Document:

CERTIFICATE OF DESIGNATION
                       OF THE VOTING POWERS, DESIGNATION,
                    PREFERENCES AND RELATIVE, PARTICIPATING,
              OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
                       LIMITATIONS AND RESTRICTIONS OF THE
                     5% CUMULATIVE PARTICIPATING CONVERTIBLE
                          PREFERRED STOCK, SERIES B OF
                                NTL INCORPORATED

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                        PURSUANT TO SECTION 151(g) OF THE
                GENERAL CORPORATION LAW OF THE STATE OF DELAWARE

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                  The undersigned, Executive Vice President, General Counsel and
Secretary of NTL Incorporated, a Delaware corporation (the "Corporation"),
HEREBY CERTIFIES that the Board of Directors, in accordance with Article FOURTH,
Section B of the Corporation's Restated Certificate of Incorporation and Section
151(g) of the Delaware General Corporation Law (the "DGCL"), has authorized the
creation of the series of Preferred Stock hereinafter provided for and has
established the dividend, redemption, conversion and voting rights thereof and
has adopted the following resolution, creating the following new series of the
Corporation's Preferred Stock:

                  "BE IT RESOLVED that, pursuant to authority expressly granted
to the Board of Directors by the provisions of Article FOURTH, Section B of the
Restated Certificate of Incorporation of the Corporation and Section 151(g) of
the DGCL, there is hereby created and authorized the issuance of a new series of
the Corporation's Preferred Stock, par value $.01 per share ("Preferred Stock"),
with the following powers, designations, dividend rights, voting powers, rights
on liquidation, conversion rights, redemption rights and other preferences and
relative, participating, optional or other special rights and with the
qualifications, limitations or restrictions on the shares of such series (in
addition to the powers, designations, preferences and relative, participating,
optional or other special rights and the qualifications, limitations or
restrictions thereof set forth in the Restated Certificate of Incorporation that
are applicable to each series of Preferred Stock) hereinafter set forth.

                  (1) Number and Designation. 2,000,000 shares of the Preferred
Stock of the Corporation shall be designated as 5% Cumulative Participating
Convertible Preferred Stock, Series B (the "5% Preferred Stock, Series B"), and
no other shares of Preferred Stock shall be designated as 5% Preferred Stock,
Series B.

                  (2) Definitions. For purposes of the 5% Preferred Stock,
Series B, the following terms shall have the meanings indicated:

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                  "Action" means any claim, action, suit, arbitration, inquiry,
         proceeding or investigation by or before any Governmental Authority.

                  "Additional Preferred" shall have the meaning set forth in
paragraph (4)(a) hereof.

                  "Affiliate" means, with respect to any specified Person, any
         other Person that directly, or indirectly through one or more
         intermediaries, controls, is controlled by, or is under common control
         with such specified Person.

                  "All But One Outstanding Share" shall have the meaning set
         forth in paragraph (6)(c) hereof.

                  "Alliance" means any joint venture, co-ownership or
         cooperation agreement or similar relationship with any
         telecommunications provider.

                  "Authorized Officer" includes any of the following officers of
         France Telecom S.A.: the Chief Executive Officer, the Chief Financial
         Officer, the General Counsel, the Executive Director - Finance and
         Human Resources, or the Treasurer.

                  "Bankruptcy Event" shall mean either of the following: (I) a
         court having jurisdiction in the premises entering a decree or order
         for (A) relief in respect of any Major Entity in an involuntary case
         under any applicable bankruptcy, insolvency or other similar law now or
         hereinafter in effect, (B) appointment of a receiver, liquidator,
         assignee, custodian, trustee, sequestrator or similar official of any
         Major Entity or for all or substantially all of the property and assets
         of any Major Entity or (C) the winding up or liquidation of the affairs
         of any Major Entity; or (II) any Major Entity (A) commencing a
         voluntary case under any applicable bankruptcy, insolvency or other
         similar law now or hereinafter in effect, or consenting to the entry of
         an order for relief in an involuntary case under any such law, (B)
         consenting to the appointment of or taking possession by a receiver,
         liquidator, assignee, custodian, trustee, sequestrator or similar
         official of any Major Entity, or for all or substantially all of the
         property and assets of any Major Entity or (C) effecting any general
         assignment for the benefit of creditors.

                  "Benefit Plan" means each of the Company's and Significant
         Subsidiaries' plan, program, policy, payroll practice, contract,
         agreement or other arrangement providing for compensation, retirement
         benefits, severance, termination pay, performance awards, stock or
         stock-related awards, fringe benefits or other employee benefits of any
         kind, whether formal or informal, funded or unfunded, written or oral
         and whether or not legally binding, including, without limitation, each
         "employee benefit plan", within the meaning of Section 3(3) of ERISA,
         and each "multi-employer plan", within the meaning of Section 3(37) of
         4001(a)(3) of ERISA.

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                  "Board of Directors" shall mean the board of directors of the
         Corporation. Except as such term is used in paragraph (9), "Board of
         Directors" shall also mean the Executive Committee, if any, of such
         board of directors or any other committee duly authorized by such board
         of directors to perform any of its responsibilities with respect to the
         5% Preferred Stock, Series B.

                  "Business Day" shall mean any day other than a Saturday,
         Sunday or a day on which state or federally chartered banking
         institutions in New York, New York or Paris, France are not required to
         be open.

                  "By-laws" means the by-laws of the Corporation as amended as
         of the date hereof and as may be amended from time to time, provided
         that such amendment does not adversely affect the rights of the holders
         of the 5% Preferred Stock, Series B.

                  "Common Stock" shall mean the Corporation's Common Stock, par
         value $.01 per share.

                  "Conflicting Investment" means any investment of funds or
         assets of the Corporation or any Corporation Subsidiary directly or
         indirectly in any French Operator or in any joint venture entity which
         is partly owned by any French Operator (the joint venture entity being
         known as the "Entity"), in connection with operations in France of such
         French Operator or Entity other than any purchase (either in a stock or
         asset purchase transaction) for cash by the Corporation and/or any
         Corporation Subsidiary of not less than 51% (based on the fair market
         value and voting power) of any company or business from any French
         Operator or the investment of funds or assets in any Entity in which
         the Corporation and/or any Corporation Subsidiary will, following such
         investment, own at least 51% (based on fair market value and voting
         power) of such Entity.

                  "Constituent Person" shall have the meaning set forth in
         paragraph (8)(e)(i) hereof.

                  "Conversion Rate" shall have the meaning set forth in
         paragraph (8)(a) hereof.

                  "Convertible Debentures" means the 7% Convertible Subordinated
         Notes due 2008 of the Corporation and NTL Communications Corp., a
         Delaware corporation, and the 5 3/4% Convertible Subordinated Notes due
         2009 of the Corporation and NTL (Delaware), Inc., a Delaware
         corporation.

                  "Core Business Assets" means assets that are used in a
         business that operates directly or indirectly, or holds a license to
         operate (i) a cable system or service, (ii) a fixed-line telephone or
         telecommunications system or service or (iii) a broadcasting
         transmission system or service.

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<PAGE>

                  "Corporation" shall have the meaning set forth in the
         preamble.

                  "Corporation Subsidiary" or "Corporation Subsidiaries" means
         any Subsidiary or all of the Subsidiaries of the Corporation,
         respectively.

                  "Corporation Systems" means all computers, hardware, software,
         systems, facilities and equipment (including, without limitation,
         cable, wireline, wireless, microwave, satellite and any other
         telecommunications equipment and facilities, and embedded
         microcontrollers in noncomputer equipment) owned, leased or licensed by
         the Corporation or any Significant Subsidiary and material to, or
         necessary for, the Corporation or any Significant Subsidiary to carry
         on its business as currently conducted or intended to be conducted.

                  "Current Market Price" of publicly traded shares of Common
         Stock or any other class of capital stock or other security of the
         Corporation or any other issuer for any day shall mean the last
         reported sale price for such security on the principal exchange or
         quotation system on which such security is listed or traded. If the
         security is not admitted for trading on any national securities
         exchange or the Nasdaq National Market, "Current Market Price" shall
         mean the average of the last reported closing bid and asked prices
         reported by the Nasdaq as furnished by any member in good standing of
         the National Association of Securities Dealers, Inc., selected from
         time to time by the Corporation for that purpose or as quoted by the
         National Quotation Bureau Incorporated. In the event that no such
         quotation is available for such day, the Current Market Price shall be
         the average of the quotations for the last five Trading Days for which
         a quotation is available within the last 30 Trading Days prior to such
         day. In the event that five such quotations are not available within
         such 30-Trading Day period, the Board of Directors shall be entitled to
         determine the Current Market Price on the basis of such quotations as
         it reasonably considers appropriate.

                  "Determination Date" shall have the meaning set forth in
         paragraph (8)(d)(ii) hereof.

                  "DGCL" shall have the meaning set forth in the preamble.

                  "Diluted Shares" means, as of any applicable time, shares of
         Common Stock issued and outstanding as of such time plus shares of
         Common Stock issuable upon conversion, redemption, exchange, exercise
         of, or as a dividend declared as of the time of measurement with
         respect to, any shares of preferred stock, options, warrants,
         debentures and other securities or any subscription rights.

                  "Dividend Payment Date" shall mean September 30, December 31,
         March 31 and June 30 of each year, commencing on June 30, 2000;
         provided, however, that, if any Dividend Payment Date falls on any day
         other than a Business Day, the dividend payment

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         due on such Dividend Payment Date shall be paid on the Business Day
         immediately following such Dividend Payment Date.

                  "Dividend Periods" shall mean quarterly dividend periods
         commencing on and including September 30, December 31, March 31 and
         June 30 of each year and ending on and including the day preceding the
         first day of the next succeeding Dividend Period (other than the
         initial Dividend Period which shall commence on the Issue Date and end
         on and include June 29, 2000).

                  "Encumbrance" means any security interest, pledge, mortgage,
         lien (including, without limitation, environmental and tax liens),
         charge, encumbrance, adverse claim, preferential arrangement or
         restriction of any kind, including, without limitation, any restriction
         on the use, voting, transfer, receipt of income or other exercise of
         any attributes of ownership, but excluding Permitted Encumbrances.

                  "Equity Securities" shall have the meaning set forth in
         paragraph (10).

                  "ERISA" means Employee Retirement Income Security Act of 1974,
         as amended.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
         as amended, and the rules and regulations thereunder.

                  "Expiration Time" shall have the meaning set forth in
         paragraph (8)(d)(v) hereof.

                  "5% Cumulative Preferred, Series A" shall have the meaning set
         forth in paragraph (3)(d) hereof.

                  "5% Preferred Stock, Series A" shall have the meaning set
         forth in paragraph (3)(d) hereof.

                  "5% Preferred Stock, Series B" shall have the meaning set
         forth in paragraph (1) hereof.

                  "5% Series A" shall have the meaning set forth in paragraph
         (3)(d) hereof.

                  "French Operator" means any significant provider of
         telecommunications services in France (or that provider's Affiliates)
         or any Person whose primary line of business in France is to provide
         telecommunications services (or such Person's Affiliates) other than
         the Corporation or its Affiliates.

                  "GAAP" means United States generally accepted accounting
         principles and practices as in effect from time to time and applied
         consistently throughout the periods involved.

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<PAGE>

                  "Governmental Authority" means any United States or foreign
         federal, state, provincial, local, supranational government,
         governmental, regulatory or administrative authority, agency or
         commission or any court, tribunal, or judicial or arbitral body.

                  "Governmental Order" means any order, writ, judgment,
         injunction, decree, stipulation, determination or award entered by or
         with any Governmental Authority.

                  "Holdco" shall have the meaning set forth in paragraph
         8(e)(ii) hereof.

                  "Indebtedness" means (a) indebtedness for borrowed money, (b)
         obligations evidenced by bonds, notes, debentures or other similar
         instruments or by letters of credit, including purchase money
         obligations or other obligations relating to the deferred purchase
         price of property (other than trade payables incurred in the ordinary
         course of business), (c) obligations as lessee under leases which have
         been or should have been, in accordance with GAAP, recorded as capital
         leases, (d) obligations under direct or indirect guaranties in respect
         of Liabilities of others, including indebtedness of others secured by
         an Encumbrance on any asset of such Person, whether or not such
         indebtedness is assumed by such Person, (e) obligations in respect of
         outstanding or unpaid checks or drafts or overdraft obligations and (f)
         accrued interest, if any, on and all other amounts owed in respect of
         any of the foregoing.

                  "Investment Agreement" means the agreement, dated July 26,
         1999, between France Telecom S.A. and NTL (Delaware), Inc., a Delaware
         corporation (f/k/a NTL Incorporated), as amended by the letter
         agreement, dated as of August 6, 1999, between NTL (Delaware), Inc. and
         France Telecom S.A., as further amended by the second letter agreement,
         dated October 8, 1999, between NTL (Delaware), Inc. and France Telecom
         S.A., and as further amended by the third letter agreement, dated
         February 8, 2000 between NTL (Delaware), Inc. and France Telecom S.A.,
         to which an agreed form of this Certificate of Designation has been
         attached as Attachment I.

                  "Issue Date" shall mean the date on which shares of 5%
         Preferred Stock, Series B are first issued.

                  "Junior Securities" shall have the meaning set forth in
         paragraph (3)(c) hereof.

                  "Junior Securities Distributions" shall have the meaning set
         forth in paragraph (4)(f) hereof.

                  "Law" means any supranational, United States or foreign
         federal, national, state, regional or local statute, law, ordinance,
         regulation, rule, code, order, other requirement or rule of law.

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<PAGE>

                  "Liabilities" means any and all debts, liabilities and
         obligations, whether accrued or fixed, absolute or contingent, matured
         or unmatured or determined or determinable, including, without
         limitation, those arising under any Law, Action or Governmental Order
         and those arising under any contract, agreement, arrangement,
         commitment or undertaking.

                  "Liquidation Right" shall mean, for each share of 5% Preferred
         Stock, Series B, the greater of (i) an amount equal to $1,000 per
         share, plus an amount equal to all dividends (whether or not earned or
         declared) accrued and unpaid thereon to the date of final distribution
         to such holders, and (ii) the amount that would be received in
         liquidation following conversion of a share of 5% Preferred Stock,
         Series B into Common Stock.

                  "Major Entity" shall mean any of the Corporation, NTL
         (Delaware), Inc., NTL Communications Corp., Diamond Cable
         Communications Limited, Diamond Holdings Limited, NTL (Triangle) LLC or
         any Significant Subsidiary.

                  "Mandatory Redemption Date" shall have the meaning set forth
         in paragraph (6)(c) hereof.

                  "Mandatory Redemption Obligation" shall have the meaning set
         forth in paragraph (6)(d) hereof.

                  "Market Value" shall mean (A) the market value of the
         Corporation's outstanding shares of capital stock plus (B) the market
         value of any debt securities of the Corporation and the Corporation
         Subsidiaries (provided that, in the case of any Corporation Subsidiary
         that is not wholly owned, such amount shall be included only to the
         extent of the Corporation's ownership interest in the Corporation
         Subsidiary) for which quotes are available from brokerage companies of
         national reputation plus (C) with respect to shares of preferred stock
         for which no such quotes are available, the aggregate amount of
         liquidation preference thereof and the aggregate amount of accumulated
         and unpaid dividends with respect thereto plus (D) the principal amount
         and the amount of accrued and unpaid interest with respect to any
         borrowings of the Corporation and the Corporation Subsidiaries
         (provided that, in the case of any Corporation Subsidiary that is not
         wholly owned, such amount shall be included only to the extent of the
         Corporation's ownership interest in the Corporation Subsidiary).

                  "Nasdaq" means the Nasdaq Stock Market, Inc., the electronic
         securities market regulated by the National Association of Securities
         Dealers, Inc.

                  "Nasdaq National Market" shall have the meaning set forth in
         Rule 4200(a)(23) of the rules of the National Association of Securities
         Dealers, Inc.

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<PAGE>

                  "9.9% Series B Preferred" shall have the meaning set forth in
         paragraph (3)(d) hereof.

                  "non-electing share" shall have the meaning set forth in
         paragraph (8)(e)(i) hereof.

                  "NYSE" means the New York Stock Exchange.

                  "outstanding", when used with reference to shares of stock,
         shall mean issued shares, excluding shares held by the Corporation or a
         subsidiary.

                  "Parity Securities" shall have the meaning set forth in
         paragraph (3)(b) hereof.

                  "Permitted Encumbrances" means such of the following as to
         which no enforcement, collection, execution, levy or foreclosure
         proceeding shall have been commenced or is reasonably expected to
         commence: (a) liens for taxes, assessments and governmental charges or
         claims that are not yet delinquent or that are being contested in good
         faith by appropriate proceedings promptly instituted and diligently
         conducted, provided that any reserve or other appropriate provision as
         shall be required in conformity with GAAP shall have been made
         therefor; (b) Encumbrances imposed by law, such as materialmen's,
         mechanics', carriers', workmen's and repairmen's liens and other
         similar liens arising in the ordinary course of business; (c) pledges
         or deposits to secure obligations under workers' compensation laws or
         similar legislation or to secure public or statutory obligations or
         other obligations of a like nature incurred in the ordinary course of
         business; (d) minor survey exceptions, reciprocal easement agreements
         and other customary encumbrances on title to real property that (i)
         were not incurred in connection with any indebtedness, (ii) do not
         render title to the property encumbered thereby unmarketable and (iii)
         do not, individually or in the aggregate, materially adversely affect
         the value or use of such property for its current and anticipated
         purposes; (e) Encumbrances permitted under any of the indentures to
         which the Corporation or a Corporation Subsidiary is a party as of the
         date of the Investment Agreement; (f) purchase money security interests
         in supplier equipment; (g) precautionary liens filed by lessors with
         respect to leased equipment; and (h) any single or series of related
         Encumbrances which are not in excess of $2,500,000 and do not
         materially impair the value or use of the property subject thereto or
         the operation of the Corporation's business at the relevant date.

                  "Person" shall mean any individual, partnership, association,
         joint venture, corporation, business, trust, joint stock company,
         limited liability company, any unincorporated organization, any other
         entity, a "group" of such persons, as that term is defined in Rule
         13d-5(b) under the Exchange Act, or a government or political
         subdivision thereof.

                  "Preferred Shares" has the meaning set forth in paragraph
         (9)(c).

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<PAGE>

                  "Preferred Stock" shall have the meaning set forth in the
         first resolution above.

                  "Pro Forma Rating" has the meaning set forth in paragraph
         (9)(h)(ix).

