Document:

<PAGE>

                                                                     Exhibit 4.3

                                                                         B293581

             COMMON STOCK

             INCORPORATED UNDER THE LAWS

             OF THE STATE OF DELAWARE

                                [GRAPHIC IMAGE]               CUSIP 892335 10 0

                                                               SEE REVERSE FOR
                               TOYS "R" US, INC.             CERTAIN DEFINITIONS
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THIS CERTIFIES THAT

IS THE OWNER OF
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         FULL-PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK $.10 PAR VALUE
OF TOYS "R" US, INC.

         transferable on the books of the Corporation in person or by
         duly authorized attorney upon surrender of this certificate
         properly endorsed. This certificate and the shares
         represented hereby are issued and shall be subject to all of
         the provisions of the Certificate of Incorporation of the
         Corporation (a copy of which is on file at the office of the
         Transfer Agent) to all of which the holder by acceptance
         hereof assents. This certificate is not valid until
         countersigned, and registered by the Transfer Agent and
         Registrar.

Witness the seal of the Corporation and the signatures of its duly authorized
officers

Dated:

                                        COUNTERSIGNED AND REGISTERED:

                                        AMERICAN STOCK TRANSFER & TRUST COMPANY
                                        NEW YORK, N.Y.
                                        TRANSFER AGENT AND REGISTRAR

                                        BY
                                            -----------------------------------
                             [SEAL]

                                            -----------------------------------
                                            AUTHORIZED SIGNATURE

<PAGE>

                               TOYS "R" US, INC.

         The corporation will furnish without charge, to each stockholder who so
requests, a copy of the provisions setting forth the designations, preferences
and relative, participating, optional or other special rights of each class of
stock or series thereof which the corporation is authorized to issue, and the
qualifications, limitations or restrictions of such preferences and/or rights.
Any such request may be addressed to the Secretary of the corporation or to the
Transfer Agent named on the face hereof.

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

TEN COM --  as tenants in common        UNIF GIFT MIN ACT --     Custodian
TEN ENT --  as tenants by the entireties                     -------------------
JT TEN  --  as joint tenants with right                      (Cust)      (Minor)
            of survivorship and not as                       under Uniform Gifts
            tenants in common                                to Minors Act

                                                             -------------------
                                                                  (State)

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

For value received _________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
   IDENTIFYING NUMBER OF ASSIGNEE

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  (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

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                                                                         shares
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of the capital stock represented by the within Certificate and do hereby
irrevocably constitute and appoint ____________________________________________
Attorney to transfer the said stock on the books of the within named
Corporation with full power of substitution in the premises.

Dated
      ------------------

                              --------------------------------------------------
                      NOTICE: The signature to this assignment must correspond
                              with the name as written upon the face of the
                              certificate in every particular without
                              alteration or enlargment or any change whatever.
                              The signature of the person executing this power
                              must be guaranteed by an eligible guarantor
                              institution such as a commercial bank, trust
                              company, securities broker/dealer, credit union,
                              or a savings association participating in a
                              medallion program approved by the Securities
                              Transfer Association, Inc.

This certificate also evidences and entitles the holder hereof to certain Rights
as set forth in the Rights Agreement between Toys "R" Us, Inc. and the Rights
Agent thereunder (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the principal
offices of Toys "R" Us, Inc. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate certificate and will
no longer be evidenced by this certificate. Toys "R" Us, Inc. will mail to the
holder of this certificate a copy of the Rights Agreement, as in effect on the
date of mailing, without charge, promptly after receipt of a written request
therefor. Under certain circumstances set forth in the Rights Agreement, Rights
issued to any Person who becomes an Acquiring Person (as defined in the Rights
Agreement) shall become null and void.<PAGE>

                                                                    Exhibit 4.11

                               TOYS "R" US, INC.

                                      AND

                             THE BANK OF NEW YORK,

                           AS PURCHASE CONTRACT AGENT

                          PURCHASE CONTRACT AGREEMENT

                           Dated as of [______], 2002

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
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ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.......................1

        SECTION 1.1       Definitions....................................................1
        SECTION 1.2       Compliance Certificates and Opinions..........................16
        SECTION 1.3       Form of Documents Delivered to Agent..........................17
        SECTION 1.4       Acts of Holders; Record Dates.................................17
        SECTION 1.5       Notices.......................................................19
        SECTION 1.6       Notice to Holders; Waiver.....................................20
        SECTION 1.7       Effect of Headings and Table of Contents......................20
        SECTION 1.8       Successors and Assigns........................................20
        SECTION 1.9       Separability Clause...........................................21
        SECTION 1.10      Benefits of Agreement.........................................21
        SECTION 1.11      Governing Law.................................................21
        SECTION 1.12      Legal Holidays................................................21
        SECTION 1.13      Counterparts..................................................21
        SECTION 1.14      Inspection of Agreement.......................................22

ARTICLE II. CERTIFICATE FORMS...........................................................22

        SECTION 2.1       Forms of Certificates Generally...............................22
        SECTION 2.2       Form of Agent's Certificate of Authentication.................23

ARTICLE III. THE UNITS..................................................................24

        SECTION 3.1       Title and Terms; Denominations................................24
        SECTION 3.2       Rights and Obligations Evidenced by the Certificates..........24
        SECTION 3.3       Execution, Authentication, Delivery and Dating................25
        SECTION 3.4       Temporary Certificates........................................26
        SECTION 3.5       Registration; Registration of Transfer and Exchange...........26
        SECTION 3.6       Book-Entry Interests..........................................28
        SECTION 3.7       Notices to Holders............................................29
        SECTION 3.8       Appointment of Successor Clearing Agency......................29
        SECTION 3.9       Definitive Certificates.......................................29
        SECTION 3.10      Mutilated, Destroyed, Lost and Stolen Certificates............30
        SECTION 3.11      Persons Deemed Owners.........................................31
        SECTION 3.12      Cancellation..................................................32
        SECTION 3.13      Establishment of Stripped Units...............................32
        SECTION 3.14      Reestablishment of Normal Units...............................34
        SECTION 3.15      Transfer of Collateral Upon Occurrence of Termination Event...36
        SECTION 3.16      No Consent to Assumption......................................37
</TABLE>

                                       i
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ARTICLE IV. THE NOTES...................................................................37

        SECTION 4.1       Payment of Interest; Rights to Interest Payments Preserved;
                          Notice........................................................37
        SECTION 4.2       Notice and Voting.............................................38
        SECTION 4.3       Tax Event Redemption..........................................39

ARTICLE V. THE PURCHASE CONTRACTS; THE REMARKETING......................................40

        SECTION 5.1       Purchase of Shares of Common Stock............................40
        SECTION 5.2       Reserved......................................................42
        SECTION 5.3       Reserved......................................................42
        SECTION 5.4       Payment of Purchase Price; Remarketing........................42
        SECTION 5.5       Issuance of Shares of Common Stock............................50
        SECTION 5.6       Adjustment of Settlement Rate.................................50
        SECTION 5.7       Notice of Adjustments and Certain Other Events................58
        SECTION 5.8       Termination Event; Notice.....................................59
        SECTION 5.9       Early Settlement..............................................59
        SECTION 5.10      Early Settlement Upon Merger..................................61
        SECTION 5.11      Charges and Taxes.............................................63
        SECTION 5.12      No Fractional Shares..........................................63

ARTICLE VI. REMEDIES....................................................................64

        SECTION 6.1       Unconditional Right of Holders to Purchase Common Stock.......64
        SECTION 6.2       Restoration of Rights and Remedies............................64
        SECTION 6.3       Rights and Remedies Cumulative................................64
        SECTION 6.4       Delay or Omission Not Waiver..................................64
        SECTION 6.5       Undertaking for Costs.........................................65
        SECTION 6.6       Waiver of Stay or Extension Laws..............................65

ARTICLE VII. THE AGENT..................................................................65

        SECTION 7.1       Certain Duties, Rights and Immunities.........................65
        SECTION 7.2       Notice of Default.............................................68
        SECTION 7.3       Certain Rights of Agent.......................................68
        SECTION 7.4       Not Responsible for Recitals, Etc.............................69
        SECTION 7.5       May Hold Units and Other Dealings.............................69
        SECTION 7.6       Money Held In Custody.........................................69
        SECTION 7.7       Compensation and Reimbursement................................69
        SECTION 7.8       Corporate Agent Required; Eligibility.........................70
        SECTION 7.9       Resignation and Removal; Appointment of Successor.............71
        SECTION 7.10      Acceptance of Appointment By Successor........................72
        SECTION 7.11      Merger, Conversion, Consolidation or Succession to Business...73
        SECTION 7.12      Preservation of Information; Communications to Holders........73
        SECTION 7.13      Failure to Act................................................74
        SECTION 7.14      No Obligations of Agent.......................................74
        SECTION 7.15      Tax Compliance................................................74
</TABLE>

                                       ii
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ARTICLE VIII. SUPPLEMENTAL AGREEMENTS...................................................75

        SECTION 8.1       Supplemental Agreements Without Consent of Holders............75
        SECTION 8.2       Supplemental Agreements With Consent of Holders...............75
        SECTION 8.3       Execution of Supplemental Agreements..........................77
        SECTION 8.4       Effect of Supplemental Agreements.............................77
        SECTION 8.5       Reference to Supplemental Agreements..........................77

ARTICLE IX. CONSOLIDATION, MERGER, SALE OR CONVEYANCE...................................78

        SECTION 9.1       Covenant Not to Merge, Consolidate, Sell or Convey Assets
                          Except Under Certain Conditions...............................78
        SECTION 9.2       Rights and Duties of Successor Corporation....................78

ARTICLE X. COVENANTS....................................................................79

        SECTION 10.1      Performance Under Purchase Contracts..........................79
        SECTION 10.2      Maintenance of office or Agency...............................79
        SECTION 10.3      Company to Reserve Common Stock...............................80
        SECTION 10.4      Covenants as to Common Stock..................................80
        SECTION 10.5      Statements of Officer of The Company as to Default............80
        SECTION 10.6      Tax Treatment.................................................80
</TABLE>

                                      iii
<PAGE>

         PURCHASE CONTRACT AGREEMENT, dated as of [______], 2002, between Toys
"R" Us, Inc., a Delaware corporation (the "Company"), and The Bank of New York,
a New York banking corporation, acting as purchase contract agent for the
Holders of Units from time to time (the "Agent").

                                    RECITALS

         The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Units.

         All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on behalf
of the Holders and delivered by the Agent, as provided in this Agreement, the
valid obligations of the Company, and to constitute this Agreement a valid
agreement of the Company, in accordance with its terms, have been done.

                                  WITNESSETH:

         For and in consideration of the premises and the purchase of the Units
by the Holders thereof, it is mutually agreed as follows:

                                   ARTICLE I.
                        DEFINITIONS AND OTHER PROVISIONS
                             OF GENERAL APPLICATION

         SECTION 1.1 Definitions.

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

         (a)      the terms defined in this Article have the meanings assigned
                  to them in this Article and include the plural as well as the
                  singular, and nouns and pronouns of the masculine gender
                  include the feminine and neuter genders;

         (b)      all accounting terms not otherwise defined herein have the
                  meanings assigned to them in accordance with generally
                  accepted accounting principles in the United States;

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

<PAGE>

         (d)      the following terms have the meanings given to them in this
                  Section 1.1(d):

                  "Act" when used with respect to any Holder, has the meaning
         specified in Section 1.4.

                  "Affiliate" has the same meaning as given to that term in Rule
         405 of the Securities Act or any successor rule thereunder.

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

                  "Agent-purchased Treasury Consideration" has the meaning
         specified in Section 5.4(b)(i).

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

                  "Applicable Market Value" has the meaning specified in Section
         5.1.

                  "Applicable Ownership Interest" means, with respect to a
         Normal Unit and the U.S. Treasury securities in the Treasury Portfolio,
         (A) a 1/20, or 5.0%, undivided beneficial ownership interest in a
         $1,000 principal or interest amount of a principal or interest strip in
         a U.S. Treasury security included in such Treasury Portfolio which
         matures on or prior to the Stock Purchase Date and (B) for the
         scheduled interest Payment Date on the Notes that occurs on the Stock
         Purchase Date, in the case of a successful remarketing that occurs
         prior to the third Business Day immediately preceding the Stock
         Purchase Date, or for each scheduled interest Payment Date on the Notes
         that occurs after the Tax Event Redemption Date and on or before the
         Stock Purchase Date, in the case of a Tax Event Redemption, a 5.0%
         undivided beneficial ownership interest in a $1,000 principal or
         interest amount of a principal or interest strip in a U.S. Treasury
         security included in the Treasury Portfolio that matures on or prior to
         that interest Payment Date or Dates.

                  "Applicable Principal Amount" means the aggregate principal
         amount of the Notes that are components of Normal Units on the Initial
         Remarketing Date or any Subsequent Remarketing Date that occurs prior
         to the third Business Day preceding the Stock Purchase Date and that
         are to be included in any remarketing.

                  "Applicants" has the meaning specified in Section 7.12(b).

                                       2
<PAGE>

                  "Bankruptcy Code" means Title 11 of the United States Code, or
         any other law of the United States that from time to time provides a
         uniform system of bankruptcy laws.

                  "Beneficial Owner" means, with respect to a Book-Entry
         Interest, a Person who is the beneficial owner of such Book-Entry
         Interest as reflected on the books of the Clearing Agency or on the
         books of a Person maintaining an account with such Clearing Agency
         (directly as a Clearing Agency Participant or as an indirect
         participant, in each case in accordance with the rules of such Clearing
         Agency).

                  "Board of Directors" means either the Board of Directors of
         the Company or the Executive Committee of such Board or any other
         committee of such Board duly authorized to act generally or in any
         particular respect for such Board hereunder.

                  "Board Resolution" means (i) a copy of a resolution certified
         by the Secretary or the Assistant Secretary of the Company to have been
         duly adopted by the Board of Directors and to be in full force and
         effect on the date of such certification, (ii) a copy of a unanimous
         written consent of the Board of Directors or (iii) a certificate signed
         by the authorized officer or officers to whom the Board of Directors
         has delegated its authority, and in each case, delivered to the Agent.

                  "Book-Entry Interest" means a beneficial interest in a Global
         Certificate, ownership and transfers of which shall be maintained and
         made through book entries by a Clearing Agency as described in Section
         3.6.

                  "Business Day" means any day other than a Saturday, Sunday or
         any other day on which banking institutions and trust companies in The
         State of New York or at a place of payment are authorized or required
         by law, regulation or executive order to be closed.

                  "Capital Stock" means any and all shares, interests, rights to
         purchase, warrants, options, participations or other equivalents of or
         interests in (however designated, whether voting or non-voting)
         corporate stock or similar interests in other types of entities.

                  "Cash" means any coin or currency of the United States as at
         the time shall be legal for payment of public and private debts.

                  "Cash Merger" has the meaning set forth in Section 5.10.

                  "Cash Settlement" has the meaning set forth in Section 5.4(a).

                  "Certificate" means a Normal Units Certificate or a Stripped
         Units Certificate.

                                       3
<PAGE>

                  "Clearing Agency" means an organization registered as a
         "Clearing Agency" pursuant to Section 17A of the Exchange Act that is
         acting as a depositary for the Units and in whose name, or in the name
         of a nominee of that organization, shall be registered a Global
         Certificate and which shall undertake to effect book-entry transfers
         and pledges of the Units.

                  "Clearing Agency Participant" means a broker, dealer, bank,
         other financial institution or other Person for whom from time to time
         the Clearing Agency effects book-entry transfers and pledges of
         securities deposited with the Clearing Agency.

                  "Closing Price" has the meaning specified in Section 5.1.

                  "Collateral" has the meaning specified in Section 2.1 of the
         Pledge Agreement.

                  "Collateral Agent" means JPMorgan Chase Bank, a New York
         banking corporation, as Collateral Agent under the Pledge Agreement
         until a successor Collateral Agent shall have become such pursuant to
         the applicable provisions of the Pledge Agreement, and thereafter
         "Collateral Agent" shall mean the Person who is then the Collateral
         Agent thereunder.

                  "Collateral Substitution" has the meaning specified in Section
         3.13.

                  "Common Stock" means the Common Stock, par value $.10 per
         share, of the Company.

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

                  "Constituent Person" has the meaning specified in Section
         5.6(b).

                  "Corporate Trust Office" means the office of the Agent at
         which, at any particular time, its corporate trust business shall be
         principally administered, which office at the date hereof is located at
         101 Barclay Street, Floor 21 West, New York, New York, 10286,
         Attention: Corporate Trust Administration, or such other address as the
         Trustee may designate from time to time by notice to the Holders and
         the Company, or the principal corporate trust office of any successor
         Trustee (or such other address is such successor Trustee may designate
         from time to time by notice to the Holders and the Company).

                  "Coupon Rate" means the percentage rate per annum at which
         each Note will bear interest initially.

                                       4
<PAGE>

                  "Current Market Price" has the meaning specified in Section
         5.6(a)(8).

                  "Custodial Agent" means JPMorgan Chase Bank, a New York
         banking corporation, as Custodial Agent under the Pledge Agreement
         until a successor Custodial Agent shall have become such pursuant to
         the applicable provisions of the Pledge Agreement, and thereafter
         "Custodial Agent" shall mean the Person who is then the Custodial Agent
         thereunder.

                  "Depositary" means, initially, DTC, until another Clearing
         Agency becomes its successor.

                  "DTC" means The Depository Trust Company, the initial Clearing
         Agency.

                  "Early Settlement" has the meaning specified in Section
         5.9(a).

                  "Early Settlement Amount" has the meaning specified in Section
         5.9(a).

                  "Early Settlement Date" has the meaning specified in Section
         5.9(a).

                  "Early Settlement Rate" has the meaning specified in Section
         5.9(b).

                  "Exchange Act" means the Securities Exchange Act of 1934 and
         any statute successor thereto, in each case as amended from time to
         time, and the rules and regulations promulgated thereunder.

                  "Expiration Date" has the meaning specified in Section 1.4.

                  "Expiration Time" has the meaning specified in Section
         5.6(a)(6).

                  "Fair Market Value" with respect to securities distributed in
         a Spin-Off means (a) in the case of any Spin-Off that is effected
         simultaneously with an initial public offering of such securities, the
         initial public offering price of those securities, and (b) in the case
         of any other Spin-Off, the average of the Sale Prices of those
         securities over the first 10 Trading Days after the effective date of
         such Spin-Off.

                  "Global Certificate" means a Certificate that evidences all or
         part of the Units and is registered in the name of a Depositary or a
         nominee thereof.

                  "Holder" means the Person in whose name the Units evidenced by
         a Normal Units Certificate and/or a Stripped Units Certificate is
         registered in the related Normal Units Register and/or the Stripped
         Units Register, as the case may be.

                  "Indenture" means the Indenture, as supplemented by the First
         Supplemental Indenture, in each case, dated as of May , 2002, between
         the Company and the Trustee relating to the Notes.

                                       5
<PAGE>

                  "Indenture Trustee" means The Bank of New York, as trustee
         under the Indenture, or any successor thereto.

                  "Initial Remarketing Date" means the date of the initial
         remarketing, which shall occur on the third Business Day immediately
         preceding May 16, 2005.

                  "Issuer Order" or "Issuer Request" means a written order or
         request signed in the name of the Company by the Chief Executive
         Officer, the Chief Financial Officer, the President, any
         Vice-President, the Treasurer, any Assistant Treasurer, the Secretary
         or any Assistant Secretary (or other officer performing similar
         functions) of the Company and delivered to the Agent.

                  "Last Failed Remarketing" has the meaning specified in Section
         5.4(b)(ii).

                  "Merger Early Settlement" has the meaning specified in Section
         5.10.

                  "Merger Early Settlement Amount" has the meaning specified in
         Section 5.10.

                  "Merger Early Settlement Date" has the meaning specified in
         Section 5.10.

                  "Non-electing Share" has the meaning specified in Section
         5.6(b).

                  "Normal Unit" means the collective rights and obligations of a
         Holder of a Normal Units Certificate in respect of a Note or the
         Applicable Ownership Interest in the Treasury Portfolio, as the case
         may be, subject in each case to the Pledge thereof, and the related
         Purchase Contract.

                  "Normal Units Certificate" means a certificate evidencing the
         rights and obligations of a Holder in respect of the number of Normal
         Units specified on such certificate, substantially in the form of
         Exhibit A hereto.

                  "Normal Units Register" and "Normal Units Registrar" have the
         respective meanings specified in Section 3.5.

                  "Notes" means the series of senior debt securities of the
         Company designated the Senior Notes due 2007, to be issued under the
         Indenture.

                  "NYSE" has the meaning specified in Section 5.1.

                  "Officer's Certificate" means a certificate signed by the
         Chief Executive Officer, the Chief Financial Officer, the President,
         any Vice- President, the Treasurer, any Assistant Treasurer, the
         Secretary or any Assistant Secretary (or other officer performing
         similar functions) of the Company and delivered to the Agent.

                                       6
<PAGE>

                  "Opinion of Counsel" means an opinion in writing signed by
         legal counsel, who may be an employee of or counsel to the Company and
         who shall be reasonably acceptable to the Agent.

                  "Opt-out Treasury Consideration" has the meaning specified in
         Section 5.4(b)(v).

                  "Outstanding Units" means, as of the date of determination,
         all Normal Units or Stripped Units evidenced by Certificates
         theretofore authenticated, executed and delivered under this Agreement,
         except:

                  (i)      If a Termination Event has occurred, (A) Stripped
                           Units for which the related Treasury Securities have
                           been theretofore deposited with the Collateral Agent
                           in trust for the Holders of such Stripped Units and
                           (B) Normal Units for which the related Note or the
                           Applicable Ownership Interest in the Treasury
                           Portfolio, as the case may be, has been theretofore
                           deposited with the Agent in trust for the Holders of
                           such Normal Units;

                  (ii)     Normal Units and Stripped Units evidenced by
                           Certificates theretofore cancelled by the Agent or
                           delivered to the Agent for cancellation or deemed
                           cancelled pursuant to the provisions of this
                           Agreement; and

                  (iii)    Normal Units or Stripped Units evidenced by
                           Certificates in exchange for or in lieu of which
                           other Certificates have been authenticated, executed
                           on behalf of the Holder and delivered pursuant to
                           this Agreement, other than any such Certificate in
                           respect of which there shall have been presented to
                           the Agent proof satisfactory to it that such
                           Certificate is held by a bona fide purchaser in whose
                           hands the Normal Units or Stripped Units evidenced by
                           such Certificate are valid obligations of the
                           Company;

         provided, that in determining whether the Holders of the requisite
         number of the Normal Units or Stripped Units have given any request,
         demand, authorization, direction, notice, consent or waiver hereunder,
         Normal Units or Stripped Units owned by the Company or any Affiliate of
         the Company shall be disregarded and deemed not to be outstanding,
         except that, in determining whether the Agent shall be protected in
         relying upon any such request, demand, authorization, direction,
         notice, consent or waiver, only Normal Units or Stripped Units which a
         Responsible Officer of the Agent knows to be so owned shall be so
         disregarded. Normal Units or Stripped Units so owned which have been
         pledged in good faith may be regarded as Outstanding Units if the
         pledgee establishes to the satisfaction of the Agent the pledgee's
         right so to act with respect to such Normal Units or Stripped Units and
         that the pledgee is not the Company or any Affiliate of the Company.

                                       7
<PAGE>

                  "Payment Date" means each February 16, May 16, August 16 and
         November 16, commencing August 16, 2002. The amount of the first
         interest payment will be prorated to reflect the interest accrued
         between the initial issuance date of the Units and August 16, 2002.

                  "Permitted Investments" means any one of the following which
         shall mature not later than three Business Days prior to the Stock
         Purchase Date (i) any evidence of indebtedness with an original
         maturity of 365 days or less issued, or directly and fully guaranteed
         or insured, by the United States of America or any agency or
         instrumentality thereof (provided that the full faith and credit of the
         United States of America is pledged in support thereof or such
         indebtedness constitutes a general obligation of it); (ii) deposits,
         certificates of deposit or acceptances with an original maturity of 365
         days or less of any institution which is a member of the Federal
         Reserve System having combined capital and surplus and undivided
         profits of not less than US $200.0 million at the time of deposit;
         (iii) investments with an original maturity of 365 days or less of any
         Person that is fully and unconditionally guaranteed by a bank referred
         to in clause (ii); (iv) investments in commercial paper, other than
         commercial paper issued by the Company or its affiliates, of any
         corporation incorporated under the laws of the United States or any
         State thereof, which commercial paper has a rating at the time of
         purchase at least equal to "A-1" by Standard & Poor's Ratings Services
         ("S&P") or at least equal to "P-1" by Moody's Investors Service, Inc.
         ("Moody's"); and (v) investments in money market funds registered under
         the Investment Company Act of 1940, as amended, rated in the highest
         applicable rating category by S&P or Moody's.

                  "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.

                  "Pledge" means the pledge under the Pledge Agreement of the
         Notes, the Treasury Securities or the Applicable Ownership Interest in
         the Treasury Portfolio, as the case may be, in each case, constituting
         a part of the Units, property, cash, securities, financial assets and
         security entitlements of the Collateral Account (as defined in the
         Pledge Agreement) and any Proceeds of any of the foregoing pursuant to
         the Pledge Agreement.

                  "Pledge Agreement" means the Pledge Agreement, dated as of the
         date hereof, by and among the Company, the Collateral Agent, the
         Custodial Agent, the Securities Intermediary and the Agent, on its own
         behalf and as attorney-in-fact for the Holders from time to time of the
         Units.

                                       8
<PAGE>

                  "Pledged Applicable Ownership Interest in the Treasury
         Portfolio" has the meaning set forth in Section 2.1(d) of the Pledge
         Agreement.

                  "Pledged Notes" has the meaning set forth in Section 2.1(d) of
         the Pledge Agreement.

                  "Pledged Treasury Securities" has the meaning set forth in
         Section 2.1(d) of the Pledge Agreement.

                  "Predecessor Certificate" means a Predecessor Normal Units
         Certificate or a Predecessor Stripped Units Certificate.

                  "Predecessor Normal Units Certificate" of any particular
         Normal Units Certificate means every previous Normal Units Certificate
         evidencing all or a portion of the rights and obligations of the
         Company and the Holder under the Normal Units evidenced thereby; and,
         for the purposes of this definition, any Normal Units Certificate
         authenticated and delivered under Section 3.10 in exchange for or in
         lieu of a mutilated, destroyed, lost or stolen Normal Units Certificate
         shall be deemed to evidence the same rights and obligations of the
         Company and the Holder as the mutilated, destroyed, lost or stolen
         Normal Units Certificate.

                  "Predecessor Stripped Units Certificate" of any particular
         Stripped Units Certificate means every previous Stripped Units
         Certificate evidencing all or a portion of the rights and obligations
         of the Company and the Holder under the Stripped Units evidenced
         thereby; and, for the purposes of this definition, any Stripped Units
         Certificate authenticated and delivered under Section 3.10 in exchange
         for or in lieu of a mutilated, destroyed, lost or stolen Stripped Units
         Certificate shall be deemed to evidence the same rights and obligations
         of the Company and the Holder as the mutilated, destroyed, lost or
         stolen Stripped Units Certificate.

                  "Principal Amount" means as to any one Note, $50.00

                  "Proceeds" means all interest, dividends, cash, instruments,
         securities, financial assets (as defined in ss. 8-102(a)(9) of the
         Uniform Commercial Code (or any successor thereto) in effect in the
         State of New York from time to time) and other property from time to
         time received, receivable or otherwise distributed upon the sale,
         exchange, maturity, collection or disposition of the Collateral or any
         proceeds thereof.

