

                                       53
<PAGE>

decided  by the  Persons  entitled  to vote  not  less  than a  majority  of the
aggregate principal amount of Outstanding  Securities  represented and voting at
such meeting.

                  Any  resolution  passed or  decisions  taken at any meeting of
Holders of Securities duly held in accordance with this Section shall be binding
on all the Holders of  Securities,  whether or not present or represented at the
meeting.

                  SECTION  8.5.  DETERMINATION  OF VOTING  RIGHTS;  CONDUCT  AND
ADJOURNMENT OF MEETINGS.

                  (a)  Notwithstanding  any other  provisions of this Indenture,
the Trustee may make such  reasonable  regulations  as it may deem advisable for
any  meeting  of  Holders  of  Securities  in regard to proof of the  holding of
Securities 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 deem  appropriate.  Except as
otherwise  permitted  or  required  by any  such  regulations,  the  holding  of
Securities  shall be proved in the manner  specified  in Section 13.4 hereof and
the appointment of any proxy shall be proved in the manner  specified in Section
13.4 hereof.  Such regulations may provide that written  instruments  appointing
proxies,  regular on their face, may be presumed  valid and genuine  without the
proof specified in Section 13.4 hereof or other proof.

                  (b) The Trustee shall, by an instrument in writing,  appoint a
temporary chairman (which may be the Trustee) of the meeting, unless the meeting
shall have been called by the Company or by Holders of Securities as provided in
Section 8.2(b),  in which case the Company or the Holders of Securities  calling
the meeting, as applicable, 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  Persons  entitled  to vote a majority  of the  aggregate  principal
amount of the Outstanding Securities represented at the meeting.

                  (c) At any  meeting,  each Holder of a Security or proxy shall
be entitled to one vote for each $1,000  principal  amount of Securities held or
represented by him; provided,  however, that no vote shall be cast or counted at
any meeting in respect of any Security  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, except as a Holder of a Security or proxy.

                  (d) Any meeting of Holders of Securities  duly called pursuant
to Section 8.2 at which a quorum is present may be  adjourned  from time to time
by Persons entitled to vote a majority of the aggregate  principal amount of the
Outstanding  Securities  represented at the meeting, and the meeting may be held
as so adjourned without further notice.

                                       54
<PAGE>

                  SECTION 8.6. COUNTING VOTES AND RECORDING ACTION OF MEETINGS.

                  The vote  upon any  resolution  submitted  to any  meeting  of
Holders of Securities  shall be by written  ballots on which shall be subscribed
the signatures of the Holders of Securities or of their representatives by proxy
and the principal  amount and serial numbers of the Outstanding  Securities 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, at least in duplicate,  of the proceedings of each meeting of Holders of
Securities  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  given as  provided  in  Section  8.2  and,  if
applicable,  Section  8.4.  Each  copy  shall  be  signed  and  verified  by the
affidavits of the  permanent  chairman and secretary of the meeting and one such
copy  shall be  delivered  to the  Company  and  another  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.

                                   ARTICLE 9

                                    COVENANTS

                  SECTION  9.1.   PAYMENT  OF   PRINCIPAL,   REDEMPTION   PRICE,
REPURCHASE PRICE AND INTEREST.

                  The  Company  will duly and  punctually  make all  payments in
respect  of the  Securities  including  the  Principal  of and  Interest  on the
Securities and the Redemption  Price and the Repurchase Price when and if at any
time any such foregoing amounts are due and payable in accordance with the terms
of the  Securities and this  Indenture.  The Company will deposit or cause to be
deposited  with the Trustee as directed by the Trustee,  on or before the day of
the Stated Maturity of any Security, all payments so due.

                  SECTION 9.2. MAINTENANCE OF OFFICES OR AGENCIES.

                  The Company  hereby  appoints the  Trustee's  Corporate  Trust
Office as its office in the Borough of  Manhattan,  The City of New York,  where
Securities may be:

                  (i) presented or surrendered for payment;

                  (ii) surrendered for registration of transfer or exchange;

                  (iii) surrendered for conversion;

                                       55
<PAGE>

and  where  notices  and  demands  to or upon  the  Company  in  respect  of the
Securities and this Indenture may be served.

                  The Company will  maintain in The City of New York,  an office
or agency where  Securities may be presented or surrendered  for payment,  where
Securities may be surrendered for  registration  of transfer or exchange,  where
Securities may be surrendered for conversion and where notices and demands to or
upon the Company in respect of the  Securities and this Indenture may be served.
The Company will give prompt  written  notice to the Trustee,  and notice to the
Holders  in  accordance  with  Section  13.2  hereof,   of  the  appointment  or
termination  of any  such  agents  and of the  location  and any  change  in the
location of any such office or agency.

                  If at any time the  Company  shall fail to  maintain  any such
required  office or agency in The City of New York, or shall fail to furnish the
Trustee with the address thereof,  presentations  and surrenders may be made at,
and  notices and demands  may be served on, the  Corporate  Trust  Office of the
Trustee.

                  SECTION 9.3. CORPORATE EXISTENCE.

                  Subject to Article 6 hereof,  the Company  will do or cause to
be done all things  necessary  to preserve and keep in full force and effect its
corporate  existence,  rights  (charter and  statutory)  and  franchises  of the
Company;  provided,  however, that the Company shall not be required to preserve
any such right or franchise if the Board of  Directors  shall  determine in good
faith that the preservation thereof is no longer desirable in the conduct of the
business  of the  Company  and its  Subsidiaries  as a whole  and  that the loss
thereof is not disadvantageous in any material respect to the Holders.

                  SECTION 9.4. REPORTS.

(a) The Company, shall deliver to the Trustee within 15 days after it files them
with  the  Commission  copies  of the  annual  reports  and of the  information,
documents  and other reports (or copies of such portions of any of the foregoing
as the Commission may by rules and regulations  prescribe)  which the Company is
required  to file with the  Commission  pursuant  to  Section 13 or 15(d) of the
Exchange Act; provided, however, the Company shall not be required to deliver to
the  Trustee  any  materials  for which the  Company  has  sought  and  received
confidential  treatment by the SEC. The Company also shall comply with the other
provisions of Section 314(a) of the TIA.

                  SECTION 9.5. COMPLIANCE CERTIFICATE.

                  The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year of the  Company,  an Officers'  Certificate  stating
that in the course of the performance by the signers of their duties as Officers
of the Company, they would normally have knowledge of any failure by the Company
to comply with all  conditions,  or Default by the Company  with  respect to any
covenants,  under this  Indenture,  and further stating whether or not they have
knowledge  of any such  failure  or Default  and,  if so,  specifying  each such

                                       56
<PAGE>

failure  or  Default  and the  nature  thereof.  In the event an  Officer of the
Company comes to have actual knowledge of a Default, regardless of the date, the
Company  shall  deliver an  Officers'  Certificate  to the  Trustee  within five
Business Days of obtaining such actual knowledge specifying such Default and the
nature and status thereof.

                  SECTION 9.6. DELIVERY OF CERTAIN INFORMATION.

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

                                   ARTICLE 10

                            REDEMPTION OF SECURITIES

                  SECTION 10.1. OPTIONAL REDEMPTION.

                  (a) At any time after  August 1, 2008,  except for  Securities
that it is required to purchase  pursuant to Section 11.1 or required to convert
pursuant to Section 12.1, the Company may, at its option,  redeem the Securities
in whole  at any time or in part  from  time to time,  on any date  prior to the
Stated Maturity of such Securities, upon notice as set forth in Section 10.4, at
the Redemption  Price  (expressed in  percentages  of the principal  amount) set
forth below if, but only if, redeemed on a Redemption Date occurring  during the
12-month period beginning on August 1 of the years indicated:

        During the Twelve Months Commencing              Redemption Price
------------------------------------------------         ----------------
2008.............................................            103.000%
2009.............................................            102.000%
2010.............................................            101.000%
2011 and thereafter..............................            100.000%

                  (b)  If  the  Company  exercises  its  option  to  redeem  the
Securities pursuant to this Section 10.1, a Holder may nevertheless exercise its
right to have its Securities  purchased pursuant to Section 11.1, if applicable,
and to convert such Securities  pursuant to Article 12, in each case,  until the
close of business two Business Days immediately preceding the Redemption Date.

                                       57
<PAGE>

                  (c) The  Company  shall pay any  Interest to the Holder of the
Securities called for redemption (including those Securities which are converted
into  Common  Stock  after the date the notice of the  redemption  is mailed and
prior to the  Redemption  Date)  accrued  but not paid to,  but  excluding,  the
Redemption Date pursuant to Section 1 of the Global Security; provided, however,
that if the Redemption  Date is an Interest  Payment Date, the Company shall pay
the  Interest  to the Holder of the  Security  at the close of  business on such
Interest Payment Date.

                  SECTION 10.2. NOTICE TO TRUSTEE.

                  If the  Company  elects to redeem  Securities  pursuant to the
provisions  of  Section  10.1  hereof  (such  election  to be ordered by a Board
Resolution),  it shall notify the Trustee at least 45 days prior to the intended
Redemption  Date (unless a shorter notice shall be  satisfactory to the Trustee)
of (i) such intended Redemption Date, (ii) the principal amount of Securities to
be redeemed and (iii) the CUSIP numbers of the Securities to be redeemed.

                  SECTION 10.3. SELECTION OF SECURITIES TO BE REDEEMED.

                  If  fewer  than all the  Securities  are to be  redeemed,  the
Trustee  shall  select  the  particular  Securities  to  be  redeemed  from  the
Outstanding  Securities by a method that complies with the  requirements  of any
exchange on which the  Securities  are  listed,  or, if the  Securities  are not
listed on an exchange,  on a pro rata basis or by lot or in accordance  with any
other method the Trustee considers fair and appropriate.  The Trustee may select
for  redemption  portions  of the  principal  amount  of  Securities  that  have
denominations larger than $1,000.

                  Securities and portions thereof that the Trustee selects shall
be in  principal  amounts in integral  multiples of $1,000.  Provisions  of this
Indenture that apply to Securities  called for redemption also apply to portions
of  Securities  called for  redemption.  The  Trustee  shall  notify the Company
promptly of the Securities or portions of Securities to be redeemed.

                  The  Trustee  shall  promptly   notify  the  Company  and  the
Registrar in writing of the Securities  selected for redemption and, in the case
of any Securities selected for partial redemption,  the principal amount thereof
to be redeemed.

                  If any Security  selected for partial  redemption is converted
or elected to be purchased in part before termination of the conversion right or
purchase  right with  respect to the portion of the  Security so  selected,  the
converted  or  purchased  portion  of such  Security  shall be  deemed to be the
portion  selected for  redemption;  provided,  however,  that the Holder of such
Security so converted or purchased and deemed  redeemed shall not be entitled to
any additional  interest payment as a result of such deemed redemption than such
Holder would have otherwise been entitled to receive upon conversion or purchase
of such Security subject to Section 1 of the Global  Security.  Securities which

                                       58
<PAGE>

have been converted or purchased during a selection of Securities to be redeemed
may be treated by the Trustee as outstanding for the purpose of such selection.

                  For  all  purposes  of  this  Indenture,  unless  the  context
otherwise  requires,  all  provisions  relating to the  redemption of Securities
shall relate,  in the case of any Securities  redeemed or to be redeemed only in
part, to the portion of the principal  amount of such Securities  which has been
or is to be redeemed.

                  SECTION 10.4. NOTICE OF REDEMPTION.

                  Notice of redemption  shall be given in the manner provided in
Section 13.2 to the Holders of Securities  to be redeemed.  Such notice shall be
given not less than 30 nor more than 60 days  prior to the  intended  Redemption
Date.

                  All notices of redemption shall state:

                  (1) such intended Redemption Date;

                  (2) the Redemption  Price and Interest  accrued and unpaid to,
but excluding, the Redemption Date, if any;

                  (3) if fewer  than all the  Outstanding  Securities  are to be
redeemed,  the  principal  amount of Securities to be redeemed and the principal
amount of Securities which will be outstanding after such partial redemption;

                  (4) that on the  Redemption  Date  the  Redemption  Price  and
Interest accrued and unpaid to, but excluding, the Redemption Date, if any, will
become due and payable upon each such Security to be redeemed;

                  (5) the  Conversion  Price,  the  date on which  the  right to
convert the principal of the  Securities  to be redeemed will  terminate and the
places where such Securities may be surrendered for conversion;

                  (6) the  place  or  places  where  such  Securities  are to be
surrendered for payment of the Redemption Price and accrued and unpaid Interest,
and

                  (7) the CUSIP number of the Securities.

                  The  notice  given  shall  specify  the  last  date  on  which
exchanges or transfers of  Securities  may be made  pursuant to Section 2.6, and
shall specify the serial numbers of Securities  and the portions  thereof called
for redemption.

                  Notice of  redemption  of  Securities  to be  redeemed  at the
election  of the  Company  shall be given by the  Company  or, at the  Company's
written  request  delivered at least 20 days prior to the date of the mailing of
such Notice (unless a shorter period shall be acceptable to the Trustee), by the
Trustee in the name of and at the expense of the Company.

                                       59
<PAGE>

                  SECTION 10.5. EFFECT OF NOTICE OF REDEMPTION.

