Document:

EXHIBIT 4.3

                  THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.

                      43/4% Convertible Subordinated Notes
                                    due 2006

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

                                    INDENTURE

                          Dated as of November 26, 2001

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

                                 SUNTRUST BANK,

                                     TRUSTEE

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

<PAGE>

                             CROSS REFERENCE TABLE*

TIA Section                                              Indenture Section
310(a)(1).........................................              7.09
(a)(2)............................................              7.09
(a)(3)............................................              N.A.
(a)(4)............................................              N.A.
(b)...............................................           7.08; 7.10
(c)...............................................              N.A.
                                                                7.13
311(a)............................................              7.13
(b)...............................................              N.A
(c)...............................................              2.05

312(a)............................................             12.03
(b)...............................................             12.03
(c)...............................................              7.14

313(a)............................................              N.A.
(b)(1)............................................              7.14
(b)(2)............................................             12.02
(c)...............................................              7.14
(d)...............................................       4.02; 4.03; 12.02

314(a)............................................              N.A.
(b)...............................................             12.04
(c)(1)............................................             12.04
(c)(2)............................................              N.A.
(c)(3)............................................              N.A.
(d)...............................................             12.05
(e)...............................................              N.A.
(f)...............................................              7.01

315(a)............................................          7.15; 12.02
(b)...............................................              7.01
(c)...............................................              7.01
(d)...............................................              6.11
(e)...............................................              2.08

316(a) (last sentence)............................              6.05
(a)(1)(A).........................................              6.04
(a)(1)(B).........................................              N.A.
 (a)(2)...........................................              6.07
(b)...............................................              6.08

317(a)(1).........................................              6.09
(a)(2)............................................              2.04
(b)...............................................             12.01

318(a)............................................

                                  N. A. means Not Applicable

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

<PAGE>
<TABLE>
<CAPTION>
                                       TABLE OF CONTENTS
<S>              <C>                                                                        <C>
                                            ARTICLE 1

                     DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.01     Definitions..................................................................1
SECTION 1.02     Other Definitions...........................................................10
SECTION 1.03     Incorporation by Reference of Trust Indenture Act...........................11
SECTION 1.04     Rules of Construction.......................................................12
SECTION 1.05     Acts of Holders.............................................................12

                                            ARTICLE 2

                                            THE NOTES

SECTION 2.01     Form and Dating.............................................................13
SECTION 2.02     Execution and Authentication................................................15
SECTION 2.03     Registrar, Paying Agent and Conversion Agent................................15
SECTION 2.04     Paying Agent to Hold Money and Notes in Trust...............................16
SECTION 2.05     Noteholder Lists............................................................16
SECTION 2.06     Transfer and Exchange.......................................................16
SECTION 2.07     Replacement Notes...........................................................18
SECTION 2.08     Outstanding Notes; Determinations of Holders' Action........................19
SECTION 2.09     Temporary Notes.............................................................19
SECTION 2.10     Cancellation................................................................20
SECTION 2.11     Persons Deemed Owners.......................................................20
SECTION 2.12     Global Notes................................................................20
SECTION 2.13     CUSIP Numbers...............................................................25
SECTION 2.14     Defaulted Interest..........................................................25
SECTION 2.15     Registration Default........................................................25

                                            ARTICLE 3

                                     REDEMPTION AND PURCHASES

SECTION 3.01     [Reserved]..................................................................26
SECTION 3.02     Optional Redemption.........................................................26
SECTION 3.03     Notice of Trustee...........................................................26
SECTION 3.04     Selection of Notes to be Redeemed...........................................26
SECTION 3.05     Notice of Redemption........................................................27
SECTION 3.06     Effect of Notice of Redemption..............................................28
SECTION 3.07     Deposit of Redemption Price.................................................28
SECTION 3.08     Notes Redeemed in Part......................................................28
SECTION 3.09     Conversion Arrangement on Call for Redemption...............................28
SECTION 3.10     Repurchase of Notes at Option of the Holder upon Change in Control..........29

<PAGE>

SECTION 3.11     Effect of Change in Control Repurchase Notice...............................33
SECTION 3.12     Deposit of Change in Control Repurchase Price...............................34
SECTION 3.13     Notes Purchased in Part.....................................................35
SECTION 3.14     Covenant to Comply with Securities Laws upon Purchase of Notes..............35
SECTION 3.15     Repayment to the Company....................................................35

                                            ARTICLE 4

                                            COVENANTS

SECTION 4.01     Payment of Principal, Premium, Interest on the Notes........................35
SECTION 4.02     SEC and Other Reports.......................................................36
SECTION 4.03     Compliance Certificate......................................................36
SECTION 4.04     Further Instruments and Acts................................................36
SECTION 4.05     Maintenance of Office or Agency.............................................36
SECTION 4.06     Delivery of Certain Information.............................................37

                                            ARTICLE 5

                                      SUCCESSOR CORPORATION

SECTION 5.01     When Company May Merge or Transfer Assets...................................37

                                            ARTICLE 6

                                      DEFAULTS AND REMEDIES

SECTION 6.01     Events of Default...........................................................38
SECTION 6.02     Acceleration................................................................40
SECTION 6.03     Other Remedies..............................................................41
SECTION 6.04     Waiver of Past Defaults.....................................................41
SECTION 6.05     Control by Majority.........................................................41
SECTION 6.06     Limitation on Suits.........................................................41
SECTION 6.07     Rights of Holders to Receive Payment........................................42
SECTION 6.08     Collection Suit by Trustee..................................................42
SECTION 6.09     Trustee May File Proofs of Claim............................................42
SECTION 6.10     Priorities..................................................................43
SECTION 6.11     Undertaking for Costs.......................................................43
SECTION 6.12     Waiver of Stay, Extension or Usury Laws.....................................43

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<PAGE>

                                            ARTICLE 7

                                             TRUSTEE

SECTION 7.01     Duties and Responsibilities of the Trustee; During Default; Prior to Default44
SECTION 7.02     Certain Rights of the Trustee...............................................45
SECTION 7.03     Trustee Not Responsible for Recitals, Disposition of Notes or Application
                 of Proceeds Thereof.........................................................46
SECTION 7.04     Trustee and Agents May Hold Notes; Collections, etc.........................46
SECTION 7.05     Moneys Held by Trustee......................................................47
SECTION 7.06     Compensation and Indemnification of Trustee and Its Prior Claim.............47
SECTION 7.07     Right of Trustee to Rely on Officers' Certificate, etc......................47
SECTION 7.08     Conflicting Interests.......................................................48
SECTION 7.09     Persons Eligible for Appointment as Trustee.................................48
SECTION 7.10     Resignation and Removal; Appointment of Successor Trustee...................48
SECTION 7.11     Acceptance of Appointment by Successor Trustee..............................49
SECTION 7.12     Merger, Conversion, Consolidation or Succession to Business of Trustee......50
SECTION 7.13     Preferential Collection of Claims Against the Company.......................50
SECTION 7.14     Reports by the Trustee......................................................50
SECTION 7.15     Trustee to Give Notice of Default, But May Withhold in Certain Circumstances50

                                            ARTICLE 8

                                      DISCHARGE OF INDENTURE

SECTION 8.01     Discharge of Liability on Notes.............................................51
SECTION 8.02     Repayment of the Company....................................................51

                                            ARTICLE 9

                                            AMENDMENTS

SECTION 9.01     Without Consent of Holders..................................................51
SECTION 9.02     With Consent of Holders.....................................................52
SECTION 9.03     Compliance with Trust Indenture Act.........................................53
SECTION 9.04     Revocation and Effect of Consents, Waivers and Actions......................53
SECTION 9.05     Notation on or Exchange of Notes............................................53
SECTION 9.06     Trustee to Sign Supplemental Indentures.....................................53
SECTION 9.07     Effect of Supplemental Indentures...........................................53

                                            ARTICLE 10

                                            CONVERSION

SECTION 10.01    Conversion Right and Conversion Price.......................................54
SECTION 10.02    Exercise of Conversion Right................................................54
SECTION 10.03    Fractions of Shares.........................................................55
SECTION 10.04    Adjustment of Conversion Price..............................................55

                                      iii
<PAGE>

SECTION 10.05    Notice of Adjustments of Conversion Price...................................65
SECTION 10.06    Notice Prior to Certain Actions.............................................65
SECTION 10.07    Company to Reserve Common Stock.............................................66
SECTION 10.08    Taxes on Conversions........................................................66
SECTION 10.09    Covenant as to Common Stock.................................................66
SECTION 10.10    Cancellation of Converted Notes.............................................66
SECTION 10.11    Effect of Reclassification, Consolidation, Merger or Sale...................66
SECTION 10.12    Adjustment for Other Distributions..........................................68
SECTION 10.13    Responsibility of Trustee for Conversion Provisions.........................69

                                            ARTICLE 11

                                          SUBORDINATION

SECTION 11.01    Agreement to Subordinate....................................................69
SECTION 11.02    Liquidation; Dissolution; Bankruptcy........................................69
SECTION 11.03    Default on Designated Senior Indebtedness...................................70
SECTION 11.04    Acceleration of Notes.......................................................71
SECTION 11.05    When Distribution Must Be Paid Over.........................................71
SECTION 11.06    Notice by the Company.......................................................72
SECTION 11.07    Subrogation.................................................................72
SECTION 11.08    Relative Rights.............................................................72
SECTION 11.09    Subordination May Not Be Impaired by the Company............................72
SECTION 11.10    Distribution or Notice to Representative....................................73
SECTION 11.11    Rights of Trustee and Paying Agent..........................................73

                                            ARTICLE 12

                                          MISCELLANEOUS

SECTION 12.01    Trust Indenture Act Controls................................................73
SECTION 12.02    Notices.....................................................................73
SECTION 12.03    Communication by Holders with Other Holders.................................74
SECTION 12.04    Certificate and Opinion as to Conditions Precedent..........................74
SECTION 12.05    Statements Required in Certificate or Opinion...............................75
SECTION 12.06    Separability Clause.........................................................75
SECTION 12.07    Rules by Trustee, Paying Agent, Conversion Agent and Registrar..............75
SECTION 12.08    Legal Holidays..............................................................75
SECTION 12.09    GOVERNING LAW...............................................................75
SECTION 12.10    No Recourse Against Others..................................................75
SECTION 12.11    Successors..................................................................76
SECTION 12.12    Multiple Originals..........................................................76
</TABLE>

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<PAGE>

EXHIBITS

Exhibit A-1      Form of Face of Global Note
Exhibit A-2      Form of Certificated Note
Exhibit B-1      Transfer Certificate
Exhibit C-1      Form of  Accredited Investor Representation Letter

                                       v
<PAGE>

     INDENTURE  dated as of November 26, 2001 between THE PROFIT  RECOVERY GROUP
INTERNATIONAL,  INC., a Georgia corporation (the "Company") and SUNTRUST BANK, a
Georgia  banking  corporation  with  trust  powers,  as trustee  hereunder  (the
"Trustee").

                             RECITALS OF THE COMPANY

     The  Company  has duly  authorized  the  creation  of an issue of its 43/4%
Convertible   Subordinated  Notes  due  2006  (herein  called  the  "Notes")  of
substantially  the  tenor and  amount  hereinafter  set  forth,  and to  provide
therefor  the Company has duly  authorized  the  execution  and delivery of this
Indenture.

     All things necessary to make the Notes,  when the Notes are executed by the
Company and authenticated and delivered hereunder,  the valid obligations of the
Company,  and to make  this  Indenture  a valid  agreement  of the  Company,  in
accordance  with  their and its  terms,  have been  done.  Further,  all  things
necessary  to duly  authorize  the  issuance of the Common  Stock of the Company
issuable upon the conversion of the Notes,  and to duly reserve for issuance the
number of shares of Common Stock issuable upon such conversion, have been done.

     This  Indenture is subject to, and shall be governed by, the  provisions of
the Trust  Indenture Act of 1939, as amended,  that are required to be a part of
and to govern  indentures  qualified  under the Trust  Indenture Act of 1939, as
amended.

                   NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

                                    ARTICLE 1

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

     SECTION 1.01  Definitions.  For all purposes of this  Indenture,  except as
otherwise expressly provided or unless the context otherwise requires:

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

          (2) all  accounting  terms  not  otherwise  defined  herein  have  the
     meanings assigned to them in accordance with GAAP; and

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

<PAGE>

     "Affiliate"  of any  specified  person means any other  person  directly or
indirectly  controlling  or  controlled  by or under  direct or indirect  common
control with such specified person.  For purposes of this definition,  "control"
when used with  respect  to any  specified  person  means the power to direct or
cause the direction of the management  and policies of such person,  directly or
indirectly,  whether through the ownership of voting securities,  by contract or
otherwise;   and  the  terms   "controlling"   and  "controlled"  have  meanings
correlative to the foregoing.  In connection with Section 6.01(7) only, the term
Affiliate  shall not  include  any  officers  or  directors  or any  controlling
shareholders of the Company.

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

     "Board of Directors"  means either the board of directors of the Company or
any duly authorized committee of such board.

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

     "Business Day" means each day of the year other than a Saturday or a Sunday
on which  banking  institutions  are not required or  authorized to close in the
City of New York or the city in which the Corporate Trust Office is located.

     "Capital  Stock" of any  corporation  means any and all shares,  interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) stock issued by that corporation.

     "Certificated Notes" means Notes that are in the form of the Notes attached
hereto as Exhibit A-2.

     "Closing Price" of any security on any date of determination means:

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

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

          (3) if such  security is not so listed on a U.S.  national or regional
     securities  exchange,  the  closing  sale price as  reported  by the NASDAQ
     National Market;

          (4) if such security is not so reported, the last quoted bid price for
     such  security in the  over-the-counter  market as reported by the National
     Quotation Bureau or similar organization; or

                                       2
<PAGE>

          (5) if such bid price is not  available,  the average of the mid-point
     of the last bid and ask prices of such  security on such date from at least
     three nationally recognized  independent  investment banking firms retained
     for this purpose by the Company.

     "Common  Stock" means the Common Stock,  without par value,  of the Company
authorized  at the  date  of this  instrument  as  originally  executed  or,  if
applicable  in the case of any  redemption  pursuant to Section 3.10 hereof upon
the  occurrence of a Change in Control,  any stock of any class of capital stock
of a successor to the Company which has no preference in respect of dividends or
of amounts  payable in the event of any  voluntary or  involuntary  liquidation,
dissolution  or  winding up of such  successor  to the  Company.  Subject to the
provisions  of Section  10.11,  shares  issuable on  conversion or repurchase of
Notes  shall  include  only  shares  of  Common  Stock or shares of any class or
classes of common stock resulting from any reclassification or reclassifications
thereof;  provided,  however,  that if at any time there  shall be more than one
such  resulting  class,  the shares so  issuable  on  conversion  of Notes shall
include  shares of all such  classes,  and the shares of each such class then so
issuable  shall be  substantially  in the  proportion  which the total number of
shares of such  class  resulting  from all such  reclassifications  bears to the
total   number  of  shares  of  all  such  classes   resulting   from  all  such
reclassifications.

     "Company"  means the party named as the "Company" in the first paragraph of
this  Indenture  until  a  successor  replaces  it  pursuant  to the  applicable
provisions  of this  Indenture,  and,  thereafter,  "Company"  shall  mean  such
successor.  The foregoing  sentence shall likewise apply to any subsequent  such
successor or successors.

     "Company  Request"  or  "Company  Order"  means a written  request or order
signed in the name of the Company by any two Officers.

     "Conversion  Agent" means any person  authorized  by the Company to convert
Notes in accordance with Article 10 hereof.

     "Corporate Trust Office" means the principal office of the Trustee at which
at any time its corporate trust business shall be administered,  which office at
the date hereof is located at 25 Park Place, 24th Floor, Atlanta, Georgia 30303,
Attention:  Corporate Trust  Division,  or such other address as the Trustee may
designate  from time to time by notice to the  Holders and the  Company,  or the
principal corporate trust office of any successor Trustee (or such other address
as a successor  Trustee may designate from time to time by notice to the Holders
and the Company).

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

     "Designated Senior  Indebtedness"  means all Senior  Indebtedness under the
Senior Credit Facility.

                                       3
<PAGE>

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

     "GAAP" means United States generally accepted  accounting  principles as in
effect from time to time.

     "Global  Notes"  means  Notes  that are in the form of the  Notes  attached
hereto as Exhibit  A-1,  and to the extent that such Notes are  required to bear
the Legend required by Section 2.06(f) such Notes with such Legend.

     "Guarantee"  means a guarantee  (other than by  endorsement  of  negotiable
instruments  for  collection  in the  ordinary  course of  business),  direct or
indirect, contingent or otherwise, in any manner (including, without limitation,
letters of credit and reimbursement  agreements in respect  thereof),  of all or
any part of any Indebtedness.

     "Holder" or "Noteholder"  means a person in whose name a Note is registered
on the Registrar's books.

     "Indebtedness" means, with respect to any person, without duplication:

          (1) all indebtedness, obligations and other liabilities, contingent or
     otherwise,  of such person for borrowed money (including overdrafts) or for
     the deferred  purchase  price of property or services,  excluding any trade
     payables and other  accrued  current  liabilities  incurred in the ordinary
     course of business,  but including,  without  limitation,  all obligations,
     contingent or otherwise,  of such person in connection  with any letters of
     credit and acceptances issued under letter of credit facilities, acceptance
     facilities or other similar facilities;

          (2) all obligations of such person evidenced by bonds,  credit or loan
     agreements, notes, debentures or other similar instruments;

          (3)   indebtedness  of  such  person  created  or  arising  under  any
     conditional  sale or  other  title  retention  agreement  with  respect  to
     property  acquired by such person  (even if the rights and  remedies of the
     seller or lender  under such  agreement in the event of default are limited
     to  repossession  or sale of such  property),  but excluding trade payables
     arising in the ordinary course of business;

          (4) all  obligations  and  liabilities,  contingent or  otherwise,  in
     respect of leases of the person  required,  in conformity  with GAAP, to be
     accounted for as capitalized  lease obligations on the balance sheet of the
     person and all obligations and other liabilities,  contingent or otherwise,
     under any lease or related  document,  including a purchase  agreement,  in
     connection  with the lease of real property or  improvements  thereon which
     provides that the person is contractually  obligated to purchase or cause a
     third party to purchase the leased  property or pay an agreed upon residual
     value of the  leased  property  to the lessor  and the  obligations  of the
     person under the lease or related  document to purchase or to cause a third
     party to purchase the leased property whether or not such lease transaction
     is characterized as an operating lease or a capitalized lease in accordance
     with GAAP, including, without limitations, synthetic lease obligations;

                                       4
<PAGE>

          (5) all  obligations  of such  person  under or in respect of interest
     rate  agreements,  currency  agreements or other swap,  cap floor or collar
     agreement,  hedge  agreement,  forward  contract or similar  instrument  or
     agreement  or foreign  currency,  hedge,  exchange  or  purchase or similar
     instrument or agreement;

          (6) all  indebtedness  referred  to in (but  not  excluded  from)  the
     preceding  clauses (1) through (5) of other  persons and all  dividends  of
     other persons,  the payment of which is secured by (or for which the holder
     of such indebtedness has an existing right,  contingent or otherwise, to be
     secured  by) any  Lien or with  respect  to  property  (including,  without
     limitation, accounts and contract rights) owned by such person, even though
     such  person  has not  assumed  or become  liable  for the  payment of such
     indebtedness  (the amount of such obligation  being deemed to be the lesser
     of the value of such  property or asset or the amount of the  obligation so
     secured);

          (7) all guarantees by such person of indebtedness  referred to in this
     definition or of any other person;

          (8) all Redeemable  Capital Stock of such person valued at the greater
     of its voluntary or involuntary maximum fixed repurchase price plus accrued
     and unpaid dividends;

          (9) the present  value of the  obligation of such person as lessee for
     net rental payments  (excluding all amounts  required to be paid on account
     of maintenance and repairs, insurance, taxes, assessments, water, utilities
     and similar charges to the extent included in such rental  payments) during
     the  remaining  term of the lease  included in any such sale and  leaseback
     transaction  including any period for which such lease has been extended or
     may, at the option of the lessor, be extended.  Such present value shall be
     calculated using a discount rate equal to the rate of interest  implicit in
     such transaction, determined in accordance with GAAP; and

          (10)  any and all  refinancings,  replacements,  deferrals,  renewals,
     extensions and refundings of or  amendments,  modifications  or supplements
     to, any  indebtedness,  obligation  or liability  of the kind  described in
     clauses (1) through (9) above.

     "Indenture"  means this Indenture,  as amended or supplemented from time to
time in accordance  with the terms hereof,  including the  provisions of the TIA
that are deemed to be a part hereof.

     "Institutional  Accredited  Investor" shall mean an institution  that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
of Regulation D under the Securities Act.

     "Interest  Payment  Date" means the Stated  Maturity of an  installment  of
interest on the Notes.

                                       5
<PAGE>

     "Interest Rate" means 43/4% per annum.

     "Issue  Date" of any Note  means the date on which the Note was  originally
issued or deemed issued as set forth on the face of the Note.

     "Lien"  means,  with  respect to any asset,  any  mortgage,  lien,  pledge,
charge,  security  interest or  encumbrance of any kind in respect of such asset
given to secure  Indebtedness,  whether  or not  filed,  recorded  or  otherwise
perfected under  applicable law (including any  conditional  sale or other title
retention  agreement,  any  lease in the  nature  thereof,  any  option or other
agreement to sell or give a security  interest in and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction with respect to any such lien,  pledge,  charge or
security interest).

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

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

     "Officers'   Certificate"  means  a  written  certificate   containing  the
information  specified  in Sections  12.04 and 12.05,  signed in the name of the
Company  by any  two  Officers,  and  delivered  to the  Trustee.  An  Officers'
Certificate  given  pursuant  to Section  4.03 shall be signed by the  principal
executive Officer,  the principal financial Officer or the principal  accounting
Officer  of the  Company  but need not  contain  the  information  specified  in
Sections 12.04 and 12.05.

     "144A  Global  Note" means a permanent  Global Note in the form of the Note
attached hereto as Exhibit A-1, and that is deposited with and registered in the
name of the Depositary,  representing  Notes sold in reliance on Rule 144A under
the Securities Act.

     "Opinion of Counsel" means a written  opinion  containing  the  information
specified  in Sections  12.04 and 12.05,  from legal  counsel who is  reasonably
acceptable to the Trustee. The counsel may be an employee of, or counsel to, the
Company or the Trustee.

     "person" or "Person" means any individual,  corporation,  limited liability
company, partnership,  joint venture,  association,  joint-stock company, trust,
unincorporated   organization,   or   government  or  any  agency  or  political
subdivision  thereof,  including any subdivision or ongoing business of any such
entity or  substantially  all of the assets of any such entity,  subdivision  or
business.

     "principal" of a Note means the principal amount due on the Stated Maturity
of the principal payment of such Note as set forth on the face of the Note.

     "Redeemable  Capital Stock" means any class of the Company's  Capital Stock
that,  either by its  terms,  by the terms of any  securities  into  which it is
convertible  or  exchangeable  or by  contract  or  otherwise,  is,  or upon the

                                       6
<PAGE>

happening  of an event or  passage  of time would be,  required  to be  redeemed
(whether by sinking fund or  otherwise)  prior to the date that is 91 days after
the Stated  Maturity of the Notes or is  redeemable  at the option of the Holder
thereof at any time prior to such date, or is convertible  into or  exchangeable
for debt  securities at any time prior to such date (unless it is convertible or
exchangeable solely at the Company's option).

     "Redemption  Date"  or  "redemption  date"  means  the date  specified  for
redemption  of the  Notes in  accordance  with the  terms of the  Notes and this
Indenture.

     "Redemption  Price" or "redemption  price" shall have the meaning set forth
in paragraph 5 on the reverse side of the Notes.

     "Registration  Rights Agreement" means the Registration Rights Agreement of
even date herewith entered into by the Company,  Merrill Lynch,  Pierce,  Fenner
and Smith and the other initial purchasers named therein.

     "Regular  Record Date" means,  with respect to the interest  payable on any
Interest  Payment Date,  the close of business on May 11 or November 11 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date.

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

     "Restricted Note" means a Note required to bear the restrictive  legend set
forth in the form of Note set forth in Exhibits A-1 and A-2 of this Indenture.

     "Restriction  Termination  Date" means,  with respect to any Note or Common
Stock, as the case may be, the date that is two years after the later of:

          (1) the Issue Date of the Note,  or, in the case of Common Stock,  the
     Issue Date of the Note upon the  conversion  of which such Common Stock was
     issued; and

          (2) the last date on which any "affiliate," as defined in Rule 144 (or
     successor provision) under the Securities Act, of the Company was the owner
     of such Note or Common Stock.

     "Rights Plan" means the Shareholder Protection Rights Agreement between the
Company and First Union  National  Bank, as rights agent , dated as of August 9,
2000, as the same may be amended from time to time.

     "Rule  144A"  means Rule 144A under the  Securities  Act (or any  successor
provision), as it may be amended from time to time.

                                       7
<PAGE>

     "SEC" means the Securities and Exchange Commission.

     "Securities  Act" means the United  States  Securities  Act of 1933 (or any
successor statute), as amended from time to time.

     "Senior Credit  Facility"  means the credit  agreement dated as of July 29,
1998 among the Company, as the borrower, the Company's domestic subsidiaries, as
guarantors,  the  various  financial  institutions  from  time to time  that are
parties  thereto,  as  lenders,  and Bank of  America,  N.A.,  as agent  for the
lenders,   including   amendments,    renewals,    extensions,    substitutions,
refinancings, restructurings and supplements thereto.

     "Senior Indebtedness" means:

          (1) all obligations of the Company,  now or hereafter existing,  under
     or in  respect  of  the  Senior  Credit  Facility  and  the  documents  and
     instruments  executed  in  connection  therewith,  whether  for  principal,
     premium,  if any, interest,  (including  interest accruing after the filing
     of, or which  would have  accrued  but for the filing of, a petition  by or
     against the Company under the Bankruptcy Law,  whether or not such interest
     is allowed as a claim after such filing in any proceeding  under such law),
     and  other  amounts  due  in  connection  therewith,   including,   without
     limitation,  any fees, premiums,  expenses,  reimbursement obligations with
     respect to indemnities,  whether  outstanding on the date of this Indenture
     or thereafter created, incurred or assumed and any hedging obligations with
     respect thereto; and

          (2) the  principal of and premium,  if any, and interest on, and fees,
     costs,  enforcement  expenses,  collateral  protection  expenses  and other
     reimbursement   or  indemnity   obligations   in  respect  of  all  of  the
     Indebtedness of the Company or obligations to any person for money borrowed
     that is evidenced by a note, bond,  debenture,  loan agreement,  or similar
     instrument or agreement  including  default interest and interest  accruing
     after a bankruptcy,  unless, in the case of any particular  Indebtedness or
     obligation,  the instrument  creating or evidencing the same or pursuant to
     which the same is outstanding  expressly provides that such Indebtedness or
     obligation shall not be senior in right of payment to the Notes.

     Notwithstanding the foregoing, "Senior Indebtedness" shall not include:

          (a) Indebtedness of the Company that is expressly subordinate in right
     of payment to any other Indebtedness of the Company;

          (b) Indebtedness evidenced by the Notes;

          (c)   Indebtedness  of  the  Company  that  by  operation  of  law  is
     subordinate to any general unsecured obligations of the Company;

          (d) any  liability  for  federal,  state or local taxes or other taxes
     owed or owing by the Company;

                                       8
<PAGE>

          (e) accounts payable or other liabilities owed or owing by the Company
     to trade creditors including  guarantees thereof or instruments  evidencing
     such liabilities;

          (f) amounts owed by the Company for  compensation  to employees or for
     services rendered to the Company;

          (g)  Indebtedness  of the  Company  to  any  Subsidiary  or any  other
     Affiliate of the Company or any of such Affiliate's Subsidiaries;

          (h) Capital Stock of the Company;

          (i)  Indebtedness  of the Company  evidenced  by any  Guarantee of any
     Indebtedness ranking equal or junior in right of payment to the Notes; and

          (j)  Indebtedness  of the Company  which,  when  incurred  and without
     respect to any  election  under  Section  1111(b) of Title 11 of the United
     States Code, is without recourse to the Company.

     "Significant  Subsidiary" means a Subsidiary of the Company,  including its
Subsidiaries, which meets any of the following conditions:

          (1) the  Company's  and its  other  Subsidiaries'  investments  in and
     advances  to the  Subsidiary  exceed 10 percent of the total  assets of the
     Company and its  Subsidiaries  consolidated as of the end of any two of the
     three most recently completed fiscal years; or

          (2) the Company's and its other  Subsidiaries'  proportionate share of
     the total assets of the  Subsidiary  exceeds 10 percent of the total assets
     of the Company and its  Subsidiaries  consolidated as of the end of any two
     of the three most recently completed fiscal years; or

          (3) the  Company's  and its other  Subsidiaries'  equity in the income
     from continuing  operations  before income taxes,  extraordinary  items and
     cumulative  effect of a change in accounting  principles of the  Subsidiary
     exceeds 10  percent  of such  income of the  Company  and its  Subsidiaries
     consolidated as of the end of any two of the three most recently  completed
     fiscal years.

     "Stated Maturity", when used with respect to any Note or any installment of
interest  thereon,  means the date  specified  in such Note as the fixed date on
which the  principal  of such Note or such  installment  of  interest is due and
payable.

     "Subsidiary"  means (i) a  corporation,  a majority of whose  Capital Stock
with voting power, under ordinary  circumstances,  to elect directors is, at the
date of  determination,  directly or indirectly owned by the Company,  by one or
more  Subsidiaries of the Company or by the Company and one or more Subsidiaries
of the Company,  (ii) a partnership  in which the Company or a Subsidiary of the
Company  holds a  majority  interest  in the  equity  capital or profits of such
partnership,  or (iii) any other person (other than a corporation)  in which the

                                       9
<PAGE>

Company, a Subsidiary of the Company or the Company and one or more Subsidiaries
of the Company, directly or indirectly, at the date of determination, has (x) at
least a  majority  ownership  interest  or (y) the power to elect or direct  the
election of a majority of the directors or other governing body of such person.

     "TIA"  means  the Trust  Indenture  Act of 1939 as in effect on the date of
this Indenture,  provided,  however,  that in the event the TIA is amended after
such date, TIA means, to the extent  required by any such amendment,  the TIA as
so amended.

     "Trading  Day"  means  a day  during  which  trading  in the  Common  Stock
generally  occurs on the New York Stock  Exchange or, if the Common Stock is not
listed on the New York  Stock  Exchange,  on the  principal  other  national  or
regional securities exchange on which the Common Stock is then listed or, if the
Common Stock is not listed on a national or regional securities exchange, on the
National  Association  of Notes Dealers  Automated  Quotation  System or, if the
Common Stock is not quoted on the National  Association  of  Securities  Dealers
Automated  Quotation  System,  on the principal other market on which the Common
Stock is then traded.

     "Trustee"  means the party named as the "Trustee" in the first paragraph of
this  Indenture  until  a  successor  replaces  it  pursuant  to the  applicable
provisions of this Indenture and,  thereafter,  shall mean such  successor.  The
foregoing  sentence shall  likewise  apply to any  subsequent  such successor or
successors.

     "United  States" means the United States of America  (including  the States
and the District of Columbia), its territories,  its possessions and other areas
subject to its jurisdiction (its  "possessions"  including Puerto Rico, the U.S.
Virgin  Islands,  Guam,  American  Samoa,  Wake Island and the Northern  Mariana
Islands).

     SECTION 1.02 Other Definitions.

                                                               Defined in
Term                                                             Section
----                                                          ------------
"Act"....................................................          1.05(a)
"Agent Members"..........................................          2.12(f)
"Bankruptcy Law".........................................           .01
"Change in Control"......................................          3.10(a)
"Change in Control Repurchase Date"......................          3.10(a)
"Change in Control Repurchase Notice"....................          3.10(d)
"Change in Control Repurchase Price".....................          3.10(a)
"Conversion Price".......................................         10.01
"Current Market Price"...................................         10.04(g)
"Custodian"..............................................          6.01
"Depositary".............................................          2.01(a)
"DTC"....................................................           .01(a)
"Event of Default".......................................          6.01

                                       10
<PAGE>
                                                               Defined in
Term                                                             Section
----                                                          ------------
"Exchange Act"...........................................          3.10(a)
"excluded securities"....................................         10.04(d)
"Expiration Time"........................................         10.04(f)
"fair market value"......................................         10.04(g)
"Legal Holiday"..........................................         12.08
"Legend".................................................          2.06(f)
"Non-Electing Share".....................................         10.11
"Non-Payment Default"....................................         11.03(b)
"Notice of Default"......................................          6.01
"Paying Agent"...........................................          2.03
"Payment Blockage Period"................................         11.03(b)
"Payment Default"........................................         11.03(a)
"Purchased Shares".......................................         10.04(f)
"Permitted Junior Securities"                                     11.02
"QIB"....................................................          2.01(a)
"Record Date"............................................         10.04(g)
"Reference Period".......................................         10.04(d)
"Registrar"..............................................          2.03
"Rule 144A Information"..................................          4.06
"Trigger Event"..........................................         10.04(d)

     SECTION 1.03  Incorporation  by Reference of Trust Indenture Act.  Whenever
this Indenture  refers to a provision of the TIA, the provision is  incorporated
by reference in and made a part of this Indenture.  The following TIA terms used
in this Indenture have the following meanings:

     "Commission" means the SEC.

     "indenture Notes" means the Notes.

     "indenture Note holder" means a Noteholder.

     "indenture to be qualified" means this Indenture.

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

     "obligor" on the indenture Notes means the Company.

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

                                       11
<PAGE>

     SECTION 1.04 Rules of Construction. Unless the context otherwise requires:

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

          (b) an accounting term not otherwise  defined has the meaning assigned
     to it in accordance with GAAP as in effect from time to time;

          (c) "or" is not exclusive;

          (d) "including" means including, without limitation; and

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

     SECTION  1.05 Acts of  Holders.  (a) Any  request,  demand,  authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders  may be embodied  in and  evidenced  by one or more
instruments of  substantially  similar tenor signed by such Holders in person or
by their  agent duly  appointed  in  writing;  and,  except as herein  otherwise
expressly  provided,  such action shall become effective when such instrument or
instruments  are  delivered  to the Trustee  and,  where it is hereby  expressly
required,  to the  Company.  Such  instrument  or  instruments  (and the  action
embodied therein and evidenced  thereby) are herein sometimes referred to as the
"Act" of Holders signing such  instrument or instruments.  Proof of execution of
any  such  instrument  or of a  writing  appointing  any  such  agent  shall  be
sufficient  for any purpose of this  Indenture  and  conclusive  in favor of the
Trustee and the Company, if made in the manner provided in this Section.

     (b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate  of a notary  public  or  other  officer  authorized  by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing  acknowledged  to such  officer  the  execution  thereof.  Where such
execution  is  by a  signer  acting  in a  capacity  other  than  such  signer's
individual  capacity,  such  certificate  or  affidavit  shall  also  constitute
sufficient proof of such signer's authority.  The fact and date of the execution
of any such instrument or writing,  or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.

     The  ownership of Notes shall be proved by the register for the Notes or by
a certificate of the Registrar.

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

                                       12
<PAGE>

     If the  Company  shall  solicit  from  the  Holders  any  request,  demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a resolution of the Board of Directors,  fix in
advance a record  date for the  determination  of Holders  entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the  Company  shall have no  obligation  to do so. If such a record  date is
fixed, such request, demand,  authorization,  direction, notice, consent, waiver
or other Act may be given before or after such record date, but only the Holders
of record at the close of  business  on such  record  date shall be deemed to be
Holders for purposes of determining whether Holders of the requisite  proportion
of  outstanding  Notes have  authorized  or agreed or consented to such request,
demand, authorization,  direction, notice, consent, waiver or other Act, and for
that  purpose the  outstanding  Notes shall be computed as of such record  date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective  pursuant
to the  provisions of this  Indenture not later than six months after the record
date.

                                    ARTICLE 2

                                    THE NOTES

     SECTION 2.01 Form and Dating.  The Notes and the Trustee's  certificate  of
authentication  to be borne by such  Notes  shall be  substantially  in the form
annexed  hereto as Exhibits A-1 and A-2,  which are  incorporated  in and made a
part of this Indenture.  The terms and provisions  contained in the form of Note
shall constitute, and are hereby expressly made, a part of this Indenture and to
the extent  applicable,  the Company and the  Trustee,  by their  execution  and
delivery of this Indenture,  expressly agree to such terms and provisions and to
be bound thereby.

     Any of the  Notes  may  have  such  letters,  numbers  or  other  marks  of
identification  and such  notations,  legends and  endorsements  as the officers
executing the same may approve (execution  thereof to be conclusive  evidence of
such  approval)  and as  are  not  inconsistent  with  the  provisions  of  this
Indenture,  or as may be  required  to  comply  with any law or with any rule or
regulation  made  pursuant  thereto  or  with  any  rule  or  regulation  of any
securities  exchange  or  automated  quotation  system on which the Notes may be
listed or designated for issuance, or to conform to usage.