                  "Purchase Contract," when used with respect to any Unit, means
         the contract forming a part of such Unit and obligating the Company to
         sell and the Holder of such Unit to purchase Common Stock on the terms
         and subject to the conditions set forth in Article V.

                                       9
<PAGE>

                  "Purchase Contract Settlement Fund" has the meaning specified
         in Section 5.5.

                  "Purchase Price" has the meaning specified in Section 5.1.

                  "Purchased Shares" has the meaning specified in Section
         5.6(a)(6).

                  "Quotation Agent" means Credit Suisse First Boston or Salomon
         Smith Barney Inc., or a successor of either or any other primary U.S.
         government securities dealer in New York City selected by the Company.

                  "Record Date" for the distribution payable on any Payment Date
         means the 15th day preceding such Payment Date.

                  "Redemption Amount" means, in the case of a Tax Event
         Redemption occurring prior to a successful remarketing of the Notes,
         for each Note the product of (i) the Principal Amount of such Note and
         (ii) a fraction whose numerator is the applicable Treasury Portfolio
         Purchase Price and whose denominator is the aggregate principal amount
         of Notes outstanding on the Tax Event Redemption Date, and in the case
         of a Tax Event Redemption occurring after a successful remarketing of
         the Notes, for each Note the Principal Amount of the Note.

                  "Redemption Price" means the redemption price per Note equal
         to the Redemption Amount plus any accrued and unpaid interest on such
         Note to the date of redemption.

                  "Register" means the Normal Units Register and the Stripped
         Units Register, as applicable.

                  "Registrar" means the Normal Units Registrar and the Stripped
         Units Registrar, as applicable.

                  "Remarketing Agent" has the meaning specified in Section
         5.4(b)(i).

                  "Remarketing Agreement" means the Remarketing Agreement to be
         entered into by and among the Company, the Remarketing Agent and the
         Agent.

                  "Remarketing Date" means the Initial Remarketing Date and any
         Subsequent Remarketing Date.

                  "Remarketing Fee" has the meaning specified in Section
         5.4(b)(i).

                  "Remarketing Notice" has the meaning specified in Section
         5.4(b).

                  "Remarketing Period" means the Initial Remarketing Date and
         any Subsequent Remarketing Period.

                                       10
<PAGE>

                  "Remarketing Value" means, except when the remarketing occurs
         on the third Business Day prior to the Stock Purchase Date, the sum of

                  (i)      the value at the Remarketing Date of such amount of
                           U.S. Treasury securities that will pay, on or prior
                           to the quarterly Payment Date falling on the Stock
                           Purchase Date, an amount of Cash equal to the
                           aggregate interest payments that are scheduled to be
                           payable on that quarterly Payment Date on (a) all
                           Notes which are included in Normal Units and which
                           are participating in the remarketing, assuming for
                           this purpose, even if not true, that the interest
                           rate on the Notes remains the initial rate; and

                  (ii)     either (a) the value at the Remarketing Date of U.S.
                           Treasury securities that will pay, on or prior to the
                           Stock Purchase Date, an amount of cash equal to the
                           Principal Amount of (1) each Note which is included
                           in a Normal Unit and is participating in the
                           remarketing; or (b) in the case of a remarketing on
                           the third Business Day before the Stock Purchase
                           Date, an amount of cash equal to $50 for each Note,
                           which is included in a Normal Unit and each Separate
                           Note that is participating in the remarketing,

         provided that for purposes of clauses (i) and (ii) above, the
         Remarketing Value shall be calculated on the assumptions that (x) the
         U.S. Treasury securities are highly liquid and mature on or within 35
         days prior to the Stock Purchase Date, as determined in good faith by
         the Remarketing Agent in a manner intended to minimize the cash value
         of the U.S. Treasury securities, and (y) the U.S. Treasury securities
         are valued based on the ask-side price of the U.S. Treasury securities
         at a time between 9:00 a.m. and 11:00 a.m. (New York City time)
         selected by the Remarketing Agent, on the Initial Remarketing Date or
         any Subsequent Remarketing Date, as the case may be, as determined on a
         third-day settlement basis by a reasonable and customary means selected
         in good faith by the Remarketing Agent, plus accrued interest to that
         date. "Reorganization Event" has the meaning specified in Section
         5.6(b).

                  "Reset Rate" has the meaning specified in Section 5.4(b)(i).

                  "Responsible Officer" means, when used with respect to the
         Agent, any officer within the corporate trust department of the Agent
         (or any successor of the Agent), including any Vice President, any
         assistant Vice President, any assistant secretary, any assistant
         treasurer, any trust officer, any senior trust officer or any other
         officer of the Agent 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 and who, in each of the above cases, shall have direct
         responsibility for the administration of this Agreement.

                                       11
<PAGE>

                  "Sale Price" of the Common Stock or any securities distributed
         in a Spin-Off, as the case may be, on any Trading Day means the closing
         sale price per share (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 asked prices) on such
         Trading Day as reported in composite transactions for the principal
         U.S. securities exchange on which the Common Stock or such securities
         are traded or, if the Common Stock or such securities are not listed on
         a U.S. national or regional securities exchange, as reported by Nasdaq.

                  "Securities Act" means the Securities Act of 1933 and any
         statute successor thereto, in each case as amended from time to time,
         and the rules and regulations promulgated thereunder.

                  "Securities Intermediary" means JPMorgan Chase Bank, a New
         York banking corporation, in its capacity as Securities Intermediary
         under the Pledge Agreement, together with its successors in such
         capacity.

                  "Separate Notes" has the meaning set forth in the Pledge
         Agreement.

                  "Settlement Date" means any Early Settlement Date or Merger
         Early Settlement Date or the Stock Purchase Date.

                  "Settlement Rate" has the meaning specified in Section 5.1.

                  "Spin-Off" means a dividend or other distribution of shares 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.

                  "Stated Amount" means, with respect to any one Normal Unit or
         Stripped Unit, $50.

                  "Stock Purchase Date" means August 16, 2005.

                  "Stripped Unit" means the collective rights and obligations of
         a holder of a Stripped Units Certificate in respect of a 1/20 undivided
         beneficial interest in a Treasury Security, subject in each case to the
         Pledge thereof, and the related Purchase Contract.

                  "Stripped Units Certificate" means a certificate evidencing
         the rights and obligations of a Holder in respect of the number of
         Stripped Units specified on such certificate, substantially in the form
         of Exhibit B hereto.

                                       12
<PAGE>

                  "Stripped Units Register" and "Stripped Units Registrar" have
         the respective meanings specified in Section 3.5.

                  "Subsequent Remarketing Date" means, provided the Initial
         Remarketing Date has been terminated, the date on which the remarketing
         agent establishes the reset rate during a Subsequent Remarketing
         Period.

                  "Subsequent Remarketing Period" means each of the Remarketing
         Periods beginning on each of the three Business Days immediately
         preceding each June 16, 2005, July 14, 2005 and August 11, 2005.

                  "Tax Event" means the receipt by the Company of an opinion of
         a nationally recognized tax counsel experienced in such matters, to the
         effect that there is more than an insubstantial risk that interest
         payable by the Company on the Notes would not be deductible, in whole
         or in part, by the Company for United States Federal income tax
         purposes, as a result of (a) any amendment to, or change (including any
         announced proposed change) in, the laws (or any regulations thereunder)
         of the United States or any political subdivision or taxing authority
         thereof or therein affecting taxation, (b) any amendment to or change
         in an official interpretation or application of such laws or
         regulations by any legislative body, court, governmental agency or
         regulatory authority or (c) any official interpretation or
         pronouncement that provides for a position with respect to such laws or
         regulations that differs from the generally accepted position on
         [_______], 2002, which amendment, change or proposed change is
         effective or which interpretation or pronouncement is announced on or
         after [_______], 2002.

                  "Tax Event Redemption" means, if a Tax Event shall occur, the
         redemption of the Notes, at the option of the Company, in whole but not
         in part, on not less than 30 days nor more than 60 days' written
         notice.

                  "Tax Event Redemption Date" means the date upon which a Tax
         Event Redemption is to occur.

                  "Tax Event Redemption Principal Amount" means in the case of a
         Tax Event Redemption occurring prior to a successful remarketing of the
         Notes, for each Note the product of the Principal Amount of the Note
         and a fraction whose numerator is the Treasury Portfolio Purchase Price
         and whose denominator is the aggregate Principal Amount of Notes
         outstanding on such Tax Event Redemption Date, and in the case of a Tax
         Event Redemption Date occurring after a successful remarketing of the
         Notes, the Principal Amount of the Notes.

                  "Terminated Remarketing Period" has the meaning specified in
         Section 5.4(b)(ii).

                                       13
<PAGE>

                  "Termination Date" means the date, if any, on which a
         Termination Event occurs.

                  "Termination Event" means the occurrence of any of the
         following events:

                  (i)      at any time on or prior to the Stock Purchase Date, a
                           judgment, decree or court order shall have been
                           entered granting relief under the Bankruptcy Code or
                           any other similar Federal or state law, adjudicating
                           the Company to be insolvent, or approving as properly
                           filed a petition seeking reorganization or
                           liquidation of the Company, and, unless such
                           judgment, decree or order shall have been entered
                           within 60 days prior to the Stock Purchase Date, such
                           decree or order shall have continued undischarged and
                           unstayed for a period of 60 days;

                  (ii)     at any time on or prior to the Stock Purchase Date, a
                           judgment, decree or court order for the appointment
                           of a receiver or liquidator or trustee or assignee in
                           bankruptcy or insolvency of the Company or of its
                           property, or for the winding up or liquidation of its
                           affairs, shall have been entered, and, unless such
                           judgment, decree or order shall have been entered
                           within 60 days prior to the Stock Purchase Date, such
                           judgment, decree or order shall have continued
                           undischarged and unstayed for a period of 60 days; or

                  (iii)    at any time on or prior to the Stock Purchase Date
                           the Company shall file a petition for relief under
                           the Bankruptcy Code or any other similar Federal or
                           state law, or shall consent to the filing of a
                           bankruptcy proceeding against it, or shall file a
                           petition or answer or consent seeking reorganization
                           or liquidation under the Bankruptcy Code or any other
                           similar Federal or state law, or shall consent to the
                           filing of any such petition, or shall consent to the
                           appointment of a receiver or liquidator or trustee or
                           assignee in bankruptcy or insolvency of it or of its
                           property, or shall make an assignment for the benefit
                           of creditors, or shall admit in writing its inability
                           to pay its debts generally as they become due.

                  "Threshold Appreciation Price" has the meaning specified in
         Section 5.1.

                  "TIA" means the Trust Indenture Act of 1939 and any statute
         successor thereto, in each case as amended from time to time, and the
         rules and regulations promulgated thereunder.

                  "Trading Day" has the meaning specified in Section 5.1.

                                       14
<PAGE>

                  "Transaction Documents" has the meaning specified in Section
         7.1(a).

                  "Treasury Portfolio" means in connection with the Initial
         Remarketing or any Subsequent Remarketing that occurs prior to the
         third Business Day preceding the Stock Purchase Date, a portfolio of
         U.S. Treasury securities consisting of principal or interest strips of
         U.S. Treasury securities that mature prior to the Stock Purchase Date
         in an aggregate amount equal to the Applicable Principal Amount, with
         respect to the scheduled interest payment date on the Notes that occurs
         on the Stock Purchase Date, principal or interest strips of U.S.
         Treasury securities that mature prior to such date in an aggregate
         amount equal to the aggregate interest payment that would be due on the
         Applicable Principal Amount of the Notes on such date if the applicable
         Coupon Rate on the Notes were not reset to the Reset Rate pursuant to
         the Indenture hereof and Opt-out Treasury Consideration and in
         connection with a Tax Event Redemption that occurs prior to the Stock
         Purchase Date, a portfolio of U.S. Treasury securities consisting of
         principal or interest strips of U.S. Treasury securities that mature on
         or prior to the Stock Purchase Date in an aggregate amount equal to the
         applicable Tax Event Redemption Principal Amount and (b) with respect
         to each scheduled interest payment date on the Notes that occurs after
         the Tax Event Redemption Date and on or before the Stock Purchase Date,
         principal or interest strips of U.S. Treasury securities that mature on
         or prior to such date in an aggregate amount equal to the aggregate
         interest payment that would be due on the applicable Tax Event
         Redemption Principal Amount of the Notes on such date, and (b) if the
         Tax Event Redemption Date occurs or after May 16, 2005 or, in the event
         of a Last Failed Remarketing, on or after the Stock Purchase Date, a
         portfolio of zero coupon U.S. Treasury securities consisting of (i)
         principal or interest strips of U.S. Treasury securities which mature
         on or prior to August 16, 2007 in an aggregate amount equal to the
         applicable Tax Event Redemption Principal Amount and (ii) with respect
         to each scheduled interest payment date on the Notes that occurs after
         the Tax Even Redemption Date, principal or interest strips of such U.S.
         Treasury securities that mature on or prior to such date in an
         aggregate amount equal to the aggregate interest payment that would be
         due on the applicable Tax Event Redemption Principal Amount of the
         Notes on such date.

                  "Treasury Portfolio Purchase Price" means the lowest aggregate
         price quoted by the Primary Treasury Dealer to the Quotation Agent (a)
         in the case of a Tax Event Redemption, on the third Business Day
         immediately preceding the Tax Event Redemption Date for the purchase of
         the applicable Treasury Portfolio for settlement on the Tax Event
         Redemption Date and (b) in the case of a successful remarketing on a
         Remarketing Date that occurs prior to the third Business Day
         immediately preceding the Stock Purchase Date, a Remarketing Date that
         occurs prior to the third Business Day immediately preceding the Stock
         Purchase Date for the purchase of the applicable Treasury Portfolio
         (excluding the Opt-out Treasury Consideration) for settlement on the
         applicable Remarketing Settlement Date.

                                       15
<PAGE>

                  "Treasury Security" means a zero-coupon U.S. Treasury security
         (CUSIP Number 912803AG8) maturing before the Stock Purchase Date that
         will pay $1,000 on such maturity date.

                  "Trustee" means The Bank of New York, a New York banking
         corporation, as trustee under the Indenture, or any successor thereto.

                  "Underwriting Agreement" means the Underwriting Agreement
         relating to the Units dated May , 2002 among the Company and the
         underwriters named therein relating to the Units.

                  "Unit" means a Normal Unit or a Stripped Unit.

                  "Vice-President" means any vice-president, whether or not
         designated by a number or a word or words added before or after the
         title "vice- president."

         SECTION 1.2 Compliance Certificates and Opinions.

         Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under any
provision of this Agreement, the Company shall furnish to the Agent an Officer's
Certificate stating that all conditions precedent, if any, provided for in this
Agreement relating to the proposed action have been complied with and, if
requested by the Agent, an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Agreement relating to such particular application or request, no additional
certificate or opinion need be furnished.

         Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement (other than the Officer's
Certificate provided for in Section 10.5) shall include:

         (a)      a statement that the individual signing such certificate or
                  opinion has read such covenant or condition and the
                  definitions herein relating thereto;

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

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

                                       16
<PAGE>

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

         SECTION 1.3 Form of Documents Delivered to Agent.

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

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

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

         SECTION 1.4 Acts of Holders; Record Dates.

         (a)      Any request, demand, authorization, direction, notice,
                  consent, waiver or other action provided by this Agreement 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 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 Agent 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 the
                  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
                  Agreement and (subject to Section 7.1) conclusive in favor of
                  the Agent and the Company, if made in the manner provided in
                  this Section.

                                       17
<PAGE>

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

         (c)      The ownership of Units shall be proved by the Normal Units
                  Register or the Stripped Units Register, as the case may be.

         (d)      Any request, demand, authorization, direction, notice,
                  consent, waiver or other Act of the Holder of any Certificate
                  shall bind every future Holder of the same Certificate and the
                  Holder of every Certificate 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 Agent or the Company in reliance thereon, whether or not
                  notation of such action is made upon such Certificate.

         (e)      The Company may set any day as a record date for the purpose
                  of determining the Holders of Outstanding Units entitled to
                  give, make or take any request, demand, authorization,
                  direction, notice, consent, waiver or other action provided or
                  permitted by this Agreement to be given, made or taken by
                  Holders of Units. If any record date is set pursuant to this
                  paragraph, the Holders of the Outstanding Normal Units and the
                  Outstanding Stripped Units, as the case may be, on such record
                  date, and no other Holders, shall be entitled to take the
                  relevant action with respect to the Normal Units or the
                  Stripped Units, as the case may be, whether or not such
                  Holders remain Holders after such record date; provided that
                  no such action shall be effective hereunder unless taken on or
                  prior to the applicable Expiration Date by Holders of the
                  requisite number of Outstanding Units on such record date.
                  Nothing in this paragraph shall be construed to prevent the
                  Company from setting a new record date for any action for
                  which a record date has previously been set pursuant to this
                  paragraph (whereupon the record date previously set shall
                  automatically and with no action by any Person be cancelled
                  and of no effect), and nothing in this paragraph shall be
                  construed to render ineffective any action taken by Holders of
                  the requisite number of Outstanding Units on the date such
                  action is taken. Promptly after any record date is set
                  pursuant to this paragraph, the Company, at its own expense,
                  shall cause notice of such record date, the proposed action by
                  Holders and the applicable Expiration Date to be given to the
                  Agent in writing and to each Holder of Units in the manner set
                  forth in Section 1.6.

                                       18
<PAGE>

         (f)      With respect to any record date set pursuant to this Section,
                  the Company may designate any date as the "Expiration Date"
                  and from time to time may change the Expiration Date to any
                  earlier or later day; provided that no such change shall be
                  effective unless notice of the proposed new Expiration Date is
                  given to the Agent in writing, and to each Holder of Units in
                  the manner set forth in Section 1.6, on or prior to the
                  existing Expiration Date. If an Expiration Date is not
                  designated with respect to any record date set pursuant to
                  this Section, the Company shall be deemed to have initially
                  designated the 180th day after such record date as the
                  Expiration Date with respect thereto, subject to its right to
                  change the Expiration Date as provided in this paragraph.
                  Notwithstanding the foregoing, no Expiration Date shall be
                  later than the 180th day after the applicable record date.

         SECTION 1.5 Notices.

         Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Agreement to
be made upon, given or furnished to, or filed with:

         (a)      the Agent by any Holder or by the Company shall be sufficient
                  for every purpose hereunder (unless otherwise herein expressly
                  provided) if made, given, furnished or filed in writing and
                  personally delivered, mailed, first-class postage prepaid,
                  telecopied or delivered by overnight air courier guaranteeing
                  next day delivery, to the Agent at 101 Barclay Street, Floor
                  21W, New York, New York 10286, Attention: Corporate Trust
                  Administration, telecopy: 212-896-7298, or at any other
                  address furnished in writing by the Agent to the Holders and
                  the Company; or

         (b)      the Company by the Agent or by any Holder shall be sufficient
                  for every purpose hereunder (unless otherwise herein expressly
                  provided) if made, given, furnished or filed in writing and
                  personally delivered, mailed, first-class postage prepaid,
                  telecopied or delivered by overnight air courier guaranteeing
                  next day delivery, to the Company at Toys "R" Us, Inc., 461
                  From Road, Paramus, New Jersey 07652, Attention: Treasurer, or
                  at any other address furnished in writing to the Agent by the
                  Company; or

         (c)      the Collateral Agent by the Agent, the Company or any Holder
                  shall be sufficient for every purpose hereunder (unless
                  otherwise herein expressly provided) if made, given, furnished
                  or filed in writing and personally delivered, mailed,
                  first-class postage prepaid, telecopied or delivered by
                  overnight air courier guaranteeing next day delivery,
                  addressed to the Collateral Agent at JPMorgan Chase Bank, 450
                  West 33rd Street, New York, New York 10001, Attention:
                  Institutional Trust Services, telecopy: 212-946-[8158][8160],
                  or at any other address furnished in writing by the Collateral
                  Agent to the Agent, the Company and the Holders; or

                                       19
<PAGE>

         (d)      the Trustee by the Company shall be sufficient for every
                  purpose hereunder (unless otherwise herein expressly provided)
                  if made, given, furnished or filed in writing and personally
                  delivered, mailed, first-class postage prepaid, telecopied or
                  delivered by overnight air courier guaranteeing next day
                  delivery, addressed to the Trustee at 101 Barclay Street,
                  Floor 21W, New York, New York 10286, Attention: Corporate
                  Trust Administration], telecopy: 212-896-7298 or at any other
                  address furnished in writing by the Trustee to the Company.

         SECTION 1.6 Notice to Holders; Waiver.

         (a)      Where this Agreement provides for notice to Holders of any
                  event, such notice shall be sufficiently given (unless
                  otherwise herein expressly provided) if in writing and mailed,
                  first-class postage prepaid, to each Holder affected by such
                  event, at its address as it appears in the applicable
                  Register, not later than the latest date, and not earlier than
                  the earliest date, prescribed for the giving of such notice.
                  In any case where notice to Holders is given by mail, neither
                  the failure to mail such notice, nor any defect in any notice
                  so mailed to any particular Holder shall affect the
                  sufficiency of such notice with respect to other Holders.
                  Where this Agreement provides for notice in any manner, such
                  notice may be waived in writing by the Person entitled to
                  receive such notice, either before or after the event, and
                  such waiver shall be the equivalent of such notice. Waivers of
                  notice by Holders shall be filed with the Agent, but such
                  filing shall not be a condition precedent to the validity of
                  any action taken in reliance upon such waiver.

         (b)      In case by reason of the suspension of regular mail service or
                  by reason of any other cause it shall be impracticable to give
                  such notice by mail, then such notification as shall be made
                  with the approval of the Agent shall constitute a sufficient
                  notification for every purpose hereunder.

         SECTION 1.7 Effect of Headings and Table of Contents.

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

         SECTION 1.8 Successors and Assigns.

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

                                       20
<PAGE>

         SECTION 1.9 Separability Clause.

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

         SECTION 1.10 Benefits of Agreement.

         Nothing in this Agreement or in the Units, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and, to the extent provided hereby, the Holders, any benefits or any legal or
equitable right, remedy or claim under this Agreement. The Holders from time to
time shall be beneficiaries of this Agreement and shall be bound by all of the
terms and conditions hereof and of the Units evidenced by their Certificates by
their acceptance of delivery of such Certificates.

         SECTION 1.11 Governing Law.

         This Agreement and the Units shall be governed by and construed in
accordance with the laws of the State of New York.

         SECTION 1.12 Legal Holidays.

         (a)      In any case where any Payment Date shall not be a Business
                  Day, then (notwithstanding any other provision of this
                  Agreement or the Normal Units Certificates) payments on the
                  Notes shall not be made on such date, but such payments shall
                  be made on the next succeeding Business Day with the same
                  force and effect as if made on such Payment Date, provided
                  that no interest shall accrue or be payable by the Company for
                  the period from and after any such Payment Date, except that
                  if such next succeeding Business Day is in the next succeeding
                  calendar year, such payment shall be made on the immediately
                  preceding Business Day with the same force and effect as if
                  made on such Payment Date.

         (b)      In any case where the Purchase Contract Date shall not be a
                  Business Day, then (notwithstanding any other provision of
                  this Agreement or the Certificates), the Purchase Contracts
                  shall not be performed on such date, but the Purchase
                  Contracts shall be performed on the immediately following
                  Business Day with the same force and effect as if performed on
                  the Stock Purchase Date.

         SECTION 1.13 Counterparts.

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

                                       21
<PAGE>

         SECTION 1.14 Inspection of Agreement.

         A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by any
Holder.

                                  ARTICLE II.
                               CERTIFICATE FORMS

         SECTION 2.1 Forms of Certificates Generally.

         (a)      The Normal Units Certificates (including the form of Purchase
                  Contract forming part of the Normal Units evidenced thereby)
                  shall be in substantially the form set forth in Exhibit A
                  hereto, with such letters, numbers or other marks of
                  identification or designation and such legends or endorsements
                  printed, lithographed or engraved thereon as may be required
                  by the rules of any securities exchange or quotation system on
                  which the Normal Units are listed or quoted for trading or any
                  depositary therefor, or as may, consistently herewith, be
                  determined by the officers of the Company executing such
                  Normal Units Certificates, as evidenced by their execution of
                  the Normal Units Certificates.

         (b)      The definitive Normal Units Certificates shall be printed,
                  lithographed or engraved on steel engraved borders or may be
                  produced in any other manner, all as determined by the
                  officers of the Company executing such Normal Units
                  Certificates, consistent with the provisions of this
                  Agreement, as evidenced by their execution thereof.

         (c)      The Stripped Units Certificates (including the form of
                  Purchase Contracts forming part of the Stripped Units
                  evidenced thereby) shall be in substantially the form set
                  forth in Exhibit B hereto, with such letters, numbers or other
                  marks of identification or designation and such legends or
                  endorsements printed, lithographed or engraved thereon as may
                  be required by the rules of any securities exchange or the
                  quotation system on which the Stripped Units may be listed or
                  quoted for trading or any depositary therefor, or as may,
                  consistently herewith, be determined by the officers of the
                  Company executing such Stripped Units Certificates, as
                  evidenced by their execution of the Stripped Units
                  Certificates.

                                       22
<PAGE>

         (d)      The definitive Stripped Units Certificates shall be printed,
                  lithographed or engraved on steel engraved borders or may be
                  produced in any other manner, all as determined by the
                  officers of the Company executing such Stripped Units
                  Certificates, consistent with the provisions of this
                  Agreement, as evidenced by their execution thereof.

         (e)      Every Global Certificate authenticated, executed on behalf of
                  the Holders and delivered hereunder shall bear a legend in
                  substantially the following form:

         "For inclusion in Global CertificateS only -- THIS CERTIFICATE IS A
GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT (AS
HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A
NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR
A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.

         Unless this Certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of The Depository Trust Company,
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein."

         SECTION 2.2 Form of Agent's Certificate of Authentication.

         (a)      The form of the Agent's certificate of authentication of the
                  Normal Units shall be in substantially the form set forth on
                  the form of the Normal Units Certificates.

         (b)      The form of the Agent's certificate of authentication of the
                  Stripped Units shall be in substantially the form set forth on
                  the form of the Stripped Units Certificates.

                                       23
<PAGE>

                                  ARTICLE III.
                                   THE UNITS

         SECTION 3.1 Title and Terms; Denominations.

         (a)      The aggregate number of Normal Units initially evidenced by
                  Certificates authenticated, executed on behalf of the Holders
                  and delivered hereunder is limited to 7,000,000 (or 8,050,000
                  if the underwriters' over-allotment option granted pursuant to
                  the Underwriting Agreement is exercised in full), except for
                  Certificates authenticated, executed and delivered upon
                  registration of transfer of, in exchange for, or in lieu of,
                  other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.13,
                  3.14, 5.9, 5.10 or 8.5.

         (b)      The Certificates shall be issuable only in registered form and
                  only in denominations of a single Unit and any integral
                  multiple thereof.

         SECTION 3.2 Rights and Obligations Evidenced by the Certificates.