                  Notice of redemption  having been given as provided in Section
10.4 hereof,  the Securities so to be redeemed  shall,  on the Redemption  Date,
become due and payable at the  Redemption  Price therein  specified and from and
after  such date  (unless  the  Company  shall  default  in the  payment  of the
Redemption Price and accrued and unpaid Interest) such Securities shall cease to
bear Interest.  Upon surrender of any such Security for redemption in accordance
with such notice,  such Security  shall be paid by the Company at the Redemption
Price;  provided,  however,  the  installments  of Interest on Securities  whose
Stated  Maturity is prior to or on the  Redemption  Date shall be payable to the
Holders of such  Securities,  registered as such on the relevant  Regular Record
Date.

                  If any  Security  called for  redemption  shall not be so paid
upon surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear Interest from the Redemption Date at the Interest Rate.

                  SECTION 10.6. DEPOSIT AND PAYMENT OF REDEMPTION PRICE.

                  Prior to or on any Redemption  Date, the Company shall deposit
with the Trustee or with a Paying Agent (or, if the Company or a  Subsidiary  or
an Affiliate of either of them is acting as the Paying  Agent,  shall  segregate
and hold in trust as provided in Section 2.4) an amount of money in  immediately
available funds  sufficient to pay the Redemption  Price, and accrued and unpaid
Interest in respect of all the Securities to be redeemed on that Redemption Date
from the last Interest  Payment Date to but not including the  Redemption  Date,
other than any  Securities  called for  redemption  on that date which have been
converted prior to the date of such deposit,  and accrued and unpaid Interest on
such Securities.  The Trustee and Paying Agent shall then cause such funds to be
paid to the Holders of the  Securities  being  redeemed in accordance  with this
Article.

                  If any  Security  delivered  for  redemption  shall  not be so
redeemed by payment to the Holders thereof on the Redemption Date, the principal
amount of such  Security  shall,  until it is  redeemed,  bear  Interest  on the
Redemption  Date to but not  including  the  actual  date of  redemption  at the
Interest Rate, and each such Security  shall remain  convertible  into shares of
Common  Stock  pursuant  to Article 12 until  such  Security  shall have been so
redeemed.

                  If any Security called for redemption is converted,  any money
deposited  with the Trustee or with a Paying Agent or so segregated  and held in
trust for the  redemption  of such  Security  shall be paid to the Company  upon
request by the Company or, if then held by the Company, shall be discharged from
such trust.

                  SECTION 10.7. SECURITIES REDEEMED IN PART.

                  Any  Security  which is to be  redeemed  only in part shall be
surrendered  at an office or agency of the Company  designated  for that purpose
pursuant to Section 9.2 hereof (with, if the Company or the Trustee so requires,
due endorsement by, or a written  instrument of transfer in form satisfactory to

                                       60
<PAGE>

the Company and the Trustee duly executed by, the Holder thereof or the Holder's
attorney duly  authorized in writing),  and the Company shall  execute,  and the
Trustee shall  authenticate  and deliver to the Holder of such Security  without
service charge,  a new Security or Securities of any authorized  denomination as
requested  by such Holder in  principal  amount equal to and in exchange for the
unredeemed portion of the Security so surrendered.

                                   ARTICLE 11

                PURCHASE AT THE OPTION OF A HOLDER UPON SPECIFIC
                     REPURCHASE DATES OR A CHANGE OF CONTROL

                  SECTION 11.1. PURCHASE RIGHT.

                  (a) On August 1 of 2008,  2013 and 2018,  (each,  a  "SPECIFIC
REPURCHASE DATE"),  each Holder shall have the right (the "PURCHASE RIGHT"),  at
the Holder's option, to require the Company to repurchase for cash, and upon the
exercise  of such  right  the  Company  shall  purchase,  all of  such  Holder's
Securities  not  theretofore  called  for  redemption,  or  any  portion  of the
principal amount thereof that is equal to $1,000 or an integral multiple thereof
as directed by such Holder  pursuant to Section  11.3  (provided  that no single
Security may be purchased in part unless the portion of the principal  amount of
such  Security to be  outstanding  after such  purchase is equal to $1,000 or an
integral multiple  thereof),  at a purchase price equal to 100% of the principal
amount of the Securities to be purchased (the "REPURCHASE PRICE"),  plus accrued
and  unpaid  Interest  on  those  Securities  to,  but  excluding  the  Specific
Repurchase  Date.  Holders may submit their  Securities  for  repurchase  to the
Paying  Agent at any time from the  opening of  business  on the date that is 20
Business Days prior to the applicable  Specific  Repurchase Date until the close
of business on the Specific Repurchase Date.

                  (b) In the event that a Change in Control  (together  with the
specific  Repurchase  Dates, the "REPURCHASE  EVENTS") shall occur,  each Holder
shall have the  Purchase  Right,  at the  Holder's  option,  but  subject to the
provisions of Section 11.2 hereof, to require the Company to purchase,  and upon
the  exercise of such right the Company  shall  purchase,  all of such  Holder's
Securities  not  theretofore  called  for  redemption,  or  any  portion  of the
principal amount thereof that is equal to $1,000 or an integral multiple thereof
as directed by such Holder  pursuant to Section  11.3  (provided  that no single
Security may be purchased in part unless the portion of the principal  amount of
such  Security to be  outstanding  after such  purchase is equal to $1,000 or an
integral multiple  thereof),  on the date (the "CHANGE OF CONTROL PURCHASE Date"
together with the Specific  Repurchase  Date, the  "REPURCHASE  DATE") that is a
Business  Day no  earlier  than 20 days nor later than 60 days after the date of
the Repurchase Election Form (as defined below) at a purchase price equal to the
Repurchase Price, plus accrued and unpaid Interest to, but excluding, the Change
of Control Purchase Date; provided,  however,  that (i) installments of Interest
on  Securities  whose  Stated  Maturity  is prior to or on the Change of Control
Purchase Date shall be payable to the Holders of such Securities,  registered as
such on the  relevant  Regular  Record  Date  according  to their  terms and the

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provisions  of  Section  1 of the Form of  Global  Security  attached  hereto at
Exhibit A. If the Holders  have a  Repurchase  Right  pursuant  to this  Section
11.2(b),  the Company shall issue a press  release  through Dow Jones & Company,
Inc. or Bloomberg  Business News  containing the relevant  information  and make
such  information  available on the Company's  website or through another public
medium as the Company may use at such time.

                  SECTION 11.2. REPURCHASE EVENT NOTICE.

                  No later  than 20  Business  Days  after the  occurrence  of a
Repurchase  Event,  the Company  shall mail a written  notice of the  Repurchase
Event (the "REPURCHASE  EVENT NOTICE") by first class mail to the Trustee and to
each Holder (and to beneficial owners as required by applicable law) pursuant to
Section 13.2.  The  Repurchase  Event Notice shall include a form of notice (the
"REPURCHASE  ELECTION  FORM") to be completed by the Holder and delivered to the
Paying Agent pursuant to Section 11.3, and shall state the following:

                  (1) that it is a  Repurchase  Event  Notice  pursuant  to this
Section;

                  (2) the events causing a Repurchase Event and the date of such
Repurchase Event;

                  (3) the  procedures  with which  such  Holder  must  comply to
exercise its right to have its  Securities  purchased  pursuant to Section 11.1,
including the date by which the completed  Repurchase  Election Form pursuant to
Section 11.3 and the Securities the Holder elects to have purchased  pursuant to
Section  11.1  must be  delivered  to the  Paying  Agent in  order to have  such
Securities  purchased  by the  Company  pursuant to Section  11.1,  the name and
address of the Paying  Agent and that the  Securities  as to which a  Repurchase
Election Form has been given may be converted, if they are otherwise convertible
pursuant to Article 12, only if the completed and delivered  Repurchase Election
Form has been  withdrawn  in  accordance  with the terms of the  Indenture,  the
Holder's  conversion  rights pursuant to Article 12 and the Conversion Rate then
in effect and any adjustments thereto;

                  (4) the Repurchase Date and the Repurchase Price;

                  (5) that,  unless the Company  defaults  in making  payment of
such Repurchase  Price,  Interest on the Securities  surrendered for purchase by
the Company will cease to accrue on and after the Repurchase Date; and

                  (6) the CUSIP number of the Securities.

                  No failure by the  Company  to give the  foregoing  Repurchase
Election Form shall limit any Holder's right to exercise its rights  pursuant to
Section 11.1 or affect the validity of the  proceedings  for the purchase of its
Securities hereunder.

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                  SECTION 11.3.  DELIVERY OF REPURCHASE  ELECTION FORM;  FORM OF
REPURCHASE ELECTION FORM; WITHDRAWAL OF REPURCHASE ELECTION FORM.

                  (a) The Company shall deliver,  or cause the Trustee or Paying
Agent, to deliver,  to all Holders (and beneficial  holders of the Securities) a
Repurchase  Election Form  substantially in the form of Exhibit D hereto,  which
with respect to Holders  purchase rights set forth in Section 11.1(a) or Section
11.1(b) and , shall be delivered to such Holders at least 20 Business Days prior
to the Repurchase  Event Purchase Date and, as set forth in Section 11.2,  shall
be included in the Repurchase  Election Form; provided that the delivery of such
form of  Repurchase  Election Form to the Holders shall be made in the Company's
name  and at the  Company's  expense  and the  text of such  form of  Repurchase
Election  Form shall be prepared  by the Company  pursuant to clause (b) of this
Section.

                  (b)  The  form  of  Repurchase  Election  Form  shall  provide
instructions  regarding  procedures  with which  holders must comply to exercise
their  rights  pursuant to Section  11.1 and the  completion  of the  Repurchase
Election Form and also shall state:

                  (1)  that  it is the  Repurchase  Election  Form  pursuant  to
Sections  11.2 and 11.3 of the Indenture and must be completed by the Holder and
delivered  to the  Paying  Agent  (and any  beneficial  holder  of  securities),
together with the delivery of the holder's  Securities for which the holder will
exercise  its  purchase  rights  pursuant  to Section  11.1,  for such holder to
receive the Repurchase Price;

                  (2) the name and address of the Paying  Agent to, and the date
by,  which  the  completed  Repurchase  Election  Form  and  Securities  must be
delivered in order for the holder to receive the applicable purchase price;

                  (3) the portion of the principal  amount of the Security which
the Holder will  deliver to be  purchased,  which  portion  must be in Principal
Amounts of $1,000 or an integral multiple thereof;

                  (4) any other  procedures then applicable that the Holder must
follow to exercise  rights  under  Article 11 and a brief  description  of those
rights;

                  (5) the Repurchase Date and the Repurchase Price;

                  (6) the  procedures  with which  such  Holder  must  comply to
exercise its right to have its  Securities  purchased  pursuant to Section 11.1,
including the date by which the completed  Repurchase  Election Form pursuant to
Section 11.3 and the Securities the Holder elects to have purchased  pursuant to
Section 11.1 must be delivered to Paying Agent in order to have such  Securities
purchased by the Company  pursuant to Section 11.1,  the name and address of the
Paying Agent and that the Securities as to which a Repurchase  Election Form has
been given may be  converted,  if they are  otherwise  convertible  pursuant  to
Article 12, only if the  completed and  delivered  Repurchase  Election Form has
been  withdrawn  in  accordance  with the terms of the  Indenture,  the Holder's

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conversion rights pursuant to Article 12, the Conversion Rate then in effect and
any adjustments thereto;

                  (7) the Holder's  right to withdraw a completed  and delivered
Repurchase  Election Form, the procedures for withdrawing a Repurchase  Election
Form,  pursuant to clause (c) below and that  Securities as to which a completed
and delivered Repurchase Election Form may be converted, if they are convertible
only in accordance  with Article 12, if the  applicable  completed and delivered
Repurchase Election Form has been withdrawn;

                  (8) that,  unless the Company  defaults  in making  payment on
Securities for which a Repurchase Election Form has been submitted,  Interest on
such Securities will cease to accrue on the Repurchase Date; and

                  (9) the CUSIP number of the Securities.

                  (c)  Notwithstanding  anything  herein  to the  contrary,  any
Holder which has  delivered a completed  Repurchase  Election Form to the Paying
Agent shall have the right to withdraw such Repurchase Election Form by delivery
of a written notice of withdrawal delivered to the office of the Paying Agent in
accordance  with the Repurchase  Election Form at any time prior to the close of
business on the day immediately preceding the Repurchase Date specifying:

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

                  (2) the principal amount of the Security with respect to which
such notice of withdrawal is being submitted; and

                  (3) the  principal  amount,  if any,  of such  Security  which
remains subject to the original  Repurchase  Election Form and which has been or
will be delivered for purchase by the Company.

                  The Paying  Agent  shall  promptly  notify the  Company of the
receipt by it of any  Repurchase  Election Form or written  notice of withdrawal
thereof.

                  SECTION 11.4. EXERCISE OF PURCHASE RIGHTS.

                  To  exercise a purchase  right  pursuant  to Section  11.1,  a
Holder  must  deliver to the  Trustee at its offices on or prior to the close of
business on the Business Day prior to the Repurchase Date the following:

                  (a) a completed Repurchase Election Form; and

                  (b) the  Securities  or cause such  Securities to be delivered
through the facilities of the Depositary,  as applicable,  with respect to which
the purchase  right is being  exercised,  with, if the Company or the Trustee so
requires,  due  endorsement  by, or a written  instrument  of transfer,  in form

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<PAGE>

satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or such Holder's attorney duly authorized in writing.