     (a) Global Notes and Certificated  Notes. Notes offered and sold within the
United States to qualified institutional buyers as defined in Rule 144A ("QIBs")
in reliance on Rule 144A shall be issued, initially in the form of a 144A Global
Note in  registered  form,  which  shall be  deposited  with the  Trustee at its
Corporate  Trust Office,  as custodian  for, and  registered in the name of, The
Depository Trust Company ("DTC") or the nominee thereof (such depositary, or any
successor  thereto,  and any such nominee being  hereinafter  referred to as the
"Depositary"),  duly executed by the Company and authenticated by the Trustee as
hereinafter  provided.  Interests  in 144A Global  Notes will be  available  for
purchase only by QIBs.  The aggregate  principal  amount of the 144A Global Note
may from time to time be  increased  or  decreased  by  adjustments  made on the
records of the Trustee and the Depositary as hereinafter provided.

                                       13
<PAGE>

     Notes (i) offered and sold to  Institutional  Accredited  Investors who are
not QIBs or (ii)  issued  pursuant  to  Section  2.12  hereof  in  exchange  for
interests in Global Notes shall be issued in the form of  Certificated  Notes in
registered form, substantially in the form of Exhibit A-2 attached hereto.

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

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

     (c) Book-Entry Provisions.  This Section 2.01(c) shall apply only to Global
Notes deposited with or on behalf of the Depositary.

     The Company shall execute and the Trustee  shall,  in accordance  with this
Section  2.01(c),  authenticate  and deliver  initially one or more Global Notes
that  (a)  shall  be  registered  in the name of the  Depositary,  (b)  shall be
delivered  by the Trustee to the  Depositary  or  pursuant  to the  Depositary's
instructions and (c) shall bear legends substantially to the following effect:

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

     TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO  TRANSFERS IN WHOLE,  BUT
     NOT IN PART, TO NOMINEES OF THE DEPOSITORY  TRUST COMPANY OR TO A SUCCESSOR
     THEREOF OR SUCH  SUCCESSOR'S  NOMINEE  AND  TRANSFERS  OF  PORTIONS OF THIS
     GLOBAL  NOTE SHALL BE  LIMITED TO  TRANSFERS  MADE IN  ACCORDANCE  WITH THE
     RESTRICTIONS  SET FORTH IN ARTICLE TWO OF THE INDENTURE  REFERRED TO ON THE
     REVERSE HEREOF."

                                       14
<PAGE>

     (d) Restrictive Legends. Until the Restriction Termination Date, all Global
Notes and all Certificated  Notes shall bear the Legend,  unless such Notes have
been  transferred  pursuant to a  registration  statement that has been declared
effective under the Securities Act. Until the Restriction  Termination Date, the
Company covenants that any stock certificate representing shares of Common Stock
delivered  by the  Company  upon  conversion  of any Notes will bear the Legend,
unless such shares have been sold pursuant to a registration  statement that has
been declared effective under the Securities Act.

     SECTION 2.02 Execution and  Authentication.  The Notes shall be executed on
behalf of the Company by any  Officer,  under its  corporate  seal  impressed or
reproduced  thereon.  The signature of the Officer on the Notes may be manual or
facsimile.

     Notes bearing the manual or facsimile signatures of individuals who were at
the time of the execution of the Notes the proper  Officers of the Company shall
bind the  Company,  notwithstanding  that such  individuals  or any of them have
ceased to hold such  offices  prior to the  authentication  and delivery of such
Notes or did not hold such offices at the date of authentication of such Notes.

     No Note shall be entitled to any benefit  under this  Indenture or be valid
or obligatory for any purpose unless there appears on such Note a certificate of
authentication  substantially  in the form  provided for herein duly executed by
the   Trustee  by  manual   signature   of  an   authorized   officer  or  other
representative, and such certificate upon any Note shall be conclusive evidence,
and the only evidence,  that such Note has been duly authenticated and delivered
hereunder.

     The Trustee shall  authenticate  and deliver Notes for original issue in an
aggregate initial principal amount of up to $110,000,000 upon its receipt of one
or more Company  Orders  without any further  action by the  Company;  provided,
however, that the Company may, without the consent of the Holders,  "reopen" the
series of Notes  established  hereunder and issue  additional Notes from time to
time in the future.  Any Notes issued in connection  with such a reopening shall
have the same terms as the Notes  other than the date of original  issuance  and
the date on which interest  shall begin to accrue.  The Notes and any additional
Notes  issued  by the  Company  in  connection  with  any such  reopening  shall
constitute a single series of Notes for purposes of this  Indenture.  Subject to
the  Company's  right to reopen the  series of Notes,  the  aggregate  principal
amount of Notes outstanding at any time may not exceed  $110,000,000,  except as
provided in Section 2.07.

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

     SECTION 2.03  Registrar,  Paying Agent and  Conversion  Agent.  The Company
shall maintain an office or agency where Notes may be presented for registration
of transfer or for exchange  ("Registrar"),  an office or agency where Notes may
be presented  for purchase or payment  ("Paying  Agent") and an office or agency
where Notes may be presented for conversion  ("Conversion Agent"). The Registrar
shall keep a  register  of the Notes and of their  transfer  and  exchange.  The
Company may have one or more co-registrars, one or more additional paying agents
and one or more additional conversion agents. The term Paying Agent includes any

                                       15
<PAGE>

additional paying agent,  including any named pursuant to Section 4.05. The term
Conversion Agent includes any additional  conversion agent,  including any named
pursuant to Section 4.05.

     The  Company  shall enter into an  appropriate  agency  agreement  with any
Registrar,  Paying  Agent,  Conversion  Agent or  co-registrar  (other  than the
Trustee).  The agreement  shall  implement the provisions of this Indenture that
relate to such  agent.  The  Company  shall  notify the  Trustee of the name and
address of any such agent. If the Company fails to maintain a Registrar,  Paying
Agent or Conversion  Agent,  the Trustee shall act as such and shall be entitled
to appropriate  compensation  therefor  pursuant to Section 7.06. The Company or
any  Subsidiary  or an  Affiliate  of either  of them may act as  Paying  Agent,
Registrar, Conversion Agent or co-registrar.

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

     SECTION  2.04  Paying  Agent to Hold  Money and  Notes in Trust.  Except as
otherwise  provided herein,  on or prior to each due date of payments in respect
of any Note,  the Company shall deposit with the Paying Agent a sum of money (in
immediately  available  funds if deposited on the due date) or, in the event the
Company  shall  elect to pay any  Change in Control  Repurchase  Price in Common
Stock  pursuant to Section 3.10 hereof,  Common  Stock  sufficient  to make such
payments  when so becoming  due.  The Company  shall  require  each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of  Noteholders  or the Trustee all money and Common Stock
held by the Paying  Agent for the making of payments in respect of the Notes and
shall  notify  the  Trustee  of any  default  by the  Company in making any such
payment.  At any time during the  continuance  of any such  default,  the Paying
Agent  shall,  upon the written  request of the  Trustee,  forthwith  pay to the
Trustee  all  money  and  Common  Stock  so held in  trust.  If the  Company,  a
Subsidiary  or an  Affiliate  of either of them acts as Paying  Agent,  it shall
segregate the money and Common Stock held by it as Paying Agent and hold it as a
separate  trust fund.  The Company at any time may require a Paying Agent to pay
all money and Common  Stock  held by it to the  Trustee  and to account  for any
funds and Common  Stock  disbursed  by it. Upon doing so, the Paying Agent shall
have no further liability for the money or Common Stock.

     SECTION 2.05 Noteholder  Lists.  The Trustee shall preserve in as current a
form as is reasonably  practicable  the most recent list  available to it of the
names and addresses of  Noteholders.  If the Trustee is not the  Registrar,  the
Company  shall cause to be furnished to the Trustee at least  semi-annually,  on
January 1 and July 1, a listing of Noteholders  dated within 13 days of the date
on which  the list is  furnished  and at such  other  times as the  Trustee  may
request  in writing a list in such form and as of such date as the  Trustee  may
reasonably require of the names and addresses of Noteholders.

     SECTION  2.06  Transfer and  Exchange.  (a) Subject to Section 2.12 hereof,
upon surrender for registration of transfer of any Note, together with a written
instrument  of  transfer  satisfactory  to the  Registrar  duly  executed by the
Noteholder  or such  Noteholder's  attorney duly  authorized in writing,  at the

                                       16
<PAGE>

office or agency of the Company designated as Registrar or co-registrar pursuant
to Section 2.03, the Company shall execute,  and the Trustee shall  authenticate
and deliver,  in the name of the designated  transferee or  transferees,  one or
more new  Notes  of any  authorized  denomination  or  denominations,  of a like
aggregate  principal  amount.  The Company shall not charge a service charge for
any registration of transfer or exchange, but the Company may require payment of
a sum  sufficient to pay all taxes,  assessments or other  governmental  charges
that may be imposed in  connection  with the  transfer  or exchange of the Notes
from the Noteholder  requesting such transfer or exchange.

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

     The  Company  shall not be  required to make,  and the  Registrar  need not
register,  transfers or exchanges of Notes selected for redemption  (except,  in
the  case of  Notes  to be  redeemed  in part,  the  portion  thereof  not to be
redeemed) or any Notes in respect of which a Change in Control Repurchase Notice
(as defined in Section  3.10(d)) has been given and not  withdrawn by the Holder
thereof in accordance with the terms of this Indenture  (except,  in the case of
Notes to be purchased in part,  the portion  thereof not to be purchased) or any
Notes for a period of 15 days  before the mailing of a notice of  redemption  of
Notes to be redeemed.

     (b)  Notwithstanding  any  provision to the contrary  herein,  so long as a
Global Note remains  outstanding  and is held by or on behalf of the Depositary,
transfers  of a  Global  Note,  in  whole  or in  part,  shall  be made  only in
accordance  with Section 2.12 and this  Section  2.06(b).  Transfers of a Global
Note shall be limited to transfers of such Global Note in whole,  or in part, to
nominees  of  the  Depositary  or to a  successor  of  the  Depositary  or  such
successor's nominee.

     (c) Successive  registrations  and registrations of transfers and exchanges
as  aforesaid  may be  made  from  time  to  time  as  desired,  and  each  such
registration shall be noted on the register for the Notes.

     (d) Any Registrar  appointed  pursuant to Section 2.03 hereof shall provide
to the  Trustee  such  information  as the  Trustee  may  reasonably  require in
connection  with the  delivery  by such  Registrar  of Notes  upon  transfer  or
exchange of Notes.

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

     (f) If Notes are issued upon the transfer, exchange or replacement of Notes
subject to  restrictions  on  transfer  and bearing the legends set forth on the
form of Note  attached  hereto  as  Exhibits  A-1 and  A-2  setting  forth  such

                                       17
<PAGE>

restrictions (collectively, the "Legend"), or if a request is made to remove the
Legend on a Note, the Notes so issued shall bear the Legend, or the Legend shall
not be removed, as the case may be, unless there is delivered to the Company and
the  Registrar  such  satisfactory  evidence,  which shall include an Opinion of
Counsel,  as may be reasonably  required by the Company and the Registrar,  that
neither  the Legend nor the  restrictions  on  transfer  set forth  therein  are
required to ensure that  transfers  thereof  comply with the  provisions of Rule
144A  or  Rule  144  under  the  Securities  Act or  that  such  Notes  are  not
"restricted"  within the meaning of Rule 144 under the Securities  Act. Upon (i)
provision of such satisfactory  evidence, or (ii) notification by the Company to
the Trustee and  Registrar of the sale of such Note  pursuant to a  registration
statement  that is  effective  at the time of such  sale,  the  Trustee,  at the
written  direction of the Company,  shall  authenticate  and deliver a Note that
does not bear the Legend.  If the Legend is removed  from the face of a Note and
the Note is subsequently held by an Affiliate of the Company,  the Company shall
cause such  Affiliate to notify the Trustee in writing and request a replacement
Note bearing the Legend.

     SECTION 2.07 Replacement Notes. If (a) any mutilated Note is surrendered to
the  Trustee,  or (b) the  Company  and the  Trustee  receive  evidence to their
satisfaction  of the  destruction,  loss or  theft  of any  Note,  and  there is
delivered  to the  Company  and the  Trustee  such Note or  indemnity  as may be
required by them to save each of them  harmless,  then, in the absence of notice
to the Company or any Responsible Officer of the Trustee that such Note has been
acquired by a bona fide purchaser, the Company shall execute and upon receipt of
a Company Request the Trustee shall  authenticate  and deliver,  in exchange for
any such mutilated Note or in lieu of any such destroyed, lost or stolen Note, a
new  Note  of  like   tenor  and   principal   amount,   bearing  a  number  not
contemporaneously outstanding.

     In case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable,  or is about to be purchased or redeemed by the
Company pursuant to Article 3 hereof, the Company in its discretion may, instead
of issuing a new Note, pay or purchase such Note, as the case may be.

     Upon the issuance of any new Notes under this Section 2.07, the Company may
require the payment of a sum  sufficient to cover any tax or other  governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.

     Every  new  Note  issued  pursuant  to  this  Section  2.07  in lieu of any
mutilated,   destroyed,  lost  or  stolen  Note  shall  constitute  an  original
additional contractual obligation of the Company,  whether or not the destroyed,
lost or stolen  Note shall be at any time  enforceable  by anyone,  and shall be
entitled to all benefits of this Indenture equally and proportionately  with any
and all other Notes duly issued hereunder.

     The  provisions of this Section 2.07 are  exclusive and shall  preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.

                                       18
<PAGE>

     SECTION 2.08 Outstanding  Notes;  Determinations of Holders' Action.  Notes
outstanding  at any time are all the Notes  authenticated  by the Trustee except
for those  cancelled  by it or  delivered  to it for  cancellation,  those  paid
pursuant  to  Section  2.07 and  those  described  in this  Section  2.08 as not
outstanding.  A Note does not cease to be outstanding  because the Company or an
Affiliate thereof holds the Note; provided, however, that in determining whether
the Holders of the  requisite  principal  amount of the  outstanding  Notes have
given or concurred in any request,  demand,  authorization,  direction,  notice,
consent or waiver  hereunder,  Notes owned by the  Company or any other  obligor
upon the Notes or any  Affiliate of the Company or such other  obligor  shall be
disregarded  and deemed  not to be  outstanding,  except  that,  in  determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization,  direction,  notice,  consent  or  waiver,  only  Notes  which  a
Responsible Officer of the Trustee knows to be so owned shall be so disregarded.
Subject  to  the  foregoing,   only  Notes  outstanding  at  the  time  of  such
determination shall be considered in any such determination (including,  without
limitation, determinations pursuant to Articles 6 and 9).

     If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding
unless the Trustee  receives proof  satisfactory to it that the replaced Note is
held by a bona fide purchaser.

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

     If a Note is converted in  accordance  with Article 10, then from and after
the time of  conversion  on the  conversion  date,  such Note shall  cease to be
outstanding and interest shall cease to accrue on such Note.

     SECTION 2.09 Temporary Notes.  Pending the preparation of definitive Notes,
the Company may execute,  and upon receipt of a Company  Order the Trustee shall
authenticate  and  deliver,  temporary  Notes which are  printed,  lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially  of the tenor of the  definitive  Notes in lieu of which  they are
issued and with such appropriate insertions, omissions,  substitutions and other
variations as the officers  executing such Notes may determine,  as conclusively
evidenced by their execution of such Notes.

     If temporary Notes are issued,  the Company will cause  definitive Notes to
be prepared  without  unreasonable  delay.  After the  preparation of definitive
Notes,  the temporary  Notes shall be  exchangeable  for  definitive  Notes upon
surrender  of the  temporary  Notes  at the  office  or  agency  of the  Company
designated  for such purpose  pursuant to Section  2.03,  without  charge to the
Holder.  Upon surrender for  cancellation of any one or more temporary Notes the
Company shall execute and the Trustee shall authenticate and deliver in exchange

                                       19
<PAGE>

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

     SECTION 2.10 Cancellation.  All Notes surrendered for payment,  purchase by
the Company  pursuant to Article 3,  conversion,  redemption or  registration of
transfer or exchange shall, if surrendered to any person other than the Trustee,
be delivered  to the Trustee and shall be promptly  cancelled by it. The Company
may at any time  deliver to the Trustee for  cancellation  any Notes  previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Trustee.  The  Company  may not issue new Notes to replace  Notes it has paid or
delivered  to the  Trustee  for  cancellation  or that any Holder has  converted
pursuant  to  Article  10.  No  Notes  shall be  authenticated  in lieu of or in
exchange for any Notes  cancelled as provided in this  Section  2.10,  except as
expressly  permitted by this Indenture.  All cancelled Notes held by the Trustee
shall be destroyed by the Trustee and the Trustee shall, upon request, deliver a
certificate of destruction to the Company.

     SECTION 2.11 Persons Deemed Owners.  Prior to due presentment of a Note for
registration of transfer,  the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name such Note is registered as the
owner of such Note for the purpose of receiving payment of principal of the Note
or the payment of any Redemption Price or Change in Control  Repurchase Price in
respect thereof, and interest thereon, for the purpose of conversion and for all
other purposes whatsoever,  whether or not such Note be overdue, and neither the
Company,  the  Trustee  nor any agent of the  Company  or the  Trustee  shall be
affected by notice to the contrary.

     SECTION 2.12 Global Notes. (a) Notwithstanding any other provisions of this
Indenture or the Notes,  (A)  transfers  of a Global Note,  in whole or in part,
shall be made only in accordance with Section 2.06 and Section  2.12(a)(i),  (B)
transfer of a beneficial interest in a Global Note for a Certificated Note shall
comply  with  Section  2.06 and  Section  2.12(a)(ii),  and (C)  transfers  of a
Certificated  Note shall comply with Section 2.06 and Sections  2.12(a)(iii) and
(iv).

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

          (ii)  Restrictions  on Transfer of a  Beneficial  Interest in a Global
     Note for a  Certificated  Note. A beneficial  interest in a Global Note may
     not be exchanged for a Certificated  Note except upon  satisfaction  of the

                                       20
<PAGE>

     requirements set forth below.  Upon receipt by the Trustee of a transfer of
     a  beneficial  interest  in a Global Note  (which  transfer,  if made to an
     Institutional  Accredited  Investor,  shall  be  made to a  Holder  that is
     acquiring a minimum of  $100,000  aggregate  principal  amount of Notes) in
     accordance with Applicable  Procedures for a Certificated  Note in the form
     satisfactory to the Trustee, together with:

               (a) so long as the Notes are Restricted Notes, certification,  in
          the form  set  forth  in  Exhibit  B-1  hereto  and,  in the case of a
          transfer to an Institutional  Accredited Investor that is not a QIB, a
          representation letter in the form set forth in Exhibit C-1 hereto;

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

               (c) if the  Company  or  Registrar  so  requests,  an  opinion of
          counsel or other evidence  reasonably  satisfactory  to them as to the
          compliance with the restrictions set forth in the Legend,

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

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

               (x) to register the transfer of such Certificated Notes; or

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

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

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

          (b) so long as such Notes are Restricted  Notes,  such Notes are being
     transferred or exchanged  pursuant to an effective  registration  statement
     under the Securities  Act or pursuant to clause (A), (B) or (C) below,  and

                                       21
<PAGE>

     are accompanied by the following additional  information and documents,  as
     applicable:

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

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

               (C) if such Certificated Notes are being transferred  pursuant to
          an  exemption  from   registration   (including  any  transfer  to  an
          Institutional Accredited Investor), (i) a certification to that effect
          (in the form set forth in Exhibits B-1, if applicable) and (ii) if the
          Company  or  Registrar  so  requests,  an  opinion of counsel or other
          evidence reasonably satisfactory to them as to the compliance with the
          restrictions set forth in the Legend.

          (iv)  Restrictions on Transfer of a Certificated Note for a Beneficial
     Interest in a Global Note. A  Certificated  Note may not be exchanged for a
     beneficial  interest  in a Global  Note  except  upon  satisfaction  of the
     requirements  set forth below in connection with certain  transfers of such
     Notes,  including any transfer from an  Institutional  Accredited  Investor
     that is not a QIB to a QIB.

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

          (x) so long as the Notes are Restricted Notes,  certification,  in the
     form  set  forth in  Exhibit  B-1,  that  such  Certificated  Note is being
     transferred to a QIB in accordance with Rule 144A; and

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

                                       22
<PAGE>

     (b) Subject to the succeeding paragraph, every Note shall be subject to the
restrictions  on transfer  provided in the Legend  including  the delivery of an
opinion of counsel, if so provided. Whenever any Restricted Note is presented or
surrendered  for  registration of transfer or for exchange for a Note registered
in a name  other than that of the  Holder,  such Note must be  accompanied  by a
certificate in  substantially  the form set forth in Exhibit B-1, dated the date
of such  surrender and signed by the Holder of such Note, as to compliance  with
such restrictions on transfer. The Registrar shall not be required to accept for
such  registration  of  transfer or exchange  any Note not so  accompanied  by a
properly completed certificate.

     (c) The restrictions  imposed by the Legend upon the transferability of any
Note  shall  cease and  terminate  when such Note has been sold  pursuant  to an
effective  registration  statement  under the  Securities  Act or transferred in
compliance  with Rule 144 under the Securities  Act (or any successor  provision
thereto) or, if earlier, upon the expiration of the holding period applicable to
sales  thereof  under Rule 144(k)  under the  Securities  Act (or any  successor
provision).  Any Note as to which  such  restrictions  on  transfer  shall  have
expired in  accordance  with their terms or shall have  terminated  may,  upon a
surrender of such Note for  exchange to the  Registrar  in  accordance  with the
provisions  of  this  Section  2.12   (accompanied,   in  the  event  that  such
restrictions  on transfer have  terminated by reason of a transfer in compliance
with Rule 144 or any  successor  provision,  by an  opinion  of  counsel  having
substantial  experience  in  practice  under the  Securities  Act and  otherwise
reasonably  acceptable  to the  Company,  addressed  to the  Company and in form
acceptable to the Company, to the effect that the transfer of such Note has been
made in compliance with Rule 144 or such successor provision),  be exchanged for
a new Note, of like tenor and aggregate  principal amount,  which shall not bear
the  restrictive  Legend.  The Company shall inform the Trustee of the effective
date of any  registration  statement  registering the Notes under the Securities
Act.  The Trustee  shall have no  obligation  or duty to monitor,  determine  or
inquire as to compliance with any  restrictions  on transfer  imposed under this
Indenture or under  applicable  law with respect to any transfer of any interest
in any Note (including any transfers between or among DTC participants,  members
or beneficial  owners in any Global Note) other than to require delivery of such
certificates and other  documentation or evidence as are expressly  required by,
and to do so if and when expressly required by, the terms of this Indenture, and
to examine  the same to  determine  substantial  compliance  as to form with the
express  requirements  hereof.  The  Trustee  shall not be liable for any action
taken  or  omitted  to be  taken  by it in good  faith  in  accordance  with the
aforementioned opinion of counsel or registration statement.

     (d) In the event that Rule 144(k) as  promulgated  under the Securities Act
is amended to shorten the two-year  restriction  period,  then  restrictions  on
transfer  on the  Notes  and the  Common  Stock  will be  deemed to refer to the
shortened  restriction  period.  The Company undertakes to inform the Trustee if
such change to Rule 144(k) occurs and the effect (if any) to the restrictions on
transfer  applicable to the Notes and Common Stock and shall provide  additional
information (including an Opinion of Counsel and/or an Officers' Certificate) if
so requested by the Trustee.

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

                                       23
<PAGE>

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

          (1)  Notwithstanding  any other  provisions  of this  Indenture or the
     Notes, except as provided in Section 2.12(a)(i), a Global Note shall not be
     exchanged  in  whole or in part  for a Note  registered  in the name of any
     Person other than the Depositary or one or more nominees thereof,  provided
     that a Global Note may be exchanged  for Notes  registered  in the names of
     any  person  designated  by  the  Depositary  in the  event  that  (i)  the
     Depositary  has  notified  the Company  that it is  unwilling  or unable to
     continue as Depositary for such Global Note or such Depositary is no longer
     eligible or in good standing under the Exchange Act or any other applicable
     Statute or regulation to continue as Depository for the Global Notes, and a
     successor  Depositary is not appointed by the Company  within 90 days after
     the Company receives notice of becomes aware of their ineligibility or (ii)
     if the  Company in its sole  discretion  determines  that the Notes will no
     longer be represented by 144A Global Notes or (iii) an Event of Default has
     occurred  and is  continuing  with  respect to the Notes.  Any Global  Note
     exchanged  pursuant to clauses (i) above shall be so exchanged in whole and
     not in part,  and any Global Note  exchanged  pursuant  to clauses  (ii) or
     (iii)  above  may be  exchanged  in whole  or from  time to time in part as
     directed by the  Depositary.  Any Note issued in exchange for a Global Note
     or any portion thereof shall be a Global Note;  provided that any such Note
     so  issued  that is  registered  in the  name of a  Person  other  than the
     Depositary or a nominee thereof shall not be a Global Note.

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

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

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

                                       24
<PAGE>

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

     SECTION  2.13 CUSIP  Numbers.  The  Company  in  issuing  the Notes may use
"CUSIP"  numbers and, if so, the Trustee shall use "CUSIP" numbers in notices of
redemption as a convenience to Holders;  provided that any such notice may state
that no  representation  is made as to the correctness of such numbers either as
printed  on the Notes or as  contained  in any notice of a  redemption  and that
reliance may be placed only on the other  identification  numbers printed on the
Notes,  and any such  redemption  shall  not be  affected  by any  defect  in or
omission of such numbers.  The Company will  promptly  notify the Trustee of any
change in the CUSIP numbers.

     SECTION 2.14 Defaulted  Interest.  If the Company  defaults in a payment of
interest on the Notes,  it shall pay,  or shall  deposit  with the Paying  Agent
money in immediately  available funds sufficient to pay, the defaulted interest,
plus (to the extent lawful) any interest payable on the defaulted  interest,  to
the Persons who are  Holders on a  subsequent  special  record  date.  A special
record  date,  as used in this  Section  2.14 with respect to the payment of any
defaulted interest, shall mean the 15th day next preceding the date fixed by the
Company  for the  payment of  defaulted  interest,  whether or not such day is a
Business Day. At least 15 days before the  subsequent  special  record date, the
Company  shall mail to each  Holder and to the  Trustee a notice that states the
subsequent  special  record  date,  the payment date and the amount of defaulted
interest to be paid.

     SECTION 2.15  Registration  Default.  The interest  rate borne by the Notes
shall be increased upon a Registration  Default (as defined in the  Registration
Rights  Agreement) as provided in the Notes.  If a Registration  Default occurs,
the Company  shall deliver to the Trustee an Officers'  Certificate  stating (1)
the increase in the Interest  Rate,  (2) when such increase is effective and (3)
when such additional interest is payable. Unless and until a Responsible Officer
of the Trustee receives such an Officer's Certificate,  the Trustee shall assume
there has been no increase in the Interest Rate.

                                       25
<PAGE>

                                    ARTICLE 3

                            REDEMPTION AND PURCHASES

     SECTION 3.01 [Reserved].

     SECTION 3.02 Optional  Redemption.  The Notes are not  redeemable  prior to
November 26,  2004.  On and after  November  26,  2004,  the Company may, at its
option,  redeem the Notes in whole or in part at any time and from time to time,
on any date prior to Stated Maturity,  upon notice as set forth in Section 3.05,
at a  redemption  price of $1,000  per  $1,000  principal  amount of Notes  (the
"Optional  Redemption  Price"),  plus any interest accrued but not paid prior to
(but not  including) the Optional  Redemption  Date, if the Closing Price of the
Common Stock has exceeded 140% of the Conversion Price (as defined in Article 10
and as such may be  adjusted  from time to time)  then in effect for at least 20
Trading Days in any  consecutive 30 Trading Day period ending on the Trading Day
prior to the date of mailing of the notice of  optional  redemption  pursuant to
Section 3.05.

     SECTION  3.03 Notice of  Trustee.  If the  Company  elects to redeem  Notes
pursuant to the  redemption  provisions of Section 3.02 hereof,  it shall notify
the  Trustee  at least 30 days  prior  but not  more  than 60 days  prior to the
Redemption Date of such intended  Redemption Date, the principal amount of Notes
to be redeemed and the CUSIP  numbers of the Notes to be redeemed.  In addition,
the Company shall furnish the Trustee with an Officer's  Certificate  certifying
that all  conditions  precedent to any such  redemption  have been  satisfied in
full.

     SECTION 3.04 Selection of Notes to be Redeemed. If fewer than all the Notes
are to be redeemed, the Trustee shall select the particular Notes to be redeemed
from the  outstanding  Notes by a method that complies with the  requirements of
any  exchange on which the Notes are listed,  or, if the Notes are not listed on
an  exchange,  on a pro rata  basis or by lot or in  accordance  with any  other
method of Trustee  considers fair and  appropriate.  Notes and portions  thereof
that the Trustee  selects  shall be in principal  amounts equal to $1,000 or any
whole multiple thereof.

     If any Note  selected  for partial  redemption  is converted in part before
termination of the  conversion  right with respect to the portion of the Note so
selected,  the converted  portion of such Note shall be deemed to be the portion
selected  for  redemption  (provided,  however,  that the Holder of such Note so
converted and deemed  redeemed shall not be entitled to any additional  interest
payment  as a result of such  deemed  redemption  than such  Holder  would  have
otherwise  been entitled to receive upon  conversion of such Note).  Notes which
have been converted during a selection of Notes to be redeemed may be treated by
the Trustee as outstanding for the purpose of such selection.

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

                                       26
<PAGE>

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

     SECTION 3.05 Notice of Redemption.  Notice of redemption  shall be given in
the  manner  provided  in  Section  12.02  hereof to the  Holders of Notes to be
redeemed.  Such  notice  shall be given  not less  than 30 nor more than 60 days
prior to the Redemption Date for redemption pursuant to Section 3.02.

     All notices of redemption shall state:

          (1) the Redemption Date;

          (2) the Redemption  Price and interest  accrued and unpaid to, but not
     including, the Redemption Date, if any;

          (3)  whether  the  Redemption  Price will be payable in cash or Common
     Stock or a combination  thereof (if the Company elects to make such payment
     with a combination of cash and Common Stock,  such notice shall provide the
     proportion of cash and Common  Stock)  pursuant to the formula set forth in
     Section 3.10(a) hereof;

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

          (5) that on the  Redemption  Date the  Redemption  Price and  interest
     accrued and unpaid to, but not including, the Redemption Date, if any, will
     become  due and  payable  upon  each  such  Note to be  redeemed,  and that
     interest thereon shall cease to accrue on and after such date;

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

          (7) the place or places  where  such Notes are to be  surrendered  for
     payment of the Redemption  Price and accrued and unpaid  interest,  if any;
     and

          (8) the CUSIP number of the Notes.

     The  notice  given  shall  specify  the  last  date on which  exchanges  or
transfers  of Notes may be made  pursuant  to  Section  2.06  hereof,  and shall
specify  the  serial  numbers  of Notes  and the  portions  thereof  called  for
redemption.

     Notice of redemption of Notes to be redeemed at the election of the Company
shall be given by the Company.

                                       27
<PAGE>

     SECTION 3.06 Effect of Notice of  Redemption.  Notice of redemption  having
been given as  provided  in Section  3.05  hereof,  the Notes so to be  redeemed
shall, on the Redemption  Date,  become due and payable at the Redemption  Price
therein specified and from and after such date (unless the Company shall default
in the payment of the  Redemption  Price and accrued and unpaid  interest)  such
Notes  shall  cease  to bear  interest.  Upon  surrender  of any  such  Note for
redemption  in  accordance  with such  notice,  such  Note  shall be paid by the
Company at the Redemption  Price plus accrued and unpaid  interest,  if any, to,
but not including, the Redemption Date; provided, however, that the installments
of interest on Notes whose Stated Maturity is prior to or on the Redemption Date
shall be payable to the Holders of such Notes, or one or more predecessor Notes,
registered as such on the relevant  Record Date according to their terms and the
provisions of Section 2.01 hereof.

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

     SECTION 3.07 Deposit of  Redemption  Price.  Prior to or on any  Redemption
Date,  the Company  shall  deposit  with the  Trustee or with a Paying  Agent an
amount of money  sufficient to pay the  Redemption  Price of all the Notes to be
redeemed on that Redemption  Date, other than any Notes called for redemption on
that date  which  have been  converted  prior to the date of such  deposit,  and
accrued and unpaid interest, if any, on such Notes.

     If any Note called for  redemption is converted,  any money  deposited with
the Trustee or with a Paying  Agent or so  segregated  and held in trust for the
redemption  of such Note shall  (subject to any right of the Holder of such Note
or any predecessor  Note to receive interest as provided in Section 4.01 hereof)
be paid to the Company on Company Request or, if then held by the Company, shall
be discharged from such trust.

     SECTION 3.08 Notes  Redeemed in Part. Any Note which is to be redeemed only
in part shall be  surrendered  at an office or agency of the Company  designated
for that purpose  pursuant to Section 4.05 hereof  (with,  if the Company or the
Trustee so requires,  due endorsement by, or a written instrument of transfer in
form  satisfactory  to the Company and the Trustee duly  executed by, the Holder
thereof or the Holder's  attorney duly  authorized in writing),  and the Company
shall execute,  and the Trustee shall  authenticate and deliver to the Holder of
such  Note  without  service  charge,  a new  Note or  Notes  of any  authorized
denomination as requested by such Holder in aggregate  principal amount equal to
and in  exchange  for the  unredeemed  portion of the  principal  of the Note so
surrendered.

     SECTION 3.09 Conversion  Arrangement on Call for Redemption.  In connection
with any  redemption  of Notes,  the Company may  arrange for the  purchase  and
conversion of any Notes called for  redemption by an agreement  with one or more
investment  banks or other  purchasers  to purchase  such Notes by paying to the
Trustee in trust for the  Noteholders,  on or prior to 11:00 a.m.  New York City
time on the Redemption Date, an amount that, together with any amounts deposited
with the Trustee by the Company for the  redemption  of such Notes,  is not less
than  the  Redemption  Price  of such  Notes.  Notwithstanding  anything  to the
contrary  contained in this Article 3, the  obligation of the Company to pay the

                                       28
<PAGE>

Redemption Price of such Notes shall be deemed to be satisfied and discharged to
the extent such amount is so paid by such  purchasers.  If such an  agreement is
entered  into,  any Notes not duly  surrendered  for  conversion  by the Holders
thereof  may, at the option of the  Company,  be deemed,  to the fullest  extent
permitted  by  law,   acquired  by  such   purchasers   from  such  Holders  and
(notwithstanding  anything to the contrary  contained in Article 10) surrendered
by such purchasers for conversion,  all as of immediately  prior to the close of
business  on the  Redemption  Date,  subject to  payment of the above  amount as
aforesaid.  The  Trustee  shall  hold and pay to the  Holders  whose  Notes  are
selected for  redemption  any such amount paid to it for purchase and conversion
in the same manner as it would moneys  deposited  with it by the Company for the
redemption of Notes. Without the Trustee's prior written consent, no arrangement
between the Company and such  purchasers  for the purchase and conversion of any
Notes  shall   increase  or  otherwise   affect  any  of  the  powers,   duties,
responsibilities,  protections,  privileges,  immunities or  obligations  of the
Trustee as set forth in this  Indenture,  and the Company  agrees to  indemnify,
defend, and hold the Trustee and its officers,  directors,  employees and agents
harmless against, any loss, liability or expense arising out of or in connection
with any such  arrangement  for the purchase and conversion of any Notes between
the Company and such  purchasers,  including the costs and expenses  incurred by
the  Trustee  in the  defense  of any claim or  liability  arising  out of or in
connection  with the  exercise  or  performance  of any of its  powers,  duties,
responsibilities or obligations under this Indenture,  except to the extent such
loss,  liability,  expense or cost results from  Trustee's  gross  negligence or
willful misconduct.

     SECTION  3.10  Repurchase  of Notes at Option of the Holder  upon Change in
Control.  (a) If there  shall  have  occurred  a Change in  Control,  all or any
portion  of the  Notes of any  Holder  equal to $1,000  or a whole  multiple  of
$1,000,  not  previously  called for  redemption,  shall be  repurchased  by the
Company,  at the option of such Holder,  at a repurchase  price equal to 100% of
the  principal  amount of the Notes to be  repurchased,  together  with interest
accrued  and unpaid to,  but  excluding,  the  repurchase  date (the  "Change in
Control  Repurchase  Price"),  on the date (the  "Change in  Control  Repurchase
Date")  that is 45 days (or if that  45th day is not a  Business  Day,  the next
succeeding  Business  Day)  after  the  Change  in  Control  Repurchase  Notice;
provided,  however, that installments of interest on Notes whose Stated Maturity
is prior to or on the Change in Control  Repurchase Date shall be payable to the
Holders of such Notes, or one or more predecessor  Notes,  registered as such on
the relevant Regular Record Date according to their terms.