                  "Purchase Shares" shall have the meaning set forth in
         paragraph (8)(d)(v) hereof.

                  "Qualified Holder" shall mean France Telecom, a societe
         anonyme formed under the laws of France, or an Affiliate, so long as
         such Person holds at least one share of the 5% Preferred Stock, Series
         B.

                  "Qualified Holding Condition" shall be satisfied so long as a
         Qualified Holder is the holder of at least 15.0% of the Diluted Shares.

                  "Record Date" shall have the meaning set forth in paragraph
         (8)(d)(iv) hereof.

                  "Relevant Compounding Factor" shall mean, with respect to each
         share of 5% Preferred Stock, Series B, upon initial issuance 1.00, and
         shall on each Dividend Payment Date be increased to equal the product
         of the Relevant Compounding Factor in effect immediately prior to such
         Dividend Payment Date and 1.0125.

                  "Rights" shall have the meaning set forth in paragraph (12)
         hereof.

                  "Rights Agreement" shall have the meaning set forth in
         paragraph (12) hereof.

                  "Securities" shall have the meaning set forth in paragraph
         (8)(d)(iii) hereof.

                  "Senior Securities" shall have the meaning set forth in
         paragraph (3)(a) hereof.

                  "Series A Certificate" means the Certificate of Designation in
         respect of the 5% Series A.

                  "set apart for payment" shall be deemed to include, without
         any action other than the following, the recording by the Corporation
         in its accounting ledgers of any accounting or bookkeeping entry which
         indicates, pursuant to a declaration of dividends or other distribution
         by the Board of Directors, the allocation of funds to be so paid on any
         series or class of capital stock of the Corporation; provided, however,
         that, if any funds for any class or series of Junior Securities or any
         class or series of Parity Securities are placed in a separate account
         of the Corporation or delivered to a disbursing, paying or other
         similar agent, then "set apart for payment" with respect to the 5%
         Preferred Stock, Series B shall mean placing such funds in a separate
         account or delivering such funds to a disbursing, paying or other
         similar agent, as the case may be.

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<PAGE>

                  "Significant Subsidiary" shall have the meaning given to such
         term in Regulation S-X under the Exchange Act.

                  "Strategic Acquisition" has the meaning set forth in the
         Investment Agreement.

                  "Subsidiaries" of any Person means any corporation,
         partnership, joint venture, limited liability company, trust, estate or
         other Person of which (or in which), directly or indirectly, more than
         50% of (a) the issued and outstanding capital stock having ordinary
         voting power to elect a majority of the board of directors of such
         corporation (irrespective of whether at the time capital stock of any
         other class or classes of such corporation shall or might have voting
         power upon the occurrence of any contingency), (b) the interest in the
         capital or profits of such partnership, joint venture or limited
         liability company or other Person or (c) the beneficial interest in
         such trust or estate is at the time owned by such first Person, or by
         such first Person and one or more of its other Subsidiaries or by one
         or more of such Person's other Subsidiaries.

                  "13% Preferred" shall have the meaning set forth in paragraph
         (3)(d) hereof.

                  "Trading Day" shall mean any day on which the securities in
         question are traded on the NYSE or, if such securities are not listed
         or admitted for trading on the NYSE, on the principal national
         securities exchange on which such securities are listed or admitted or,
         if not listed or admitted for trading on any national securities
         exchange, on the Nasdaq National Market or, if such securities are not
         quoted thereon, in the applicable securities market in which the
         securities are traded.

                  "Transaction" shall have the meaning set forth in paragraph
         (8)(e)(i) hereof.

                  "Transaction Agreement" shall mean the Restated Transaction
         Agreement, dated as of July 26, 1999, among NTL (Delaware), Inc., Bell
         Atlantic Corporation, Cable & Wireless plc and Cable & Wireless
         Communications plc.

                  "Trigger Event" shall have the meaning set forth in paragraph
         (9)(b) hereof.

                  "Trigger Event Cure" shall have the meaning set forth in
         paragraph (9)(b) hereof.

                  "25-Day Average Market Price" shall mean, for any security,
         the volume- weighted average of the Current Market Prices of that
         security for the twenty-five Trading Days immediately preceding the
         date of determination.

                  (3) Rank. Any class or series of stock of the Corporation
         shall be deemed to rank:

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<PAGE>

                  (a) prior to the 5% Preferred Stock, Series B, either as to
the payment of dividends or as to distribution of assets upon liquidation,
dissolution or winding up, or both, if the holders of such class or series shall
be entitled by the terms thereof to the receipt of dividends and of amounts
distributable upon liquidation, dissolution or winding up, in preference or
priority to the holders of 5% Preferred Stock, Series B ("Senior Securities");

                  (b) on a parity with the 5% Preferred Stock, Series B, either
as to the payment of dividends or as to distribution of assets upon liquidation,
dissolution or winding up, or both, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share thereof be different
from those of the 5% Preferred Stock, Series B, if the holders of the 5%
Preferred Stock, Series B and of such class of stock or series shall be entitled
by the terms thereof to the receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, or both, in proportion to their
respective amounts of accrued and unpaid dividends per share or liquidation
preferences, without preference or priority one over the other and such class of
stock or series is not a class of Senior Securities ("Parity Securities"); and

                  (c) junior to the 5% Preferred Stock, Series B, either as to
the payment of dividends or as to the distribution of assets upon liquidation,
dissolution or winding up, or both, if such stock or series shall be Common
Stock or if the holders of the 5% Preferred Stock, Series B shall be entitled to
receipt of dividends, and of amounts distributable upon liquidation, dissolution
or winding up, in preference or priority to the holders of shares of such stock
or series ("Junior Securities").

                  (d) The 13% Series B Senior Redeemable Exchangeable Preferred
Stock (the "13% Preferred") is a Senior Security. The 9.9% Non-Voting
Mandatorily Redeemable Preferred Stock, Series B ("9.9% Series B Preferred") is
a Junior Security. Each of (i) the 5% Cumulative Participating Convertible
Preferred Stock, Series A (the "5% Series A") and any dividends paid on the 5%
Series A in accordance with its terms, to the extent that such dividends are
paid in preferred stock having terms substantially identical to the 5% Series A
and any dividends paid on preferred stock issued as in-kind dividends thereon,
to the extent such dividends are paid in preferred stock having terms
substantially identical to the 5% Series A (the 5% Series A and all such in-kind
dividends being hereinafter referred to as the "5% Preferred Stock, Series A")
and (ii) the 5% Cumulative Preferred Stock, Series A (the "5% Cumulative
Preferred, Series A") is a Parity Security. One or more classes of Additional
Preferred (as defined below) shall be Parity Securities; provided, however, that
there shall be no issue of other Senior Securities, Parity Securities or rights
or options exercisable for or convertible into any such securities, except as
approved by the holders of the 5% Preferred Stock, Series B pursuant to
paragraph 9(f).

                  (e) The respective definitions of Senior Securities, Junior
Securities and Parity Securities shall also include any rights or options
exercisable for or convertible into any of the Senior Securities, Junior
Securities and Parity Securities, as the case may be. The 5% Preferred Stock,
Series B shall be subject to the creation of Junior Securities, Parity
Securities and Senior Securities as set forth herein.

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<PAGE>

                  (4) Dividends. (a) Subject to paragraph (8)(b)(ii), the
holders of shares of 5% Preferred Stock, Series B shall be entitled to receive,
when, as and if declared by the Board of Directors, out of funds legally
available for the payment of dividends, dividends at the quarterly rate of
$12.50 per share (assuming a $1,000.00 face amount) payable in cash, shares of
Common Stock (such Common Stock for this purpose to be assigned a value equal to
the 25-Day Average Market Price as of the record date for such Dividend Payment
Date) or additional shares of Preferred Stock of a class to be designated by the
Board of Directors having terms substantially identical to the 5% Preferred
Stock, Series B, except as follows: (A) the Conversion Rate (as set forth in
Section 8(a)) on such Preferred Stock initially shall be the quotient resulting
from the division of the Conversion Rate (as then in effect on the 5% Preferred
Stock, Series B) by the Relevant Compounding Factor (except that for purposes of
additional shares of Preferred Stock payable as a dividend for the initial
Dividend Period, the Conversion Rate shall be the quotient resulting from the
division of the Conversion Rate (as then in effect) by 1.0041667 and (B) the
number of shares of such Preferred Stock payable as a dividend on any Dividend
Payment Date shall increase for each Dividend Payment Date from the first
Dividend Payment Date by the Relevant Compounding Factor (such classes of
Preferred Stock singularly and collectively, the "Additional Preferred"). All
dividends on the 5% Preferred Stock, Series B, in whatever form, shall be
payable in arrears quarterly on each Dividend Payment Date and shall be
cumulative from the Issue Date (except that dividends on Additional Preferred
shall accrue from the date such Additional Preferred is issued or would have
been issued in accordance with this Certificate of Designation if such dividends
had been declared), whether or not in any Dividend Period or Dividend Periods
there shall be funds of the Corporation legally available for the payment of
such dividends. Each such dividend shall be payable to the holders of record of
shares of the 5% Preferred Stock, Series B, as they appear on the stock records
of the Corporation at the close of business on the record date for such
dividend. Upon the declaration of any such dividend, the Board of Directors
shall fix as such record date on the fifth Business Day preceding the relevant
Dividend Payment Date and shall give notice on or prior to the record date of
the form of payment of such dividend. Accrued and unpaid dividends for any past
Dividend Payment Date may be declared and paid at any time, without reference to
any Dividend Payment Date, to holders of record on such record date, not more
than 45 days nor less than five Business Days preceding the payment date
thereof, as may be fixed by the Board of Directors.

                  (b) In addition to the dividends described in the preceding
paragraph, holders of shares of the 5% Preferred Stock, Series B shall be
entitled to receive an amount equal to the amount (and in the form of
consideration) that such holders would be entitled to receive if, pursuant to
paragraph (8), they had converted such 5% Preferred Stock, Series B fully into
Common Stock immediately before the record date for the payment of any such
dividends on Common Stock. Each such dividend shall be payable to the holders of
record of shares of the 5% Preferred Stock, Series B as they appear on the stock
records of the Corporation at the close of business on the record date for such
dividend on Common Stock, and the Corporation shall pay each such dividend on
the applicable payment date for such dividend on the Common Stock.

                                       12
<PAGE>

                  (c) For the purpose of determining the number of Additional
Preferred to be issued pursuant to paragraph (4)(a), each such Additional
Preferred shall be valued at $1,000.00. Holders of such Additional Preferred
shall be entitled to receive dividends payable at the rates specified in
paragraph (4)(a).

                  (d) The dividends payable for the initial Dividend Period, or
any other period shorter than a full Dividend Period, on the 5% Preferred Stock,
Series B shall accrue daily and be computed on the basis of a 360-day year and
the actual number of days in such period. No interest, or sum of money in lieu
of interest, shall be payable in respect of any dividend payment or payments on
the 5% Preferred Stock, Series B that may be in arrears except as otherwise
provided herein.

                  (e) So long as any shares of the 5% Preferred Stock, Series B
are outstanding, no dividends, except as described in the next succeeding
sentence, shall be declared or paid or set apart for payment on Parity
Securities or Junior Securities, for any period, nor shall any Parity Securities
or Junior Securities be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any such Parity Securities or Junior Securities) by the
Corporation (except for conversion into or exchange into other Parity Securities
or Junior Securities, as the case may be) unless, in each case, (i) full
cumulative dividends on all outstanding shares of the 5% Preferred Stock, Series
B for all Dividend Periods terminating on or prior to the date of such
redemption, repurchase or other acquisition shall have been paid or set apart
for payment, (ii) sufficient funds shall have been paid or set apart for the
payment of the dividend for the current Dividend Period with respect to the 5%
Preferred Stock, Series B and (iii) the Corporation is not in default with
respect to any redemption of shares of 5% Preferred Stock, Series B by the
Corporation pursuant to paragraph (6) below. When dividends are not fully paid
in Common Stock or Additional Preferred or are not paid in full in cash or a sum
sufficient for such payment is not set apart, as aforesaid, all dividends
declared upon shares of the 5% Preferred Stock, Series B and all dividends
declared upon Parity Securities shall be declared ratably in proportion to the
respective amounts of dividends accumulated and unpaid on the 5% Preferred
Stock, Series B and accumulated and unpaid on such Parity Securities.

                  (f) So long as any shares of the 5% Preferred Stock, Series B
are outstanding, no dividends (other than (i) any rights issued pursuant to the
Rights Agreement and (ii) dividends or distributions paid in shares of, or
options, warrants or rights to subscribe for or purchase shares of, Junior
Securities) shall be declared or paid or set apart for payment or other
distribution declared or made upon Junior Securities, nor shall any Junior
Securities be redeemed, purchased or otherwise acquired (other than a
redemption, purchase, or other acquisition of shares of Common Stock made for
purposes of an employee incentive or benefit plan of the Corporation or any
subsidiary) (all such dividends, distributions, redemptions or purchases being
hereinafter referred to as "Junior Securities Distributions") for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation, directly or
indirectly (except by conversion into or

                                       13
<PAGE>

exchange for Junior Securities, including pursuant to paragraph 4(d) of the 9.9%
Series B Preferred), unless, in each case, (A) full cumulative dividends on all
outstanding shares of the 5% Preferred Stock, Series B and all other Parity
Securities shall have been paid or set apart for payment for all past Dividend
Periods and dividend periods for such other stock, (B) sufficient funds shall
have been paid or set apart for the payment of the dividend for the current
Dividend Period with respect to the 5% Preferred Stock, Series B and all other
Parity Securities, (C) the Corporation is not in default with respect to any
redemption of shares of 5% Preferred Stock, Series B by the Corporation pursuant
to paragraph (6) below, and (D) the Corporation has fully performed its
obligations under paragraphs (4)(b) and (6) hereof.

                  (5) Liquidation Preference. (a) In the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, before any payment or distribution of the assets of the Corporation
(whether capital or surplus) shall be made to or set apart for the holders of
Junior Securities, the holders of the shares of 5% Preferred Stock, Series B
shall be entitled to receive the Liquidation Right. If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation, or
proceeds thereof, distributable among the holders of the shares of 5% Preferred
Stock, Series B shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any Parity Securities, then such assets,
or the proceeds thereof, shall be distributed among the holders of shares of 5%
Preferred Stock, Series B and any such other Parity Securities ratably in
accordance with the respective amounts that would be payable on such shares of
5% Preferred Stock, Series B and any such other stock if all amounts payable
thereon were paid in full. For the purposes of this paragraph (5), (i) a
consolidation or merger of the Corporation with one or more corporations, or
(ii) a sale or transfer of all or substantially all of the Corporation's assets,
shall not be deemed to be a liquidation, dissolution or winding up, voluntary or
involuntary, of the Corporation.

                  (b) Subject to the rights of the holders of any Parity
Securities, upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of the 5% Preferred
Stock, Series B, as provided in this paragraph (5), any other series or class or
classes of Junior Securities shall, subject to the respective terms and
provisions (if any) applying thereto, be entitled to receive any and all assets
remaining to be paid or distributed, and the holders of the 5% Preferred Stock,
Series B shall not be entitled to share therein.

                  (6) Redemption. (a) On and after the first Business Day
following the earlier to occur of (i) the seventh anniversary of the Issue Date
and (ii) the date on which both (A) the 25-Day Average Market Price of the
Common Stock shall have exceeded $96.00 and (B) the fourth anniversary of the
Issue Date, to the extent the Corporation shall have funds legally available for
such payment, the Corporation may redeem at its option shares of 5% Preferred
Stock, Series B, from time to time in part, All But One Outstanding Share or, if
the Qualified Holding Condition is not satisfied, in whole, payable at the
option of the Corporation in (A) cash, at a redemption price of $1,000.00 per
share, (B) in shares of Common Stock, at a redemption price of $1,000.00 per
share, or (C) in a combination of cash and Common Stock, at a redemption price
based on the respective combination of consideration, together, in each case,

                                       14
<PAGE>

with accrued and unpaid dividends thereon, whether or not declared, to, but
excluding, the date fixed for redemption, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (6)(a), the price per share of Common Stock shall be the 25-Day
Average Market Price.

                  (b) On and after the first Business Day following the tenth
anniversary of the Issue Date, each holder of shares of 5% Preferred Stock,
Series B shall have the right to require the Corporation, to the extent the
Corporation shall have funds legally available therefor, to redeem such holder's
shares of 5% Preferred Stock, Series B, from time to time in part, All But One
Outstanding Share or, if the Qualified Holding Condition is not satisfied, in
whole, at a redemption price of $1,000.00 per share, payable at the option of
the Corporation in cash, shares of Common Stock or a combination thereof,
together with accrued and unpaid dividends thereon to, but excluding, the date
fixed for redemption, without interest. For purposes of determining the number
of shares of the Common Stock to be issued pursuant to this paragraph (6)(b),
the price per share of Common Stock shall equal the 25-Day Average Market Price.
Any holder of shares of 5% Preferred Stock, Series B who elects to exercise its
rights pursuant to this paragraph (6)(b) shall deliver to the Corporation a
written notice of election not less than 20 days prior to the date on which such
holder demands redemption pursuant to this paragraph 6(b), which notice shall
set forth the name of the Holder, the number of shares of 5% Preferred Stock,
Series B to be redeemed and a statement that the election to exercise a
redemption right is being made thereby, and, subject to paragraph (11)(d), shall
deliver to the Corporation on or before the date of redemption certificates
evidencing the shares of 5% Preferred Stock, Series B to be redeemed, duly
endorsed for transfer to the Corporation.

                  (c) If the Corporation shall not have redeemed all outstanding
shares of 5% Preferred Stock, Series B pursuant to paragraphs (6)(a) or (6)(b),
on the twentieth anniversary of the Issue Date (the "Mandatory Redemption
Date"), to the extent the Corporation shall have funds legally available for
such payment, the Corporation shall redeem All But One Outstanding Share of 5%
Preferred Stock, Series B, or, if the Qualified Holding Condition is not
satisfied, all outstanding shares of 5% Preferred Stock, Series B, at a
redemption price of $1,000.00 per share, payable at the option of the
Corporation in cash, shares of Common Stock or a combination thereof, together
with accrued and unpaid dividends thereon to, but excluding, the Mandatory
Redemption Date, without interest. For purposes of determining the number of
shares of the Common Stock to be issued pursuant to this paragraph (6)(c), the
price per share of Common Stock shall be the 25-Day Average Market Price. For
purposes of the 5% Preferred Stock, Series B, "All But One Outstanding Share"
means all but one share of 5% Preferred Stock, Series B outstanding at the
relevant time. For the avoidance of doubt, so long as the Qualified Holding
Condition is satisfied, at least one share of 5% Preferred Stock, Series B shall
remain outstanding in perpetuity. As soon as (i) the Qualified Holding Condition
is no longer satisfied and (ii) there is only one share of 5% Preferred Stock,
Series B that has not been redeemed pursuant to this paragraph (6) or converted
pursuant to paragraph (8), that one outstanding share of 5% Preferred Stock,
Series B shall be redeemed, payable, at the option of the holder, in cash or in
Common Stock.