         (a)      Each Normal Units Certificate shall evidence the number of
                  Normal Units specified therein, with each such Normal Unit
                  representing the ownership by the Holder thereof of a
                  beneficial interest in a Note or Applicable Ownership Interest
                  in the Treasury Portfolio, as the case may be, subject to the
                  Pledge of such Note or Applicable Ownership Interest in the
                  Treasury Portfolio, as the case may be, by such Holder
                  pursuant to the Pledge Agreement and the Indenture, and the
                  rights and obligations of the Holder thereof and the Company
                  under one Purchase Contract. The Agent as attorney-in-fact
                  for, and on behalf of, the Holder of each Normal Unit shall
                  pledge, pursuant to the Pledge Agreement and the Indenture,
                  the Note or the Applicable Ownership Interest in the Treasury
                  Portfolio, as the case may be, forming a part of such Normal
                  Unit, to the Collateral Agent and grant to the Collateral
                  Agent a security interest in the right, title, and interest of
                  such Holder in such Note or such Applicable Ownership Interest
                  in the Treasury Portfolio, as the case may be, for the benefit
                  of the Company, to secure the obligation of the Holder under
                  each Purchase Contract to purchase the Common Stock of the
                  Company. Prior to the purchase of shares of Common Stock under
                  each Purchase Contract, such Purchase Contracts shall not
                  entitle the Holders of Normal Units Certificates to any of the
                  rights of a holder of shares of Common Stock, including,
                  without limitation, the right to vote or receive any dividends
                  or other payments or to consent or to receive notice as
                  stockholders in respect of the meetings of stockholders or for
                  the election of directors of the Company or for any other
                  matter, or any other rights whatsoever as stockholders of the
                  Company.

                                       24
<PAGE>

         (b)      Each Stripped Units Certificate shall evidence the number of
                  Stripped Units specified therein, with each such Stripped Unit
                  representing the ownership by the Holder thereof of a 1/20 or
                  5.0% undivided beneficial interest in a Treasury Security with
                  a principal amount at maturity equal to $1,000, subject to the
                  Pledge of such interest in such Treasury Security by such
                  Holder pursuant to the Pledge Agreement, and the rights and
                  obligations of the Holder thereof and the Company under one
                  Purchase Contract. Prior to the purchase of shares of Common
                  Stock under each Purchase Contract, such Purchase Contracts
                  shall not entitle the Holders of Stripped Units Certificates
                  to any of the rights of a holder of shares of Common Stock,
                  including, without limitation, the right to vote or receive
                  any dividends or other payments or to consent or to receive
                  notice as stockholders in respect of the meetings of
                  stockholders or for the election of directors of the Company
                  or for any other matter, or any other rights whatsoever as
                  stockholders of the Company.

         SECTION 3.3 Execution, Authentication, Delivery and Dating.

         (a)      Subject to the provisions of Sections 3.13 and 3.14, upon the
                  execution and delivery of this Agreement, and at any time and
                  from time to time thereafter, the Company may deliver
                  Certificates executed by the Company to the Agent for
                  authentication, execution on behalf of the Holders and
                  delivery, together with its Issuer Order for authentication of
                  such Certificates, and the Agent in accordance with such
                  Issuer Order shall authenticate, execute on behalf of the
                  Holders and deliver such Certificates.

         (b)      The Certificates shall be executed on behalf of the Company by
                  the Chief Executive Officer, the Chief Financial Officer, the
                  President, any Vice-President, the Treasurer, any Assistant
                  Treasurer, the Secretary or any Assistant Secretary (or other
                  officer performing similar functions) of the Company and
                  delivered to the Agent. The signature of any of these officers
                  on the Certificates may be manual or facsimile.

         (c)      Certificates bearing the manual or facsimile signatures of
                  individuals who were at any time 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 Certificates
                  or did not hold such offices at the date of such Certificates.

         (d)      No Purchase Contract evidenced by a Certificate shall be valid
                  until such Certificate has been executed on behalf of the
                  Holder by the manual signature of an authorized officer of the
                  Agent, as such Holder's attorney-in-fact. Such signature by an
                  authorized officer of the Agent shall be conclusive evidence
                  that the Holder of such Certificate has entered into the
                  Purchase Contracts evidenced by such Certificate.

         (e)      Each Certificate shall be dated the date of its
                  authentication.

                                       25
<PAGE>

         (f)      No Certificate shall be entitled to any benefit under this
                  Agreement or be valid or obligatory for any purpose unless
                  there appears on such Certificate a certificate of
                  authentication substantially in the form provided for herein
                  executed by an authorized signatory of the Agent by manual
                  signature, and such certificate upon any Certificate shall be
                  conclusive evidence, and the only evidence, that such
                  Certificate has been duly authenticated and delivered
                  hereunder.

         SECTION 3.4 Temporary Certificates.

         (a)      Pending the preparation of definitive Certificates, the
                  Company shall execute and deliver to the Agent, and the Agent
                  shall authenticate, execute on behalf of the Holders, and
                  deliver, in lieu of such definitive Certificates, temporary
                  Certificates which are in substantially the form set forth in
                  Exhibit A or Exhibit B hereto, as the case may be, with such
                  letters, numbers or other marks of identification or
                  designation and such legends or endorsements printed,
                  lithographed or engraved thereon as may be required by the
                  rules of any securities exchange on which the Normal Units or
                  Stripped Units, as the case may be, are listed, or as may,
                  consistent herewith, be determined by the officers of the
                  Company executing such Certificates, as evidenced by their
                  execution of the Certificates.

         (b)      If temporary Certificates are issued, the Company will cause
                  definitive Certificates to be prepared without unreasonable
                  delay. After the preparation of definitive Certificates, the
                  temporary Certificates shall be exchangeable for definitive
                  Certificates upon surrender of the temporary Certificates at
                  the Corporate Trust Office, at the expense of the Company and
                  without charge to the Holder. Upon surrender for cancellation
                  of any one or more temporary Certificates, the Company shall
                  execute and deliver to the Agent, and the Agent shall
                  authenticate, execute on behalf of the Holder, and deliver in
                  exchange therefor, one or more definitive Certificates of like
                  tenor and denominations and evidencing a like number of Normal
                  Units or Stripped Units, as the case may be, as the temporary
                  Certificate or Certificates so surrendered. Until so
                  exchanged, the temporary Certificates shall in all respects
                  evidence the same benefits and the same obligations with
                  respect to the Normal Units or Stripped Units, as the case may
                  be, evidenced thereby as definitive Certificates.

         SECTION 3.5 Registration; Registration of Transfer and Exchange.

         (a)      The Agent shall keep at the Corporate Trust Office a register
                  (the "Normal Units Register") in which, subject to such
                  reasonable regulations as it may prescribe, the Agent shall
                  provide for the registration of Normal Units Certificates and
                  of transfers of Normal Units Certificates (the Agent, in such
                  capacity, the "Normal Units Registrar") and a register (the
                  "Stripped Units Register") in which, subject to such
                  reasonable regulations as it may prescribe, the Agent shall
                  provide for the registration of the Stripped Units
                  Certificates and transfers of Stripped Units Certificates (the
                  Agent, in such capacity, the "Stripped Units Registrar").

                                       26
<PAGE>

         (b)      Upon surrender for registration of transfer of any Certificate
                  at the Corporate Trust Office, the Company shall execute and
                  deliver to the Agent, and the Agent shall authenticate,
                  execute on behalf of the designated transferee or transferees,
                  and deliver, in the name of the designated transferee or
                  transferees, one or more new Certificates of like tenor and
                  denominations, and evidencing a like number of Normal Units or
                  Stripped Units, as the case may be.

         (c)      At the option of the Holder, Certificates may be exchanged for
                  other Certificates, of like tenor and denominations and
                  evidencing a like number of Normal Units or Stripped Units, as
                  the case may be, upon surrender of the Certificates to be
                  exchanged at the Corporate Trust Office. Whenever any
                  Certificates are so surrendered for exchange, the Company
                  shall execute and deliver to the Agent, and the Agent shall
                  authenticate, execute on behalf of the Holder, and deliver the
                  Certificates which the Holder making the exchange is entitled
                  to receive.

         (d)      All Certificates issued upon any registration of transfer or
                  exchange of a Certificate shall evidence the ownership of the
                  same number of Normal Units or Stripped Units, as the case may
                  be, and be entitled to the same benefits and subject to the
                  same obligations, under this Agreement as the Normal Units or
                  Stripped Units, as the case may be, evidenced by the
                  Certificate surrendered upon such registration of transfer or
                  exchange.

         (e)      Every Certificate presented or surrendered for registration of
                  transfer or for exchange shall (if so required by the Agent)
                  be duly endorsed, or be accompanied by a written instrument of
                  transfer in form satisfactory to the Company and the Agent
                  duly executed, by the Holder thereof or its attorney duly
                  authorized in writing.

         (f)      No service charge shall be made for any registration of
                  transfer or exchange of a Certificate, but the Company and the
                  Agent may require payment from the Holder of a sum sufficient
                  to cover any tax or other governmental charge that may be
                  imposed in connection with any registration of transfer or
                  exchange of Certificates, other than any exchanges pursuant to
                  Sections 3.4, 3.6, 3.9 and 8.5 not involving any transfer.

                                       27
<PAGE>

         (g)      Notwithstanding the foregoing, the Company shall not be
                  obligated to execute and deliver to the Agent, and the Agent
                  shall not be obligated to authenticate, execute on behalf of
                  the Holder and deliver any Certificate presented or
                  surrendered for registration of transfer or for exchange on or
                  after the Business Day immediately preceding the earlier of
                  the Stock Purchase Date or the Termination Date. In lieu of
                  delivery of a new Certificate, upon satisfaction of the
                  applicable conditions specified above in this Section and
                  receipt of appropriate registration or transfer instructions
                  from such Holder, the Agent shall,

                  (i)      if the Stock Purchase Date has occurred, deliver the
                           shares of Common Stock issuable in respect of the
                           Purchase Contracts forming a part of the Units
                           evidenced by such Certificate,

                  (ii)     in the case of Normal Units, if a Termination Event
                           shall have occurred prior to the Stock Purchase Date,
                           transfer the Notes or the Applicable Ownership
                           Interest in the Treasury Portfolio, as applicable,
                           relating to such Normal Units, or

                  (iii)    in the case of Stripped Units, if a Termination Event
                           shall have occurred prior to the Stock Purchase Date,
                           transfer the Treasury Securities relating to such
                           Stripped Units, in each case subject to the
                           applicable conditions and in accordance with the
                           applicable provisions of Article V.

         SECTION 3.6 Book-Entry Interests.

         The Certificates, on original issuance, will be issued in the form of
one or more, fully registered Global Certificates, to be delivered to the
Depositary or its custodian by, or on behalf of, the Company. Such Global
Certificate shall initially be registered in the applicable Register in the name
of Cede & Co., the nominee of the Depositary, and no Beneficial Owner will
receive a definitive Certificate representing such Beneficial Owner's interest
in such Global Certificate, except as provided in Section 3.9. The Agent shall
enter into an agreement with the Depositary if so requested by the Company.
Unless and until definitive, fully registered Certificates have been issued to
Beneficial Owners pursuant to Section 3.9:

         (a)      the provisions of this Section 3.6 shall be in full force and
                  effect;

         (b)      the Company shall be entitled to deal with the Clearing Agency
                  for all purposes of this Agreement (including receiving
                  approvals, votes or consents hereunder) as the Holder of the
                  Units and the sole holder of the Global Certificate(s) and
                  shall have no obligation to the Beneficial Owners;

                                       28
<PAGE>

         (c)      to the extent that the provisions of this Section 3.6 conflict
                  with any other provisions of this Agreement, the provisions of
                  this Section 3.6 shall control; and

         (d)      the rights of the Beneficial Owners shall be exercised only
                  through the Clearing Agency and shall be limited to those
                  established by law and agreements between such Beneficial
                  Owners and the Clearing Agency and/or the Clearing Agency
                  Participants. The Clearing Agency will make book-entry
                  transfers among Clearing Agency Participants.

         SECTION 3.7 Notices to Holders.

         Whenever a notice or other communication to the Holders is required to
be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any Units
registered in the name of a Clearing Agency or the nominee of a Clearing Agency,
the Company or the Company's agent shall, except as set forth herein, have no
obligations to the Beneficial Owners.

         SECTION 3.8 Appointment of Successor Clearing Agency.

         If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Units, the Company may, in its sole discretion,
appoint a successor Clearing Agency with respect to the Units.

         SECTION 3.9 Definitive Certificates.

         If

         (i)      a Clearing Agency elects to discontinue its services as
                  securities depositary with respect to the Units and a
                  successor Clearing Agency is not appointed within 90 days
                  after such discontinuance pursuant to Section 3.8,

         (ii)     the Company elects to terminate the book-entry system through
                  the Clearing Agency with respect to the Units, or

         (iii)    there shall have occurred and be continuing a default by the
                  Company in respect of its obligations under one or more
                  Purchase Contracts,

then upon surrender of the Global Certificates representing the Book- Entry
Interests with respect to the Units by the Clearing Agency, accompanied by
registration instructions, the Company shall cause definitive Certificates to be
delivered to Beneficial Owners in accordance with the instructions of the
Clearing Agency. The Company and the Agent shall not be liable for any delay in
delivery of such instructions and may conclusively rely on and shall be
protected in relying on, such instructions.

                                       29
<PAGE>

         SECTION 3.10 Mutilated, Destroyed, Lost and Stolen Certificates.

         (a)      If any mutilated Certificate is surrendered to the Agent, the
                  Company shall execute and deliver to the Agent, and the Agent
                  shall authenticate, execute on behalf of the Holder, and
                  deliver in exchange therefor, a new Certificate at the cost of
                  the Holder, evidencing the same number of Normal Units or
                  Stripped Units, as the case may be, and bearing a Certificate
                  number not contemporaneously outstanding.

         (b)      If there shall be delivered to the Company and the Agent (i)
                  evidence to their satisfaction of the destruction, loss or
                  theft of any Certificate, and (ii) such security or indemnity
                  at the cost of the Holder as may be required by them to hold
                  each of them and any agent of any of them harmless, then, in
                  the absence of notice to the Company or the Agent that such
                  Certificate has been acquired by a bona fide purchaser, the
                  Company shall execute and deliver to the Agent, and the Agent
                  shall authenticate, execute on behalf of the Holder, and
                  deliver to the Holder, in lieu of any such destroyed, lost or
                  stolen Certificate, a new Certificate, evidencing the same
                  number of Normal Units or Stripped Units, as the case may be,
                  and bearing a Certificate number not contemporaneously
                  outstanding.

         (c)      Notwithstanding the foregoing, the Company shall not be
                  obligated to execute and deliver to the Agent, and the Agent
                  shall not be obligated to authenticate, execute on behalf of
                  the Holder, and deliver to the Holder, a Certificate on or
                  after the Business Day immediately preceding the earlier of
                  the Stock Purchase Date or the Termination Date. In lieu of
                  delivery of a new Certificate, upon satisfaction of the
                  applicable conditions specified above in this Section and
                  receipt of appropriate registration or transfer instructions
                  from such Holder, the Agent shall (i) if the Stock Purchase
                  Date has occurred, deliver the shares of Common Stock issuable
                  in respect of the Purchase Contracts forming a part of the
                  Units evidenced by such Certificate, or (ii) if a Termination
                  Event shall have occurred prior to the Stock Purchase Date,
                  transfer the Notes, the Applicable Ownership Interest in the
                  Treasury Portfolio or the Treasury Securities, as the case may
                  be, evidenced thereby, in each case subject to the applicable
                  conditions and in accordance with the applicable provisions of
                  Article V.

         (d)      Upon the issuance of any new Certificate under this Section,
                  the Company and the Agent may require the payment by the
                  Holder 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
                  Agent) connected therewith.

                                       30
<PAGE>

         (e)      Every new Certificate issued pursuant to this Section in lieu
                  of any destroyed, lost or stolen Certificate shall constitute
                  an original additional contractual obligation of the Company
                  and of the Holder in respect of the Unit evidenced thereby,
                  whether or not the destroyed, lost or stolen Certificate (and
                  the Units evidenced thereby) shall be at any time enforceable
                  by anyone, and shall be entitled to all the benefits and be
                  subject to all the obligations of this Agreement equally and
                  proportionately with any and all other Certificates delivered
                  hereunder.

         (f)      The provisions of this Section 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 Certificates.

         SECTION 3.11 Persons Deemed Owners.

         (a)      Prior to due presentment of a Certificate for registration of
                  transfer, the Company and the Agent, and any agent of the
                  Company or the Agent, may treat the Person in whose name such
                  Certificate is registered as the owner of the Units evidenced
                  thereby, for the purpose of receiving interest payments on the
                  Notes, performance of the Purchase Contracts and for all other
                  purposes whatsoever (subject to Section 4.1(a)), whether or
                  not any such payments shall be overdue and notwithstanding any
                  notice to the contrary, and neither the Company nor the Agent,
                  nor any agent of the Company or the Agent, shall be affected
                  by notice to the contrary.

         (b)      Notwithstanding the foregoing, with respect to any Global
                  Certificate, nothing herein shall prevent the Company, the
                  Agent or any agent of the Company or the Agent, from giving
                  effect to any written certification, proxy or other
                  authorization furnished by any Clearing Agency (or its
                  nominee), as a Holder, with respect to such Global Certificate
                  or impair, as between such Clearing Agency and owners of
                  beneficial interests in such Global Certificate, the operation
                  of customary practices governing the exercise of rights of
                  such Clearing Agency (or its nominee) as Holder of such Global
                  Certificate. None of the Company, the Agent, or any agent of
                  the Company or the Agent, will have any responsibility or
                  liability for any aspect of the records relating to or
                  payments made on account of beneficial ownership interests of
                  a Global Certificate or maintaining, supervising or reviewing
                  any records relating to such beneficial ownership interests.

                                       31
<PAGE>

         SECTION 3.12 Cancellation.

         (a)      All Certificates surrendered (i) for delivery of shares of
                  Common Stock on or after any Settlement Date; (ii) upon the
                  transfer of Notes, Applicable Ownership Interest in the
                  Treasury Portfolio or Treasury Securities, as the case may be,
                  after the occurrence of a Termination Event; or (iii) upon the
                  registration of a transfer or exchange of a Unit shall, if
                  surrendered to any Person other than the Agent, be delivered
                  to the Agent and, if not already cancelled, shall be promptly
                  cancelled by it. The Company may at any time deliver to the
                  Agent for cancellation any Certificates previously
                  authenticated, executed and delivered hereunder which the
                  Company may have acquired in any manner whatsoever, and all
                  Certificates so delivered shall, upon Issuer Order, be
                  promptly cancelled by the Agent. No Certificates shall be
                  authenticated, executed on behalf of the Holder and delivered
                  in lieu of or in exchange for any Certificates cancelled as
                  provided in this Section, except as expressly permitted by
                  this Agreement. All cancelled Certificates held by the Agent
                  shall be disposed of by the Agent in accordance with its
                  customary procedures.

         (b)      If the Company or any Affiliate of the Company shall acquire
                  any Certificate, such acquisition shall not operate as a
                  cancellation of such Certificate unless and until such
                  Certificate is delivered to the Agent cancelled or for
                  cancellation.

         SECTION 3.13 Establishment of Stripped Units.

         (a)      Except as otherwise provided in this Section 3.13, so long as
                  a Tax Event Redemption has not occurred, at any time on or
                  prior to 10:00 a.m. (New York City time) on the seventh
                  Business Day immediately preceding the Stock Purchase Date, a
                  Holder of Normal Units shall have the right to substitute
                  Treasury Securities for the Pledged Notes or Pledged
                  Applicable Ownership Interest in the Treasury Portfolio, as
                  the case may be, securing such Holder's obligations under the
                  Purchase Contracts comprising a part of such Normal Units (a
                  "Collateral Substitution"), by (a) transferring to the
                  Collateral Agent Treasury Securities having an aggregate
                  principal amount equal to the aggregate Stated Amount of such
                  Normal Units and (b) delivering such Normal Units to the
                  Purchase Contract Agent, accompanied by a notice,
                  substantially in the form of Exhibit D hereto, to the Agent
                  stating that such Holder has Transferred Treasury Securities
                  to the Collateral Agent pursuant to this Section 3.13 (stating
                  the principal amount and the CUSIP numbers of the Treasury
                  Securities Transferred by such Holder) and requesting that the
                  Purchase Contract Agent instruct the Collateral Agent to
                  release from the Pledge the Pledged Notes or Pledged
                  Applicable Ownership Interest in the Treasury Portfolio, as
                  the case may be, related to such Normal Units, whereupon the

                                       32
<PAGE>

                  Purchase Contract Agent shall promptly give such instruction
                  in writing to the Collateral Agent substantially in the form
                  provided in Exhibit C. Notwithstanding the foregoing, a Holder
                  may not substitute Treasury Securities for Pledged Notes or
                  Pledged Applicable Ownership Interest in the Treasury
                  Portfolio pursuant to this Section 3.13 on or after 10:00 a.m.
                  (New York City time) (i) on the fourth Business Day
                  immediately preceding the Initial Remarketing Date until the
                  Business Day immediately following such Initial Remarketing
                  Date; (ii) during any subsequent Remarketing Period until the
                  Business Day immediately following such Remarketing Period;
                  and (iii) on or after 10:00 a.m. (New York City time) on the
                  seventh Business Day immediately preceding the Stock Purchase
                  Date. Upon receipt of Treasury Securities from a Holder of
                  Normal Units and the related written instruction from the
                  Purchase Contract Agent, in accordance with the terms of the
                  Pledge Agreement, the Collateral Agent shall release the
                  Pledged Notes or Pledged Applicable Ownership Interest in the
                  Treasury Portfolio, as the case may be, and shall promptly
                  Transfer such Pledged Notes, or Pledged Applicable Ownership
                  Interest in the Treasury Portfolio, as the case may be, free
                  and clear of any lien, pledge or security interest created
                  under the Pledge Agreement, to the Purchase Contract Agent,
                  and upon receipt thereof the Agent shall promptly:

                  (i)      cancel the related Normal Units;

                  (ii)     transfer the Pledged Notes, or Pledged Applicable
                           Ownership Interest in the Treasury Portfolio, as the
                           case may be, to the Holder; and

                  (iii)    authenticate, execute on behalf of such Holder and
                           deliver to such Holder a Stripped Units Certificate
                           executed by the Company in accordance with Section
                           3.3 evidencing the same number of Purchase Contracts
                           as were evidenced by the cancelled Normal Units.

         (b)      Holders who elect to separate the Pledged Notes or Pledged
                  Applicable Ownership Interest in the Treasury Portfolio, as
                  the case may be, from the related Purchase Contract and to
                  substitute Treasury Securities for such Pledged Notes or
                  Pledged Applicable Ownership Interest in the Treasury
                  Portfolio, as the case may be, shall be responsible for any
                  fees or expenses payable to the Collateral Agent for its
                  services as Collateral Agent in respect of the substitution,
                  and the Company shall not be responsible for any such fees or
                  expenses.

                                       33
<PAGE>

         (c)      Holders may make Collateral Substitutions (i) if Treasury
                  Securities are being substituted for Pledged Notes, only in
                  integral multiples of 20 Normal Units, or (ii) if the
                  Collateral Substitutions occur after the Initial Remarketing
                  Date (if such remarketing is successful), or any Subsequent
                  Remarketing Date (if such remarketing is successful), or a Tax
                  Event Redemption, as the case may be, only in integral
                  multiples of Normal Units such that the Treasury Securities to
                  be deposited and the Applicable Ownership Interest in the
                  Treasury Portfolio to be released are in integral multiples of
                  $1,000.

         (d)      In the event a Holder making a Collateral Substitution
                  pursuant to this Section 3.13 fails to effect a book-entry
                  transfer of the Normal Units or fails to deliver a Normal
                  Units Certificate to the Agent after depositing Treasury
                  Securities with the Collateral Agent, the Pledged Notes or
                  Pledged Applicable Ownership Interest in the Treasury
                  Portfolio, as the case may be, constituting a part of such
                  Normal Units, and any distributions on such Pledged Notes or
                  Pledged Applicable Ownership Interest in the Treasury
                  Portfolio, as the case may be, shall be held in the name of
                  the Agent or its nominee in trust for the benefit of such
                  Holder, until such Normal Units are so transferred or the
                  Normal Units Certificate is so delivered, as the case may be,
                  or, with respect to a Normal Units Certificate, such Holder
                  provides evidence satisfactory to the Company and the Agent
                  that such Normal Units Certificate has been destroyed, lost or
                  stolen, together with any indemnity that may be required by
                  the Agent and the Company.

         (e)      Except as provided in this Section 3.13, for so long as the
                  Purchase Contract underlying a Normal Unit remains in effect,
                  such Normal Unit shall not be separable into its constituent
                  parts, and the rights and obligations of the Holder of such
                  Normal Unit in respect of the Note or the Applicable Ownership
                  Interest in the Treasury Portfolio, as the case may be, and
                  the Purchase Contract comprising such Normal Unit may be
                  acquired, and may be transferred and exchanged, only as a
                  Normal Unit.

         (f)      The Holders' right to create Stripped Units as set forth in
                  this Section and the limit of the preceding sentence shall in
                  no way limit the ability of the Purchase Contract Agent, the
                  Collateral Agent, the Securities Intermediary or the
                  Remarketing Agent to substitute the Treasury Portfolio for the
                  Notes then comprising a part of Normal Units upon a successful
                  remarketing.

                                       34
<PAGE>

         SECTION 3.14 Reestablishment of Normal Units.

         (a)      Except as otherwise provided in this Section 3.14 at any time
                  on or prior to 10:00 a.m. (New York City time) on the seventh
                  Business Day immediately preceding the Stock Purchase Date, a
                  Holder of Stripped Units shall have the right to reestablish
                  Normal Units by (x) transferring to the Collateral Agent Notes
                  or Applicable Ownership Interest (as defined in clause (A) of
                  the definition of such term) in the Treasury Portfolio, as the
                  case may be, then comprising such number of Normal Units as is
                  equal to such Stripped Units and (y) delivering such Stripped
                  Units, accompanied by a notice, substantially in the form of
                  Exhibit D hereto, to the Agent stating that such Holder has
                  transferred Notes or Applicable Ownership Interests in the
                  Treasury Portfolio to the Collateral Agent pursuant to this
                  Section 3.14 and requesting that the Purchase Contract Agent
                  instruct the Collateral Agent to release from the Pledge the
                  Pledged Treasury Securities related to such Stripped Units,
                  whereupon the Purchase Contract Agent shall give such
                  instruction to the Collateral Agent substantially in the form
                  provided in Exhibit C; provided, however, that if a Tax Event
                  Redemption or a successful Remarketing has occurred and the
                  Treasury Portfolio has become a component of the Normal Units,
                  Holders of Stripped Units may make such substitution only in
                  integral multiples of _________, at any time on or prior to
                  the Business Day immediately preceding the Stock Purchase
                  Date; provided further, however, that such a Holder of
                  Stripped Units shall not have the right to reestablish Normal
                  Units pursuant to this Section 3.14 on or after 10:00 a.m.
                  (New York City time) (i) on the fourth Business Day
                  immediately preceding the Initial Remarketing Date until the
                  Business Day immediately following such Initial Remarketing
                  Date; (ii) during any subsequent Remarketing Period until the
                  Business Day immediately following such Remarketing Period;
                  and (iii) on or after 10:00 a.m. (New York City time) on the
                  seventh Business Day immediately preceding the Stock Purchase
                  Date. Upon receipt of the Notes or Applicable Ownership
                  Interest in the Treasury Portfolio, as the case may be, from
                  such Holder and the instruction from the Purchase Contract
                  Agent, the Collateral Agent, in accordance with the terms of
                  the Pledge Agreement, shall release the Pledged Treasury
                  Securities and shall promptly Transfer such Pledged Treasury
                  Securities, free and clear of any lien, pledge or security
                  interest created under the Pledge Agreement to the Purchase
                  Contract Agent, and upon receipt thereof, the Purchase
                  Contract Agent shall promptly:

                  (i)      cancel the related Stripped Units;

                  (ii)     transfer the Pledged Treasury Securities to the
                           Holder; and

                  (iii)    authenticate, execute on behalf of such Holder and
                           deliver a Normal Units Certificate executed by the
                           Company in accordance with Section 3.3 evidencing the
                           same number of Purchase Contracts as were evidenced
                           by the cancelled Stripped Units.