     Subject to the  fulfillment  by the Company of the  conditions set forth in
Section  3.10(b)  hereof,  the  Company  may elect to pay the  Change in Control
Repurchase  Price (to the extent not paid in cash) by  delivering  the number of
shares of Common  Stock  equal to (i) the  Change in  Control  Repurchase  Price
divided  by (ii) 95% of the  average of the  Closing  Prices per share of Common
Stock for the five consecutive Trading Days immediately  preceding and including
the third Trading Day prior to the Change in Control Repurchase Date.

     Whenever  in this  Indenture  (including  Sections  2.01,  6.01(a) and 6.07
hereof) or Exhibit A-1 annexed hereto there is a reference,  in any context,  to
the  principal  of any Note as of any time,  such  reference  shall be deemed to
include  reference to the Change in Control  Repurchase Price payable in respect
to such Note to the extent that such Change in Control  Repurchase Price is, was
or would be so  payable  at such  time,  and  express  mention  of the Change in

                                       29
<PAGE>

Control  Repurchase  Price  in any  provision  of this  Indenture  shall  not be
construed  as  excluding  the  Change  in  Control  Repurchase  Price  in  those
provisions of this  Indenture when such express  mention is not made;  provided,
however,  that, for the purposes of Article 11 hereof,  such reference  shall be
deemed to include  reference to the Change in Control  Repurchase  Price only to
the extent the Change in Control  Repurchase  Price is payable in cash or Common
Stock or a combination thereof.

     A "Change in Control" of the  Company  shall be deemed to have  occurred at
such time after the original  issuance of Notes as any of the  following  events
shall occur:

          (i) the  acquisition  by any person,  including any syndicate or group
     deemed to be a "person" under Section  13(d)(3) of the Securities  Exchange
     Act of 1934, as amended (the  "Exchange  Act"),  of  beneficial  ownership,
     directly or  indirectly,  through a purchase,  merger or other  acquisition
     transaction  or series of  transactions,  of shares of the Capital Stock of
     the Company  entitling  that  person to  exercise  50% or more of the total
     voting power of all shares of such Capital Stock entitled to vote generally
     in elections of directors,  other than any acquisition by the Company,  any
     of its Subsidiaries or any employee benefit plans of the Company; or

          (ii) any consolidation or merger of the Company with or into any other
     person,  any merger of another person into the Company,  or any conveyance,
     transfer,  sale, lease or other  disposition of all or substantially all of
     the Company's properties and assets to another person, other than:

               (A)  any   transaction   (1)  that   does  not   result   in  any
          reclassification,  conversion, exchange or cancellation of outstanding
          shares of the Capital  Stock of the Company and (2)  pursuant to which
          holders of the Capital Stock of the Company  immediately  prior to the
          transaction have the entitlement to exercise,  directly or indirectly,
          50% or more of the total  voting  power of all  shares of the  Capital
          Stock of the Company  entitled to vote  generally  in the  election of
          directors of the continuing or surviving person  immediately after the
          transaction; or

               (B) any merger  solely for the purpose of changing the  Company's
          jurisdiction  of  incorporation  and resulting in a  reclassification,
          conversion  or exchange of  outstanding  shares of Common Stock solely
          into shares of Common Stock of the surviving entity;

          (iii) during any consecutive  two-year period,  individuals who at the
     beginning  of that  two-year  period  constituted  the  Board of  Directors
     (together with any new directors  whose election to the Board of Directors,
     or whose  nomination for election by the  shareholders of the Company,  was
     approved by a vote of a majority of the directors  then still in office who
     were either  directors at the beginning of such period or whose election or
     nomination for election were  previously so approved)  cease for any reason
     to constitute a majority of the Board of Directors then in office; or

                                       30
<PAGE>

          (iv) the Company is  liquidated or dissolved or a resolution is passed
     by  the  Company's   stockholders   approving  a  plan  of  liquidation  or
     dissolution of the Company other than in a transaction  which complies with
     the provisions described in Article 5 of the Indenture.

     Beneficial  ownership  shall be determined  in  accordance  with Rule 13d-3
     promulgated  by the SEC under the  Exchange  Act. The term  "person"  shall
     include any syndicate or group that would be deemed to be a "person"  under
     Section 13(d)(3) of the Exchange Act.

     (b) The following are  conditions to the Company's  election to pay for the
Change in Control Repurchase Price in Common Stock:

          (i) The shares of Common Stock to be issued upon  repurchase  of Notes
     hereunder:

               (A) shall not require  registration  under any federal securities
          law  before  such  shares  may be freely  transferable  without  being
          subject to any transfer  restrictions  under the  Securities  Act upon
          repurchase or, if such  registration  is required,  such  registration
          shall be completed and shall become  effective  prior to the Change in
          Control Repurchase Date; and

               (B) shall not require  registration  with,  or  approval  of, any
          governmental  authority  under any state law or any other  federal law
          before shares may be validly issued or delivered upon repurchase or if
          such registration is required or such approval must be obtained,  such
          registration  shall be  completed or such  approval  shall be obtained
          prior to the Change in Control Repurchase Date.

          (ii) The shares of Common Stock to be listed upon  repurchase of Notes
     hereunder  are,  or shall have  been,  approved  for  listing on the Nasdaq
     National  Market  or the New York  Stock  Exchange  or  listed  on  another
     national securities  exchange,  in any case, prior to the Change in Control
     Repurchase Date.

          (iii) All shares of Common  Stock which may be issued upon  repurchase
     of Notes will be issued out of the Company's authorized but unissued Common
     Stock and will,  upon issue,  be duly and validly issued and fully paid and
     nonassessable and free of any preemptive or similar rights.

          (iv) If any of the  conditions  set forth in clauses (i) through (iii)
     of this  Section  3.08(b) are not  satisfied in  accordance  with the terms
     thereof,  the  Change  in  Control  Repurchase  Price  shall be paid by the
     Company only in cash.

     (c) Unless the Company shall have theretofore  called for redemption all of
the  outstanding  Notes,  prior to or on the 30th day after the  occurrence of a
Change in Control,  the Company,  or, at the written  request and expense of the
Company prior to or on the 30th day after such  occurrence,  the Trustee,  shall
give to all Noteholders,  in the manner provided in Section 12.02 hereof, notice

                                       31
<PAGE>

of the occurrence of the Change in Control and of the repurchase right set forth
herein  arising as a result  thereof.  The Company  shall also deliver a copy of
such notice of a  repurchase  right to the Trustee.  The notice shall  include a
form of Change in Control  Repurchase  Notice (as defined in Section 3.10(d)) to
be completed by the Noteholder and shall state:

          (1)  briefly,  the events  causing a Change in Control and the date of
     such Change in Control;

          (2) the date by which the Change in Control Repurchase Notice pursuant
     to this Section 3.10 must be given;

          (3) the Change in Control Repurchase Date;

          (4) the Change in Control Repurchase Price;

          (5) the name and address of the Paying Agent and the Conversion Agent;

          (6) the Conversion Price and any adjustments thereto;

          (7) that Notes as to which a Change in Control  Repurchase  Notice has
     been given may be  converted  pursuant  to  Article  10 hereof  only if the
     Change in Control  Repurchase  Notice has been withdrawn in accordance with
     the terms of this Indenture;

          (8) that Notes  must be  surrendered  to the  Paying  Agent to collect
     payment;

          (9) that the  Change in  Control  Repurchase  Price for any Note as to
     which a Change in  Control  Repurchase  Notice  has been duly given and not
     withdrawn  will be paid  promptly  following  the  later of the  Change  in
     Control Repurchase Date and the time of surrender of such Note as described
     in (8) above;

          (10) briefly, the procedures the Holder must follow to exercise rights
     under this Section 3.08;

          (11) briefly, the conversion rights of the Notes;

          (12) the  procedures  for  withdrawing a Change in Control  Repurchase
     Notice;

          (13)  that,  unless the  Company  defaults  in making  payment of such
     Redemption  Price,  interest on Notes called for  redemption  will cease to
     accrue on and after the Redemption Date;

          (14) the CUSIP number of the Notes; and

          (15) whether the Change in Control  Repurchase  Price shall be paid by
     the  Company  in cash  or by  delivery  of  shares  of  Common  Stock  or a
     combination  thereof,  and if a  combination  thereof,  such  notice  shall
     provide the proportion of cash and Common Stock.

                                       32
<PAGE>

     (d) A Holder may exercise its rights  specified in Section  3.10(a)  hereof
upon delivery of a written  notice of purchase (a "Change in Control  Repurchase
Notice")  to the Paying  Agent at any time prior to the close of business on the
Change in Control Repurchase Date, stating:

          (1) the  certificate  number of the Note which the Holder will deliver
     to be purchased;

          (2) the portion of the  principal  amount of the Note which the Holder
     will deliver to be  purchased,  which portion must be $1,000 or an integral
     multiple thereof; and

          (3) that  such  Note  shall be  purchased  pursuant  to the  terms and
     conditions specified in paragraph 6 on the reverse side of the Notes.

     The  delivery  of such Note to the Paying  Agent  prior to, on or after the
Change in Control Repurchase Date (together with all necessary  endorsements) at
the  offices of the Paying  Agent  shall be a  condition  to the  receipt by the
Holder of the Change in Control  Repurchase Price therefor;  provided,  however,
that such Change in Control  Repurchase  Price shall be so paid pursuant to this
Section 3.10 only if the Note so delivered to the Paying Agent shall  conform in
all  respects to the  description  thereof  set forth in the  related  Change in
Control Repurchase Notice.

     The  Company  shall  purchase  from the Holder  thereof,  pursuant  to this
Section  3.10,  a portion of a Note if the  principal  amount of such portion is
$1,000 or an integral  multiple of $1,000.  Provisions  of this  Indenture  that
apply  to the  purchase  of all of a Note  also  apply to the  purchase  of such
portion of such Note.

     Any purchase by the Company contemplated pursuant to the provisions of this
Section 3.10 shall be  consummated  by the delivery of the  consideration  to be
received  by the Holder  promptly  following  the later of the Change in Control
Repurchase  Date and the time of  delivery  of the Note to the  Paying  Agent in
accordance with this Section 3.10.

     Notwithstanding  anything herein to the contrary,  any Holder delivering to
the Paying Agent the Change in Control  Repurchase  Notice  contemplated by this
Section  3.10(d)  shall  have the  right to  withdraw  such  Change  in  Control
Repurchase  Notice at any time prior to the close of  business  on the Change in
Control  Repurchase  Date by delivery of a written  notice of  withdrawal to the
Paying Agent in accordance with Section 3.11.

     The Paying Agent shall promptly  notify the Company of the receipt by it of
any Change in Control Repurchase Notice or written withdrawal thereof.

     SECTION 3.11 Effect of Change in Control Repurchase Notice. Upon receipt by
the Paying Agent of the Change in Control Repurchase Notice specified in Section
3.10(d),  the  Holder of the Note in  respect  of which  such  Change in Control
Repurchase  Notice was given shall  (unless  such  Change in Control  Repurchase
Notice is withdrawn as specified in the following two paragraphs)  thereafter be

                                       33
<PAGE>

entitled to receive solely the Change in Control  Repurchase  Price with respect
to such Note.  Such  Change in Control  Repurchase  Price  shall be paid to such
Holder,  subject to receipt of consideration for the Notes and/or Notes from the
Holders by the Paying Agent,  promptly  following the later of (x) the Change in
Control  Repurchase  Date with respect to such Note  (provided the conditions in
Section  3.10(d) have been  satisfied) and (y) the time of delivery of such Note
to the Paying  Agent by the Holder  thereof  in the manner  required  by Section
3.10(d).  Notes in respect of which a Change in Control  Repurchase  Notice, has
been given by the Holder  thereof  may not be  converted  pursuant to Article 10
hereof on or after the date of the delivery of such Change in Control Repurchase
Notice  unless such Change in Control  Repurchase  Notice has first been validly
withdrawn as specified in the following two paragraphs.

     A Change  in  Control  Repurchase  Notice  may be  withdrawn  by means of a
written  notice of  withdrawal  delivered  to the office of the Paying  Agent in
accordance with the Change in Control Repurchase Notice at any time prior to the
close of business on the Change in Control Repurchase Date specifying:

          (1) the certificate number of the Note in respect of which such notice
     of withdrawal is being submitted,

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

          (3) the principal  amount,  if any, of such Note which remains subject
     to the original Change in Control  Repurchase  Notice and which has been or
     will be delivered for purchase by the Company.

     There shall be no repurchase of any Notes pursuant to Section 3.10 if there
has  occurred  (prior to, on or after,  as the case may be, the  giving,  by the
Holders of such Notes, of the required Change in Control  Repurchase Notice) and
is  continuing  an Event of Default  (other than a default in the payment of the
Change in Control Repurchase Price with respect to such Notes). The Paying Agent
will  promptly  return  to the  respective  Holders  thereof  any Notes (x) with
respect to which a Change in Control  Repurchase  Notice has been  withdrawn  in
compliance with this  Indenture,  or (y) held by it during the continuance of an
Event of Default  (other  than a default in the payment of the Change in Control
Repurchase  Price with  respect to such Notes) in which case,  upon such return,
the Change in Control  Repurchase Notice with respect thereto shall be deemed to
have been withdrawn.

     SECTION 3.12 Deposit of Change in Control  Repurchase Price. Prior to 11:00
a.m. (New York City time) on the Change in Control  Repurchase  Date the Company
shall deposit with the Trustee or with the Paying Agent (or, if the Company or a
Subsidiary  or an  Affiliate  of either of them is acting as the  Paying  Agent,
shall  segregate  and hold in trust as  provided  in Section  2.04) an amount of
money (in  immediately  available  funds if deposited on such  Business  Day) or
Common Stock, or a combination  thereof, if permitted  hereunder,  sufficient to

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<PAGE>

pay the  aggregate  Change  in  Control  Repurchase  Price  of all the  Notes or
portions  thereof  which  are  to be  purchased  as of  the  Change  in  Control
Repurchase Date.

     SECTION  3.13 Notes  Purchased  in Part.  Any Note which is to be purchased
only in part shall be  surrendered  at the office of the Paying Agent (with,  if
the  Company  or the  Trustee  so  requires,  due  endorsement  by, or a written
instrument of transfer in form  satisfactory to the Company and the Trustee duly
executed by, the Holder  thereof or such Holder's  attorney  duly  authorized in
writing) and the Company shall execute and the Trustee  shall  authenticate  and
deliver to the Holder of such Note, without service charge, a new Note or Notes,
of any  authorized  denomination  as  requested  by  such  Holder  in  aggregate
principal  amount equal to, and in exchange  for,  the portion of the  principal
amount of the Note so surrendered which is not purchased.

     SECTION  3.14  Covenant to Comply  with  Securities  Laws upon  Purchase of
Notes.  In  connection  with any offer to purchase or  repurchase of Notes under
Section 3.10 hereof (provided that such offer or purchase constitutes an "issuer
tender offer" for purposes of Rule 13e-4 (which term,  as used herein,  includes
any  successor  provision  thereto)  under the  Exchange Act at the time of such
offer or purchase), the Company shall (i) comply with Rule 13e-4, Rule 14e-1 and
any  other  tender  offer  rules  under  the  Exchange  Act  which  may  then be
applicable,  (ii) file the related Schedule TO (or any successor schedule,  form
or report) or any other  schedule  required  under the  Exchange  Act, and (iii)
otherwise  comply with all federal and state securities laws so as to permit the
rights and obligations under Section 3.10 to be exercised in the time and in the
manner specified in Section 3.10.

     SECTION 3.15  Repayment  to the  Company.  The Trustee and the Paying Agent
shall  return to the  Company  any cash or shares of Common  Stock  that  remain
unclaimed as provided in paragraph 12 of the Notes,  together  with  interest or
dividends,  if any,  thereon,  held by them for the  payment  of the  Change  in
Control  Repurchase  Price;  provided,  however,  that to the  extent  that  the
aggregate  amount of cash or shares of Common  Stock  deposited  by the  Company
pursuant to Section  3.12  exceeds the  aggregate  Change in Control  Repurchase
Price of the  Notes or  portions  thereof  which the  Company  is  obligated  to
purchase as of the Change in Control  Repurchase  Date then  promptly  after the
Business Day following the Change in Control  Repurchase  Date the Trustee shall
return any such excess to the Company  together with  interest or dividends,  if
any, thereon.

                                    ARTICLE 4

                                    COVENANTS

     SECTION  4.01 Payment of  Principal,  Premium,  Interest on the Notes.  The
Company will duly and punctually  pay the principal of and premium,  if any, and
interest at the  Interest  Rate in respect of the Notes in  accordance  with the
terms of the Notes and this  Indenture.  The Company will deposit or cause to be
deposited with the Trustee as directed by the Trustee, no later than 11:00 a.m.,
New York City time on the day of the Stated Maturity of any interest installment
or  principal  payment  of any Note,  all  payments  so due.  Principal  amount,
Redemption Price, Change in Control Repurchase Price, and cash interest shall be
considered  paid on the applicable date due if at 11:00 a.m., New York City time
on such date (or,  in the case of a Change in  Control  Repurchase  Price on the
Business Day following the  applicable  Change in Control  Repurchase  Date) the
Trustee or the Paying Agent holds, in accordance  with this Indenture,  money or
Notes, if permitted hereunder, sufficient to pay all such amounts then due.

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<PAGE>

     The Company  shall,  to the extent  permitted by law, pay cash  interest on
overdue  amounts at the rate per annum set forth in  paragraph  1 on the reverse
side of the Notes,  compounded  semi-annually,  which interest shall accrue from
the date such  overdue  amount was  originally  due to the date  payment of such
amount, including interest thereon, has been made or duly provided for. All such
overdue interest shall be payable on demand.

     SECTION  4.02 SEC and  Other  Reports.  The  Company  shall  file  with the
Trustee,  within 15 days  after it files  such  annual  and  quarterly  reports,
information,  documents  and other  reports  with the SEC,  copies of its annual
report and of the  information,  documents  and other reports (or copies of such
portions  of any of the  foregoing  as the  SEC  may by  rules  and  regulations
prescribe)  which the  Company  is  required  to file with the SEC  pursuant  to
Section  13 or 15(d) of the  Exchange  Act.  If at any time the  Company  is not
subject  to Section  13 or 15(d) of the  Exchange  Act,  such  reports  shall be
provided at the times the Company  would have been  required to provide  reports
had it  continued  to have been  subject  to such  reporting  requirements.  The
Company also shall comply with the other provisions of TIA Section 314(a).

     SECTION  4.03  Compliance  Certificate.  The Company  shall  deliver to the
Trustee  within  120  days  after  the end of each  fiscal  year of the  Company
(beginning  with the fiscal  year  ending on  December  31,  2001) an  Officers'
Certificate,  stating whether or not to the knowledge of the signers thereof the
Company is in default in the  performance  and  observance  of any of the terms,
provisions  and conditions of this  Indenture  (without  regard to any period of
grace or requirement of notice  provided  hereunder) and if the Company shall be
in default,  specifying  all such defaults and the nature and status  thereof of
which they may have knowledge.

     SECTION 4.04 Further Instruments and Acts. Upon request of the Trustee, the
Company will execute and deliver  such further  instruments  and do such further
acts as may be reasonably  necessary or proper to carry out more effectively the
purposes of this Indenture.

     SECTION 4.05 Maintenance of Office or Agency.  The Company will maintain in
the  Borough  of  Manhattan,  the City of New  York,  an office or agency of the
Trustee,  Registrar,  Paying  Agent  and  Conversion  Agent  where  Notes may be
presented  or  surrendered  for  payment,  where  Notes may be  surrendered  for
registration of transfer, exchange, purchase, redemption or conversion and where
notices  and  demands  to or upon the  Company  in respect of the Notes and this
Indenture  may be served.  The office of Computer  Share,  located c/o  SunTrust
Bank, 88 Pine Street,  19th Floor, New York, New York 10005,  shall initially be
such office or agency for all of the aforesaid purposes.  The Company shall give
prompt written  notice to the Trustee of the location,  and of any change in the
location,  of any such office or agency  (other than a change in the location of
the office of the  Trustee).  If at any time the Company  shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 12.02.

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<PAGE>

     The Company may also from time to time  designate one or more other offices
or agencies where the Notes may be presented or surrendered  for any or all such
purposes and may from time to time rescind such designations; provided, however,
that no such  designation or rescission  shall in any manner relieve the Company
of its  obligation  to maintain an office or agency in the Borough of Manhattan,
the City of New York, for such purposes.

     SECTION 4.06 Delivery of Certain Information.  At any time when the Company
is not subject to Section 13 or 15(d) of the Exchange Act, upon the request of a
Holder or any  beneficial  Holder of Notes or shares of Common Stock issued upon
conversion  thereof,  the Company will promptly furnish or cause to be furnished
Rule 144A Information (as defined below) to such Holder or any beneficial holder
of Notes or holder of shares of Common Stock issued upon conversion of Notes, or
to a prospective  purchaser of any such security  designated by any such holder,
as the case may be, to the extent  required to permit  compliance by such Holder
or holder with Rule 144A under the Securities Act in connection  with the resale
of any such security.  "Rule 144A  Information"  shall be such information as is
specified pursuant to Rule 144A(d)(4) under the Securities Act.

                                    ARTICLE 5

                              SUCCESSOR CORPORATION

     SECTION 5.01 When Company May Merge or Transfer  Assets.  The Company shall
not consolidate with, merge with or into any other person or convey, transfer or
lease its  properties  and assets  substantially  as an  entirety to any person,
unless:

          (a) either (1) the Company shall be the continuing  corporation or (2)
     the person (if other than the Company) formed by such consolidation or into
     which the Company is merged or the person  which  acquires  by  conveyance,
     transfer or lease the properties and assets of the Company substantially as
     an entirety (i) shall be organized and validly  existing  under the laws of
     the  United  States  and  (ii)  shall  expressly  assume,  by an  indenture
     supplemental  hereto,  executed  and  delivered  to the  Trustee,  in  form
     reasonably  satisfactory  to the  Trustee,  all of the  obligations  of the
     Company under the Notes and this Indenture;

          (b) at the time of such transaction,  no Event of Default and no event
     which,  after  notice or lapse of time,  would  become an Event of Default,
     shall have happened and be continuing; and

          (c) the  Company  shall have  delivered  to the  Trustee an  Officers'
     Certificate   and  an  Opinion  of   Counsel,   each   stating   that  such
     consolidation, merger, conveyance, transfer or lease and, if a supplemental
     indenture  is  required  in   connection   with  such   transaction,   such
     supplemental indenture,  comply with this Article 5 and that all conditions
     precedent  herein  provided  for  relating  to such  transaction  have been
     satisfied.

     For purposes of the foregoing, the transfer (by lease, assignment,  sale or
otherwise) of the properties and assets of one or more Subsidiaries  (other than
to the Company or another  Subsidiary),  which, if such assets were owned by the

                                       37
<PAGE>

Company,  would constitute all or substantially all of the properties and assets
of the Company,  shall be deemed to be the transfer of all or substantially  all
of the properties and assets of the Company.

     The successor person formed by such consolidation or into which the Company
is merged or the successor person to which such conveyance, transfer or lease is
made shall succeed to, and be substituted  for, and may exercise every right and
power of, the  Company  under  this  Indenture  with the same  effect as if such
successor had been named as the Company herein;  and  thereafter,  except in the
case of a lease  and  obligations  the  Company  may have  under a  supplemental
indenture  pursuant to Section 10.11,  the Company shall be discharged  from all
obligations and covenants under this Indenture and the Notes. Subject to Section
9.06,  the  Company,  the Trustee and the  successor  person  shall enter into a
supplemental  indenture  to evidence the  succession  and  substitution  of such
successor person and such discharge and release of the Company.

                                    ARTICLE 6

                              DEFAULTS AND REMEDIES

     SECTION 6.01 Events of Default. An "Event of Default" occurs if:

          (1) the Company fails to pay when due the principal of or premium,  if
     any,  on any of the Notes at  maturity,  upon  redemption  or exercise of a
     repurchase right or otherwise, whether or not such payment is prohibited by
     Article 11 of this Indenture;

          (2) the Company  fails to pay an  installment  of interest  (including
     liquidated  damages, if any) on any of the Notes that continues for 30 days
     after the date when due,  whether  or not such  payment  is  prohibited  by
     Article 11 of this Indenture;

          (3) the Company fails to deliver shares of Common Stock, together with
     cash in lieu of fractional  shares,  when such Common Stock or cash in lieu
     of fractional  shares is required to be delivered upon conversion of a Note
     and such failure continues for 10 days after such delivery date;

          (4) the Company  fails to perform or observe any other term,  covenant
     or agreement  contained in the Notes or this  Indenture  for a period of 30
     days after  receipt by the  Company of a Notice of Default  (as  defined in
     this Section 6.01);

          (5) the  Company  fails  to give or  cause  the  Trustee  to give  all
     Noteholders  notice of the  occurrence of a Change in Control in accordance
     with the provisions of Section 3.10(c) hereof;

          (6) one or more defaults in the payment of principal of or premium, if
     any, on any of the Company's Indebtedness aggregating $5.0 million or more,
     when the same becomes due and payable at the  scheduled  maturity  thereof,
     and such  default or defaults  shall have  continued  after any  applicable
     grace period and shall not have been cured or waived within a 30-day period

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<PAGE>

     after  the  date  of a  Notice  of  Default  or (B)  any  of the  Company's
     Indebtedness  aggregating  $5.0 million or more shall have been accelerated
     or  otherwise  declared  due and  payable,  or  required  to be  prepaid or
     repurchased (other than by regularly  scheduled required  prepayment) prior
     to the scheduled maturity thereof and such acceleration is not rescinded or
     annulled within a 30-day period after a Notice of Default;

          (7) the rendering  against the Company or any of its Affiliates of one
     or more final unsatisfied judgments not covered by insurance aggregating in
     excess of $5.0 million,  which are not stayed,  bonded or discharged within
     60 days;

          (8) the Company, or any Significant Subsidiary, or any Subsidiaries of
     the  Company  which  in  the  aggregate  would   constitute  a  Significant
     Subsidiary  pursuant  to or under or within the  meaning of any  Bankruptcy
     Law:

               (A) commences a voluntary case or proceeding;

               (B) consents to the entry of an order for relief against it in an
          involuntary case or proceeding or the commencement of any case against
          it;

               (C) consents to the  appointment  of a Custodian of it or for any
          substantial part of its property;

               (D) makes a general assignment for the benefit of its creditors;

               (E) files a petition in bankruptcy  or answer or consent  seeking
          reorganization or relief; or

               (F) consents to the filing of such a petition or the  appointment
          of or taking possession by a Custodian; or

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

               (A)  is  for  relief  against  the  Company  or  any  Significant
          Subsidiary or any  Subsidiaries  of the Company which in the aggregate
          would  constitute a Significant  Subsidiary in an involuntary  case or
          proceeding,  or adjudicates the Company or any Significant  Subsidiary
          or any  Subsidiaries  of the  Company  which  in the  aggregate  would
          constitute a Significant Subsidiary insolvent or bankrupt;

               (B)  appoints  a  Custodian  of the  Company  or any  Significant
          Subsidiary or any  Subsidiaries  of the Company which in the aggregate
          would constitute a Significant  Subsidiary or for any substantial part
          of its or their properties; or

                                       39
<PAGE>

               (C) orders the  winding up or  liquidation  of the Company or any
          Significant Subsidiary or any Subsidiaries of the Company which in the
          aggregate would constitute a Significant Subsidiary;

     and the order or decree remains unstayed and in effect for 60 days.

               "Bankruptcy  Law" means  Title 11,  United  States  Code,  or any
          similar federal or state law for the relief of debtors.

               "Custodian" means any receiver,  trustee,  assignee,  liquidator,
          custodian or similar official under any Bankruptcy Law.

     A Default  under  clauses  (4), (6) or (7) above is not an Event of Default
until the  Trustee  notifies  the  Company,  or the  Holders  of at least 25% in
aggregate  principal  amount of the  Notes at the time  outstanding  notify  the
Company and the  Trustee,  of the  Default  and the  Company  does not cure such
Default  (and such  Default is not waived)  within the time  specified in clause
(4), (6) or (7) above after actual receipt of such notice.  Any such notice must
specify the Default,  demand that it be remedied and state that such notice is a
"Notice of Default".

     The Company  will  deliver to the  Trustee,  within five  Business  Days of
becoming aware of the occurrence of an Event of Default, written notice thereof.
In addition,  the Company shall deliver to the Trustee,  within 30 days after it
becomes aware of the occurrence thereof,  written notice of any event which with
the  lapse of time and the  giving of notice  would  become an Event of  Default
under  clause (4),  (6) or (7) above,  its status and what action the Company is
taking or proposes to take with respect thereto.

     SECTION 6.02  Acceleration.  If an Event of Default (other than an Event of
Default  specified  in Section  6.01(8) or (9))  occurs and is  continuing,  the
Trustee by notice to the  Company,  or the Holders of at least 25% in  aggregate
principal  amount of the Notes at the time  outstanding by notice to the Company
and the Trustee, may declare the Notes due and payable at their principal amount
together  with  accrued  interest.  Upon a  declaration  of  acceleration,  such
principal  and  accrued  and unpaid  interest  to the date of  payment  shall be
immediately due and payable.

     If an Event of Default specified in Section 6.01(8) or (9) above occurs and
is continuing, then the principal and the interest on all the Notes shall become
and be immediately  due and payable  without any declaration or other act on the
part of the Trustee or any Noteholders.

     The Holders of a majority in aggregate principal amount of the Notes at the
time  outstanding,  by notice to the Trustee  (and  without  notice to any other
Noteholder)  may rescind or annul an  acceleration  and its  consequences if the
rescission  would not  conflict  with any judgment or decree and if all existing
Events of Default have been cured or waived  except  nonpayment of the principal
and any  accrued  cash  interest  that  have  become  due  solely as a result of
acceleration  and if all amounts due to the Trustee under Section 7.06 have been
paid. No such rescission shall affect any subsequent Default or impair any right
consequent thereto.

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<PAGE>

     SECTION  6.03  Other  Remedies.  If an  Event  of  Default  occurs  and  is
continuing,  the Trustee may pursue any available  remedy to collect the payment
of the  principal,  the premium,  if any,  and any accrued cash  interest on the
Notes or to  enforce  the  performance  of any  provision  of the  Notes or this
Indenture.

     The Trustee may maintain a proceeding  even if the Trustee does not possess
any of the  Notes or  produce  any of the  Notes in the  proceeding.  A delay or
omission  by the Trustee or any  Noteholder  in  exercising  any right or remedy
accruing  upon an Event of  Default  shall  not  impair  the  right or remedy or
constitute a waiver of, or acquiescence  in, the Event of Default.  No remedy is
exclusive of any other remedy. All available remedies are cumulative.

     SECTION  6.04  Waiver  of Past  Defaults.  The  Holders  of a  majority  in
aggregate  principal amount of the Notes at the time  outstanding,  by notice to
the Trustee (and without notice to any other Noteholder),  may waive an existing
Default and its consequences except (1) an Event of Default described in Section
6.01(1) or (2), (2) a Default in respect of a provision  that under Section 9.02
cannot be amended  without  the  consent of each  Noteholder  affected  or (3) a
Default which  constitutes a failure to convert any Note in accordance  with the
terms of Article 10. When a Default is waived,  it is deemed cured,  but no such
waiver shall extend to any  subsequent or other Default or impair any consequent
right.  This Section 6.04 shall be in lieu of Section  316(a)1(B) of the TIA and
such Section  316(a)1(B) is hereby  expressly  excluded from this Indenture,  as
permitted by the TIA.

     SECTION 6.05  Control by  Majority.  The Holders of a majority in aggregate
principal  amount  of the Notes at the time  outstanding  may  direct  the time,
method and place of conducting any  proceeding  for any remedy  available to the
Trustee or of exercising any trust or power  conferred on the Trustee.  However,
the Trustee may refuse to follow any direction  that  conflicts with law or this
Indenture or that the Trustee  determines in good faith is unduly prejudicial to
the  rights of other  Noteholders  or would  involve  the  Trustee  in  personal
liability unless the Trustee is offered indemnity reasonably  satisfactory to it
against  loss,  liability  or  expense.  This  Section  6.05 shall be in lieu of
Section  316(a)1(A) of the TIA and such Section  316(a)1(A) is hereby  expressly
excluded from this Indenture, as permitted by the TIA.

     SECTION 6.06  Limitation on Suits.  A Noteholder  may not pursue any remedy
with respect to this Indenture or the Notes unless:

          (1) the Holder  gives to the Trustee  written  notice  stating that an
     Event of Default is continuing;

          (2) the Holders of at least 25% in aggregate  principal  amount of the
     Notes at the time  outstanding  make a written  request  to the  Trustee to
     pursue the remedy;

          (3) such Holder or Holders offer to the Trustee reasonable security or
     indemnity  satisfactory  to the  Trustee  against  any loss,  liability  or
     expense;

          (4) the Trustee does not comply with the request  within 60 days after
     receipt of such notice, request and offer of security or indemnity; and

                                       41
<PAGE>

          (5) the Holders of a majority  in  aggregate  principal  amount of the
     Notes  at the  time  outstanding  do  not  give  the  Trustee  a  direction
     inconsistent with the request during such 60-day period.

     A Noteholder  may not use this  Indenture  to  prejudice  the rights of any
other  Noteholder  or  to  obtain  a  preference  or  priority  over  any  other
Noteholder.

     SECTION  6.07  Rights of Holders to Receive  Payment.  Notwithstanding  any
other provision of this Indenture, the right of any Holder to receive payment of
the principal amount,  premium, if any, plus Redemption Price, Change in Control
Repurchase  Price or any accrued  cash  interest in respect of the Notes held by
such Holder,  on or after the respective due dates expressed in the Notes or any
Redemption  Date, and to convert the Notes in accordance  with Article 10, or to
bring suit for the  enforcement of any such payment on or after such  respective
dates or the right to  convert,  shall not be  impaired  or  affected  adversely
without the consent of such Holder.

     SECTION 6.08 Collection Suit by Trustee.  If an Event of Default  described
in Section  6.01(1) or (2) occurs and is  continuing,  the  Trustee  may recover
judgment in its own name and as trustee of an express  trust against the Company
for the whole amount  owing with  respect to the Notes and the amounts  provided
for in Section 7.06.

     SECTION 6.09  Trustee May File Proofs of Claim.  In case of the pendency of
any   receivership,   insolvency,   liquidation,   bankruptcy,   reorganization,
arrangement,  adjustment,  composition or other judicial  proceeding relative to
the Company or any other  obligor  upon the Notes or the property of the Company
or of such other  obligor  or their  creditors,  the  Trustee  (irrespective  of
whether the principal  amount,  Redemption Price,  Change in Control  Repurchase
Price or any accrued cash interest in respect of the Notes shall then be due and
payable as therein  expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
any such  amount)  shall be entitled  and  empowered,  by  intervention  in such
proceeding or otherwise,

          (a) to file and prove a claim for the  whole  amount of the  principal
     amount, Redemption Price, Change in Control Repurchase Price or any accrued
     cash  interest  and to  file  such  other  papers  or  documents  as may be
     necessary  or  advisable  in  order  to  have  the  claims  of the  Trustee
     (including   any  claim   for  the   reasonable   compensation,   expenses,
     disbursements  and advances of the  Trustee,  its agents and counsel or any
     other  amounts  due the  Trustee  under  Section  7.06) and of the  Holders
     allowed in such judicial proceeding, and

          (b) to collect  and receive  any moneys or other  property  payable or
     deliverable on any such claims and to distribute the same;

and any custodian,  receiver,  assignee,  trustee,  liquidator,  sequestrator or
similar  official in any such judicial  proceeding is hereby  authorized by each
Holder to make such  payments to the Trustee  and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the

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<PAGE>

Trustee  any  amount  due  it  for  the   reasonable   compensation,   expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.06.

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

     SECTION 6.10 Priorities. If the Trustee collects any money pursuant to this
Article 6, it shall pay out the money in the following order:

          (1) to the Trustee for amounts due under Section 7.06;

          (2) to  Noteholders  for  amounts  due and unpaid on the Notes for the
     principal amount, Redemption Price, Change in Control Purchase Price or any
     accrued cash interest as the case may be,  ratably,  without  preference or
     priority  of any kind,  according  to such  amounts  due and payable on the
     Notes; and

          (3) the balance, if any, to the Company.

     The  Trustee  may fix a record  date and  payment  date for any  payment to
Noteholders  pursuant to this Section  6.10. At least 15 days before such record
date,  the Trustee shall mail to each  Noteholder  and the Company a notice that
states the record date, the payment date and the amount to be paid.

     SECTION 6.11  Undertaking for Costs. In any suit for the enforcement of any
right or remedy under this  Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee,  a court in its discretion may require
the filing by any party  litigant  (other  than the  Trustee)  in the suit of an
undertaking  to pay the costs of the suit,  and the court in its  discretion may
assess  reasonable  costs,  including  reasonable  attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses  made by the party  litigant.  This Section 6.11
does not apply to a suit by the Trustee,  a suit by a Holder pursuant to Section
6.07 or a suit by Holders of more than 10% in aggregate  principal amount of the
Notes at the time  outstanding.  This  Section  6.11 shall be in lieu of Section
315(e) of the TIA and such Section 315(e) is hereby expressly excluded from this
Indenture, as permitted by the TIA.