                  SECTION 11.5. DEPOSIT AND PAYMENT OF THE PURCHASE PRICE.

                  (a) If a Holder has exercised  its rights  pursuant to Section
11.1 and has  satisfied  the  conditions  for the  exercise  of such  rights  in
accordance with Section 11.4,  then the Company shall,  prior to 10:00 a.m. (New
York City time) on the Business Day following the  Repurchase  Date deposit with
the Trustee or with the Paying Agent (or, if the Company or a  Subsidiary  or an
Affiliate of either of them is acting as the Paying Agent,  shall  segregate and
hold in trust as  provided  in  Section  2.4) an amount of money in  immediately
available  funds,  if  deposited  on such  Business  Day  sufficient  to pay the
aggregate  Repurchase  Price of all the Securities or portions thereof which are
to be purchased  on such  purchase  date,  and the Trustee or Paying  Agent,  as
applicable shall pay the Holder the Repurchase Price, as applicable,  multiplied
by the principal  amount of Securities  for which such rights were exercised and
not withdrawn on or prior to the Purchase Date.

                  (b) There shall be no purchase of any  Securities  pursuant to
Section 11.1 if there has occurred  (prior to, on or after,  as applicable,  the
giving, by the Holders of such Securities,  of the required  Repurchase Election
Form) and is continuing an Event of Default (other than a default in the payment
of the Repurchase Price with respect to such Securities).  The Paying Agent will
promptly  return to the  respective  Holders  thereof  any  Securities  (x) with
respect to which a Repurchase  Election  Form has been  withdrawn in  compliance
with this  Indenture,  or (y) held by it during the  continuance  of an Event of
Default  (other  than a default  in the  payment  of the  Repurchase  Price with
respect to such  Securities)  in which case,  upon such return,  the  Repurchase
Election Form with respect thereto shall be deemed to have been withdrawn.

                  (c) If any Security delivered for purchase pursuant to Section
11.1 shall not be so paid on the Repurchase  Date, the principal  amount of such
Security  shall,  until it is paid,  bear Interest from the purchase date to but
not including the date of actual  payment  hereunder at the Interest  Rate,  and
each such Security shall remain convertible into shares of Common Stock pursuant
to Article 12 until such Security shall have been paid.

                  SECTION 11.6. EFFECT OF DELIVERY OF CHANGE OF CONTROL PURCHASE
NOTICE AND PURCHASE.

                  (a) Upon receipt by the Paying Agent of a Repurchase  Election
Form,  the Holder of the Security in respect of which such  Repurchase  Election
Form was  delivered  shall  (unless such  Repurchase  Election Form is withdrawn
pursuant  to Section  11.3(c))  thereafter  be  entitled  to receive  solely the
Repurchase Price with respect to such Security, and, if applicable,  any accrued
and unpaid Interest.  Securities in respect of which a Repurchase  Election Form
has been  delivered  by the Holder  thereof  may not be  converted  pursuant  to
Article 12 on or after the date of the delivery of such Repurchase Election Form

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<PAGE>

unless such  Repurchase  Election Form which has been completed and delivered to
the Paying Agent has first been validly withdrawn pursuant to Section 11.3(c).

                  (b) All Securities delivered for purchase shall be canceled by
the Trustee or Paying Agent, as applicable.

                  SECTION 11.7. CERTIFICATED SECURITIES PURCHASED IN PART.

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

                  SECTION  11.8.  COVENANT TO COMPLY WITH  SECURITIES  LAWS UPON
PURCHASE OF SECURITIES.

                  When   complying  with  the  provisions  of  this  Article  11
(provided  that such offer or purchase  constitutes an "issuer tender offer" for
purposes of Rule 13e-4 (which  term,  as used  herein,  includes  any  successor
provision  thereto)  under  the  Exchange  Act at the  time  of  such  offer  or
purchase), the Company shall (a) comply with Rule 13e-4 and Rule 14e-1 under the
Exchange Act, (b) file the related Schedule TO (or any successor schedule,  form
or report) under the Exchange Act and (c) otherwise  comply with all federal and
state  securities  laws so as to permit the rights  and  obligations  under this
Article  11 to be  exercised  in the time and in the  manner  specified  in this
Article 11.

                  SECTION  11.9.  REPAYMENT TO THE COMPANY.  The Trustee and the
Paying  Agent  shall  return to the  Company  any cash that  remains  unclaimed,
together with interest or dividends,  if any, thereon (subject to the provisions
of Sections 2.3 and 5.4), held by them for the payment of the Repurchase  Price;
provided,  however,  that  to the  extent  that  the  aggregate  amount  of cash
deposited  by the  Company  pursuant  to  Section  11.5  exceeds  the  aggregate
Repurchase  Price of the  Securities  or portions  thereof  which the Company is
obligated  to purchase on the Purchase  Date then,  unless  otherwise  agreed in
writing  with the  Company,  promptly  after the  Business  Day  following  such
Purchase Date, the Trustee or Paying Agent, as applicable, shall return any such
excess to the Company  together  with interest or  dividends,  if any,  thereon,
subject to the provisions of Section 5.4.

                                   ARTICLE 12

                            CONVERSION OF SECURITIES

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<PAGE>

                  SECTION 12.1. CONVERSION RIGHT; CONVERSION PRICE.

                  (a) Subject to and upon compliance with the provisions of this
Article,  at the  option of the  Holder  at any time and from time to time,  any
Security or any portion of the  principal  amount  thereof  which is an integral
multiple of $1,000 may be converted at the principal amount thereof,  or of such
portion thereof,  into duly authorized,  fully paid and nonassessable  shares of
Common Stock, at the Conversion Price,  determined as hereinafter  provided,  in
effect at the time of  conversion;  provided that such right of  conversion  may
only be exercised under the following circumstances:

                        (i) during any Conversion Period, if the Market Price of
            the Common Stock for at least 20 Trading Days in the 30  consecutive
            Trading Day period  ending on the last day of the  preceding  Fiscal
            Quarter was more than 110% of the Conversion Price in effect on such
            30th Trading Day;

                        (ii) on or  before  August  15,  2018,  during  the five
            Business Day period following any 10 consecutive  Trading Day period
            in which the  average  Market  Price of the  Securities  for such 10
            Trading Day period was less than 98% of the average Conversion Value
            of the Securities during the same 10 Trading Day period;

                        (iii) at any time prior to the close of  business on the
            day that is one  Business  Day  immediately  preceding a  Redemption
            Date,  if such Security has been called for  redemption  pursuant to
            Article 10 hereof; or

                        (iv) as provided in Section 12.1(b).

The Conversion Agent shall, on behalf of the Company, determine on a daily basis
whether the Securities  shall be convertible as a result of the occurrence of an
event specified in clause (i) or clause (ii) above and, if the Securities  shall
be so convertible,  the Conversion  Agent shall promptly  deliver to the Company
and the Trustee  written  notice thereof  whenever the  Securities  shall become
convertible  pursuant  to  Section  12.1 and 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 13.2, and the Company shall also publicly  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.

                  (b) In addition, in the event that:

                        (i) (A) the Company  distributes to all or substantially
            all holders of shares of Common Stock  rights or warrants  entitling
            them  (for a  period  expiring  within  60 days of the date for such
            distribution)  to subscribe for or purchase  shares of Common Stock,
            at a price per share less than the Market  Price of the Common Stock
            at the  time  of the  announcement  of  such  distribution,  (B) the

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<PAGE>

            Company distributes to all or substantially all holders of shares of
            Common  Stock cash or other  assets,  debt  securities  or rights or
            warrants to purchase the Company's securities, where the Fair Market
            Value (as determined by the Board of Directors) of such distribution
            per share of Common Stock  exceeds 5% of the Market Price of a share
            of Common Stock on the Business Day  immediately  preceding the date
            of  declaration  of such  distribution  or (C) an event  that  would
            constitute a Change of Control  occurs but for the provisions of the
            provision to the  definition  of "Change of Control",  then, in each
            case, the  Securities may be surrendered  for conversion at any time
            on and after the date that the Company  gives  notice to the Holders
            of such  right,  which  shall be not less than 20 days  prior to the
            Ex-Dividend Time for such distribution, in the case of clause (A) or
            (B), or within 20 Business  Days after the  occurrence  of the event
            that would  constitute  a change of  control,  in the case of clause
            (C),  until (1) the earlier of the close of business on the Business
            Day  immediately  preceding  the  Ex-Dividend  Time or the  date the
            Company announces that such distribution will not take place, in the
            case of clause (A) or (B), or (2) the  earlier of 20  Business  Days
            after the Company's  delivery of the Repurchase  Event Notice or the
            date the Company  announces  that the event that would  constitute a
            change of control will not take place, in the case of clause (C); or

                        (ii)  the  Company  consolidates  with  or  merges  into
            another Person,  or is a party to a binding share exchange  pursuant
            to which the shares of Common  Stock would be  converted  into cash,
            securities  or other  property as set forth in Section  12.5 hereof,
            then the Securities  may be  surrendered  for conversion at any time
            from and after the date which is 15 days prior to the date announced
            by the Company as the anticipated effective time of such transaction
            until 15 days after the actual date of such  transaction,  provided,
            however,  that at the effective  time of a transaction  described in
            the immediately  preceding  clause,  the right to convert a Security
            into Common Stock will be changed into a right to convert a Security
            into the kind and amount of cash, securities or other property which
            a Holder  would have  received  if such  Holder had  converted  such
            Security immediately prior to such transaction.

                  "CONVERSION  PERIOD"  means the period from and  including the
thirtieth  Trading Day in a Fiscal Quarter to, but not including,  the thirtieth
Trading Day in the immediately following Fiscal Quarter.

                  "CONVERSION  VALUE",  on any day,  means  the  product  of the
Market Price for the Common Stock as of such day multiplied by the  then-current
Conversion Rate.

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

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<PAGE>

                  The  "CONVERSION  RATE",  at any time,  shall equal (A) $1,000
divided by the  Conversion  Price at such time,  rounded to three decimal places
(rounded  up if the fourth  decimal  place  thereof  is 5 or more and  otherwise
rounded down).

                  (c) The  price  at  which  shares  of  Common  Stock  shall be
delivered upon conversion (the  "CONVERSION  PRICE") shall be initially equal to
$8.375 per share of Common Stock,  subject to adjustment,  in certain instances,
as provided in Section 12.4.

                  (d) No payment or adjustment will be made for dividends on, or
other distributions with respect to, any Common Stock except as provided in this
Article 12.

                  SECTION 12.2. EXERCISE OF CONVERSION RIGHT

                  (a)  To  exercise  the  conversion  right  with  respect  to a
Certificated  Security, a Holder must (1) deliver a completed conversion notice,
the form of which is provided in Exhibit D, to the  Depositary  stating that the
Holder elects to convert such Certificated  Security or, if less than the entire
principal  amount  thereof  is  to  be  converted,  the  portion  thereof  to be
converted,   (2)  deliver  duly  signed  completed  conversion  notice  and  the
Certificated  Security duly endorsed or assigned to the Company or in blank,  at
the office of any Conversion  Agent, (3) pay all Interest to which the Holder is
not entitled, if any, pursuant to Section 1 of the Global Security,  and (4) pay
any transfer taxes or other applicable taxes or duties, if required.

                  (b) To convert  interests in a Global Security,  a Holder must
deliver to DTC the appropriate instruction form for conversion pursuant to DTC's
conversion program.

                  (c)  To  the  extent  provided  in  Section  1 of  the  Global
Security, Securities surrendered for conversion during the period from the close
of business  on any  Regular  Record Date to the opening of business on the next
succeeding  Interest  Payment  Date  (except in the case of any  Security  whose
Stated Maturity is prior to such Interest  Payment Date) shall be accompanied by
payment  by such  Holder in  immediately  available  funds to the  Company of an
amount equal to the Interest to be received on such Interest Payment Date on the
principal amount of Securities being  surrendered for conversion.  To the extent
provided in Section 1 of the Global Security,  Securities which have been called
for  redemption  by the  Company in a notice of  redemption  pursuant to Section
10.4, and are converted  prior to redemption,  shall not require such concurrent
payment to the  Company,  and if  converted  during time period set forth in the
preceding sentence,  the Holders of such converted  Securities shall be entitled
to receive (and  retain) any accrued  interest on the  principal  amount of such
surrendered Securities, if any.

                  (d)  Securities   shall  be  deemed  to  have  been  converted
immediately  prior to the  close of  business  on the day of  surrender  of such
Securities for conversion in accordance  with the foregoing  provisions,  and at
such time the rights of the Holders of such  Securities  as Holders shall cease,
and the  Person or  Persons  entitled  to  receive  the  shares of Common  Stock

                                       69
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issuable upon conversion  shall be treated for all purposes as the record holder
or holders of such shares of Common Stock at such time.

                  (e) In the case of any  Security  which is  converted  in part
only, or if a Holder  converts  less than the  principal  amount it owns at such
time,  upon such  conversion  the Company  shall  execute and the Trustee  shall
authenticate and deliver to the Holder thereof, at the expense of the Company, a
new Security or Securities of authorized denominations in principal amount equal
to the unconverted portion of the principal amount of such Securities.

                  (f) As  promptly  as  practicable  on or after the  Conversion
Date, the Company shall cause to be issued and delivered to the Conversion Agent
a  certificate  or  certificates  for the number of full shares of Common  Stock
issuable upon  conversion of such  Securities,  together with payment in lieu of
any fraction of a share as provided in Section 12.3 hereof.