                                       35
<PAGE>

         (b)      Holders of Stripped Units may reestablish Normal Units (i)
                  only in integral multiples of 20 Stripped Units for 20 Normal
                  Units or (ii) if the reestablishment occurs after the Initial
                  Remarketing Date (if such remarketing is successful) or any
                  Subsequent Remarketing Date (if such remarketing is
                  successful), or after a Tax Event Redemption, only in integral
                  multiples of Stripped Units such that the Applicable Ownership
                  Interest in the Treasury Portfolio to be deposited and the
                  Treasury Securities to be released are in integral multiples
                  of $1,000.

         (c)      Except as provided in this Section 3.14, for so long as the
                  Purchase Contract underlying a Stripped Unit remains in
                  effect, such Stripped Unit shall not be separable into its
                  constituent parts, and the rights and obligations of the
                  Holder of such Stripped Unit in respect of the Treasury
                  Securities and Purchase Contract comprising such Stripped Unit
                  may be acquired, and may be transferred and exchanged, only as
                  a Stripped Unit. The Holders' right to reestablish Normal
                  Units as set forth in this Section and the limit of the
                  preceding sentence shall in no way limit the ability of the
                  Purchase Contract Agent, the Collateral Agent, the Securities
                  Intermediary or the Remarketing Agent to substitute the
                  Treasury Portfolio for the Notes then comprising a part of
                  Normal Units upon a successful remarketing (other than the
                  Notes of Holders of Normal Units that have elected not to
                  participate in the remarketing).

         (d)      Holders of Stripped Units who reestablish Normal Units shall
                  be responsible for any fees or expenses payable to the
                  Collateral Agent for its services as Collateral Agent in
                  respect of the substitution, and the Company shall not be
                  responsible for any such fees or expenses.

         (e)      In the event a Holder who reestablishes Normal Units pursuant
                  to this Section 3.14 fails to effect a book-entry transfer of
                  the Stripped Units or fails to deliver a Stripped Units
                  Certificate to the Agent after depositing Pledged Notes or
                  Pledged Applicable Ownership Interest in the Treasury
                  Portfolio, as the case may be, with the Collateral Agent, the
                  Treasury Securities constituting a part of such Stripped
                  Units, and any distributions on such Treasury Securities shall
                  be held in the name of the Agent or its nominee in trust for
                  the benefit of such Holder, until such Stripped Units are so
                  transferred or the Stripped Units Certificate is so delivered,
                  as the case may be, or, with respect to a Stripped Units
                  Certificate, such Holder provides evidence satisfactory to the
                  Company and the Agent that such Stripped Units Certificate has
                  been destroyed, lost or stolen, together with any indemnity
                  that may be required by the Agent and the Company.

                                       36
<PAGE>

         SECTION 3.15 Transfer of Collateral Upon Occurrence of Termination
Event.

         Upon the occurrence of a Termination Event and the transfer to the
Agent of the Notes, the Applicable Ownership Interest in the Treasury Portfolio
or the Treasury Securities, as the case may be, underlying the Normal Units and
the Stripped Units, respectively, pursuant to the terms of the Pledge Agreement,
the Agent shall request transfer instructions with respect to such Notes, the
Applicable Ownership Interest in the Treasury Portfolio or Treasury Securities,
as the case may be, from each Holder by written request mailed to such Holder at
its address as it appears in the Normal Units Register or the Stripped Units
Register, as the case may be. Upon book-entry transfer of the Normal Units or
Stripped Units or delivery of a Normal Units Certificate or Stripped Units
Certificate to the Agent with such transfer instructions, the Agent shall
Transfer the Notes, Applicable Ownership Interest in the Treasury Portfolio or
Treasury Securities, as the case may be, underlying such Normal Units or
Stripped Units, respectively, to such Holder by book-entry transfer, or other
appropriate procedures, in accordance with such instructions. In the event a
Holder of Normal Units or Stripped Units fails to effect such transfer or
delivery, the Notes, Applicable Ownership Interest in the Treasury Portfolio or
Treasury Securities, as the case may be, underlying such Normal Units or
Stripped Units, respectively, and any distributions thereon, shall be held in
the name of the Agent or its nominee in trust for the benefit of such Holder,
until the earlier of (1) such Normal Units or Stripped Units are transferred or
the Normal Units Certificate or Stripped Units Certificate is surrendered or
such Holder provides satisfactory evidence that such Normal Units Certificate or
Stripped Units Certificate has been destroyed, lost or stolen, together with any
indemnity that may be required by the Agent and the Company and (2) the
expiration of the time specified in applicable abandoned property laws.

         SECTION 3.16 No Consent to Assumption.

         Each Holder of a Unit, by acceptance thereof, shall be deemed expressly
to have withheld any consent to the assumption under Section 365 of the
Bankruptcy Code or otherwise, of the Purchase Contract by the Company, any
receiver, liquidator or person or entity performing similar functions or its
trustee in the event that the Company becomes the debtor under the Bankruptcy
Code or subject to other similar state or Federal law providing for
reorganization or liquidation.

                                  ARTICLE IV.
                                   THE NOTES

         SECTION 4.1 Payment of Interest; Rights to Interest Payments Preserved;
Notice.

         (a)      A payment on any Note or Applicable Ownership Interest in the
                  Treasury Portfolio, as the case may be, which is paid on any
                  Payment Date other than a Payment Date with respect to the
                  stated amount due on the Applicable Ownership Interest in the
                  Treasury Portfolio shall, subject to receipt thereof by the
                  Agent from the Collateral Agent (if the Collateral Agent is
                  the registered owner thereof) as provided by the terms of the
                  Pledge Agreement, be paid to the Person in whose name the
                  Normal Units Certificate (or one or more Predecessor Normal
                  Units Certificates) of which such Note or the Applicable
                  Ownership Interest in the Treasury Portfolio, as the case may
                  be, is a part is registered at the close of business on the
                  Record Date for such Payment Date.

                                       37
<PAGE>

         (b)      Each Normal Units Certificate evidencing Notes delivered under
                  this Agreement upon registration of transfer of or in exchange
                  for or in lieu of any other Normal Units Certificate shall
                  carry the rights to interest accrued and unpaid, which were
                  carried by the Notes or Applicable Ownership Interest in the
                  Treasury Portfolio, as the case may be, underlying such other
                  Normal Units Certificate.

         (c)      In the case of any Normal Unit with respect to which Early
                  Settlement of the underlying Purchase Contract is effected on
                  an Early Settlement Date, Merger Early Settlement of the
                  underlying Purchase Contract is effected on a Merger Early
                  Settlement Date, Cash Settlement is effected on the seventh
                  Business Day preceding the Stock Purchase Date, or a
                  Collateral Substitution is effected, in each case on a date
                  that is after any Record Date and on or prior to the next
                  succeeding Payment Date, payments on the Note or the
                  Applicable Ownership Interest in the Treasury Portfolio, as
                  the case may be, underlying such Normal Unit otherwise payable
                  on such Payment Date shall be payable on such Payment Date
                  notwithstanding such Early Settlement, Merger Early
                  Settlement, Cash Settlement or Collateral Substitution, as the
                  case may be, and such payments shall, subject to receipt
                  thereof by the Agent, be payable to the Person in whose name
                  the Normal Units Certificate (or one or more Predecessor
                  Normal Unit Certificates) was registered at the close of
                  business on the Record Date. Except as otherwise expressly
                  provided in the immediately preceding sentence, in the case of
                  any Normal Unit with respect to which Early Settlement, Merger
                  Early Settlement or Cash Settlement of the underlying Purchase
                  Contract is effected, or with respect to which a Collateral
                  Substitution has been effected, payments on the related Notes
                  or payments on the Applicable Ownership Interest in the
                  Treasury Portfolio, as the case may be, that would otherwise
                  be payable after the applicable Settlement Date or after such
                  Collateral Substitution, as the case may be, shall not be
                  payable hereunder to the Holder of such Normal Unit; provided,
                  that to the extent that such Holder continues to hold the
                  Separate Notes that formerly comprised a part of such Holder's
                  Normal Units, such Holder shall be entitled to receive the
                  payments on such Separate Notes.

                                       38
<PAGE>

         SECTION 4.2 Notice and Voting.

         Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Notes but only to the extent instructed by the Holders as described below. Upon
receipt of notice of any meeting at which holders of Notes are entitled to vote
or upon any solicitation of consents, waivers or proxies of holders of Notes,
the Agent shall, as soon as practicable thereafter, mail to the Holders of
Normal Units a notice (a) containing such information as is contained in the
notice or solicitation, (b) stating that each Holder on the record date set by
the Agent therefor (which, to the extent possible, shall be the same date as the
record date for determining the holders of Notes entitled to vote) shall be
entitled to instruct the Agent as to the exercise of the voting rights
pertaining to the Pledged Notes underlying their Normal Units and (c) stating
the manner in which such instructions may be given. Upon the written request of
the Holders of Normal Units on such record date, the Agent shall endeavor
insofar as practicable to vote or cause to be voted, in accordance with the
instructions set forth in such requests, the maximum number of Pledged Notes as
to which any particular voting instructions are received. In the absence of
specific instructions from the Holder of a Normal Unit, the Agent shall abstain
from voting the Pledged Note underlying such Normal Unit. The Company hereby
agrees, if applicable, to solicit Holders of Normal Units to timely instruct the
Agent in order to enable the Agent to vote such Pledged Notes.

         SECTION 4.3 Tax Event Redemption.

         Upon the occurrence of a Tax Event Redemption prior to the successful
remarketing of Notes, the Company may elect to instruct in writing the
Collateral Agent to apply, and upon such written instruction, the Collateral
Agent, pursuant to the Pledge Agreement, shall apply, out of the aggregate
Redemption Price for all outstanding Notes, an amount equal to the aggregate Tax
Event Redemption Principal Amount for such Notes that are components of Normal
Units to purchase on behalf of the Holders of Normal Units the Treasury
Portfolio and promptly remit the remaining portion of such Redemption Price to
the Agent for payment to the Holders of such Normal Units. The Treasury
Portfolio will be substituted for the Pledged Notes, and will be pledged to the
Collateral Agent in accordance with the terms of the Pledge Agreement to secure
the obligation of each Holder of a Normal Unit to purchase the Common Stock
under the Purchase Contract constituting a part of such Normal Unit. Following
the occurrence of a Tax Event Redemption prior to a successful remarketing of
the Notes, the Holders of Normal Units and the Collateral Agent shall have such
security interests, rights and obligations with respect to the Treasury
Portfolio as the Holder of Normal Units and the Collateral Agent had in respect
of the Notes, as the case may be, subject to the Pledge thereof as provided in
Articles II, III, IV, V and VI of the Pledge Agreement, and any reference herein
or in the Certificates to the Note shall be deemed to be a reference to such
Treasury Portfolio and any reference herein or in the Certificates to interest
on the Notes shall be deemed to be a reference to corresponding distributions on
the Treasury Portfolio. The Company may cause to be made in any Normal Unit
Certificates thereafter to be issued such change in phraseology and form (but
not in substance) as may be appropriate to reflect the substitution of the
Treasury Portfolio for Notes as collateral.

                                       39
<PAGE>

         The Company shall cause notice of any Tax Event Redemption to be
mailed, at least 30 calendar days but not more than 60 calendar days before such
Tax Event Redemption Date, to each Holder of Notes to be redeemed at its
registered address.

         Upon the occurrence of a Tax Event Redemption after the successful
remarketing of the Notes, the Redemption Price will be payable in cash to the
holders of the Notes.

                                   ARTICLE V.
                    THE PURCHASE CONTRACTS; THE REMARKETING

         SECTION 5.1 Purchase of Shares of Common Stock.

         (a)      Each Purchase Contract shall, unless an Early Settlement has
                  occurred in accordance with Section 5.9, or a Merger Early
                  Settlement has occurred in accordance with Section 5.10,
                  obligate the Holder of the related Unit to purchase, and the
                  Company to sell, on the Stock Purchase Date at a price equal
                  to $50 (the "Purchase Price"), a number of issued shares of
                  Common Stock equal to the Settlement Rate unless, on or prior
                  to the Stock Purchase Date, there shall have occurred a
                  Termination Event with respect to the Unit of which such
                  Purchase Contract is a part. The "Settlement Rate" is equal
                  to,

                  (i)      if the Applicable Market Value is greater than or
                           equal to $[_____] (the "Threshold Appreciation
                           Price"), [_____] shares of Common Stock per Purchase
                           Contract,

                  (ii)     if the Applicable Market Value is less than the
                           Threshold Appreciation Price, but is greater than
                           $[_____], the number of shares of Common Stock per
                           Purchase Contract equal to the Stated Amount of the
                           related Unit divided by the Applicable Market Value,
                           and

                  (iii)    if the Applicable Market Value is equal to or less
                           than $[_____], [_____] shares of Common Stock per
                           Purchase Contract,

in each case subject to adjustment as provided in Section 5.6 (and in each case
rounded upward or downward to the nearest 1/20,000th of a share). As provided in
Section 5.12, no fractional shares of Common Stock will be issued upon
settlement of Purchase Contracts.

         (b)      No fractional shares of Common Stock will be issued by the
                  Company on the Stock Purchase Date. In lieu of fractional
                  shares, the Holder will be entitled to receive an amount in
                  cash as provided in Section 5.12.

                                       40
<PAGE>

         (c)      The "Applicable Market Value" means the average of the Closing
                  Price per share of Common Stock on each of the 20 consecutive
                  Trading Days ending on the third Trading Day immediately
                  preceding the Stock Purchase Date. The "Closing Price" of the
                  Common Stock on any date of determination means the closing
                  sale price (or, if no closing price is reported, the last
                  reported sale price per share) of the Common Stock on the New
                  York Stock Exchange (the "NYSE") on such date or, if the
                  Common Stock is not listed for trading on the NYSE on any such
                  date, as reported in the composite transactions for the
                  principal United States securities exchange on which the
                  Common Stock is so listed, or if the Common Stock is not so
                  listed on a United States national or regional securities
                  exchange, as reported by The Nasdaq Stock Market, or, if the
                  Common Stock is not so reported, the last quoted bid price for
                  the Common Stock in the over-the-counter market as reported by
                  the National Quotation Bureau or similar organization, or, if
                  such bid price is not available, the market value of the
                  Common Stock on such date as determined by a nationally
                  recognized independent investment banking firm retained for
                  this purpose by the Company. A "Trading Day" means a day on
                  which the Common Stock (A) is not suspended from trading on
                  any national or regional securities exchange or association or
                  over-the-counter market at the close of business and (B) has
                  traded at least once on the national or regional securities
                  exchange or association or over-the-counter market that is the
                  primary market for the trading of the Common Stock.

         (d)      Each Holder of a Unit, by its acceptance thereof, irrevocably
                  authorizes the Agent to enter into and perform the related
                  Purchase Contract on its behalf as its attorney-in-fact
                  (including the execution of Certificates on behalf of such
                  Holder), agrees to be bound by the terms and provisions hereof
                  and thereof, covenants and agrees to perform its obligations
                  under such Purchase Contracts, and consents to the provisions
                  hereof, irrevocably authorizes the Agent as its
                  attorney-in-fact to enter into and perform the Pledge
                  Agreement on its behalf as its attorney-in-fact, and consents
                  to and agrees to be bound by the Pledge of the Notes, or
                  Applicable Ownership Interest in the Treasury Portfolio, or
                  the Treasury Securities, as the case may be, pursuant to the
                  Pledge Agreement; provided that upon a Termination Event, the
                  rights of the Holder of such Unit under the Purchase Contract
                  may be enforced without regard to any other rights or
                  obligations. Each Holder of a Unit, by its acceptance thereof,
                  further covenants and agrees, to the remarketing of the Note
                  included in its Normal Unit, if applicable, pursuant to the
                  remarketing provisions set forth herein and in the Remarketing
                  Agreement that, to the extent and in the manner provided in
                  Section 5.4 and the Pledge Agreement, but subject to the terms
                  thereof, payments in respect of the Notes or Applicable
                  Ownership Interest in the Treasury Portfolio, or the Treasury
                  Securities, as the case may be, to be paid upon settlement of
                  such Holder's obligations to purchase Common Stock under the
                  Purchase Contract, shall be paid on the Stock Purchase Date by
                  the Collateral Agent to the Company in satisfaction of such
                  Holder's obligations under such Purchase Contract and agrees
                  to (i) treat its acquisition of each Normal Unit as the
                  acquisition of the Note and Purchase Contract constituting the
                  Normal Unit and (ii) treat itself as the owner for all tax
                  purposes of the related Notes, Applicable Ownership Interest
                  in the Treasury Portfolio or Treasury Securities, as the case
                  may be.

                                       41
<PAGE>

         (e)      Upon registration of transfer of a Certificate, the transferee
                  shall be bound (without the necessity of any other action on
                  the part of such transferee) under the terms of this
                  Agreement, the Purchase Contracts underlying such Certificate
                  and the Pledge Agreement, and the transferor shall be released
                  from the obligations under this Agreement, the Purchase
                  Contracts underlying the Certificates so transferred and the
                  Pledge Agreement. The Company covenants and agrees, and each
                  Holder of a Certificate, by its acceptance thereof, likewise
                  covenants and agrees, to be bound by the provisions of this
                  paragraph.

         SECTION 5.2 Reserved.

         SECTION 5.3 Reserved.

         SECTION 5.4 Payment of Purchase Price; Remarketing.

         (a)      Unless a Tax Event Redemption, successful remarketing,
                  Termination Event, Merger Early Settlement or Early Settlement
                  has occurred, each Holder of a Normal Unit may pay in Cash
                  ("Cash Settlement") the Purchase Price for the shares of
                  Common Stock to be purchased pursuant to a Purchase Contract
                  if such Holder notifies the Agent by use of a notice in
                  substantially the form of Exhibit E hereto of its intention to
                  make a Cash Settlement. Such notice must be made on or prior
                  to 10:00 a.m. (New York City time) on the tenth Business Day
                  immediately preceding the Stock Purchase Date. The Agent shall
                  promptly notify the Collateral Agent of the receipt of such a
                  notice from a Holder intending to make a Cash Settlement.

                  (i)      A Holder of a Normal Unit who has so notified the
                           Agent of its intention to make a Cash Settlement is
                           required to pay the Purchase Price to the Collateral
                           Agent prior to 10:00 a.m. (New York City time) on the
                           seventh Business Day immediately preceding the Stock
                           Purchase Date in cash by certified or cashiers' check
                           or wire transfer, in each case, in immediately
                           available funds payable to or upon the order of the
                           Collateral Agent for deposit into the Collateral
                           Account. Any such cash received by the Collateral
                           Agent will be invested promptly by the Collateral
                           Agent in Permitted Investments and such cash paid to
                           the Company on the Stock Purchase Date in settlement
                           of the Purchase Contract in accordance with the terms
                           of this Agreement and the Pledge Agreement. Any funds
                           received by the Collateral Agent in respect of the
                           investment earnings from the investment in such
                           Permitted Investments, will be distributed to the
                           Agent when received for payment to the Holder. If
                           such Holder fails to deliver the required cash, the
                           Holder shall be deemed to have consented to the
                           disposition of the Pledged Notes pursuant to the
                           remarketing as described in paragraph (b) below.

                                       42
<PAGE>

                  (ii)     If a Holder of a Normal Units fails to notify the
                           Agent of its intention to make a Cash Settlement in
                           accordance with paragraph (a)(i) above, the Holder
                           shall be deemed to have consented to the disposition
                           of the Pledged Notes pursuant to the remarketing as
                           described in paragraph (b) below.

                  (iii)    If a Holder of a Normal Unit does notify the Agent as
                           provided in paragraph (a)(i) above of its intention
                           to pay the Purchase Price in cash, but fails to make
                           such payment as required by paragraph (a)(i) above,
                           the Notes of such a Holder will not be remarketed but
                           instead the Collateral Agent, for the benefit of the
                           Company, will exercise its rights as a secured party
                           with respect to such Notes, including but not limited
                           to those rights specified in subsection (b)(iii)
                           below.

         (b)      (i)      The Company shall engage a nationally recognized
                           investment bank (the "Remarketing Agent") pursuant to
                           a Remarketing Agreement to be mutually agreed upon by
                           the Company and the Remarketing Agent to sell the
                           Notes of Holders of Normal Units, other than Holders
                           that have elected not to participate in the
                           remarketing pursuant to the procedures set forth in
                           clause (v) below, and holders of Separate Notes that
                           have elected to participate in the remarketing
                           pursuant to the procedures set forth in clause (vi)
                           below and in Section 4.5(d) of the Pledge Agreement.
                           On or before the tenth Business Day prior to any
                           Remarketing Date, the Remarketing Agent shall give
                           the Agent and the Company written notice of its
                           intent to remarket the Notes. After receiving such
                           notice and on or before the seventh Business Day
                           prior to any Remarketing Date, the Company shall give
                           Holders of Normal Units and holders of Separate Notes
                           notice of the remarketing (the "Remarketing Notice")
                           (the form of which notice to be provided by the
                           Company and to designate an individual at the Company
                           whom Holders may contact for information regarding
                           the remarketing) in a daily newspaper in the English
                           language of general circulation in The City of New
                           York, which is expected to be The Wall Street

                                       43
<PAGE>

                           Journal, including the specific U.S. Treasury
                           security or securities (including the CUSIP number
                           and/or the principal terms of such Treasury security
                           or securities) described in clause (v) below, that
                           must be delivered by Holders of Normal Units that
                           elect not to participate in the remarketing pursuant
                           to clause (v) below, no later than 10:00 a.m. (New
                           York City time) on the fourth Business Day preceding
                           such Remarketing Date. Not later than 15 nor more
                           than 30 calendar days prior, the Company shall
                           request the Clearing Agency (or any successor
                           Clearing Agency), to notify its Beneficial Owners or
                           Depositary Participants holding Normal Units or
                           Separate Notes of the impending remarketing. The
                           Agent shall notify, by 10:00 a.m. (New York City
                           time) on the third Business Day preceding the
                           Remarketing Date, the Remarketing Agent and the
                           Collateral Agent of the aggregate number of Notes of
                           Normal Unit Holders to be remarketed. On the third
                           Business Day immediately preceding the Remarketing
                           Date, no later than by 10:00 a.m. (New York City
                           time), pursuant to the terms of the Pledge Agreement,
                           the Agent will notify the Remarketing Agent of the
                           aggregate number of Separate Notes to be remarketed.
                           Upon receipt of such notice from the Agent, the
                           Remarketing Agent will on the Initial Remarketing
                           Date or a Subsequent Remarketing Date, as the case
                           may be, use its reasonable best efforts to (i)
                           establish a rate of interest that, in the opinion of
                           the Remarketing Agent, will, when applied to the
                           Notes (assuming, even if not true, that all of the
                           Notes are included in the remarketing), enable the
                           then current aggregate market value of the Notes to
                           have a value equal to 100.25% of the Remarketing
                           Value as of the Remarketing Date, provided that in no
                           event shall the Reset Rate be less than the initial
                           rate borne by the Notes and will not exceed the
                           maximum rate permitted by state usury laws and other
                           applicable laws (such rate and the rate specified in
                           Section 5.4(b)(iii), the "Reset Rate"), and (ii) sell
                           such Notes on such date at a price equal to at least
                           100.25% of the Remarketing Value. In the case of a
                           successful remarketing prior to the third Business
                           Day prior to the Stock Purchase Date, the Remarketing
                           Agent will use the proceeds from a successful
                           remarketing to purchase in open market transactions
                           or at Treasury auction the appropriate U.S. Treasury
                           securities (the "Agent-purchased Treasury
                           Consideration") with the CUSIP numbers, if any,
                           selected by the Remarketing Agent, described in
                           clauses (i) and (ii) of the definition of Remarketing
                           Value related to the Notes of Holders of Normal Units
                           that were remarketed. On or prior to the third
                           Business Day following the Initial Remarketing Date
                           or a Subsequent Remarketing Date, as the case may be,
                           the Remarketing Agent shall deliver such
                           Agent-purchased Treasury Consideration to the Agent,
                           which shall thereupon deliver such Agent-purchased

                                       44
<PAGE>

                           Treasury Consideration to the Collateral Agent. The
                           Collateral Agent, for the benefit of the Company,
                           will thereupon apply such Agent-purchased Treasury
                           Consideration, in accordance with the Pledge
                           Agreement, to secure such Holders' obligations under
                           the Purchase Contracts. In the case of a successful
                           remarketing on the third Business Day prior to the
                           Stock Purchase Date, the Remarketing Agent will cause
                           the proceeds from such successful remarketing to be
                           remitted, along with notification thereof, to the
                           Agent for the benefit of the Holders of such
                           remarketed Notes, which shall thereupon deliver such
                           Cash Proceeds to the Collateral Agent. The Collateral
                           Agent, for the benefit of the Company, will thereupon
                           apply such cash proceeds, in accordance with the
                           Pledge Agreement, to secure such Holders' obligations
                           under the Purchase Contracts. In connection with any
                           successful remarketing, the Remarketing Agent will
                           deduct as a remarketing fee an amount not exceeding
                           25 basis points (.25%) of the total proceeds from the
                           remarketing (the "Remarketing Fee"). The Remarketing
                           Agent will remit (1) the portion of the proceeds from
                           the remarketing attributable to the Separate Notes to
                           the holders of Separate Notes that were remarketed
                           and (2) the remaining portion of the proceeds, in
                           each case, less those proceeds used to purchase the
                           Agent-purchased Treasury Consideration (in the case
                           of a remarketing prior to the third Business Day
                           prior to the Stock Purchase Date), to the Holders of
                           the Normal Units that were remarketed, all determined
                           on a pro rata basis, in each case, on or prior to the
                           third Business Day following the Initial Remarketing
                           Date or a Subsequent Remarketing Date, as the case
                           may be. Holders whose Notes are so remarketed will
                           not otherwise be responsible for the payment of any
                           Remarketing Fee in connection therewith. If such
                           successful remarketing is consummated after 4:30 p.m.
                           (New York City time) on such Remarketing Date and,
                           despite using its commercially reasonable efforts,
                           the Remarketing Agent cannot cause the applications
                           of the proceeds specified above to occur on such
                           Remarketing Date, then the Remarketing Agent may make
                           such applications and remittances on the next
                           succeeding Business Day.