     SECTION 6.12 Waiver of Stay, Extension or Usury Laws. The Company covenants
(to the extent  that it may  lawfully do so) that it will not at any time insist
upon,  or  plead,  or in any  manner  whatsoever  claim or take the  benefit  or
advantage  of,  any stay or  extension  law or any usury or other  law  wherever
enacted,  now or at any time hereafter in force, which would prohibit or forgive
the Company from paying all or any portion of the principal  amount,  Redemption
Price,  Change in Control  Repurchase  Price or any  accrued  cash  interest  in
respect of Notes, or any interest on such amounts,  as contemplated  herein,  or
which may affect the covenants or the  performance  of this  Indenture;  and the
Company (to the extent that it may lawfully do so) hereby  expressly  waives all
benefit or  advantage of any such law,  and  covenants  that it will not hinder,

                                       43
<PAGE>

delay or impede the  execution of any power herein  granted to the Trustee,  but
will suffer and permit the  execution  of every such power as though no such law
had been enacted.

                                    ARTICLE 7

                                     TRUSTEE

     SECTION 7.01 Duties and  Responsibilities  of the Trustee;  During Default;
Prior to Default.  The Trustee,  prior to the  occurrence of an Event of Default
hereunder  and after the curing or waiving of all such  Events of Default  which
may have occurred, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture.  In case an Event of Default hereunder
has occurred  (which has not been cured or waived),  the Trustee shall  exercise
such of the rights and powers vested in it by this  Indenture,  and use the same
degree of care and skill in their  exercise,  as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.

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

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

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

          (ii) in the  absence  of bad  faith  on the part of the  Trustee,  the
     Trustee may  conclusively  rely, as to the truth of the  statements and the
     correctness  of  the  opinions  expressed  therein,  upon  any  statements,
     certificates  or opinions  furnished to the Trustee and  conforming  to the
     requirements  of this  Indenture;  but in the case of any such  statements,
     certificates  or opinions  which by any provision  hereof are  specifically
     required to be furnished to the Trustee,  the Trustee shall be under a duty
     to  examine  the  same to  determine  whether  or not they  conform  to the
     requirements of this Indenture;

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

     (c) the  Trustee  shall not be liable with  respect to any action  taken or
omitted to be taken by it in good faith in accordance  with the direction of the
Holders  pursuant  to Section  6.05  relating  to the time,  method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Indenture.

                                       44
<PAGE>

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

     The  provisions of this Section 7.01 are in  furtherance  of and subject to
Sections 315 and 316 of the TIA.

     SECTION 7.02 Certain  Rights of the Trustee.  In furtherance of and subject
to the TIA and subject to Section 7.01:

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

          (b) any request,  direction,  order or demand of the Company mentioned
     herein shall be sufficiently  evidenced by an Officers' Certificate (unless
     other evidence in respect thereof be herein specifically  prescribed);  and
     any resolution of the Board of Directors may be evidenced to the Trustee by
     a copy thereof certified by the secretary or an assistant  secretary of the
     Company;

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

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

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

          (f) prior to the occurrence of an Event of Default hereunder and after
     the curing or waiving of all such Events of Default,  the Trustee shall not
     be bound to make any investigation  into the facts or matters stated in any
     resolution,  certificate,  statement,  instrument, opinion, report, notice,
     request,  consent,  order,  approval,  appraisal,  bond,  debenture,  note,
     coupon, security, or other paper or document unless requested in writing to
     do so by the  Holders of not less than a majority  in  aggregate  principal

                                       45
<PAGE>

     amount of the Notes then outstanding;  provided that, if the payment within
     a  reasonable  time to the Trustee of the costs,  expenses  or  liabilities
     likely to be incurred by it in the making of such  investigation is, in the
     opinion  of the  Trustee,  not  reasonably  assured  to the  Trustee by the
     security  afforded  to it by the terms of this  Indenture,  the Trustee may
     require  reasonable  indemnity  against such expenses or  liabilities  as a
     condition   to   proceeding;   the   reasonable   expenses  of  every  such
     investigation  shall be paid by the  Company  or, if paid by the Trustee or
     any predecessor trustee, shall be repaid by the Company upon demand;

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

          (h) The Trustee's  immunities and  protections  from liability and its
     rights  to  compensation  and   indemnification   in  connection  with  the
     performance  of  its  duties  under  this  Indenture  shall  extend  to the
     Trustee's  officers,  directors,  agents and  employees and its services as
     Paying Agent,  Registrar or any other role assumed by the Trustee hereunder
     or to which it has been  appointed.  Such  immunities and  protections  and
     right  to   indemnification,   together   with  the   Trustee's   right  to
     compensation,  shall survive the Trustee's  resignation  or removal and the
     final payment of the Notes;

          (i) The  Trustee  is not  required  to give  any bond or  surety  with
     respect  to the  performance  of its duties or the  exercise  of its powers
     under this Indenture; and

          (j) The Trustee  shall not be deemed to have  knowledge of any Default
     or Event of Default hereunder except (i) during any period it is serving as
     Paying Agent for the Notes,  any Event of Default pursuant to Sections 6.01
     (1),  (2) or (3),  or (ii)  any  Default  or Event  of  Default  of which a
     Responsible  Officer shall have received written  notification or otherwise
     obtained actual knowledge.

     SECTION 7.03 Trustee Not Responsible for Recitals,  Disposition of Notes or
Application of Proceeds Thereof. The recitals contained herein and in the Notes,
except  the  Trustee's  certificates  of  authentication,  shall be taken as the
statements of the Company,  and the Trustee  assumes no  responsibility  for the
correctness of the same. The Trustee makes no  representation as to the validity
or  sufficiency  of this  Indenture  or of the Notes.  The Trustee  shall not be
accountable  for the use or application by the Company of any of the Notes or of
the proceeds thereof.

     SECTION  7.04  Trustee and Agents May Hold  Notes;  Collections,  etc.  The
Trustee or any agent of the Company or the  Trustee,  in its  individual  or any
other capacity, may become the owner or pledgee of Notes with the same rights it
would have if it were not the  Trustee or such  agent and,  subject to  Sections
7.08 and 7.13,  if operative,  may otherwise  deal with the Company and receive,
collect,  hold and retain  collections  from the Company with the same rights it
would have if it were not the Trustee or such agent.

                                       46
<PAGE>

     SECTION 7.05 Moneys Held by Trustee.  Subject to the  provisions of Section
8.02 hereof,  all moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be  segregated  from other funds  except to the extent  required by
mandatory provisions of law. Neither the Trustee nor any agent of the Company or
the Trustee shall be under any liability for interest on any moneys  received by
it hereunder.

     SECTION  7.06  Compensation  and  Indemnification  of Trustee and Its Prior
Claim. The Company covenants and agrees to pay to the Trustee from time to time,
and the Trustee  shall be entitled  to, such  compensation  (which  shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express  trust) to be agreed to in writing by the Trustee and the  Company,  and
the  Company  covenants  and agrees to pay or  reimburse  the  Trustee  and each
predecessor Trustee upon its request for all reasonable expenses,  disbursements
and advances  incurred or made by or on behalf of it in  accordance  with any of
the provisions of this Indenture (including (i) the reasonable  compensation and
the  expenses  and  disbursements  of its  counsel  and of all  agents and other
persons not  regularly in its employ and (ii)  interest at the prime rate on any
disbursements  and  advances  made by the  Trustee  and not paid by the  Company
within 5 days after  receipt of an invoice  for such  disbursement  or  advance)
except  any  such  expense,  disbursement  or  advance  as may  arise  from  its
negligence or bad faith. The Company also covenants to indemnify the Trustee and
each  predecessor  Trustee  for,  and to hold it  harmless  against,  any  loss,
liability  or  expense  incurred  without  negligence  or bad faith on its part,
arising out of or in connection  with the acceptance or  administration  of this
Indenture or the trusts hereunder and its duties hereunder,  including the costs
and expenses of defending itself against or investigating any claim of liability
in the  premises.  The  obligations  of the Company  under this  Section 7.06 to
compensate and indemnify the Trustee and each predecessor  Trustee and to pay or
reimburse the Trustee and each predecessor  Trustee for expenses,  disbursements
and  advances  shall  constitute  additional  indebtedness  hereunder  and shall
survive the  satisfaction  and  discharge  of this  Indenture.  Such  additional
indebtedness  shall be a senior claim to that of the Notes upon all property and
funds held or collected  by the Trustee as such,  except funds held in trust for
the  benefit  of the  Holders  of  particular  Notes,  and the Notes are  hereby
effectively  subordinated to such senior claim to such extent. The provisions of
this  Section  7.06 shall  survive the  termination  of this  Indenture  and the
resignation  or removal of the  Trustee.  When the  Trustee  incurs  expenses or
renders  services in  connection  with an Event of Default  specified in Section
6.01 or in  connection  with  Article Six hereof,  the expenses  (including  the
reasonable fees and expenses of its counsel) and the  compensation  for services
in connection  therewith are to constitute expenses of administration  under any
bankruptcy law.

     SECTION  7.07  Right of  Trustee  to Rely on  Officers'  Certificate,  etc.
Subject to Sections 7.01 and 7.02,  whenever in the administration of the trusts
of this Indenture the Trustee shall deem it necessary or desirable that a matter
be proved or  established  prior to taking or  suffering  or omitting any action
hereunder,  such matter  (unless  other  evidence  in respect  thereof be herein
specifically  prescribed)  may, in the absence of negligence or bad faith on the
part of the Trustee,  be deemed to be conclusively  proved and established by an
Officers' Certificate delivered to the Trustee.

                                       47
<PAGE>

     SECTION 7.08 Conflicting  Interests.  If the Trustee has or shall acquire a
conflicting  interest  within the meaning of the TIA,  the Trustee  shall either
eliminate such interest or resign,  to the extent and in the manner provided by,
and subject to the provisions of, the TIA.

     SECTION 7.09 Persons Eligible for Appointment as Trustee. The Trustee shall
at all times be a corporation or banking  association  having a combined capital
and surplus of at least $10,000,000.  If such corporation or banking association
files  reports  of  condition  at  least  annually,  pursuant  to  law or to the
requirements of the aforesaid supervising or examining authority,  then, for the
purposes  of this  Section  7.09,  the  combined  capital  and  surplus  of such
corporation  shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so filed. In case at any time the Trustee
shall cease to be eligible in  accordance  with the  provisions  of this Section
7.09,  the Trustee  shall resign  immediately  in the manner and with the effect
specified in Section 7.10.

     SECTION 7.10 Resignation and Removal; Appointment of Successor Trustee. (a)
The Trustee,  or any trustee or trustees  hereafter  appointed,  may at any time
resign  with  respect  to one or more or all  series of Notes by giving  written
notice of  resignation  to the  Company and by mailing  notice  thereof by first
class mail to the Holders of Notes at their last  addresses as they shall appear
on the Note register.  Upon receiving  such notice of  resignation,  the Company
shall promptly appoint a successor trustee or trustees by written  instrument in
duplicate,  executed by authority of the Board of  Directors,  one copy of which
instrument  shall be  delivered  to the  resigning  Trustee  and one copy to the
successor  trustee  or  trustees.  If no  successor  trustee  shall have been so
appointed and have accepted appointment within 30 days after the mailing of such
notice of resignation, the resigning trustee may petition any court of competent
jurisdiction for the appointment of a successor  trustee,  or any Noteholder who
has been a bona fide  Holder of a Note for at least six months  may,  subject to
the  provisions of Section  7.11, on behalf of himself and all others  similarly
situated,  petition any such court for the  appointment of a successor  trustee.
Such court may thereupon,  after such notice,  if any, as it may deem proper and
prescribe, appoint a successor trustee.

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

          (i) the Trustee  shall fail to comply with the  provisions  of Section
     7.08 with  respect  to any Notes  after  written  request  therefor  by the
     Company or by any  Noteholder who has been a bona fide Holder of a Note for
     at least six months; or

          (ii) the Trustee  shall cease to be  eligible in  accordance  with the
     provisions of Section 7.09 and shall fail to resign after  written  request
     therefor by the Company or by any Noteholder; or

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

                                       48
<PAGE>

then,  in any such  case,  the  Company  may remove the  Trustee  and  appoint a
successor trustee by written instrument, in duplicate,  executed by order of the
Board  of  Directors  of the  Company,  one copy of  which  instrument  shall be
delivered to the Trustee so removed and one copy to the successor  trustee,  or,
subject to the  provisions of Section 7.11,  any  Noteholder who has been a bona
fide  Holder of a Note for at least six months may on behalf of himself  and all
others similarly situated,  petition any court of competent jurisdiction for the
removal of the Trustee and the  appointment of a successor  trustee.  Such court
may thereupon,  after such notice,  if any, as it may deem proper and prescribe,
remove the  Trustee and appoint a successor  trustee.  If no  successor  trustee
shall have been appointed and have accepted  appointment  within 30 days after a
notice of removal has been given,  the removed  trustee may  petition a court of
competent jurisdiction for the appointment of a successor trustee.

     (c) The Holders of a majority in aggregate principal amount of the Notes at
the time  outstanding may at any time remove the Trustee and appoint a successor
trustee by  delivering to the Trustee so removed,  to the  successor  trustee so
appointed  and to the Company the  evidence  provided for in Section 1.05 of the
action in that regard taken by the Noteholders.

     (d) Any  resignation  or removal of the  Trustee and any  appointment  of a
successor  trustee  pursuant to any of the provisions of this Section 7.10 shall
become  effective upon  acceptance of  appointment  by the successor  trustee as
provided in Section 7.11.

     SECTION 7.11 Acceptance of Appointment by Successor Trustee.  Any successor
trustee  appointed as provided in Section 7.10 shall  execute and deliver to the
Company and to its predecessor trustee an instrument  accepting such appointment
hereunder,  and thereupon the resignation or removal of the predecessor  trustee
shall become effective and such successor trustee, without any further act, deed
or  conveyance,  shall  become  vested  with  all  rights,  powers,  duties  and
obligations  of its  predecessor  hereunder,  with like effect as if  originally
named as trustee  hereunder;  but,  nevertheless,  on the written request of the
Company or of the  successor  trustee,  upon payment of its charges then unpaid,
the trustee ceasing to act shall pay over to the successor trustee all moneys at
the time held by it  hereunder  and shall  execute  and  deliver  an  instrument
transferring  to such  successor  trustee all such  rights,  powers,  duties and
obligations.  Upon  request of any such  successor  trustee,  the Company  shall
execute any and all instruments in writing for more fully and certainly  vesting
in and  confirming  to such  successor  trustee all such rights and powers.  Any
trustee  ceasing  to act  shall,  nevertheless,  retain a prior  claim  upon all
property or funds held or  collected  by such trustee to secure any amounts then
due it pursuant to the provisions of Section 7.06.

     No successor  trustee shall accept  appointment as provided in this Section
7.11  unless at the time of such  acceptance  such  successor  trustee  shall be
qualified under the provisions of Section 7.08 and eligible under the provisions
of Section 7.09.

     Upon acceptance of appointment by any successor trustee as provided in this
Section 7.11,  the Company shall mail notice  thereof by first class mail to the
Holders of Notes at their last  addresses as they shall appear in the  register.
If the  acceptance of  appointment  is  substantially  contemporaneous  with the
resignation,  then  the  notice  called  for by the  preceding  sentence  may be
combined  with the notice  called for by Section  7.10.  If the Company fails to

                                       49
<PAGE>

mail  such  notice  within  ten days  after  acceptance  of  appointment  by the
successor trustee, the successor trustee shall cause such notice to be mailed at
the expense of the Company.

     SECTION 7.12 Merger, Conversion, Consolidation or Succession to Business of
Trustee.  Any corporation or banking  association  into which the Trustee may be
merged or converted or with which it may be consolidated,  or any corporation or
banking  association  resulting from any merger,  conversion or consolidation to
which the Trustee shall be a party,  or any  corporation or banking  association
succeeding to all or  substantially  all of the corporate  trust business of the
Trustee,  shall be the  successor of the Trustee  hereunder,  provided that such
corporation or banking  association  shall be qualified  under the provisions of
Section 7.08 and eligible  under the  provisions  of Section  7.09,  without the
execution  or filing of any paper or any  further  act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.  In case at the
time such  successor to the Trustee shall succeed to the trusts  created by this
Indenture any of the Notes shall have been authenticated but not delivered,  any
such successor to the Trustee may adopt the certificate of authentication of any
predecessor  Trustee and deliver  such Notes so  authenticated;  and, in case at
that time any of the Notes shall not have been  authenticated,  any successor to
the Trustee may  authenticate  such Notes either in the name of any  predecessor
hereunder or in the name of the  successor  Trustee;  and in all such cases such
certificate  shall have the full force and effect that this  Indenture  provides
for the certificate of authentication of the Trustee;  provided,  that the right
to adopt the  certificate of  authentication  of any  predecessor  Trustee or to
authenticate  Notes in the name of any  predecessor  Trustee shall apply only to
its successor or successors by merger, conversion or consolidation.

     SECTION 7.13  Preferential  Collection of Claims  Against the Company.  The
Trustee shall comply with the provisions of Section 311 of the TIA.

     SECTION  7.14  Reports by the Trustee.  (a) The Trustee  shall  transmit to
Holders and other  persons such reports  concerning  the Trustee and its actions
under this  Indenture,  but only as may be  required  pursuant to the TIA, on or
before July 15 in each year that such  report is  required,  such  reports to be
dated as of the immediately preceding May 15.

     (b) A copy of each such report shall,  at the time of such  transmission to
Noteholders,  be  furnished to the Company and be filed by the Trustee with each
stock  exchange  upon  which  the Notes are  listed  and also with the SEC.  The
Company  agrees to notify the Trustee when and as the Notes  become  admitted to
trading on any national securities exchange.

     SECTION 7.15 Trustee to Give Notice of Default, But May Withhold in Certain
Circumstances.  The Trustee shall transmit to the Noteholders,  as the names and
addresses of such  Holders  appear on the Note  register,  notice by mail of all
Defaults which have occurred, such notice to be transmitted within 90 days after
the  occurrence  thereof,  unless such defaults shall have been cured before the
giving of such  notice;  provided  that,  except in the case of  Default  in the
payment of the  principal  of,  interest on, or other  similar  obligation  with
respect to, any of the Notes, the Trustee shall be protected in withholding such
notice if and so long as the board of directors,  the executive committee,  or a

                                       50
<PAGE>

trust  committee  of directors or trustees  and/or  Responsible  Officers of the
Trustee in good faith  determines  that the withholding of such notice is in the
best interests of the Noteholders.

                                   ARTICLE 8

                             DISCHARGE OF INDENTURE

     SECTION 8.01 Discharge of Liability on Notes. When (i) the Company delivers
to the Trustee all  outstanding  Notes  (other than Notes  replaced  pursuant to
Section 2.07) for cancellation or (ii) all outstanding Notes will become due and
payable within one year of their Stated Maturity or (iii) all outstanding  Notes
are  scheduled  for  redemption  within one year and, in all cases,  the Company
deposits  with the Trustee cash or, if  expressly  permitted by the terms of the
Notes,  Common  Stock  sufficient  to pay  all  amounts  due  and  owing  on all
outstanding  Notes (other than Notes replaced  pursuant to Section 2.07), and if
in any case the Company  pays all other sums  payable  hereunder by the Company,
then this  Indenture  shall,  subject  to Section  7.06,  cease to be of further
effect.  The Trustee shall join in the  execution of a document  prepared by the
Company acknowledging  satisfaction and discharge of this Indenture on demand of
the Company  accompanied by an Officers'  Certificate and Opinion of Counsel and
at the cost and expense of the Company.

     SECTION 8.02  Repayment  of the  Company.  The Trustee and the Paying Agent
shall return to the Company upon written request any money or securities held by
them for the  payment of any  amount  with  respect  to the Notes  that  remains
unclaimed for two years,  subject to applicable  unclaimed  property law.  After
return to the Company,  Holders entitled to the money or securities must look to
the Company  for payment as general  creditors  unless an  applicable  abandoned
property  law  designates  another  person and the Trustee and the Paying  Agent
shall have no further liability to the Noteholders with respect to such money or
securities for that period commencing after the return thereof.

                                   ARTICLE 9

                                   AMENDMENTS

     SECTION  9.01 Without  Consent of Holders.  The Company and the Trustee may
amend this  Indenture or the Notes without the consent of any Noteholder for the
purposes of, among other things:

          (1) adding to the Company's covenants for the benefit of the Holders;

          (2) surrendering any right or power conferred upon the Company;

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

          (4) reducing the  Conversion  Price,  provided that the reduction will
     not adversely affect the interests of Holders in any material respect;

                                       51
<PAGE>

          (5) complying with the  requirements  of the SEC in order to effect or
     maintain the qualification of this Indenture under the TIA;

          (6) making any changes or modifications to this Indenture necessary in
     connection  with the  registration of the Notes under the Securities Act as
     contemplated  by the  Registration  Rights  Agreement,  provided  that this
     action  does not  adversely  affect  the  interests  of the  Holders in any
     material respect;

          (7) curing any  ambiguity,  omission,  inconsistency  or correcting or
     supplementing any defective provision contained in this Indenture; provided
     that such  modification or amendment does not, in the good faith opinion of
     the Board of Directors of the Trustee,  adversely  affect the  interests of
     the Holders;

          (8) adding or modifying any other provisions which the Company and the
     Trustee may deem necessary or desirable and which will not adversely affect
     the interests of the Holders;

          (9) complying with Article 5; or

          (10)   providing   for   uncertificated   Notes  in  addition  to  the
     Certificated Notes so long as such  uncertificated  Notes are in registered
     form for purposes of the Internal Revenue Code of 1986, as amended.

     SECTION  9.02 With  Consent of  Holders.  With the  written  consent of the
Holders of at least a majority in aggregate principal amount of the Notes at the
time  outstanding,  the Company and the Trustee may amend this  Indenture or the
Notes. However, without the consent of each Noteholder affected, an amendment to
this Indenture or the Notes may not:

          (1) change the  maturity of the  principal  of or any  installment  of
     interest on any Note (including any payment of liquidated damages);

          (2) reduce the principal amount of, or premium, if any, or interest on
     (including any payment of liquidated damages), any Note;

          (3)  reduce  the  Interest  Rate  or  interest  (including  liquidated
     damages) on any Note;

          (4) change the currency of payment of principal of,  premium,  if any,
     or interest of any Note;

          (5)  impair the right to  institute  suit for the  enforcement  of any
     payment on or with respect to, or conversion of, any Note;

          (6) except as otherwise  permitted or  contemplated  by  provisions of
     this Indenture concerning corporate  reorganizations,  adversely affect the
     repurchase  option of Holders  upon a Change in  Control or the  conversion
     rights of Holders;

                                       52
<PAGE>

          (7)  modify  the  subordination  provisions  of the  Notes in a manner
     adverse to the Holders; or

          (8) reduce  the  percentage  in  aggregate  principal  amount of Notes
     outstanding  necessary  to modify or amend this  Indenture  or to waive any
     past default.

     It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed  amendment,  but it shall be
sufficient if such consent approves the substance thereof.

     After an amendment under this Section 9.02 becomes  effective,  the Company
shall mail to each Holder a notice briefly describing the amendment.

     SECTION  9.03  Compliance  with Trust  Indenture  Act.  Every  supplemental
indenture executed pursuant to this Article shall comply with the TIA.

     SECTION 9.04 Revocation and Effect of Consents,  Waivers and Actions. Until
an amendment,  waiver or other action by Holders  becomes  effective,  a consent
thereto by a Holder of a Note  hereunder is a  continuing  consent by the Holder
and every  subsequent  Holder of that Note or portion of the Note that evidences
the same  obligation as the consenting  Holder's  Note,  even if notation of the
consent,  waiver or action is not made on the Note. However,  any such Holder or
subsequent  Holder may revoke the consent,  waiver or action as to such Holder's
Note or portion of the Note if the  Trustee  receives  the notice of  revocation
before the date the  amendment,  waiver or action  becomes  effective.  After an
amendment, waiver or action becomes effective, it shall bind every Noteholder.

     SECTION  9.05  Notation on or Exchange of Notes.  Notes  authenticated  and
delivered  after the execution of any  supplemental  indenture  pursuant to this
Article  may,  and shall if  required  by the  Trustee,  bear a notation in form
approved  by the  Trustee as to any  matter  provided  for in such  supplemental
indenture.  If the  Company  shall so  determine,  new Notes so  modified  as to
conform,  in the  opinion of the Board of  Directors,  to any such  supplemental
indenture  may be prepared  and  executed by the Company and  authenticated  and
delivered by the Trustee in exchange for outstanding Notes.

     SECTION 9.06 Trustee to Sign  Supplemental  Indentures.  The Trustee  shall
sign any  supplemental  indenture  authorized  pursuant to this Article 9 if the
amendment  contained therein does not, in the good faith opinion of the Trustee,
adversely  affect the  rights,  duties,  liabilities,  protections,  privileges,
indemnities or immunities of the Trustee.  If it does, the Trustee may, but need
not, sign such supplemental  indenture.  In signing such supplemental  indenture
the Trustee  shall be entitled to receive,  and  (subject to the  provisions  of
Section 7.01) shall be fully protected in relying upon, an Officers' Certificate
and an Opinion of Counsel stating that such amendment is authorized or permitted
by this Indenture and complies with the TIA.

     SECTION 9.07 Effect of Supplemental  Indentures.  Upon the execution of any
supplemental  indenture under this Article,  this Indenture shall be modified in

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<PAGE>

accordance therewith,  and such supplemental indenture shall form a part of this
Indenture for all purposes;  and every Holder of Notes theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.

                                   ARTICLE 10

                                   CONVERSION

     SECTION 10.01  Conversion Right and Conversion  Price.  Subject to and upon
compliance  with the  provisions  of this  Article,  at the option of the Holder
thereof, any Note or any portion of the principal amount thereof which is $1,000
or an  integral  multiple of $1,000 may be  converted  at the  principal  amount
thereof,  or of such  portion  thereof,  into duly  authorized,  fully  paid and
nonassessable  shares of Common Stock,  at the Conversion  Price,  determined as
hereinafter provided, in effect at the time of conversion. Such conversion right
shall expire at the close of business on November 26, 2006.

     In case a Note or portion thereof is called for redemption, such conversion
right in respect of the Note or the portion so called, shall expire at the close
of business on the  Business  Day  preceding  the  Redemption  Date,  unless the
Company  defaults in making the payment  due upon  redemption.  In the case of a
Change in  Control  for which the Holder  exercises  its  repurchase  right with
respect to a Note or portion  thereof,  such conversion  right in respect of the
Note or portion  thereof  shall  expire at the close of business on the Business
Day immediately preceding the Change in Control Repurchase Date.

     The  price at  which  shares  of  Common  Stock  shall  be  delivered  upon
conversion (the "Conversion  Price") shall be initially equal to $7.74 per share
of Common Stock. The Conversion Price shall be adjusted in certain  instances as
provided in  paragraphs  (a),  (b),  (c),  (d), (e), (f), (h) and (i) of Section
10.04 and Section 10.12 hereof.

     SECTION 10.02  Exercise of  Conversion  Right.  To exercise the  conversion
right,  the Holder of any Note to be converted  shall  surrender  such Note duly
endorsed or assigned to the Company or in blank, at the office of any Conversion
Agent,  accompanied by a duly signed conversion notice substantially in the form
attached to the Note to the Company  stating  that the Holder  elects to convert
such  Note or,  if less  than  the  entire  principal  amount  thereof  is to be
converted, the portion thereof to be converted.

     Notes  surrendered  for  conversion  during  the  period  from the close of
business  on any  Regular  Record  Date to the  opening of  business on the next
succeeding  Interest  Payment Date shall be  accompanied  by payment in New York
Clearing House funds or other funds acceptable to the Company of an amount equal
to the interest to be received on such  Interest  Payment Date on the  principal
amount of Notes being  surrendered  for  conversion.  No such  payment  shall be
required upon  surrender for  conversion if the Notes so  surrendered  have been
called for redemption  with a Redemption Date that occurs during the period from
the close of business on any Regular Record Date to the close of business on the
third Business Day after the Interest  Payment Date next succeeding such Regular
Record Date.

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<PAGE>

     Notes shall be deemed to have been converted immediately prior to the close
of business on the day of surrender of such Notes for  conversion  in accordance
with the  foregoing  provisions,  and at such time the rights of the  Holders of
such Notes as Holders shall cease, and the Person or Persons entitled to receive
the Common Stock issuable upon  conversion  shall be treated for all purposes as
the record  holder or holders of such Common Stock at such time.  As promptly as
practicable  on or after the  conversion  date,  the  Company  shall cause to be
issued and delivered to such Conversion  Agent a certificate or certificates for
the number of full shares of Common Stock  issuable  upon  conversion,  together
with  payment in lieu of any  fraction of a share as  provided in Section  10.03
hereof.

     In the  case of any  Note  which  is  converted  in part  only,  upon  such
conversion  the Company  shall execute and the Trustee  shall  authenticate  and
deliver to the Holder  thereof,  at the  expense of the  Company,  a new Note or
Notes of authorized  denominations  in aggregate  principal  amount equal to the
unconverted portion of the principal amount of such Notes.

     If shares of Common  Stock to be issued  upon  conversion  of a  Restricted
Note, or securities  to be issued upon  conversion of a Restricted  Note in part
only,  are to be  registered  in a name  other  than that of the  Holder of such
Restricted  Note, such Holder must deliver to the Conversion Agent a certificate
in  substantially  the form set forth in the form of Note set forth in Exhibit A
annexed  hereto,  dated the date of surrender of such Restricted Note and signed
by such Holder, as to compliance with the restrictions on transfer applicable to
such Restricted Note. Neither the Trustee nor any Conversion Agent, Registrar or
Transfer  Agent  shall be  required to register in a name other than that of the
Holder  shares of  Common  Stock or Notes  issued  upon  conversion  of any such
Restricted Note not so accompanied by a properly completed certificate.

     The Company hereby initially appoints the Trustee as the Conversion Agent.

     SECTION 10.03  Fractions of Shares.  No  fractional  shares of Common Stock
shall be issued  upon  conversion  of any Note or  Notes.  If more than one Note
shall be surrendered  for conversion at one time by the same Holder,  the number
of full shares which shall be issued upon  conversion  thereof shall be computed
on the basis of the  aggregate  principal  amount  of the  Notes  (or  specified
portions  thereof) so  surrendered.  Instead of any  fractional  share of Common
Stock which would  otherwise be issued upon  conversion of any Note or Notes (or
specified portions thereof),  the Company shall pay a cash adjustment in respect
of such fraction  (calculated to the nearest  one-100th of a share) in an amount
equal to the same  fraction  of the quoted  price of the Common  Stock as of the
Trading Day preceding the date of conversion.

     SECTION 10.04 Adjustment of Conversion Price. The Conversion Price shall be
subject to adjustments, calculated by the Company, from time to time as follows:

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

                                       55
<PAGE>

          (1) the  numerator  of which  shall be the  number of shares of Common
     Stock  outstanding  at the close of business on the Record Date (as defined
     in Section 10.4(g)) fixed for such determination, and

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

     Such  reduction  shall become  effective  immediately  after the opening of
     business  on  the  day  following  the  Record  Date.  If any  dividend  or
     distribution of the type described in this Section 10.04(a) is declared but
     not so paid or made,  the  Conversion  Price shall again be adjusted to the
     Conversion  Price  which  would  then  be in  effect  if such  dividend  or
     distribution had not been declared.

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

          (c) In case the  Company  shall issue  rights or warrants  (other than
     pursuant to the Rights Plan) and other than any rights or warrants referred
     to in Section 10.04(d)) to all holders of its outstanding  shares of Common
     Stock  entitling  them to subscribe for or purchase  shares of Common Stock
     (or  securities  convertible  into  Common  Stock) at a price per share (or
     having a conversion price per share) less than the Current Market Price (as
     defined in Section 10.04(g)) on the Record Date fixed for the determination
     of stockholders entitled to receive such rights or warrants, the Conversion
     Price shall be  adjusted so that the same shall equal the price  determined
     by multiplying the Conversion Price in effect at the opening of business on
     the date after such Record Date by a fraction:

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

               (2) the  denominator  of which  shall be the  number of shares of
          Common Stock  outstanding  on the close of business on the Record Date
          plus the total number of additional  shares of Common Stock so offered
          for subscription or purchase (or into which the convertible securities
          so offered are convertible).

                                       56
<PAGE>

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

          (d) In case the Company shall, by dividend or otherwise, distribute to
     all holders of its Common Stock shares of any class of capital stock of the
     Company or the capital stock of any  Subsidiary of the Company  (other than
     any  dividends  or  distributions  to which  Section  10.04(a)  applies) or
     evidences of its indebtedness or other assets,  including  securities,  but
     excluding (1) any rights or warrants referred to in Section  10.04(c),  (2)
     any  dividends or  distributions  in  connection  with a  reclassification,
     change, merger, consolidation,  statutory share exchange, combination, sale
     or conveyance  to which Section 10.11 hereof  applies and (3) dividends and
     distributions  paid  exclusively  in  cash  (the  securities  described  in
     foregoing  clauses (1), (2) and (3)  hereinafter  in this Section  10.04(d)
     called the "excluded securities"),  then, in each such case, subject to the
     second succeeding paragraph of this Section 10.04(d),  the Conversion Price
     shall be adjusted  so that the same shall be equal to the price  determined
     by multiplying  the  Conversion  Price in effect  immediately  prior to the
     close of business on the Record Date (as defined in Section  10.04(g)) with
     respect to such distribution by a fraction:

               (1) the  numerator  of which  shall be the Current  Market  Price
          (determined  as  provided in Section  10.04(g))  on such date less the
          fair market  value (as  determined  by the Board of  Directors,  whose
          determination shall be conclusive and set forth in a Board Resolution)
          on such date of the portion of the  securities so  distributed  (other
          than  excluded  securities)  applicable  to one share of Common  Stock
          (determined  on the basis of the number of shares of the Common  Stock
          outstanding on the Record Date), and

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

Such  reduction  shall  become  effective  immediately  prior to the  opening of
business on the day  following the Record Date.  However,  in the event that the
then fair market value (as so  determined)  of the portion of the  securities so
distributed (other than excluded  securities)  applicable to one share of Common

                                       57
<PAGE>

Stock is equal to or greater  than the Current  Market Price on the Record Date,
in lieu of the foregoing  adjustment,  adequate  provision shall be made so that
each Holder  shall have the right to receive upon  conversion  of a Note (or any
portion  thereof) the amount of securities so  distributed  (other than excluded
securities)  such Holder would have received had such Holder converted such Note
(or portion  thereof)  immediately  prior to such Record Date. In the event that
such dividend or distribution is not so paid or made, the Conversion Price shall
again be  adjusted to be the  Conversion  Price which would then be in effect if
such dividend or distribution had not been declared.

     If  the  Board  of  Directors  determines  the  fair  market  value  of any
distribution for purposes of this Section 10.04(d) by reference to the actual or
when issued  trading  market for any  securities  comprising all or part of such
distribution (other than excluded securities),  it must in doing so consider the
prices in such  market over the same period  (the  "Reference  Period")  used in
computing the Current  Market Price  pursuant to Section  10.04(g) to the extent
possible, unless the Board of Directors in a Board Resolution determines in good
faith that  determining the fair market value during the Reference  Period would
not be in the best interest of the Holder.