                  (g) A Security  in respect of which a Holder has  delivered  a
Repurchase  Election  Form  exercising  the option of such Holder to require the
Company to  purchase  such  Security  may be  converted  only if such  notice of
exercise is withdrawn in accordance with Section 11.3(c).

                  SECTION 12.3. FRACTIONS OF SHARES.

                  No  fractional  shares of Common  Stock  shall be issued  upon
conversion  of any Security or  Securities.  If more than one Security  shall be
surrendered  for  conversion at one time by the same Holder,  the number of full
shares of Common Stock which shall be issued upon  conversion  thereof  shall be
computed on the basis of the aggregate  principal  amount of the  Securities (or
specified portions thereof) so surrendered.  Instead of any fractional shares of
Common Stock which would  otherwise be issued upon conversion of any Security or
Securities  (or  specified  portions  thereof),  the  Company  shall  pay a cash
adjustment in respect of such fraction (calculated to the nearest one-100th of a
share) in an amount equal to the same fraction of the Market Price of the shares
of Common Stock as of the Trading Day preceding the Conversion Date.

                  SECTION 12.4. ADJUSTMENT OF CONVERSION PRICE.

                  The   Conversion   Price  shall  be  subject  to   adjustment,
calculated in good faith by the Company, from time to time as follows:

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

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<PAGE>

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

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

                  Such reduction shall become  effective  immediately  after the
opening of business on the day  following  the  Conversion  Record Date.  If any
dividend  or  distribution  of the type  described  in this  Section  12.4(a) is
declared but not so paid or made, the  Conversion  Price shall again be adjusted
to the  Conversion  Price  which  would  then be in effect if such  dividend  or
distribution had not been declared.

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

                  (c) In case the Company shall issue rights or warrants  (other
than  any  rights  or  warrants  referred  to in  Section  12.4(d))  to  all  or
substantially  all holders of its  outstanding  shares of Common Stock entitling
them to  subscribe  for or  purchase  shares  of  Common  Stock  (or  securities
convertible  into  shares  of Common  Stock)  at a price per share (or  having a
conversion price per share) less than the Current Market Price on the Conversion
Record Date fixed for the determination of stockholders entitled to receive such
rights or  warrants,  the  Conversion  Price  shall be adjusted so that the same
shall equal the price  determined by multiplying the Conversion  Price in effect
at the opening of business  on the date after such  Conversion  Record Date by a
fraction:

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

                           (2) the  denominator  of which shall be the number of
         shares of Common  Stock  outstanding  on the close of  business  on the
         Conversion  Record Date, plus the total number of additional  shares of

                                       71
<PAGE>

         Common Stock so offered for subscription or purchase (or into which the
         convertible securities so offered are convertible).

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

                  Notwithstanding  the foregoing,  in the event that the Company
shall make a distribution  subject to this Section 12.4(c),  the Company may, in
lieu of making any adjustment  required  pursuant to this Section 12.4(c),  make
proper  provision so that each Holder of a Security who converts  such  Security
(or a portion  thereof) after the Conversion  Record Date for such  distribution
shall be entitled to receive upon such conversion,  in addition to the shares of
Common Stock issuable upon such  conversion,  the  securities  such Holder would
have  received had such Holder  converted  such  Security  (or portion  thereof)
immediately prior to such Conversion Record Date.

                  (d) (i) In case the Company  shall,  by dividend or otherwise,
distribute to all or substantially all holders of its Common Stock shares of any
class of Capital Stock of the Company (other than any dividends or distributions
to which  Section  12.4(a)  applies) or evidences of its  indebtedness,  cash or
other  assets,  including  securities,  but excluding (1) any rights or warrants
referred  to in  Section  12.4(c),  (2)  dividends  or  distributions  of stock,
securities or other  property or assets  (including  cash) in connection  with a
reclassification,  change,  merger,  consolidation,  statutory  share  exchange,
combination, sale or conveyance to which Section 12.11 applies and (3) dividends
and distributions paid exclusively in cash (such Capital Stock,  evidence of its
indebtedness,  cash, other assets or securities being distributed hereinafter in
this Section 12.4(d) called the "DISTRIBUTED ASSETS"),  then, in each such case,
subject to clause (ii) of this Section  12.4(d),  the Conversion  Price shall be
reduced so that the same shall be equal to the price  determined by  multiplying
the Conversion Price in effect immediately prior to the close of business on the
Conversion Record Date with respect to such distribution by a fraction:

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<PAGE>

                           (1) the  numerator  of  which  shall  be the  Current
         Market Price on such date, less the Fair Market Value (as determined by
         the Board of Directors, whose determination shall be conclusive and set
         forth  in a Board  Resolution)  on  such  date  of the  portion  of the
         distributed  assets so  distributed  applicable  to one share of Common
         Stock  (determined on the basis of the number of shares of Common Stock
         outstanding on the Conversion Record Date); and

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

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

                           (ii) If the Board of  Directors  determines  the Fair
         Market Value of any  distribution  for purposes of this Section 12.4(d)
         by  reference  to the  actual or when  issued  trading  market  for any
         distributed assets comprising all or part of such distribution, it must
         in doing so  consider  the prices in such  market  over the same period
         (the "REFERENCE  PERIOD") used in computing the Current Market Price to
         the  extent  possible,  unless  the  Board  of  Directors  in  a  Board
         Resolution  determines in good faith that  determining  the Fair Market
         Value during the Reference  Period would not be in the best interest of
         the Holders.

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

                           (iii) Rights or warrants  distributed  by the Company
         to all  holders  of Common  Stock  entitling  the  holders  thereof  to

                                       73
<PAGE>

         subscribe for or purchase shares of the Company's Capital Stock (either
         initially or under  certain  circumstances),  which rights or warrants,
         until the occurrence of a specified  event or events  specified in such
         rights or warrants or related  instruments or agreements  governing the
         same (a "TRIGGER EVENT"):

                           (1) are deemed to be transferred  with such shares of
         Common Stock;

                           (2) are not exercisable; and

                           (3) are also issued in respect of future issuances of
         Common Stock;

shall be deemed  not to have  been  distributed  for  purposes  of this  Section
12.4(d) (and no adjustment to the  Conversion  Price under this Section  12.4(d)
will be required) until the occurrence of the earliest  Trigger Event;  provided
that (1) if such right or warrant is  subject  to  subsequent  events,  upon the
occurrence of which such right or warrant shall become  exercisable  to purchase
different  distributed  assets,  evidences  of  indebtedness  or other assets or
entitle the holder to purchase a different  number or amount of the foregoing or
to  purchase  any of the  foregoing  at a  different  purchase  price,  then the
occurrence of each such event shall be deemed to be the date of issuance and the
Conversion Record Date with respect to a new right or warrant (and a termination
or expiration of the existing  right or warrant  without  exercise by the holder
thereof);  and (2) in the event of any distribution (or deemed  distribution) of
rights or warrants,  or any Trigger Event or other event (of the type  described
in the preceding sentence) with respect thereto,  that resulted in an adjustment
to the Conversion Price under this Section 12.4(d):

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

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

                  For  purposes of this Section  12.4(d) and  Sections  12.4(a),
12.4(b) and 12.4(c),  any dividend or distribution to which this Section 12.4(d)
is applicable  that also  includes  shares of Common  Stock,  a  subdivision  or
combination  of Common  Stock to which  Section  12.4(b)  applies,  or rights or

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<PAGE>

warrants to subscribe  for or purchase  shares of Common Stock to which  Section
12.4(c) applies (or any combination thereof), shall be deemed instead to be:

                  (A)  a  dividend  or   distribution   of  the   evidences   of
indebtedness,  assets,  shares of Capital Stock, rights or warrants,  other than
such shares of Common Stock,  such  subdivision or combination or such rights or
warrants to which Sections 12.4(a), 12.4(b) and 12.4(c) apply, respectively (and
any Conversion Price reduction  required by this Section 12.4(d) with respect to
such dividend or distribution shall then be made), immediately followed by

                  (B) a dividend or distribution of such shares of Common Stock,
such  subdivision  or  combination  or such rights or warrants  (and any further
Conversion  Price reduction  required by Sections  12.4(a),  12.4(b) and 12.4(c)
with respect to such dividend or distribution shall then be made), except:

                  (I)  the   Conversion   Record   Date  of  such   dividend  or
distribution  shall be substituted as (x) "the date fixed for the  determination
of  stockholders  entitled  to receive  such  dividend  or other  distribution",
"Conversion  Record Date fixed for such  determinations"  and "Conversion Record
Date"  within  the  meaning  of  Section  12.4(a),  (y) "the day upon which such
subdivision  becomes effective" and "the day upon which such combination becomes
effective"  within the meaning of Section  12.4(b),  and (z) as "the  Conversion
Record Date fixed for the determination of stockholders entitled to receive such
rights or warrants",  "the Conversion Record Date fixed for the determination of
the  stockholders  entitled  to  receive  such  rights  or  warrants"  and  such
"Conversion Record Date" within the meaning of Section 12.4(c); and

                  (II) any shares of Common Stock  included in such  dividend or
distribution  shall not be deemed  "outstanding  at the close of business on the
Conversion  Record  Date fixed for such  determination"  within  the  meaning of
Section  12.4(a) and any reduction or increase in the number of shares of Common
Stock  resulting from such  subdivision  or combination  shall be disregarded in
connection with such dividend or distribution.

                  (e) In case the  Company  shall,  by  dividend  or  otherwise,
distribute  to  all or  substantially  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 Price shall be reduced so that the same shall
equal the rate  determined by multiplying  the Conversion  Rate in effect on the
applicable record date by a fraction,

                                 (1) the numerator of which shall be the Current
                  Market  Price on such record date less the full amount of cash
                  so distributed as applicable to one share of Common Stock; and

                                 (2)  the  denominator  of  which  shall  be the
                  Current Market Price on such record date,

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<PAGE>

such adjustment to be effective  immediately prior to the opening of business on
the day following the  Conversion  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 Conversion  Record Date, in lieu of
the foregoing  adjustment,  adequate provision shall be made so that each Holder
shall have the right to receive upon  conversion  the amount of cash such holder
would have received had such Holder  converted each Security on the Record Date.
If such dividend or  distribution  is not so paid or made, the Conversion  Price
shall again be adjusted to be the Conversion  Price 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 stockholders of consideration  per share of Common Stock having a
Fair Market Value (as determined by the Board of Directors,  whose determination
shall be  conclusive  and set forth in a Board  Resolution)  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 Market  Price of a
share of Common Stock on the Trading Day next  succeeding the  Expiration  Time,
the  Conversion  Price  shall be reduced so that the same shall  equal the price
determined by multiplying the Conversion  Price in effect  immediately  prior to
the Expiration Time by a fraction,

                                 (1) the  numerator of which shall be the number
                  of shares of Common Stock outstanding  (including any tendered
                  or exchanged  shares) at the Expiration Time multiplied by the
                  Market  Price of a 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; and

                                 (2) the  denominator  of which shall be the sum
                  of (x) the Fair Market Value  (determined as aforesaid) of the
                  aggregate  consideration  payable to stockholders based on the
                  acceptance  (up to any maximum  specified  in the terms of the
                  tender or exchange  offer) of all shares  validly  tendered or
                  exchanged  and not  withdrawn as of the  Expiration  Time (the
                  shares  deemed  so  accepted  up to any  such  maximum,  being
                  referred to as the "PURCHASED  SHARES") and (y) the product of
                  the  number of shares of Common  Stock  outstanding  (less any
                  Purchased  Shares) at the Expiration Time and the Market Price
                  of a share of Common Stock on the Trading Day next  succeeding
                  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  Price shall again be adjusted to be the Conversion  Price that would
then be in effect if such tender or exchange offer had not been made.

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<PAGE>

                  (g) For purposes of this Section  12.4,  the  following  terms
shall have the meanings indicated:

                           (1) "CURRENT  MARKET PRICE" shall mean the average of
         the  daily  Market  Prices  per share of  Common  Stock (or such  other
         security as  specified  herein) for the ten  consecutive  Trading  Days
         immediately prior to the date in question; provided, however, that if:

                           (i) the "ex" date (as  hereinafter  defined)  for any
         event  (other  than  the  issuance  or   distribution   requiring  such
         computation)  that  requires  an  adjustment  to the  Conversion  Price
         pursuant to Section  12.4(a),  (b),  (c), (d), (e) or (f) occurs during
         such ten  consecutive  Trading Days,  the Market Price for each Trading
         Day prior to the "ex" date for such other  event  shall be  adjusted by
         multiplying  such  Market  Price by the  same  fraction  by  which  the
         Conversion  Price is so  required  to be  adjusted  as a result of such
         other event;

                           (ii) the  "ex"  date for any  event  (other  than the
         issuance or distribution  requiring such  computation) that requires an
         adjustment to the Conversion  Price pursuant to Section  12.4(a),  (b),
         (c),  (d), (e) or (f) occurs on or after the "ex" date for the issuance
         or  distribution  requiring  such  computation  and prior to the day in
         question,  the Market  Price for each Trading Day on and after the "ex"
         date for such other event shall be adjusted by multiplying  such Market
         Price by the reciprocal of the fraction by which the  Conversion  Price
         is so required to be adjusted as a result of such other event; and

                           (iii) the "ex" date for the issuance or  distribution
         requiring  such  computation  is  prior to the day in  question,  after
         taking into account any adjustment  required  pursuant to clause (i) or
         (ii) of this proviso, the Market Price for each Trading Day on or after
         such "ex" date shall be  adjusted  by adding  thereto the amount of any
         cash and the Fair Market Value (as determined by the Board of Directors
         in a  manner  consistent  with  any  determination  of such  value  for
         purposes  of  Section  12.4(d)  or (f),  whose  determination  shall be
         conclusive  and set forth in a Board  Resolution)  of the  evidences of
         indebtedness,  shares  of  Capital  Stock or assets  being  distributed
         applicable  to one share of Common Stock as of the close of business on
         the day before such "ex" date.