                                       45
<PAGE>

                  (ii)     If, despite its reasonable best efforts, the
                           Remarketing Agent cannot establish a Reset Rate on
                           the Initial Remarketing Date so as to allow the
                           Remarketing Agent to remarket the Notes offered for
                           remarketing on such date at a price equal to 100.25%
                           of the Remarketing Value, the Remarketing Agent will
                           attempt to establish a Reset Rate meeting these
                           requirements on each of the three Business Days
                           immediately preceding each of June 16, 2005, July 14,
                           2005 and the third Business Day preceding August 16,
                           2005 (each a "Subsequent Remarketing Period"). If the
                           Remarketing Agent cannot remarket the Notes included
                           in the remarketing on the Initial Remarketing Date or
                           during any Subsequent Remarketing Period at a price
                           equal to at least 100.25% of the Remarketing Value or
                           the Remarketing Agent has determined that the
                           remarketing may not be commenced or consummated
                           pursuant to applicable law, the remarketing will be
                           deemed to have failed (each, a "Terminated
                           Remarketing Period"). If, in spite of using its
                           reasonable best efforts, the Remarketing Agent fails
                           to remarket the Notes underlying the Normal Units at
                           least 100.25% of the Remarketing Value in accordance
                           with the terms of the Pledge Agreement by 4:00 p.m.
                           (New York City time) on the third Business Day
                           immediately preceding the Stock Purchase Date or the
                           Remarketing Agent has determined that the remarketing
                           may not be commenced or consummated pursuant to
                           applicable law, the remarketing will be deemed to
                           have failed, the "Last Failed Remarketing" will be
                           deemed to have occurred. The Collateral Agent, for
                           the benefit of the Company, may exercise its rights
                           as a secured party with respect to such Notes,
                           including those actions specified in subsection
                           (b)(iii) below and at the direction of the Company
                           retain or dispose of the Pledged Notes in accordance
                           with applicable law and satisfy in full from any such
                           disposition or retention, such Holders' obligations
                           to pay the Purchase Price for the Common Stock;
                           provided, that if upon the Last Failed Remarketing,
                           the Collateral Agent delivers the Notes to the
                           Company in full satisfaction of the Holder's
                           obligation under the Purchase Contract, any
                           accumulated and unpaid interest on such Notes will
                           become payable by the Company to the Agent for
                           payment to the Holder of the Normal Units to which
                           such Notes relate. Such payment will be made by the
                           Company on or prior to 5:00 p.m. (New York City time)
                           on the Stock Purchase Date in lawful money of the
                           United States by certified or cashier's check or wire
                           transfer in immediately available funds payable to or
                           upon the order of the Agent.

                                       46
<PAGE>

                  (iii)    In the event of a Last Failed Remarketing or the
                           Notes have not been earlier redeemed pursuant to a
                           Tax Event Redemption, the Remarketing Agent shall
                           determine the Reset Rate that shall apply to the
                           Notes held by the Holders of Separated Notes
                           according to the following method, provided that in
                           no event shall the Reset Rate be less than the
                           initial rate borne by the Notes. After the Last
                           Failed Remarketing, the Remarketing Agent will take
                           the average of the interest rates quoted to it by
                           three nationally recognized investment banks selected
                           by the Company, which are underwriters or dealers in
                           debt securities similar to the Notes, that in their
                           judgment reflects an accurate market rate of interest
                           applicable to the Notes at that time. Following
                           receipt of these quotes, the Remarketing Agent will
                           have the right, in its sole judgment, to either
                           recalculate the average based on only two of the
                           quoted interest rates if one of the three quotes, in
                           the Remarketing Agent's sole discretion, did not
                           reflect market conditions or, alternatively,
                           determine a consensus among the investment banks
                           rather than a strict mathematical average by taking
                           into account all relevant qualitative and
                           quantitative factors. These factors may include, but
                           shall not limited to, maturity of the Notes, the
                           credit rating and credit risk of the Company and
                           companies of similar industries, the then yield to
                           maturity of the Notes and the state of the markets
                           for primary and secondary sales of similar debt
                           securities.

                           If a Terminated Remarketing Period occurs, the
                           Remarketing Agent will, pursuant to the Remarketing
                           Agreement, promptly advise the Trustee, the Purchase
                           Contract Agent, the Collateral Agent, the Company and
                           the Depositary that a Terminated Remarketing Period
                           has occurred. The Company will cause a notice of any
                           Terminated Remarketing Period, the Last Failed
                           Remarketing and the Reset Rate to be published not
                           later than the fourth Business Day following the
                           Initial Remarketing Date or a Subsequent Remarketing
                           Date and the date of the Last Failed Remarketing, as
                           the case may be, in a daily newspaper in the English
                           language of general circulation in The City of New
                           York, which is expected to be The Wall Street
                           Journal. The Company will also release this
                           information by means of Bloomberg and Reuters
                           newswire or, if not available, by similar means.

                  (iv)     With respect to any Notes which constitute part of
                           Normal Units which are subject to the Last Failed
                           Remarketing, the Collateral Agent for the benefit of
                           the Company reserves all of its rights as a secured
                           party with respect thereto and, subject to applicable
                           law and Section 5.4(e) below, may, among other
                           things, foreclose on and retain such Notes for the
                           benefit of the Company and permit the Company to
                           cause the Notes to be sold or to retain and cancel
                           such Notes, in either case, in full satisfaction of
                           such Holders' obligations under the Purchase
                           Contracts.

                                       47
<PAGE>

                  (v)      A Holder of Normal Units may elect not to participate
                           in the remarketing and retain the Notes underlying
                           such Units by notifying the Agent (by delivering
                           written notice to the Agent, substantially in the
                           form of Exhibit D hereto (including the CUSIP number
                           and/or the principal terms of such security or
                           securities), stating that the Holder has Transferred
                           the specific U.S. Treasury security or securities
                           identified by the Agent that constitute the U.S.
                           Treasury securities described in clauses (i) and (ii)
                           of the definition of Remarketing Value relating to
                           the retained Notes (the "Opt-out Treasury
                           Consideration") to the Agent not later than 10:00
                           a.m. (New York City time) on the fourth Business Day
                           immediately preceding (i) the Initial Remarketing
                           Date until the Business Day immediately following
                           such Initial Remarketing Date (ii) Subsequent
                           Remarketing Periods beginning on the third Business
                           Day preceding June 16, 2005 and July 14, 2005 until
                           the Business Day immediately following such
                           Remarketing Period and (iii) the tenth Business Day
                           preceding the Stock Purchase Date. Upon receipt
                           thereof by the Agent, the Agent shall deliver such
                           Opt-out Treasury Consideration to the Collateral
                           Agent. The Collateral Agent will hold Opt-out
                           Treasury Consideration in an account separate from
                           the Collateral Account. On the Remarketing Settlement
                           Date, the Collateral Agent, for the benefit of the
                           Company shall thereupon transfer to the Collateral
                           Account such Opt-out Treasury Consideration to secure
                           such Normal Units Holder's obligations under their
                           applicable Purchase Contract constituting a part of
                           the Holder's Normal Units, in substitution for the
                           Pledged Notes and to fund the quarterly interest
                           payment due to such Holders on the Stock Purchase
                           Date and deliver the applicable Notes to these
                           Holders. On the first Business Day, immediately
                           following a Terminated Remarketing Period, the
                           Collateral Agent will Transfer the Opt-out Treasury
                           Consideration to the Agent and the Agent will
                           transfer promptly such Opt-out Treasury Consideration
                           to the appropriate Holders. A Holder that does not so
                           deliver the Opt-out Treasury Consideration pursuant
                           to this clause (iv) shall be deemed to have elected
                           to participate in the remarketing.

                  (vi)     Pursuant to the Indenture, a Holder of Separate
                           Note(s) may elect to participate in the remarketing
                           by delivering its Separate Notes along with notice of
                           its election, substantially in the form of Exhibit C,
                           to the Collateral Agent not later than 10:00 a.m.
                           (New York City time) on the fourth Business Day (i)
                           immediately preceding the Initial Remarketing Date
                           until the Business Day immediately following such
                           Initial Remarketing Date and (ii) immediately
                           preceding any Subsequent Remarketing Period until the
                           Business Day immediately following such Remarketing
                           Period. The Collateral Agent will hold these Notes in
                           an account separate from the Collateral Account.
                           Holders of Separate Notes that have elected
                           previously to have their Separate Notes remarketed
                           will have the right to withdraw that election on or
                           prior to 10:00 a.m. (New York City time), on the
                           applicable dates specified in the preceding sentence.
                           Within three Business Days following the applicable
                           Remarketing Date, (A) if the remarketing was
                           successful, the Remarketing Agent will notify the
                           Collateral Agent of the successful remarketing and
                           request that the Separate Notes be delivered to the
                           purchasers thereof, and (B) if there was a Terminated
                           Remarketing Period on such date, the Collateral Agent
                           will return the Separate Notes to their Holders.

                                       48
<PAGE>

         (c)      Upon the maturity of the Pledged Treasury Securities
                  underlying the Stripped Units and the Pledged Applicable
                  Ownership Interest in the Treasury Portfolio, underlying the
                  Normal Units, the Collateral Agent shall invest the Proceeds
                  promptly in Permitted Investments and pay to the Company, on
                  the Stock Purchase Date, an amount equal to the aggregate
                  Purchase Price applicable to such Units, as payment for the
                  Common Stock issuable upon settlement thereof without
                  receiving any instructions from the Holders of such Units. Any
                  such Proceeds received by the Collateral Agent in excess of
                  the Purchase Price and any funds received by the Collateral
                  Agent in respect of the investment earnings from the
                  investment in such Permitted Investments will be distributed
                  to the Agent when received for payment to the Holders and the
                  Agent shall promptly cause such excess proceeds to be
                  distributed on a pro rata basis to such Holders.

         (d)      Any distribution to Holders of excess funds and interest
                  described in Section 5.4(b) and (c) above shall be payable at
                  the office of the Agent in The City of New York maintained for
                  that purpose or, at the option of the Holder or the holder of
                  Separate Notes, as applicable, by check mailed to the address
                  of the Person entitled thereto at such address as it appears
                  on the Register or by wire transfer to an account specified by
                  the Holder or the holder of Separate Notes, as applicable.

         (e)      The obligations of each Holder to pay the Purchase Price are
                  non-recourse obligations and except to the extent paid by
                  Early Settlement, Merger Early Settlement or Cash Settlement,
                  are payable solely out of the Proceeds of any Collateral
                  pledged to secure the obligations of the Holders and in no
                  event will Holders be liable for any deficiency between such
                  payments and the Purchase Price.

         (f)      Notwithstanding anything to the contrary herein, the Company
                  shall not be obligated to issue any Common Stock in respect of
                  a Purchase Contract or deliver any certificates therefor to
                  the Holder of the related Unit unless the Company shall have
                  received payment in full for the shares of Common Stock to be
                  purchased thereunder by such Holder in the manner herein set
                  forth.

         (g)      Pursuant to the Indenture and this Article, in the event of a
                  successful remarketing, the interest rate on all of the
                  outstanding Notes (whether or not included in the remarketing)
                  shall be adjusted to the Reset Rate and, in the event of a
                  Last Failed Remarketing, the interest rate on all Separate
                  Notes shall be adjusted to the Reset Rate as set forth in
                  Section 5.4(b)(iii).

                                       49
<PAGE>

         SECTION 5.5 Issuance of Shares of Common Stock.

         Unless a Termination Event shall have occurred on or prior to the Stock
Purchase Date or an Early Settlement or a Merger Early Settlement shall have
occurred, on the Stock Purchase Date, upon its receipt of payment for the shares
of Common Stock purchased by the Holders pursuant to the foregoing provisions of
this Article and subject to Section 5.6, the Company shall issue and deposit
with the Agent, for the benefit of the Holders of the Outstanding Units, one or
more certificates representing the newly issued shares of Common Stock
registered in the name of the Agent (or its nominee) as custodian for the
Holders (such certificates for shares of Common Stock, together with any
dividends or distributions for which a record date and payment date for such
dividend or distribution has occurred after the Stock Purchase Date, being
hereinafter referred to as the "Purchase Contract Settlement Fund") to which the
Holders are entitled hereunder. Subject to the foregoing, upon surrender of a
Certificate to the Agent on or after the Stock Purchase Date, together with
settlement instructions thereon duly completed and executed, the Holder of such
Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Common Stock which such Holder is
entitled to receive pursuant to the provisions of this Article V together with
cash in lieu of fractional shares as provided in Section 5.12 and any dividends
or distributions with respect to such shares constituting part of the Purchase
Contract Settlement Fund, but without any interest thereon, and the Certificate
so surrendered shall forthwith be cancelled. Such shares shall be registered in
the name of the Holder or the Holder's designee as specified in the settlement
instructions provided by the Holder to the Agent. If any shares of Common Stock
issued in respect of a Purchase Contract are to be registered to a Person other
than the Person in whose name the Certificate evidencing such Purchase Contract
is registered, no such registration shall be made unless the Person requesting
such registration has paid any transfer and other taxes required by reason of
such registration in a name other than that of the registered Holder of such
Certificate or has established to the satisfaction of the Company that such tax
either has been paid or is not payable.

         SECTION 5.6 Adjustment of Settlement Rate.

         (a)      Adjustments for Dividends, Distributions, Stock Splits, Etc.

                  (1)      Stock Dividends. In case the Company shall pay or
                           make a dividend or other distribution on the Common
                           Stock in Common Stock, the Settlement Rate, as in
                           effect at the opening of business on the day
                           following the date fixed for the determination of
                           stockholders entitled to receive such dividend or
                           other distribution shall be increased by dividing
                           such Settlement Rate by a fraction of which the
                           numerator shall be the number of shares of Common
                           Stock outstanding at the close of business on the
                           date fixed for such determination and the denominator
                           shall be the sum of such number of shares and the
                           total number of shares constituting such dividend or
                           other distribution, such increase to become effective
                           immediately after the opening of business on the day
                           following the date fixed for such determination. For
                           the purposes of this paragraph (1), the number of
                           shares of Common Stock at the time outstanding shall
                           not include shares held in the treasury of the
                           Company but shall include any shares issuable in
                           respect of any 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.

                                       50
<PAGE>

                  (2)      Stock Purchase Rights. In case the Company shall
                           issue rights, options or warrants, other than
                           pursuant to any dividend reinvestment plan or share
                           purchase plan, to all holders of its Common Stock
                           (not being available on an equivalent basis to
                           Holders of the Securities upon settlement of the
                           Purchase Contracts underlying such Securities)
                           entitling them, for a period expiring within 45 days
                           after the record date for the determination of
                           stockholders entitled to receive such rights, options
                           or warrants, to subscribe for or purchase shares of
                           Common Stock at a price per share less than the
                           Current Market Price per share of the Common Stock on
                           the date fixed for the determination of stockholders
                           entitled to receive such rights, options or warrants
                           (other than pursuant to a dividend reinvestment plan
                           or share purchase plan), the Settlement Rate in
                           effect at the opening of business on the day
                           following the date fixed for such determination shall
                           be increased by dividing such Settlement Rate by a
                           fraction of which (i) the numerator shall be the
                           number of shares of Common Stock outstanding at the
                           close of business on the date fixed for such
                           determination plus the number of shares of Common
                           Stock which the aggregate offering price of the total
                           number of shares of Common Stock so offered for
                           subscription or purchase would purchase at such
                           Current Market Price and (ii) the denominator shall
                           be the number of shares of Common Stock outstanding
                           at the close of business on the date fixed for such
                           determination plus the number of shares of Common
                           Stock so offered for subscription or purchase, such
                           increase to become effective immediately after the
                           opening of business on the day following the date
                           fixed for such determination. For purposes of this
                           paragraph (2), 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 any
                           shares issuable in respect of any share certificates
                           issued in lieu of fractions of shares of Common
                           Stock. The Company shall not issue any such rights,
                           options or warrants in respect of shares of Common
                           Stock held in the treasury of the Company.

                                       51
<PAGE>

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

                  (4)      Debt or Asset Distributions. (i) In case the Company
                           shall, by dividend or otherwise, distribute to all
                           holders of its Common Stock evidences of its
                           indebtedness or assets (including securities, but
                           excluding any rights or warrants referred to in
                           paragraph (2) of this Section, any dividend or
                           distribution paid exclusively in cash and any
                           dividend, shares of capital stock of any class or
                           series, or similar equity interests, of or relating
                           to a subsidiary or other business unit in the case of
                           a Spin-Off referred to in the next paragraph, or
                           distribution referred to in paragraph (1) of this
                           Section), the Settlement Rate shall be adjusted so
                           that the same shall equal the rate determined by
                           dividing the Settlement Rate in effect immediately
                           prior to the close of business on the date fixed for
                           the determination of stockholders entitled to receive
                           such distribution by a fraction, the numerator of
                           which shall be the Current Market Price per share of
                           the Common Stock on the date fixed for such
                           determination less the then fair market value (as
                           reasonably determined by the Board of Directors,
                           whose determination shall be conclusive and the basis
                           for which shall be described in a Board Resolution
                           filed with the Agent) of the portion of the assets or
                           evidences of indebtedness so distributed applicable
                           to one share of Common Stock and the denominator of
                           which shall be such Current Market Price per share of
                           the Common Stock, such adjustment to become effective
                           immediately prior to the opening of business on the
                           day following the date fixed for the determination of
                           stockholders entitled to receive such distribution.
                           In any case in which this paragraph (4) is
                           applicable, paragraph (2) of this Section shall not
                           be applicable.

                           (ii)     In the case of a Spin-Off, the Settlement
                                    Rate in effect immediately before the close
                                    of business on the record date fixed for
                                    determination of stockholders entitled to
                                    receive that distribution will be increased
                                    by multiplying the Settlement Rate by a
                                    fraction, the numerator of which is the
                                    Current Market Price per share of the Common
                                    Stock plus the Fair Market Value of the
                                    portion of those shares of Capital Stock or
                                    similar equity interests so distributed
                                    applicable to one share of Common Stock and
                                    the denominator of which is the Current
                                    Market Price per share of the Common Stock.
                                    Any adjustment to the settlement rate under
                                    this paragraph 4(ii) will occur at the
                                    earlier of (1) the tenth Trading Day from,
                                    and including, the effective date of the
                                    Spin-Off and (2) the date of the securities
                                    being offered in the Initial Public Offering
                                    of the Spin-Off, if that Initial Public
                                    Offering is effected simultaneously with the
                                    Spin-Off.

                                       52
<PAGE>

                  (5)      Cash Distributions. In case the Company shall, (i) by
                           dividend or otherwise, distribute to all holders of
                           its Common Stock cash (excluding any cash that is
                           distributed in a Reorganization Event to which
                           Section 5.6(b) applies or as part of a distribution
                           referred to in paragraph (4) of this Section) in an
                           aggregate amount that, combined together with (ii)
                           the aggregate amount of any other distributions to
                           all holders of its 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 paragraph (5) or
                           paragraph (6) of this Section has been made and (iii)
                           the aggregate of any cash plus the fair market value
                           as of the date of the expiration of the tender or
                           exchange offer referred to below (as reasonably
                           determined by the Board of Directors, whose
                           determination shall be conclusive and the basis for
                           which shall be described in a Board Resolution) of
                           consideration payable in respect of any tender 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 payment of the distribution described in
                           clause (i) above and in respect of which no
                           adjustment pursuant to this paragraph (5) or
                           paragraph (6) of this Section has been made, exceeds
                           15% of the product of the Current Market Price per
                           share of the Common Stock on the date for the
                           determination of holders of shares of Common Stock
                           entitled to receive 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 for determination,
                           the Settlement Rate shall be increased so that the
                           same shall equal the rate determined by dividing the
                           Settlement Rate in effect immediately prior to the
                           close of business on the date fixed for determination
                           of the stockholders entitled to receive such
                           distribution by a fraction (A) the numerator of which
                           shall be equal to the Current Market Price per share
                           of the Common Stock on the date fixed for such
                           determination less an amount equal to the quotient of
                           (x) the combined amount distributed or payable in the
                           transactions described in clauses (i), (ii) and (iii)
                           above and (y) the number of shares of Common Stock
                           outstanding on such date for determination and (B)
                           the denominator of which shall be equal to the
                           Current Market Price per share of the Common Stock on
                           such date for determination.
<PAGE>

                           (6) Tender Offers. In case (i) a tender or exchange
                  offer made by the Company or any subsidiary of the Company for
                  all or any portion of the Common Stock shall expire and such
                  tender or exchange offer (as amended upon the expiration
                  thereof) shall require the payment to stockholders (based on
                  the acceptance (up to any maximum specified in the terms of
                  the tender or exchange offer) of Purchased Shares) of an
                  aggregate consideration having a fair market value (as
                  reasonably determined by the Board of Directors, whose
                  determination shall be conclusive and the basis for which
                  shall be described in a Board Resolution) that combined
                  together with (ii) the aggregate of the cash plus the fair
                  market value (as determined by the Board of Directors, whose
                  determination shall be conclusive and described in a Board
                  Resolution), as of the expiration of such tender or exchange
                  offer, of consideration payable in respect of any other tender
                  or exchange offer, by the Company or any subsidiary of the
                  Company for all or any portion of the Common Stock expiring
                  within the 12 months preceding the expiration of such tender
                  or exchange offer and in respect of which no adjustment
                  pursuant to paragraph (5) of this Section or this paragraph
                  (6) has been made and (iii) the aggregate amount of any
                  distributions to all holders of the Company's Common Stock
                  made exclusively in cash within the 12 months preceding the
                  expiration of such tender or exchange offer and in respect of
                  which no adjustment pursuant to paragraph (5) of this Section
                  or this paragraph (6) has been made, exceeds 15% of the
                  product of the Current Market Price per share of the Common
                  Stock as of the last time (the "Expiration Time") tenders
                  could have been made pursuant to such tender or exchange offer
                  (as it may be amended) times the number of shares of Common
                  Stock outstanding (including any tendered 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 Settlement Rate shall be adjusted so
                  that the same shall equal the rate determined by dividing the
                  Settlement Rate immediately prior to the close of business on
                  the date of the Expiration Time by a fraction (A) the
                  numerator of which shall be equal to (x) the product of (I)
                  the Current Market Price per share of the Common Stock on the
                  date of the Expiration Time and (II) the number of shares of
                  Common Stock outstanding (including any tendered shares) on
                  the Expiration Time less (y) the amount of cash plus the fair
                  market value (determined as aforesaid) of the aggregate
                  consideration payable to stockholders based on the
                  transactions described in clauses (i), (ii) and (iii) above
                  (assuming in the case of clause (i) the acceptance, up to any
                  maximum specified in the terms of the tender or exchange
                  offer, of Purchased Shares), and (B) the denominator of which
                  shall be equal to the product of (x) the Current Market Price
                  per share of the Common Stock as of the Expiration Time and
                  (y) the number of shares of Common Stock outstanding
                  (including any tendered shares) as of the Expiration Time less
                  the number of all shares validly tendered and not withdrawn as
                  of the Expiration Time (the shares deemed so accepted, up to
                  any such maximum, being referred to as the "Purchased
                  Shares").

                                       54
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                           (7) Reclassification. The reclassification of Common
                  Stock into securities including securities other than Common
                  Stock (other than any reclassification upon a Reorganization
                  Event to which Section 5.6(b) applies) shall be deemed to
                  involve (i) a distribution of such securities other than
                  Common Stock to all holders of Common Stock (and the effective
                  date of such reclassification shall be deemed to be "the date
                  fixed for the determination of stockholders entitled to
                  receive such distribution" and the "date fixed for such
                  determination" within the meaning of paragraph (4) of this
                  Section), and (ii) a subdivision, split or combination, as the
                  case may be, of the number of shares of Common Stock
                  outstanding immediately prior to such reclassification into
                  the number of shares of Common Stock outstanding immediately
                  thereafter (and the effective date of such reclassification
                  shall be deemed to be "the day upon which such subdivision or
                  split becomes effective" or "the day upon which such
                  combination becomes effective," as the case may be, and "the
                  day upon which such subdivision, split or combination becomes
                  effective" within the meaning of paragraph (3) of this
                  Section).

                           (8) "Current Market Price" The "Current Market Price"
                  of the Common Stock means (a) on any day the average of the
                  Sales Prices for the 5 consecutive Trading Day preceding the
                  earlier of the day preceding the day in question and the day
                  before the "ex date" with respect to the issuance or
                  distribution requiring computation, (b) in the case of any
                  Spin-Off that is effected simultaneously with and Initial
                  Public Offering of the securities being distributed in the
                  Spin-Off, the Sale Price of the Common Stock on the Trading
                  Day on which the initial public offering price of the
                  securities being distributed in the Spin-Off is determined,
                  and (c) in the case of any other Spin-Off, the average of the
                  Sale Prices of the Common Stock over the first 10 Trading Days
                  after the effective date of such Spin-Off. For purposes of
                  this paragraph, the term "ex date," when used with respect to
                  any issuance or distribution, shall mean the first date on
                  which the Common Stock trades regular way on such exchange or
                  in such market without the right to receive such issuance or
                  distribution.

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<PAGE>

                           (9) Calculation of Adjustments. All adjustments to
                  the Settlement Rate shall be calculated to the nearest
                  1/20,000th of a share of Common Stock (or if there is not a
                  nearest 1/20,000th of a share to the next lower 1/20,000th of
                  a share). No adjustment in the Settlement Rate shall be
                  required unless such adjustment would require an increase or
                  decrease of at least one percent therein; provided, that any
                  adjustments which by reason of this subparagraph are not
                  required to be made shall be carried forward and taken into
                  account in any subsequent adjustment. If an adjustment is made
                  to the Settlement Rate pursuant to paragraph (1), (2), (3),
                  (4), (5), (6), (7) or (10) of this Section 5.6(a), an
                  adjustment shall also be made to the Applicable Market Value
                  solely to determine which of clauses (i), (ii) or (iii) of the
                  definition of Settlement Rate in Section 5.1(a) will apply on
                  the Stock Purchase Date. Such adjustment shall be made by
                  multiplying the Applicable Market Value by a fraction, the
                  numerator of which shall be the Settlement Rate immediately
                  after such adjustment pursuant to paragraph (1), (2), (3),
                  (4), (5), (6), (7) or (10) of this Section 5.6(a) and the
                  denominator of which shall be the Settlement Rate immediately
                  before such adjustment; provided, that if such adjustment to
                  the Settlement Rate is required to be made pursuant to the
                  occurrence of any of the events contemplated by paragraph (1),
                  (2), (3), (4), (5), (7) or (10) of this Section 5.6(a) during
                  the period taken into consideration for determining the
                  Applicable Market Value, appropriate and customary adjustments
                  shall be made to the Settlement Rate.

                           (10) Increase of Settlement Rate. The Company may
                  make such increases in the Settlement Rate, in addition to
                  those required by this Section, as it considers to be
                  advisable in order to avoid or diminish any income tax to any
                  holders of shares of Common Stock resulting from any dividend
                  or distribution of stock or issuance of rights or warrants to
                  purchase or subscribe for stock or from any event treated as
                  such for income tax purposes or for any other reasons.

                                       56
<PAGE>

         (b) Adjustment for Consolidation, Merger or Other Reorganization Event.

         In the event of

                           (1) any consolidation or merger of the Company with
                  or into another Person (other than a merger or consolidation
                  in which the Company is the continuing corporation and in
                  which the Common Stock outstanding immediately prior to the
                  merger or consolidation is not exchanged for cash, securities
                  or other property of the Company or another corporation),

                           (2) any sale, transfer, lease or conveyance to
                  another Person of the property of the Company as an entirety
                  or substantially as an entirety,

                           (3) any statutory exchange of securities of the
                  Company with another Person (other than in connection with a
                  merger or acquisition), or

                           (4) any liquidation, dissolution or winding up of the
                  Company other than as a result of or after the occurrence of a
                  Termination Event

         (any such event, a "Reorganization Event"),

each share of Common Stock covered by each Purchase Contract forming a part of a
Unit immediately prior to such Reorganization Event shall, after such
Reorganization Event, be converted for purposes of the Purchase Contract into
the kind and amount of securities, cash and other property receivable in such
Reorganization Event (without any interest thereon, and without any right to
dividends or distribution thereon which have a record date that is prior to the
Stock Purchase Date) per share of Common Stock by a holder of Common Stock that
(i) is not a Person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be (any such Person, a "Constituent Person"),
or an Affiliate of a Constituent Person to the extent such Reorganization Event
provides for different treatment of Common Stock held by Affiliates of the
Company and non-Affiliates, and (ii) failed to exercise his rights of election,
if any, as to the kind or amount of securities, cash and other property
receivable upon such Reorganization Event (provided that if the kind or amount
of securities, cash and other property receivable upon such Reorganization Event
is not the same for each share of Common Stock held immediately prior to such
Reorganization Event by other than a Constituent Person or an Affiliate thereof
and in respect of which such rights of election shall not have been exercised
("Non-electing Share"), then for the purpose of this Section the kind and amount
of securities, cash and other property receivable upon such Reorganization Event
by each Non-electing Share shall be deemed to be the kind and amount so
receivable per share by a plurality of the Non-electing Shares). On the Stock
Purchase Date, the Settlement Rate then in effect will be applied to the value
on the Stock Purchase Date of such securities, cash or other property.