                                       15
<PAGE>

                  (d) If the Corporation is unable or shall fail to discharge
its obligation to redeem all outstanding shares or All But One Outstanding Share
of 5% Preferred Stock, Series B pursuant to paragraphs 6(b) or 6(c) (each, a
"Mandatory Redemption Obligation"), the Mandatory Redemption Obligation shall be
discharged as soon as the Corporation is able to discharge such Mandatory
Redemption Obligation. If and so long as any Mandatory Redemption Obligation
with respect to the 5% Preferred Stock, Series B shall not be fully discharged,
the Corporation shall not (i) directly or indirectly, redeem, purchase, or
otherwise acquire any Parity Security or discharge any mandatory or optional
redemption, sinking fund or other similar obligation in respect of any Parity
Securities (except in connection with a redemption, sinking fund or other
similar obligation to be satisfied pro rata with the 5% Preferred Stock, Series
B) or (ii) declare or make any Junior Securities Distribution (other than
dividends or distributions paid in shares of, or options, warrants or rights to
subscribe for or purchase shares of, Junior Securities), or, directly or
indirectly, discharge any mandatory or optional redemption, sinking fund or
other similar obligation in respect of the Junior Securities.

                  (e) Upon any redemption of 5% Preferred Stock, Series B, the
Corporation shall pay the redemption price and any accrued and unpaid dividends
in arrears to, but excluding, the applicable redemption date.

                  (f) For purposes of paragraph (6)(a) only, unless full
cumulative dividends (whether or not declared) on all outstanding shares of 5%
Preferred Stock, Series B and any Parity Securities shall have been paid or
contemporaneously are declared and paid or set apart for payment for all
Dividend Periods terminating on or prior to the applicable redemption date and
notice has been given in accordance with paragraph (7), none of the shares of 5%
Preferred Stock, Series B shall be redeemed, and no sum shall be set aside for
such redemption, unless shares of 5% Preferred Stock, Series B are redeemed pro
rata and notice has previously been given in accordance with paragraph (7).

                  (7) Procedure for Redemption. (a) If the Corporation shall
redeem shares of 5% Preferred Stock, Series B pursuant to paragraph 6(a), notice
of such redemption shall be given by certified mail, return receipt requested,
postage prepaid, mailed not less than 30 days nor more than 60 days prior to the
redemption date, to each holder of record of the shares to be redeemed at such
holder's address as the same appears on the stock register of the Corporation
and confirmed by facsimile transmission to each holder of record if the
Corporation has been furnished with such facsimile address by the holder(s);
provided, however, that neither the failure to give such notice nor confirmation
nor any defect therein or in the mailing thereof, to any particular holder,
shall affect the sufficiency of the notice or the validity of the proceedings
for redemption with respect to the other holders. Any notice that was mailed in
the manner herein provided shall be conclusively presumed to have been duly
given on the date mailed whether or not the holder receives the notice. Each
such notice shall state: (i) the redemption date; (ii) the number of shares of
5% Preferred Stock, Series B to be redeemed and, if fewer than all the shares
held by such holder are to be redeemed, the number of shares to be redeemed from
such holder; (iii) the amount payable, whether such amount shall be paid in
Common Stock or in cash, and, if

                                       16
<PAGE>

the payment is in Common Stock, an explanation of the determination of the
amount to be paid; (iv) the place or places where certificates for such shares
are to be surrendered or where the notice under paragraph (11)(d) should be sent
for payment of the redemption price; and (v) that dividends on the shares to be
redeemed will cease to accrue on such redemption date, except as otherwise
provided herein.

                  (b) If notice has been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in providing
for the payment of the redemption price of the shares called for redemption and
dividends accrued and unpaid thereon, if any), (i) except as otherwise provided
herein, dividends on the shares of 5% Preferred Stock, Series B so called for
redemption shall cease to accrue, (ii) said shares shall no longer be deemed to
be outstanding, and (iii) all rights of the holders thereof as holders of the 5%
Preferred Stock, Series B shall cease (except the right to receive from the
Corporation the redemption price without interest thereon, upon surrender and
endorsement (or a constructive surrender under paragraph (11)(d)) of their
certificates if so required, and to receive any dividends payable thereon).

                  (c) Upon surrender (including a constructive surrender under
paragraph (11)(d)) in accordance with notice given pursuant to this paragraph
(7) of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid, plus any dividends payable
thereon. If fewer than all the outstanding shares of 5% Preferred Stock, Series
B are to be redeemed, the number of shares to be redeemed shall be determined by
the Board of Directors and the shares to be redeemed shall be selected pro rata
(with any fractional shares being rounded to the nearest whole share). In case
fewer than all the shares represented by any such certificate are redeemed, a
new certificate shall be issued, subject to a holder's election under paragraph
(11)(d), representing the surrendered shares without cost to the holder thereof.

                  (8) Conversion. (a) Subject to and upon compliance with the
provisions of this paragraph (8), a holder of shares of 5% Preferred Stock,
Series B shall have the right, at any time and from time to time, at such
holder's option, to convert any or All But One Outstanding Share or, if the
Qualified Holding Condition is not satisfied, all outstanding shares, of 5%
Preferred Stock, Series B held by such holder, but not fractions of shares, into
fully paid and non-assessable shares of Common Stock by surrendering such shares
to be converted, such surrender to be made in the manner provided in paragraph
(8)(b) hereof. The number of shares of Common Stock deliverable upon conversion
of each share of 5% Preferred Stock, Series B shall be equal to 12.50 (as
adjusted as provided herein, the "Conversion Rate"). The Conversion Rate is
subject to adjustment from time to time pursuant to paragraph (8)(d) hereof. The
right to convert shares called for redemption pursuant to paragraph 6(a) shall
terminate at the close of business on the date immediately preceding the date
fixed for such redemption unless the Corporation shall default in making payment
of the amount payable upon such redemption, in which case such right of
conversion shall be reinstated. Upon conversion, any accrued and

                                       17
<PAGE>

unpaid dividends on the 5% Preferred Stock, Series B at the date of conversion
shall be paid to the holder thereof in accordance with the provisions of
paragraph (4), except that, upon conversion of All But One Outstanding Share or,
if the Qualified Holding Condition is not satisfied, all outstanding shares, of
5% Preferred Stock, Series B held by such holder, all such accrued and unpaid
dividends at the date of conversion shall be paid in Common Stock at the
applicable Conversion Rate.

                  (b) (i) In order to exercise the conversion privilege, the
holder of each share of 5% Preferred Stock, Series B to be converted shall
surrender (or constructively surrender in accordance with paragraph (11)(d)) the
certificate representing such share, duly endorsed or assigned to the
Corporation or in blank, at the office of the Corporation, or to any transfer
agent of the Corporation previously designated by the Corporation to the holders
of the 5% Preferred Stock, Series B for such purposes, with a written notice of
election to convert completed and signed, specifying the number of shares to be
converted. Such notice shall state that the holder has satisfied any legal or
regulatory requirement for conversion, including compliance with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976; provided, however, that
the Corporation shall use its best efforts in cooperating with such holder to
obtain such legal or regulatory approvals to the extent its cooperation is
necessary. Such notice shall also state the name or names (with address and
social security or other taxpayer identification number, if applicable) in which
the certificate or certificates for Common Stock are to be issued. Unless the
shares issuable on conversion are to be issued in the same name as the name in
which such share of 5% Preferred Stock, Series B is registered, each share
surrendered for conversion shall be accompanied by instruments of transfer, in
form satisfactory to the Corporation, duly executed by the holder or the
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid). All certificates representing
shares of 5% Preferred Stock, Series B surrendered for conversion shall be
canceled by the Corporation or the transfer agent.

                  (ii) Subject to the last sentence of paragraph (8)(a), holders
of shares of 5% Preferred Stock, Series B at the close of business on a dividend
payment record date shall not be entitled to receive the dividend payable on
such shares on the corresponding Dividend Payment Date if such holder shall have
surrendered (or made a constructive surrender under paragraph (11)(d)) for
conversion such shares at any time following the preceding Dividend Payment Date
and prior to such Dividend Payment Date.

                  (iii) Subject to a holder's election under paragraph (11)(d),
as promptly as practicable after the surrender (including a constructive
surrender under paragraph (11)(d)) by a holder of the certificates for shares of
5% Preferred Stock, Series B as aforesaid, the Corporation shall issue and shall
deliver to such holder, or on the holder's written order, a certificate or
certificates (which certificate or certificates shall have the legend set forth
in paragraph (11)(c)) for the whole number of duly authorized, validly issued,
fully paid and non-assessable shares of Common Stock issuable upon the
conversion of such shares in accordance with the provisions of this paragraph
(8), and any fractional interest in respect of a share of Common Stock arising
on

                                       18
<PAGE>

such conversion shall be settled as provided in paragraph (8)(c). Upon
conversion of only a portion of the shares of 5% Preferred Stock, Series B
represented by any certificate, a new certificate shall be issued representing
the unconverted portion of the certificate so surrendered without cost to the
holder thereof. Subject to a holder's election under paragraph (11)(d), upon the
surrender (including a constructive surrender under paragraph (11)(d)) of
certificates representing shares of 5% Preferred Stock, Series B to be
converted, such shares shall no longer be deemed to be outstanding and all
rights of a holder with respect to such shares so surrendered shall immediately
terminate except the right to receive the Common Stock and other amounts payable
pursuant to this paragraph (8).

                  (iv) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock, Series B shall have been surrendered (or
deemed surrendered pursuant to an election under paragraph (11)(d)) and such
notice received by the Corporation as aforesaid, and the person or persons in
whose name or names any certificate or certificates for shares of Common Stock
shall be issuable upon such conversion shall be deemed to have become the holder
or holders of record of the shares of Common Stock represented thereby at such
time on such date and such conversion shall be into a number of shares of Common
Stock equal to the product of the number of shares of 5% Preferred Stock, Series
B surrendered times the Conversion Rate in effect at such time on such date,
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such Person or Persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open, but such conversion shall be based
upon the Conversion Rate in effect on the date upon which such shares shall have
been surrendered and such notice received by the Corporation.

                  (c) (i) No fractional shares or scrip representing fractions
of shares of Common Stock shall be issued upon conversion of the 5% Preferred
Stock, Series B. Instead of any fractional interest in a share of Common Stock
that would otherwise be deliverable upon the conversion of a share of 5%
Preferred Stock, Series B, the Corporation shall pay to the holder of such share
an amount in cash based upon the Current Market Price of Common Stock on the
Trading Day immediately preceding the date of conversion. If more than one share
shall be surrendered for conversion (or deemed surrendered under paragraph
(10)(d)) at one time by the same holder, the number of full shares of Common
Stock issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares of 5% Preferred Stock, Series B surrendered (or
deemed surrendered under paragraph (10)(d)) for conversion by such holder.

                  (ii) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock, Series B shall have been surrendered (or
deemed surrendered under paragraph (10)(d)) and such notice received by the
Corporation as aforesaid, and the Person or Persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become the holder or holders of record
of the shares of Common Stock represented thereby at such time on such date and
such conversion shall be into a number of shares of Common Stock equal to the
product of the number of shares of 5% Preferred Stock, Series B surrendered
times the Conversion Rate in effect at such time on such date, unless

                                       19
<PAGE>

the stock transfer books of the Corporation shall be closed on that date, in
which event such Person or Persons shall be deemed to have become such holder or
holders of record at the close of business on the next succeeding day on which
such stock transfer books are open, but such conversion shall be based upon the
Conversion Rate in effect on the date upon which such shares shall have been
surrendered (or deemed surrendered under paragraph (10)(d)) and such notice
received by the Corporation.

                  (d) The Conversion Rate shall be adjusted from time to time as
follows:

                  (i) If the Corporation shall after the Issue Date (A) declare
         a dividend or make a distribution on its Common Stock in shares of its
         Common Stock, (B) subdivide its outstanding Common Stock into a greater
         number of shares, (C) combine its outstanding Common Stock into a
         smaller number of shares, or (D) effect any reclassification of its
         outstanding Common Stock, the Conversion Rate in effect on the record
         date for such dividend or distribution, or the effective date of such
         subdivision, combination or reclassification, as the case may be, shall
         be proportionately adjusted so that the holder of any share of 5%
         Preferred Stock, Series B thereafter surrendered for conversion shall
         be entitled to receive the number and kind of shares of Common Stock
         that such holder would have owned or have been entitled to receive
         after the happening of any of the events described above had such share
         been converted immediately prior to the record date in the case of a
         dividend or distribution or the effective date in the case of a
         subdivision, combination or reclassification. An adjustment made
         pursuant to this subparagraph (i) shall become effective immediately
         after the opening of business on the Business Day next following the
         record date (except as provided in paragraph (8)(h)) in the case of a
         dividend or distribution and shall become effective immediately after
         the opening of business on the Business Day next following the
         effective date in the case of a subdivision, combination or
         reclassification. Adjustments in accordance with this paragraph
         (8)(d)(i) shall be made whenever any event listed above shall occur.

                           (ii) If the Corporation shall after the Issue Date
         fix a record date for the issuance of rights or warrants (in each case,
         other than any rights issued pursuant to a shareholder rights plan) to
         all holders of Common Stock entitling them (for a period expiring
         within 45 days after such record date) to subscribe for or purchase
         Common Stock (or securities convertible into Common Stock) at a price
         per share (or, in the case of a right or warrant to purchase securities
         convertible into Common Stock, having an effective exercise price per
         share of Common Stock, computed on the basis of the maximum number of
         shares of Common Stock issuable upon conversion of such convertible
         securities, plus the amount of additional consideration payable, if
         any, to receive one share of Common Stock upon conversion of such
         securities) less than the 25-Day Average Market Price on the date on
         which such issuance was declared or otherwise announced by the
         Corporation (the "Determination Date"), then the Conversion Rate in
         effect at the opening of business on the Business Day next following
         such record date shall be adjusted so that the holder of each share of
         5% Preferred Stock, Series B

                                       20

<PAGE>

         shall be entitled to receive, upon the conversion thereof, the number
         of shares of Common Stock determined by multiplying (I) the Conversion
         Rate in effect immediately prior to such record date by (II) a
         fraction, the numerator of which shall be the sum of (A) the number of
         shares of Common Stock outstanding on the close of business on the
         Determination Date and (B) the number of additional shares of Common
         Stock offered for subscription or purchase pursuant to such rights or
         warrants (or in the case of a right or warrant to purchase securities
         convertible into Common Stock, the aggregate number of additional
         shares of Common Stock into which the convertible securities so offered
         are initially convertible), and the denominator of which shall be the
         sum of (A) the number of shares of Common Stock outstanding on the
         close of business on the Determination Date and (B) the number of
         shares that the aggregate proceeds to the Corporation from the exercise
         of such rights or warrants for Common Stock would purchase at such
         25-Day Average Market Price on such date (or, in the case of a right of
         warrant to purchase securities convertible into Common Stock, the
         number of shares of Common Stock obtained by dividing the aggregate
         exercise price of such rights or warrants for the maximum number of
         shares of Common Stock issuable upon conversion of such convertible
         securities, plus the aggregate amount of additional consideration
         payable, if any, to convert such securities into Common Stock, by such
         25-Day Average Market Price). Such adjustment shall become effective
         immediately after the opening of business on the Business Day next
         following such record date (except as provided in paragraph (8)(h)).
         Such adjustment shall be made successively whenever such a record date
         is fixed. In the event that after fixing a record date such rights or
         warrants are not so issued, the Conversion Rate shall be readjusted to
         the Conversion Rate which would then be in effect if such record date
         had not been fixed. In determining whether any rights or warrants
         entitle the holders of Common Stock to subscribe for or purchase shares
         of Common Stock at less than such 25-Day Average Market Price, there
         shall be taken into account any consideration received by the
         Corporation upon issuance and upon exercise of such rights or warrants,
         the value of such consideration, if other than cash, to be determined
         by the Board of Directors in good faith. In case any rights or warrants
         referred to in this subparagraph (ii) shall expire unexercised after
         the same have been distributed or issued by the Corporation (or, in the
         case of rights or warrants to purchase securities convertible into
         Common Stock once exercised, the conversion right of such securities
         shall expire), the Conversion Rate shall be readjusted at the time of
         such expiration to the Conversion Rate that would have been in effect
         if no adjustment had been made on account of the distribution or
         issuance of such expired rights or warrants.