     Rights or  warrants  distributed  by the  Company to all  holders of Common
Stock  entitling the holders  thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights  or  warrants,  until  the  occurrence  of a  specified  event or  events
("Trigger Event"):

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

          (i) are not exercisable; and

          (ii) are also issued in respect of future issuances of Common Stock,

shall be deemed  not to have  been  distributed  for  purposes  of this  Section
10.04(d) (and no adjustment to the Conversion  Price under this Section 10.04(d)
will be required)  until the occurrence of the earliest  Trigger Event.  If such
right or warrant is subject to subsequent  events,  upon the occurrence of which
such right or warrant shall become exercisable to purchase different securities,
evidences  of  indebtedness  or other assets or entitle the holder to purchase a
different  number or amount of the foregoing or to purchase any of the foregoing
at a different  purchase price,  then the occurrence of each such event shall be
deemed to be the date of issuance and record date with respect to a new right or
warrant  (and a  termination  or  expiration  of the  existing  right or warrant
without  exercise  by the  holder  thereof).  In  addition,  in the event of any
distribution  (or deemed  distribution)  of rights or  warrants,  or any Trigger
Event or other event (of the type  described  in the  preceding  sentence)  with
respect  thereto,  that resulted in an adjustment to the Conversion  Price under
this Section 10.04(d):

          (1) in the case of any such  rights or  warrants  which shall all have
     been redeemed or repurchased  without exercise by any holders thereof,  the
     Conversion  Price  shall  be  readjusted  upon  such  final  redemption  or
     repurchase to give effect to such  distribution  or Trigger  Event,  as the
     case may be, as though it were a cash distribution,  equal to the per share
     redemption  or repurchase  price  received by a holder of Common Stock with

                                       58
<PAGE>

     respect to such rights or warrant  (assuming  such holder had retained such
     rights or warrants),  made to all holders of Common Stock as of the date of
     such redemption or repurchase, and

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

     For purposes of this Section 10.04(d) and Sections  10.04(a),  10.04(b) and
10.04(c),  any  dividend  or  distribution  to which this  Section  10.04(d)  is
applicable  that  also  includes  shares  of  Common  Stock,  a  subdivision  or
combination  of Common Stock to which  Section  10.04(b)  applies,  or rights or
warrants to subscribe  for or purchase  shares of Common Stock to which  Section
10.04(c) applies (or any combination thereof), shall be deemed instead to be:

          (3) a dividend  or  distribution  of the  evidences  of  indebtedness,
     assets,  shares of capital stock, rights or warrants other than such shares
     of Common Stock, such subdivision or combination or such rights or warrants
     to which Sections 10.04(a),  10.04(b) and 10.04(c) apply, respectively (and
     any  Conversion  Price  reduction  required by this Section  10.04(d)  with
     respect to such dividend or distribution  shall then be made),  immediately
     followed by

          (4) a dividend or  distribution  of such shares of Common Stock,  such
     subdivision  or  combination  or such rights or  warrants  (and any further
     Conversion  Price  reduction  required by Sections  10.04(a),  10.04(b) and
     10.04(c) with respect to such dividend or distribution shall then be made),
     except:

               (A) the Record  Date of such  dividend or  distribution  shall be
          substituted  as  (x)  "the  date  fixed  for  the   determination   of
          stockholders entitled to receive such dividend or other distribution",
          "Record Date fixed for such  determinations"  and "Record Date" within
          the  meaning  of  Section  10.04(a),  (y)  "the day  upon  which  such
          subdivision   becomes   effective"   and  "the  day  upon  which  such
          combination becomes effective" within the meaning of Section 10.04(b),
          and (z) as "the  date  fixed  for the  determination  of  stockholders
          entitled to receive such rights or  warrants",  "the Record Date fixed
          for the  determination  of the  stockholders  entitled to receive such
          rights or  warrants"  and such  "Record  Date"  within the  meaning of
          Section 10.04(c), and

               (B) any  shares of Common  Stock  included  in such  dividend  or
          distribution shall not be deemed "outstanding at the close of business
          on the date  fixed  for such  determination"  within  the  meaning  of
          Section 10.04(a) and any reduction or increase in the number of shares
          of Common Stock resulting from such  subdivision or combination  shall
          be disregarded in connection with such dividend or distribution.

                                       59
<PAGE>

          (e) In case the Company shall, by dividend or otherwise, distribute to
     all  holders  of  its  Common  Stock  cash  (excluding  any  cash  that  is
     distributed  upon  a  reclassification,   change,  merger,   consolidation,
     statutory share exchange,  combination, sale or conveyance to which Section
     10.11 hereof  applies or as part of a  distribution  referred to in Section
     10.04(d) hereof),  in an aggregate amount that, combined together with: (1)
     the  aggregate  amount of any other such  distributions  to all  holders of
     Common Stock made  exclusively  in cash within the 12 months  preceding the
     date of payment of such distribution, and in respect of which no adjustment
     pursuant to this Section  10.04(e) has been made,  and (2) the aggregate of
     any  cash  plus  the fair  market  value  (as  determined  by the  Board of
     Directors, whose determination shall be conclusive and set forth in a Board
     Resolution)  of  consideration  payable in  respect of any tender  offer or
     exchange  offer by the  Company or any of its  Subsidiaries  for all or any
     portion of the Common Stock  concluded  within the 12 months  preceding the
     date of such distribution,  and in respect of which no adjustment  pursuant
     to Section 10.04(f) hereof has been made, exceeds 10% of the product of the
     Current Market Price  (determined  as provided in Section  10.04(g)) on the
     Record Date with respect to such distribution times the number of shares of
     Common  Stock  outstanding  on  such  date,  then  and in each  such  case,
     immediately  after the close of business on such date, the Conversion Price
     shall be  reduced  so that the same  shall  equal the price  determined  by
     multiplying the Conversion Price in effect  immediately  prior to the close
     of business on such Record Date by a fraction:

               (i) the  numerator of which shall be equal to the Current  Market
          Price on the Record Date less an amount  equal to the  quotient of (x)
          the excess of such combined amount over such 10% and (y) the number of
          shares of Common Stock outstanding on the Record Date, and

               (ii)  the  denominator  of which  shall  be equal to the  Current
          Market Price on such date.

However,  in the event that the then fair market value (as so determined) of the
portion of the  securities  so  distributed  (other  than  excluded  securities)
applicable  to one share of Common Stock is equal to or greater than the Current
Market Price on the Record Date, in lieu of the foregoing  adjustment,  adequate
provision shall be made so that each Holder shall have the right to receive upon
conversion  of a Note (or any  portion  thereof)  the amount of cash such Holder
would have  received had such Holder  converted  such Note (or portion  thereof)
immediately  prior to such  Record  Date.  In the event  that such  dividend  or
distribution  is not so paid or  made,  the  Conversion  Price  shall  again  be
adjusted  to be the  Conversion  Price  which  would  then be in  effect if such
dividend or distribution had not been declared.

          (f) In case a tender  offer or  exchange  offer made by the Company or
     any of its  Subsidiaries  for all or any portion of the Common  Stock shall
     expire  and such  tender  offer or  exchange  offer  (as  amended  upon the
     expiration thereof) shall require the payment to stockholders (based on the
     acceptance (up to any maximum specified in the terms of the tender offer or
     exchange  offer) of  Purchased  Shares (as defined  below)) of an aggregate
     consideration  having a fair market  value (as  determined  by the Board of
     Directors, whose determination shall be conclusive and set forth in a Board
     Resolution) that combined together with:

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<PAGE>

          (1)  the  aggregate  of the  cash  plus  the  fair  market  value  (as
     determined  by  the  Board  of  Directors,  whose  determination  shall  be
     conclusive  and set forth in a Board  Resolution),  as of the expiration of
     such tender offer or exchange offer, of consideration payable in respect of
     any other tender  offers or exchange  offers,  by the Company or any of its
     Subsidiaries for all or any portion of the Common Stock expiring within the
     12 months  preceding the  expiration of such tender offer or exchange offer
     and in respect of which no adjustment pursuant to this Section 10.04(f) has
     been made, and

          (2) the aggregate  amount of any  distributions  to all holders of the
     Company's  Common Stock made exclusively in cash within 12 months preceding
     the  expiration  of such tender  offer or exchange  offer and in respect of
     which no adjustment pursuant to Section 10.04(e) has been made, exceeds 10%
     of the  product of the  Current  Market  Price  (determined  as provided in
     Section  10.04(g)) as of the last time (the  "Expiration  Time") tenders or
     exchanges  could have been made  pursuant to such tender  offer or exchange
     offer (as it may be  amended)  times the  number of shares of Common  Stock
     outstanding  (including  any tendered  shares or  exchanged  shares) on the
     Expiration  Time,  then,  and in each such case,  immediately  prior to the
     opening of business on the day after the date of the  Expiration  Time, the
     Conversion  Price  shall be adjusted so that the same shall equal the price
     determined by multiplying the Conversion Price in effect  immediately prior
     to close of business on the date of the Expiration Time by a fraction:

               (i) the  numerator  of which  shall be the  number  of  shares of
          Common Stock outstanding  (including any tendered or exchanged shares)
          at the Expiration  Time  multiplied by the Current Market Price of the
          Common Stock on the Trading Day next  succeeding the Expiration  Time,
          and

               (ii) the  denominator  shall  be the sum of (x) the  fair  market
          value (determined as aforesaid) of the aggregate consideration payable
          to stockholders  based on the acceptance (up to any maximum  specified
          in the terms of the  tender  offer or  exchange  offer) of all  shares
          validly  tendered or exchanged and not withdrawn as of the  Expiration
          Time (the shares  deemed so accepted,  up to any such  maximum,  being
          referred  to as the  "Purchased  Shares")  and (y) the  product of the
          number  of  shares of Common  Stock  outstanding  (less any  Purchased
          Shares) on the  Expiration  Time and the Current  Market  Price of the
          Common Stock on the Trading Day next succeeding the Expiration Time.

Such reduction (if any) shall become effective  immediately prior to the opening
of business on the day  following  the  Expiration  Time.  In the event that the
Company is  obligated  to purchase  shares  pursuant to any such tender offer or

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<PAGE>

exchange offer, but the Company is permanently  prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the Conversion
Price shall again be adjusted to be the Conversion  Price which would then be in
effect  if such  tender  offer  or  exchange  offer  had not been  made.  If the
application of this Section 10.04(f) to any tender offer or exchange offer would
result in an increase in the Conversion  Price, no adjustment  shall be made for
such tender offer or exchange offer under this Section 10.04(f).

          (g) For purposes of this Section 10.04, the following terms shall have
     the meanings indicated:

               (1)  "Current  Market  Price" shall mean the average of the daily
          Closing  Prices  per  share of Common  Stock  for the ten  consecutive
          Trading  Days  immediately  prior to the date in  question;  provided,
          however, that if:

                    (i) the "ex"  date (as  hereinafter  defined)  for any event
               (other  than  the  issuance  or   distribution   requiring   such
               computation)  that requires an adjustment to the Conversion Price
               pursuant to Section  10.04(a),  (b),  (c), (d), (e) or (f) occurs
               during such ten  consecutive  Trading Days, the Closing Price for
               each  Trading  Day  prior to the "ex" date for such  other  event
               shall be adjusted by  multiplying  such Closing Price by the same
               fraction  by which  the  Conversion  Price is so  required  to be
               adjusted as a result of such other event;

                    (ii) the "ex" date for any event (other than the issuance or
               distribution   requiring  such   computation)  that  requires  an
               adjustment to the Conversion Price pursuant to Section  10.04(a),
               (b),  (c),  (d),  (e) or (f) occurs on or after the "ex" date for
               the issuance or distribution requiring such computation and prior
               to the day in question, the Closing Price for each Trading Day on
               and after the "ex" date for such other event shall be adjusted by
               multiplying  such Closing Price by the reciprocal of the fraction
               by which the Conversion  Price is so required to be adjusted as a
               result of such other event; and

                    (iii)  the  "ex"  date  for  the  issuance  or  distribution
               requiring such computation is prior to the day in question, after
               taking into account any  adjustment  required  pursuant to clause
               (i) or (ii) of this  proviso,  the Closing Price for each Trading
               Day on or after  such  "ex"  date  shall be  adjusted  by  adding
               thereto  the  amount  of any cash and the fair  market  value (as
               determined by the Board of Directors in a manner  consistent with
               any  determination of such value for purposes of Section 10.04(d)
               or (f), whose  determination shall be conclusive and set forth in
               a Board  Resolution) of the evidences of indebtedness,  shares of
               capital stock or assets being distributed applicable to one share
               of Common  Stock as of the close of  business  on the day  before
               such "ex" date.

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<PAGE>

For purposes of any computation under Section 10.04(f), the Current Market Price
of the Common  Stock on any date shall be deemed to be the  average of the daily
Closing  Prices  per  share  of  Common  Stock  for  such  day and the  next two
succeeding Trading Days; provided,  however, that if the "ex" date for any event
(other  than the tender  offer  requiring  such  computation)  that  requires an
adjustment to the Conversion Price pursuant to Section 10.04(a),  (b), (c), (d),
(e) or (f) occurs on or after the  Expiration  Time for the  tender or  exchange
offer requiring such  computation and prior to the day in question,  the Closing
Price for each Trading Day on and after the "ex" date for such other event shall
be adjusted by multiplying  such Closing Price by the reciprocal of the fraction
by which the Conversion  Price is so required to be adjusted as a result of such
other event. For purposes of this paragraph, the term "ex" date, when used:

          (A) with respect to any issuance or distribution, means the first date
     on which the Common Stock trades regular way on the relevant exchange or in
     the relevant  market from which the Closing Price was obtained  without the
     right to receive such issuance or distribution;

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

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

Notwithstanding the foregoing, whenever successive adjustments to the Conversion
Price are called for pursuant to this Section 10.04,  such adjustments  shall be
made  to the  Current  Market  Price  as  may be  necessary  or  appropriate  to
effectuate  the intent of this Section 10.04 and to avoid unjust or  inequitable
results as determined in good faith by the Board of Directors.

          (2) "fair market  value"  shall mean the amount which a willing  buyer
     would pay a willing seller in an arm's length transaction.

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

          (h) The Company may make such  reductions in the Conversion  Price, in
     addition to those required by Section 10.04(a),  (b), (c), (d), (e) or (f),
     as the Board of  Directors  considers  to be advisable to avoid or diminish
     any  income tax to holders  of Common  Stock or rights to  purchase  Common
     Stock  resulting from any dividend or  distribution  of stock (or rights to
     acquire stock) or from any event treated as such for income tax purposes.

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<PAGE>

     To the extent  permitted by  applicable  law, the Company from time to time
may  reduce  the  Conversion  Price by any  amount for any period of time if the
period is at least 20 days and the  reduction is  irrevocable  during the period
and the Board of Directors determines in good faith that such reduction would be
in the best interests of the Company,  which  determination  shall be conclusive
and set forth in a Board  Resolution.  Whenever the Conversion  Price is reduced
pursuant to the  preceding  sentence,  the Company shall mail to the Trustee and
each Holder at the address of such Holder as it appears in the Register a notice
of the reduction at least 15 days prior to the date the reduced Conversion Price
takes effect,  and such notice shall state the reduced  Conversion Price and the
period during which it will be in effect.

          (i) No adjustment  in the  Conversion  Price shall be required  unless
     such adjustment would require an increase or decrease of at least 1% in the
     Conversion Price then in effect;  provided,  however,  that any adjustments
     which by reason of this Section  10.04(i) are not required to be made shall
     be carried forward and taken into account in any subsequent adjustment. All
     calculations  under this  Article 10 shall be made by the Company and shall
     be made to the nearest cent or to the nearest one hundredth of a share,  as
     the case may be. No  adjustment  need be made for a change in the par value
     or no par value of the Common Stock.

          (j) In  any  case  in  which  this  Section  10.04  provides  that  an
     adjustment  shall become effective  immediately  after a Record Date for an
     event, the Company may defer until the occurrence of such event (i) issuing
     to the Holder of any Note  converted  after such Record Date and before the
     occurrence  of such event the  additional  shares of Common Stock  issuable
     upon such  conversion  by reason of the  adjustment  required by such event
     over and above the Common Stock issuable upon such conversion before giving
     effect to such adjustment and (ii) paying to such holder any amount in cash
     in lieu of any fraction pursuant to Section 10.03 hereof.

          (k) For purposes of this Section 10.04, the number of shares of Common
     Stock at any time outstanding shall not include shares held in the treasury
     of the  Company  but shall  include  shares  issuable  in  respect of scrip
     certificates  issued in lieu of  fractions of shares of Common  Stock.  The
     Company  will not pay any  dividend or make any  distribution  on shares of
     Common Stock held in the treasury of the Company.

          (l) If the  distribution  date for the rights  provided  in the Rights
     Plan occurs prior to the date a Note is  converted,  the Holder of the Note
     who  converts  such Note after the  distribution  date is not  entitled  to
     receive the rights that would  otherwise  be attached  (but for the date of
     conversion)  to the shares of Common Stock  received upon such  conversion;
     provided, however, that an adjustment shall be made to the Conversion Price
     pursuant to Section 10.04(b) as if the rights were being distributed to the
     common stockholders of the Company immediately prior to such conversion. If
     such an adjustment is made and the rights are later  redeemed,  invalidated
     or terminated,  then a corresponding  reversing adjustment shall be made to
     the Conversion Price, on an equitable basis, to take account of such event.

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<PAGE>

     SECTION  10.05 Notice of  Adjustments  of  Conversion  Price.  Whenever the
Conversion  Price is adjusted as herein  provided  (other than in the case of an
adjustment  pursuant to the second  paragraph of Section  10.04(h) for which the
notice required by such paragraph has been provided), the Company shall promptly
file with the  Trustee  and any  Conversion  Agent  other  than the  Trustee  an
Officers' Certificate setting forth the adjusted Conversion Price and showing in
reasonable detail the facts upon which such adjustment is based.  Promptly after
delivery  of such  Officers'  Certificate,  the Company  shall  prepare a notice
stating  that the  Conversion  Price has been  adjusted  and  setting  forth the
adjusted  Conversion  Price  and  the  date on  which  each  adjustment  becomes
effective,  and shall  mail such  notice to each  Holder at the  address of such
Holder as it appears in the  Register  within 20 days of the  effective  date of
such adjustment. Failure to deliver such notice shall not effect the legality or
validity of any such adjustment.

     SECTION  10.06 Notice Prior to Certain  Actions.  In case at any time after
the date hereof:

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

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

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

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

the Company shall cause to be filed at each office or agency  maintained for the
purpose of conversion of Notes pursuant to Section 4.05 hereof,  and shall cause
to be provided to the Trustee and all Holders in  accordance  with Section 12.02
hereof,  at least 20 days (or 10 days in any case specified in clause (1) or (2)
above) prior to the applicable record or effective date hereinafter specified, a
notice stating:

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<PAGE>

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

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

     Neither the failure to give such notice nor any defect therein shall affect
the legality or validity of the proceedings or actions  described in clauses (1)
through (4) of this Section 10.06.

     SECTION  10.07 Company to Reserve  Common  Stock.  The Company shall at all
times use its best efforts to reserve and keep  available,  free from preemptive
rights,  out of its  authorized  but unissued  Common Stock,  for the purpose of
effecting the  conversion of Notes,  the full number of shares of fully paid and
nonassessable  Common  Stock  then  issuable  upon the  conversion  of all Notes
outstanding.

     SECTION  10.08  Taxes  on  Conversions.  Except  as  provided  in the  next
sentence,  the Company  will pay any and all taxes  (other than taxes on income)
and duties  that may be payable in respect of the issue or delivery of shares of
Common Stock on conversion of Notes pursuant hereto. A Holder  delivering a Note
for  conversion  shall be liable for and will be required to pay any tax or duty
which may be  payable  in  respect  of any  transfer  involved  in the issue and
delivery  of shares of Common  Stock in a name  other than that of the Holder of
the Note or Notes to be converted,  and no such issue or delivery  shall be made
unless the Person  requesting  such issue has paid to the  Company the amount of
any such tax or duty, or has established to the satisfaction of the Company that
such tax or duty has been paid.

     SECTION 10.09 Covenant as to Common Stock.  The Company  covenants that all
shares of Common  Stock which may be issued upon  conversion  of Notes will upon
issue be fully paid and nonassessable  and, except as provided in Section 10.08,
the  Company  will pay all taxes,  liens and charges  with  respect to the issue
thereof.

     SECTION 10.10  Cancellation  of Converted  Notes.  All Notes  delivered for
conversion  shall  be  delivered  to the  Trustee  to be  canceled  by or at the
direction of the Trustee, which shall dispose of the same as provided in Section
2.10.

     SECTION 10.11 Effect of Reclassification, Consolidation, Merger or Sale. If
any of following events occur, namely:

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<PAGE>

          (1) any reclassification or change of the outstanding shares of Common
     Stock (other than a change in par value, or from par value to no par value,
     or from no par  value to par  value,  or as a result  of a  subdivision  or
     combination),

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

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

the Company or the  successor  or  purchasing  corporation,  as the case may be,
shall execute with the Trustee a supplemental indenture (which shall comply with
the TIA as in force at the date of execution of such  supplemental  indenture if
such  supplemental  indenture is then required to so comply) providing that such
Note shall be convertible  into the kind and amount of shares of stock and other
securities or property or assets  (including  cash) which such Holder would have
been   entitled  to  receive  upon  such   reclassification,   change,   merger,
consolidation,  statutory  share exchange,  combination,  sale or conveyance had
such  Notes  been  converted  into  Common  Stock   immediately  prior  to  such
reclassification,  change,  merger,  consolidation,  statutory  share  exchange,
combination,  sale or  conveyance  assuming  such holder of Common Stock did not
exercise its rights of election, if any, as to the kind or amount of securities,
cash or other property receivable upon such  reclassification,  change,  merger,
consolidation,   statutory  share  exchange,  combination,  sale  or  conveyance
(provided  that,  if the kind or amount of  securities,  cash or other  property
receivable upon such reclassification,  change, merger, consolidation, statutory
share exchange,  combination,  sale or conveyance is not the same for each share
of Common Stock in respect of which such rights of election  shall not have been
exercised  ("Non-Electing  Share"),  then for the purposes of this Section 10.11
the kind and amount of securities,  cash or other property  receivable upon such
reclassification,  change,  merger,  consolidation,  statutory  share  exchange,
combination,  sale or conveyance for each Non-Electing  Share shall be deemed to
be  the  kind  and  amount  so  receivable  per  share  by a  plurality  of  the
Non-Electing Shares). Such supplemental  indenture shall provide for adjustments
which shall be as nearly  equivalent as may be  practicable  to the  adjustments
provided for in this  Article 10. If, in the case of any such  reclassification,
change, merger,  consolidation,  statutory share exchange,  combination, sale or
conveyance,  the stock or other securities and assets receivable  thereupon by a
holder of shares of Common Stock  includes  shares of stock or other  securities
and assets of a corporation other than the successor or purchasing  corporation,
as the case may be, in such  reclassification,  change,  merger,  consolidation,
statutory  share   exchange,   combination,   sale  or  conveyance,   then  such
supplemental  indenture  shall also be  executed by such other  corporation  and
shall contain such additional provisions to protect the interests of the Holders
of the Notes as the Board of Directors shall  reasonably  consider  necessary by
reason of the  foregoing,  including to the extent  practicable  the  provisions
providing for the repurchase rights set forth in Section 3.10 hereof.

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<PAGE>

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

     The  above  provisions  of this  Section  10.11  shall  similarly  apply to
successive   reclassifications,   mergers,   consolidations,   statutory   share
exchanges, combinations, sales and conveyances.

     If this Section  10.11  applies to any event or  occurrence,  Section 10.04
hereof shall not apply.

     SECTION 10.12 Adjustment for Other Distributions.  If, after the Issue Date
of the  Securities,  the Company pays a dividend or makes a distribution  to all
holders of its Common Stock  consisting of Capital Stock of any class or series,
or similar  equity  interests,  of or relating to a Subsidiary or other business
unit of the Company,  the Conversion  Price shall be adjusted in accordance with
the formula:

                              P' = P x 1/(1 + F/M)

where:

     P' = the adjusted Conversion Price.

     P = the current Conversion Price.

     M = the average of the Post-Distribution Prices of the Common Stock for the
10 trading days commencing on and including the fifth trading day after the date
on which  "ex-dividend  trading"  commences for such dividend or distribution on
the principal  United States  exchange or market which such  securities are then
listed or quoted (the "Ex-Dividend Date").

     F = the fair market value of the securities  distributed in respect of each
share of Common Stock shall mean the number of securities distributed in respect
of each share of Common Stock multiplied by the average of the Post-Distribution
Prices of those securities distributed for the 10 trading days commencing on and
including the fifth trading day after the Ex-Dividend Date.

     "Post-Distribution  Price" of Capital Stock or any similar equity  interest
on any date means the closing per unit sale price (or, if no closing  sale price
is  reported,  the  average  of the bid and ask  prices  or, if more than one in
either case,  the average of the average bid and the average ask prices) on such
date for trading of such units on a "when  issued"  basis  without due bills (or
similar  concept) as reported in the  composite  transactions  for the principal
United  States  securities  exchange  or market on which such  Capital  Stock or
equity  interest is traded or, if the Capital Stock or equity  interest,  as the
case may be, is not listed on a United  States  national or regional  securities
exchange or market,  as  reported  by the  National  Association  of  Securities
Dealers  Automated   Quotation  System  or  by  the  National  Quotation  Bureau
Incorporated; provided that if on any date such units have not traded on a "when
issued" basis,  the  Post-Distribution  Price shall be the closing per unit sale
price (or, if no closing sale price is reported,  the average of the bid and ask
prices or, if more than one in either  case,  the average of the average bid and

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<PAGE>

the  average  ask  prices) on such date for  trading of such units on a "regular
way" basis  without due bills (or similar  concept) as reported in the composite
transactions for the principal United States  securities  exchange on which such
Capital  Stock or equity  interest is traded or, if the Capital  Stock or equity
interest,  as the case may be, is not  listed  on a United  States  national  or
regional  securities  exchange,  as  reported  by the  National  Association  of
Securities  Dealers  Automated  Quotation  System or by the  National  Quotation
Bureau  Incorporated.  In the absence of such  quotation,  the Company  shall be
entitled  to  determine  the  Post-Distribution  Price  on  the  basis  of  such
quotations,  which reflect the  post-distribution  value of the Capital Stock or
equity interests as it considers appropriate.

     SECTION 10.13  Responsibility  of Trustee for  Conversion  Provisions.  The
Trustee,  subject to the  provisions of Section 7.01 hereof,  and any Conversion
Agent shall not at any time be under any duty or responsibility to any Holder of
Notes to determine  whether any facts exist which may require any  adjustment of
the  Conversion  Price,  or with  respect  to the  nature  or intent of any such
adjustments when made, or with respect to the method  employed,  or herein or in
any supplemental  indenture provided to be employed, in making the same. Neither
the  Trustee,  subject  to the  provisions  of  Section  7.01  hereof,  nor  any
Conversion  Agent shall be accountable with respect to the validity or value (of
the kind or amount) of any Common Stock, or of any other securities or property,
which may at any time be issued or delivered  upon the  conversion  of any Note;
and it or they do not make any representation with respect thereto.  Neither the
Trustee,  subject to the  provisions of Section 7.01 hereof,  nor any Conversion
Agent  shall be  responsible  for any  failure  of the  Company to make any cash
payment  or to  issue,  transfer  or  deliver  any  shares  of  stock  or  share
certificates or other  securities or property upon the surrender of any Note for
the purpose of conversion; and the Trustee, subject to the provisions of Section
7.01 hereof, and any Conversion Agent shall not be responsible or liable for any
failure  of the  Company  to comply  with any of the  covenants  of the  Company
contained in this Article.

                                   ARTICLE 11

                                  SUBORDINATION

     SECTION 11.01 Agreement to Subordinate. The Company agrees, and each Holder
by  accepting  a  Note  agrees,  that  the  Indebtedness,   interest  and  other
obligations of any kind (including the obligation to pay any liquidated  damages
upon the occurrence of a Registration  Default)  evidenced by the Notes and this
Indenture are subordinated in right of payment,  to the extent and in the manner
provided  in this  Article  11,  to the  prior  payment  in full in cash or cash
equivalents of all Senior Indebtedness  (whether  outstanding on the date hereof
or  hereafter  created,   incurred,   assumed  or  guaranteed),   and  that  the
subordination is for the benefit of the holders of Senior Indebtedness.

     SECTION 11.02  Liquidation;  Dissolution;  Bankruptcy.  In the event of any
insolvency or bankruptcy case or proceeding,  or any receivership,  liquidation,
reorganization  or other similar case or  proceeding  in  connection  therewith,
relating to the Company or to its assets,  or any  liquidation,  dissolution  or
other  winding-up  of the  Company,  whether  voluntary or  involuntary,  or any
assignment  for the  benefit  of  creditors  or other  marshaling  of  assets or

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<PAGE>

liabilities  of the Company  (except in  connection  with the  consolidation  or
merger  of  the  Company  or  its  liquidation  or  dissolution   following  the
conveyance,  transfer or lease of its properties and assets  substantially  upon
the  terms and  conditions  described  in  Article  5),  the  holders  of Senior
Indebtedness  will  be  entitled  to  receive  payment  in  full in cash or cash
equivalents of all Senior Indebtedness,  before the Noteholders will be entitled
to receive any payment or distribution of any kind or character  (other than any
payment  or  distribution  in the  form of  equity  securities  or  subordinated
securities of the Company or any successor obligor that, in the case of any such
subordinated  securities,  are  subordinated  in right of  payment to all Senior
Indebtedness  that may at the time be outstanding to at least the same extent as
the Notes are so subordinated (such equity securities or subordinated securities
hereinafter being "Permitted Junior Securities")) on account of principal of, or
premium, if any, or additional  interest,  if any, or interest on the Notes; and
any payment or  distribution  of assets of the Company of any kind or character,
whether in cash, property or securities (other than a payment or distribution in
the form of Permitted Junior Securities),  by set-off or otherwise, to which the
Noteholders  or the Trustee  would be entitled  but for the  provisions  of this
Article 11 shall be paid by the  liquidating  trustee  or agent or other  person
making such payment or distribution, whether a trustee in bankruptcy, a receiver
or  liquidating  trustee  or  otherwise,  directly  to  the  holders  of  Senior
Indebtedness or their representative or representatives ratably according to the
aggregate amounts remaining unpaid on account of the Senior  Indebtedness to the
extent  necessary to make payment in full of all Senior  Indebtedness  remaining
unpaid,  after  giving  effect to any  current  payment or  distribution  to the
holders of such Senior Indebtedness.

     SECTION 11.03 Default on Designated Senior Indebtedness.  (a) No payment or
distribution  of any assets of the Company of any kind or character,  whether in
cash,  property or securities (other than Permitted Junior  Securities),  may be
made by or on behalf of the Company on account of principal of, premium, if any,
or  interest  on the Notes or on account of the  purchase,  redemption  or other
acquisition  of Notes upon the  occurrence  of any  Payment  Default  until such
Payment  Default shall have been cured or waived in writing or shall have ceased
to exist or such Designated  Senior  Indebtedness  shall have been discharged or
paid in full in cash or cash equivalents. "Payment Default" shall mean a default
in payment,  whether at  scheduled  maturity,  upon  scheduled  installment,  by
acceleration or otherwise,  of principal of, or premium,  if any, or interest on
Designated Senior Indebtedness beyond any applicable grace period.

     (b) No payment or  distribution of any assets of the Company of any kind or
character,  whether in cash, property or securities (other than Permitted Junior
Securities),  may be made by or on behalf of the Company on account of principal
of,  premium,  if any, or  interest on the Notes or on account of the  purchase,
redemption or other  acquisition of Notes during a Payment  Blockage  Period (as
defined  below),  upon the  occurrence  of any default or event of default  with
respect to any Designated Senior  Indebtedness other than any Payment Default on
such Designated Senior  Indebtedness  pursuant to which the maturity thereof may
be accelerated (a  "Non-Payment  Default") and receipt by the Trustee of written
notice thereof from the trustee or other representative of holders of Designated
Senior  Indebtedness,  or any default  with  respect to such  Designated  Senior
Indebtedness other than a Payment Default.

                                       70
<PAGE>

     The  Payment  Blockage  Period  shall  mean the  period  (each,  a "Payment
Blockage  Period") that will commence upon the date of receipt by the Trustee of
written notice from the trustee or such other  representative  of the holders of
the Designated Senior  Indebtedness in respect of which the Non-Payment  Default
exists and shall end on the earliest of:

          (i)  179  days   thereafter   provided  that  any  Designated   Senior
     Indebtedness as to which notice was given shall not  theretofore  have been
     accelerated;

          (ii) the date on which such  Non-Payment  Default is cured,  waived or
     ceases to exist;

          (iii)  the  date on  which  such  Designated  Senior  Indebtedness  is
     discharged or paid in full in cash or cash equivalents; or

          (iv) the date on which such  Payment  Blockage  Period shall have been
     terminated by written notice to the Trustee or the Company from the trustee
     or such other representative initiating such Payment Blockage Period,

after which the  Company  will resume  making any and all  required  payments in
respect of the Notes, including any missed payments. In any event, not more than
one  Payment  Blockage  Period  may  be  commenced  during  any  period  of  365
consecutive  days. No Non-Payment  Default that existed or was continuing on the
date of the commencement of any Payment Blockage Period will be, or can be made,
the basis for the commencement of a subsequent  Payment Blockage Period,  unless
such Non-Payment  Default has been cured or waived for a period of not less than
90  consecutive  days  subsequent to the  commencement  of such initial  Payment
Blockage Period.

     SECTION 11.04 Acceleration of Notes. If payment of the Notes is accelerated
because of an Event of Default,  the Company shall  promptly  notify  holders of
Senior Indebtedness of the acceleration.

     SECTION  11.05  When  Distribution  Must Be Paid Over.  In the event  that,
notwithstanding  the  provisions  of  Sections  11.02 and 11.03,  any payment or
distribution of any kind or character,  whether in cash, property or securities,
shall be received by the Trustee or any  Noteholder  which is prohibited by such
provisions,  then such  payment  shall be held in trust for the  benefit of, and
shall be paid over and delivered by such Trustee or  Noteholder  to, the trustee
or any other representative of holders of Senior Indebtedness, as their interest
may appear,  for application to Senior  Indebtedness  remaining unpaid until all
such Senior Indebtedness has been paid in full in cash or cash equivalents after
giving  effect to any  concurrent  distribution  to or for the holders of Senior
Indebtedness.

     With respect to the holders of Senior Indebtedness,  the Trustee undertakes
to perform only such  obligations on the part of the Trustee as are specifically
set forth in this  Article  11, and no implied  covenants  or  obligations  with
respect to the holders of Senior  Indebtedness shall be read into this Indenture
against the Trustee.  The Trustee shall not be deemed to owe any fiduciary  duty
to the  holders  of  Senior  Indebtedness,  and  shall not be liable to any such

                                       71
<PAGE>

holders  if the  Trustee  shall  pay  over  or  distribute  to or on  behalf  of
Noteholders  or the  Company  or any other  Person  money or assets to which any
holders of Senior  Indebtedness  shall be entitled by virtue of this Article 11,
except if such  payment is made as a result of the willful  misconduct  or gross
negligence of the Trustee.

     SECTION 11.06 Notice by the Company.  The Company shall promptly notify the
Trustee and the Paying  Agent of any facts known to the Company that would cause
a payment of any  obligations  with respect to the Notes to violate this Article
11, but failure to give such notice  shall not affect the  subordination  of the
Notes to the Senior Indebtedness as provided in this Article 11.

     SECTION 11.07  Subrogation.  After all Senior  Indebtedness is paid in full
and until the Notes are paid in full,  Noteholders shall be subrogated  (equally
and ratably with all other Indebtedness that is equal in right of payment to the
Notes) to the rights of holders of Senior Indebtedness to receive  distributions
applicable to Senior  Indebtedness  to the extent that  distributions  otherwise
payable  to  the  Noteholders  have  been  applied  to  the  payment  of  Senior
Indebtedness.  A  distribution  made under this  Article 11 to holders of Senior
Indebtedness  that  otherwise  would have been made to  Noteholders  is not,  as
between the Company and Noteholders, a payment by the Company of the Notes.

     SECTION 11.08 Relative Rights.  This Article 11 defines the relative rights
of Holders and holders of Senior Indebtedness.  Nothing in this Indenture shall:
(i) impair,  as between the Company and Holders,  the obligation of the Company,
which is absolute  and  unconditional,  to pay  principal of and interest on the
Notes in accordance with their terms; (ii) affect the relative rights of Holders
and  creditors  of  Holdings  other than their  rights in relation to holders of
Senior Indebtedness;  or (iii) prevent the Trustee or any Holder from exercising
its available remedies upon a Default or Event of Default, subject to the rights
of  holders  and owners of Senior  Indebtedness  to  receive  distributions  and
payments  otherwise payable to Holders of Notes. If the Company fails because of
this Article 11 to pay principal of or interest on a Note on the Stated Maturity
date, the failure is still a Default or Event of Default.

     SECTION 11.09 Subordination May Not Be Impaired by the Company. No right of
any  holder  of  Senior   Indebtedness  to  enforce  the  subordination  of  the
Indebtedness  evidenced  by the Notes shall be impaired by any act or failure to
act by the  Company or any Holder or by the failure of the Company or any Holder
to comply with this Indenture.

     Without in any way  limiting the  generality  of this  Section  11.09,  the
holders of Senior  Indebtedness may, at any time and from time to time,  without
the  consent  of or notice to the  Trustee  or the  Holders,  without  incurring
responsibility  to the Trustee or the Holders and without impairing or releasing
the  subordination  provided in this Article 11 or the obligations  hereunder of
the  Holders to the  holders of Senior  Indebtedness,  do any one or more of the
following:  (a) change the manner,  place or terms of payment or extend the time
of  payment  of,  or renew  or  alter,  Senior  Indebtedness  or any  instrument
evidencing  the  same  or any  agreement  under  which  Senior  Indebtedness  is
outstanding  or  secured;  (b) sell,  exchange,  release,  foreclose  against or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness;  (c) release any Person liable in any manner for the collection of
Senior  Indebtedness;  and (d)  exercise or refrain from  exercising  any rights
against the Company, and Subsidiary thereof or any other Person.