                                       57
<PAGE>

         In the event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires the assets of the
Company or, in the event of a liquidation or dissolution of the Company, the
Company or a liquidating trust created in connection therewith, shall execute
and deliver to the Agent an agreement supplemental hereto providing that the
Holder of each Outstanding Unit shall have the rights provided by this Section
5.6. Such supplemental agreement shall provide for adjustments which, for events
subsequent to the effective date of such supplemental agreement, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section. The above provisions of this Section shall similarly apply to
successive Reorganization Events.

         SECTION 5.7 Notice of Adjustments and Certain Other Events.

                  (a) Whenever the Settlement Rate is adjusted as herein
         provided, the Company shall:

                           (i) forthwith compute the Settlement Rate and the
                  Applicable Market Value in accordance with Section 5.6 and
                  prepare and transmit to the Agent an Officer's Certificate
                  setting forth the Settlement Rate and the Applicable Market
                  Value, the method of calculation thereof in reasonable detail,
                  and the facts requiring such adjustment and upon which such
                  adjustment is based; and

                           (ii) as soon as practicable following the occurrence
                  of an event that requires an adjustment to the Settlement Rate
                  pursuant to Section 5.6 (or if the Company is not aware of
                  such occurrence, as soon as practicable after becoming so
                  aware), provide a written notice to the Holders of the Units
                  of the occurrence of such event and a statement in reasonable
                  detail setting forth the method by which the adjustment to the
                  Settlement Rate and the Applicable Market Value was determined
                  and setting forth the adjusted Settlement Rate and the
                  Applicable Market Value.

                  (b) The Agent shall not at any time be under any duty or
         responsibility to any Holder of Units to determine whether any facts
         exist which may require any adjustment of the Settlement Rate and the
         Applicable Market Value, or with respect to the nature or extent or
         calculation of any such adjustment when made, or with respect to the
         method employed in making the same. The Agent shall not be accountable
         with respect to the validity or value (or the kind or amount) of any
         shares of Common Stock, or of any securities or property, which may at
         the time be issued or delivered with respect to any Purchase Contract;
         and the Agent makes no representation with respect thereto. The Agent
         shall not be responsible for any failure of the Company to issue,
         transfer or deliver any shares of Common Stock pursuant to a Purchase
         Contract or to comply with any of the duties, responsibilities or
         covenants of the Company contained in this Article.

                                       58
<PAGE>

         SECTION 5.8 Termination Event; Notice.

         The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including the rights and obligations of Holders to
purchase Common Stock, shall immediately and automatically terminate, without
the necessity of any notice or action by any Holder, the Agent or the Company,
if, on or prior to the Stock Purchase Date, a Termination Event shall have
occurred. Upon and after the occurrence of a Termination Event, the Normal Units
shall thereafter represent the right to receive the Pledged Notes or the
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
forming a part of such Normal Units, and the Stripped Units shall thereafter
represent the right to receive the Pledged Treasury Securities forming a part of
such Stripped Units, in each case in accordance with the provisions of Section
4.3 of the Pledge Agreement. Upon the occurrence of a Termination Event, the
Company shall promptly but in no event later than two Business Days thereafter
give written notice to the Agent, the Collateral Agent and to the Holders, at
their addresses as they appear in the Register.

         SECTION 5.9 Early Settlement.

                  (a) Unless a Holder has effected a Merger Early Settlement or
         a Termination Event shall have occurred, subject to and upon compliance
         with the provisions of this Section 5.9, Purchase Contracts underlying
         Units having an aggregate Stated Amount equal to $1,000 or an integral
         multiple thereof, may, at the option of the Holder thereof, be settled
         early ("Early Settlement") at any time, provided that Holders may not
         settle early after 10:00 a.m. (New York City time) (i) on or after the
         fourth Business Day immediately preceding the Initial Remarketing Date
         until the next Business Day immediately following such Initial
         Remarketing Date; (ii) on or after the fourth Business Day immediately
         preceding any Subsequent Remarketing Period until the next Business Day
         immediately following a Terminated Remarketing or (iii)on or after the
         seventh Business Day immediately preceding the Stock Purchase Date. In
         order to exercise the right to effect Early Settlement with respect to
         any Purchase Contract, the Holder of the Certificate evidencing the
         related Unit shall deliver such Certificate to the Agent at the
         Corporate Trust Office an "Election to Settle Early" form on the
         reverse side of the Certificate and any other documents requested by
         the Agent and accompanied by payment payable to the Company in
         immediately available funds in an amount (the "Early Settlement
         Amount") equal to the product of (i) the Stated Amount of such Units
         multiplied by (ii) the number of Purchase Contracts with respect to
         which the Holder has elected to effect Early Settlement within the time
         frames specified in the preceding sentence. If the foregoing
         requirements are first satisfied with respect to Purchase Contracts
         underlying any Unit at or prior to 5:00 p.m. (New York City time) on a
         Business Day, such day shall be the "Early Settlement Date" with
         respect to such Unit and if such requirements are first satisfied after
         5:00 p.m. (New York City time) on a Business Day or on a day that is
         not a Business Day, the "Early Settlement Date" with respect to such
         Units shall be the next succeeding Business Day.

                                       59
<PAGE>

                  (b) Upon payment of the Early Settlement Amount by the Holder
         of the related Normal Units or Stripped Units, as the case may be, the
         Company shall issue, and the Holder shall be entitled to receive,
         [____] shares of Common Stock on account of such Purchase Contract (the
         "Early Settlement Rate"). The Early Settlement Rate shall be adjusted
         in the same manner and at the same time as the Settlement Rate is
         adjusted pursuant to Section 5.6.

                  (c) No later than the third Business Day after the applicable
         Early Settlement Date, the Company shall cause:

                           (1) the shares of Common Stock issuable upon Early
                  Settlement of Purchase Contracts to be issued and delivered;
                  and

                           (2) the related Pledged Notes or Pledged Applicable
                  Ownership Interest in the Treasury Portfolio, in the case of
                  Normal Units, or the related Pledged Treasury Securities, in
                  the case of Stripped Units, to be released from the Pledge by
                  the Collateral Agent and transferred, in each case, to the
                  Agent for delivery to the Holder thereof or the Holder's
                  designee, pursuant to the Pledge Agreement.

                  (d) Upon Early Settlement of any Purchase Contracts, and
         subject to receipt of shares of Common Stock from the Company and the
         Pledged Notes, Pledged Applicable Ownership Interest (as specified in
         clause (A) of the definition of such term) in the Treasury Portfolio,
         or Pledged Treasury Securities, as the case may be, from the Collateral
         Agent, as applicable, the Agent shall, in accordance with the
         instructions provided by the Holder thereof on the applicable form of
         Election to Settle Early on the reverse of the Certificate evidencing
         the related Units;

                           (1) transfer to the Holder the Pledged Notes, Pledged
                  Applicable Ownership Interest in the Treasury Portfolio, or
                  Pledged Treasury Securities, as the case may be, forming a
                  part of such Units pursuant to the Pledge Agreement; and

                                       60
<PAGE>

                           (2) deliver to the Holder a certificate or
                  certificates for the full number of shares of Common Stock
                  issuable upon such Early Settlement together with payment in
                  lieu of any fraction of a share, as provided in Section 5.12.

                  (e) In the event that Early Settlement is effected with
         respect to Purchase Contracts underlying less than all the Units
         evidenced by a Certificate, upon such Early Settlement, the Company
         shall execute and the Agent shall authenticate, execute and deliver to
         the Holder thereof, at the expense of the Company, a Certificate
         evidencing the Units as to which Early Settlement was not effected.

                  (f) The Company agrees that, if required under U.S. Federal
         securities laws, it will use commercially reasonable efforts to (1)
         have in effect a registration statement covering the shares of our
         Common Stock to be delivered in respect of the Purchase Contracts being
         settled and (2) provide a prospectus in connection therewith, in each
         case in a form that may be used in connection with the Early Settlement
         pursuant to this Section 5.9.

         SECTION 5.10 Early Settlement Upon Merger.

                  (a) In the event of a merger or consolidation of the Company
         of the type described in clause (1) of Section 5.6(b) in which the
         Common Stock outstanding immediately prior to such merger or
         consolidation is exchanged for consideration consisting of at least 30%
         cash or cash equivalents (any such event, a "Cash Merger"), then the
         Company (or the successor to the Company hereunder) shall be required
         to offer the Holder of each Unit the right to settle the Purchase
         Contract underlying such Unit prior to the Stock Purchase Date ("Merger
         Early Settlement") as provided herein. On or before the fifth Business
         Day after the consummation of a Cash Merger, the Company or, at the
         request and expense of the Company, the Agent, shall give all Holders
         notice of the occurrence of the Cash Merger and of the right of Merger
         Early Settlement arising as a result thereof. The Company shall also
         deliver a copy of such notice to the Agent and the Collateral Agent.

                  Each such notice shall contain:

                           (i) the date, which shall be 10 Business Days after
                  the date of such notice, on which the Merger Early Settlement
                  may be effected (the "Merger Early Settlement Date");

                           (ii) the date, which shall be on or by the third
                  Business Day prior to the Merger Early Settlement Date, by
                  which the Merger Early Settlement right must be exercised;

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<PAGE>

                           (iii) the Settlement Rate that will be in effect on
                  the Merger Early Settlement Date after giving effect to such
                  Cash Merger and the kind and amount of securities, cash and
                  other property receivable by the Holder upon settlement of
                  each Purchase Contract pursuant to Section 5.6(b);

                           (iv) a statement to the effect that all or a portion
                  of the Purchase Price payable by the Holder to settle the
                  Purchase Contract will be offset against the amount of cash so
                  receivable upon exercise of Merger Early Settlement, as
                  applicable; and

                           (v) the instructions a Holder must follow to exercise
                  the Merger Early Settlement right.

                  (b) To exercise a Merger Early Settlement right, a Holder
         shall deliver to the Agent at the Corporate Trust Office on or before
         5:00 p.m. (New York City time) on the third Business Day before the
         Merger Early Settlement Date the Certificate(s) evidencing the Units
         with respect to which the Merger Early Settlement right is being
         exercised and, if the Holder holds physical Certificates, such Holder
         shall deliver the Certificate(s) duly endorsed for transfer to the
         Company or in blank with the form of Election to Settle Early on the
         reverse thereof duly completed and, in each instance, accompanied by
         payment payable to the Company in immediately available funds in an
         amount equal to the Early Settlement Amount less the amount of cash
         that otherwise would be deliverable by the Company or its successor
         upon settlement of the Purchase Contract in lieu of Common Stock
         pursuant to Section 5.6(b) and as described in the notice to Holders
         (the "Merger Early Settlement Amount").

                  (c) On the Merger Early Settlement Date, if the Company has
         received the Merger Early Settlement Amount for the applicable number
         of Purchase Contracts being settled by Merger Early Settlement, the
         Company shall deliver or cause to be delivered (i) the net cash,
         securities and other property to be received by such exercising Holder,
         equal to the Settlement Rate as adjusted pursuant to Section 5.6, in
         respect of the number of Purchase Contracts for which such Merger Early
         Settlement right was exercised, and (ii) the related Pledged Notes or
         Pledged Applicable Ownership Interest in the Treasury Portfolio, in the
         case of Normal Units, or Pledged Treasury Securities, in the case of
         Stripped Units, to be released from the Pledge by the Collateral Agent
         and transferred, in each case, to the Agent for delivery to the Holder
         thereof or its designee pursuant to the Pledge Agreement. In the event
         a Merger Early Settlement right shall be exercised by a Holder in
         accordance with the terms hereof, all references herein to Stock
         Purchase Date shall be deemed to refer to such Merger Early Settlement
         Date.

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<PAGE>

                  (d) Upon Merger Early Settlement of any Purchase Contracts,
         and subject to receipt of such net cash, securities or other property
         from the Company and the Pledged Notes, Pledged Applicable Ownership
         Interest in the Treasury Portfolio or Pledged Treasury Securities, as
         the case may be, from the Collateral Agent, as applicable, the Agent
         shall, in accordance with the instructions provided by the Holder
         thereof on the applicable form of Election to Settle Early on the
         reverse of the Certificate evidencing the related Units, (i) transfer
         to the Holder the Pledged Notes, Pledged Treasury Consideration,
         Pledged Applicable Ownership Interest in the Treasury Portfolio, or
         Pledged Treasury Securities, as the case may be, forming a part of such
         Units, pursuant to the Pledge Agreement, and (ii) deliver to the Holder
         such net cash, securities or other property issuable upon such Merger
         Early Settlement together with payment in lieu of any fraction of a
         share, as provided in Section 5.12.

                  (e) In the event that Merger Early Settlement is effected with
         respect to Purchase Contracts underlying less than all the Units
         evidenced by a Certificate, upon such Merger Early Settlement, the
         Company (or the successor to the Company hereunder) shall execute and
         the Agent shall authenticate, execute and deliver to the Holder
         thereof, at the expense of the Company, a Certificate evidencing the
         Units as to which Merger Early Settlement was not effected.

         SECTION 5.11 Charges and Taxes.

         The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant to
the Purchase Contracts provided, that the Company shall not be required to pay
any such tax or taxes which may be payable in respect of any exchange of or
substitution for a Certificate evidencing a Unit or any issuance of a share of
Common Stock in a name other than that of the registered Holder of a Certificate
surrendered in respect of the Units evidenced thereby, other than in the name of
the Agent, as custodian for such Holder, and the Company shall not be required
to issue or deliver such share certificates or Certificates unless and until the
Person or Persons requesting the transfer or issuance thereof shall have paid to
the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid.

         SECTION 5.12 No Fractional Shares.

         No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Stock Purchase Date or
upon Early Settlement or Merger Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be surrendered for
settlement at one time by the same Holder, the number of full shares of Common
Stock which shall be delivered upon settlement shall be computed on the basis of
the aggregate number of Purchase Contracts evidenced by the Certificates so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be deliverable upon settlement of any Purchase Contracts on the
applicable Settlement Date or upon Early Settlement or Merger Early Settlement,
the Company, through the Agent, shall make a cash payment in respect of such
fractional shares in an amount equal to the value of such fractional shares
times the Applicable Market Value. The Company shall provide the Agent from time
to time with sufficient funds to permit the Agent to make all cash payments
required by this Section 5.12 in a timely manner.

                                       63
<PAGE>

                                  ARTICLE VI.
                                    REMEDIES

         SECTION 6.1 Unconditional Right of Holders to Purchase Common Stock.

         The Holder of any Unit shall have the right, which is absolute and
unconditional, to purchase Common Stock pursuant to the Purchase Contract
constituting a part of such Unit and to institute suit for the enforcement of
any such right to purchase Common Stock, and such rights shall not be impaired
without the consent of such Holder.

         SECTION 6.2 Restoration of Rights and Remedies.

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

         SECTION 6.3 Rights and Remedies Cumulative.

         Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

         SECTION 6.4 Delay or Omission Not Waiver.

         No delay or omission of any Holder to exercise any right or remedy upon
a default shall impair any such right or remedy or constitute a waiver of any
such right. Every right and remedy given by this Article or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.

                                       64
<PAGE>

         SECTION 6.5 Undertaking for Costs.

         All parties to this Agreement agree, and each Holder of a Unit, by its
acceptance of such Unit shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Agreement, or in any suit against the Agent for any action taken,
suffered or omitted by it as Agent, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
provided that the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Agent, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% of the Outstanding Units, or to any suit instituted by any Holder for
the enforcement of distributions on any Notes on any Purchase Contract on or
after the respective Payment Date therefor in respect of any Unit held by such
Holder, or for enforcement of the right to purchase shares of Common Stock under
the Purchase Contract constituting part of any Unit held by such Holder.

         SECTION 6.6 Waiver of Stay or Extension Laws.

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

                                  ARTICLE VII.
                                    THE AGENT

         SECTION 7.1 Certain Duties, Rights and Immunities.

                  (a) The Agent shall act as agent for the Holders of the Units
         hereunder with such powers as are specifically vested in the Agent by
         the terms of this Agreement, the Pledge Agreement, the Remarketing
         Agreement, the Notes and the Units, and any documents evidencing
         thereof or related thereto (the "Transaction Documents"), together with
         such other powers as are reasonably incidental thereto. The Agent:

                                       65
<PAGE>

                           (1) shall have no duties or responsibilities except
                  those expressly set forth in the Transaction Documents and no
                  implied covenants or obligations shall be inferred from any
                  Transaction Documents against the Agent, nor shall the Agent
                  be bound by the provisions of any agreement by any party
                  hereto beyond the specific terms hereof;

                           (2) In the absence of bad faith on its part, shall be
                  entitled conclusively to rely upon (x) any certification,
                  order, judgment, opinion, notice or other communication
                  (including, without limitation, any thereof by telephone or
                  facsimile) furnished to the Agent and conforming to the
                  requirement of the Transaction Document and reasonably
                  believed by it to be genuine and correct and to have been
                  signed or sent by or on behalf of the proper Person or Persons
                  (without being required to determine the correctness of any
                  fact stated therein), (y) the truth of the statements and the
                  correctness of the opinions expressed therein and (z) advice
                  and statements of legal counsel and other experts selected by
                  the Agent; but in the case of any such certificates or
                  opinions which by any provisions hereof are specifically
                  required to be furnished to such Agent, such Agent shall be
                  under a duty to examine the same to determine whether or not
                  they conform to the requirements of this Agreement.

                           (3) as to any matters not expressly provided for by
                  any Transaction Document, shall in all cases be fully
                  protected in acting, or in refraining from acting, hereunder
                  or thereunder in accordance with instructions given by the
                  Company or the Holders in accordance with the Transaction
                  Documents;

                           (4) shall not be responsible for any recitals
                  contained in any Transaction Document, or in any certificate
                  or other document referred to or provided for in, or received
                  by it under, any Transaction Document or the Units, or for the
                  value, validity, effectiveness, genuineness, enforceability or
                  sufficiency of any Transaction Document (other than as against
                  the Agent) or the Units or any other document referred to or
                  provided for herein or therein or for any failure by the
                  Company, any Holder or any other Person (except the Agent) to
                  perform any of its obligations hereunder or thereunder or for
                  the perfection, priority or, except as expressly required
                  hereby, existence, validity, perfection or maintenance of any
                  security interest created under the Pledge Agreement, or for
                  the use or application by the Company of the proceeds in
                  respect of the Purchase Contracts;

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                           (5) shall not be required to initiate or conduct any
                  litigation or collection proceedings hereunder;

                           (6) shall not be responsible for any action taken or
                  omitted to be taken by it in good faith hereunder or under any
                  other document or instrument referred to or provided for
                  herein or in connection herewith or therewith, except for its
                  own gross negligence or willful misconduct; and

                           (7) shall not be required to advise any party as to
                  selling or retaining, or taking or refraining from taking any
                  action with respect to, the Units or other rights under any
                  Transaction Document.

                  (b) No provision of any Transaction Document shall be
         construed to relieve the Agent from liability for its own grossly
         negligent action, its own grossly negligent failure to act, its own bad
         faith, or its own willful misconduct, except that:

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

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

                           (3) in no event shall the Agent be required to expend
                  or risk its own funds or otherwise incur any financial
                  liability in the performance of any of its duties hereunder,
                  or in the exercise of its rights or powers, if it shall have
                  reasonable grounds for believing that repayment of such funds
                  or adequate indemnity against such risk or liability is not
                  reasonably assured to it.

                  (c) In no event shall the Agent or its officers, employees or
         agents be liable for any special, indirect, individual, punitive or
         consequential loss or damages, lost profits or loss of business,
         arising in connection with any Transaction Document, whether or not the
         likelihood of such loss or damage was known to the Agent, and
         regardless of the form of action.

                  (d) Whether or not therein expressly so provided, every
         provision of every Transaction Document relating to the conduct or
         affecting the liability of or affording protection to the Agent shall
         be subject to the provisions of this Section.

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                  (e) The Agent is authorized to execute and deliver this
         Agreement and the Pledge Agreement and any supplement thereto in its
         capacity as Agent.

                  (f) The Agent shall have no liability whatsoever for the
         action or inaction of any Clearing Agency or any book-entry system
         thereof. In no event shall any Clearing Agency or any book-entry system
         thereof be deemed an agent or subcustodian of the Agent.

         SECTION 7.2 Notice of Default.

         Within 60 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Agent has actual knowledge, the
Agent shall transmit by mail to the Company and the Holders of Units, as their
names and addresses appear in the Register, notice of such default hereunder,
unless such default shall have been cured or waived; provided, however, the
Agent shall be protected in withholding such notice if and so long as the board
of directors, the executive committee and/or the Responsible Officers of the
Agent in good faith determines that the withholding of such notice is in the
interest of the Holders of the Units.

         SECTION 7.3 Certain Rights of Agent.

         Subject to the provisions of Section 7.1:

                  (a) any request or direction of the Company mentioned herein
         shall be sufficiently evidenced by an Officer's Certificate, Issuer
         Order or Issuer Request, and any resolution of the Board of Directors
         of the Company may be sufficiently evidenced by a Board Resolution;

                  (b) whenever in the administration of this Agreement the Agent
         shall deem it desirable that a matter be proved or established prior to
         taking, suffering or omitting any action hereunder, the Agent (unless
         other evidence be herein specifically prescribed) may, in the absence
         of negligence, willful misconduct or bad faith on its part, rely upon
         an Officer's Certificate of the Company;

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

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

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                  (e) the Agent may execute any of the powers hereunder or
         perform any duties hereunder either directly or by or through agents or
         attorneys or an Affiliate of the Agent and the Agent shall not be
         responsible for any misconduct or negligence on the part of any agent
         or attorney or an Affiliate appointed with due care by it hereunder.

         SECTION 7.4 Not Responsible for Recitals, Etc.

         The recitals contained herein and in the Certificates shall be taken as
the statements of the Company.

         SECTION 7.5 May Hold Units and Other Dealings.

         Any Registrar or any other agent of the Company, or the Agent and its
Affiliates, in their individual or any other capacity, may become the owner or
pledgee of Units and may otherwise deal with the Company, the Collateral Agent
or any other Person with the same rights it would have if it were not Registrar
or such other agent, or the Agent. The Agent and its Affiliates may (without
having to account therefor to the Company or any Holder of Units or holder of
Separate Notes) accept deposits from, lend money to, make their investments in
and generally engage in any kind of banking, trust or other business with the
Company, any Holder of Units and any holder of Separate Notes (and any of their
respective subsidiaries or Affiliates) as if it were not acting as the Agent and
the Agent and their Affiliates may accept fees and other consideration from the
Company, any Holder of Units or any holder of Separate Notes without having to
account for the same to any such Person.

         SECTION 7.6 Money Held In Custody.

         Money held by the Agent in custody hereunder need not be segregated
from the Agent's other funds except to the extent required by law or provided
herein. The Agent shall be under no obligation to invest or pay interest on any
money received by it hereunder except as otherwise agreed in writing with the
Company.

         SECTION 7.7 Compensation and Reimbursement.

         The Company agrees:

                  (a) to pay all fees and expenses related to the retention of
         the Collateral Agent under the Pledge Agreement;

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                  (b) to pay all fees and expenses related to the; enforcement
         by the Agent of the rights of the Holders hereunder or under the
         Transaction Documents;

                  (c) to pay to the Agent from time to time compensation for all
         services rendered by it hereunder or under the Transaction Documents as
         shall be agreed in writing between the Company and the Agent;

                  (d) to reimburse the Agent upon its request for all reasonable
         expenses, disbursements and advances incurred or made by the Agent in
         accordance with any provision of this Agreement or the Transaction
         Documents (including the reasonable compensation and the reasonable
         expenses and disbursements of its agents and counsel), except any such
         expense, disbursement or advance as may be attributable to its
         negligence, willful misconduct or bad faith; and

                  (e) to indemnify the Agent and any predecessor Agent for, and
         to hold it harmless against, any loss, damage, claim, liability or
         expense including taxes (other than taxes based upon, measured by or
         determined by the income of the Agent), incurred without gross
         negligence, willful misconduct or bad faith on their part, arising out
         of or in connection with the acceptance or administration of its duties
         under the Transaction Documents, including the costs and expenses
         (including reasonable fees and expenses of counsel) of defending
         themselves against any claim or liability in connection with the
         exercise or performance of any of its powers or duties under the
         Transaction Documents. The Agent shall promptly notify the Company of
         any third party claim which may give rise to the indemnity hereunder
         and give the Company the opportunity to participate in the defense of
         such claim with counsel reasonably satisfactory to the indemnified
         party, and no such claim shall be settled without the written consent
         of the Company, which consent shall not be unreasonably withheld,
         provided that any failure to give any such notice shall not affect the
         obligation of the Company under this Section.

         The provisions of this Section 7.7 shall survive the termination of
this Agreement or the resignation or removal of the Agent.

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         SECTION 7.8 Corporate Agent Required; Eligibility.

         There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having (or being a member of a bank
holding company having) a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or state authority and having a
Corporate Trust Office in the Borough of Manhattan, The City of New York, if
there be such a corporation, qualified and eligible under this Article and
willing to act on reasonable terms. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Agent shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.

         SECTION 7.9 Resignation and Removal; Appointment of Successor.

                  (a) No resignation or removal of the Agent and no appointment
         of a successor Agent pursuant to this Article shall become effective
         until the acceptance of appointment by the successor Agent in
         accordance with the applicable requirements of Section 7.10.

                  (b) The Agent may resign at any time by giving written notice
         thereof to the Company 60 days prior to the effective date of such
         resignation. If the instrument of acceptance by a successor Agent
         required by Section 7.10 shall not have been delivered to the Agent
         within 30 days after the giving of such notice of resignation, the
         resigning Agent may petition any court of competent jurisdiction at the
         expense of the Company for the appointment of a successor Agent.

                  (c) The Agent may be removed at any time by Act of the Holders
         of a majority in number of the Outstanding Units delivered to the Agent
         and the Company.

                  (d) If at any time:

                           (1) the Agent fails to comply with Section 310(b) of
                  the TIA, as if the Agent were an Trustee under an indenture
                  qualified under the TIA, after written request therefor by the
                  Company or by any Holder who has been a bona fide Holder of a
                  Unit for at least six months; or

                           (2) the Agent shall cease to be eligible under
                  Section 7.8 and shall fail to resign after written request
                  therefor by the Company or by any such Holder; or

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

                  then, in any such case, (x) the Company by a Board Resolution
         may remove the Agent, or (y) any Holder who has been a bona fide Holder
         of a Unit 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 Agent and the appointment of a successor Agent.

                  (e) If the Agent shall resign, be removed or become incapable
         of acting, or if a vacancy shall occur in the office of Agent for any
         cause, the Company, by a Board Resolution, shall promptly appoint a
         successor Agent and shall comply with the applicable requirements of
         Section 7.10. If no successor Agent shall have been so appointed by the
         Company and accepted appointment in the manner required by Section
         7.10, any Holder who has been a bona fide Holder of a Unit for at least
         six months may, on behalf of himself and all others similarly situated,
         petition any court of competent jurisdiction for the appointment of a
         successor Agent.