                  Notwithstanding the foregoing, for purposes of any computation
under Section 12.4(f),  the Current Market Price of the Common Stock on any date
shall be deemed to be the average of the daily Market Prices per share of Common
Stock for such day and the next two succeeding Trading Days; provided,  however,
that if the "ex" date for any event (other than the tender offer  requiring such
computation)  that requires an adjustment to the  Conversion  Price  pursuant to
Section  12.4(a),  (b), (c),  (d), (e) or (f) occurs on or after the  Expiration
Time for the tender or exchange offer  requiring such  computation  and prior to
the day in question, the Market Price for each Trading Day on and after the "ex"
date for such other event shall be adjusted by multiplying  such Market Price by
the reciprocal of the fraction by which the  Conversion  Price is so required to

                                       77
<PAGE>

be adjusted as a result of such other event. For purposes of this paragraph, the
term "ex" date, when used:

                  (I) 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 Market Price was obtained  without the
right to receive such issuance or distribution;

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

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

                  Notwithstanding the foregoing, whenever successive adjustments
to the  Conversion  Price are called for  pursuant to this  Section  12.4,  such
adjustments  shall be made to the Current  Market  Price as may be  necessary or
appropriate to effectuate the intent of this Section 12.4 and to avoid unjust or
inequitable results as determined in good faith by the Board of Directors.

                           (1) "FAIR  MARKET  VALUE"  shall mean,  if there is a
         current  market for the asset,  debt or  transaction  in question,  the
         amount  that a willing  buyer  would  pay a willing  seller in an arm's
         length  transaction  or, in the  absence  of a current  market for such
         asset, debt or transaction,  the amount determined in good faith by the
         Board of Directors that represents its determination of the fair market
         value of the asset.

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

                  The Company may make such reductions in the Conversion  Price,
in addition to those required by Sections 12.4(a), (b), (c), (d), (e) or (f), 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 or otherwise.

                                       78
<PAGE>

                  (h) No adjustment need be made for (i) a transaction  referred
to in Sections 12.4 or 12.11 if Holders  participate in the transaction  without
conversion on a basis and with notice that the Board of Directors  determines to
be fair and  appropriate  in light of the basis and  notice on which  holders of
shares of Common Stock  participate  in the  transaction;  (ii) the issuance and
distribution  of rights to  purchase  shares of Common  Stock  pursuant to (A) a
Company plan for reinvestment of dividends or interest,  (B) a change in the par
value or no par value of the  shares of Common  Stock or (C) to the  extent  the
Securities  become  convertible  pursuant to this Article 12 in whole or in part
into cash,  with  respect to such cash  after  such cash is  distributed  to the
Holders in satisfaction of such conversion right.

                  (i) To the extent  permitted  by  applicable  law, the Company
from time to time may reduce the  Conversion  Price by any amount for any period
of time if the  period  is at  least 20 days and the  reduction  is  irrevocable
during the period and the Board of Directors  determines in good faith that such
reduction  would be in the best  interests of the Holders,  which  determination
shall be conclusive and set forth in a Board Resolution.

                           Whenever the Conversion  Price is reduced pursuant to
the preceding sentence, the Company shall
mail to the Trustee and the  Conversion  Agent and each Holder at the address of
such Holder as it appears in the Register a notice of the  reduction at least 15
days prior to the date the  reduced  Conversion  Price  takes  effect,  and such
notice shall state the reduced  Conversion  Price and the period during which it
will be in effect.

                  (j) No  adjustment in the  Conversion  Price shall be required
unless such  adjustment  would require an increase or decrease of at least 1% in
such price;  provided,  however,  that any  adjustments  which by reason of this
Section  12.4(j) are not required to be made shall be carried  forward and taken
into account in any subsequent  adjustment.  All calculations under this Article
12 shall be made by the  Company in good faith and shall be made to the  nearest
cent or to the nearest one hundredth of a share,  as  applicable.  No adjustment
need be made for a change in the par value or no par value of the Common Stock.

                  (k) No adjustment in Conversion Price shall be required if the
Fair Market Value of any assets, debt securities or rights,  warrants or options
to purchase the  securities of the Company,  including but not limited to Common
Stock,  in each case applicable to each share of Common Stock are distributed to
the Company's  stockholders  and such Fair Market Value either equals or exceeds
the Current  Market  Price or such Current  Market  Price  exceeds the such Fair
Market Price Value by an amount not exceeding $1.00; provided,  however, in lieu
of an adjustment to the Conversion  Price,  adequate  provision shall be made so
that each Holder shall have the right to receive upon  conversion of a Security,
in addition to shares of Common Stock, the kind and amount of such  distribution
such  Holder  would  have  received  had such  Holder  converted  such  Security
immediately prior to the Conversion Record Date for determining the shareholders
entitled to receive the distribution.

                                       79
<PAGE>

                  (l) In any case in which this  Section 12.4  provides  that an
adjustment shall become effective immediately after a Conversion Record Date for
an event,  the Company may defer until the  occurrence of such event (i) issuing
to the Holder of any security  converted after such  Conversion  Record Date and
before  the  occurrence  of such  event the  additional  shares of Common  Stock
issuable upon such conversion by reason of the adjustment required by such event
over and above the Common Stock  issuable  upon such  conversion  before  giving
effect to such  adjustment  and (ii) paying to such holder any amount in cash in
lieu of any fraction pursuant to Section 12.3.

                  (m) For purposes of this Section 12.4, 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.

                  (n) If the  distribution  date for the rights  provided in the
Company's  rights  agreement,  if any,  occurs  prior to the date a Security  is
converted,  the Holder of the  Security  who converts  such  Security  after the
distribution  date is not entitled to receive the rights that would otherwise be
attached (but for the date of conversion) to the shares of Common Stock received
upon such conversion; provided, however, that an adjustment shall be made to the
Conversion  Price  pursuant  to  clause  12.4(b)  as if the  rights  were  being
distributed to the common  stockholders of the Company immediately prior to such
conversion.  If such an  adjustment  is made and the rights are later  redeemed,
invalidated or terminated,  then a corresponding  reversing  adjustment shall be
made to the Conversion  Price,  on an equitable  basis,  to take account of such
event.

                  (o) 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 a subsidiary of the Company, then the Conversion Price shall be reduced
so that the same  shall be equal to the  price  determined  by  multiplying  the
Conversion  Price in effect  immediately  prior to the close of  business on the
Conversion Record Date with respect to such distribution by a fraction:

                           (1) the  numerator  of  which  shall  be the  Current
         Market  Price of the shares of  Capital  Stock of such  subsidiary  (as
         determined  by the Board of  Directors,  whose  determination  shall be
         conclusive and set forth in a Board Resolution), measured from the date
         of such distribution; and

                           (2) the  denominator  of which  shall be the  Current
         Market Price of the Company's  common stock,  measured from the date of
         such distribution.

                  SECTION 12.5. NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.

                  Whenever the Conversion  Price is adjusted as herein  provided
(other than in the case of an  adjustment  pursuant to the second  paragraph  of
Section  12.4(i)  for which  the  notice  required  by such  paragraph  has been
provided),  the Company shall  promptly file with the Trustee and any Conversion

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Agent other than the Trustee an Officers' Certificate setting forth the adjusted
Conversion  Price and  showing  in  reasonable  detail the facts upon which such
adjustment is based. Promptly after delivery of such Officers' Certificate,  the
Company  shall  prepare  a notice  stating  that the  Conversion  Price has been
adjusted and setting forth the adjusted  Conversion  Price and the date on which
each adjustment becomes effective,  and shall mail such notice to each Holder at
the address of such Holder  pursuant to Section 13.2 within 20 days prior to the
effective  date of such  adjustment.  Failure to deliver  such notice  shall not
affect the legality or validity of any such adjustment.

                  SECTION 12.6. NOTICE PRIOR TO CERTAIN ACTIONS.

                  In case at any time after the date hereof:

                           (1) the  Company  shall  declare a  dividend  (or any
         other  distribution) on its Common Stock payable otherwise than in cash
         out of its capital surplus or its consolidated retained earnings;

                           (2) the Company  shall  authorize the granting to the
         holders of its Common Stock of rights or warrants to  subscribe  for or
         purchase  any  shares of Capital  Stock of any class (or of  securities
         convertible  into shares of Capital Stock of any class) or of any other
         rights;

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

                           (4) there shall occur the  voluntary  or  involuntary
         dissolution, liquidation or winding up of the Company;

the Company shall cause to be filed at each office or agency  maintained for the
purpose of conversion of securities  pursuant to Section 9.2, and shall cause to
be provided to the Trustee and all Holders in  accordance  with Section 13.2, at
least 20 days (or 10 days in any case  specified  in  clause  (1) or (2)  above)
prior to the applicable record or effective date hereinafter specified, a notice
stating:

                  (A) the date on which a record is to be taken for the  purpose
of such dividend, distribution, rights or warrants, or, if a record is not to be
taken,  the date as of which the holders of shares of Common  Stock of record to
be  entitled  to such  dividend,  distribution,  rights  or  warrants  are to be
determined; or

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<PAGE>

                  (B)  the  date  on  which   such   reclassification,   merger,
consolidation,   statutory  share   exchange,   combination,   sale,   transfer,
conveyance,  dissolution,  liquidation  or  winding  up is  expected  to  become
effective,  and the date as of which it is  expected  that  holders of shares of
Common  Stock of record  shall be entitled to  exchange  their  shares of Common
Stock  for   securities,   cash  or  other   property   deliverable   upon  such
reclassification,   merger,  consolidation,   statutory  share  exchange,  sale,
transfer, dissolution, liquidation or winding up.

                  Neither the failure to give such notice nor any defect therein
shall affect the legality or validity of the proceedings or actions described in
clauses (1) through (4) of this Section 12.6.

                  SECTION 12.7. COMPANY TO RESERVE COMMON STOCK.

                  The Company  shall at all times  reserve  and keep  available,
free from  preemptive  rights,  out of its authorized but unissued Common Stock,
for the purpose of effecting the conversion of the  Securities,  the full number
of shares of fully paid and  nonassessable  Common Stock then  issuable upon the
conversion of all Outstanding Securities.

                  SECTION 12.8. COMMON STOCK TO BE FULLY PAID AND NONASSESSABLE.

                  The  Company  covenants  that all  Common  Stock  which may be
issued  upon  conversion  of  Securities  will  upon  issue  be  fully  paid and
nonassessable  and, except as provided in Section 12.9, the Company will pay all
taxes, liens and charges with respect to the issue thereof.

                  SECTION 12.9. TAXES ON CONVERSIONS.

                  Except as provided in the next sentence,  the Company will pay
any and all taxes (other than taxes on income) and duties that may be payable in
respect of the issue or  delivery  of shares of Common  Stock on  conversion  of
Securities pursuant to Article 12. A Holder delivering a Security for conversion
shall be liable  for and will be  required  to pay any tax or duty  which may be
payable in respect of any transfer  involved in the issue and delivery of shares
of Common  Stock in a name  other  than that of the  Holder of the  Security  or
Securities to be converted,  and no such issue or delivery  shall be made unless
the Person  requesting such issue has paid to the Company the amount of any such
tax or duty, or has established to the satisfaction of the Company that such tax
or duty has been paid.

                  SECTION 12.10. CANCELLATION OF CONVERTED SECURITIES.

                  All Securities  delivered for conversion shall be delivered to
the Trustee to be canceled by or at the direction of the Trustee.

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<PAGE>

                  SECTION  12.11.  EFFECT  OF  RECLASSIFICATION,  CONSOLIDATION,
MERGER OR SALE.