                                       72
<PAGE>

     SECTION  11.10  Distribution  or  Notice  to  Representative.   Whenever  a
distribution  is to  be  made  or a  notice  given  to  holders  of  any  Senior
Indebtedness, the distribution may be made and the notice given to their trustee
or representative.

     Upon any payment or  distribution  of assets of the Company  referred to in
this  Article 11, the Trustee and the Holders of Notes shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such  representative(s) or of the liquidating trustee or agent or
other Person  making any  distribution  to the Trustee or to the Holders for the
purpose  of   ascertaining   the  Persons   entitled  to   participate  in  such
distribution,  all holders of the Senior  Indebtedness and other Indebtedness of
the Company,  the amount thereof or payable thereon,  the amount or amounts paid
or distributed  thereon and all other facts pertinent thereto or to this Article
11.

     SECTION  11.11  Rights of Trustee  and Paying  Agent.  Notwithstanding  the
provisions  of this  Article 11 or any other  provision of this  Indenture,  the
Trustee  shall not be charged with  knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Trustee, and the
Trustee and the Paying Agent may continue to make payments on the Notes,  unless
a Responsible  Officer of the Trustee shall have received at its Corporate Trust
Office at least three  Business  Days prior to the date of such payment  written
notice of facts that would cause the payment of any obligations  with respect to
the Notes to violate this Article 11. Only the Company or its representative may
give such  notice.  Nothing in this  Article  11 shall  impair the claims of, or
payments to, the Trustee under or pursuant to Section 7.06.

     The  Trustee  in its  individual  or any  other  capacity  may hold  Senior
Indebtedness with the same rights it would have if it were not Trustee.

                                   ARTICLE 12

                                  MISCELLANEOUS

     SECTION  12.01 Trust  Indenture  Act  Controls.  If any  provision  of this
Indenture  limits,  qualifies,  or  conflicts  with another  provision  which is
required to be included in this  Indenture by the TIA,  the  required  provision
shall control.

     SECTION 12.02 Notices. Any request, demand, authorization,  notice, waiver,
consent or  communication  shall be in writing and delivered in person or mailed
by first-class  mail,  postage  prepaid,  addressed as follows or transmitted by
facsimile  transmission  (confirmed  by  guaranteed  overnight  courier)  to the
following facsimile numbers:

                                       73
<PAGE>

     if to the Company:

                  The Profit Recovery Group International, Inc.
                  2300 Windy Ridge Parkway
                  Suite 100 North
                  Atlanta, GA 30339-8426
                  Attention:  Clinton McKellar, Jr., Esq.
                  Telephone No.:  (770) 779-3900
                  Facsimile No.:  (770) 779-3133

     if to the Trustee:

                  SunTrust Bank
                  25 Park Place, 24th Floor
                  **Atlanta, Georgia 30303
                  Attention:  Corporate Trust Division
                  Telephone No.:  (404) 588-7591
                  Facsimile No.:  (404) 588-7335

     The  Company  or the  Trustee  by notice  given to the other in the  manner
provided  above may designate  additional or different  addresses for subsequent
notices or communications.

     Any notice or  communication  given to a Noteholder  shall be mailed to the
Noteholder, by first-class mail, postage prepaid, at the Noteholder's address as
it appears on the registration  books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.

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

     If the Company mails a notice or communication to the Noteholders, it shall
mail a copy to the Trustee and each Registrar, Paying Agent, Conversion Agent or
co-registrar.

     SECTION 12.03 Communication by Holders with Other Holders.  Noteholders may
communicate  pursuant to TIA Section 312(b) with other  Noteholders with respect
to their rights under this Indenture or the Notes. The Company, the Trustee, the
Registrar, the Paying Agent, the Conversion Agent and anyone else shall have the
protection of TIA Section 312(c).

     SECTION 12.04 Certificate and Opinion as to Conditions Precedent.  Upon any
request or  application  by the Company to the Trustee to take any action  under
this Indenture, the Company shall furnish to the Trustee:

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

                                       74
<PAGE>

          (2) an  Opinion  of  Counsel  stating  that,  in the  opinion  of such
     counsel, all such conditions precedent have been complied with.

     SECTION 12.05 Statements Required in Certificate or Opinion. Each Officers'
Certificate or Opinion of Counsel with respect to compliance  with a covenant or
condition provided for in this Indenture shall include:

          (1) a statement that each person making such Officers'  Certificate or
     Opinion of Counsel has read such covenant or condition;

          (2) a brief statement as to the nature and scope of the examination or
     investigation  upon which the  statements  or  opinions  contained  in such
     Officers' Certificate or Opinion of Counsel are based;

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

          (4) a statement that, in the opinion of such person,  such covenant or
     condition has been complied with.

     SECTION 12.06 Separability  Clause. In case any provision in this Indenture
or in the Notes  shall be  invalid,  illegal  or  unenforceable,  the  validity,
legality and enforceability of the remaining  provisions shall not in any way be
affected or impaired thereby.

     SECTION  12.07  Rules  by  Trustee,  Paying  Agent,  Conversion  Agent  and
Registrar.  The Trustee may make reasonable  rules for action by or a meeting of
Noteholders.  The  Registrar,  Conversion  Agent and the  Paying  Agent may make
reasonable rules for their functions.

     SECTION  12.08 Legal  Holidays.  A "Legal  Holiday" is any day other than a
Business  Day. If any  specified  date  (including  a date for giving  notice or
making a payment or a purchase) is a Legal Holiday, the action shall be taken on
the next  succeeding day that is not a Legal  Holiday,  and, if the action to be
taken on such date is a payment in respect of the Notes,  no  interest,  if any,
shall accrue for the intervening period.

     SECTION 12.09  GOVERNING LAW. THIS INDENTURE AND THE NOTES WILL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     SECTION 12.10 No Recourse Against Others. A director,  officer, employee or
stockholder,  as such,  of the  Company  shall  not have any  liability  for any
obligations  of the Company  under the Notes or this  Indenture or for any claim
based on, in respect of or by reason of such  obligations or their creation.  By
accepting a Note,  each  Noteholder  shall waive and release all such liability.
The waiver and release shall be part of the  consideration  for the issue of the
Notes.

                                       75
<PAGE>

     SECTION 12.11  Successors.  All agreements of the Company in this Indenture
and the Notes shall bind its  successor.  All  agreements of the Trustee in this
Indenture shall bind its successor.

     SECTION 12.12 Multiple Originals. The parties may sign any number of copies
of this  Indenture.  Each  signed  copy  shall be an  original,  but all of them
together  represent the same agreement.  One signed copy is enough to prove this
Indenture.

                                       76
<PAGE>

     IN WITNESS WHEREOF, the undersigned,  being duly authorized,  have executed
this Indenture on behalf of the  respective  parties hereto as of the date first
above written.

                                THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.

                                By:   /s/ John M. Cook
                                      ----------------------------------------
                                Name:  John M. Cook
                                Title: Chief Executive Officer

                                SUNTRUST BANK,
                                as Trustee

                                By:   /s/ George Hogan
                                      ----------------------------------------
                                Name:  George Hogan
                                Title: Vice President

<PAGE>

                                   EXHIBIT A-1

                          [FORM OF FACE OF GLOBAL NOTE]

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

     TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO  TRANSFERS IN WHOLE,  BUT
NOT IN PART,  TO NOMINEES OF THE  DEPOSITORY  TRUST  COMPANY,  OR TO A SUCCESSOR
THEREOF OR SUCH  SUCCESSOR'S  NOMINEE AND  TRANSFERS  OF PORTIONS OF THIS GLOBAL
NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE  RESTRICTIONS SET
FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

     THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT"), OR ANY STATE  SECURITIES LAWS.
NEITHER THIS NOTE NOR ANY  INTEREST OR  PARTICIPATION  HEREIN MAY BE  REOFFERED,
SOLD,  ASSIGNED,  TRANSFERRED,  PLEDGED,  ENCUMBERED  TRANSFERRED  OR  OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH  REGISTRATION  OR UNLESS SUCH  TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION  REQUIREMENTS OF THE SECURITIES
ACT.

     BY  ACQUISITION  HEREOF,  THE  HOLDER  (1)  REPRESENTS  THAT  IT  IS  (A) A
"QUALIFIED  INSTITUTIONAL  BUYER" (AS DEFINED IN RULE 144A UNDER THE  SECURITIES
ACT)  OR (B) AN  INSTITUTIONAL  "ACCREDITED  INVESTOR"  WITHIN  THE  MEANING  OF
SUBPARAGRAPHS  (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT
IS  ACQUIRING  THIS  NOTE  FOR ITS OWN  ACCOUNT  OR FOR THE  ACCOUNT  OF SUCH AN
INSTITUTIONAL  ACCREDITED  INVESTOR FOR INVESTMENT  PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION  WITH, ANY  DISTRIBUTION  IN VIOLATION OF
THE  SECURITIES  ACT;  (2) AGREES THAT IT WILL NOT PRIOR TO THE DATE THAT IS TWO
YEARS (OR SUCH  SHORTER  PERIOD OF TIME AS  PERMITTED  BY RULE 144(k)  UNDER THE
SECURITIES  ACT) AFTER THE LATER OF THE INITIAL  ISSUANCE OF THE NOTE  EVIDENCED
HEREBY AND THE LAST DATE ON WHICH THE PROFIT RECOVERY GROUP INTERNATIONAL,  INC,
(THE  "COMPANY") OR ANY "AFFILIATE" (AS DEFINED IN RULE 144 UNDER THE SECURITIES
ACT) OF THE  COMPANY  WAS THE  OWNER OF THE NOTE (THE  "RESTRICTION  TERMINATION
DATE")  RESELL OR  OTHERWISE  TRANSFER THE NOTE  EVIDENCED  HEREBY OR THE COMMON
STOCK  ISSUED  UPON  CONVERSION  OF SUCH NOTE  EXCEPT (A) TO THE  COMPANY OR ANY
SUBSIDIARY  THEREOF,  (B) FOR SO LONG  AS THE  NOTES  ARE  ELIGIBLE  FOR  RESALE
PURSUANT  TO RULE  144A,  TO A PERSON  IT  REASONABLY  BELIEVES  IS A  QUALIFIED
INSTITUTIONAL  BUYER THAT  PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A,  (C) TO AN  INSTITUTIONAL  "ACCREDITED  INVESTOR"

                                      A-1-1
<PAGE>

WITHIN THE MEANING OF  SUBPARAGRAPHS  (a)(1),  (2), (3) OR (7) OF RULE 501 UNDER
THE SECURITIES ACT THAT IS ACQUIRING A MINIMUM OF $100,000  AGGREGATE  PRINCIPAL
AMOUNT  OF THE  NOTES  FOR  ITS  OWN  ACCOUNT  OR FOR  THE  ACCOUNT  OF  SUCH AN
INSTITUTIONAL  ACCREDITED  INVESTOR FOR INVESTMENT  PURPOSES AND NOT WITH A VIEW
TO, OR FOR OFFER OR SALE IN CONNECTION  WITH, ANY  DISTRIBUTION  IN VIOLATION OF
THE  SECURITIES   ACT,  (D)  PURSUANT  TO  ANOTHER   AVAILABLE   EXEMPTION  FROM
REGISTRATION  PROVIDED UNDER THE SECURITIES ACT (IF AVAILABLE),  OR (E) PURSUANT
TO A  REGISTRATION  STATEMENT  WHICH  HAS  BEEN  DECLARED  EFFECTIVE  UNDER  THE
SECURITIES  ACT  (AND  WHICH  CONTINUES  TO BE  EFFECTIVE  AT THE  TIME  OF SUCH
TRANSFER);  AND (3) AGREES THAT IT WILL  DELIVER TO EACH PERSON TO WHOM THE NOTE
EVIDENCED HEREBY IS TRANSFERRED  (OTHER THAN A TRANSFER  PURSUANT TO CLAUSE 2(E)
ABOVE) A NOTICE  SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  IN CONNECTION WITH
ANY TRANSFER OF THE NOTE  EVIDENCED  HEREBY BEFORE THE  RESTRICTION  TERMINATION
DATE (OTHER THAN A TRANSFER  PURSUANT  TO CLAUSE  2(E)  ABOVE),  THE HOLDER MUST
CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER
OF SUCH  TRANSFER  AND SUBMIT  THIS NOTE TO  SUNTRUST  BANK,  AS  TRUSTEE  (OR A
SUCCESSOR  TRUSTEE,  AS  APPLICABLE).  THE HOLDER MUST,  PRIOR TO SUCH  TRANSFER
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(E) ABOVE), FURNISH TO SUNTRUST BANK,
AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE),  SUCH CERTIFICATIONS,  LEGAL
OPINIONS OR OTHER  INFORMATION AS THE COMPANY MAY REASONABLY  REQUIRE TO CONFIRM
THAT  SUCH  TRANSFER  IS BEING  MADE  PURSUANT  TO AN  EXEMPTION  FROM,  OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THIS  LEGEND WILL BE REMOVED  UPON ANY  TRANSFER  OF THE NOTE  EVIDENCED  HEREBY
PURSUANT TO CLAUSE 2(E) ABOVE OR UPON OR AFTER THE RESTRICTION TERMINATION DATE.

                                     A-1-2
<PAGE>

                  THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
                  43/4% Convertible Subordinated Notes due 2006

                                                             CUSIP NO. 743168AA4

     No.: 1

     Issue Date: November 26, 2001

     THE  PROFIT  RECOVERY  GROUP  INTERNATIONAL,  INC.  a Georgia  corporation,
promises  to pay to Cede & Co.  or  registered  assigns,  the  principal  sum of
[_______________] DOLLARS ($[_____________]) on November 26, 2006.

     This Note shall bear  interest as specified on the other side of this Note.
This Note is convertible as specified on the other side of this Note.

     Additional  provisions of this Note are set forth on the other side of this
Note.

Dated:  November 26, 2001         THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.

                                  By: ___________________________________
                                  Name:
                                  Title:

[SEAL]

Attest:

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

TRUSTEE'S CERTIFICATE OF
AUTHENTICATION

SunTrust Bank,
as Trustee, certifies that this
is one of the Notes referred to
in the within-mentioned Indenture (as
defined on the other side of this Note).

By_____________________________
     Authorized Signatory

Dated: ________________________

                                     A-1-3
<PAGE>

                         [FORM OF REVERSE SIDE OF NOTE]

                  43/4% Convertible Subordinated Note due 2006

     Capitalized  terms used  herein  but not  defined  shall have the  meanings
assigned to them in the Indenture unless otherwise indicated.

1.   Cash Interest.

     The Company  promises to pay interest at the  Interest  Rate in cash on the
principal amount of this Note. The Company will pay cash interest  semi-annually
in arrears on May 26 and  November  26 of each year (each an  "Interest  Payment
Date"), beginning on May 26, 2002, to Holders of record at the close of business
on the  preceding  May 11 or November 11 (whether or not a business day) (each a
"Regular Record Date"), as the case may be, immediately  preceding such Interest
Payment  Date.  Cash interest on the Notes will accrue from the most recent date
to which  interest  has been paid or duly  provided  or, if no interest has been
paid,  from the Issue  Date.  Cash  interest  will be computed on the basis of a
360-day year of twelve  30-day  months.  The Company  shall pay cash interest on
overdue  principal,  or if shares of Common Stock (or cash in lieu of fractional
shares) in respect of a conversion of this Note in accordance  with the terms of
Article 10 of the Indenture are not delivered when due, at the rate borne by the
Notes,  and it  shall  pay  interest  in cash on  overdue  installments  of cash
interest at the same rate to the extent  lawful.  All such overdue cash interest
shall be payable on demand.

     In accordance with the terms of the Registration  Rights Agreement,  during
the  first  90  days  following  a  Registration  Default  (as  defined  in  the
Registration  Rights  Agreement),  the Interest Rate borne by the Notes shall be
increased by 0.25% on:

     (A)  the 61st day after the  earliest  date of original  issuance of any of
          the Notes, if the Shelf  Registration  Statement is not filed with the
          SEC; or

     (B)  the 151st day following the earliest date of original  issuance of any
          of the Notes,  if the Shelf  Registration  Statement  is not  declared
          effective; or

     (C)  the day  after  the fifth  business  day after the Shelf  Registration
          Statement,  previously declared  effective,  ceases to be effective or
          fails to be usable,  if a  post-effective  amendment  (or report filed
          with the Exchange Act) that cures the Shelf Registration  Statement is
          not filed during such five Business Day period; or

     (D)  the day after the 45th or 90th day,  as the case may be, of any period
          that the prospectus contained in the Shelf Registration  Statement has
          been suspended, if such suspension has not been terminated.

From and after the 91st day following such  Registration  Default,  the Interest
Rate  borne by the Notes  shall be  increased  by 0.50%.  In no event  shall the
Interest Rate borne by the Notes be increased by more than 0.50%

                                       A-1-4
<PAGE>

     Any amount of additional interest will be payable in cash semi-annually, in
arrears,  on each Interest Payment Date and will cease to accrue on the date the
Registration  Default is cured.  The Holder of this  Security is entitled to the
benefits of the Registration Rights Agreement.

2.   Method of Payment.

     Subject to the terms and conditions of the Indenture, the Company will make
payments in respect of the principal of,  premium,  if any, and cash interest on
this Note and in respect of Redemption  Prices and Change in Control  Repurchase
Prices to Holders who surrender Notes to a Paying Agent to collect such payments
in respect  of the  Notes.  The  Company  will pay cash  amounts in money of the
United  States that at the time of payment is legal tender for payment of public
and private  debts.  However,  the Company may make such cash  payments by check
payable in such money. A Holder with an aggregate  principal  amount of Notes in
excess of  $5,000,000  will be paid by wire  transfer in  immediately  available
funds at the written  election of such Holder  received by the Paying  Agent and
containing all relevant  information  necessary to make such wire transfer.  Any
such  election  shall  remain  in full  force and  effect  unless  rescinded  or
otherwise  modified in writing.  Any payment required to be made on any day that
is not a Business Day will be made on the next succeeding Business Day.

3.   Paying Agent, Conversion Agent and Registrar.

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

4.   Indenture.

     The Company  issued the Notes under an  Indenture  dated as of November 26,
2001 (the  Indenture"),  between the Company and the  Trustee.  The terms of the
Notes include those stated in the Indenture and those made part of the Indenture
by reference to the Trust  Indenture Act of 1939, as amended,  as in effect from
time to time (the "TIA").  Capitalized  terms used herein and not defined herein
have the meanings  ascribed  thereto in the Indenture.  The Notes are subject to
all such terms,  and Noteholders are referred to the Indenture and the TIA for a
statement of those terms.

     The  Notes are  general  unsecured  obligations  of the  Company  initially
limited to $110,000,000  aggregate  principal amount (subject to Section 2.07 of
the  Indenture  and the  Issuer's  right to reopen the series of Notes  pursuant
Section 2.02 of the Indenture).  The Indenture does not limit other indebtedness
of the Company, secured or unsecured.

                                      A-1-5
<PAGE>

5.   Optional Redemption.

     This Note is not  redeemable  prior to November 26, 2004.  This Note may be
redeemed  in  whole or in part,  upon  not  less  than 30 nor more  than 60 days
notice,  at any time and from  time to time on or after  November  26,  2004 and
prior to Stated Maturity,  at the option of the Company, at the redemption price
of $1,000 per $1,000 principal amount of Notes plus any interest accrued but not
paid prior to (but not including) the Optional  Redemption  Date, if the Closing
Price of the Common Stock has exceeded 140% of the Conversion  Price (as defined
in the  Indenture  and as such may be adjusted from time to time) then in effect
for at least 20 Trading Days in any  consecutive 30 Trading Day period ending on
the  Trading  Day  prior  to the  date of  mailing  of the  notice  of  optional
redemption pursuant to Section 3.05 of the Indenture.

     If fewer than all the Notes are to be  redeemed,  the Trustee  shall select
the particular Notes to be redeemed from the outstanding Notes by the methods as
provided  in the  Indenture.  If any Note  selected  for partial  redemption  is
converted in part before termination of the conversion right with respect to the
portion of the Note so  selected,  the  converted  portion of such Note shall be
deemed to be the portion selected for redemption  (provided,  however,  that the
Holder of such Note so converted  and deemed  redeemed  shall not be entitled to
any additional  interest payment as a result of such deemed redemption than such
Holder would have  otherwise  been  entitled to receive upon  conversion of such
Note).  Notes  which  have  been  converted  during a  selection  of Notes to be
redeemed  may be treated by the Trustee as  outstanding  for the purpose of such
selection.

     On and after the  Redemption  Date,  interest  ceases to accrue on Notes or
portions of Notes  called for  redemption,  unless the  Company  defaults in the
payment of the Redemption Price and accrued and unpaid interest.

     Notice  of  redemption  will be  given by the  Company  to the  Holders  as
provided in the Indenture.

     No sinking fund is provided for the Notes.

6.   Repurchase by the Company at the Option of the Holder.

     If a Change in Control occurs,  the Holder,  at the Holder's option,  shall
have the right, in accordance  with the provisions of the Indenture,  to require
the  Company to  repurchase  the Notes (or any portion of the  principal  amount
hereof that is at least $1,000 or an integral  multiple  thereof,  provided that
the portion of the principal  amount of this Note to be  outstanding  after such
repurchase  is at least  equal to $1,000)  at the  Change in Control  Repurchase
Price  in cash or  Common  Stock or a  combination  thereof,  plus any  interest
accrued and unpaid to, but excluding, the Change in Control Repurchase Date.

     Subject to the conditions provided in the Indenture,  the Company may elect
to pay the Change in Control  Repurchase  Price (to the extent not paid in cash)
by  delivering  a number of shares of Common  Stock  equal to (i) the  Change in
Control  Repurchase  Price  divided by (ii) 95% of the  average  of the  Closing
Prices per share for the five consecutive Trading Days immediately preceding and
including the third Trading Day prior to the Change in Control Repurchase Date.

                                     A-1-6
<PAGE>

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

     A Change in Control  Repurchase  Notice will be given by the Company to the
Holders as provided in the Indenture.  To exercise a repurchase  right, a Holder
must deliver to the Trustee a written notice as provided in the Indenture.

     Holders have the right to withdraw any Change in Control  Repurchase Notice
by delivering  to the Paying Agent a written  notice of withdrawal in accordance
with the provisions of the Indenture.

7.   Notice of Redemption.

     Notice of an  optional  redemption  will be mailed at least 30 days but not
more  than 60 days  before  the  Redemption  Date to each  Holder of Notes to be
redeemed at the Holder's  registered  address.  If money  sufficient  to pay the
Redemption  Price of all Notes  (or  portions  thereof)  to be  redeemed  on the
Redemption Date is deposited with the Paying Agent prior to or on the Redemption
Date,  immediately  after such Redemption Date interest ceases to accrue on such
Notes or  portions  thereof.  Notes  in  denominations  larger  than  $1,000  of
principal  amount may be  redeemed  in part but only in  integral  multiples  of
$1,000 of principal amount.

8.   Conversion.

     Subject  to the  next two  succeeding  sentences,  a  Holder  of a Note may
convert it into  Common  Stock of the  Company  at any time  before the close of
business on November 26, 2006. If the Note is called for redemption,  the Holder
may  convert it at any time before the close of  business  on the  Business  Day
preceding the Redemption Date. A Note in respect of which a Holder has delivered
a Change in Control  Repurchase  Notice  exercising the option of such Holder to
require the Company to purchase  such Note may be converted  only if such notice
of exercise is withdrawn in accordance with the terms of the Indenture.

     The  initial  Conversion  Price shall be equal to $7.74 per share of Common
Stock,  subject to adjustment in certain events described in the Indenture.  The
Company shall pay a cash  adjustment as provided in the Indenture in lieu of any
fractional share of Common Stock.

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

9.   Conversion Arrangement on Call for Redemption.

     Any Notes called for redemption,  unless  surrendered for conversion before
the close of business on the Business Day preceding the Redemption  Date, may be
deemed to be purchased from the Holders of such Notes at an amount not less than
the Redemption Price, by one or more investment  bankers or other purchasers who

                                     A-1-7
<PAGE>
may agree with the Company to purchase  such Notes from the Holders,  to convert
them into Common  Stock of the Company and to make payment for such Notes to the
Trustee in trust for such Holders.

10.  Denominations; Transfer; Exchange.

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

11.  Persons Deemed Owners.

     The registered Holder of this Note may be treated as the owner of this Note
for all purposes.

12.  Unclaimed Money or Notes.

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

13.  Amendment; Waiver.

     Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Notes may be amended with the written  consent of the Holders of at least
a majority in aggregate  principal  amount of the Notes at the time  outstanding
and (ii) certain  Defaults may be waived with the written consent of the Holders
of  a  majority  in  aggregate  principal  amount  of  the  Notes  at  the  time
outstanding.  Subject to certain exceptions set forth in the Indenture,  without
the  consent  of any  Noteholder,  the  Company  and the  Trustee  may amend the
Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency,
or to comply with  Article 5 of the  Indenture,  to provide  for  uncertificated
Notes in  addition  to or in place of  certificated  Notes or to make any change
that does not adversely  affect the rights of any Noteholder,  or to comply with
any requirement of the SEC in connection with the qualification of the Indenture
under the TIA.

14.  Defaults and Remedies.

     Under the Indenture, Events of Default include (1) the Company fails to pay
when due the  principal of or premium,  if any, on any of the Notes at maturity,
upon redemption or exercise of a repurchase  right or otherwise,  whether or not
such payment is prohibited by Article 11 of the Indenture; (2) the Company fails

                                     A-1-8
<PAGE>

to pay an installment of interest (including  liquidated damages, if any) on any
of the Notes that continues for 30 days after the date when due,  whether or not
such payment is prohibited by Article 11 of the Indenture; (3) the Company fails
to deliver  shares of Common  Stock,  together  with cash in lieu of  fractional
shares,  when such Common Stock or cash in lieu of fractional shares is required
to be delivered upon conversion of a Note and such failure continues for 10 days
after such delivery  date; (4) the Company fails to perform or observe any other
term, covenant or agreement contained in the Notes or the Indenture for a period
of 30 days after written notice of such failure, requiring the Company to remedy
the same,  shall have been given to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in aggregate  principal amount of
the Notes then  outstanding;  (5) the Company fails to give or cause the Trustee
to give all  Noteholders  notice of the  occurrence  of a Change in  Control  in
accordance with the provisions of Section 3.10(c) of the Indenture;  (6) (A) one
or more  defaults in the payment of principal  of or premium,  if any, on any of
the Company's Indebtedness aggregating $5,000,000 or more, when the same becomes
due and payable at the scheduled maturity thereof,  and such default or defaults
shall have continued  after any applicable  grace period and shall not have been
cured or waived within a 30-day period after the date of such default or (B) any
of the  Company's  Indebtedness  aggregating  $5,000,000 or more shall have been
accelerated or otherwise declared due and payable,  or required to be prepaid or
repurchased (other than by regularly scheduled required prepayment) prior to the
scheduled  maturity  thereof and such  acceleration is not rescinded or annulled
within  a  30-day  period  after  the  date  of  such  acceleration;  and (7) if
unsatisfied  judgements  not  covered  by  insurance  aggregating  in  excess of
$5,000,000 rendered against the Company or any of its Affiliates and not stayed,
bonded or  discharged  within 60 days;  and (8)  certain  events of  bankruptcy,
insolvency  or  reorganization  with  respect to the Company or any  Significant
Subsidiary  or any  Subsidiaries  of the Company  which in the  aggregate  would
constitute a Significant Subsidiary. If an Event of Default (other than an Event
of Default  specified  in clause (8) or (9) of  Section  6.01 of the  Indenture)
occurs  and is  continuing,  the  Trustee,  or the  Holders  of at least  25% in
aggregate principal amount of the Notes at the time outstanding, may declare all
the Notes to be due and payable  immediately.  Certain  events of  bankruptcy or
insolvency are Events of Default which will result in the Notes becoming due and
payable immediately upon the occurrence of such Events of Default.

     Noteholders  may not enforce the  Indenture or the Notes except as provided
in the  Indenture.  The Trustee may refuse to enforce the Indenture or the Notes
unless  it  receives  reasonable  indemnity  or  security.  Subject  to  certain
limitations, Holders of a majority in aggregate principal amount of the Notes at
the time  outstanding  may direct the  Trustee in its  exercise  of any trust or
power.  The Trustee  may  withhold  from  Noteholders  notice of any  continuing
Default  (except a Default in payment of amounts  specified in clause (1) or (2)
above) if it determines that withholding notice is in their interests.

15.  Subordination

     The payment of  principal  of,  premium,  if any, and interest on the Notes
will be subordinated in right of payment, as set forth in the Indenture,  to the
prior  payment in full in cash or cash  equivalents  of all Senior  Indebtedness
whether outstanding on the date of the Indenture or thereafter incurred.

                                     A-1-9
<PAGE>

16.  Trustee Dealings with the Company.

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

17.  No Recourse Against Others.

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

18.  Authentication.

     This Note shall not be valid until an  authorized  signatory of the Trustee
manually signs the Trustee's  Certificate of Authentication on the other side of
this Note.

19.  Abbreviations.

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

20.  GOVERNING LAW.

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

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

     The Company will furnish to any Noteholder upon written request and without
charge a copy of the  Indenture  which has in it the text of this Note in larger
type. Requests may be made to:

                  The Profit Recovery Group International, Inc.
                  2300 Windy Ridge Parkway
                  Suite 100 North
                  Atlanta, Georgia 30339-8426
                  Attention:  Chief Financial Officer

                                     A-1-10
<PAGE>

<TABLE>
<CAPTION>
<S>                                                              <C>

ASSIGNMENT FORM                                                  CONVERSION NOTICE

To assign this Note, fill in the form below:                     To convert this Note into Common Stock of the
                                                                 Company, check the box:

I or we assign and transfer this Note to                                        [  ]

------------------------------------------------------------     To convert only part of this Note, state the
                                                                 principal amount to be converted (which must be
                                                                 $1,000 or an integral multiple of $1,000):
------------------------------------------------------------
(Insert assignee's social sec. or tax ID no.)

                                                                 $--------------------------

                                                                 If you want the stock certificate made out in
                                                                 another person's name, fill in the form below:
------------------------------------------------------------

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

(Print or type assignee's name, address and zip code)
                                                                 -----------------------------------------------------

                                                                 -----------------------------------------------------
                                                                 (Insert other person's social sec. or tax ID no.)
And irrevocably appoint

                                     A-1-11
<PAGE>

_____________________ agent to transfer this Note on the
books of the Company.  The agent may substitute another to
act for him.
                                                                 -----------------------------------------------------

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

                                                                 -----------------------------------------------------
                                                                 (Print or type other person's name, address and zip
                                                                 code)

---------------------------------------------------------------- -----------------------------------------------------
Date:                                                            Your Signature:
     -----------------------------------------------------------                --------------------------------------

                         (Sign exactly as your name appears on the other side of this Note)

</TABLE>

                                     A-1-12

<PAGE>

                                   EXHIBIT A-2

                           [Form of Certificated Note]

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

     THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE  HEREOF,  AGREES TO OFFER, SELL,
OR OTHERWISE  TRANSFER  SUCH NOTE,  PRIOR TO THE DATE (THE  "RESALE  RESTRICTION
TERMINATION  DATE"),  WHICH IS TWO YEARS AFTER THE LATER OF THE  ORIGINAL  ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH THE PROFIT RECOVERY GROUP  INTERNATIONAL,
INC. (THE  "COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE
(OR ANY  PREDECESSOR  OF SUCH  NOTE) ONLY (A) TO THE  COMPANY OR ANY  SUBSIDIARY
THEREOF,  (B) FOR SO LONG AS THIS NOTE AND THE SHARES OF COMMON  STOCK  ISSUABLE
UPON CONVERSION OF THIS NOTE ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A  QUALIFIED  INSTITUTIONAL  BUYER TO WHICH  NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,  (C) PURSUANT TO A REGISTRATION
STATEMENT  WHICH HAS BEEN DECLARED  EFFECTIVE  UNDER THE SECURITIES  ACT, OR (D)
PURSUANT TO ANOTHER  AVAILABLE  EXEMPTION FROM THE REGISTRATION  REQUIREMENTS OF
THE SECURITIES ACT,  SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S  RIGHTS PRIOR TO
ANY SUCH OFFER,  SALE OR  TRANSFER  PURSUANT TO CLAUSE (C) OR (D) TO REQUIRE THE
DELIVERY  OF AN OPINION  OF  COUNSEL,  CERTIFICATION  AND/OR  OTHER  INFORMATION
SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE FOREGOING  CASES, A CERTIFICATE
OF TRANSFER IN THE FORM  APPEARING  ON THE OTHER SIDE OF THIS NOTE IS  COMPLETED
AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON
THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.

     [THE FOREGOING  LEGEND MAY BE REMOVED FROM THIS NOTE ON SATISFACTION OF THE
CONDITIONS SPECIFIED IN THE INDENTURE.]

                                     A-2-1
<PAGE>

                  THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.
                  43/4% Convertible Subordinated Notes due 2006

                                                            CUSIP NO. 743168 AA4

         No.:

         Issue Date:

     THE PROFIT  RECOVERY  GROUP  INTERNATIONAL,  INC.,  a Georgia  corporation,
promises  to pay to Cede & Co.  or  registered  assigns,  the  principal  sum of
[___________] DOLLARS ($[__________]) on November 26, 2006.

     This Note shall bear  interest as specified on the other side of this Note.
This Note is convertible as specified on the other side of this Note.

     Additional  provisions of this Note are set forth on the other side of this
Note.

Dated:  November 26, 2001             THE PROFIT RECOVERY GROUP
                                      INTERNATIONAL, INC.

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

TRUSTEE'S CERTIFICATE OF
AUTHENTICATION

SunTrust Bank, as Trustee,
certifies that this is one of
the Notes referred to in the
within-mentioned Indenture (as
defined on the other side of this Note).

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

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

                                     A-2-2
<PAGE>

                         [Text of Reverse Side of Note]

                              Use Exhibit A-1 Text

                                     A-2-3

<PAGE>

                                   EXHIBIT B-1

                              Transfer Certificate

     In connection with any transfer of any of the Notes within the period prior
to the  expiration of the holding  period  applicable to the sales thereof under
Rule 144(k) under the Securities Act of 1933, as amended (the "Securities  Act")
(or any successor  provision),  the  undersigned  registered  owner of this Note
hereby  certifies  with  respect  to  $____________   principal  amount  of  the
above-captioned   Notes  presented  or  surrendered  on  the  date  hereof  (the
"Surrendered Notes") for registration of transfer, or for exchange or conversion
where the Notes  issuable upon such exchange or conversion  are to be registered
in a name  other  than  that of the  undersigned  registered  owner  (each  such
transaction   being  a  "transfer"),   that  such  transfer  complies  with  the
restrictive legend set forth on the face of the Surrendered Notes for the reason
checked below:

     []   A  transfer  of the  Surrendered  Notes is made to the  Company or any
          Subsidiaries; or

     []   The  transfer  of the  Surrendered  Notes is being made to a qualified
          institutional  buyer (as  defined in Rule 144A  promulgated  under the
          U.S.  Securities Act of 1933, as amended (the  "Securities  Act")) and
          otherwise complies with complies with Rule 144A; or

     []   The transfer of  Surrendered  Notes in a minimum  aggregate  principal
          amount of $100,000 is being made to an institutional investor which is
          an "accredited  investor" (as defined in Rule  501(a)(1),  (2), (3) or
          (7) of Regulation D under the Securities  Act) and otherwise  complies
          with complies with Regulation D; or

     []   The  transfer of the  Surrendered  Notes is  pursuant to an  effective
          registration statement under the Securities Act; or

     []   The transfer of the Surrendered Notes is pursuant to another available
          exemption from the registration requirement of the Securities Act.

and unless the box below is  checked,  the  undersigned  confirms  that,  to the
undersigned's knowledge,  such Notes are not being transferred to an "affiliate"
of the Company as defined in Rule 144 under the Securities Act (an "Affiliate").

     []   The transferee is an Affiliate of the Company.

DATE:                                                        Signature(s)

            (If the registered owner is a corporation, partnership or
             fiduciary, the title of the Person signing on behalf of
                     such registered owner must be stated.)

                                     A-2-4
<PAGE>

                                   EXHIBIT C-1

               [Form of Accredited Investor Representation Letter]

The Profit Recovery Group International, Inc.
2300 Windy Ridge Parkway
Suite 100 North
Atlanta, Georgia 30339-8426

Dear Sirs and Mesdames:

     We are delivering this letter in connection  with the proposed  transfer of
$_____________  principal amount of the 43/4% Convertible Subordinated Notes due
2006 (the  "Notes")  of The  Profit  Recovery  Group  International,  Inc.  (the
"Company"),  which are convertible into shares of the Company's Common Stock, no
par value per share (the "Common Stock").