                  (iii) If the Corporation shall fix a record date for the
        making of a distribution to all holders of its Common Stock of evidences
        of its indebtedness, shares of its capital stock or assets (excluding
        regular cash dividends or distributions declared in the ordinary course
        by the Board of Directors and dividends payable in Common Stock for
        which an adjustment is made pursuant to paragraph (8)(d)(i)) or rights
        or warrants (in each case, other than any rights issued pursuant to a
        shareholder rights plan) to subscribe for or purchase any of its
        securities (excluding those rights and warrants issued to all holders of

                                       21
<PAGE>

        Common Stock entitling them (for a period expiring within 45 days after
        such record date) to subscribe for or purchase Common Stock or
        securities convertible into shares of Common Stock, which rights and
        warrants are referred to in and treated under subparagraph (ii) above)
        (any of the foregoing being hereinafter in this subparagraph (iii)
        called the "Securities"), then in each such case the Conversion Rate
        shall be adjusted so that the holder of each share of 5% Preferred
        Stock, Series B shall be entitled to receive, upon the conversion
        thereof, the number of shares of Common Stock determined by multiplying
        (I) the Conversion Rate in effect immediately prior to the close of
        business on such record date by (II) a fraction, the numerator of which
        shall be the 25-Day Average Market Price per share of the Common Stock
        on such record date, and the denominator of which shall be the 25-Day
        Average Market Price per share of the Common Stock on such record date
        less the then-fair market value (as determined by the Board of Directors
        in good faith, whose determinations shall be conclusive) of the portion
        of the assets, shares of its capital stock or evidences of indebtedness
        so distributed or of such rights or warrants applicable to one share of
        Common Stock. Such adjustment shall be made successively whenever such a
        record date is fixed; and in the event that after fixing a record date
        such distribution is not so made, the Conversion Rate shall be
        readjusted to the Conversion Rate which would then be in effect if such
        record date had not been fixed. Such adjustment shall become effective
        immediately at the opening of business on the Business Day next
        following (except as provided in paragraph (8)(h)) the record date for
        the determination of shareholders entitled to receive such distribution.
        For the purposes of this subparagraph (iii), the distribution of a
        Security, which is distributed not only to the holders of the Common
        Stock on the date fixed for the determination of shareholders entitled
        to such distribution of such Security, but also is distributed with each
        share of Common Stock delivered to a Person converting a share of 5%
        Preferred Stock, Series B after such determination date, shall not
        require an adjustment of the Conversion Rate pursuant to this
        subparagraph (iii); provided, however, that on the date, if any, on
        which a Person converting a share of 5% Preferred Stock, Series B would
        no longer be entitled to receive such Security with a share of Common
        Stock (other than as a result of the termination of all such
        Securities), a distribution of such Securities shall be deemed to have
        occurred and the Conversion Rate shall be adjusted as provided in this
        subparagraph (iii) (and such day shall be deemed to be "the date fixed
        for the determination of shareholders entitled to receive such
        distribution" and "the record date" within the meaning of the three
        preceding sentences). If any rights or warrants referred to in this
        subparagraph (iii) shall expire unexercised after the same shall have
        been distributed or issued by the Corporation, the Conversion Rate shall
        be readjusted at the time of such expiration to the Conversion Rate that
        would have been in effect if no adjustment had been made on account of
        the distribution or issuance of such expired rights or warrants.

                  (iv) In case the Corporation shall, by dividend or otherwise,
        distribute to all holders of its Common Stock cash in the amount per
        share that, together with the aggregate of the per share amounts of any
        other cash distributions to all holders of its Common Stock made within
        the 12 months preceding the date of payment of such

                                       22
<PAGE>

        distribution and in respect of which no adjustment pursuant to this
        paragraph (iv) has been made exceeds 5.0% of the 25-Day Average Market
        Price immediately prior to the date of declaration of such dividend or
        distribution (excluding any dividend or distribution in connection with
        the liquidation, dissolution or winding up of the Corporation, whether
        voluntary or involuntary, and any cash that is distributed upon a
        merger, consolidation or other transaction for which an adjustment
        pursuant to paragraph 8(e) is made), then, in such case, the Conversion
        Rate shall be adjusted so that the same shall equal the rate determined
        by multiplying the Conversion Rate in effect immediately prior to the
        close of business on the Record Date for the cash dividend or
        distribution by a fraction the numerator of which shall be the Current
        Market Price of a share of the Common Stock on the Record Date and the
        denominator shall be such Current Market Price less the per share amount
        of cash so distributed during the 12-month period applicable to one
        share of Common Stock, such adjustment to be effective immediately prior
        to the opening of business on the Business Day following the Record
        Date; provided, however, that in the event the denominator of the
        foregoing fraction is zero or negative, in lieu of the foregoing
        adjustment, adequate provision shall be made so that each holder of 5%
        Preferred Stock, Series B shall have the right to receive upon
        conversion, in addition to the shares of Common Stock to which the
        holder is entitled, the amount of cash such holder would have received
        had such holder converted each share of 5% Preferred Stock, Series B at
        the beginning of the 12-month period. In the event that such dividend or
        distribution is not so paid or made, the Conversion Rate shall again be
        adjusted to be the Conversion Rate which would then be in effect if such
        dividend or distribution had not been declared. Notwithstanding the
        foregoing, if any adjustment is required to be made as set forth in this
        paragraph (8)(d)(iv), the calculation of any such adjustment shall
        include the amount of the quarterly cash dividends paid during the 12-
        month reference period only to the extent such dividends exceed the
        regular quarterly cash dividends paid during the 12 months preceding the
        12-month reference period. For purposes of this paragraph (8)(d)(iv),
        "Record Date" shall mean, with respect to any dividend or distribution
        in which the holders of Common Stock have the right to receive cash, the
        date fixed for determination of shareholders entitled to receive such
        cash.

                  In the event that at any time cash distributions to holders of
        Common Stock are not paid equally on all series of Common Stock, the
        provisions of this paragraph 8(d)(iv) will apply to any cash dividend or
        cash distribution on any series of Common Stock otherwise meeting the
        requirements of this paragraph, and shall be deemed amended to the
        extent necessary so that any adjustment required will be made on the
        basis of the cash dividend or cash distribution made on any such series.

                  (v) In case of the consummation of a tender or exchange offer
        (other than an odd-lot tender offer) made by the Corporation or any
        subsidiary of the Corporation for all or any portion of the outstanding
        shares of Common Stock to the extent that the cash and fair market value
        (as determined in good faith by the Board of Directors of the
        Corporation, whose determination shall be conclusive and shall be
        described in a

                                       23
<PAGE>

        resolution of such Board) of any other consideration included in such
        payment per share of Common Stock at the last time (the "Expiration
        Time") tenders or exchanges may be made pursuant to such tender or
        exchange offer (as amended) exceed by more than 5.0%, with any smaller
        excess being disregarded in computing the adjustment to the Conversion
        Rate provided in this paragraph (8)(d)(v), the first reported sale price
        per share of the Common Stock on the Trading Day next succeeding the
        Expiration Time, then the Conversion Rate shall be adjusted so that the
        same shall equal the rate determined by multiplying the Conversion Rate
        in effect immediately prior to the Expiration Time by a fraction the
        numerator of which shall be the sum of (x) the fair market value
        (determined as aforesaid) of the aggregate consideration payable to
        shareholders based on the acceptance (up to any maximum specified in the
        terms of the tender or exchange offer) of all shares validly tendered or
        exchanged and not withdrawn as of the Expiration Time (the shares deemed
        so accepted, up to any such maximum, being referred to as the "Purchase
        Shares") and (y) the product of the number of shares of Common Stock
        outstanding (less any Purchase Shares) on the Expiration Time and the
        first reported sale price of the Common Stock on the Trading Day next
        succeeding the Expiration Time, and the denominator of which shall be
        the number of shares of Common Stock outstanding (including any tendered
        or exchanged shares) on the Expiration Time multiplied by the first
        reported sale price of the 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.

                  (vi) No adjustment in the Conversion Rate shall be required
        unless such adjustment would require a cumulative increase or decrease
        of at least 1% in the Conversion Rate; provided, however, that any
        adjustments that by reason of this subparagraph (vi) are not required to
        be made shall be carried forward and taken into account in any
        subsequent adjustment until made, and provided further that any
        adjustment shall be required and made in accordance with the provisions
        of this paragraph (8) (other than this subparagraph (vi)) not later than
        such time as may be required in order to preserve the tax-free nature of
        a distribution for United States income tax purposes to the holders of
        shares of 5% Preferred Stock, Series B or Common Stock. Notwithstanding
        any other provisions of this paragraph (8), the Corporation shall not be
        required to make any adjustment of the Conversion Rate for the issuance
        of any shares of Common Stock pursuant to any plan providing for the
        reinvestment of dividends or interest payable on securities of the
        Corporation and the investment of additional optional amounts in shares
        of Common Stock under such plan. All calculations under this paragraph
        (8) shall be made to the nearest dollar or to the nearest 1/1,000 of a
        share, as the case may be. Anything in this paragraph (8)(d) to the
        contrary notwithstanding, the Corporation shall be entitled, to the
        extent permitted by law, to make such adjustments in the Conversion
        Rate, in addition to those required by this paragraph (8)(d), as it in
        its discretion shall determine to be advisable in order that any stock
        dividends subdivision of shares, reclassification or combination of
        shares, distribution or rights or warrants to

                                       24
<PAGE>

        purchase stock or securities, or a distribution of other assets (other
        than cash dividends) hereafter made by the Corporation to its
        shareholders shall not be taxable.

                  (vii) In the event that, at any time as a result of shares of
        any other class of capital stock becoming issuable in exchange or
        substitution for or in lieu of shares of Common Stock or as a result of
        an adjustment made pursuant to the provisions of this paragraph (8)(d),
        the holder of 5% Preferred Stock, Series B upon subsequent conversion
        shall become entitled to receive any shares of capital stock of the
        Corporation other than Common Stock, the number of such other shares so
        receivable upon conversion of any shares of 5% Preferred Stock, Series B
        shall thereafter be subject to adjustment from time to time in a manner
        and on terms as nearly equivalent as practicable to the provisions
        contained herein.

                  (e) (i) If the Corporation shall be a party to any transaction
(including without limitation, a merger, consolidation, sale of all or
substantially all of the Corporation's assets or recapitalization of the Common
Stock and excluding any transaction as to which paragraph (8)(d)(i) applies)
(each of the foregoing being referred to herein as a "Transaction"), in each
case as a result of which shares of Common Stock shall be converted into the
right to receive stock, securities or other property (including cash or any
combination thereof), there shall be no adjustment to the Conversion Rate but
each share of 5% Preferred Stock, Series B which is not converted into the right
to receive stock, securities or other property in connection with such
Transaction shall thereafter be convertible into the kind and amount of shares
of stock, securities and other property (including cash or any combination
thereof) receivable upon the consummation of such Transaction by a holder of
that number of shares or fraction thereof of Common Stock into which one share
of 5% Preferred Stock, Series B was convertible immediately prior to such
Transaction, assuming such holder of Common Stock (i) is not a Person with which
the Corporation consolidated or into which the Corporation merged or which
merged into the Corporation or to which such sale or transfer was made, as the
case may be ("Constituent Person"), or an affiliate of a Constituent Person and
(ii) failed to exercise his rights of election, if any, as to the kind or amount
of stock securities and other property (including cash) receivable upon such
Transaction (provided, that, if the kind or amount of stock, securities and
other property (including cash) receivable upon such Transaction is not the same
for each share of Common Stock of the Corporation held immediately prior to such
Transaction by other than a Constituent Person or an affiliate thereof and in
respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this paragraph (8)(e) the kind
and amount of stock, securities and other property (including cash) receivable
upon such Transaction by 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).
The provisions of this paragraph (8)(e)(i) shall similarly apply to successive
Transactions.

                  (ii) Notwithstanding anything herein to the contrary, if the
Corporation is reorganized such that the Common Stock is exchanged for the
common stock of a new entity ("Holdco") whose common stock is traded on the
Nasdaq National Market or another

                                       25
<PAGE>

recognized securities exchange or automated quotation system, then the
Corporation, by notice to and consultation with the holders of the 5% Preferred
Stock, Series B, may cause the exchange of this 5% Preferred Stock, Series B for
preferred stock of Holdco having the same terms and conditions as set forth
herein; provided that the rights attaching to the preferred stock of Holdco
shall be adjusted so as to comply with the local law of the country of
incorporation of Holdco or the new share structure of Holdco subject to such
rights effectively giving the same economic rights as the 5% Preferred Stock,
Series B (including for these purposes any resultant change in the tax treatment
for the holders of such stock).

                  (f) If:

                  (i) the Corporation shall declare a dividend (or any other
distribution) on the Common Stock; or

                  (ii) the Corporation shall authorize the granting to the
holders of the Common Stock of rights or warrants to subscribe for or purchase
any shares of any class or any other rights or warrants; or

                  (iii) there shall be any subdivision, combination or
reclassification of the Common Stock or any consolidation or merger to which the
Corporation is a party and for which approval of any shareholders of the
Corporation is required, or the sale or transfer of all or substantially all of
the assets of the Corporation as an entirety; or

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

then the Corporation shall cause to be filed with any transfer agent designated
by the Corporation pursuant to paragraph (8)(b) and shall cause to be mailed to
the holders of shares of the 5% Preferred Stock, Series B at their addresses as
shown on the stock records of the Corporation, as promptly as possible, but at
least ten days prior to the applicable date hereinafter specified, a notice
stating (A) the date on which a record is to be taken for the purpose of such
dividend (or such other distribution) or rights or warrants, or, if a record is
not to be taken, the date as of which the holders of Common Stock of record to
be entitled to such dividend, distribution or rights or warrants are to be
determined or (B) the date on which such subdivision, combination,
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up or other action is expected to become effective, and
the date as of which it is expected that holders of Common Stock of record shall
be entitled to exchange their shares of Common Stock for securities or other
property, if any, deliverable upon such subdivision, combination,
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up. Failure to give or receive such notice or any defect
therein shall not affect the legality or validity of any distribution, right,
warrant subdivision, combination, reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, winding up or other action, or the vote upon
any of the foregoing.

                                       26
<PAGE>

                  (g) Whenever the Conversion Rate is adjusted as herein
provided, the Corporation shall prepare an officer's certificate with respect to
such adjustment of the Conversion Rate setting forth the adjusted Conversion
Rate and the effective date of such adjustment and shall mail a copy of such
officer's certificate to the holder of each share of 5% Preferred Stock, Series
B at such holder's last address as shown on the stock records of the
Corporation. If the Corporation shall have designated a transfer agent pursuant
to paragraph (8)(b), it shall also promptly file with such transfer agent an
officer's certificate setting forth the Conversion Rate after such adjustment
and setting forth a brief statement of the facts requiring such adjustment which
certificate shall be conclusive evidence of the correctness of such adjustment.

                  (h) In any case in which paragraph (8)(d) provides that an
adjustment shall become effective on the day next following a record date for an
event, the Corporation may defer until the occurrence of such event (i) issuing
to the holder of any share of 5% Preferred Stock, Series B converted after such
record date and before the occurrence of such event the additional shares of
Common Stock issuable upon such conversion by reason of the adjustment required
by such event over and above the Common Stock issuable upon such conversion
before giving effect to such adjustment and (ii) paying to such holder any
amount in cash in lieu of any fraction pursuant to paragraph (8)(c).

                  (i) For purposes of this paragraph (8), the number of shares
of Common Stock at any time outstanding shall not include any shares of Common
Stock then owned or held by or for the account of the Corporation. The
Corporation shall not pay a dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.

                  (j) There shall be no adjustment of the Conversion Rate in
case of the issuance of any stock of the Corporation in a reorganization,
acquisition or other similar transaction except as specifically set forth in
this paragraph (8). If any single action would require adjustment of the
Conversion Rate pursuant to more than one subparagraph of this paragraph (8),
only one adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value.

                  (k) If the Corporation shall take any action affecting the
Common Stock, other than action described in this paragraph (8), that in the
opinion of the Board of Directors materially adversely affects the conversion
rights of the holders of the shares of 5% Preferred Stock, Series B, the
Conversion Rate may be adjusted, to the extent permitted by law, in such manner,
if any, and at such time, as the Board of Directors may determine to be
equitable in the circumstances; provided that the provisions of this paragraph
(8)(k) shall not affect any rights the holders of 5% Preferred Stock, Series B
may have at law or in equity.

                  (l) (i) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock or its issued shares of
Common Stock held in its treasury, or both, for the

                                       27
<PAGE>

purpose of effecting conversion of the 5% Preferred Stock, Series B, the full
number of shares of Common Stock deliverable upon the conversion of all
outstanding shares of 5% Preferred Stock, Series B not theretofore converted.
For purposes of this paragraph (8)(l) the number of shares of Common Stock that
shall be deliverable upon the conversion of all outstanding shares of 5%
Preferred Stock, Series B shall be computed as if at the time of computation all
such outstanding shares were held by a single holder.

                  (ii) The Corporation covenants that any shares of Common Stock
issued upon conversion of the 5% Preferred Stock, Series B shall be duly
authorized, validly issued, fully paid and non-assessable. Before taking any
action that would cause an adjustment increasing the Conversion Rate such that
the quotient of $1,000.00 and the Conversion Rate (which quotient initially
shall be $80.00) would be reduced below the then-par value of the shares of
Common Stock deliverable upon conversion of the 5% Preferred Stock, Series B,
the Corporation will take any corporate action that, in the opinion of its
counsel, may be necessary in order that the Corporation may validly and legally
issue fully paid and non-assessable shares of Common Stock based upon such
adjusted Conversion Rate.

                  (iii) Prior to the delivery of any securities that the
Corporation shall be obligated to deliver upon conversion of the 5% Preferred
Stock, Series B, the Corporation shall comply with all applicable federal and
state laws and regulations which require action to be taken by the Corporation.

                  (m) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion of the 5%
Preferred Stock, Series B pursuant hereto; provided, however, that the
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issue or delivery of shares of Common Stock or
other securities or property in a name other than that of the holder of the 5%
Preferred Stock, Series B to be converted and no such issue or delivery shall be
made unless and until the Person requesting such issue or delivery has paid to
the Corporation the amount of any such tax or established, to the satisfaction
of the Corporation, that such tax has been paid.

                  (n) No adjustment in the Conversion Rate need be made for a
transaction referred to in paragraph (8)(d)(i) through (v) above to the extent
that all holders of 5% Preferred Stock, Series B are entitled to participate in
such transaction pursuant to paragraph 4(b).

                  (9) Governance. (a) The holders of record of shares of 5%
Preferred Stock, Series B shall not be entitled to any voting rights except as
hereinafter provided in this paragraph (9) or as otherwise provided by law.

                  (b) If and whenever either (i) six quarterly dividends
(whether or not consecutive) payable on the 5% Preferred Stock, Series B have
not been paid in full, (ii) the Corporation shall have failed to discharge its
Mandatory Redemption Obligation, or (iii) there

                                       28
<PAGE>

occurs a Bankruptcy Event (any such event described in the preceding
subparagraphs (i) through (iii) being hereinafter referred to as a "Trigger
Event"), a vote of the holders of shares of 5% Preferred Stock, Series B, voting
as a single class, will be required on all matters brought to shareholders of
the Corporation. Whenever all arrears in dividends on the 5% Preferred Stock,
Series B then outstanding shall have been paid and dividends thereon for the
current quarterly dividend period shall have been paid or declared and set apart
for payment, the Corporation shall have fulfilled its Mandatory Redemption
Obligation, and all Bankruptcy Events shall have been cured (the "Trigger Event
Cure"), then the right of the holders of the 5% Preferred Stock, Series B to
vote as described in this paragraph 9(b) shall cease (but subject always to the
same provisions for the vesting of such voting rights if any Trigger Event
occurs).