                  (f) The Company shall give, or shall cause such successor
         Agent to give, notice of each resignation and each removal of the Agent
         and each appointment of a successor Agent by mailing written notice of
         such event by first-class mail, postage prepaid, to all Holders as
         their names and addresses appear in the applicable Register. Each
         notice shall include the name of the successor Agent and the address of
         its Corporate Trust Office.

         SECTION 7.10 Acceptance of Appointment By Successor.

                  (a) In case of the appointment hereunder of a successor Agent,
         every such successor Agent so appointed shall execute, acknowledge and
         deliver to the Company and to the retiring Agent an instrument
         accepting such appointment, and thereupon the resignation or removal of
         the retiring Agent shall become effective and such successor Agent,
         without any further act, deed or conveyance, shall become vested with
         all the rights, powers, agencies and duties of the retiring Agent; but,
         on the request of the Company or the successor Agent, such retiring
         Agent shall, upon payment of its charges, execute and deliver an
         instrument transferring to such successor Agent all the rights, powers
         and trusts of the retiring Agent and duly assign, transfer and deliver
         to such successor Agent all property and money held by such retiring
         Agent hereunder.

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<PAGE>

                  (b) Upon request of any such successor Agent, the Company
         shall execute any and all instruments for more fully and certainly
         vesting in and confirming to such successor Agent all such rights,
         powers and agencies referred to in paragraph (a) of this Section.

                  (c) No successor Agent shall accept its appointment unless at
         the time of such acceptance such successor Agent shall be qualified and
         eligible under this Article.

         SECTION 7.11 Merger, Conversion, Consolidation or Succession
                      to Business.

         Any corporation into which the Agent may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Agent, shall be the successor of the Agent hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor by merger, conversion or consolidation to
such Agent shall adopt such authentication and execution and deliver the
Certificates so authenticated and executed with the same effect as if such
successor Agent had itself authenticated and executed such Units.

         SECTION 7.12 Preservation of Information; Communications to Holders.

                  (a) The Agent shall preserve, in as current a form as is
         reasonably practicable, the names and addresses of Holders received by
         the Agent in its capacity as Registrar.

                  (b) If three or more Holders (herein referred to as
         "Applicants") apply in writing to the Agent, and furnish to the Agent
         reasonable proof that each such applicant has owned a Unit for a period
         of at least six months preceding the date of such application, and such
         application states that the applicants desire to communicate with other
         Holders with respect to their rights under this Agreement or under the
         Units and is accompanied by a copy of the form of proxy or other
         communication which such applicants propose to transmit, then the Agent
         shall mail to all the Holders copies of the form of proxy or other
         communication which is specified in such request, with reasonable
         promptness after a tender to the Agent of the materials to be mailed
         and of payment, or provision, in the absence of bad faith, satisfactory
         to the Agent for the payment, of the reasonable expenses of such
         mailing.

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         SECTION 7.13 Failure to Act.

         In the event of any dispute between or conflicting claims by or among
the parties hereto or any other Person, the Agent shall be entitled, after
prompt notice to the Company and the Holders of Units, at its sole option, to
refuse to comply with any and all such claims, demands or instructions so long
as such dispute or conflict shall continue, and the Agent shall not be or become
liable in any way to any of the parties hereto for its failure or refusal to
comply with such conflicting claims, demands or instructions. The Agent shall be
entitled to refuse to act until either (i) such conflicting or adverse claims or
demands shall have been finally determined by a court of competent jurisdiction
or settled by agreement between the conflicting parties as evidenced in a
writing, reasonably satisfactory to the Agent, or (ii) the Agent shall have
received security or an indemnity reasonably satisfactory to the Agent
sufficient to save the Agent harmless from and against any and all loss,
liability or reasonable out-of-pocket expense which the Agent may incur by
reason of its acting without bad faith, willful misconduct or gross negligence.
The Agent may in addition elect to commence an interpleader action or seek other
judicial relief or orders as the Agent may deem necessary. Notwithstanding
anything contained herein to the contrary, the Agent shall not be required to
take any action that is in its opinion contrary to law or to the terms of any
Transaction Document, or which would in its opinion subject it or any of its
officers, employees or directors to liability.

         SECTION 7.14 No Obligations of Agent.

         Except to the extent otherwise provided in this Agreement, the Agent
assumes no obligation and shall not be subject to any liability under this
Agreement, the Pledge Agreement or any Purchase Contract in respect of the
obligations of the Holder of any Unit thereunder. The Company agrees, and each
Holder of a Certificate, by such Holder's acceptance thereof, shall be deemed to
have agreed, that the Agent's execution of the Certificates on behalf of the
Holders shall be solely as agent and attorney-in-fact for the Holders, and that
the Agent shall have no obligation to perform such Purchase Contracts on behalf
of the Holders, except to the extent expressly provided in Article V.

         SECTION 7.15 Tax Compliance.

                  (a) The Agent, on its own behalf and on behalf of the Company,
         will comply with all applicable certification, information reporting
         and withholding (including "backup" withholding) requirements imposed
         on it as a paying agent by applicable tax laws, regulations or
         administrative practice with respect to any payments made with respect
         to the Units. Such compliance shall include, without limitation, the
         preparation and timely filing of required returns and the timely
         payment of all amounts required to be withheld to the appropriate
         taxing authority or its designated agent.

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                  (b) The Agent shall comply with any reasonable written
         direction timely received from the Company with respect to the
         application of such requirements to particular payments or Holders or
         in other particular circumstances, and may for purposes of this
         Agreement rely on any such direction in accordance with the provisions
         of Section 7.1(a)(2).

                  (c) The Agent shall maintain all appropriate records
         documenting compliance with such requirements, and shall make such
         records available, on written request, to the Company or its authorized
         representative within a reasonable period of time after receipt of such
         request.

                                 ARTICLE VIII.
                             SUPPLEMENTAL AGREEMENTS

         SECTION 8.1 Supplemental Agreements Without Consent of Holders.

         Without the consent of any Holders, the Company and the Agent, at any
time and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the
following purposes:

                  (a) to evidence the succession of another Person to the
         Company, and the assumption by any such successor of the covenants of
         the Company herein and in the Certificates; or

                  (b) to add to the covenants of the Company for the benefit of
         the Holders, or to surrender any right or power herein conferred upon
         the Company; or

                  (c) to evidence and provide for the acceptance of appointment
         hereunder by a successor Agent; or

                  (d) to make provision with respect to the rights of Holders
         pursuant to the requirements of Section 5.6(b) or 5.10; or

                  (e) to cure any ambiguity, to correct or supplement any
         provisions herein which may be inconsistent with any other provisions
         herein, or to make any other provisions with respect to such matters or
         questions arising under this Agreement, provided such action shall not
         adversely affect the interests of the Holders.

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         SECTION 8.2 Supplemental Agreements With Consent of Holders.

                  (a) With the consent of the Holders of not less than a
         majority of the outstanding Purchase Contracts voting together as one
         class, by Act of said Holders delivered to the Company and the Agent,
         the Company, when authorized by a Board Resolution, and the Agent may
         enter into an agreement or agreements supplemental hereto, in form
         satisfactory to the Company and the Agent, for the purpose of modifying
         in any manner the terms of the Purchase Contracts, or the provisions of
         this Agreement or the rights of the Holders in respect of the Units;
         provided, that, except as contemplated herein, no such supplemental
         agreement shall, without the consent of the Holder of each Outstanding
         Unit affected thereby:

                           (1) change any Payment Date;

                           (2) change the amount or the type of Collateral
                  required to be Pledged to secure a Holder's Obligations under
                  the Purchase Contract, impair the right of the Holder of any
                  Purchase Contract to receive distributions on the related
                  Collateral (except for the rights of Holders of Normal Units
                  to substitute the Treasury Securities for the Pledged Notes,
                  Pledged Treasury Consideration or Pledged Applicable Ownership
                  Interest in the Treasury Portfolio, or the rights of holders
                  of Stripped Units to substitute Notes or Applicable Ownership
                  Interest in the Treasury Portfolio for the Pledged Treasury
                  Securities) or otherwise adversely affect the Holder's
                  beneficial rights in or to such Collateral or materially
                  adversely alter the rights in or to such Collateral subject to
                  the Pledge Agreement;

                           (3) impair the right to institute suit for the
                  enforcement of any Purchase Contract;

                           (4) reduce the number of shares of Common Stock to be
                  purchased pursuant to any Purchase Contract, increase the
                  price to purchase shares of Common Stock upon settlement of
                  any Purchase Contract, change the Stock Purchase Date or
                  otherwise materially adversely affect the Holder's rights
                  under any Purchase Contract;

                           (5) reduce the percentage of the outstanding Purchase
                  Contracts the consent of whose Holders is required for any
                  such supplemental agreement; or

                           (6) Change the place or currency of payment for any
                  amounts payable in respect of the Units, increase any amounts
                  payable by Holders in respect of the Units or decrease any
                  other amounts receivable by Holders in respect of the Units.

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         provided, that if any amendment or proposal referred to above would
         adversely affect only the Normal Units or the Stripped Units, then only
         the affected class of Holder as of the record date for the Holders
         entitled to vote thereon will be entitled to vote on such amendment or
         proposal, and such amendment or proposal shall not be effective except
         with the consent of Holders of not less than a majority or 100% of such
         class, as the case may be.

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

         SECTION 8.3 Execution of Supplemental Agreements.

         In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Agent shall be provided and (subject
to Section 7.1) shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental agreement is authorized or
permitted by this Agreement. The Agent may, but shall not be obligated to, enter
into any such supplemental agreement which affects the Agent's own rights,
duties or immunities under this Agreement or otherwise.

         SECTION 8.4 Effect of Supplemental Agreements.

         Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every Holder
of Certificates theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder shall be bound thereby.

         SECTION 8.5 Reference to Supplemental Agreements.

         Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Agent, bear a notation in form
approved by the Agent as to any matter provided for in such supplemental
agreement. If the Company shall so determine, new Certificates so modified as to
conform, in the opinion of the Agent and the Company, to any such supplemental
agreement may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Agent in exchange for
Outstanding Certificates.

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                                  ARTICLE IX.
                    CONSOLIDATION, MERGER, SALE OR CONVEYANCE

         SECTION 9.1 Covenant Not to Merge, Consolidate, Sell or Convey Assets
                     Except Under Certain Conditions.

         The Company covenants that it shall not consolidate with or merge into
any other entity or convey or transfer its properties and assets substantially
as an entirety to any Person unless:

         (i) the Person formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance or transfer the properties
and assets of the Company substantially as an entirety shall be a corporation,
limited liability company or trust (if not the Company) organized and validly
existing under the laws of the United States of America or any State thereof or
the District of Columbia, and shall expressly assume all the obligations of the
Company under the Purchase Contracts, this Agreement, the Remarketing Agreement
and the Pledge Agreement by one or more supplemental agreements in form
reasonably satisfactory to the Agent and the Collateral Agent, executed and
delivered to the Agent and the Collateral Agent by such successor entity, the
due and punctual performance of every obligation and covenant of this Agreement
on the part of the Company to be performed or observed;

         (ii) immediately after giving effect to such transaction, no default
and no event which, after notice or lapse of time, or both, would become a
default under this Agreement, the Purchase Contracts, the Pledge Agreement or
the Remarketing Agreement, shall have occurred and be continuing; and

         (iii) the Company has delivered to the to the Agent and the Collateral
Agent an Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer and such supplemental agreement
comply with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.

         In the event the Company is not the successor of any such
consolidation, merger or sale of the assets substantially as an entirety and the
successor is a limited liability company or trust, then the Company or such
trust or limited liability company, in connection with such transaction, shall
create a corporation to act as a co-obligor of the Purchase Contracts, Notes and
Units.

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         SECTION 9.2 Rights and Duties of Successor Corporation.

         Upon any consolidation or merger, or any conveyance or transfer of the
properties and assets of the Company substantially as an entirety in accordance
with Section 9.1, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance or transfer is made
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Agreement, the Pledge Agreement and the Purchase
Contracts with the same effect as if such successor Person had been named as the
Company herein, and thereafter the predecessor Person shall be relieved of all
obligations and covenants under this Agreement, the Pledge Agreement and the
Purchase Contracts. In the event of any such conveyance or transfer, the Company
as the predecessor Person may thereupon or at any time thereafter be dissolved,
wound up, or liquidated.

                                   ARTICLE X.
                                    COVENANTS

         SECTION 10.1 Performance Under Purchase Contracts.

         The Company covenants and agrees for the benefit of the Holders from
time to time of the Units that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.

         SECTION 10.2 Maintenance of office or Agency.

                  (a) The Company will maintain in the Borough of Manhattan, The
         City of New York an office or agency where Certificates may be
         presented or surrendered for acquisition of shares of Common Stock upon
         settlement of the Purchase Contracts on any Settlement Date and for
         transfer of Collateral upon occurrence of a Termination Event, where
         Certificates may be surrendered for registration of transfer or
         exchange, for a Collateral Substitution or reestablishment of Normal
         Units and where notices and demands to or upon the Company in respect
         of the Units and this Agreement may be served. The Company will give
         prompt written notice to the Agent of the location, and any change in
         the location, of such office or agency. If at any time the Company
         shall fail to maintain any such required office or agency or shall fail
         to furnish the Agent with the address thereof, such presentations,
         surrenders, notices and demands may be made or served at the Corporate
         Trust Office, and the Company hereby appoints the Agent as its agent to
         receive all such presentations, surrenders, notices and demands.

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                  (b) The Company may also from time to time designate one or
         more other offices or agencies where Certificates may be presented or
         surrendered for any or all such purposes and may from time to time
         rescind such designations; provided, 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. The Company will give prompt written notice
         to the Agent of any such designation or rescission and of any change in
         the location of any such other office or agency. The Company hereby
         designates as the place of payment for the Units the Corporate Trust
         Office and appoints the Agent at its Corporate Trust Office as paying
         agent in such city.

         SECTION 10.3 Company to Reserve Common Stock.

         The Company shall at all times prior to the Stock Purchase Date reserve
and keep available, free from preemptive rights, out of its authorized but
unissued Common Stock the full number of shares of Common Stock issuable against
tender of payment in respect of all Purchase Contracts constituting a part of
the Units evidenced by Outstanding Certificates without giving effect to any
changes in the number of such shares due to Sections 5.6 and 5.7.

         SECTION 10.4 Covenants as to Common Stock.

         The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Units will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.

         SECTION 10.5 Statements of Officer of The Company as to Default.

         The Company will deliver to the Agent, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officer's
Certificate, stating whether or not to the best knowledge of the signer thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions hereof, and if the Company shall be in default,
specifying all such defaults and the nature and status thereof of which such
Officer may have knowledge.

         SECTION 10.6 Tax Treatment

         The Company and the Holders by purchasing a Normal Unit, covenant and
agree, for U.S. federal, state and local income tax and franchise tax purposes,
to (i) treat a Holder's acquisition of the Normal Units as the acquisition of
the Note and Purchase Contract constituting the Normal Unit and (ii) treat each
Holder as the owner of the related Notes, Applicable Ownership Interest in the
Treasury Portfolio or Treasury Securities, as the case may be.

                            [SIGNATURE PAGES FOLLOW]

                                       80
<PAGE>

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

                                     TOYS "R" US, INC.

                                     By:  ________________________________
                                     Name:
                                     Title:

                                     THE BANK OF NEW YORK
                                     as Purchase Contract Agent

                                     By:  ________________________________
                                     Name:
                                     Title:

                                       81
<PAGE>
                                    EXHIBIT A
                        FORM OF NORMAL UNITS CERTIFICATE

         [For inclusion in Global CertificateS only -- THIS CERTIFICATE IS A
GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT (AS
HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A
NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR
A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.

         Unless this Certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, 49th Floor, New York, New York
10041-0099) to the Company or its agent for registration of transfer, exchange
or payment, and any Certificate issued is registered in the name of Cede & Co.,
or such other name as requested by an authorized representative of The
Depository Trust Company, and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]

                   (Form of Face of Normal Units Certificate)

No. ______________                                       CUSIP No. ____________
Number of Normal Units___

         This Normal Units Certificate certifies that [For inclusion in Global
Certificates only -- Cede & Co.] is the registered Holder of the number of
Normal Units set forth above [For inclusion in Global Certificates only - or
such other number of Normal Units reflected in the Schedule of Increases or
Decreases in Global Certificates attached hereto]. Each Normal Unit represents
(i) either (a) beneficial ownership by the Holder of one Senior Note due 2007
(the "Note") of Toys "R" Us, Inc., a Delaware corporation (the "Company") having
a principal amount of $50, subject to the Pledge of such Note by such Holder
pursuant to the Pledge Agreement, or (b) if the Note has been remarketed by the
Remarketing Agent (or if the Holder has elected not to have the Note remarketed)
by the Applicable Ownership Interest in such Treasury Portfolio by such Holder
pursuant to the Pledge Agreement, or (c) if a Tax Event Redemption has occurred,
the Applicable Ownership Interest in the Treasury Portfolio subject to the
Pledge pursuant to the Pledge Agreement, and (ii) the rights and obligations of
the Holder under one Purchase Contract with the Company. All capitalized terms
used but not defined herein which are defined have the meaning set forth in the
Purchase Contract Agreement.

                                      A-1
<PAGE>

         Pursuant to the Pledge Agreement, the Notes or Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, constituting part of
each Normal Units evidenced hereby has been pledged to the Collateral Agent, for
the benefit of the Company, to secure the obligations of the Holder under the
Purchase Contract comprising a part of such Normal Units.

         The Pledge Agreement provides that all payments of principal on the
Pledged Notes or if applicable, the Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) in the Treasury Portfolio, as the
case may be, or interest payments on the Pledged Notes (as defined in the Pledge
Agreement) or on the Applicable Ownership Interest (as specified in clause (B)
of the definition of such term) in the Treasury Portfolio, as the case may be,
constituting part of the Normal Units received by the Collateral Agent shall be
paid by the Collateral Agent by wire transfer in same day funds (i) in the case
of (A) interest payments with respect to Pledged Notes or Pledged Applicable
Ownership Interest (as specified in clause (B) of the definition of such term)
in the Treasury Portfolio, as the case may be, and (B) any payments of principal
with respect to any Notes on the Applicable Ownership Interest (as specified in
clause (A) of the definition of such terms) in the Treasury Portfolio, as the
case may be, that have been released from the Pledge pursuant to the Pledge
Agreement, to the Agent to the account designated by the Agent, no later than
2:00 p.m. (New York City time) on the Business Day such payment is received by
the Collateral Agent (provided that in the event such payment is received by the
Collateral Agent on a day that is not a Business Day or after 12:30 p.m. (New
York City time) on a Business Day, then such payment shall be made no later than
10:30 a.m. (New York City time) on the next succeeding Business Day) and (ii) in
the case of payments of principal on any Pledged Notes or Pledged Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
in the Treasury Portfolio, as the case may be, that has not been released from
the Pledge pursuant to the Pledge Agreement to the Company on the Stock Purchase
Date (as defined herein) in accordance with the terms of the Pledge Agreement,
in full satisfaction of the respective obligations of the Holders of the Normal
Units of which such Pledged Notes or Pledged Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, are a part under the Purchase
Contracts forming a part of such Normal Units. Interest on any Notes or
distributions on the Applicable Ownership Interest (as specified in clause (B)
of the definition of such term) of the Treasury Portfolio, as the case may be,
forming part of a Normal Unit evidenced hereby which are payable quarterly in
arrears on February 16, May 16, August 16, and November 16, each year,
commencing on August 16, 2002 (each a "Payment Date"), shall, subject to receipt
thereof from the Collateral Agent, be paid to the Person in whose name this
Normal Units Certificate (or a Predecessor Normal Units Certificate) is
registered at the close of business on the Record Date for such Payment Date.

                                      A-2
<PAGE>

         Each Purchase Contract evidenced hereby obligates the Holder of this
Normal Units Certificate to purchase, and the Company to sell, on August 16,
2005 (the "Stock Purchase Date"), at a price equal to $50 (the "Stated Amount"),
a number of newly issued shares of Common Stock, $.10 par value per share
("Common Stock"), of the Company, equal to the Settlement Rate, then in effect,
unless on or prior to the Stock Purchase Date there shall have occurred a
Termination Event, Cash Settlement, Early Settlement or Merger Early Settlement
with respect to the Normal Units of which such Purchase Contract is a part, all
as provided in the Purchase Contract Agreement and more fully described on the
reverse hereof. The Purchase Price (as defined herein) for the shares of Common
Stock purchased pursuant to each Purchase Contract evidenced hereby, if not paid
earlier, shall be paid on the Stock Purchase Date by application of payments
received in respect of the Pledged Notes or Pledged Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, pledged to secure the
obligations of the Holder under such Purchase Contract in accordance with the
terms of the Pledge Agreement.

         Payments on the Notes or Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, will be payable at the office of the Agent in The
City of New York or, at the option of the Company, by check mailed to the
address of the Person entitled thereto as such address appears on the Normal
Units Register or by wire transfer to an account specified by such Person at
least five Business Days prior to the applicable Payment Date.

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

         Unless the certificate of authentication hereon has been authenticated
by the Agent by manual signature, this Normal Units Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.

                                      A-3
<PAGE>

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

                                     TOYS "R" US, INC.

                                     By:  ________________________________
                                     Name:
                                     Title:

                             HOLDER SPECIFIED ABOVE (as to obligations of such
                             Holder under the Purchase Contracts evidenced
                             hereby)

                             By: THE BANK OF NEW YORK, not individually
                             but solely as Attorney-in-Fact of such Holder

                             By:__________________________________
                                Authorized Signatory

         AGENT'S CERTIFICATE OF AUTHENTICATION This is one of the Normal Units
Certificates referred to in the within mentioned Purchase Contract Agreement.

                                     THE BANK OF NEW YORK,
                                     as Purchase Contract Agent

Dated: _______________________       By:___________________________
                                     Authorized Signatory

                                      A-4
<PAGE>

         (Form of Reverse of Normal Units Certificate)

         Each Purchase Contract evidenced hereby is governed by the Purchase
Contract Agreement, dated as of May , 2002 (as may be supplemented from time to
time, the "Purchase Contract Agreement"), between the Company and The Bank of
New York, as Purchase Contract Agent (including its successors thereunder,
herein called the "Agent"), to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Agent, the Company, and the Holders and of the terms upon
which the Normal Units Certificates are, and are to be, executed and delivered.

         Each Purchase Contract evidenced hereby obligates the Holder of this
Normal Units Certificate to purchase, and the Company to sell, on the Stock
Purchase Date at a price equal to $50 (the "Purchase Price"), a number of shares
of Common Stock of the Company equal to the Settlement Rate, then in effect,
unless, on or prior to the Stock Purchase Date, there shall have occurred a
Termination Event or an Early Settlement, Merger Early Settlement or Cash
Settlement with respect to the Units of which such Purchase Contract is a part.
The "Settlement Rate" is equal to (a) if the Applicable Market Value is greater
than or equal to $[____] (the "Threshold Appreciation Price"), [____] shares of
Common Stock per Purchase Contract, (b) if the Applicable Market Value is less
than the Threshold Appreciation Price but is greater than $[____], the number of
shares of Common Stock per Purchase Contract equal to the Stated Amount of the
related Unit divided by the Applicable Market Value and (c) if the Applicable
Market Value is less than or equal to $[____], [____] shares of Common Stock per
Purchase Contract, in each case subject to adjustment as provided in the
Purchase Contract Agreement. No fractional shares of Common Stock will be issued
upon settlement of Purchase Contracts, as provided in the Purchase Contract
Agreement. The number of shares of Common Stock per Purchase Contract will be
subject to adjustment as provided by Sections 5.6 and 5.7 of the Purchase
Contract Agreement.

         The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Stock Purchase Date.

         The "Closing Price" of the Common Stock on any date of determination
means the closing sale price per share (or, if no closing price is reported, the
last reported sale price per share) of the Common Stock on the New York Stock
Exchange (the "NYSE") on such date or, if the Common Stock is not listed for
trading on the NYSE on any such date, as reported in the composite transactions
for the principal United States securities exchange on which the Common Stock is
so listed, or if the Common Stock is not so listed on a United States national
or regional securities exchange, as reported by The Nasdaq Stock Market, or, if
the Common Stock is not so reported, the last quoted bid price for the Common
Stock in the over-the-counter market as reported by the National Quotation
Bureau or similar organization, or, if such bid price is not available, the
market value of the Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company.

                                      A-5
<PAGE>

         A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the- counter market that is the primary market for the
trading of the Common Stock.

         Each Purchase Contract evidenced hereby may be settled prior to the
Stock Purchase Date through Cash Settlement, Early Settlement or Merger Early
Settlement, in accordance with the terms of the Purchase Contract Agreement.

         In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Normal Units Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby (i) by effecting a Cash Settlement, Early Settlement or Merger Early
Settlement, (ii) by application of payments received in respect of the Pledged
Applicable Ownership Interest in the Treasury Portfolio acquired from the
proceeds of a remarketing of the related Pledged Notes underlying the Normal
Units represented by this Normal Units Certificate, (iii) if the Holder has
elected not to participate in the remarketing, by application of payments
received in respect of the Opt-out Treasury Consideration deposited by such
Holder in respect of such Purchase Contract or (iv) if a Tax Event Redemption
has occurred prior to the successful remarketing of the Notes by application of
payments received in respect of the Pledged Applicable Ownership Interest in the
Treasury Portfolio by the Collateral Agent on behalf of the Holder of this
Normal Units Certificate. If, as provided in the Purchase Contract Agreement,
upon the occurrence of a Last Failed Remarketing the Collateral Agent, for the
benefit of the Company, exercises its rights as a secured creditor with respect
to the Pledged Notes related to this Normal Units Certificate, any accrued and
unpaid interest on such Pledged Notes will become payable by the Company to the
Holder of this Normal Units Certificate in the manner provided for in the
Purchase Contract Agreement and the Indenture.

         The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate Purchase
Price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.

                                      A-6
<PAGE>

         Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Notes. Upon receipt of notice of any meeting at which holders of Notes are
entitled to vote or upon the solicitation of consents, waivers or proxies of
holders of Notes, the Agent shall, as soon as practicable thereafter, mail to
the Holders of Normal Units a notice (a) containing such information as is
contained in the notice or solicitation, (b) stating that each such Holder on
the record date set by the Agent therefor (which, to the extent possible, shall
be the same date as the record date for determining the holders of Notes
entitled to vote) shall be entitled to instruct the Agent as to the exercise of
the voting rights pertaining to the Pledged Notes constituting a part of such
Holder's Normal Units and (c) stating the manner in which such instructions may
be given. Upon the written request of the Holders of Normal Units on such record
date, the Agent shall endeavor insofar as practicable to vote or cause to be
voted, in accordance with the instructions set forth in such requests, the
maximum number of Pledged Notes as to which any particular voting instructions
are received. In the absence of specific instructions from the Holder of a
Normal Unit, the Agent shall abstain from voting the Pledged Note evidenced by
such Normal Unit.