     We hereby confirm that:

          (i) we are an institutional  "accredited  investor" within the meaning
     of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act
     of 1933, as amended (the "Securities  Act") (an  "Institutional  Accredited
     Investor");

          (ii) any purchase of the  securities by us will be for our own account
     or for the account of one or more other institutional  accredited investors
     for which we exercise sole investment discretion;

          (iii) in the event that we  purchase  any of the  securities,  we will
     acquire  securities  having a  minimum  principal  amount  of not less than
     $100,000 for our own account or for any  separate  account for which we are
     acting;

          (iv) we have such  knowledge and  experience in financial and business
     matters  that  we are  capable  of  evaluating  the  merits  and  risks  of
     purchasing the securities;

          (v) we are not acquiring the  securities  with a view to  distribution
     thereof or with any  present  intention  of  offering or selling any of the
     securities,  except inside the United  States in accordance  with Rule 144A
     under the Securities Act, as provided below;  provided that the disposition
     of our property and the property of any accounts for which we are acquiring
     securities shall remain at all times within our control; and

          (vi) we have  received a copy of the offering  memorandum  relating to
     the offering of the securities and  acknowledge  that we have had access to
     such  financial  and  other   information,   and  have  been  afforded  the

                                     C-1-1
<PAGE>

     opportunity  to ask such  questions of  representatives  of the Company and
     receive  answers  thereto,  as we deem  necessary  in  connection  with our
     decision to purchase the securities.

     We  understand  that  the  Notes  were  originally  offered  and  sold in a
transaction  not involving any public  offering  within the United States within
the  meaning of the  Securities  Act and that the Notes and the shares of Common
Stock (the "Notes")  issuable upon  conversion  thereof have not been registered
under the Securities  Act, and we agree, on our own behalf and on behalf of each
account  for which we  acquire  any  Notes,  that if in the  future we decide to
resell  or  otherwise  transfer  such  Notes  prior  to the  date  (the  "Resale
Restriction  Termination  Date")  which  is two  years  after  the  later of the
original  issuance  of the Notes and the last  date on which the  Company  or an
affiliate of the Company was the owner of the Note,  such Notes may be resold or
otherwise transferred only (i) to the Company or any subsidiary thereof, or (ii)
for as long as the Notes are  eligible  for resale  pursuant to Rule 144A,  to a
person it reasonably believes is a "qualified  institutional  buyer" (as defined
in Rule 144A under the Securities Act) that purchases for its own account or for
the account of a qualified institutional buyer to which notice is given that the
transfer is being made in reliance  on Rule 144A,  or (iii) to an  Institutional
Accredited  Investor that is acquiring the Note for its own account,  or for the
account of such Institutional  Accredited  Investor for investment  purposes and
not with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act, or (iv) pursuant to another available exemption
from registration under the Securities Act (if applicable), or (v) pursuant to a
registration  statement  which has been declared  effective under the Securities
Act and, in each case, in accordance with any applicable  securities laws of any
State  of  the  United  States  or  any  other  applicable  jurisdiction  and in
accordance  with the legends set forth on the Notes. We further agree to provide
any person  purchasing  any of the Notes other than pursuant to clause (v) above
from us a  notice  advising  such  purchaser  that  resales  of such  Notes  are
restricted  as stated  herein.  We  understand  that the trustee or the transfer
agent,  as the case may be,  for the Notes  will not be  required  to accept for
registration  of transfer any Notes  pursuant to (iii) or (iv) above except upon
presentation  of  evidence  satisfactory  to  the  Company  that  the  foregoing
restrictions on transfer have been complied with. We further understand that any
Notes  will be in the form of  definitive  physical  certificates  and that such
certificates will bear a legend reflecting the substance of this paragraph other
than certificates representing Notes transferred pursuant to clause (v) above.

     We  acknowledge  that you and  others  will  rely  upon our  confirmations,
acknowledgments  and  agreements  set forth  herein,  and we agree to notify you
promptly in writing if any of our representations or warranties herein ceases to
be accurate and complete.

     THIS LETTER SHALL BE GOVERNED BY, AND  CONSTRUED IN  ACCORDANCE  WITH,  THE
LAWS OF THE STATE OF NEW YORK,  WITHOUT  REGARD TO  PRINCIPLES  OF  CONFLICTS OF
LAWS.

Date:
     ------------------------------         ------------------------------------
                                            (Name of Purchaser)

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

                                     C-1-2
1420539v1EXHIBIT 4.4

                  4 3/4% CONVERTIBLE SUBORDINATED NOTES DUE 2006

                          REGISTRATION RIGHTS AGREEMENT

                          Dated as of November 26, 2001

                                  by and among

         THE PROFIT RECOVERY GROUP INTERNATIONAL, INC., as the Company,

               MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

                                       and

                            OTHER INITIAL PURCHASERS

                              as Initial Purchasers

<PAGE>

                          REGISTRATION RIGHTS AGREEMENT

     This  Registration  Rights Agreement (the  "Agreement") is made and entered
into  as  of  November  26,  2001  by  and  among  The  Profit   Recovery  Group
International,  Inc.,  a Georgia  corporation  (the  "Company")  and the Initial
Purchasers (as hereinafter defined).

     This Agreement is made pursuant to the Purchase  Agreement,  dated November
20, 2001, among the Company,  as issuer of the 4 3/4%  Convertible  Subordinated
Notes  due  2006  (the  "Notes"),  and the  Initial  Purchasers  (the  "Purchase
Agreement").  In  order to  induce  the  Initial  Purchasers  to enter  into the
Purchase  Agreement,  the Company has agreed to provide the registration  rights
set forth in this  Agreement  to the  Initial  Purchasers  and their  respective
direct and indirect transferees. The execution and delivery of this Agreement is
a condition  to the closing of the  transactions  contemplated  by the  Purchase
Agreement and each Holder (as defined below) by  participating in a Registration
Statement agrees to be bound by this Agreement.

     The parties hereby agree as follows:

     Section 1.  Definitions.  As used in this  Agreement,  the following  terms
shall have the following meanings:

     Act: As defined in the final paragraph of this Section 1.

     Affiliate: An affiliate of any specified person shall mean any other person
directly or indirectly  controlling or controlled by or under direct or indirect
common control with such specified person.  For the purposes of this definition,
"control,"  when used with respect to any person,  means the power to direct the
management and policies of such person, directly or indirectly,  whether through
the  ownership  of voting  securities,  by contract or  otherwise  and the terms
"affiliated,"  "controlling" and "controlled"  have meanings  correlative to the
foregoing.

     Agreement:  This Registration Rights Agreement, as the same may be amended,
supplemented or modified from time to time in accordance with the terms hereof.

     Business Day: Each Monday, Tuesday, Wednesday,  Thursday and Friday that is
not a day on which banking  institutions in New York, New York are authorized or
obligated by law or executive order to close.

     Closing Date: November 26, 2001.

     Common  Stock:  Common  stock,  no par value,  of the Company and any other
shares of common  stock as may  constitute  "Common  Stock" for  purposes of the
Indenture as issuable or issued upon conversion of the Notes.

     Company:  The  Profit  Recovery  Group   International,   Inc.,  a  Georgia
corporation, and any successor corporation thereto.

<PAGE>

     Controlling Person: As defined in Section 6(a) hereof.

     Damages  Payment  Date:  Each  of the  semiannual  interest  payment  dates
provided in the Notes.

     Deferral Notice: As defined in Section 4(c) hereof.

     Effectiveness Period: As defined in Section 2(a) hereof.

     Effectiveness Target Date: The 150th day following the Closing Date.

     Exchange  Act: The  Securities  Exchange Act of 1934,  as amended,  and the
rules and regulations promulgated by the SEC thereunder.

     Filing Date: The 60th day after the Closing Date.

     Holder: Each owner of any Registrable Securities.

     Indemnified Person: As defined in Section 6(a) hereof.

     Indenture: The Indenture,  dated as of the date hereof, between the Company
and the Trustee,  pursuant to which the Notes are to be issued,  as the same may
be amended,  modified or  supplemented  from time to time in accordance with the
terms thereof.

     Initial Purchasers:  Merrill Lynch, Pierce, Fenner & Smith Incorporated and
each other initial purchaser as set forth in the Purchase Agreement.

     Liquidated Damages: As defined in Section 3(a) hereof.

     Notice and Questionnaire:  The Notice and Questionnaire  attached hereto as
Annex A.

     Notes: As defined in the second paragraph hereof.

     Notice  Holder:  On any date,  any Holder  that has  delivered a Notice and
Questionnaire to the Company on or prior to such date.

     Proceeding:  An  action,  claim,  suit or  proceeding  (including,  without
limitation,  an  investigation  or partial  proceeding,  such as a  deposition),
whether commenced or threatened.

     Prospectus:   The  prospectus   included  in  any  Registration   Statement
(including,   without  limitation,   a  prospectus  that  discloses  information
previously  omitted  from a  prospectus  filed in reliance  upon Rule 430A),  as
amended or supplemented by any prospectus supplement, with respect to the resale
of any of the Registrable Securities covered by such Registration Statement, and
all  other  amendments  and  supplements  to  any  such  prospectus,   including
post-effective amendments, and all materials incorporated by reference or deemed
to be incorporated by reference, if any, in such prospectus.

                                       2
<PAGE>

     Purchase Agreement: As defined in the second paragraph hereof.

     Record Holder: (i) with respect to any Damages Payment Date relating to any
shares of Common Stock as to which any such Liquidated Damages have accrued, the
registered  Holder of such shares 15 days prior to the next  succeeding  Damages
Payment Date; and (ii) with respect to any Damages  Payment Date relating to any
Notes as to which any such Liquidated Damages has accrued, the registered Holder
of such Notes 15 days prior to the next succeeding Damages Payment Date.

     Registrable  Securities:  The Notes,  the shares of Common Stock into which
such Notes are converted or  convertible  (including  any shares of Common Stock
issued or  issuable  thereon  upon any stock  split,  stock  combination,  stock
dividend  or the  like),  upon  original  issuance  thereof  and  at  all  times
subsequent thereto, and associated related rights, if any, until the earliest of
(i) the date on which the resale thereof has been  effectively  registered under
the Securities Act and disposed of in accordance with the Registration Statement
relating  thereto,  (ii) the date on which such security has been distributed to
the public pursuant to Rule 144 or is saleable pursuant to paragraph (k) of Rule
144 or (iii) the date on which it ceases to be outstanding.

     Registration Default: As defined in Section 3(a) hereof.

     Registration  Statement:  Any  registration  statement of the Company filed
with the SEC pursuant to the Securities Act that covers the resale of any of the
Registrable  Securities pursuant to the provisions of this Agreement,  including
the  Prospectus,  amendments and supplements to such  registration  statement or
Prospectus,  including pre- and post-effective amendments, all exhibits thereto,
and all  material  incorporated  by reference  or deemed to be  incorporated  by
reference, if any, in such registration statement.

     Requisite Information: As defined in Section 2(c) hereof.

     Rule 144: Rule 144  promulgated by the SEC pursuant to the Securities  Act,
as such  Rule  may be  amended  from  time to  time,  or any  successor  rule or
regulation.

     Rule 144A: Rule 144A promulgated by the SEC pursuant to the Securities Act,
as such  Rule  may be  amended  from  time to  time,  or any  successor  rule or
regulation.

     Rule 158: Rule 158  promulgated by the SEC pursuant to the Securities  Act,
as such  Rule  may be  amended  from  time to  time,  or any  successor  rule or
regulation.

     Rule 415: Rule 415  promulgated by the SEC pursuant to the Securities  Act,
as such  Rule  may be  amended  from  time to  time,  or any  successor  rule or
regulation.

     Rule 424: Rule 424  promulgated by the SEC pursuant to the Securities  Act,
as such  Rule  may be  amended  from  time to  time,  or any  successor  rule or
regulation.

                                       3
<PAGE>

     Rule 430A: Rule 430A promulgated by the SEC pursuant to the Securities Act,
as such  Rule  may be  amended  from  time to  time,  or any  successor  rule or
regulation.

     SEC: The Securities and Exchange Commission.

     Securities  Act: The Securities Act of 1933, as amended,  and the rules and
regulations promulgated by the SEC thereunder.

     Shelf Registration Statement: As defined in Section 2(a) hereof.

     TIA:  The  Trust  Indenture  Act of 1939,  as  amended,  and the  rules and
regulations promulgated by the SEC thereunder.

     Transfer Agent:  The registrar and transfer agent for the Company's  Common
Stock.

     Trustee: The trustee under the Indenture.

     References  herein  to the term  "Holders  of a  majority  in  interest  of
Registrable Securities" or words to a similar effect shall mean, with respect to
any request,  notice, demand, objection or other action by the Holders hereunder
or pursuant hereto (each, an "Act"), registered Holders of a number of shares of
then  outstanding  Common  Stock  constituting  Registrable  Securities  and  an
aggregate amount of then outstanding Notes constituting  Registrable Securities,
such that the sum of such shares of Common  Stock and the shares of Common Stock
issuable upon  conversion of such Notes  constitutes in excess of 50% of the sum
of all of the then outstanding shares of Common Stock  constituting  Registrable
Securities and the number of shares of Common Stock issuable upon  conversion of
then outstanding Notes constituting Registrable Securities.  For purposes of the
preceding sentence, Registrable Securities owned, directly or indirectly, by the
Company or its Affiliates shall be deemed not to be outstanding.

     Section 2. Shelf Registration Statement.

     (a) The  Company,  at its  expense,  agrees to file with the SEC as soon as
reasonably  practicable  after the Closing Date,  but in no event later than the
Filing Date, a Registration Statement for an offering to be made on a delayed or
continuous basis pursuant to Rule 415 covering all of the Registrable Securities
or separate  Registration  Statements for an offering to be made on a delayed or
continuous basis pursuant to Rule 415 covering all of the Common Stock and Notes
constituting  Registrable  Securities,   respectively  (each  such  Registration
Statement filed by the Company pursuant to this Agreement a "Shelf  Registration
Statement").  Each Shelf  Registration  Statement shall be on Form S-3 under the
Securities Act or another  appropriate  form selected by the Company  permitting
registration  of such  Registrable  Securities  for resale by the Holders in the
manner or manners reasonably  designated by Holders of a majority in interest of
Registrable  Securities  being sold. The Company shall not permit any securities
other than the Registrable  Securities to be included in any Shelf  Registration
Statement.  The  Company  shall use all  reasonable  efforts to cause each Shelf
Registration  Statement to be declared  effective pursuant to the Securities Act
as soon as reasonably practicable following the filing thereof, but in any event

                                       4
<PAGE>

not later than the Effectiveness Target Date after the Closing Date, and to keep
each Shelf Registration  Statement  continuously  effective under the Securities
Act until the  earlier of (i) the date that is two years after the date on which
all of the Notes are sold by the Company  (including  those sold pursuant to the
option  granted to the Initial  Purchasers  in the  Purchase  Agreement)  to the
Initial Purchasers (the "Effectiveness  Period"), (ii) the date when the Holders
of  Registrable  Securities  are able to sell all  such  securities  immediately
without  restriction  pursuant to the volume  limitation  provisions of Rule 144
under the Securities  Act or any successor  rule thereto or otherwise,  or (iii)
the  sale  pursuant  to any  Shelf  Registration  of all  securities  registered
thereunder.

     (b)  Supplements  and  Amendments.  The  Company  shall use all  reasonable
efforts to keep each Shelf  Registration  Statement  continuously  effective  by
supplementing and amending the Shelf  Registration  Statement if required by the
rules,  regulations or instructions applicable to the registration form used for
such Shelf  Registration  Statement,  if  required by the  Securities  Act or if
reasonably requested by the Holders of a majority in interest of the Registrable
Securities or by any underwriter of such Registrable Securities.

     (c)  Selling  Securityholder  Information.  Each  Holder  wishing  to  sell
Registrable  Securities  pursuant to a Shelf Registration  Statement and related
Prospectus  agrees to  deliver a Notice and  Questionnaire  that  confirms  such
Holder's  agreement to be bound by the terms of this Agreement and includes such
information  regarding it and the distribution of its Registrable  Securities as
is required by law to be disclosed by the Holder in the applicable  Registration
Statement  (the  "Requisite  Information")  to the Company prior to any intended
distribution of Registrable  Securities under the Shelf Registration  Statement.
The Company shall not be required to include in any Shelf Registration Statement
and related  Prospectus the  Registrable  Securities of any Holder that does not
provide the Company  with a Notice and  Questionnaire  in  accordance  with this
Section  2(c).  The Company  shall file,  within  five  Business  Days after the
receipt  of a Notice  and  Questionnaire  from any  Holder  which  includes  the
Requisite  Information  with  respect to such Holder,  a  Prospectus  supplement
pursuant  to  Rule  424 or  otherwise  amend  or  supplement  such  Registration
Statement to include in the  Prospectus  the  Requisite  Information  as to such
Holder (and the  Registrable  Securities  held by such Holder),  and the Company
shall provide such Holder within five Business Days after receipt of such Notice
and  Questionnaire  with a copy of such Prospectus as so amended or supplemented
containing  the Requisite  Information  in order to permit such Holder to comply
with the  Prospectus  delivery  requirements  of the  Securities Act in a timely
manner with respect to any proposed  disposition  of such  Holder's  Registrable
Securities and to file the same with the SEC. Each Holder shall promptly  notify
the Company of any material  changes to the Requisite  Information  contained in
the Notice and  Questionnaire  provided  to the Company by such  Holder.  If the
Company shall fail to file the appropriate  supplement or amendment  within five
Business  Days of  receipt  of such  notice,  the  Company  shall pay the Holder
Liquidated  Damages in the manner  set forth in Section 3.  Furthermore,  if the
filing requires a  post-effective  amendment to the  Registration  Statement and
such amendment is not declared  effective  within 45 Business Days of the filing
of the  post-effective  amendment,  the Company shall pay the Holder  Liquidated
Damages in the manner set forth in Section 3. If any such Registration Statement

                                       5
<PAGE>

refers to any Holder by name or otherwise as the holder of any securities of the
Company,  then such Holder  shall have the right to  require,  in the event that
such  reference  to such  Holder by name or  otherwise  is not  required  by the
Securities Act or any similar Federal statute then in force, the deletion of the
reference to such Holder in such  Registration  Statement at any time subsequent
to the time that such reference ceases to be required.

     (d) Material Events;  Suspension of Sales.  Notwithstanding  the provisions
contained in this Section 2, in the event that, in the judgment of the Company's
Board of  Directors,  it is  advisable to suspend use of the  Prospectus  due to
pending corporate  developments,  public filings with the SEC or similar events,
the Company shall  promptly  deliver a written  certificate  to each  registered
Holder, the Trustee, the Transfer Agent and the managing  underwriters,  if any,
to the  effect  that the use of the  Prospectus  is to be  suspended  until  the
Company shall  deliver a written  notice that the use of the  Prospectus  may be
resumed.  Thereafter,  the use of the  Prospectus  shall be  suspended,  and the
Company  shall not be  required to maintain  the  effectiveness  of, or amend or
update the Shelf Registration  Statement, or amend or supplement the Prospectus;
provided,  however,  that the Company shall only be permitted to suspend the use
of the Prospectus for a period not to exceed 45 days in any  three-month  period
or, an  aggregate of 90 days in any  12-month  period.  The Company will use its
best efforts to ensure that the use of the Prospectus may be resumed as soon as,
in the judgment of the Company's Board of Directors,  disclosure of the material
relating to such pending development,  filing or event would not have a material
adverse effect on the Company.

     (e) Additional  Agreements of Holders. Each Holder agrees not to dispose of
Registrable  Securities  pursuant to the Shelf  Registration  Statement  without
complying  with  the  prospectus  delivery  requirements  under  the Act and the
provisions of paragraph (d) above regarding use of the  Prospectus.  Each Holder
further  agrees  that it will  comply  fully with  applicable  federal and state
securities  laws  in  connection  with  the   distribution  of  any  Registrable
Securities  pursuant to the Shelf  Registration  Statement.  Each Holder further
acknowledges  having  been  advised  by  the  Company  that  applicable  federal
securities  laws  prohibit  Holders from trading in securities of the Company at
any time  while in  possession  of  material  non-public  information  about the
Company.

     Section 3. Liquidated Damages.

     (a) The  Company  and the Initial  Purchasers  agree that the Holders  will
suffer  damages if the  Company  fails to fulfill  its  obligations  pursuant to
Section 2 hereof and that it would not be  possible to  ascertain  the extent of
such damages  with  precision.  Accordingly,  the Company  hereby  agrees to pay
liquidated damages ("Liquidated Damages") to each Holder under the circumstances
and to the extent set forth below:

          (i) if the Shelf  Registration  Statement  has not been filed with the
     SEC on or prior to the Filing Date; or

          (ii) if such Shelf Registration Statement is not declared effective by
     the SEC on or prior to the applicable Effectiveness Target Date; or

                                       6
<PAGE>

          (iii) any Shelf Registration Statement ceases to be effective or fails
     to be usable at any time during the  Effectiveness  Period  (without  being
     succeeded  within  five  Business  Days by a  post-effective  amendment  or
     supplement to such Registration  Statement that cures such failure and that
     is itself, in the case of post-effective  amendment,  immediately  declared
     effective); or

          (iv) the Prospectus has been suspended as described in clause (iii) of
     this Section 3(a) longer than the period  permitted by such paragraph (each
     of the foregoing, a "Registration Default").

     In the event of a Registration  Default,  commencing on (and including) the
date immediately  succeeding the date of any Registration  Default and ending on
(but  excluding)  the  next  date on  which  no  Registration  Default  shall be
continuing,  the  Company  agrees to pay,  as  liquidated  damages  and not as a
penalty,  an amount,  payable on the Damages  Payment Dates to Record Holders of
then  outstanding  Notes that are Registrable  Securities or of then outstanding
shares of  Underlying  Common  Stock  issued upon  conversion  of Notes that are
Registrable Securities, if any, as the case may be, at a rate per annum equal to
one-quarter  of one percent  (0.25%) for the first 90-day  period from the Event
Date, and thereafter at a rate per annum equal to one-half of one percent (0.5%)
of the aggregate Applicable Principal Amount of such Notes, to Record Holders of
the then  outstanding  Notes that are Registrable  Securities,  or the aggregate
principal  amount  of  the  Notes  converted  to  Record  Holders  of  the  then
outstanding shares of Common Stock that are Registrable Securities,  as the case
may be. Following the cure of a Registration  Default,  Liquidated  Damages will
cease to accrue with respect to such  Registration  Default  (without in any way
limiting  the  effect  of any  subsequent  Registration  Default).  All  accrued
Liquidated  Damages  shall  be paid to the  holders  of (i)  Notes  constituting
Registrable  Securities,  pursuant to the terms of the Indenture with respect to
the  payment of  interest;  and (ii)  shares of Common  Stock,  in the manner as
interest  payments on the Notes on semiannual  payment dates that  correspond to
interest  payment dates for the Notes.  The parties hereto agree and acknowledge
that the  payment  of  Liquidated  Damages  to  holders  of Common  Stock upon a
Registration  Default pursuant to this Agreement shall not be a dividend on such
shares of Common Stock.

     (b) The Company shall notify the Transfer Agent or the Trustee, as the case
may  be,  within  one  Business  Day  after  each  and  every  date  on  which a
Registration Default occurs.  Liquidated Damages shall be paid by the Company to
the Record Holders of Common Stock on each Damages Payment Date by wire transfer
of immediately  available funds to the accounts  specified by them or by mailing
checks to their  registered  addresses  as they  appear in the  register  of the
Company for the Common Stock,  if no such  accounts  have been  specified in the
Notice and  Questionnaire  on or before the Damages Payment Date; and Liquidated

                                       7
<PAGE>

Damages shall be paid by the Company to the Record  Holders of the Notes on each
semiannual  interest payment date together with interest to be paid on the Notes
pursuant  to the  terms  of the  Indenture,  by  wire  transfer  of  immediately
available funds to the accounts  specified by them or by mailing checks to their
registered  addresses  as they appear in the Notes  Register  (as defined in the
Indenture)  if  no  such  accounts  have  been   specified  in  the  Notice  and
Questionnaire on or before the Damages Payment Date; provided, however, that any
Liquidated  Damages  accrued with respect to any Notes or portion thereof called
for  redemption  on a redemption  date,  repurchased  on a repurchase  date,  or
converted into shares of Common Stock on a conversion  date prior to the Damages
Payment  Date  shall,  in any such  event,  be paid  instead  to the  Holder who
submitted such Notes or portion thereof for redemption, repurchase or conversion
on the applicable  redemption  date,  repurchase date or conversion date, as the
case may be, on such date.

     Section  4.  Registration  Procedures.  In  connection  with the  Company's
registration  obligations hereunder, the Company shall effect such registrations
on the  appropriate  form  selected  by the  Company  to  permit  the  resale of
Registrable  Securities  in  accordance  with the intended  method or methods of
disposition  thereof, and pursuant thereto the Company shall as expeditiously as
reasonably possible:

     (a) No fewer  than five  Business  Days  prior to the  initial  filing of a
Registration  Statement or Prospectus  and no fewer than two Business Days prior
to  the  filing  of any  amendment  or  supplement  thereto  (excluding,  unless
requested,  any document that would be incorporated or deemed to be incorporated
therein by reference and then only to the Holder who so  requested),  furnish to
the Holders and the managing underwriters,  if any, copies of all such documents
proposed to be filed (excluding,  unless requested, those incorporated or deemed
to be  incorporated  by reference  and then only to the Holder who so requested)
and cause the officers and directors of the Company,  counsel to the Company and
independent  certified  public  accountants  to the  Company  to respond to such
inquiries as shall be necessary in connection with such registration  statement,
in the  opinion  of  counsel  to such  underwriters,  to  conduct  a  reasonable
investigation  within the meaning of the  Securities  Act. The Company shall not
file any such Registration  Statement or related Prospectus or any amendments or
supplements thereto (excluding any document that would be incorporated or deemed
incorporated by reference) to which the Holders of a majority in interest of the
Registrable  Securities or the managing  underwriters,  if any, shall reasonably
object in writing (by hand-delivery,  courier guaranteeing overnight delivery or
telecopy) within five Business Days after the receipt of such documents;

     (b) Prepare and file with the SEC such amendments, including post-effective
amendments,  to each  Registration  Statement  as may be  necessary to keep such
Registration Statement continuously effective for the applicable time period set
forth in Section 2(a) hereof; cause the related Prospectus to be supplemented by
any required Prospectus supplement,  and as so supplemented to be filed pursuant
to Rule 424 (or any similar  provisions then in force) under the Securities Act;
and  comply  with the  provisions  of the  Securities  Act with  respect  to the
disposition  of all  securities  covered  by  such  Registration  Statement  and
Prospectus  during such period in accordance with the intended method or methods
of  disposition  by the Holder set forth in such  Registration  Statement  as so
amended or in such Prospectus as so supplemented (including, without limitation,
the filing of any Prospectus  supplement pursuant to Rule 424 in order to add or
change any selling security holder  information  (including any such supplements
or  amendments  pursuant to Section 2(c) hereof,  provided  such Holder to which
such change  applies  complies with the Requisite  Information  requirements  of
Section 2(c) hereof));

                                       8
<PAGE>

     (c) Notify the Holders and the managing underwriters, if any, promptly (and
in the case of an event specified by clause (i)(A) of this paragraph in no event
fewer than two Business  Days prior to such  filing)  and, (if  requested by any
such  person)  confirm such notice in writing,  (i)(A) when a Prospectus  or any
Prospectus supplement or post-effective  amendment is proposed to be filed, and,
(B) with respect to a Registration  Statement or any  post-effective  amendment,
when the same has become effective;  (ii) of any request of the SEC or any other
Federal or state  governmental  authority for  amendments or supplements to such
Registration  Statement  or related  Prospectus  or for  additional  information
related  thereto;  (iii)  of the  issuance  by the  SEC,  any  state  securities
commission,  any other governmental agency or any court of any stop order, order
or  injunction  suspending  or  enjoining  the use or the  effectiveness  of the
Registration  Statement or the initiation or threatening of any  proceedings for
that  purpose  (a  "Deferral   Notice");   (iv)  if  at  any  time  any  of  the
representations  and  warranties  of the  Company  contained  in  any  agreement
(including any underwriting  agreement)  contemplated by Section 4(m) hereof are
not true and correct in all material respects; (v) of the receipt by the Company
of any  notification  with respect to the  suspension  of the  qualification  or
exemption from  qualification  of any of the Registrable  Securities for sale in
any  jurisdiction,  or the  initiation or threatening of any proceeding for such
purpose;  (vi) of the  existence of any fact or the  happening of any event that
makes any statement made in such  Registration  Statement or related  Prospectus
untrue in any material  respect,  or that  requires the making of any changes in
such  Registration   Statement  or  Prospectus  so  that  in  the  case  of  the
Registration  Statement,  it will not contain any untrue statement of a material
fact or omit to state  any  material  fact  required  to be  stated  therein  or
necessary to make the statements therein not misleading and that, in the case of
the  Prospectus,  such  Prospectus  will not contain any untrue  statement  of a
material fact or omit to state any material  fact required to be stated  therein
or necessary to make the statements therein, in light of the circumstances under
which  they were  made,  not  misleading  and (vi) of the  determination  by the
Company that a  post-effective  amendment to a  Registration  Statement  will be
filed with the SEC,  which notice may, at the  discretion  of the Company (or as
required pursuant to Section 3(i)), state that it constitutes a Deferral Notice,
in which event the provisions of Section 3(i) shall apply;

     (d) Use all  reasonable  efforts to avoid the  issuance  of, or, if issued,
obtain the withdrawal of any stop order or order enjoining or suspending the use
or effectiveness of a Registration Statement or the lifting of any suspension of
the  qualification  (or exemption from  qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment;

     (e) If requested by the Initial  Purchasers  or managing  underwriters,  if
any, or the Holders of a majority  in  interest  of the  Registrable  Securities
being  sold  in  connection  with  such  offering,  (i)  promptly  include  in a
Prospectus  supplement  or  post-effective  amendment  such  information  as the
Initial  Purchasers  or managing  underwriters,  if any, or such  Holders  agree
should, in their reasonable  judgment,  be included  therein;  and (ii) make all
required filings of such Prospectus supplement or such post-effective  amendment
as soon as reasonably practicable after the Company has received notification of
the matters to be  included  in such  Prospectus  supplement  or  post-effective
amendment; provided, however, that the Company shall not be required to take any

                                       9
<PAGE>

action  pursuant to this Section 4(e) that are not in the opinion of counsel for
the Company, in compliance with applicable law;

     (f) Furnish to each Holder who so requests, each Initial Purchaser and each
managing  underwriter,  if any,  without charge,  at least one conformed copy of
each  Registration  Statement and each amendment  thereto,  including  financial
statements (but excluding schedules,  all documents incorporated or deemed to be
incorporated therein by reference and all exhibits,  unless requested in writing
by such Holder or any Initial Purchaser or any managing underwriter);

     (g) Deliver to each Holder and the underwriters, if any, without charge, as
many  copies  of  the  Prospectus  or  Prospectuses   (including  each  form  of
Prospectus)  and each  amendment  or  supplement  thereto  as such  persons  may
reasonably  request;  and,  unless the Company  shall have given  notice to such
Holder  pursuant to Section 2(d), the Company hereby consents to the use of such
Prospectus  and each  amendment  or  supplement  thereto by each of the  selling
Holders of Registrable  Securities and the  underwriters,  if any, in connection
with  the  offering  and  sale of the  Registrable  Securities  covered  by such
Prospectus and any amendment or supplement thereto;

     (h)  Prior  to any  public  offering  of  Registrable  Securities,  use all
reasonable  efforts to  register or qualify,  or  cooperate  with the Holders of
Registrable Securities to be sold or tendered for, the underwriters, if any, and
their  respective  counsel in connection with the  registration or qualification
(or exemption from such  registration  or  qualification)  of, such  Registrable
Securities  for offer and sale  under  the  securities  or Blue Sky laws of such
jurisdictions  within the United States as any Holder or underwriter  reasonably
requests in writing,  keep each such registration or qualification (or exemption
therefrom)  effective during the period such Registration  Statement is required
to be kept effective and do any and all other acts or things  necessary  legally
to enable the disposition in such  jurisdictions  of the Registrable  Securities
covered by the applicable  Registration Statement;  provided,  however, that the
Company  shall not be  required  to  qualify  generally  to do  business  in any
jurisdiction  where it is not then so  qualified,  take any  action  that  would
subject it to general  service of process in any such  jurisdiction  where it is
not then so subject or subject the  Company to any tax in any such  jurisdiction
where it is not then so subject;

     (i) In connection with any sale or transfer of Registrable  Securities that
will result in such securities no longer being Registrable Securities, cooperate
with the Holders and the managing  underwriters,  if any, to (i)  facilitate the
timely  preparation  and  delivery  of  certificates   representing  Registrable
Securities  to be sold,  which  certificates  shall  not  bear  any  restrictive
legends,  shall (in the case of Notes) bear a CUSIP  number  different  from the
CUSIP number for the Registrable  Securities and shall be in a form eligible for
deposit with The  Depository  Trust  Company;  and (ii) enable such  Registrable
Securities  to be in such  denominations  and  registered  in such  names as the
managing  underwriters,  if any, or Holders may reasonably  request at least two
Business Days prior to any sale of Registrable Securities;

     (j)  Cause  the  offering  of the  Registrable  Securities  covered  by the
Registration  Statement  to  be  registered  with  or  approved  by  such  other

                                       10
<PAGE>

governmental  agencies or authorities within the United States, except as may be
required as a consequence  of the nature of a Holder's  business,  in which case
the Company will  cooperate  in all  reasonable  respects  and at such  Holder's
expense with the filing of such Registration  Statement and the granting of such
approvals as may be reasonably necessary to enable the seller or sellers thereof
or the  underwriters,  if any, to consummate the disposition of such Registrable
Securities;  provided,  however,  that the  Company  shall  not be  required  to
register the Registrable  Securities in any jurisdiction  that would require the
Company to qualify to do  business in any  jurisdiction  where it is not then so
qualified,  subject  it to general  service of process in any such  jurisdiction
where it is not then so subject or  subject  the  Company to any tax in any such
jurisdiction where it is not then so subject;

     (k) Upon the  occurrence  of any event  contemplated  by  Section  4(c)(vi)
hereof,  as promptly as  reasonably  practicable  (subject to any  suspension of
sales  pursuant to Section  2(d)  hereof),  prepare a supplement  or  amendment,
including,  if appropriate,  a post-effective  amendment,  to each  Registration
Statement or a supplement to the related Prospectus or any document incorporated
or deemed to be incorporated  therein by reference,  and file any other required
document so that, as thereafter  delivered,  such Prospectus will not 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,  in light of the
circumstances under which they were made, not misleading;

     (l)  Prior  to the  effective  date  of the  first  Registration  Statement
relating  to the  Registrable  Securities,  to  provide a CUSIP  number  for the
Registrable Securities to be sold pursuant to the Registration Statement;

     (m) Enter into such agreements  (including any  underwriting  agreements in
form,  scope and substance as are customary in underwritten  offerings) and take
all such other  actions in  connection  therewith  (including  those  reasonably
requested by the managing underwriters,  if any, or the Holders of a majority in
interest  of the  Registrable  Securities  being  sold) in order to  expedite or
facilitate the sale of such Registrable Securities;  provided, however, that the
Company is not  required to  facilitate  an  underwritten  offering  without its
consent,  given in its sole  discretion.  In  connection  with any  underwritten
offering,  the Company will (i) make such  representations and warranties to the
Holders  of such  Registrable  Securities  and the  underwriters,  if any,  with
respect to the  business  of the Company and its  subsidiaries  (including  with
respect to businesses or assets acquired or to be acquired by any of them),  and
the Registration  Statement,  Prospectus and documents,  if any, incorporated or
deemed to be incorporated by reference therein, in each case, in form, substance
and scope as are  customarily  made by issuers to  underwriters  in underwritten
offerings,  and  confirm  the same if and when  requested;  (ii)  seek to 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 each selling Holder of Registrable
Securities  and  each  of  the  underwriters,   if  any,  covering  the  matters
customarily covered in opinions requested in underwritten  offerings  (including
any such matters as may be reasonably  requested by such  underwriters));  (iii)
use all  reasonable  efforts to obtain  customary  "cold  comfort"  letters  and
updates thereof from the independent certified public accountants of the Company
(and, if necessary,  any other independent  certified public  accountants of any

                                       11
<PAGE>

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  (where  reasonably  possible) to each
selling Holder of Registrable  Securities and each of the underwriters,  if any,
such  letters  to  be in  customary  form  and  covering  matters  of  the  type
customarily  covered in "cold comfort"  letters in connection with  underwritten
offerings;  and (v) deliver such documents and certificates as may be reasonably
requested  by the Holders of majority  interest  of the  Registrable  Securities
being sold or the  managing  underwriters,  if any,  to evidence  the  continued
validity of the  representations  and warranties  made pursuant to clause (i) of
this  Section  4(m) and to evidence  compliance  with any  customary  conditions
contained in the underwriting  agreement or other agreement  entered into by the
Company;

     (n) Make  available for  inspection by a  representative  of the Holders of
Registrable  Securities  being sold, any underwriter  participating  in any such
disposition of Registrable Securities,  if any, and any attorney,  consultant or
accountant retained by such selling Holders or underwriter, at the offices where
normally  kept,  during  reasonable  business  hours,  all  financial  and other
records,  pertinent  corporate  documents and  properties of the Company and its
subsidiaries as they may reasonably request, and cause the officers,  directors,
agents  and  employees  of the  Company  and  its  subsidiaries  to  supply  all
information  in each  case  reasonably  requested  by any  such  representative,
underwriter,   attorney,  consultant  or  accountant  in  connection  with  such
Registration Statement;  provided,  however, that such persons shall first agree
in writing with the Company that any information  that is reasonably and in good
faith  designated  by the  Company  in writing  as  confidential  at the time of
delivery or inspection  (as the case may be) of such  information  shall be kept
confidential  by such  persons,  unless (i)  disclosure of such  information  is
required  by court  or  administrative  order  or is  necessary  to  respond  to
inquiries of regulatory  authorities;  (ii)  disclosure of such  information  is
required  by law  (including  any  disclosure  requirements  pursuant to Federal
securities laws in connection with the filing of any  Registration  Statement or
the use of any Prospectus);  (iii) such information  becomes generally available
to the public other than as a result of a disclosure  or failure to safeguard by
any such person;  or (iv) such information  becomes available to any such person
from a  source  other  than  the  Company  and  such  source  is not  bound by a
confidentiality agreement;

     (o) Use all reasonable efforts to cause the Indenture to be qualified under
the TIA not later than the effective  date of the first  Registration  Statement
relating to the Registrable Securities;  and in connection therewith,  cooperate
with  the  Trustee  and the  Holders  of  Notes  or  Common  Stock  constituting
Registrable  Securities to effect such changes to the Indenture,  if any, as may
be required for such  Indenture to be so qualified in accordance  with the terms
of the TIA; and execute,  and use all reasonable efforts to cause the Trustee to
execute,  all customary documents as may be required to effect such changes, and
all other forms and documents (including Form T-1) required to be filed with the
SEC to enable the Indenture to be so qualified under the TIA in a timely manner;

     (p)  Comply  with  applicable  rules  and  regulations  of the SEC and make
generally  available to its security holders earning  statements  satisfying the
provisions  of Section 11(a) of the  Securities  Act or Rule 158 (or any similar

                                       12
<PAGE>

rule promulgated  under the Securities Act), no later than 45 days after the end
of any 12-month  period (or 90 days after the end of any 12-month period if such
period is a fiscal  year) (i)  commencing  at the end of any  fiscal  quarter in
which  Registrable  Securities are sold to  underwriters in a firm commitment or
best efforts underwritten offering; and (ii) if not sold to underwriters in such
an offering,  commencing on the first day of the first fiscal  quarter after the
effective date of a Registration  Statement,  which  statement  shall cover said
period, consistent with the requirements of Rule 158; and

     (q) (i) list  all  shares  of  Common  Stock  covered  by any  Registration
Statements on any securities  exchange on which the Common Stock is then listed;
or (ii)  authorize for quotation on the Nasdaq  National  Market  ("Nasdaq") all
Common Stock covered by all such Registration  Statements if the Common Stock is
then so authorized for quotation.