                  (c) In addition to the power to elect directors in accordance
with paragraph (9)(d), upon the occurrence of any Trigger Event, the number of
directors then constituting the Board of Directors shall be increased by two and
the holders of shares of 5% Preferred Stock, Series B, together with the holders
of 5% Preferred Stock, Series A, the 5% Cumulative Preferred, Series A, and
shares of every other series of preferred stock (including, without limitation,
Additional Preferred) upon which like rights to vote for the election of two
additional directors have been conferred and are exercisable (resulting from
either the failure to pay dividends or the failure to redeem) (the 5% Preferred
Stock, Series A and any such other series are collectively referred to as the
"Preferred Shares"), voting as a single class regardless of series, shall be
entitled to elect the two additional directors to serve on the Board of
Directors at any annual meeting of stockholders or special meeting held in place
thereof, or at a special meeting of the holders of 5% Preferred Stock, Series B
and the Preferred Shares, called as hereinafter provided. Whenever all arrears
in dividends on the Preferred Shares then outstanding shall have been paid and
dividends thereon for the current quarterly dividend period shall have been paid
or declared and set apart for payment, the Corporation shall have fulfilled any
redemption obligation in respect of the Preferred Shares, and the Trigger Event
Cure has occurred, then the right of the holders of the 5% Preferred Stock,
Series B and the Preferred Shares to elect such additional two directors shall
cease (but subject always to the same provisions for the vesting of such voting
rights if any Trigger Event occurs), and the terms of office of all persons
elected as directors by the holders of 5% Preferred Stock, Series B and the
Preferred Shares shall forthwith terminate and the number of members of the
Board of Directors shall be reduced accordingly. At any time after such voting
power shall have been so vested in holders of shares of 5% Preferred Stock,
Series B and the Preferred Shares, the Secretary of the Corporation may, and
upon the written request of any holder of 5% Preferred Stock, Series B
(addressed to the secretary at the principal office of the Corporation) shall,
call a special meeting of the holders of the 5% Preferred Stock, Series B and of
the Preferred Shares for the election of the two directors to be elected by them
as herein provided, such call to be made by notice similar to that provided in
the By-laws for a special meeting of the stockholders or as required by law. If
any such special meeting required to be called as above provided shall not be
called by the Secretary of the Corporation within 20 days after receipt of any
such request, then any holder of shares of 5% Preferred Stock, Series B may call
such meeting, upon the notice above provided, and for that purpose shall have
access to the stock books of the Corporation. The

                                       29
<PAGE>

directors elected at any such special meeting shall hold office until the next
annual meeting of the stockholders or special meeting held in lieu thereof if
such office shall not have previously terminated as above provided. If any
vacancy shall occur among the directors elected by the holders of the 5%
Preferred Stock, Series B and the Preferred Shares, a successor shall be elected
by the Board of Directors, upon the nomination of the then-remaining director
elected by the holders of the 5% Preferred Stock, Series B and the Preferred
Shares or the successor of such remaining director, to serve until the next
annual meeting of the stockholders or special meeting held in place thereof if
such office shall not have previously terminated as provided above.

                  (d) (i) (A) In addition to any other rights granted in this
paragraph (9) to elect directors or to vote on any matter submitted to
stockholders, all holders of shares of 5% Preferred Stock, Series B, voting
separately as a class, shall have the right to elect directors to serve on the
Board of Directors in accordance with the provisions of this paragraph (9)(d),
so long as the Qualified Holding Condition is satisfied.

                  (B) If there are twelve or fewer members of the Board of
Directors, the Qualified Holder shall be entitled to elect three directors. If
there are fourteen or more members of the Board of Directors, the Qualified
Holder shall be entitled to elect four directors. In either case, any director
that is appointed by a holder of shares of 5% Series A, pursuant to paragraph
(9)(d) of the Series A Certificate, shall be counted toward the three or four
directors, as the case may be, that a Qualified Holder is entitled to appoint
pursuant to this paragraph (9)(d).

                  (C) Immediately upon failure of the Qualified Holding
Condition, this paragraph (9)(d), paragraphs (9)(h), (9)(i) and (9)(j) shall be
of no effect and the rights granted in such paragraphs to the holders of the 5%
Preferred Stock, Series B shall cease to apply.

                  (ii) The Qualified Holder may appoint, remove or replace such
directors by way of a written notice by the Qualified Holder to the Corporation,
at a special meeting called pursuant to subparagraph (iii) of this paragraph
(9)(d) or at any annual meeting of stockholders, provided that such voting
rights may not be exercised at any meeting unless an Authorized Officer of the
Qualified Holder shall be present at such meeting in person or by proxy. The
absence of a quorum of the holders of Common Stock shall not affect the exercise
by the holders of shares of 5% Preferred Stock, Series B of such rights. At any
meeting at which the holders of shares of 5% Preferred Stock, Series B shall
exercise such voting rights initially, they shall have the right, voting
separately as a class, to elect the number of directors provided under paragraph
(9)(d)(i)(B) to fill vacancies in the Board of Directors, to the extent that
such number of vacancies then exist, or, if such right is exercised at an annual
meeting, to elect such number of directors. If necessary, the holders of the
shares of 5% Preferred Stock, Series B shall have the right to make such
increase in the number of members of the Board of Directors as shall be
necessary to permit them to so elect such number of directors. If the Qualified
Holder exercises its right to appoint, remove or replace a director by way of a
written notice to the Corporation,

                                       30
<PAGE>

any such appointment, removal or replacement shall be effective immediately upon
the sending of such written notice to the Corporation.

                  (iii) Unless the holders of shares of 5% Preferred Stock,
Series B shall have previously exercised their right to elect the number of
directors provided under paragraph (9)(d)(i)(B), the Board of Directors shall
order, and any stockholder or stockholders owning in the aggregate not less than
25% of the total number of the shares of 5% Preferred Stock, Series B
outstanding may request, the calling of a special meeting of the holders of
shares of 5% Preferred Stock, Series B, which meeting shall thereupon promptly
be called by the Secretary of the Corporation. Notice of such meeting and of any
annual meeting at which holders of shares of 5% Preferred Stock, Series B are
entitled to vote pursuant to this paragraph (9)(d) shall be given to each holder
of record of shares of 5% Preferred Stock, Series B by mailing a copy of such
notice to him at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier than 20 days
and not later than 60 days after such order or request or in default of the
calling of such meeting within 60 days after such order or request, such meeting
may be called on similar notice by any stockholder or stockholders owning in the
aggregate not less than 25% of the total number of outstanding shares of 5%
Preferred Stock, Series B.

                  (iv) The holders of shares of Common Stock and shares of 5%
Preferred Stock, Series B, and other classes or series of stock of the
Corporation, if applicable, shall continue to be entitled to elect all the
directors until holders of the shares of 5% Preferred Stock, Series B shall have
exercised their right to elect the number of directors provided under paragraph
(9)(d)(i)(B), voting as a separate class (or exercised such right pursuant to a
written notice, as set forth under paragraph (9)(d)(ii)), after the exercise of
which right (x) the directors so elected by the holders of shares of 5%
Preferred Stock, Series B shall continue in office until their successors shall
have been elected by such holders (or appointed pursuant to a written notice, as
set forth under paragraph (9)(d)(ii)), and (y) any vacancy in the Board of
Directors may (except as provided in paragraph (9)(d)(ii)) be filled by vote of
a majority of the remaining directors theretofore elected by the holders of the
class of capital stock which elected the directors whose offices shall have
become vacant. References in this paragraph (9)(d)(iv) to directors elected by
the holders of a particular class of capital stock shall include directors
elected by such directors to fill vacancies as provided in clause (y) of the
foregoing sentence.

                  (e) Without the written consent of the holders of at least
66-2/3% in liquidation preference of the outstanding shares of 5% Preferred
Stock, Series B or the vote of holders of at least 66-2/3% in liquidation
preference of the outstanding shares of 5% Preferred Stock, Series B at a
meeting of the holders of 5% Preferred Stock, Series B called for such purpose,
the Corporation will not amend, alter or repeal any provision of the Certificate
of Incorporation (by merger or otherwise) so as to adversely affect the
preferences, rights or powers of the 5% Preferred Stock, Series B; provided that
any such amendment that changes the dividend payable on, the Conversion Rate
with respect to, or the liquidation preference of, the 5% Preferred Stock,
Series B shall require the affirmative vote at a meeting of holders of 5%
Preferred Stock,

                                       31
<PAGE>

Series B called for such purpose or written consent of the holder of each share
of 5% Preferred Stock, Series B.

                  (f) Without the written consent of the holders of at least
66-2/3% in liquidation preference of the outstanding shares of 5% Preferred
Stock, Series B or the vote of holders of at least 66-2/3% in liquidation
preference of the outstanding shares of 5% Preferred Stock, Series B at a
meeting of such holders called for such purpose, the Corporation will not issue
any additional 5% Preferred Stock, Series B or create, authorize or issue any
Parity Securities or Senior Securities or increase the authorized amount of any
such other class or series; provided that this paragraph 9(f) shall not limit
the right of the Corporation to (i) issue Additional Preferred as dividends
pursuant to paragraph 4 or (ii) issue Parity Securities or Senior Securities in
order to refinance, redeem or refund the 13% Preferred, 5% Cumulative Preferred,
Series A, or the 5% Preferred Stock, Series A, provided that the maximum value
of such Parity Securities or Senior Securities issued by the Corporation in such
refinancing as shall be reflected on the Corporation's consolidated balance
sheet prepared in accordance with GAAP applied on a basis consistent with the
Corporation's prior practice, shall not exceed in the aggregate the aggregate
value of the 13% Preferred, 5% Cumulative Preferred, Series A, or the 5%
Preferred Stock, Series A, respectively, as reflected on the Corporation's
consolidated balance sheet as contained in the report filed by the Corporation
with the United States Securities and Exchange Commission pursuant to the
Exchange Act that is most recent prior to such refinancing.

                  (g) In exercising the voting rights set forth in this
paragraph (9), each share of 5% Preferred Stock, Series B shall have one vote
per share, except that when any other series of preferred stock shall have the
right to vote with the 5% Preferred Stock, Series B as a single class on any
matter, then the 5% Preferred Stock, Series B and other series shall have with
respect to such matters one vote per $1,000 of stated liquidation preference.
Except as otherwise required by applicable law or as set forth herein, the
shares of 5% Preferred Stock, Series B shall not have any relative,
participating, optional or other special voting rights and powers and the
consent of the holders thereof shall not be required for the taking of any
corporate action.

                  (h) So long as the Qualified Holding Condition is met:

                  (i) there shall be no more than sixteen members of the Board
of Directors;

                  (ii) at least one director appointed by the Qualified Holder
shall be a member of each committee of the Board of Directors, other than a
committee formed to evaluate transactions with that holder;

                  (iii) the directors elected by the Qualified Holder to the
Board of Directors pursuant to paragraph (9)(d) shall be elected as members of
the boards of directors of the Corporation Subsidiaries, if such boards of
directors include substantially all of the other members of the Board of
Directors;

                                       32
<PAGE>

                  (iv) the By-laws shall contain provisions (A) requiring
notices to be given to directors in a reasonable and customary form and allowing
directors enough time to take any action that directors may deem necessary with
respect to such notice and (B) allowing participation of directors in any
meeting of the Board of Directors and any committee thereof by means of
telephonic conference;

                  (v) the Corporation shall not offer, issue, sell or transfer
any securities to any Person or amend or waive the Rights Agreement to permit a
transaction by any Person, if as a result of such offer, issuance, sale or
transfer, such Person will beneficially own 15.0% or more of the Diluted Shares;
provided, however, that this paragraph (9)(h)(v) shall not apply to a
transaction or series of related transactions involving a contractual sale or
other acquisition of 100% of the capital stock of the Corporation, so long as
(a) such transaction is definitive or provides for a make-whole premium or
similar significant penalty payable to shareholders of the Corporation other
than the potential acquirer if the potential acquirer does not complete such a
transaction, and (b) the transactions contemplated by such agreement are
approved by the Board of Directors and are (A) submitted for approval by the
holders of Common Stock or (B) subject to the tender offer rules under the
Exchange Act;

                  (vi) if the Corporation offers, issues, sells or transfers any
securities to any Person that would result in such Person owning less than 15.0%
of the Diluted Shares, the Corporation shall comply with the provisions of
paragraph (10) and shall not (A) grant to such Person a right to elect more than
one director to the Board of Directors or (B) agree to standstill or transfer
restrictions more favorable than those granted to the Qualified Holder under the
Investment Agreement and shall not grant any rights to such Person that the
Qualified Holder does not have herein or under the Investment Agreement;

                  (vii) the Corporation shall not consummate, without the
approval of a majority of holders of the Common Stock or the unanimous approval
by the Board of Directors or a committee thereof (if such committee includes a
director appointed by the Qualified Holder), any transaction or a series of
related transactions involving (A) an acquisition (either in an asset or stock
purchase transaction) or (B) a sale or transfer (either in an asset or stock
purchase transaction) (other than a spin-off (to the Corporation's stockholders)
of the Corporation's and the Corporation Subsidiaries' broadcast assets or
assets located outside of the United Kingdom, it being understood that the
Purchaser shall have the corporate governance and other rights with respect to
such spun-off entity, as provided pursuant to the Investment Agreement) of Core
Business Assets, if the fair market value of the Core Business Assets to be so
acquired, sold or transferred exceeds, in the aggregate, 10% of the Market
Value;

                  (viii) the acquisition of any assets or stock of a business
that does not constitute Core Business Assets, in any transaction or series of
related transactions that represents, individually or when aggregated with all
such transactions completed during the immediately preceding 24 months, 10% or
more of the Market Value at the time of the proposed new acquisition, will
require the approval of at least 66-2/3% of the holders of the then-outstanding

                                       33
<PAGE>

Common Stock, unless the Board of Directors or a committee thereof (if such
committee includes a director appointed by the Qualified Holder) approves such
transaction unanimously, and a transaction shall be considered to be completed
in the preceding 24-month period if it shall have been either completed (in
which case the fair market value of the acquired assets shall be determined at
the time of completion) or announced pursuant to a definitive agreement (in
which case the fair market value of the acquired assets shall be determined at
the time of such announcement);

                  (ix) the Corporation shall not, without the unanimous approval
by the Board of Directors or a committee thereof (if such committee includes a
director appointed by the Qualified Holder), incur any Indebtedness (other than
any refinancing of any existing Indebtedness that would not result in a material
increase of the principal amount of such existing Indebtedness) after the date
on which the Corporation receives its first credit rating from a rating agency
of national reputation giving effect to the Strategic Acquisition (the "Pro
Forma Rating"), if the Board of Directors has reason to believe (after
reasonable inquiry of an internationally recognized rating agency or a major
investment bank having expertise in credit rating advisory work) that the effect
of incurring such Indebtedness would reduce the credit rating of NTL
Communications Corp. below (i) the lower of (x) the equivalent of Standard &
Poor's rating of BB- or (y) the Pro Forma Rating, if such Indebtedness is
incurred prior to January 1, 2001 or (ii) the equivalent of Standard & Poor's
rating of BB, if the Indebtedness is incurred on or after January 1, 2001; and

                  (x) the Corporation shall maintain the total number of
directors at a level that enables the Qualified Holder to elect at least ten
percent of the members of the Board of Directors.

                  (i) So long as the Qualified Holding Condition is met, none of
the following shall be permitted without the prior written approval of one of
the Authorized Officers:

                  (I) a reclassification, combination, stock dividend or any
         similar transaction that may adversely affect the rights of the holders
         of the 5% Preferred Stock, Series B;

                  (II) an amendment to the Certificate of Incorporation or
         By-laws that may adversely affect the rights of the holders of the 5%
         Preferred Stock, Series B;

                  (III) commencement or institution of a Bankruptcy Event;

                  (IV) issuance by the Corporation of any security that would
         adversely affect the rights of holders of the 5% Preferred Stock,
         Series A or the 5% Preferred Stock, Series B; or

                  (V) any agreement by the Corporation or any of its Affiliates
         to enter into a Conflicting Investment.

                                       34
<PAGE>

                  (j) Before entering into any Alliance to provide
telecommunications services in any country in the European Union, the
Corporation shall consult with the Qualified Holder with a view to mutually
cooperating in such venture.

                  (k) Nothing in this paragraph (9) shall be in derogation of
any rights that a holder of shares of 5% Preferred Stock, Series B may have in
its capacity as a holder of shares of Common Stock.

                  (10) Preemptive Rights. The Corporation shall not issue, sell,
transfer to any Person or grant to any Person a right to acquire any shares of
capital stock or options, warrants or similar instruments or any other security
convertible or exchangeable for shares of capital stock of the Corporation
(other than (i) through exercise of any options, warrants, Convertible
Debentures, the 13% Preferred, 5% Cumulative Preferred, Series A or the 9.9%
Series B Preferred, in each case, that is outstanding on the Issue Date or the
issuance of options to the employees of the Corporation and the Corporation
Subsidiaries pursuant to Benefit Plans existing on the Issue Date, as such
Benefit Plans may be amended or replaced (provided that such amended or replaced
Benefit Plans shall have terms similar to and consistent with the terms of
Existing Benefit Plans), and the exercise of such options, (ii) as consent
payments contemplated by and in accordance with Section 5.01(d)(iv) of the
Investment Agreement, (iii) as contemplated by the Transaction Agreement, or
(iv) as dividends on or conversion or in redemption of shares of preferred stock
contemplated by and in accordance with Section 5.01(d)(iii) of the Investment
Agreement (the "Equity Securities")), unless the Qualified Holder is notified in
writing of any such issuance, sale or transfer and is offered the right to
purchase at the sale price and on the terms and conditions of the sale such
quantity of Equity Securities as would be necessary for the Purchaser to
maintain its then current beneficial ownership level of the Diluted Shares. The
preemptive rights of the Qualified Holder pursuant to this paragraph (10) shall
be exercised in a manner and based on a timetable that will not restrict or
adversely affect the Corporation's ability to raise equity capital in a flexible
and cost-effective manner.

                  (11) General Provisions. (a) The headings of the paragraphs,
subparagraphs, clauses and subclauses of this Certificate of Designation are for
convenience of reference only and shall not define, limit or affect any of the
provisions hereof.

                  (b) If the Corporation shall have failed to declare or pay
dividends as required pursuant to paragraph (4) hereof or shall have failed to
discharge any obligation to redeem shares of 5% Preferred Stock, Series B
pursuant to paragraph (6) hereof, the holders of shares of 5% Preferred Stock,
Series B shall be entitled to receive, in addition to all other amounts required
to be paid hereunder, when, as and if declared by the Board of Directors, out of
funds legally available for the payment of dividends, cash dividends on the
aggregate dividends which the Corporation shall have failed to declare or pay or
the redemption price, together with accrued and unpaid dividends thereon, as the
case may be, at a rate of 2% per quarter, compounded quarterly, for the period
during which the failure to pay dividends or failure to discharge an obligation
to redeem shares of 5% Preferred Stock, Series B shall continue.