                  If any of following events occur:

                           (1) any reclassification or change of the outstanding
         shares of Common Stock  (other than a change in par value,  or from par
         value  to no par  value,  or from no par  value to par  value,  or as a
         result of a subdivision or  combination),  as a result of which holders
         of Common Stock shall be entitled to receive Capital Stock,  securities
         or other  property  or assets  (including  cash) with  respect to or in
         exchange for such Common Stock;

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

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

then (A) the Company or the successor or purchasing Person, as applicable, shall
execute with the Trustee a supplemental  indenture (which shall comply with this
Indenture and the TIA as in force at the date of execution of such  supplemental
indenture  if  such  supplemental  indenture  is  then  required  to so  comply)
providing that such security  shall be  convertible  into the kind and amount of
shares of Capital Stock and other  securities  or property or assets  (including
cash)  which  such  Holder  would  have  been  entitled  to  receive  upon  such
reclassification,  change,  merger,  consolidation,  statutory  share  exchange,
combination,  sale or conveyance had such  Securities been converted into Common
Stock immediately prior to such reclassification, change, merger, consolidation,
statutory share exchange,  combination,  sale or conveyance assuming such holder
of Common Stock did not exercise its rights of election,  if any, as to the kind
or amount of  securities,  cash or other property  receivable  upon such merger,
consolidation,  statutory share exchange,  sale or conveyance (provided that, if
the kind or amount of securities,  cash or other property  receivable  upon such
merger,  consolidation,  statutory share exchange, sale or conveyance is not the
same for each share of Common  Stock in respect of which such rights of election
shall not have been exercised  ("NON-ELECTING  SHARE"), then for the purposes of
this Section  12.11 the kind and amount of  securities,  cash or other  property
receivable upon such merger,  consolidation,  statutory share exchange,  sale or
conveyance for each Non-Electing Share shall be deemed to be the kind and amount
so  receivable  per  share by a  plurality  of the  Non-Electing  Shares).  Such
supplemental  indenture shall provide for  adjustments  which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
12. If, in the case of any such reclassification, change, merger, consolidation,
statutory share exchange,  combination,  sale or conveyance,  the stock or other

                                       83
<PAGE>

securities and assets receivable  thereupon by a holder of Common Stock includes
shares of stock or other  securities and assets of a corporation  other than the
successor or purchasing Person, as applicable, in such reclassification, change,
merger,   consolidation,   statutory  share  exchange,   combination,   sale  or
conveyance,  then such  supplemental  indenture  shall also be  executed by such
other  corporation and shall contain such  additional  provisions to protect the
interests of the Holders as the Board of  Directors  shall  reasonably  consider
necessary by reason of the foregoing,  including to the extent  practicable  the
provisions providing for the Purchase rights set forth in Article 11.

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

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

                  If this  Section  12.11  applies  to any event or  occurrence,
Section 12.4 shall not apply.

                  SECTION  12.12.   RESPONSIBILITY  OF  TRUSTEE  FOR  CONVERSION
PROVISIONS.

                  The Trustee, subject to the provisions of Section 5.1, and any
Conversion  Agent shall not at any time be under any duty or  responsibility  to
any Holder of Securities to determine  whether any facts exist which may require
any adjustment of the Conversion  Price, or with respect to the nature or intent
of any such adjustments  when made, or with respect to the method  employed,  or
herein or in any supplemental  indenture provided to be employed,  in making the
same.  Neither the Trustee,  subject to the  provisions  of Section 5.1, nor any
Conversion  Agent shall be accountable with respect to the validity or value (of
the kind or amount) of any Common Stock or of any other  securities or property,
which  may at any  time be  issued  or  delivered  upon  the  conversion  of any
Security;  and it or they do not make any  representation  with respect thereto.
Neither  the  Trustee,  subject  to the  provisions  of  Section  5.1,  nor  any
Conversion Agent shall be responsible for any failure of the Company to make any
cash  payment  or to issue,  transfer  or  deliver  any shares of stock or share
certificates or other  securities or property upon the surrender of any Security
for the purpose of  conversion;  and the Trustee,  subject to the  provisions of
Section 5.1, and any Conversion Agent shall not be responsible or liable for any
failure  of the  Company  to comply  with any of the  covenants  of the  Company
contained in this Article.

                                   ARTICLE 13

                     OTHER PROVISIONS OF GENERAL APPLICATION

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<PAGE>

                  SECTION 13.1. TRUST INDENTURE ACT CONTROLS.

                  This  Indenture is subject to the  provisions of the TIA which
are required to be part of this Indenture,  and shall, to the extent applicable,
be governed by such provisions.

                  SECTION 13.2. NOTICES.

                  Any notice or  communication  to the Company or the Trustee is
duly given if in writing (which may be by facsimile with the original to follow)
and delivered in person or mailed by  first-class  mail to the address set forth
below:

                  (a) if to the Company:

                  Alloy, Inc.
                  151 West 26th Street, 11th Floor
                  New York, NY  10001
                  Telecopy: (212) 244-4311
                  Attention:  Chief Executive Officer

                  With copies to:

                  Alloy, Inc.
                  151 West 26th Street, 11th Floor
                  New York, NY  10001
                  Telecopy: (212) 244-4311
                  Attention:  General Counsel

                  and

                  Katten Muchin Zavis & Rosenman
                  1025 Thomas Jefferson St., N.W.
                  East Lobby, Suite 700
                  Washington, District of Columbia
                  20007-5201
                  Telecopy:  (202) 339-6058
                  Attention:  Richard Graf

                  (b) if to the Trustee:

                  Deutsche Bank Trust Company Americas
                  Corporate Trust & Agency Services
                  60 Wall Street
                  27th Floor - Mail Stop NYC60-2710
                  New York, NY  10005

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<PAGE>

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

                  Any  notice or  communication  to a Holder  shall be mailed by
first class mail to his address  shown on the  Register  kept by the  Registrar.
Failure  to mail a notice or  communication  to a Holder  or any  defect in such
notice or  communication  shall not affect its sufficiency with respect to other
Holders.  If the company mails a notice or  communication  to Holders,  it shall
mail a copy to the Trustee at the same time

                  If a notice or  communication  is mailed or sent in the manner
provided above within the time  prescribed it is duly given as of the date it is
mailed,  whether or not the  addressee  receives  it,  except that notice to the
Trustee shall only be effective upon receipt thereof by the Trustee.

                  SECTION 13.3. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.

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

                  SECTION 13.4. ACTS OF HOLDERS OF SECURITIES.

                  (a) Any request,  demand,  authorization,  direction,  notice,
consent,  waiver or other action provided by this Indenture to be given or taken
by Holders of Securities may be embodied in and evidenced by:

                           (1) one or more instruments of substantially  similar
         tenor  signed  by such  Holders  in  person  or by agent or proxy  duly
         appointed in writing;

                           (2) the  record of Holders  of  Securities  voting in
         favor  thereof,  either in  person  or by  proxies  duly  appointed  in
         writing,  at any meeting of Holders of Securities  duly called and held
         in accordance with the provisions of Article 8; or

                           (3) a combination  of such  instruments  and any such
         record.

                  Except as herein  otherwise  expressly  provided,  such action
shall become effective when such instrument or instruments or record or both are
delivered  to the Trustee and,  where it is hereby  expressly  required,  to the
Company.  Such  instrument or  instruments  and record (and the action  embodied
therein and evidenced  thereby) are herein sometimes referred to as the "ACT" of
the Holders of Securities  signing such  instrument or instruments and so voting
at such  meeting.  Proof of  execution  of any such  instrument  or of a writing
appointing  any such  agent or  proxy,  or of the  holding  by any  Person  of a
Security,  shall be sufficient for any purpose of this Indenture and (subject to

                                       86
<PAGE>

Section 5.1)  conclusive  in favor of the Trustee and the Company if made in the
manner  provided  in this  Section.  The  record of any  meeting  of  Holders of
Securities shall be proved in the manner provided in Section 8.6.

                  (b) The fact and date of the  execution  by any  Person of any
such  instrument  or  writing  may be proved  in any  manner  which the  Trustee
reasonably deems sufficient.

                  (c) The principal amount and serial numbers of Securities held
by any Person,  and the date of such Person holding the same, shall be proved by
the Register.

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

                  SECTION  13.5.   CERTIFICATE  AND  OPINION  AS  TO  CONDITIONS
PRECEDENT.

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

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

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

                  Upon any  application or request by the Company to the Trustee
to take any action under any  provision  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

                                       87
<PAGE>

opinion  of such  Counsel  all such  conditions  precedent,  if any,  have  been
complied with,  except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this  Indenture  relating  to such  particular  application  or  request,  no
additional certificate or opinion need be furnished.

                  SECTION 13.6. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.

                  Each  certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

                           (1) a statement  that each  individual  signing  such
         certificate or opinion on behalf of the Company, has read such covenant
         or condition and the definitions herein relating thereto;

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

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

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

                  SECTION 13.7. EFFECT OF HEADINGS AND TABLE OF CONTENTS.

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

                  SECTION 13.8. SUCCESSORS AND ASSIGNS.

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

                  SECTION 13.9. SEPARABILITY CLAUSE.

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

                  SECTION 13.10. BENEFITS OF INDENTURE.

                  Nothing  contained  in this  Indenture  or in the  Securities,
express or implied,  shall give to any Person, other than the parties hereto and
their successors  hereunder and the Holders of Securities,  any benefit or legal

                                       88
<PAGE>

or equitable right, remedy or claim under this Indenture.

                  SECTION 13.11. GOVERNING LAW.

                  THIS  INDENTURE AND THE  SECURITIES  SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                  SECTION 13.12. COUNTERPARTS.

                  This instrument may be executed in any number of counterparts,
each of which when so executed  shall be deemed to be an  original  but all such
counterparts shall together constitute but one and the same instrument.

                  SECTION 13.13. LEGAL HOLIDAYS.

                  In any case where any Interest Payment Date,  Redemption Date,
Repurchase  Date or Stated  Maturity of any  Security or the last day on which a
Holder  of a  Security  has a right to  convert  such  Security  shall  not be a
Business   Day  at  any  Place  of   Payment  or  Place  of   Conversion,   then
(notwithstanding  any other  provision of this  Indenture or of the  Securities)
payment of Principal on or Interest on or conversion of the Securities, need not
be made at such Place of Payment or Place of  Conversion on such day, but may be
made on the next  succeeding  Business  Day at such Place of Payment or Place of
Conversion  with the same  force and effect as if made on the  Interest  Payment
Date, Redemption Date, Repurchase Date or at the Stated Maturity or on such last
day for conversion;  provided, however, that in the case that payment is made on
such succeeding  Business Day, no Interest shall accrue on the amount so payable
for the period  from and after such  Interest  Payment  Date,  Redemption  Date,
Repurchase Date or Stated Maturity, as applicable.

                  SECTION 13.14. RECOURSE AGAINST OTHERS.

                  No recourse for the payment of the Principal of or Interest on
any Securities,  or for any claim based thereon or otherwise in respect thereof,
shall be had  against  any  incorporator,  shareholder,  officer or  director or
manager,  as such,  past,  present or future,  of the  Company of any  successor
entity to the Company, whether by virtue of any constitution, statute or rule of
law or by the  enforcement of any  assessment or penalty or otherwise,  all such
liability being, by the acceptance  thereof and as part of the consideration for
the issue thereof, expressly waived and released.

                                       89
<PAGE>

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

                                   ALLOY, INC.

                                   By: /s/ Gina R. DiGioia
                                      ------------------------------------------
                                      Name:  Gina R. DiGioia
                                      Title: Vice President and General Counsel

                                   DEUTSCHE BANK TRUST COMPANY
                                   AMERICAS,  AS  TRUSTEE  AND
                                   NOT   IN   ITS   INDIVIDUAL
                                   CAPACITY.

                                   By: /s/ Irina Golovashchuk
                                      ------------------------------------------
                                      Name:  Irina Golovashchuk
                                      Title: Associate

                                       90
<PAGE>

                                    EXHIBIT A

                                               [FORM OF FACE OF GLOBAL SECURITY]

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

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

         THE SECURITY  EVIDENCED  BY THIS  CERTIFICATE  HAS NOT BEEN  REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
         ANY STATE  SECURITIES  LAWS,  AND MAY NOT BE OFFERED,  SOLD,  ASSIGNED,
         TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT AS SET
         FORTH IN THE FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER:

         (1)  AGREES  THAT IT WILL NOT  WITHIN  TWO  YEARS  AFTER  THE  ORIGINAL
         ISSUANCE OF THIS  SECURITY  RESELL OR  OTHERWISE  TRANSFER THE SECURITY
         EVIDENCED  HEREBY OR THE COMMON STOCK ISSUABLE UPON  CONVERSION OF SUCH
         SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF,  (B) TO A
         QUALIFIED  INSTITUTIONAL  BUYER IN COMPLIANCE  WITH RULE 144A UNDER THE
         SECURITIES  ACT,  (C)  PURSUANT  TO  THE  EXEMPTION  FROM  REGISTRATION
         PROVIDED BY RULE 144 UNDER THE  SECURITIES ACT (IF  AVAILABLE),  OR (D)
         PURSUANT TO A REGISTRATION  STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
         UNDER THE  SECURITIES  ACT AND WHICH  CONTINUES  TO BE EFFECTIVE AT THE
         TIME OF SUCH TRANSFER; AND

         (2)  AGREES  THAT IT WILL  DELIVER  TO THE  ISSUER  HEREOF,  AT LEAST 3
         BUSINESS DAYS PRIOR TO ANY INTENDED TRANSFER PURSUANT TO THE PROVISIONS
         OF CLAUSE 1(D) ABOVE,  A WRITTEN  NOTICE OF SUCH HOLDER'S  INTENTION TO

<PAGE>

         EFFECT SUCH A TRANSFER,  WHICH  NOTICE  SHALL  REMAIN  EFFECTIVE  FOR 5
         BUSINESS DAYS AFTER SUCH DELIVERY; AND

         (3) AGREES  THAT IT WILL  DELIVER TO EACH  PERSON TO WHOM THE  SECURITY
         EVIDENCED  HEREBY IS  TRANSFERRED  (OTHER  THAN A TRANSFER  PURSUANT TO
         CLAUSE 1(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

         IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY WITHIN
         TWO YEARS AFTER THE ORIGINAL  ISSUANCE OF SUCH  SECURITY  (OTHER THAN A
         TRANSFER  PURSUANT  TO CLAUSE  1(D)  ABOVE),  THE HOLDER MUST CHECK THE
         APPROPRIATE  BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
         OF SUCH  TRANSFER  AND SUBMIT THIS  CERTIFICATE  TO THE TRUSTEE (OR ANY
         SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFER IS PURSUANT
         TO CLAUSE 1(B) OR 1(C) ABOVE,  THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
         FURNISH TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE),  SUCH
         CERTIFICATIONS,  LEGAL OPINIONS OR OTHER  INFORMATION AS THE COMPANY OR
         THE TRUSTEE MAY  REASONABLY  REQUIRE TO CONFIRM  THAT SUCH  TRANSFER IS
         BEING MADE  PURSUANT TO AN  EXEMPTION  FROM,  OR IN A  TRANSACTION  NOT
         SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

         THIS  LEGEND WILL BE REMOVED  UPON THE  EARLIER OF THE  TRANSFER OF THE
         SECURITY  EVIDENCED  HEREBY  PURSUANT  TO  CLAUSE  1(D)  ABOVE  OR  THE
         EXPIRATION  OF TWO YEARS FROM THE  ORIGINAL  ISSUANCE  OF THE  SECURITY
         EVIDENCED HEREBY.