     (r) Make reasonable  effort to provide such  information as is required for
any filings  required to be made with the  National  Association  of  Securities
Dealers, Inc.

     Section 5.  Registration  Expenses.  All fees and expenses  incident to the
performance  of or compliance  with this Agreement by the Company shall be borne
by it whether or not any  Registration  Statement is filed or becomes  effective
and  whether  or  not  any  securities  are  offered  or  sold  pursuant  to any
Registration  Statement.  The fees and  expenses  referred  to in the  foregoing
sentence shall include,  without  limitation,  (i) all  registration and filings
fees  (including,  without  limitation,  fees and  expenses  (A) with respect to
filings required to be made with the National Association of Securities Dealers,
Inc. and (B) in compliance with securities or Blue Sky laws (including,  without
limitation  and in addition  to that  provided  for in this  Section 5, fees and
disbursements  of  counsel  for the  underwriters  in  connection  with Blue Sky
qualifications   of  the  Registrable   Securities  and   determination  of  the
eligibility of the Registrable  Securities for investment under the laws of such
jurisdictions as the managing underwriters,  if any, or Holders of a majority in
interest of Registrable  Securities,  may  designate));  (ii) printing  expenses
(including,  without  limitation,  of printing  Prospectuses  if the printing of
Prospectuses is required by the managing underwriters, if any, or by the Holders
of a  majority  in  interest  of the  Registrable  Securities  included);  (iii)
messenger,   telephone  and  delivery   expenses;   (iv)   reasonable  fees  and
disbursements of counsel for the Company (plus one counsel deemed appropriate by
the representative of the Initial  Purchasers) in accordance with the provisions
of Section 5 hereof;  (v) fees and  disbursements  of all independent  certified
public  accountants  referred  to  in  Section  4(m)(iii)  (including,   without
limitation,  the expenses of any special audit and "comfort" letters required by
or incident to such  performance);  (vi) fees and expenses of all other  persons
retained  by the  Company.  In  addition,  the  Company  shall pay its  internal
expenses  (including,  without  limitation,  all  salaries  and  expenses of its
officers and employees performing legal or accounting duties), the expense of an
annual audit and the fees and expenses  incurred in connection  with the listing
of the  securities  to be registered  on any  securities  exchange or the Nasdaq
National  Market.  Notwithstanding  anything in this  Agreement to the contrary,
each Holder shall pay all underwriting  discounts and brokerage commissions with
respect to any Registrable Securities sold by it.

                                       13
<PAGE>

     Section 6. Indemnification.

     (a) The Company agrees to indemnify and hold harmless the Initial Purchaser
and each Holder of Registrable  Securities and each person, if any, who controls
the Initial Purchaser or any Holder of Registrable Securities within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act, as
follows:

          (i) against  any and all loss,  liability,  claim,  damage and expense
     whatsoever,  as  incurred,  arising out of any untrue  statement or alleged
     untrue statement of a material fact contained in the Registration Statement
     (or any amendment  thereto),  or the omission or alleged omission therefrom
     of a material fact  required to be stated  therein or necessary to make the
     statements therein not misleading or arising out of any untrue statement or
     alleged  untrue  statement of a material fact  included in any  preliminary
     prospectus or the Prospectus (or any amendment or supplement  thereto),  or
     the omission or alleged omission  therefrom of a material fact necessary in
     order to make the  statements  therein,  in the light of the  circumstances
     under which they were made, not misleading;

          (ii) against any and all loss,  liability,  claim,  damage and expense
     whatsoever,  as  incurred,  to the extent of the  aggregate  amount paid in
     settlement of any  litigation,  or any  investigation  or proceeding by any
     governmental  agency  or body,  commenced  or  threatened,  or of any claim
     whatsoever  based upon any such untrue  statement or omission,  or any such
     alleged  untrue  statement or omission,  provided  that (subject to Section
     6(d) below) any such  settlement is effected with the prior written consent
     of the Company; and

          (iii) against any and all expense  whatsoever,  as incurred (including
     the fees and  disbursements  of counsel  chosen by the Initial  Purchaser),
     reasonably  incurred in  investigating,  preparing or defending against any
     litigation,  or any investigation or proceeding by any governmental  agency
     or body,  commenced or threatened,  or any claim  whatsoever based upon any
     such untrue statement or omission,  or any such alleged untrue statement or
     omission, to the extent that any such expense is not paid under (i) or (ii)
     above;

provided,  however,  that this indemnity  agreement shall not apply to any loss,
liability,  claim,  damage or expense to the  extent  arising  out of any untrue
statement or omission or alleged  untrue  statement or omission made in reliance
upon and in conformity with written information  furnished to the Company by the
Initial   Purchaser,   such  Holder  of  Registrable   Securities   (which  also
acknowledges  the  indemnity  provisions  herein)  or any  person,  if any,  who
controls  the Initial  Purchaser  or any such Holder of  Registrable  Securities
expressly for use in the Registration  Statement (or any amendment thereto),  or
any  preliminary  prospectus or the  Prospectus  (or any amendment or supplement
thereto);  provided,  further,  that this indemnity agreement shall not apply to
any loss, liability,  claim, damage or expense (1) arising from an offer or sale
of Registrable  Securities  occurring  during a Deferral  Period,  if a Deferral
Notice was given to such Notice Holder in  accordance  with Section 8(b), or (2)
if the Holder fails to deliver at or prior to the written  confirmation of sale,
the most recent Prospectus, as amended or supplemented,  and such Prospectus, as

                                       14
<PAGE>
amended or supplemented,  would have corrected such untrue statement or omission
or alleged untrue statement or omission of a material fact.

     (b) In connection with any Shelf Registration in which a Holder, including,
without  limitation,   the  Initial  Purchaser,  of  Registrable  Securities  is
participating,  in furnishing information relating to such Holder of Registrable
Securities  to the  Company in writing  expressly  for use in such  Registration
Statement,  any  preliminary  prospectus,  the  Prospectus or any  amendments or
supplements thereto, the Holders of such Registrable Securities agree, severally
and not jointly,  to indemnify and hold harmless the Initial  Purchaser and each
person,  if any, who controls the Initial Purchaser within the meaning of either
Section  15 of the  Securities  Act or Section  20 of the  Exchange  Act and the
Company, and each person, if any, who controls the Company within the meaning of
either such  Section,  against any and all loss,  liability,  claim,  damage and
expense described in the indemnity  contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue  statements  or  omissions,  made in the  Registration  Statement (or any
amendment  thereto),  or any  preliminary  prospectus or the  Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information  furnished  to  the  Company  by or on  behalf  of  such  Holder  of
Registrable Securities (which also acknowledges the indemnity provisions herein)
or any person,  if any, who controls any such Holder of  Registrable  Securities
expressly for use in the  Registration  Statement (or any amendment  thereto) or
such  preliminary  prospectus or the  Prospectus (or any amendment or supplement
thereto).

     The Initial  Purchaser  agrees to indemnify  and hold harmless the Company,
the Holders of Registrable Securities, and each person, if any, who controls the
Company or any Holder of  Registrable  Securities  within the  meaning of either
Section 15 of the  Securities  Act or Section 20 of the Exchange Act against any
and all loss,  liability,  claim,  damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred,  but only with respect
to untrue  statements or omissions,  or alleged untrue  statements or omissions,
made  in  the  Registration   Statement  (or  any  amendment  thereto),  or  any
preliminary  prospectus  or the  Prospectus  (or  any  amendment  or  supplement
thereto) in reliance upon and in conformity with written  information  furnished
to the Company by the Initial  Purchaser  expressly for use in the  Registration
Statement  (or any  amendment  thereto) or such  preliminary  prospectus  or the
Prospectus (or any amendment or supplement thereto).

     (c) Each  indemnified  party shall give  notice as  promptly as  reasonably
practicable to each  indemnifying  party of any action  commenced  against it in
respect of which indemnity may be sought hereunder,  but failure to so notify an
indemnifying  party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially  prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on  account of this  indemnity  agreement.  The  indemnifying  party,  upon
request of the indemnified party,  shall retain counsel reasonably  satisfactory
to the indemnified  party to represent the indemnified  party and any others the
indemnifying  party may designate in such  proceeding and shall pay the fees and
disbursements  of  such  counsel  related  to  such  proceeding.   In  any  such
proceeding,  any  indemnified  party  shall  have the  right to  retain  its own

                                       15
<PAGE>

counsel,  but the fees and expenses of such  counsel  shall be at the expense of
such  indemnified  party unless (i) the  indemnifying  party and the indemnified
party shall have  mutually  agreed to the  retention of such counsel or (ii) the
named parties to any such proceeding  (including any impleaded  parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel  would be  inappropriate  due to actual or potential
differing  interests between them. It is understood that the indemnifying  party
shall  not,  in  respect  of the  legal  expenses  of any  indemnified  party in
connection with any proceeding or related  proceedings in the same jurisdiction,
be  liable  for (a) the fees and  expenses  of more than one  separate  firm (in
addition to any local counsel),  whose fees must be reasonable,  for the Initial
Purchaser,  Holders of  Registrable  Securities,  and all  persons,  if any, who
control the Initial  Purchaser or Holders of Registrable  Securities  within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act,  collectively  (b) the fees and expenses of more than one separate firm (in
addition to any local counsel),  whose fees must be reasonable,  for the Company
and each person,  if any, who controls the Company  within the meaning of either
such  Section,  and that all fees and expenses  payable  under (a) and (b) above
shall be reimbursed as they are incurred.  In the case of any such separate firm
for the  Initial  Purchaser,  Holders of  Registrable  Securities,  and  control
persons of the Initial  Purchaser and Holders of  Registrable  Securities,  such
firm shall be designated in writing by the Initial Purchaser. In the case of any
such separate firm for the Company and control persons of the Company, such firm
shall be designated in writing by the Company.  The indemnifying party shall not
be liable for any  settlement  of any  proceeding  effected  without its written
consent,  but if settled with such consent or if there be a final non-appealable
judgment for the  plaintiff,  the  indemnifying  party  agrees to indemnify  the
indemnified  party  from and  against  any loss or  liability  by reason of such
settlement or judgment.  No indemnifying party shall,  without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry
of any  judgment  with  respect  to any  litigation,  or  any  investigation  or
proceeding by any governmental agency or body,  commenced or threatened,  or any
claim whatsoever in respect of which  indemnification  or contribution  could be
sought under this Section 6 (whether or not the  indemnified  parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional  release of each indemnified  party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.

     (d)  If  at  any  time  an  indemnified   party  shall  have  requested  an
indemnifying  party to reimburse the indemnified  party for fees and expenses of
counsel,  such  indemnifying  party  agrees  that it  shall  be  liable  for any
settlement of the nature  contemplated by Section 6(a)(ii)  effected without its
written  consent if (i) such  settlement is entered into more than 45 days after
receipt by such indemnifying party of aforesaid request,  (ii) such indemnifying
party shall have  received  notice of the terms of such  settlement  at least 30
days prior to such  settlement  being  entered into and (iii) such  indemnifying
party shall not have reimbursed such  indemnified  party in accordance with such
request prior to the date of such  settlement;  provided,  that an  indemnifying
party shall not be liable for any such settlement  effected  without its consent
if such  indemnifying  party (1) reimburses such indemnified party in accordance
with such request to the extent it considers  such request to be reasonable  and
(2) provides written notice to the indemnified party  substantiating  the unpaid
balance as unreasonable, in each case prior to the date of such settlement.

                                       16
<PAGE>

     (e) If the  indemnification to which an indemnified party is entitled under
this  Section  6 is for  any  reason  unavailable  to or  insufficient  although
applicable in accordance with its terms to hold harmless an indemnified party in
respect of any losses,  liabilities,  claims,  damages or  expenses  referred to
therein,  then each indemnifying  party shall contribute to the aggregate amount
of such  losses,  liabilities,  claims,  damages and  expenses  incurred by such
indemnified party, as incurred,  in such proportion as is appropriate to reflect
the relative fault of the  indemnifying  party or parties on the one hand and of
the  indemnified  party on the other hand in connection  with the  statements or
omissions  which  resulted  in such  losses,  liabilities,  claims,  damages  or
expenses, as well as any other relevant equitable considerations.

     The  relative  fault of the  Company on the one hand and the Holders of the
Registrable  Securities  or the  Initial  Purchaser  on the other  hand shall be
determined  by  reference  to,  among other  things,  whether any such untrue or
alleged untrue  statement of a material fact or omission or alleged  omission to
state a material fact relates to  information  supplied by the Company or by the
Holder of the Registrable  Securities or the Initial  Purchaser and the parties'
relative intent, knowledge,  access to information and opportunity to correct or
prevent such statement or omission.

     The  parties  hereto  agree  that it  would  not be just and  equitable  if
contribution  pursuant  to  this  Section  6(e)  were  determined  by  pro  rata
allocation or by any other method of  allocation  which does not take account of
the  equitable  considerations  referred  to above  in this  Section  6(e).  The
aggregate amount of losses, liabilities,  claims, damages, and expenses incurred
by an  indemnified  party and  referred to above in this  Section  6(e) shall be
deemed to include any out-of-pocket  legal or other expenses reasonably incurred
by such indemnified party in  investigating,  preparing or defending against any
litigation,  or any  investigation or proceeding by any  governmental  agency or
body,  commenced  or  threatened,  or any claim  whatsoever  based upon any such
untrue or alleged untrue statement or omission or alleged omission.

     Notwithstanding the provisions of this Section 6, neither the Holder of any
Registrable Securities nor the Initial Purchaser, shall be required to indemnify
or  contribute  any amount in excess of the  amount by which the total  price at
which the Registrable  Securities sold by such Holder of Registrable  Securities
or by the Initial  Purchaser,  as the case may be, and distributed to the public
were offered to the public exceeds the amount of any damages that such Holder of
Registrable  Securities or the Initial  Purchaser has otherwise been required to
pay 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.

     For purposes of this Section  6(e),  each person,  if any, who controls the
Initial Purchaser or any Holder of Registrable  Securities within the meaning of
Section 15 of the  Securities  Act or Section 20 of the  Exchange Act shall have

                                       17
<PAGE>

the same rights to  contribution  as the Initial  Purchaser or such Holder,  and
each person,  if any, who controls the Company  within the meaning of Section 15
of the  Securities  Act or  Section 20 of the  Exchange  Act shall have the same
rights to contribution as the Company, as the case may be.

     Section 7. Information Requirements.  (a) The Company covenants that, if at
any time before the end of the  Effectiveness  Period the Company is not subject
to the reporting  requirements  of the Exchange Act, the Company will  cooperate
with any  Holder of  Registrable  Securities  and take such  further  reasonable
action as any Holder of Registrable Securities may reasonably request in writing
(including,  without limitation,  making such reasonable  representations as any
such Holder may  reasonably  request),  all to the extent  required from time to
time to enable such Holder to sell Registrable  Securities without  registration
under the Securities  Act within the  limitation of the  exemptions  provided by
Rule 144 and  Rule  144A  under  the  Securities  Act and  customarily  taken in
connection with sales pursuant to such  exemptions.  Upon the written request of
any Holder of Registrable Securities, the Company shall deliver to such Holder a
written  statement  as to whether  the  Company  has  complied  with such filing
requirements,  unless such a statement has been  included in the Company's  most
recent report  required to be filed and filed  pursuant to Section 13 or Section
15(d) of Exchange Act. Notwithstanding the foregoing,  nothing in this Section 7
shall be deemed to require the Company to register any of its  securities  under
any section of the Exchange Act.

     (b) The  Company  shall file  reports  required to be filed by it under the
Exchange Act.

     Section 8. Underwritten Registration.  If any of the Registrable Securities
covered by any Shelf  Registration  Statement are to be sold in an  underwritten
offering,  the investment  banker or investment  bankers and manager or managers
that will  administer  the offering  will be  investment  bankers of  recognized
national  standing  selected  by the  Holders of a majority  in interest of such
Registrable Securities included in such offering,  subject to the consent of the
Company  (which will not be  unreasonably  withheld or  delayed).  No person may
participate in any  underwritten  registration  hereunder unless such person (i)
agrees to sell such  person's  Registrable  Securities  on the basis  reasonably
provided in any  underwriting  arrangements  approved  by the  persons  entitled
hereunder  to approve such  arrangements;  and (ii)  completes  and executes all
questionnaires,   powers  of  attorney,  indemnities,  underwriting  agreements,
lock-up  agreements and other documents  reasonably  required under the terms of
such underwriting arrangements.

     Section 9. Miscellaneous.

     (a) Remedies. In the event of a breach by the Company or by a Holder of any
of their  respective  obligations  under  this  Agreement,  each  Holder  or the
Company,  in addition to being  entitled to exercise all rights  granted by law,
including, without limitation, recovery of damages, will be entitled to specific
performance  of its rights  under this  Agreement.  The  Company and each Holder
agree that  monetary  damages  would not be adequate  compensation  for any loss
incurred by reason of a breach by it of any of the  provisions of this Agreement
and  hereby  further  agree  that,  in the  event  of any  action  for  specific
performance  in respect of such  breach,  they shall  waive the  defense  that a

                                       18
<PAGE>

remedy at law would be adequate. This Section 9(a) shall not apply to any breach
for which Liquidated Damages have been specifically provided hereunder.

     (b) No  Inconsistent  Agreements.  The  Company has not and shall not enter
into any agreement that is  inconsistent  with the rights granted to the Holders
in this Agreement or otherwise  conflicts with the provisions hereof. The rights
granted to the Holders  hereunder  do not in any way  conflict  with and are not
inconsistent  with the rights  granted to the  holders  of the  Company's  other
issued and outstanding securities under any such agreements.  The Company is not
currently a party to any agreement granting any registration rights with respect
to any of its  securities  to any  person  which  conflicts  with the  Company's
obligations  hereunder  or gives  any  other  party  the  right to  include  any
securities in any Registration  Statement filed pursuant hereto, except for such
rights and conflicts as have been irrevocably waived.

     (c) No Adverse Action  Affecting the  Registrable  Securities.  The Company
will not take any action with respect to the Registrable  Securities which would
adversely  affect the ability of any of the Holders to include such  Registrable
Securities in a registration undertaken pursuant to this Agreement.

     (d) No Piggyback on Registrations. After the date hereof, the Company shall
not  grant  to any of its  security  holders  (other  than the  Holders  in such
capacity) the right to include any of its  securities in any Shelf  Registration
Statement.

     (e) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended,  modified or supplemented,  and
waivers or consents to departures from the provisions  hereof, may not be given,
without  the  written  consent of the  Holders of a majority  in interest of the
Registrable  Securities,  provided,  however,  that,  for the  purposes  of this
Agreement,  Registrable  Securities that are owned,  directly or indirectly,  by
either the Company or an  Affiliate  of the Company are not deemed  outstanding.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof  with  respect  to a matter  that  relates  exclusively  to the rights of
Holders whose  Registrable  Securities are being sold pursuant to a Registration
Statement  and that does not directly or  indirectly  affect the rights of other
Holders may be given by Holders of a majority  in  interest  of the  Registrable
Securities being sold by such Holders pursuant to such  Registration  Statement,
provided,  however,  that the  provisions  of this  sentence may not be amended,
modified,  or  supplemented  except in  accordance  with the  provisions  of the
immediately   preceding   sentence.   Each  Holder  of  Registrable   Securities
outstanding at the time of any such amendment, modification,  supplement, waiver
or consent or  thereafter  shall be bound by any such  amendment,  modification,
supplement, waiver or consent effected pursuant to this Section 9(e), whether or
not any notice,  writing or marking  indicating  such  amendment,  modification,
supplement,  waiver or  consent  appears  on the  Registrable  Securities  or is
delivered to such Holder.

     (f) Notices.  All notices and other  communications  provided for herein or
permitted  hereunder  shall  be  made  in  writing  by  hand-delivery,   courier
guaranteeing  overnight  delivery,  certified  first-class  mail, return receipt
requested,  or telecopy and shall be deemed given (i) when made, if made by hand
delivery, (ii) upon confirmation,  if made by telecopier, (iii) one (1) Business

                                       19
<PAGE>

Day after being  deposited  with such courier,  if made by overnight  courier or
(iv) on the date  indicated  on the notice of  receipt,  if made by  first-class
mail, to the parties as follows:

          (i) if to a Holder, to the address of such Holder as it appears in the
     Notice and Questionnaire,  or, if not so specified,  in the Common Stock or
     Notes register of the Company, as applicable;

          (ii) if to the Company to:

               The Profit Recovery Group International, Inc.
               2300 Windy Ridge Parkway
               Suite 100 North
               Atlanta, GA  30339-8426
               Telephone No.  (770) 779-3900
               Facsimile No.  (770) 779-3034
               Attention:  Chief Financial Officer

          (iii) If to the Initial Purchasers, to:

               Merrill Lynch & Co.,
               Merrill Lynch, Pierce, Fenner & Smith
                    Incorporated
               4 World Financial Center
               New York, New York  10080
               Attention:  Investment Banking Counsel
               Telecopy No.:  (212) 449-3307

Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given, when delivered by hand, if personally delivered;
one Business Day after being  timely  delivered to a next-day air courier,  upon
receipt by the Company after being deposited in the mail,  postage  prepaid,  if
mailed; and when receipt is acknowledged by the recipient's  telecopier machine,
if telecopied.

     (g)  Successors and Assigns.  This Agreement  shall inure to the benefit of
and be binding upon the successors and permitted  assigns of each of the parties
and shall inure to the benefit of each existing and future  Holder.  The Company
may not assign its rights or  obligations  hereunder  without the prior  written
consent of the Holders of a majority in interest of the Registrable  Securities,
other than by operation of law  pursuant to a merger or  consolidation  to which
the Company is a party.

     (h)  Counterparts.  This  Agreement  may  be  executed  in  any  number  of
counterparts  by the parties  hereto,  each of which when so  executed  shall be
deemed to be an original and all of which taken  together  shall  constitute one
and the same instrument.

                                       20
<PAGE>

     (i) Governing  Law. THIS  AGREEMENT  SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND  PERFORMED  WITHIN THE STATE OF NEW YORK  WITHOUT  REGARD TO  PRINCIPLES  OF
CONFLICTS OF LAW.

     (j) Severability.  If any term, provision,  covenant or restriction of this
Agreement is held by a court of competent  jurisdiction to be invalid,  illegal,
void or  unenforceable,  the remainder of the terms,  provisions,  covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected,  impaired or  invalidated,  and the parties hereto shall use
their best efforts to find and employ an  alternative  means to achieve the same
or substantially the same result as that  contemplated by such term,  provision,
covenant or restriction, it being intended that all of the rights and privileges
of the parties shall be enforceable to the fullest extent permitted by law.

     (k)  Headings.  The  headings  in this  Agreement  are for  convenience  of
reference only and shall not limit or otherwise  affect the meaning hereof.  All
references  made in this  Agreement to "Section" and  "paragraph"  refer to such
Section or paragraph of this Agreement, unless expressly stated otherwise.

     (l) Entire Agreement.  This Agreement is intended by the parties as a final
expression  of their  agreement  and is intended to be a complete and  exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained  herein and the registration  rights granted by the
Company with respect to the  Registrable  Securities.  Except as provided in the
Purchase  Agreement,  there  are  no  restrictions,   promises,   warranties  or
undertakings,  other than those set forth or referred to herein, with respect to
the  registration  rights granted by the Company with respect to the Registrable
Securities.  This  Agreement  supersedes all prior  agreements and  undertakings
among the parties solely with respect to such registration rights.

     (m)  Termination.  This  Agreement  and  the  obligations  of  the  parties
hereunder shall terminate upon the end of the Effectiveness  Period,  except for
any  liabilities  or  obligations  under  Sections  4,  5 or 6  hereof  and  the
obligations to make payments of and provide for Liquidated Damages under Section
3 hereof to the extent such damages accrue prior to the end of the Effectiveness
Period, each of which shall remain in effect in accordance with its terms.

                                       21
<PAGE>

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

                               THE PROFIT RECOVERY GROUP INTERNATIONAL, INC.

                               By:  /s/ John M. Cook
                                  --------------------------------------------
                                  Name:  John M. Cook
                                  Title: Chief Executive Officer

The foregoing Registration Rights
Agreement is hereby confirmed and
agreed to as of the date first written above:

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
  INCORPORATED

By: MERRILL LYNCH, PIERCE, FENNER & SMITH
      INCORPORATED

By: /s/ Robert Powers
    --------------------------------------
         Authorized Signatory

Acting on behalf of itself and the Initial Purchasers

                                       22
<PAGE>

                                                                         Annex A

            FORM OF SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

     The undersigned beneficial holder of 4 3/4% Convertible  Subordinated Notes
due 2006 (the "Notes") of The Profit Recovery Group International,  Inc. ("PRG")
or common stock,  without par value issued upon conversion of Notes (the "Common
Stock"  and  together  with the Notes,  the  "Registrable  Securities"),  of PRG
understands  that PRG has  filed or  intends  to file  with the  Securities  and
Exchange Commission (the "SEC") a registration statement on Form S-3 (the "Shelf
Registration  Statement") for the  registration and resale under Rule 415 of the
Securities Act of 1933, as amended (the  "Securities  Act"),  of the Registrable
Securities in accordance  with the terms of the  Registration  Rights  Agreement
(the  "Registration  Rights  Agreement") dated November 26, 2001 between PRG and
the initial  purchasers  named therein.  The  Registration  Rights  Agreement is
available from PRG upon request at the address set forth below.  All capitalized
terms not otherwise  defined herein shall have the meanings  ascribed thereto in
the Registration Rights Agreement.

     Each beneficial owner of Registrable Securities is entitled to the benefits
of the Registration  Rights Agreement.  In order to sell or otherwise dispose of
any  Registrable  Securities  pursuant to the Shelf  Registration  Statement,  a
beneficial  owner of  Registrable  Securities  generally  will be required to be
named  as  a  selling  securityholder  in  the  related  prospectus,  deliver  a
prospectus  to  purchasers  of  Registrable  Securities  and be  bound  by those
provisions of the Registration  Rights  Agreement  applicable to such beneficial
owner  (including  certain  indemnification   provisions  as  described  below).
Beneficial owners that do not complete this Notice and Questionnaire and deliver
it to PRG as provided below will not be named as selling  securityholders in the
prospectus  and  therefore  will  not  be  permitted  to  sell  any  Registrable
Securities pursuant to the Shelf Registration  Statement.  Beneficial owners are
encouraged  to complete and deliver this Notice and  Questionnaire  prior to the
effectiveness of the Shelf Registration Statement so that such beneficial owners
may be named as selling securityholders in the related prospectus at the time of
effectiveness.  Upon  receipt of a  completed  Notice and  Questionnaire  from a
beneficial  owner  following  the   effectiveness  of  the  Shelf   Registration
Statement,  PRG will,  as promptly as  practicable  but in any event within five
business days of such receipt,  file such  amendments to the Shelf  Registration
Statement or  supplements  to the related  prospectus as are necessary to permit
such holder to deliver such prospectus to purchasers of Registrable Securities.

     Certain   legal   consequences   arise   from   being   named  as   selling
securityholders in the Shelf Registration  Statement and the related prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel  regarding the consequences of being
named or not being named as a selling  securityholder in the Shelf  Registration
Statement and the related prospectus.

Notice

     The  undersigned   beneficial  owner  (the  "Selling   Securityholder")  of
Registrable  Securities  hereby gives notice to PRG of its  intention to sell or
otherwise dispose of Registrable Securities  beneficially owned by it and listed
below in Item 3 (unless otherwise  specified under Item 3) pursuant to the Shelf

                                      A-1
<PAGE>

Registration  Statement.  The undersigned,  by signing and returning this Notice
and Questionnaire, understands that it will be bound by the terms and conditions
of this Notice and Questionnaire and the Registration Rights Agreement.

     Pursuant to the Registration  Rights Agreement,  the undersigned has agreed
to  indemnify  and hold  harmless  the  initial  purchasers  of the  Registrable
Securities and each person, if any, who controls such initial  purchasers within
the  meaning  of either  Section 15 of the  Securities  Act or Section 20 of the
Securities  Exchange Act of 1934, as amended (the  "Exchange  Act") and PRG, and
each person, if any, who controls PRG within the meaning of either such section,
against  any and all loss,  liability,  claim,  damage  and  expense  arising in
connection  with  statements  concerning  the  undersigned  made  in  the  Shelf
Registration   Statement  or  the  related   prospectus  in  reliance  upon  the
information provided in this Notice and Questionnaire.

                                       A-2
<PAGE>

     The  undersigned  hereby  provides  the  following  information  to PRG and
represents and warrants that such information is accurate and complete:

                                  QUESTIONNAIRE

1.   (a) Full Legal Name of Selling Securityholder:

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

     (b)  Full  Legal Name of  Registered  Holder (if not the same as (a) above)
          through which Registrable Securities listed in (3) below are held:

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

     (c)  Full Legal Name of DTC  Participant (if applicable and if not the same
          as (b) above) through which Registrable Securities listed in (3) below
          are held:

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

2.   Address for Notices to Selling Securityholder:

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

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

     Telephone:
                ----------------------------------------------------------------

     Fax:
           ---------------------------------------------------------------------

     Contact Person:
                     -----------------------------------------------------------

3.   Beneficial Ownership of Registrable Securities:

     (a)  Type and  principal  amount  of  Registrable  Securities  beneficially
          owned:

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

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

     (b)   CUSIP No(s). of such Registrable Securities beneficially owned:

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

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

4.   Beneficial ownership of PRG securities owned by the Selling Securityholder:

     Except as set forth  below in this Item  (4),  the  undersigned  is not the
     beneficial  or  registered  owner of any  securities  of PRG other than the
     Registrable Securities listed above in Item (3).

                                       A-3
<PAGE>

     (a)  Type and amount of other securities  beneficially owned by the Selling
          Securityholder:

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

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

     (b)  CUSIP No(s). of such Registrable Securities beneficially owned:

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

5.   Relationship with PRG:

     Except  as  set  forth  below,  neither  the  undersigned  nor  any  of its
     affiliates,  directors or principal equity holder (5% or more) has held any
     position or office or has had any other material  relationship with PRG (or
     its predecessors or affiliates) during the past three years.

     State any exceptions here:

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

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

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

6.   Plan of Distribution:

     Except  as set  forth  below,  the  undersigned  (including  its  donees or
     pledgees) intends to distribute the Registrable  Securities listed above in
     Item (3) pursuant to the Shelf  Registration  Statement only as follows (if
     at all): Such Registrable Securities may be sold from time to time directly
     by the undersigned or alternatively  through underwriters or broker-dealers
     or agents. If the Registrable  Securities are sold through  underwriters or
     broker-dealers,   the  Selling   Securityholder  will  be  responsible  for
     underwriting   discounts  or  commissions  or  agent's  commissions.   Such
     Registrable  Securities  may be sold in one or more  transactions  at fixed
     prices,  at prevailing market prices at the time of sale, at varying prices
     determined at the time of sale, or at negotiated prices.  Such sales may be
     effected in transactions  (which may involve block transactions) (i) on any
     national  securities exchange or quotation service on which the Registrable
     Securities  may be  listed  or  quoted  at the  time of  sale,  (ii) in the
     over-the-counter  market,  (iii)  in  transactions  otherwise  than on such
     exchanges or services or in the over-the-counter market or (iv) through the
     writing of options. In connection with sales of the Registrable  Securities
     or otherwise,  the  undersigned  may enter into hedging  transactions  with
     broker-dealers,  which may in turn engage in short sales of the Registrable
     Securities,  short and  deliver  Registrable  Securities  to close out such
     short positions, or loan or pledge Registrable Securities to broker-dealers
     that in turn may sell such securities.

                                       A-4
<PAGE>

     State any exceptions here:

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

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

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

     Note:In no event may such  method(s)  of  distribution  take the form of an
          underwritten offering of the Registrable  Securities without the prior
          agreement of PRG.

     The undersigned  acknowledges  that it understands its obligation to comply
with the provisions of the Securities Exchange Act of 1934, as amended,  and the
rules  thereunder  relating to stock  manipulation,  particularly  Regulation  M
thereunder  (or any successor  rules or  regulations),  in  connection  with any
offering of Registrable Securities pursuant to the Shelf Registration Statement.
The undersigned  agrees that neither it nor any person acting on its behalf will
engage in any transaction in violation of such provision.

     The Selling  Securityholder  hereby  acknowledges its obligations under the
Registration Rights Agreement to indemnify and hold harmless certain persons set
forth therein.

     Pursuant to the Registration Rights Agreement, PRG has agreed under certain
circumstances   to  indemnify  the  Selling   Securityholders   against  certain
liabilities.

     In accordance  with the  undersigned's  obligation  under the  Registration
Rights  Agreement  to provide  such  information  as may be  required by law for
inclusion  in the  Shelf  Registration  Statement,  the  undersigned  agrees  to
promptly notify PRG of any  inaccuracies or changes in the information  provided
herein that may occur  subsequent to the date hereof at any time while the Shelf
Registration Statement remains effective.  All notices hereunder and pursuant to
the  Registrant  Rights  Agreement  shall be made in writing at the  address set
forth below.

     By  signing  below,  the  undersigned  consents  to the  disclosure  of the
information  contained  herein in its answers to Items (1) through (6) above and
the inclusion of such  information in the Shelf  Registration  Statement and the
related  prospectus.  The undersigned  understands that such information will be
relied upon by PRG in connection  with the preparation or amendment of the Shelf
Registration Statement and the related prospectus.

                                      A-5
<PAGE>

     IN WITNESS WHEREOF,  the  undersigned,  by authority duly given, has caused
this Notice and  Questionnaire  to be executed and delivered either in person or
by its duly authorized agent.

                                Beneficial Owner

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

     Dated:_______________

        PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE
              TO THE PROFIT RECOVERY GROUP INTERNATIONAL, INC. AT:

                            2300 Windy Ridge Parkway
                                 Suite 100 North
                             Atlanta, GA 30339-8426
                        Attention: Chief Financial Office

                                       A-6
<PAGE>

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