                                       35
<PAGE>

                  (c) The shares of 5% Preferred Stock, Series B shall bear the
following legend:

                 THE SHARES OF PREFERRED STOCK, PAR VALUE $.01, OF THE COMPANY
                 (THE "PREFERRED STOCK") (AND THE SHARES OF COMMON STOCK, PAR
                 VALUE $.01, OF THE COMPANY (THE "COMMON STOCK") INTO WHICH THE
                 PREFERRED STOCK MAY BE CONVERTED) REPRESENTED BY THIS
                 CERTIFICATE MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES
                 ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
                 AMENDED (THE "ACT"), AND ANY APPLICABLE STATE SECURITIES LAWS
                 OR AN APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS. THE
                 TRANSFER OF THE PREFERRED STOCK (OR COMMON STOCK, IF THE
                 PREFERRED STOCK HAS BEEN CONVERTED) EVIDENCED BY THIS
                 CERTIFICATE IS SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVIDED
                 FOR IN THE INVESTMENT AGREEMENT, DATED JULY 26, 1999, AS
                 AMENDED, AMONG NTL (DELAWARE), INC. AND FRANCE TELECOM, A COPY
                 OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF THE COMPANY AND
                 WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH
                 PREFERRED STOCK UPON WRITTEN REQUEST TO THE COMPANY.

                 THE SHARES OF PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE
                 MAY BE CONVERTED INTO COMMON STOCK, PAR VALUE $.01, OF THE
                 COMPANY (THE "COMMON STOCK") OR REDEEMED IN EXCHANGE FOR COMMON
                 STOCK WITHOUT THE SURRENDER AND EXCHANGE OF THIS CERTIFICATE
                 FOR CERTIFICATES REPRESENTING SUCH COMMON STOCK. A NOTICE OF
                 SUCH CONVERSION EVENT, IF ANY, IS ON FILE AT THE EXECUTIVE
                 OFFICES OF THE COMPANY AND WILL BE FURNISHED WITHOUT CHARGE TO
                 THE HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST TO THE
                 COMPANY.

                  The shares of Common Stock issuable upon conversion of the 5%
Preferred Stock, Series B shall bear the following legend:

                 THE SHARES OF COMMON STOCK, PAR VALUE $.01, OF THE
                 COMPANY (THE "COMMON STOCK") REPRESENTED BY THIS
                 CERTIFICATE MAY NOT BE OFFERED OR SOLD IN THE UNITED
                 STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OF
                 1933, AS AMENDED (THE "ACT"), AND ANY APPLICABLE STATE
                 SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM
                 REGISTRATION REQUIREMENTS.  THE TRANSFER OF THE COMMON

                                       36
<PAGE>

                 STOCK EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO THE
                 RESTRICTIONS ON TRANSFER PROVIDED FOR IN THE INVESTMENT
                 AGREEMENT, DATED AS OF JULY 26, 1999, AS AMENDED, AMONG NTL
                 (DELAWARE), INC. AND FRANCE TELECOM, A COPY OF WHICH IS ON FILE
                 AT THE EXECUTIVE OFFICES OF THE COMPANY AND WILL BE FURNISHED
                 WITHOUT CHARGE TO THE HOLDER OF SUCH COMMON STOCK UPON WRITTEN
                 REQUEST TO THE COMPANY.

                  (d) (i) Whenever in connection with any conversion or
redemption of the 5% Preferred Stock, Series B in exchange for Common Stock the
holder is required to surrender certificates representing such shares of 5%
Preferred Stock, Series B, such holder may, by written notice to the Corporation
and its transfer agent, elect to retain such certificates. In such case, the
certificates so retained by the holder thereof shall be deemed to represent, at
and from the date of such conversion or redemption, the number of shares of
Common Stock issuable upon such conversion or redemption (subject to paragraph
(8)(c), if applicable), and shall be so reflected upon the books of the
Corporation and its transfer agent.

                  (ii) (A) A holder who has previously elected to retain
certificates representing the 5% Preferred Stock, Series B in accordance with
paragraph (11)(d)(i) upon conversion or redemption may subsequently elect to
receive certificates representing the shares of Common Stock issued upon such
conversion or redemption. To receive certificates representing such shares of
Common Stock, the holder of such certificate shall surrender it, duly endorsed
or assigned to the Corporation or in blank, at the office of the Corporation, or
to any transfer agent of the Corporation previously designated by the
Corporation for such purposes, with a written notice of that election.

                  (B) Unless the certificates to be issued shall be registered
in the same name as the name in which such surrendered certificates are
registered, each certificate so surrendered shall be accompanied by instruments
of transfer, in form satisfactory to the Corporation, duly executed by the
holder or the holder's duly authorized attorney and an amount sufficient to pay
any transfer or similar tax (or evidence reasonably satisfactory to the
Corporation demonstrating that such taxes have been paid). All certificates so
surrendered shall be canceled by the Corporation or the transfer agent.

                  (C) As promptly as practicable after the surrender by a holder
of such certificates, the Corporation shall issue and shall deliver to such
holder, or on the holder's written order, a certificate or certificates (which
certificate or certificates shall have the legend set forth in paragraph 11(c))
for the number of duly authorized, validly issued, fully paid and non-assessable
shares of Common Stock represented by the certificates so surrendered.

                  (12) Shareholder Rights Plan. The shares of 5% Preferred
Stock, Series B shall be entitled to the benefits of a number of rights
("Rights") issuable under the Shareholder Rights Agreement, dated as of October
1, 1993, as amended, between the Company and Continental

                                       37
<PAGE>

Stock Transfer & Trust Company or any successor plan of similar purpose and
effect (the "Rights Agreement") equal to the number of shares of Common Stock
then issuable upon conversion of the 5% Preferred Stock, Series B at the
prevailing Conversion Rate. Any shares of Common Stock deliverable upon
conversion of a share of 5% Preferred Stock, Series B or upon payment of a
dividend shall be accomplished by a Right."

                                       38REGISTRATION RIGHTS AGREEMENT

         This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into
as of this 30th day of May, 2000, between NTL Incorporated, a Delaware
corporation, f/k/a NTL Holdings Incorporated (the "Company"), and France Telecom
S.A., a societe anonyme organized under the laws of France (the "Purchaser").

         WHEREAS, the Purchaser and NTL (Delaware), Inc., a Delaware
corporation, f/k/a NTL Incorporated ("NTL Delaware") are parties to an
Investment Agreement, dated as of July 26, 1999, as amended (the "Investment
Agreement") wherein the Purchaser agreed to purchase from NTL Delaware
27,027,027 shares of NTL Delaware common stock, par value $0.01 per share (the
"NTL Delaware Common Shares"), and 2,000,000 shares of NTL Delaware 5%
Cumulative Participating Convertible Preferred Stock, Series B, par value $0.01
per share, having an aggregate liquidation preference of $2,000,000,000 (the
"NTL Delaware Preferred Shares");

         WHEREAS, in connection with a five-for-four stock split by way of stock
dividend of NTL Delaware, with a record date of October 4, 1999 and a payment
date of October 7, 1999, and another five-for-four stock split by way of stock
dividend of NTL Delaware, with a record date of January 31, 2000 and a payment
date of February 3, 2000, the Purchaser and NTL Delaware executed amendments to
the Investment Agreement, the effect of which is to change the number of NTL
Delaware Common Shares deliverable thereunder to 42,229,730, and to effect
conforming changes to the Conversion Rate and redemption stock price thresholds
set forth in the Certificate of Designation in respect of the NTL Delaware
Preferred Shares;

         WHEREAS, in connection with an Agreement and Plan of Merger, by and
among NTL Delaware, the Company and Holdings Merger Sub Inc., a Delaware
corporation ("Holdco Sub"), dated as of February 9, 2000 (the "Merger
Agreement"), Holdco Sub merged with and into NTL Delaware on May 18, 2000, with
NTL Delaware continuing as the surviving corporation in the merger (the "Holding
Company Merger"), and in connection with the Holding Company Merger, the Company
became the ultimate corporate parent of NTL Delaware;

         WHEREAS, in accordance with Section 3.11 of the Merger Agreement and
Section 9.08 of the Investment Agreement, the Company assumed the obligations of
NTL Delaware under the Investment Agreement, and therefore, pursuant to the
Investment Agreement, on the date hereof, in exchange for payment therefor, the
Company is delivering to the Purchaser 42,229,730 shares (the "Common Shares")
of Common Stock, par value $0.0l, of the Company (the "Common Stock") and
2,000,000 shares (the "Preferred Shares") of the Company's 5% Cumulative
Participating Convertible Preferred Stock, Series B, par value $0.01 per share
(the "Preferred Stock"), having an aggregate liquidation preference of
$2,000,000,000, in lieu of the NTL Delaware Common Shares and the NTL Delaware
Preferred Shares, respectively;

         WHEREAS, each share of Preferred Stock is initially convertible into
twelve and one-half shares of Common Stock; and

<PAGE>

         WHEREAS, as a condition to the Purchaser's obligation to close the
transactions contemplated under the Investment Agreement, the Company must enter
into this Agreement with the Purchaser;

         NOW, THEREFORE, in consideration of the foregoing, the parties to this
Agreement hereby agree as follows:

                                   ARTICLE ONE
                                   DEFINITIONS

         Capitalized terms used but not defined herein shall have the meaning
ascribed thereto in the Investment Agreement.

         "Bell Atlantic Agreement" shall have the meaning set forth in Section
2.01.

         "Blackout Period" shall have the meaning set forth in Section 3.01(b).

         "C&W Agreement" shall have the meaning set forth in Section 2.01.

         "Cogecom" shall have the meaning set forth in Section 6.06.

         "Company Indemnified Person" shall have the meaning specified in
Section 5.01(b).

         "Demand" shall have the meaning set forth in Section 2.01.

         "Exchange Act" shall mean the United States Securities Exchange Act of
1934, as amended, or any United States federal statute then in effect that has
replaced such statute, and a reference to a particular section thereof shall be
deemed to include a reference to the comparable section, if any, of any such
replacement United States federal statute.

         "Existing Agreements" means (i) the Registration Rights Agreement,
dated January 28, 1999, between the Company and Microsoft Corporation, (ii) the
Registration Rights Agreement, dated September 22, 1998, between the Company and
Vision Networks III B.V., (iii) the Registration Rights Agreement, dated March
8, 1999, by and among the Company and the various Shareholders Listed in Annex A
thereto, and (iv) the Registration Rights Agreement, dated October 28, 1998, by
and among the Company, Comcast Corporation and Warburg, Pincus Investors, L.P.

         "Existing Holders" shall have the meaning set forth in Section 2.05.

         "5% Preferred Stock" means the Preferred Shares and any other shares of
preferred stock of the Company having substantially identical terms to the
Preferred Shares and issued as dividends on the Preferred Shares or shares of
preferred stock issued as dividends thereon.

                                        2
<PAGE>

         "Indemnified Persons" means Purchaser Indemnified Persons and Company
Indemnified Persons.

         "indemnifying parties" shall have the meaning set forth in Section
5.01(c).

         "Losses" shall have the meaning set forth in Section 5.01(a).

         "Maximum Number" shall have the meaning set forth in Section 2.05.

         "Person" shall mean an individual, trustee, corporation, partnership,
limited liability company, joint stock company, trust, unincorporated
association, union, business association, firm or other entity.

         "Preliminary Prospectus" shall mean any preliminary Prospectus or
preliminary Prospectus supplement that may be included in any Registration
Statement.

         "Proceedings" and "Proceeding" shall have the meaning set forth in
Section 5.01(c).

         "Prospectus" shall mean the Prospectus included in any Registration
Statement (including, without limitation, a prospectus that includes information
previously omitted from a prospectus filed as part of an effective Registration
Statement in reliance on Rule 430A under the Securities Act), as amended or
supplemented by any Prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.

         "Public Offering" shall mean the offer of shares of Common Stock or
securities convertible into or exchangeable for Common Stock on a
broadly-distributed basis, not limited to sophisticated investors (except for
qualified institutional buyers pursuant to Rule 144A under the Securities Act),
pursuant to a firm-commitment or best-efforts underwriting or purchase
arrangement.

         "Purchaser Indemnified Person" shall have the meaning specified in
Section 5.01(a).

         "Registrable Securities" means (a) the Common Shares, (b) any shares of
Common Stock issued upon the conversion or redemption of 5% Preferred Stock, (c)
any shares of Common Stock issued as dividends upon the 5% Preferred Stock, and
(d) any Registrable Securities described in clauses (a), (b) or (c) above that
underlie any securities the value of which relates to or is based upon the
Registrable Securities described in (a) through (c) above or which are either
optionally or mandatorily exchangeable for or convertible into such Registrable
Securities (any such security, a "Derivative Security"). If as a result of any
reclassification, stock split, stock dividend, business combination, exchange
offer or other transaction or event, any capital stock, evidences of
indebtedness, warrants, options, rights or other securities (collectively "Other
Securities") are issued or transferred to the Purchaser in respect of
Registrable Securities held by the Purchaser, references herein to Registrable
Securities shall be deemed to include such Other Securities.

                                        3
<PAGE>

         "Registration Expenses" has the meaning set forth in Section 4.01.

         "Registration Statement" shall mean any registration statement of the
Company under the Securities Act that covers any of the Registrable Securities,
including the Prospectus, amendments and supplements to such Registration
Statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
Registration Statement.

         "Regulations" shall mean the General Rules and Regulations of the SEC
under the Securities Act.

         "Rule 144" shall mean Rule 144 of the Regulations, as such rule may be
amended from time to time, or any similar rule (other than Rule 144A) or
regulation hereafter adopted by the SEC providing for offers and sales of
securities made in compliance therewith resulting in offers and sales by
subsequent holders of such securities being free of the registration and
prospectus delivery requirements of the Securities Act.

         "SEC" shall mean the United States Securities and Exchange Commission
or any other United States federal agency at the time administering the
Securities Act or the Exchange Act.

         "Securities Act" shall mean the United States Securities Act of 1933,
as amended, or any United States federal statute then in effect that has
replaced such statute, and a reference to a particular section thereof shall be
deemed to include a reference to the comparable section, if any, of any such
replacement United States federal statute.

         "Seller" and "Sellers" shall have the meaning set forth in Section
2.06.

                                   ARTICLE TWO
                      REGISTRATION UNDER THE SECURITIES ACT

         SECTION 2.01. Demand Registration. If at any time the Purchaser shall
request the Company in writing (each, a "Demand") to register under the
Securities Act a specified number of Registrable Securities (including
Registrable Securities to be used to settle a Derivative Security), the Company
shall use its best efforts to effect the registration under the Securities Act
of the Registrable Securities which the Company has been so requested to
register as soon as reasonably practicable so as to permit the sale thereof, and
in connection therewith shall prepare and file a Registration Statement with the
SEC under the Securities Act to effect such registration; provided, that each
such request shall (i) specify the number of shares of Registrable Securities
intended to be offered and sold, (ii) describe the nature or method of the
proposed offer and sale thereof, and (iii) contain the undertaking of the
Purchaser to provide all such information and materials and take all such action
as may be required in order to permit the Company to comply with all applicable
requirements of the SEC and to obtain any desired acceleration of the effective
date of such Registration Statement. Except as provided in the following
sentence, the Company agrees not to

                                        4
<PAGE>

grant to any other person registration rights pursuant to which such person
would have the right to register shares of Common Stock on a Registration
Statement filed by the Company pursuant to the exercise of the Purchaser's
rights under this Agreement. The Purchaser agrees that the Company may grant to
the "Holders" (as that term is defined in each of the Registration Rights
Agreement between the Company and Bell Atlantic Corporation, dated February 2,
2000 (the "Bell Atlantic Agreement") and the Registration Rights Agreement
between the Company and Cable and Wireless plc, dated February 2, 2000 (the "C&W
Agreement")) the right to register shares of Common Stock on a Registration
Statement filed by the Company pursuant to the exercise of the Purchaser's
rights under this Section 2.01 of this Agreement, provided, that, so long as
this Agreement or any successor agreement remains in full force and effect (a)
such registrations are effected in accordance with the terms of Section 2.2(b)
of the Bell Atlantic Agreement or Section 2.2(b) of the C&W Agreement, as the
case may be, and (b) neither Section 2.2(b) of the Bell Atlantic Agreement nor
Section 2.2(b) of the C&W Agreement is modified or amended in a manner that is
adverse to the Purchaser without the prior written consent of the Purchaser.

         SECTION 2.02. Limits on Demand Registrations. The Company shall not be
required to effect any registration pursuant to Section 2.01 after six Demands
requested by the Purchaser pursuant to Section 2.01 shall have been effected
unless, after such six Demands have been effected, the Purchaser has not sold
all shares of Registrable Securities then held by it. In that event, the
Purchaser and the Company shall negotiate in good faith the provision by the
Company of additional Demands pursuant to this Agreement as are reasonably
appropriate.

         SECTION 2.03. Withdrawal. The Purchaser shall have the right to request
withdrawal of any Registration Statement filed with the SEC pursuant to Section
2.01 or Section 2.07 (and the Company shall so withdraw such Registration
Statement) so long as such Registration Statement has not become effective,
provided that, in such case, the Purchaser shall pay all related out-of-pocket
Registration Expenses reasonably incurred by the Company unless a Registration
Statement shall be effected pursuant to Section 2.01 or Section 2.07 within 270
days after such withdrawal.

         SECTION 2.04. Effective Registration Statement. A registration
requested pursuant to Section 2.01 shall not be deemed to be effected (i) if a
Registration Statement with respect thereto shall not have become effective
under the Securities Act and remained effective for at least 90 days or until
the completion of the distribution of the Registrable Securities thereunder,
whichever is earlier (including, without limitation, because of a withdrawal of
such Registration Statement by the Purchaser prior to the effectiveness thereof
pursuant to Section 2.03 hereof), (ii) if, after it has become effective, such
registration is interfered with for any reason by any stop order, injunction or
other order or requirement of the SEC or any other governmental authority, or as
a result of the initiation of any proceeding for such a stop order by the SEC
through no fault of the Purchaser and the result of such interference is to
prevent the Purchaser from disposing of such Registrable Securities proposed to
be sold in accordance with the intended methods of disposition, (iii) the
Company exercises its rights under Section 3.01(b) and the result is a delay in
the proposed distribution of any Registrable Securities and the Purchaser
determines not to sell such Registrable Securities pursuant to such registration
as a result of such delay, or (iv) if the conditions to closing specified in the
purchase agreement or underwriting agreement entered into in connection with any

                                        5
<PAGE>

underwritten offering shall not be satisfied or waived with the consent of the
Purchaser, other than as a result of any breach by the Purchaser or any
underwriter of its obligations thereunder or hereunder.