                                      A-2

<PAGE>

                                   ALLOY, INC.

                  5.375% CONVERTIBLE SENIOR DEBENTURE DUE 2023

CUSIP NO. 019855 AA 3

No._____________                                           $_________________

                  ALLOY, INC., a Delaware  corporation  (including any successor
corporation  under the Indenture  hereinafter  referred to, the "COMPANY"),  for
value  received,  hereby promises to pay to  _______________,  or its registered
assigns, the principal sum of _____________ U.S. Dollars  ($_______________)  on
August 1, 2023.

                  Interest  Payment Dates:  February 1 and August 1,  commencing
February 1, 2004.

                  Regular Record Dates: January 15 and July 15.

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

                                      A-3

<PAGE>

                  IN WITNESS WHEREOF, the Company has caused this Security to be
duly executed manually or by facsimile by its duly authorized officers.

                                  ALLOY, INC.

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

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

Dated:

Trustee's Certificate of Authentication

This is one of the 5.375%  Convertible  Senior  Debentures due 2023 described in
the within-named Indenture.

DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee

By:  _____________________________
        Authorized Signatory

Dated:   _____________,

                                      A-4

<PAGE>

                      [FORM OF REVERSE OF GLOBAL SECURITY]

                    5.375% Convertible Senior Notes due 2023

                  This Security is one of a duly authorized  issue of the 5.375%
Convertible Senior Notes due 2023 (the "Securities") of Alloy, Inc.., a Delaware
corporation (including any successor corporation under the Indenture hereinafter
referred to, the  "Company"),  issued under an  Indenture,  dated as of July 23,
2003 (the  "Indenture"),  between the Company and  Deutsche  Bank Trust  Company
Americas,  as trustee (the  "Trustee").  The terms of the Security include those
stated in the  Indenture,  those made part of the  Indenture by reference to the
Trust  Indenture  Act of 1939, as amended  ("TIA"),  and those set forth in this
Security.  This Security is subject to all such terms,  and Holders are referred
to the  Indenture  and the TIA for a statement of all such terms.  To the extent
permitted by applicable law, in the event of any inconsistency between the terms
of this  Security  and the terms of the  Indenture,  the terms of the  Indenture
shall control.  Capitalized  terms used but not defined herein have the meanings
assigned to them in the Indenture referred to below unless otherwise indicated.

1. Interest

                  The Company  promises to pay Interest on the principal  amount
of the Securities at the interest rate of 5.375% (the "Interest  Rate") from the
date of issuance until  repayment in full at August 1, 2023, or until an earlier
conversion,  redemption  or  repurchase.  The Company  will pay Interest on this
Security  semi-annually  in arrears on February and July of each year (each,  an
"interest payment date"), commencing February 1, 2004.

                  The  Securities  shall bear  interest from July 23, 2003 until
the principal  amount  thereof is paid or made  available for payment,  or until
such date on which the  Securities  are  converted,  redeemed  or  purchased  as
provided herein at a rate of 5.375% per annum.

                  Interest on the Securities  shall be computed (i) for any full
semi-annual  period for which a particular  Interest Rate is applicable,  on the
basis of a 360-day  year of twelve  30-day  months  and (ii) for any  period for
which a particular  Interest Rate is applicable for less than a full  semiannual
period for which Interest is calculated, on the basis of a 30-day month and, for
such  periods of less than a month,  the actual  number of days  elapsed  over a
30-day month.
                  If this Security is redeemed or  repurchased by the Company on
a date that is after the  record  date and prior to the  corresponding  interest
payment  date,  interest  accrued  and unpaid  hereon to but not  including  the
applicable  Redemption Date or Change of Control  Purchase Date, as the case may
be, will be paid to the same Holder to whom the Company  pays the  principal  of
this Security.

                  Interest on Securities converted after a record date but prior
to the  corresponding  interest  payment  date will be paid to the Holder of the
Securities  on the record  date but,  upon  conversion,  the Holder must pay the
Company the interest which has accrued and will be paid on such interest payment
date;  provided,  that no such payment  need be made with respect to  Securities

                                      A-5
<PAGE>

which will be redeemed by the Company after a record date and prior to the third
Business Day after the corresponding interest payment date.

                  If  the  principal  amount  hereof  or  any  portion  of  such
principal  amount or any  interest on any Security is not paid when due (whether
upon  acceleration  pursuant to Section 4.8 of the Indenture,  upon the date set
for  payment  of the  Redemption  Price  pursuant  to  Section  10 hereof or the
Repurchase  Price  pursuant to Section 11 hereof or upon the Stated  Maturity of
this  Security),  then in each such case the overdue amount shall, to the extent
permitted by law, bear interest at the Interest Rate, compounded  semi-annually,
which  interest  shall  accrue  from the date on which such  overdue  amount was
originally  due to the  date of  payment  of  such  amount,  including  interest
thereon,  has been made or duly provided for. All such interest shall be payable
on demand.

2. Method of Payment.

                  Except as  provided  below,  interest  will be paid (i) on the
Global  Securities to The  Depository  Trust  Company  ("DTC") or its nominee in
immediately  available  funds,  (ii)  on any  definitive  Securities  having  an
aggregate principal amount of $5,000,000 or less, by check mailed to the Holders
of such Securities;  and (iii) on any definitive  Securities having an aggregate
principal  amount of more  than  $5,000,000,  by wire  transfer  in  immediately
available funds at the election of the Holders of such Securities.

                  At Stated Maturity the Company will pay interest on definitive
Securities at the Company's  office or agency in New York City,  which initially
will be the Corporate Trust Office of the Trustee in New York City.

                  Principal  on  Global  Securities  will  be paid to DTC or its
nominee in immediately available funds.  Principal on definitive Securities will
be  payable,  upon  Stated  Maturity or when due, at the office or agency of the
Company in New York City,  maintained for such purpose,  initially the Corporate
Trust Office of the Trustee in New York City.

                  Subject  to the terms and  conditions  of the  Indenture,  the
Company will make payments in cash in respect of Redemption  Prices,  Repurchase
Prices and at Stated  Maturity to Holders who  surrender  Securities to a Paying
Agent to collect such  payments in respect of the  Securities.  The Company will
pay cash  amounts in money of the United  States  that at the time of payment is
legal tender for payment of public and private debts.  However,  the Company may
make such cash payments by check payable in such money.

3. Paying Agent, Conversion Agent and Registrar.

                  Initially,   Deutsche   Bank  Trust   Company   Americas  (the
"Trustee") will act as Paying Agent, Conversion Agent and Registrar. The Company
may appoint and change any Paying Agent,  Conversion Agent or Registrar  without
notice,  other  than  notice to the  Trustee;  provided  that the  Company  will
maintain at least one Paying  Agent in the State of New York,  City of New York,
Borough  of  Manhattan,  which  shall  initially  be an  office or agency of the
Trustee.  The Company or any of its  Subsidiaries or any of their Affiliates may
act as Paying Agent, Conversion Agent or Registrar.

                                      A-6
<PAGE>

4. Indenture.

                  The Securities are senior unsecured obligations of the Company
limited to $65,000,000  ($78,000,000 if the Initial  Purchasers'  over-allotment
option is exercised in full  pursuant to the  Purchase  Agreement)  in aggregate
principal  amount.  The  Indenture  does not  limit  other  indebtedness  of the
Company, secured or unsecured.

5. Redemption at the Option of the Company.

                  No sinking fund is provided for the Securities. The Securities
are not  redeemable  by the Company  prior to August 1, 2008.  At any time on or
after  August 1, 2008,  except for  Securities  that it is  required to purchase
pursuant to Section  11.1 of the  Indenture  or required to convert  pursuant to
Section  12.1 of the  Indenture,  the Company  may,  at its option,  redeem this
Security in whole at any time or in part from time to time, on any date prior to
the Stated Maturity of the Security, upon notice as set forth in Section 10.4 of
the  Indenture,  at  the  Redemption  Price  (expressed  in  percentages  of the
principal amount) set forth below if, but only if, redeemed on a Redemption Date
occurring  each  August 1 during  the  12-month  period  beginning  on the years
indicated:

------------------------------------------------------- -----------------
                                                           Redemption
         During the Twelve Months Commencing                 Price
------------------------------------------------------- -----------------
2008................................................        103.000%
------------------------------------------------------- -----------------
2009................................................        102.000%
------------------------------------------------------- -----------------
2010................................................        101.000%
------------------------------------------------------- -----------------
2011 and thereafter.................................        100.000%
------------------------------------------------------- -----------------

                  If the Company  exercises  its option to redeem this  Security
pursuant,  a Holder may  nevertheless  exercise its right to have this  Security
purchased  pursuant to Section  11.1 of the  Indenture,  if  applicable,  and to
convert such Securities  pursuant to Article 12 of the Indenture,  in each case,
until  the  close of  business  two  Business  Days  immediately  preceding  the
Redemption Date.

                  The  Company  shall  pay any  Interest  to the  Holder of this
Security if called for  redemption  (including  if it is  converted  into Common
Stock  after the date the  notice of the  redemption  is mailed and prior to the
Redemption  Date) accrued but not paid to, but excluding,  the  Redemption  Date
pursuant  to  Section 1 of the this  Security;  provided,  however,  that if the
Redemption Date is an Interest  Payment Date, the Company shall pay the Interest
to the Holder of the Security at the close of business on such Interest  Payment
Date.  If the  Security  is  redeemed,  then on and after the  Redemption  Date,
Interest  shall cease to accrue on Securities  or portions of Securities  called
for  redemption,  unless the Company  defaults in the payment of the  Redemption
Price.

                  Securities in original denominations larger than $1,000 may be
redeemed in part. If any Security  selected for partial  redemption is converted
or elected to be purchased in part before  termination of the  conversion  right
with  respect to the  portion of the  Security so  selected,  the  converted  or
purchased  portion of such Security  shall be deemed to be the portion  selected

                                      A-7
<PAGE>

for redemption (provided, however, that the Holder of such Security so converted
or  purchased  and  deemed  redeemed  shall not be  entitled  to any  additional
interest  payment as a result of such deemed  redemption  than such Holder would
have  otherwise  been  entitled to receive upon  conversion  or purchase of such
Security).  Securities which have been converted or purchased during a selection
of  Securities to be redeemed may be treated by the Trustee as  outstanding  for
the purpose of such selection.

                  The Company is required to furnish the notice of redemption to
the Holders as provided in the Indenture.

6. Purchase Right Upon a Specific Date or Repurchase Event.

                  If a Repurchase Event occurs,  this Security,  at the Holder's
option,  shall have the right,  subject to the conditions and in accordance with
the  provisions  of the  Indenture,  to require  the  Company to  purchase  this
Security (or any portion of the principal  amount hereof that is at least $1,000
or an integral  multiple  thereof,  provided  that the portion of the  principal
amount of this Security to be outstanding  after such purchase is at least equal
to $1,000 or an integral  multiple  thereof) at the Repurchase  Price,  plus any
accrued and unpaid Interest to, but excluding,  the Repurchase  Date;  provided,
however,  that (i)  installments  of  Interest  on this  Security  if its Stated
Maturity is prior to or on the  Repurchase  Event Purchase Date shall be payable
to the Holders of this  Security,  registered  as such on the  relevant  Regular
Record Date  according  to their terms and the  provisions  of Section 1 of this
Security.

7. Notice of Redemption.

                  Notice of  redemption  pursuant to Section 5 of this  Security
will be mailed at least 30 days but not more than 60 days before the  Redemption
Date to each Holder of  Securities  to be redeemed  at the  Holder's  registered
address.  If money  sufficient to pay the Redemption Price of all Securities (or
portions  thereof) to be redeemed on the  Redemption  Date is deposited with the
Paying  Agent  prior  to or on  the  Redemption  Date,  immediately  after  such
Redemption  Date  interest  ceases  to  accrue on such  Securities  or  portions
thereof.

8. Conversion.

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

                  A  Security  in  respect  of which a Holder  has  delivered  a
Repurchase  Election  Form,  exercising the option of such Holder to require the
Company to purchase  such  Security,  may be converted  only if such  Repurchase
Election Form is withdrawn in accordance with the terms of the Indenture.