         SECTION 2.05. "Piggy-Back" Rights. If the Company proposes to register
any shares of Common Stock for itself or any of its stockholders (the "Existing
Holders") under the Securities Act on a Registration Statement on Form S-1, Form
S-2 or Form S-3 (or an equivalent general registration form then in effect) for
purposes of a Public Offering of such shares, the Company shall give written
notice of such proposal at least 20 days before the anticipated filing date,
with notice shall include the intended method of distribution of such shares, to
the Purchaser. Such notice shall specify at a minimum the number of shares of
Common Stock proposed to be registered, the proposed filing date of such
Registration Statement, any proposed means of distribution of such shares and
the proposed managing underwriter, if any. Subject to Section 2.06, upon the
written request of the Purchaser, given within 10 days after the receipt of any
such written notice by facsimile confirmed by mail (which request shall specify
the Registrable Securities intended to be disposed of by the Purchaser), the
Company will use its best efforts to include in the Registration Statement with
respect to such Public Offering the Registrable Securities referred to in the
Purchaser's request; provided, however, that any participation in such Public
Offering by the Purchaser shall be on substantially the same terms as the
Company's (or its other stockholders') participation therein; and provided
further that the amount of Registrable Securities to be included in any such
Public Offering shall not exceed the maximum number which the managing
underwriter of such Public Offering considers in its reasonable commercial
judgment to be appropriate based on market conditions and other relevant factors
(the "Maximum Number"). The Purchaser shall have the right to withdraw a request
to include Registrable Securities in any Public Offering pursuant to this
Section 2.05 by giving written notice to the Company of its election to withdraw
such request at least five business days prior to the proposed effective date of
such Registration Statement.

         SECTION 2.06. (a) Allocation of Securities Included in a Public
Offering. If the lead managing underwriter for any Public Offering to be
effected pursuant to Section 2.05 of this Agreement shall advise the Company and
the Purchaser (each, a "Seller" and, collectively, the "Sellers") in writing
that the number of shares of Common Stock sought to be included in such Public
Offering (including those sought to be offered by the Company, those sought to
be offered by the Sellers and those sought to be offered by Existing Holders) is
more than the Maximum Number, the shares of Common Stock to be included in such
Public Offering shall be allocated pursuant to the following procedures: First,
the Company shall be entitled to include all of the securities that it has
proposed to include, and second, to the extent that any other securities may be
included without exceeding the Maximum Number, and subject to rights of any
parties under the Existing Agreements, the Purchaser shall be entitled to
participate in that registration on a basis no less favorable than that of any
other holder of the Company's securities.

                  (b) Notwithstanding anything to the contrary in Section 2.05
and Section 2.06, the Purchaser shall be entitled to participate in a Public
Offering effected by the Company pursuant to a request under an Existing
Agreement only to the extent that the terms of such Existing Agreement permits
an Existing Holder to so participate. The Company agrees that in any

                                        6
<PAGE>

modification or amendment of an Existing Agreement, the rights of the Purchaser
as granted under this Agreement will not be adversely affected, and that
registration rights granted by the Company under any future registration rights
agreement that the Company may enter into will be on a basis no more favorable
than the rights granted to the Purchaser herein, unless the Company also grants
equivalent rights to the Purchaser at the time of such other agreement.

         SECTION 2.07. Shelf Registration. (a) If at any time the Purchaser
shall request to the Company in writing, the Company shall use its best efforts
to file and cause to be declared effective a "shelf" Registration Statement on
any appropriate form pursuant to Rule 415 (or similar rule that may be adopted
by the SEC) under the Securities Act for Registrable Securities, which form
shall be available for the sale of the Registrable Securities in accordance with
the intended method or methods of distribution thereof. The Company agrees to
use its best efforts to keep such Registration Statement continuously effective
and usable for resale of Registrable Securities, for a period of twenty-four
months from the date on which the SEC declares such Registration Statement
effective or such shorter period which will terminate at such time as the
Purchaser has sold all the Registrable Securities covered by such Registration
Statement; provided, however, that the Company may elect that such Registration
Statement not be filed or usable during any Blackout Period (as defined in
Section 3.01(b)). The Purchaser shall be entitled to a total of three "shelf"
registration statements pursuant to this Section 2.07, each of which shall count
as one Demand for purposes of the limitations on Demands set forth in Section
2.02.

                                  ARTICLE THREE
                           OBLIGATIONS OF THE COMPANY

         SECTION 3.01. (a) Whenever the Company is required by the provisions of
this Agreement to use its best efforts to effect the registration of any Common
Stock under the Securities Act, the Company shall (i) prepare and, as soon as
reasonably possible and in any event within 45 days following receipt of a
notice from the Purchaser to that effect, file with the SEC a Registration
Statement with respect to such Registrable Securities, and shall use its best
efforts to cause such Registration Statement to become effective and to remain
effective until the sale of all of the shares of Registrable Securities so
registered or, in the case of a "shelf" registration statement filed pursuant to
Section 2.07, for the period specified in that Section; (ii) prepare and file
with the SEC such amendments and supplements to such Registration Statement and
the Prospectus used in connection therewith as may be reasonably necessary to
make and to keep such Registration Statement effective and to comply with the
provisions of the Securities Act with respect to the sale or other disposition
of all securities proposed to be registered pursuant to such Registration
Statement until the sale of all of the shares of Registrable Securities so
registered or, in the case of a "shelf" registration statement filed pursuant to
Section 2.07, for the period specified in that Section; and (iii) take all such
other action either necessary or desirable to permit the shares of Registrable
Securities held by the Purchaser to be registered and disposed of in accordance
with the method of disposition described herein.

                  (b) Notwithstanding the foregoing, if the Company shall
furnish to the Purchaser a certificate signed by its Chairman, Chief Executive
Officer or Chief Financial Officer stating that

                                        7
<PAGE>

(i) filing a Registration Statement or maintaining effectiveness of a current
Registration Statement would have a material adverse effect on the Company or
its stockholders in relation to any material financing, acquisition or other
corporate transaction, and the Company has determined in good faith that such
disclosure is not in the best interests of the Company and its shareholders, or
(ii) the Company has determined in good faith that the filing or maintaining
effectiveness of a current Registration Statement would require disclosure of
material information the Company has a valid business purpose of retaining as
confidential, the Company shall be entitled to postpone filing or suspend the
use by the Purchaser of the Registration Statement for a reasonable period of
time, but not in excess of 60 consecutive calendar days (a "Blackout Period").
The Company shall be entitled to exercise such suspension rights more than one
time in any calendar year; provided that such exercise shall not prevent the
Purchaser from being entitled to at least 240 days of effective registration
rights per year and that no suspension period may commence if it is less than 30
calendar days from the prior such suspension period.

                  (c) In connection with any Registration Statement, the
following provisions shall apply:

                  (1) The Company shall furnish to the Purchaser, prior to the
         filing thereof with the SEC, a copy of any Registration Statement, and
         each amendment thereof and each amendment or supplement, if any, to the
         Prospectus included therein and shall afford the Purchaser, the
         managing underwriters, and their respective counsel, if any, a
         reasonable opportunity within a reasonable time period to review and
         comment on copies of all such documents (including a reasonable
         opportunity to review copies of any documents to be incorporated by
         reference therein and all exhibits thereto) proposed to be filed.

                  (2) The Company shall take such action as may be necessary so
         that: (i) any Registration Statement and any amendment thereto and any
         Prospectus forming part thereof and any amendment or supplement thereto
         (and each report or other document incorporated therein by reference)
         complies in all material respects with the Securities Act and the
         Exchange Act and the respective rules and regulations thereunder, (ii)
         any Registration Statement and any amendment thereto does not, when it
         becomes effective, contain an untrue statement of a material fact or
         omit to state a material fact required to be stated therein or
         necessary to make the statements therein not misleading, and (iii) any
         Prospectus forming part of any Registration Statement, and any
         amendment or supplement to such Prospectus, does not include an untrue
         statement of a material fact or omit to state a material fact necessary
         in order to make the statements therein, in the light of the
         circumstances under which they were made, not misleading.

                  (3) (A) The Company shall advise the Purchaser and, if
         requested by the Purchaser, confirm such advice in writing:

                           (i) when a Registration Statement and any amendment
                  thereto has been filed with the SEC and when the Registration
                  Statement or any post-effective amendment thereto has become
                  effective; and

                                        8
<PAGE>

                           (ii)of any request by the SEC for amendments or
                  supplements to the Registration Statement or the Prospectus
                  included therein or for additional information.

                  (B) The Company shall advise the Purchaser and, if requested
         by the Purchaser, confirm such advice in writing of:

                           (i) the issuance by the SEC of any stop order
                  suspending effectiveness of the Registration Statement or the
                  initiation of any proceedings for that purpose;

                           (ii)the receipt by the Company of any notification
                  with respect to the suspension of the qualification of the
                  securities included therein for sale in any jurisdiction or
                  the initiation of any proceeding for such purpose; and

                           (iii) the happening of any event that requires the
                  making of any changes in the Registration Statement or the
                  Prospectus so that, as of such date, the Registration
                  Statement and the Prospectus do not contain an untrue
                  statement of a material fact and do not omit to state a
                  material fact required to be stated therein or necessary to
                  make the statements therein (in the case of the Prospectus, in
                  the light of the circumstances under which they were made) not
                  misleading (which advice shall be accompanied by an
                  instruction to suspend the use of the Prospectus relating to
                  such Registrable Securities until the requisite changes have
                  been made).

                  (4) The Company shall use its best efforts to prevent the
         issuance, and if issued to obtain the withdrawal, of any order
         suspending the effectiveness of the Registration Statement relating to
         such Registrable Securities at the earliest possible time.

                  (5) The Company shall furnish to the Purchaser with respect to
         the Registration Statement relating to such Registrable Securities,
         without charge, such number of copies of such Registration Statement
         and any post-effective amendment thereto, including financial
         statements and schedules, and all reports, other documents and exhibits
         (including those incorporated by reference) as the Purchaser shall
         reasonably request.

                  (6) The Company shall furnish to the Purchaser such number of
         copies of any Prospectus (including any preliminary Prospectus and any
         amended or supplemented Prospectus) relating to such Registrable
         Securities, in conformity with the requirements of the Securities Act,
         as the Purchaser may reasonably request in order to effect the offering
         and sale of the shares of such Registrable Securities to be offered and
         sold, but only while the Company shall be required under the provisions
         hereof to cause the Registration Statement to remain effective, and the
         Company consents (except during a Blackout Period or event contemplated
         by Section 3.01(c)(3)(B)(iii)) to the use of the Prospectus or any
         amendment or supplement thereto by the Purchaser in connection with the
         offering and sale of the Registrable Securities covered by the
         Prospectus or any amendment or supplement thereto.

                                        9
<PAGE>

                  (7) Prior to any offering of Registrable Securities pursuant
         to any Registration Statement, the Company shall use its best efforts
         to register or qualify the Registrable Securities covered by such
         Registration Statement under the securities or blue sky laws of such
         states as the Purchaser shall reasonably request, maintain any such
         registration or qualification current until the earlier of the sale of
         the Registrable Securities so registered or 90 days subsequent to the
         effective date of the Registration Statement, and do any and all other
         acts and things either reasonably necessary or advisable to enable the
         Purchaser to consummate the public sale or other disposition of the
         Registrable Securities in jurisdictions where the Purchaser desires to
         effect such sales or other disposition; provided that the Company shall
         not be required to take any action that would subject it to the general
         jurisdiction of the courts of any jurisdiction in which it is not so
         subject or to qualify as a foreign corporation in any jurisdiction
         where the Company is not so qualified.

                  (8) In connection with any offering of Registrable Securities
         registered pursuant to this Agreement, the Company shall (x) furnish
         the Purchaser, at the Company's expense, on a timely basis with
         certificates free of any restrictive legends representing ownership of
         the Registrable Securities being sold in such denominations and
         registered in such names as the Purchaser shall request and (y)
         instruct the transfer agent and registrar of the Registrable Securities
         to release any stop transfer orders with respect to the Registrable
         Securities.

                  (9) Upon the occurrence of any event contemplated by Section
         3.01(c)(3)(B)(iii) above, the Company shall promptly prepare a
         post-effective amendment to any Registration Statement or an amendment
         or supplement to the related Prospectus or file any other required
         document so that, as thereafter delivered to purchasers of the
         Registrable Securities included therein, the Prospectus will not
         include an untrue statement of a material fact or omit to state any
         material fact necessary to make the statements therein, in the light of
         the circumstances under which they were made, not misleading. If the
         Company notifies the Purchaser of the occurrence of any Blackout Period
         or any event contemplated by Section 3.01(c)(3)(B)(iii) above, the
         Purchaser shall suspend the use of the Prospectus, for a period not to
         exceed sixty calendar days in accordance with Section 3.01(b), until
         the requisite changes to the Prospectus have been made.

                  (10) The Company shall make generally available to its
         security holders or otherwise provide in accordance with Section 11(a)
         of the Securities Act as soon as practicable after the effective date
         of the applicable Registration Statement an earnings statement
         satisfying the provisions of Section 11(a) of the Securities Act.

                  (11) The Company shall, if requested, promptly include or
         incorporate in a Prospectus supplement or post-effective amendment to a
         Registration Statement, such information as the managing underwriters
         administering an underwritten offering of the Registrable Securities
         registered thereunder reasonably request to be included therein and to
         which the Company does not reasonably object and shall make all
         required filings of such Prospectus supplement or post-effective
         amendment as soon as practicable after they are

                                       10
<PAGE>

         notified of the matters to be included or incorporated in such
         Prospectus supplement or post-effective amendment.

                  (12) If requested, the Company shall enter into an
         underwriting agreement with a nationally recognized investment banking
         firm or firms selected by the Purchaser and reasonably acceptable to
         the Company containing representations, warranties, indemnities and
         agreements then customarily included by an issuer in underwriting
         agreements with respect to secondary underwritten distributions, and in
         connection therewith, if an underwriting agreement is entered into,
         cause the same to contain indemnification provisions and procedures
         substantially identical to those set forth in Article Five (or such
         other provisions and procedures acceptable to the managing
         underwriters, if any) with respect to all parties to be indemnified
         pursuant to Article Five and take all such other actions as are
         reasonably requested by the managing underwriters for such underwritten
         offering in order to expedite or facilitate the registration or the
         disposition of such Registrable Securities.

                  (13) In the event the Purchaser proposes to conduct an
         underwritten Public Offering, then the Company shall: (i) make
         reasonably available for inspection by the Purchaser and its counsel,
         any underwriter participating in any distribution pursuant to such
         Registration Statement, and any attorney, accountant or other agent
         retained by the Purchaser or any such underwriter, all relevant
         financial and other records, pertinent corporate documents and
         properties of the Company and its subsidiaries as shall be reasonably
         necessary to enable them to conduct a "reasonable" investigation for
         purposes of Section 11(a) of the Securities Act; (ii) cause the
         Company's officers, directors and employees to make reasonably
         available for inspection all relevant information reasonably requested
         by the Purchaser or any such underwriter, attorney, accountant or agent
         in connection with any such Registration Statement, in each case, as is
         customary for similar due diligence examinations; provided that any
         information that is designated in writing by the Company, in good
         faith, as confidential at the time of delivery of such information
         shall be kept confidential by the Purchaser, such underwriter, or any
         such, attorney, accountant or agent, unless such disclosure is made in
         connection with a court proceeding or required by law, or such
         information becomes available to the public generally or through a
         third party without an accompanying obligation of confidentiality;
         (iii) obtain opinions of counsel to the Company and updates thereof
         (which counsel and opinions (in form, scope and substance) shall be
         reasonably satisfactory to the managing underwriters, if any, addressed
         to the Purchaser and the underwriters, if any, covering such matters as
         are customarily covered in opinions requested in underwritten offerings
         and such other matters as may be reasonably requested by the Purchaser
         and underwriters (it being agreed that the matters to be covered by
         such opinion or written statement by such counsel delivered in
         connection with such opinions shall include in customary form, without
         limitation, as of the date of the opinion and as of the effective date
         of the Registration Statement or most recent post-effective amendment
         thereto, as the case may be, the absence from such Registration
         Statement and the Prospectus included therein, as then amended or
         supplemented, including the documents incorporated by reference
         therein, of an untrue statement of a material fact or the omission to
         state therein a material fact required to be stated therein or
         necessary to make the

                                       11
<PAGE>

         statements therein not misleading; (iv) obtain "cold comfort" letters
         and updates thereof from the independent public accountants of the
         Company (and, if necessary, any other independent public accountants of
         any subsidiary of the Company or of any business acquired by the
         Company for which financial statements and financial data are, or are
         required to be, included in the Registration Statement), addressed to
         the Purchaser and the underwriters, if any, in customary form and
         covering matters of the type customarily covered in "cold comfort"
         letters in connection with primary underwritten offerings; and (v)
         deliver such documents and certificates as may be reasonably requested
         by the Purchaser and the managing underwriters, if any, and with any
         customary conditions contained in the underwriting agreement or other
         agreement entered into by the Company. The foregoing actions set forth
         in clauses (iii), (iv) and (v) of this Section 3.01(c)(13) shall be
         performed at each closing under any underwritten offering to the extent
         required thereunder.

                  (14) The Company will use its best efforts to cause such
         Registrable Securities to be admitted for quotation on the Nasdaq
         National Market or other stock exchange or trading system on which the
         Common Stock primarily trades on or prior to the effective date of any
         Registration Statement hereunder.

                  (15) The Company shall use its best efforts to take all other
         steps reasonably necessary to effect the registration, offering and
         sale of the Registrable Securities covered by a Registration Statement
         contemplated hereby and enter into any other customary agreements and
         take such other actions, including participation of senior management
         in "roadshows" as are reasonably required in order to expedite or
         facilitate the disposition of such Registrable Securities, and the
         Company shall secure the participation of its senior management for
         such purposes.

                  (16) The Company shall, at the reasonable request of the
         Purchaser, hold periodic meetings with representatives of the Purchaser
         to report on the market for the Company's securities and opportunities
         for the Purchaser to effect sales of such Registrable Securities.

                  (d) With a view to making available the benefits of certain
rules and regulations of the SEC which may at any time permit the sale of the
Registrable Securities to the public without registration, the Company agrees
to:

                  (1) Make and keep public information available, as those terms
         are understood and defined in and interpreted under Rule 144, at all
         times;

                  (2) During the term of this Agreement, furnish to the
         Purchaser upon request: (i) a written statement by the Company as to
         its compliance with the reporting requirements of Rule 144, (ii) a copy
         of the most recent annual or quarterly report of the Company, and (iii)
         such other reports and documents of the Company as the Purchaser may
         reasonably request in availing itself of any rule or regulation of the
         SEC allowing the Purchaser to sell any such securities without
         registration.

                                       12
<PAGE>

                                  ARTICLE FOUR
                                    EXPENSES

         SECTION 4.01. Expenses Payable by the Company. Except as provided in
Section 4.02 below, all fees and expenses incident to the registration and sale
of Registrable Securities shall be borne by the Company whether or not a
Registration Statement is filed or becomes effective, including, without
limitation, (i) all registration, qualification and filing fees (including,
without limitation, (A) fees with respect to filings required to be made with
the NASD and (B) fees and expenses of compliance with state securities or blue
sky laws (including, without limitation, fees and disbursements of counsel for
the Company or the underwriters, or both, in connection with blue sky
qualifications of the Registrable Securities)), (ii) messenger and delivery
expenses, word processing, duplicating and printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities in a
form eligible for deposit with The Depository Trust Company, printing
Preliminary Prospectuses, Prospectuses, Prospectus supplements, including those
delivered to or for the account of the Purchaser as provided in this Agreement,
and printing or preparing any underwriting agreement, agreement among
underwriters and related syndicate or selling group agreements, pricing
agreements and blue sky memoranda), (iii) fees and disbursements of counsel for
the Company, (iv) fees and disbursements of all independent certified public
accountants for the Company (including, without limitation, the expenses of any
"comfort letters" required by or incident to such performance), (v) the fees and
expenses of any "qualified independent underwriter" or other independent
appraiser participating in an offering pursuant to Section 3 of Rule 2720 of the
Conduct Rules of the NASD (unless such qualified independent underwriter is
required as a result of an affiliation between an underwriter selected by the
Purchaser and the Purchaser, in which case such fees and expenses will be borne
by the Purchaser), (vi) Securities Act liability insurance, if the Company so
desires such insurance, (vii) all out-of-pocket expenses of the Company
(including, without limitation, expenses incurred by the Company, its officers,
directors, employees and agents performing legal or accounting duties or
preparing or participating in "roadshow" presentations or of any public
relations, investor relations or other consultants or advisors retained by the
Company in connection with any roadshow, including travel and lodging expenses
of such roadshows), and (viii) the fees and expenses incurred in connection with
the quotation or listing of shares of Common Stock on any securities exchange or
automated securities quotation system. The fees and expenses set forth in this
Section 4.01 are collectively referred to as "Registration Expenses".

         SECTION 4.02. Expenses Payable by the Purchaser. The Purchaser shall
pay all underwriting discounts and commissions or broker's commissions incurred
in connection with the sale or other disposition of Registrable Securities for
or on behalf of the Purchaser's account as well as the fees and expenses of the
Purchaser's counsel.

                                       13
<PAGE>

                                  ARTICLE FIVE
                        INDEMNIFICATION AND CONTRIBUTION

         SECTION 5.01. (a) Indemnification by the Company. The Company shall,
without limitation as to time, indemnify and hold harmless, to the fullest
extent permitted by law, the Purchaser and any underwriter participating in the
distribution, their respective officers, directors, partners and agents and
employees of each of them, each Person who controls the Purchaser or any such
underwriter (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act) and the officers, directors, partners, agents and
employees of each such controlling person (individually, a "Purchaser
Indemnified Person") from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, costs of investigating,
preparing to defend, defending and appearing as a third-party witness and
attorneys' fees and disbursements) and expenses, including any amounts paid in
respect of any settlements (collectively, "Losses"), joint or several, without
duplication, as incurred, arising out of or based upon any untrue or alleged
untrue statement of a material fact contained in any Registration Statement,
Prospectus or form of prospectus, or in any amendment or supplements thereto or
in any Preliminary Prospectus, or arising out of or based upon, in the case of
the Registration Statement or any amendments thereto, any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, and, in the case of the Prospectus or
form of prospectus, or in any amendments or supplements thereto, or in any
Preliminary Prospectus, any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading
except, in either case, (i) to the extent, but only to the extent, that such
untrue or alleged untrue statement or omission or alleged omission has been made
therein in reliance upon and in conformity with information furnished in writing
to the Company by such Purchaser Indemnified Person expressly for use therein
and (ii) if the Person asserting any such Losses who purchased the Registrable
Securities which are the subject thereof did not receive a copy of an amended
Preliminary Prospectus or the final Prospectus (or the final Prospectus as
amended or supplemented) at or prior to the written confirmation of the sale of
such Registrable Securities to such person (if it is determined that the Company
has provided such Preliminary Prospectus and it was the responsibility of such
Purchaser Indemnified Person to provide such person with a current copy of the
Prospectus or amended or supplemented Prospectus, as the case may be) and the
untrue statement or alleged untrue statement or omission or alleged omission of
a material fact made in such Preliminary Prospectus was corrected in the amended
Preliminary Prospectus or the final Prospectus (or the final Prospectus as
amended and supplemented).

                  (b) Indemnification by Purchaser. In connection with any
Registration Statement in which the Purchaser as a holder of Registrable
Securities is participating, the Purchaser shall severally but not jointly,
without limitation as to time, indemnify and hold harmless, to the fullest
extent permitted by law, the Company, any underwriter participating in the
distribution and their respective directors, officers, agents and employees,
each Person who controls the Company or any such underwriter (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling person
(individually, a "Company Indemnified Person"), from and against any and all
Losses, as incurred,

                                       14
<PAGE>

arising out of or based upon (i) any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, Prospectus, or form of
prospectus, or in any amendment or supplement thereto or in any Preliminary
Prospectus, or arising out of or based upon, in the case of the Registration
Statement or any amendments thereto, any omission or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and, in the case of the Prospectus, or form of
prospectus, or in any amendments or supplements thereto, or in any Preliminary
Prospectus, any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in either case, to the
extent, but only to the extent, that such untrue or alleged untrue statement or
omission or alleged omission has been made therein in reliance upon and in
conformity with information furnished in writing to the Company by the Purchaser
expressly for use therein or (ii) the failure of the Purchaser (if it is
determined that it was the responsibility of the Purchaser) at or prior to the
written confirmation of the sale of the Registrable Securities to send or
deliver a copy of an amended Preliminary Prospectus or the final Prospectus (or
the final Prospectus as amended or supplemented) to the Person asserting any
such Losses who purchased the Registrable Securities which are the subject
thereof and the untrue statement or alleged untrue statement or omission or
alleged omission of a material fact made in such Preliminary Prospectus was
corrected in the amended Preliminary Prospectus or the final Prospectus (or the
final Prospectus as amended and supplemented). In no event shall the liability
of the Purchaser hereunder be, or be claimed by the Company to be, greater in
amount than the dollar amount of the proceeds actually received by the Purchaser
upon the sale of the Registrable Securities giving rise to such indemnification
obligation.

                  (c) Conduct of Indemnification Proceedings. Each Indemnified
Person shall give prompt notice to the party or parties from which such
indemnity is sought (the "indemnifying parties") of the commencement of any
action or proceeding (including any governmental investigation) (collectively
"Proceedings" and individually a "Proceeding") with respect to which such
Indemnified Person seeks indemnification or contribution pursuant hereto;
provided, however, that the failure so to notify the indemnifying parties shall
not relieve the indemnifying parties from any obligation or liability except to
the extent that the indemnifying party was otherwise unaware of such Proceeding
and the indemnifying parties shall have been materially prejudiced by such
failure. The indemnifying parties shall have the right, exercisable by giving
written notice to an Indemnified Person promptly after the receipt of written
notice from such Indemnified Person of such Proceeding, to assume, at the
indemnifying parties' expense, the defense of any such proceeding, with counsel
reasonably satisfactory to such Indemnified Person and shall pay as incurred the
fees and disbursements of such counsel related to such Proceeding; provided,
however, that an Indemnified Person or Indemnified Persons (if more than one
such Indemnified Person is named in any Proceeding) shall have the right to
employ separate counsel in any such Proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person or Indemnified Persons unless: (i) the indemnifying
party or parties agree to pay such fees and expenses; or (ii) the indemnifying
parties fail promptly to assume the defense of such Proceeding or fail promptly
to employ counsel reasonably satisfactory to such Indemnified Person or
Indemnified Persons; or (iii) the named parties to any such action (including
any impleaded parties) include both an Indemnified Person and the indemnifying
party, and the

                                       15
<PAGE>

Indemnified Person or Indemnified Persons shall have been advised by counsel
that there may be a conflict between the positions of the indemnifying party or
an affiliate of the indemnifying party and such Indemnified Person or
Indemnified Persons in conducting the defense of such action or proceeding or
that there may be legal defenses available to such Indemnified Person or
Indemnified Persons different from or in addition to those available to the
indemnifying party or such affiliate, in which case, if such Indemnified Person
or Indemnified Persons notifies the indemnifying parties in writing that it
elects to employ separate counsel at the expense of the indemnifying parties,
the indemnifying parties shall not have the right to assume the defense thereof
and such counsel shall be at the expense of the indemnifying parties, it being
understood, however, that the indemnifying parties shall not, in connection with
any one such Proceeding or separate but substantially similar or related
Proceedings in the same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (together with appropriate local
counsel) at any time for such Indemnified Person or Indemnified Persons. Whether
or not such defense is assumed by the indemnifying parties, such indemnifying
parties or Indemnified Person or Indemnified Persons will not be subject to any
liability for any settlement made without its or their consent (but such consent
will not be unreasonably withheld). No indemnifying party shall be liable for
any settlement of any such action or proceeding effected without its written
consent, but if settled with its written consent each indemnifying party jointly
and severally agrees, subject to the exception and limitations set forth above,
to indemnify and hold harmless each Indemnified Person from and against any loss
or liability by reason of such settlement. No indemnification provided for in
Section 5.01(a) or 5.01(b) shall be available to any party who shall fail to
give notice as provided in this Section 5.01(c) if the party to whom notice was
not given was unaware of the proceeding to which such notice would have related
and was materially prejudiced by the failure to give such notice, but the
failure to give such notice shall not relieve the indemnifying party or parties
from any liability which it or they may have to an Indemnified Person otherwise
than on account of the provisions of Section 5.01(a) or 5.01(b). No indemnifying
party shall, without the consent of the Indemnified Person, consent to entry of
any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Person of a release from
all liability in respect of such claim or litigation.

                  (d) Contribution. If the indemnification provided for in this
Section 5.01 is unavailable to an Indemnified Person or is insufficient to hold
such Indemnified Person harmless for any Losses in respect to which this Section
5.01 would otherwise apply by its terms, except by reasons of Section 5.01(a)(i)
or (ii) hereof or the failure of the Indemnified Person to give notice as
required in Section 5.01(c) hereof (provided that the indemnifying party was
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice), then each applicable
indemnifying party, in lieu of indemnifying such Indemnified Person, shall have
an obligation to contribute to the amount paid or payable by such Indemnified
Person as a result of such Losses, in such proportion as is appropriate to
reflect the relative fault of the indemnifying party, on the one hand, and such
Indemnified Person, on the other hand, in connection with the actions,
statements or omissions that resulted in such Losses as well as any other
relevant equitable considerations. Where the Indemnified Person is an
underwriter participating in the distribution of Registrable Securities,
however, each indemnifying party, and, in addition, if the

                                       16
<PAGE>

indemnifying party is the Purchaser, the Company, shall have an obligation to
contribute to the amount paid or payable by such Indemnified Person as the
result of such Losses in such proportion as is appropriate to reflect not only
(i) the relative fault of the Company, the Purchaser and the underwriters in
connection with the actions, statements or omissions that resulted in such
Losses, as well as any other relevant equitable considerations, but also (ii)
the relative benefits received by the Purchaser on the one hand and the
underwriters on the other hand from the distribution of the Registrable
Securities. The relative benefit derived by the parties shall be determined by
reference to, among other things, the fact that the Company entered into this
Agreement to induce the Purchaser to engage in the transaction pursuant to which
the Registrable Securities were acquired. The relative benefits received by the
Purchaser on the one hand and the underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from any such offering
(before deducting expenses) received by the Purchaser bear to the total
underwriting discounts or commissions received by the underwriters. The relative
fault of such indemnifying party, on the one hand, and Indemnified Person, on
the other hand, shall be determined by reference to, among other things, whether
any action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has been
taken by, or relates to information supplied by, such indemnifying party or
Indemnified Person, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent any such action, statement or
omission. The amount paid or payable by a party as a result of any Losses shall
be deemed to include any legal or other fees or expenses incurred by such party
in connection with any Proceeding, to the extent such party would have been
indemnified for such expenses if the indemnification provided for in Section
5.01(a) or Section 5.01(b) were available to such party.

                  The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 5.01(d) were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5.01(d), if the
Purchaser is an indemnifying party, it shall not be required to contribute any
amount in excess of the amount by which the total price at which the Registrable
Securities sold by such indemnifying party and distributed to the public were
offered to the public (net of any underwriting discounts and commissions and
expenses) exceeds the amount of any damages that such indemnifying party has
otherwise been required to pay or has paid by reason of such untrue or alleged
untrue statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.

                  (e) Remedies Cumulative. The indemnity, contribution and
expense reimbursement obligations under this Section 5.01 shall be in addition
to any liability each indemnifying party may otherwise have and shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Indemnified Person.

                  (f) Underwriting Agreement Controls. In the event of any
conflict between the indemnification and contribution terms as herein set forth
and as set forth in any underwriting agreement entered pursuant hereto, the
underwriting agreement shall control.

                                       17
<PAGE>

                  (g) The obligations of the Company and the Purchaser under
this Section 5.01 shall survive the completion of any offering of Registrable
Securities in a Registration Statement.

                                   ARTICLE SIX
                               GENERAL PROVISIONS

         SECTION 6.01. Notices. Except as otherwise provided in this Agreement,
any notice or other communication given under this Agreement shall be sufficient
if in writing and sent by registered or certified mail, return receipt
requested, postage prepaid, to a party at its address set forth below (or at
such other address as shall be designated for such purpose by such party in a
written notice to the other party hereto):

              (a)   If to the Company:

                       NTL Incorporated
                       110 East 59th Street
                       New York, NY  10022
                       Telecopy:  (212) 906-8497
                       Attention: Richard J. Lubasch, Esq.
                                  (e-mail: lubasch@ntli.com)

                    with copies (which shall not constitute notice to the
                    Company) to:

                       Skadden, Arps, Slate, Meagher & Flom LLP
                       Four Times Square
                       New York, NY  10036
                       Telecopy:  (212) 735-2000
                       Attention: Thomas Kennedy, Esq.
                                  (e-mail: tkennedy@skadden.com)

              (b)   If to the Purchaser:

                       France Telecom, S.A.
                       208-212, rue Raymond Losserand
                       75505 Paris Cedex 15, France
                       Telecopy:  (331) 44-44-21-54
                       Attention: Philippe Mc Allister
                                  (e-mail: philippe.mcallister@francetelecom.fr)

                                       18
<PAGE>

                    with a copy (which shall not constitute notice to the
                    Purchaser) to:

                            Shearman & Sterling
                            599 Lexington Avenue
                            New York, NY  10022
                            Telecopy:  (212) 848-7179
                            Attention: Alfred J. Ross, Esq.

All such notices and communications shall be effective when received by the
addressee.

         SECTION 6.02. Governing Law. This Agreement shall be governed in all
respects by the internal laws of the State of New York as applied to contracts
entered into solely between residents of, and to be performed entirely within,
such state, and without reference to principles of conflicts of laws or choice
of laws.

         SECTION 6.03. Entire Agreement; Amendments. This Agreement constitutes
the full and entire understanding and agreement between the parties with regard
to the subject matter hereof and supersedes all prior agreements and
understandings among the parties relating to the subject matter hereof. Neither
this Agreement nor any term hereof may be amended, waived, discharged or be
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought.
This Agreement supersedes the Registration Rights Agreement, dated August 13,
1999, between NTL Delaware and the Purchaser, which agreement shall be of no
further force and effect.

         SECTION 6.04. Successor and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns.

         SECTION 6.05. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restriction of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.

         SECTION 6.06. Transfer or Assignment of Registration Rights. The
registration rights set forth in this Agreement shall be transferable or
assignable by the Purchaser, in whole or in part and from time to time; provided
that each transferee agrees in writing to be subject to all the terms and
conditions of this Agreement. Without limitation of the foregoing, the parties
understand and agree that Compagnie Generale des Communications (COGECOM) S.A.
("Cogecom") shall be entitled to exercise any right granted hereunder to the
Purchaser, so long as Cogecom (a) remains a wholly-owned subsidiary of the
Purchaser and (b) holds any Registrable Securities.

         SECTION 6.07. Remedies. In the event of a breach by any party of any of
its obligations under this Agreement, the other parties, in addition to being
entitled to exercise all rights provided herein or granted by law, including
recovery of damages, will be entitled to specific performance of

                                       19
<PAGE>

their rights under this Agreement. The Company and the Purchaser agree that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by the Company or the Purchaser, as the case may be, of any
of the provisions of this Agreement and hereby further agrees that, in the event
of any action for specific performance in respect of such breach, the Company or
the Purchaser, as the case may be, shall waive the defense that a remedy at law
would be adequate. No failure or delay on the part of the Company or the
Purchaser in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy.

         SECTION 6.08. Derivative Securities. If the Purchaser so requests, the
parties shall negotiate in good faith such additional provisions as are
reasonably necessary or appropriate to effect the offering and sale of
Derivative Securities in a reasonable and customary manner.

              [The balance of this page intentionally left blank.]

                                       20

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth above.

                                       NTL INCORPORATED

                                       By:   /s/ Richard J. Lubasch
                                          ----------------------------------
                                             Name:  Richard J. Lubasch
                                             Title: Executive Vice President

                                       FRANCE TELECOM S.A.

                                       By:   /s/ Eric Bouvier
                                          --------------------------------
                                             Name:  Eric Bouvier
                                             Title: Senior Vice-President

                                       21

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