                  The initial Conversion Price is $8.375,  subject to adjustment
in  certain  events  described  in  the  Indenture.  A  Holder  that  surrenders
Securities for conversion will receive cash or a check in lieu of any fractional
share of Common Stock.

                                      A-8
<PAGE>

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

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

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

9. Denominations; Transfer; Exchange.

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

10. Persons Deemed Owners.

                  The  registered  Holder  of  this  Security  as  shown  on the
Register may be treated as the owner of this Security for all purposes.

11. Unclaimed Money or Securities.

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

12. Amendment; Waiver.

                  Subject to certain exceptions set forth in the Indenture,  (i)
the Indenture or the Securities  may be amended (a) with the written  consent of
the  Holders  of at  least a  majority  in  aggregate  principal  amount  of the

                                      A-9
<PAGE>

outstanding  Securities or (b) by the adoption of a resolution,  at a meeting of
Holders of the Securities at the time  outstanding at which a quorum is present,
by the Holders of at least a majority of the aggregate  principal  amount of the
Securities at the time outstanding represented at such meeting, and (ii) certain
Defaults may be waived (a) with the written consent of the Holders of a majority
in  aggregate  principal  amount  of the  outstanding  Securities  or (b) by the
adoption of a resolution,  at a meeting of Holders of the Securities at the time
outstanding at which a quorum is present,  by the Holders of at least a majority
of the aggregate  principal  amount of the  Securities  at the time  outstanding
represented  at such  meeting.  The  Indenture  and the  Securities  may also be
amended by the Company and the  Trustee,  without the consent of any Holder,  in
certain  circumstances  set  forth  in the  Indenture;  provided,  that  certain
provisions of the Indenture and the  Securities  may not be amended  without the
consent of each affected Holder.

13. Defaults and Remedies.

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

14. Trustee Dealings with the Company.

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

15. No Recourse Against Others.

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

16. Authentication.

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

17. Abbreviations.

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

                                      A-10
<PAGE>

18. GOVERNING LAW.

                  THIS  SECURITY  AND THE  INDENTURE  SHALL BE GOVERNED  BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

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

                  Alloy, Inc.
                  151 West 26th Street, 11th Floor
                  New York, NY  10001
                  Telecopy:  (212) 244-4311
                  Attention:  General Counsel

19. Registration Rights.

                  The Holders of the  Securities are entitled to the benefits of
a Resale Registration  Rights Agreement,  dated as of July 23, 2003, between the
Company,  Lehman Brothers Inc., CIBC World Markets Corp., JP Morgan  Securities,
Inc. and SG Cowen  Securities  Corporation  including  the receipt of Additional
Amounts (as defined in such agreement)  upon a registration  default (as defined
in such agreement).

                                      A-11
<PAGE>

                  SCHEDULE OF INCREASES AND DECREASES OF GLOBAL SECURITY

    Initial Principal Amount of Global Security: ____________ ($___________).

<TABLE>
<CAPTION>
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Date                      Amount of Increase     Amount of Decrease in   Principal Amount of    Notation by
                          in Principal Amount    Principal Amount of     Global Security        Registrar or
                          of Global Security     Global Security         After Increase or      Security Custodian
                                                                         Decrease
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
<S>                       <C>                    <C>                     <C>                    <C>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

------------------------- ---------------------- ----------------------- ---------------------- ----------------------
</TABLE>

                                      A-12
<PAGE>

                                 ASSIGNMENT FORM

         To assign this Security, fill in the form below and have your signature
guaranteed:

         (I) or (we) assign and transfer this Security to:

             (Insert assignee's social security or tax I.D. number)

              (Print or type assignee's name, address and zip code)

and irrevocably  appoint  ____________ to transfer this Security on the books of
the Company. The agent may substitute another to act for him.

        Your Name:
                   -------------------------------------------------------------
            (Print your name exactly as it appears on the face of this Security)

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

   Your Signature:
                   -------------------------------------------------------------
                (Sign exactly as your name appears on the face of this Security)

   Signature Guarantee*:
                         -------------------------------------------------------

--------
* Participant in a recognized  Signature  Guarantee  Medallion Program (or other
Signature  guarantor  acceptable to the Trustee).  * Participant in a recognized
Signature Guarantee  Medallion Program (or other Signature guarantor  acceptable
to the Trustee).

                                      A-13
<PAGE>

                                CONVERSION NOTICE

TO:      Alloy, Inc.
         151 West 26th Street, 11th Floor
         New York, NY  10001
         Telecopy:  (212) 244-4311
         Attention:  General Counsel

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

<TABLE>

<S>                                                                                                      <C>
         Your Name:
                     -------------------------------------------------------------------------------------
                           (Print your name exactly as it appears on the face of this Security)

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

         Your Signature: ____________________________________________________
                           (Sign exactly as your name appears on the face of this Security)

         Social Security or other Taxpayer Identification Number:
                                                                  ----------------------------------------

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

         Signature Guarantee*?:
                                --------------------------------------------------------------------------
</TABLE>

         Fill in for registration of shares (if to be issued) and Securities (if
to be delivered) other than to and in the name of the registered holder:

--------------------------------------------------------------------------------
                                     (Name)

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

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

                                      A-14
<PAGE>

* Participant in a recognized  Signature  Guarantee  Medallion Program (or other
Signature guarantor acceptable to the Trustee).

                                      A-15
<PAGE>

                                                                       EXHIBIT B

                     [FORM OF FACE OF CERTIFICATED SECURITY]

         THE SECURITY  EVIDENCED  BY THIS  CERTIFICATE  HAS NOT BEEN  REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
         ANY STATE  SECURITIES  LAWS,  AND MAY NOT BE OFFERED,  SOLD,  ASSIGNED,
         TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT AS SET
         FORTH IN THE FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER:

         (1)  AGREES  THAT IT WILL NOT  WITHIN  TWO  YEARS  AFTER  THE  ORIGINAL
         ISSUANCE OF THIS  SECURITY  RESELL OR  OTHERWISE  TRANSFER THE SECURITY
         EVIDENCED  HEREBY OR THE COMMON STOCK ISSUABLE UPON  CONVERSION OF SUCH
         SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF,  (B) TO A
         QUALIFIED  INSTITUTIONAL  BUYER IN COMPLIANCE  WITH RULE 144A UNDER THE
         SECURITIES  ACT,  (C)  PURSUANT  TO  THE  EXEMPTION  FROM  REGISTRATION
         PROVIDED BY RULE 144 UNDER THE  SECURITIES ACT (IF  AVAILABLE),  OR (D)
         PURSUANT TO A REGISTRATION  STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
         UNDER THE  SECURITIES  ACT AND WHICH  CONTINUES  TO BE EFFECTIVE AT THE
         TIME OF SUCH TRANSFER;

         (2)  AGREES  THAT IT WILL  DELIVER  TO THE  ISSUER  HEREOF,  AT LEAST 3
         BUSINESS DAYS PRIOR TO ANY INTENDED TRANSFER PURSUANT TO THE PROVISIONS
         OF CLAUSE 1(D) ABOVE,  A WRITTEN  NOTICE OF SUCH HOLDER'S  INTENTION TO
         EFFECT SUCH A TRANSFER,  WHICH  NOTICE  SHALL  REMAIN  EFFECTIVE  FOR 5
         BUSINESS DAYS AFTER SUCH DELIVERY; AND

         (3) AGREES  THAT IT WILL  DELIVER TO EACH  PERSON TO WHOM THE  SECURITY
         EVIDENCED  HEREBY IS  TRANSFERRED  (OTHER  THAN A TRANSFER  PURSUANT TO
         CLAUSE 1(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

         IN CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY WITHIN
         TWO YEARS AFTER THE ORIGINAL  ISSUANCE OF SUCH  SECURITY  (OTHER THAN A
         TRANSFER  PURSUANT  TO CLAUSE  1(D)  ABOVE),  THE HOLDER MUST CHECK THE
         APPROPRIATE  BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
         OF SUCH  TRANSFER  AND SUBMIT THIS  CERTIFICATE  TO THE TRUSTEE (OR ANY
         SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFER IS PURSUANT
         TO CLAUSE 1(B) OR 1(C) ABOVE,  THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
         FURNISH TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE),  SUCH
         CERTIFICATIONS,  LEGAL OPINIONS OR OTHER  INFORMATION AS THE COMPANY OR

                                      B-2

<PAGE>

         THE TRUSTEE MAY  REASONABLY  REQUIRE TO CONFIRM  THAT SUCH  TRANSFER IS
         BEING MADE  PURSUANT TO AN  EXEMPTION  FROM,  OR IN A  TRANSACTION  NOT
         SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

         THIS  LEGEND WILL BE REMOVED  UPON THE  EARLIER OF THE  TRANSFER OF THE
         SECURITY  EVIDENCED  HEREBY  PURSUANT  TO  CLAUSE  1(D)  ABOVE  OR  THE
         EXPIRATION  OF TWO YEARS FROM THE  ORIGINAL  ISSUANCE  OF THE  SECURITY
         EVIDENCED HEREBY.

<PAGE>

                                   ALLOY, INC.

                  5.375% CONVERTIBLE SENIOR DEBENTURE DUE 2023

No.: _________                                     CUSIP:
Issue Date: _____, 2003                            Principal Amount:  $_________

         ALLOY,   INC.,  a  Delaware   corporation   (including   any  successor
corporation  under the Indenture  hereinafter  referred to, the "COMPANY"),  for
value  received,  hereby promises to pay to  _______________,  or its registered
assigns, the principal sum of _____________ U.S. Dollars  ($_______________)  on
August 1, 2023.

         Interest Payment Dates: February 1 and August 1, commencing February 1,
2004.

         Regular Record Dates: January 15 and July 15.

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

                                      B-3
<PAGE>

                  IN WITNESS WHEREOF, the Company has caused this Security to be
duly executed manually or by facsimile by its duly authorized officers.

                                   ALLOY, INC.

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

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

Dated: [         ], 2003

Trustee's Certificate of Authentication

This is one of the 5.375%  Convertible  Senior  Debentures due 2023 described in
the within-named Indenture.

DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee

By:  _____________________________
        Authorized Signatory

Dated:   _____________, 2003

                                      B-4

<PAGE>

[FORM OF REVERSE OF CERTIFICATED SECURITY IS IDENTICAL TO EXHIBIT A]

<PAGE>

                                                                       EXHIBIT C

                  5.375% Convertible Senior Debentures due 2023

                              TRANSFER CERTIFICATE

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

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

                           [_]      The transfer of the  Surrendered  Securities
                                    is made to a Qualified  Institutional  Buyer
                                    in  compliance  with  Rule  144A  under  the
                                    Securities Act; or

                           [_]      A  transfer  of the  Surrendered  Securities
                                    pursuant to an exemption  from  registration
                                    under Rule 144A under the Securities Act;

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

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

                  DATE:__________________________________
                                  Signature(s)

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

                                       A-1
<PAGE>

                  Signature Guaranteed*

                  --------------------------------
                  *Participant in a recognized Signature
                  Guarantee  Medallion  Program  (or other  Signature  guarantor
acceptable to the Trustee).

                                       A-2
<PAGE>

                                CONVERSION NOTICE

TO:      Alloy, Inc.
         151 West 26th Street, 11th Floor
         New York, NY  10001
         Telecopy:  (212) 244-4311
         Attention:  General Counsel

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

<TABLE>

<S>                                                                                                       <C>

         Your Name:
                     -------------------------------------------------------------------------------------
                           (Print your name exactly as it appears on the face of this Security)

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

         Your Signature: ____________________________________________________
                           (Sign exactly as your name appears on the face of this Security)

         Social Security or other Taxpayer Identification Number:
                                                                  ----------------------------------------

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

         Signature Guarantee*?:
                                --------------------------------------------------------------------------
</TABLE>

         Fill in for registration of shares (if to be issued) and Securities (if
to be delivered) other than to and in the name of the registered holder:

--------------------------------------------------------------------------------
                                     (Name)

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

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

                                       A-3
<PAGE>

* Participant in a recognized  Signature  Guarantee  Medallion Program (or other
Signature guarantor acceptable to the Trustee).

                                       A-4
<PAGE>

                            REPURCHASE ELECTION FORM

TO:      Alloy, Inc.
         151 West 26th Street, 11th Floor
         New York, NY  10001
         Telecopy:  (212) 244-4311
         Attention:  General Counsel

                  The  undersigned  registered  owner  of this  Security  hereby
irrevocably acknowledges receipt of a notice from Alloy, Inc. (the "COMPANY") as
to the occurrence of a Repurchase Event with respect to the Company and requests
and instructs the Company to repay the entire principal amount of this Security,
or the portion thereof (which is $1,000 principal amount or an integral multiple
thereof)  below  designated,  in  accordance  with the  terms  of the  Indenture
referred to in this Security,  together with Interest accrued and unpaid to, but
excluding, such date, to the registered holder hereof.

<TABLE>

<S>                                                                                                       <C>

         Your Name:
                     -------------------------------------------------------------------------------------
                           (Print your name exactly as it appears on the face of this Security)

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

         Your Signature: ____________________________________________________
                           (Sign exactly as your name appears on the face of this Security)

         Social Security or other Taxpayer Identification Number:
                                                                  ----------------------------------------

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

         Signature Guarantee*?:
                                --------------------------------------------------------------------------
</TABLE>

                                       A-5

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