         The Normal Units Certificates are issuable only in registered form and
only in denominations of a single Normal Unit and any integral multiple thereof.
The transfer of any Normal Units Certificate will be registered and Normal Units
Certificates may be exchanged as provided in the Purchase Contract Agreement.
The Normal Units Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents permitted by the Purchase
Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Holder of a Normal Unit may substitute
Treasury Securities for the Pledged Notes or Pledged Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, securing its obligations
under the related Purchase Contract in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement. From and after such Collateral
Substitution, the Unit for which such Pledged Treasury Securities secures the
Holder's obligation under the Purchase Contract shall be referred to as a
"Stripped Unit" evidenced by a Stripped Units Certificate. A Holder that elects
to substitute a Treasury Security for Pledged Notes or Pledged Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, thereby
creating Stripped Units, shall be responsible for any fees or expenses payable
in connection therewith. Except as provided in the Purchase Contract Agreement,
for so long as the Purchase Contract underlying a Normal Unit remains in effect,
such Normal Unit shall not be separable into its constituent parts, and the
rights and obligations of the Holder of such Normal Units in respect of the
Pledged Note or Pledged Applicable Ownership Interest in the Treasury Portfolio,
as the case may be, and Purchase Contract constituting such Normal Unit may be
transferred and exchanged only as a Normal Unit.

                                      A-7
<PAGE>

         A Holder of Stripped Units may reestablish Normal Units by delivering
to the Collateral Agent Notes or the Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, in exchange for the release of the
Pledged Treasury Securities in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement.

         The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to purchase Common Stock, shall immediately and automatically terminate,
without the necessity of any notice or action by any Holder, the Agent or the
Company, if, on or prior to the Stock Purchase Date, a Termination Event shall
have occurred. Upon the occurrence of a Termination Event, the Company shall
promptly but in no event later than two Business Days thereafter give written
notice to the Agent, the Collateral Agent and to the Holders, at their addresses
as they appear in the Normal Units Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Notes or
Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may
be, from the Pledge in accordance with the provisions of the Pledge Agreement.

         Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts may
be settled early ("Early Settlement") as provided in the Purchase Contract
Agreement. In order to exercise the right to effect Early Settlement with
respect to any Purchase Contracts evidenced by this Normal Units Certificate,
the Holder of this Normal Units Certificate shall deliver to the Agent at the
Corporate Trust Office an Election to Settle Early form set forth below and any
other documents requested by the Agent duly completed and accompanied by payment
in the form of immediately available funds payable to the order of the Company
in an amount (the "Early Settlement Amount") equal to the product of (A) $50
times (B) the number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement.

         Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Notes or Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) in the Treasury Portfolio, as the case may be,
underlying such Units shall be released from the Pledge as provided in the
Pledge Agreement and the Holder of each Purchase Contract forming part of a
Normal Unit as to which Early Settlement is effected equal to ___ share of
Common Stock per Purchase Contract (the "Early Settlement Rate"). The Early
Settlement Rate shall be adjusted in the same manner and at the same time as the
Settlement Rate is adjusted as provided in the Purchase Contract Agreement.

         Upon registration of transfer of this Normal Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Normal Units
Certificate. The Company covenants and agrees, and the Holder, by its acceptance
hereof, likewise covenants and agrees, to be bound by the provisions of this
paragraph.

                                      A-8
<PAGE>

         The Holder of this Normal Units Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Normal Units evidenced hereby on his behalf as his
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
such Holder's obligations under such Purchase Contracts, consents to the
provisions of the Purchase Contract Agreement, authorizes the Agent to enter
into and perform the Pledge Agreement on such Holder's behalf as
attorney-in-fact, and consents to the Pledge of the Notes or the Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, underlying
this Normal Units Certificate pursuant to the Pledge Agreement. The Holder
further covenants and agrees, that, to the extent and in the manner provided in
the Purchase Contract Agreement and the Pledge Agreement, but subject to the
terms thereof, payments in respect of the Pledged Notes or Pledged Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, to be paid
upon settlement of such Holder's obligations to purchase Common Stock under the
Purchase Contract, shall be paid on the Stock Purchase Date by the Collateral
Agent to the Company in satisfaction of such Holder's obligations under such
Purchase Contract and such Holder shall acquire no right, title or interest in
such payments.

         Each Purchase Contract evidenced hereby obligates the Holder to agree,
for U.S. federal, state and local income and franchise tax purposes, to (i)
treat an acquisition of the Normal Unit as an acquisition of the Note and
Purchase Contract constituting the Normal Unit and (ii) treat itself as owner of
the related Notes, Applicable Ownership Interest in the Treasury Portfolio or
Treasury Securities, as the case may be.

         Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.

         The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.

                                      A-9
<PAGE>

         The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Normal Units Certificate is
registered as the owner of the Normal Units evidenced hereby for the purpose of
receiving quarterly payments on the Notes, or the Applicable Ownership Interest
in the Treasury Portfolio, as the case may be, performance of the Purchase
Contracts and for all other purposes whatsoever (subject to the Record Date
provisions hereof), whether or not any payments in respect thereof be overdue
and notwithstanding any notice to the contrary, and neither the Company, the
Agent, such Affiliates nor any such agent shall be affected by notice to the
contrary.

         The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.

         A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.

                                      A-10
<PAGE>

                                  ABBREVIATIONS

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

TEN COM -                            as tenants in common

UNIF GIFT MIN ACT -                  Custodian

                                     ------------------------------------------
                                     (cust)                            (minor)

                                     Under Uniform Gifts to Minors Act

                                     ------------------------------------------
                                                        (State)

TEN ENT -                            as tenants by the entireties

JT TEN -                             as joint tenants with right of survivorship
                                     and not as tenants in common

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

                                      A-11
<PAGE>

                                   ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto

________________________________________________________________________________
________________________________________________________________________________

(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

(Please Print or Type Name and Address Including Postal Zip Code of Assignee)

the within Normal Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ____________________________ attorney to
transfer said Normal Units Certificates on the books of Toys "R" Us, Inc. with
full power of substitution in the premises.

Dated: _______________________           Signature: ___________________________

         NOTICE: The signature to this assignment must correspond with the name
as it appears upon the face of the within Normal Units Certificates in every
particular, without alteration or enlargement or any change whatsoever.

Signature Guarantee: ______________________________________________________

                                      A-12
<PAGE>

                             SETTLEMENT INSTRUCTIONS

         The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Stock Purchase Date of the
Purchase Contracts underlying the number of Normal Units evidenced by this
Normal Units Certificate be registered in the name of, and delivered, together
with a check in payment for any fractional shares, to the undersigned at the
address indicated below unless a different name and address have been indicated
below. If shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer tax payable incident thereto.

Dated: ___________________               Signature: ___________________________
                                         Signature Guarantee: _________________
                                         (if assigned to another person)

If shares are to be registered in the name     REGISTERED HOLDER
of and delivered to a Person other than
the Holder, please (i) print such Person's     Please print name and address
name and address and (ii) provide a guarantee  of Registered Holder:
of your signature:

----------------------------------             ---------------------------------
              Name                                          Name

----------------------------------             ---------------------------------
              Address                                       Address

Social Security or other Taxpayer
Identification Number, if any

                                      A-13
<PAGE>

                            ELECTION TO SETTLE EARLY

         The undersigned Holder of this Normal Units Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
Section 5.9 of the terms of the Purchase Contract Agreement with respect to the
Purchase Contracts underlying the number of Normal Units evidenced by this
Normal Units Certificate specified below. The option to effect Early Settlement
may be exercised only with respect to Purchase Contracts underlying Normal Units
with an aggregate Stated Amount equal to $50 or an integral multiple thereof,
provided, however, that such option may only be exercised with respect to
Purchase Contracts underlying Normal Units secured by Pledged Applicable
Ownership Interest in the Treasury Portfolio with an aggregate Stated Amount
equal to $1,000 or an integral multiple thereof. The undersigned Holder directs
that a certificate for shares of Common Stock deliverable upon such Early
Settlement be registered in the name of, and delivered, together with a check in
payment for any fractional shares and any Normal Units Certificate representing
any Normal Units evidenced hereby as to which Early Settlement of the related
Purchase Contracts is not effected, to the undersigned at the address indicated
below unless a different name and address have been indicated below. Pledged
Notes or Pledged Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, deliverable upon such Early Settlement will be transferred in
accordance with the transfer instructions set forth below. If shares are to be
registered in the name of a Person other than the undersigned, the undersigned
will pay any transfer tax payable incident thereto.

Dated: ____________________         Signature: _____________________________
                                    Signature Guarantee: ___________________

         Number of Units evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:

If shares of Common Stock are to be            REGISTERED HOLDER
registered in the name of and delivered to
and Pledged Notes or Pledged Applicable
Ownership Interest in the Treasury             Please print name and address of
Portfolio, as the case may be, are to be       Registered Holder:
transferred to a Person other than the Holder, please print such Person's name
and address:

----------------------------------             ---------------------------------
              Name                                          Name

----------------------------------             ---------------------------------
              Address                                       Address

                                      A-14
<PAGE>

Social Security or other Taxpayer
Identification Number, if any

         Transfer instructions for Pledged Notes or Pledged Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, transferable upon Early
Settlement or a Termination Event:

                                      A-15
<PAGE>

                     (TO BE ATTACHED TO GLOBAL CERTIFICATES)

            SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE

         The following increases or decreases in this Global Certificate have
been made:

                                            Stated Amount
            Amount of         Amount of     of the Global
           Decrease in       Increase in     Certificate
          Stated Amount   Stated Amount of  Following Such
          of the Global      the Global      Decrease or        Signature of
 Date      Certificate       Certificate       Increase     Authorized Signatory

                                      A-16
<PAGE>

                                    EXHIBIT B

                       FORM OF STRIPPED UNITS CERTIFICATE

         [FOR INCLUSION IN GLOBAL CERTIFICATES ONLY -- THIS CERTIFICATE IS A
GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT (AS
HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAME OF A CLEARING AGENCY OR A
NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR
A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.

         Unless this Certificate is presented by an authorized representative of
The Depository Trust Company (55 Water Street, 49th Floor, New York, New York
10041-0099) to the Company or its agent for registration of transfer, exchange
or payment, and any Certificate issued is registered in the name of Cede & Co.,
or such other name as requested by an authorized representative of The
Depository Trust Company, and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]

         Form of Face of Stripped Units Certificate

No.                                                      CUSIP No. ____________
Number of Stripped Units

         This Stripped Units Certificate certifies that [For inclusion in Global
Certificates only -- Cede & Co.] is the registered Holder of the number of
Stripped Units set forth above [For inclusion in Global Certificates only - or
such other number of Stripped Units reflected in the Schedule of Increases or
Decreases in Global Certificate attached hereto]. Each Stripped Unit represents
(i) a 1/20 undivided beneficial ownership interest in a Treasury Security,
subject to the Pledge of such interest in such Treasury Security by such Holder
pursuant to the Pledge Agreement, and (ii) the rights and obligations of the
Holder under one Purchase Contract with Toys "R" Us, Inc., a Delaware
corporation (the "Company"). All capitalized terms used herein which are defined
in the Purchase Contract Agreement have the meaning set forth therein.

         Pursuant to the Pledge Agreement, the Treasury Security constituting
part of each Stripped Units evidenced hereby has been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a part of such Stripped Units.

                                      B-1
<PAGE>

         Each Purchase Contract evidenced hereby obligates the Holder of this
Stripped Units Certificate to purchase, and the Company to sell, on August 16,
2005 (the "Stock Purchase Date"), at a price equal to $50 (the "Stated Amount"),
a number of shares of Common Stock, $.10 par value per share ("Common Stock"),
of the Company, equal to the Settlement Rate, then in effect, unless on or prior
to the Stock Purchase Date there shall have occurred a Termination Event, Cash
Settlement, Early Settlement or Merger Early Settlement with respect to the
Stripped Units of which such Purchase Contract is a part, all as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof. The
Purchase Price (as defined herein) for the shares of Common Stock purchased
pursuant to each Purchase Contract evidenced hereby, if not paid earlier, shall
be paid on the Stock Purchase Date by application of payments received in
respect of the Pledged Treasury Securities pledged to secure the obligations
under such Purchase Contract in accordance with the terms of the Pledge
Agreement.

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

         Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Stripped Units Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.

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

                             TOYS "R" US, INC.

                             By: ____________________________________
                             Name:
                             Title:

                             HOLDER SPECIFIED ABOVE (as to obligations of such
                             Holder under the Purchase Contracts)

                             By: THE BANK OF NEW YORK, not individually but
                             solely as Attorney-in-Fact of such Holder

                             By: ____________________________________
                                 Authorized Signatory

                                      B-2
<PAGE>

                      AGENT'S CERTIFICATE OF AUTHENTICATION

         This is one of the Stripped Units referred to in the within-mentioned
Purchase Contract Agreement.

                                            THE BANK OF NEW YORK,
                                            as Purchase Contract Agent

Dated:________________________              By:____________________________
                                            Authorized Signatory

                     (Reverse of Stripped Units Certificate)

         Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of May , 2002 (as may be supplemented from time to
time, the "Purchase Contract Agreement"), between the Company and The Bank of
New York, as Purchase Contract Agent (including its successors thereunder,
herein called the "Agent"), to which the Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Agent, the Company and the Holders and of the terms upon which
the Stripped Units Certificates are, and are to be, executed and delivered.

         Each Purchase Contract evidenced hereby obligates the Holder of this
Stripped Units Certificate to purchase, and the Company to sell, on the Stock
Purchase Date at a price equal to $50 (the "Purchase Price"), a number of shares
of Common Stock of the Company equal to the Settlement Rate, then in effect,
unless, on or prior to the Stock Purchase Date, there shall have occurred a
Termination Event or an Early Settlement, Merger Early Settlement or Cash
Settlement with respect to the Units of which such Purchase Contract is a part.
The "Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is greater than or equal to $[____] (the "Threshold Appreciation Price"),
[____] shares of Common Stock per Purchase Contract, (b) if the Applicable
Market Value is less than the Threshold Appreciation Price but is greater than
$[____], the number of shares of Common Stock per Purchase Contract equal to the
Stated Amount divided by the Applicable Market Value and (c) if the Applicable
Market Value is less than or equal to $[____], [____] shares of Common Stock per
Purchase Contract, in each case subject to adjustment as provided in the
Purchase Contract Agreement. No fractional shares of Common Stock will be issued
upon settlement of Purchase Contracts, as provided in the Purchase Contract
Agreement. The number of shares of Common Stock per Purchase Contract will be
subject to adjustment as provided by Sections 5.6 and 5.7 of the Purchase
Contract Agreement.

                                      B-3
<PAGE>

         The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Stock Purchase Date.

         The "Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is reported, the last
reported sale price) of the Common Stock on the New York Stock Exchange (the
"NYSE") on such date or, if the Common Stock is not listed for trading on the
NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United States national or
regional securities exchange, as reported by The Nasdaq Stock Market, or, if the
Common Stock is not so reported, the last quoted bid price for the Common Stock
in the over-the-counter market as reported by the National Quotation Bureau or
similar organization, or, if such bid price is not available, the market value
of the Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the Company.

         A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.

         Each Purchase Contract evidenced hereby may be settled prior to the
Stock Purchase Date through Early Settlement, Merger Early Settlement or Cash
Settlement, in accordance with the terms of the Purchase Contract Agreement.

         In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Stripped Units Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby (i) by effecting an Early Settlement, Merger Early Settlement or Cash
Settlement or (ii) by application of payments received in respect of the Pledged
Treasury Securities underlying the Stripped Units represented by this Stripped
Units Certificate.

         The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate Purchase
Price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.

         The Stripped Units Certificates are issuable only in registered form
and only in denominations of a single Stripped Unit and any integral multiple
thereof. The transfer of any Stripped Units Certificate will be registered and
Stripped Units Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Stripped Units Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. The Holder of a Stripped
Units may substitute for the Pledged Treasury Securities securing its
obligations under the related Purchase Contract Notes or Applicable Ownership
Interest in the Treasury Portfolio in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement. From and after such substitution,
the Units for which such Pledged Notes or Pledged Applicable Ownership Interest
in the Treasury Portfolio secures the Holder's obligation under the Purchase
Contract shall be referred to as a "Normal Units" evidenced by a Normal Units
Certificate. A Holder that elects to substitute Notes or Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, for Pledged Treasury
Securities, thereby reestablishing Normal Units, shall be responsible for any
fees or expenses payable in connection therewith. Except as provided in the
Purchase Contract Agreement, for so long as the Purchase Contract underlying a
Stripped Unit remains in effect, such Stripped Unit shall not be separable into
its constituent parts, and the rights and obligations of the Holder of such
Stripped Unit in respect of the Pledged Treasury Security and the Purchase
Contract constituting such Stripped Unit may be transferred and exchanged only
as a Stripped Units.

                                      B-4
<PAGE>

         The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights and
obligations of Holders to purchase Common Stock, shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Stock Purchase Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Agent, the Collateral Agent and to the
Holders, at their addresses as they appear in the Stripped Units Register. Upon
and after the occurrence of a Termination Event, the Collateral Agent shall
release the Pledged Treasury Securities from the Pledge in accordance with the
provisions of the Pledge Agreement.

         Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts may
be settled early ("Early Settlement") as provided in the Purchase Contract
Agreement. In order to exercise the right to effect Early Settlement with
respect to any Purchase Contracts evidenced by this Stripped Units Certificate,
the Holder of this Stripped Units Certificate shall deliver to the Agent at the
Corporate Trust Office an Election to Settle Early form set forth below and any
other documents requested by the Agent duly completed and accompanied by payment
in the form of immediately available funds payable to the order of the Company
in an amount (the "Early Settlement Amount") equal to the product of (A) $50
times (B) the number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement.

                                      B-5
<PAGE>

         Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Pledged Treasury Securities underlying such Units shall be released
from the Pledge as provided in the Pledge Agreement and the Holder of each
Purchase Contract forming part of Pledged Treasury Securities Units as to which
Early Settlement is effected equal to ___ share of Common Stock per Purchase
Contract (the "Early Settlement Rate"). The Early Settlement Rate shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted as provided in the Purchase Contract Agreement.

         Upon registration of transfer of this Stripped Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Stripped
Units Certificate. The Company covenants and agrees, and the Holder, by his
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.

         The Holder of this Stripped Units Certificate, by his acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Stripped Units evidenced hereby on his behalf as
its attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
such Holder's obligations under such Purchase Contracts, consents to the
provisions of the Purchase Contract Agreement, authorizes the Agent to enter
into and perform the Pledge Agreement on such Holder's behalf as
attorney-in-fact, and consents to the Pledge of the Treasury Securities
underlying this Stripped Units Certificate pursuant to the Pledge Agreement. The
Holder further covenants and agrees, that, to the extent and in the manner
provided in the Purchase Contract Agreement and the Pledge Agreement, but
subject to the terms thereof, payments in respect of the Pledged Treasury
Securities, to be paid upon settlement of such Holder's obligations to purchase
Common Stock under the Purchase Contract, shall be paid on the Stock Purchase
Date by the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no right,
title or interest in such payments.

         Each Purchase Contract evidenced hereby obligates the Holder to agree,
for U.S. federal, state and local income and franchise tax purposes, to (i)
treat an acquisition of the Stripped Units as an acquisition of the Treasury
Security and Purchase Contract constituting the Stripped Units and (ii) treat
itself as owner of the Treasury Securities.

                                      B-6
<PAGE>

         Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.

         The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.

         The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Stripped Units Certificate
is registered as the owner of the Stripped Units evidenced hereby for the
purpose of, performance of the Purchase Contracts and for all other purposes
whatsoever (subject to the Record Date provisions hereof), whether or not any
payments in respect thereof be overdue and notwithstanding any notice to the
contrary, and neither the Company, the Agent, such Affiliate, nor any such agent
shall be affected by notice to the contrary.

         The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.

         A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.

                                      B-7
<PAGE>

                                  ABBREVIATIONS

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

TEN COM -                             as tenants in common

UNIF GIFT MIN ACT -                   Custodian

                                      -----------------------------------------
                                      (cust)                            (minor)

                                      Under Uniform Gifts to Minors Act

                                      -----------------------------------------
                                                         (State)

TEN ENT -                             as tenants by the entireties

JT TEN -                              as joint tenants with right of
                                      survivorship and not as tenants in common

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

                                      B-8
<PAGE>

                                   ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto

________________________________________________________________________________
________________________________________________________________________________

(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)

________________________________________________________________________________
________________________________________________________________________________

(Please Print or Type Name and Address Including Postal Zip Code of Assignee)

the within Stripped Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ____________________________ attorney to
transfer said Stripped Units Certificates on the books of Toys "R" Us, Inc. with
full power of substitution in the premises.

Dated: ______________________             Signature: ___________________________

                                          NOTICE: The signature to this
                                          assignment must correspond with the
                                          name as it appears upon the face of
                                          the within Stripped Units
                                          Certificates in every particular,
                                          without alteration or enlargement or
                                          any change whatsoever.

Signature Guarantee: ___________________________________________________________

                                      B-9
<PAGE>

                             SETTLEMENT INSTRUCTIONS

         The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Stock Purchase Date of the
Purchase Contracts underlying the number of Stripped Units evidenced by this
Stripped Units Certificate be registered in the name of, and delivered, together
with a check in payment for any fractional share, to the undersigned at the
address indicated below unless a different name and address have been indicated
below. If shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer tax payable incident thereto.

Dated: ___________________                Signature: ___________________________
                                          Signature Guarantee: _________________
                                          (if assigned to another person)

If shares are to be registered in the name of    REGISTERED HOLDER
and delivered to a Person other than the
Holder, please (i) print such Person's name      Please print name and address
and address and (ii) provide a guarantee of      of Registered Holder:
your signature:

----------------------------------               -------------------------------
                 Name                                            Name

----------------------------------               -------------------------------
                 Address                                        Address

Social Security or other Taxpayer
Identification Number, if any

                                      B-10
<PAGE>

         ELECTION TO SETTLE EARLY

         The undersigned Holder of this Stripped Units Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Stripped Units evidenced by this Stripped
Units Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Stripped Units with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Stripped Units Certificate representing any Stripped Units evidenced hereby as
to which Early Settlement of the related Purchase Contracts is not effected, to
the undersigned at the address indicated below unless a different name and
address have been indicated below. Pledged Treasury Securities deliverable upon
such Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.

Dated: ____________________         Signature: _____________________________
                                    Signature Guarantee: ___________________

         Number of Units evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:

If shares of Common Stock are to be             REGISTERED HOLDER
registered in the name of and delivered to
and Pledged Treasury Securities are to be       Please print name and address of
transferred to a Person other than the          Registered Holder:
Holder, please print  such Person's name
and address:

----------------------------------              -------------------------------
                 Name                                          Name

----------------------------------              -------------------------------
                 Address                                       Address

                                      B-11
<PAGE>

Social Security or other Taxpayer
Identification Number, if any

         Transfer instructions for Pledged Treasury Securities transferable upon
Early Settlement or a Termination Event:

                                      B-12
<PAGE>

                     (TO BE ATTACHED TO GLOBAL CERTIFICATES)

            SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE

         The following increases or decreases in this Global Certificate have
been made:

                                           Stated Amount
           Amount of         Amount of     of the Global
          Decrease in       Increase in     Certificate
         Stated Amount   Stated Amount of  Following Such
         of the Global      the Global      Decrease or        Signature of
 Date     Certificate       Certificate       Increase     Authorized Signatory

                                      B-13
<PAGE>

                                    EXHIBIT C

                   INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
                                COLLATERAL AGENT

JPMorgan Chase Bank,
as Collateral Agent
450 West 33rd Street
New York, NY 10001
Attn: Institutional Trust Services

Re:      Equity Security Units of Toys "R" Us, Inc. (the "Company")

         We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of May , 2002, (the "Pledge Agreement") among the
Company, you, as Collateral Agent, Custodial Agent and Securities Intermediary
and us, as Purchase Contract Agent and as attorney-in-fact for the holders of
[Normal Units] [Stripped Units] from time to time, that the holder of Units
listed below (the "Holder") has elected to substitute [$_____ aggregate
principal amount of Treasury Securities (CUSIP No. 912803AG8)] [$_______
aggregate principal amount of Notes $_____ or $_____ Applicable Ownership
Interest in the Treasury Portfolio, as the case may be,] in exchange for the
related [Pledged Notes or the Pledged Applicable Ownership Interest in the
Treasury Portfolio, as the case may be,] [Pledged Treasury Securities] held by
you in accordance with the Pledge Agreement and has delivered to us a notice
stating that the Holder has Transferred [Treasury Securities] [Notes or the
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] to
you, as Collateral Agent. We hereby instruct you, upon receipt of such [Pledged
Treasury Securities] [Pledged Notes or the Pledged Applicable Ownership Interest
in the Treasury Portfolio, as the case may be,], and upon the payment by such
Holder of any applicable fees, to release the [Notes or the Applicable Ownership
Interest in the Treasury Portfolio, as the case may be,] [Treasury Securities]
related to such [Normal Units] [Stripped Units] to us in accordance with the
Holder's instructions. Capitalized terms used herein but not defined shall have
the meaning set forth in the Pledge Agreement.

                                       C-1

<PAGE>

Date:  _____________________

                                      THE BANK OF NEW YORK,
                                      as Purchase Contract Agent

                                      By:_______________________________
                                         Name:
                                         Title:

Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Notes or the Applicable Ownership Interest in the
Treasury Portfolio] for the [Pledged Notes or the Pledged Applicable Ownership
Interest in the Treasury Portfolio] [Pledged Treasury Securities]:

Name:

Social Security or other Taxpayer Identification
Number, if any:

Address:

                                       C-2
<PAGE>

                                    EXHIBIT D

               INSTRUCTION FROM HOLDER TO PURCHASE CONTRACT AGENT

The Bank of New York,
as Purchase Contract Agent
101 Barclay Street
Floor 21 W
New York, NY 10286
Attn: Corporate Trust Administration
Telecopy: [212-896-7298]

Re:  Equity Security Units of Toys "R" Us, Inc. (the "Company")

         The undersigned Holder hereby notifies you that it has delivered to
JPMorgan Chase Bank, as Collateral Agent, Custodial Agent and Securities
Intermediary [$_______ aggregate principal amount of Treasury Securities (CUSIP
No. 912803AG8)] [$_______ aggregate principal amount of Notes or the Applicable
Ownership Interest in the Treasury Portfolio, as the case may be] in exchange
for the related [Pledged Notes or the Pledged Applicable Ownership Interest in
the Treasury Portfolio, as the case may be] [Pledged Treasury Securities] held
by the Collateral Agent, in accordance with Section [4.1] [4.2] of the Pledge
Agreement, dated May , 2002 (the "Pledge Agreement"), among you, the Company and
the Collateral Agent. The undersigned Holder has paid the Collateral Agent all
applicable fees relating to such exchange. The undersigned Holder hereby
instructs you to instruct the Collateral Agent to release to you on behalf of
the undersigned Holder the [Pledged Notes or Pledged Applicable Ownership
Interest in the Treasury Portfolio, as the case may be] [Pledged Treasury
Securities] related to such [Normal Units] [Stripped Units]. Capitalized terms
used herein but not defined shall have the meaning set forth in the Pledge
Agreement.

Date:  ___________________   Signature:____________________________________

                             Signature Guarantee:  ________________________

Please print name and address of Registered Holder:

Name:

Social Security or other Taxpayer Identification Number, if any:

Address:

                                       D-1
<PAGE>

                                    EXHIBIT E
                        NOTICE TO SETTLE BY SEPARATE CASH

The Bank of New York,
as Purchase Contract Agent
101 Barclay Street
Floor 21 W
New York, NY 10286
Attn: Corporate Trust Administration
Telecopy: [212-896-7298]

         Re:   Equity Security Units of Toys "R" Us, Inc. (the" Company")

         The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.5 of the Purchase Contract Agreement dated as of May , 2002 among
the Company and you, as Purchase Contract Agent and as Attorney-in-Fact for the
Holders of the Purchase Contracts, that such Holder has elected to pay to the
Collateral Agent, on or prior to 10:00 a.m. (New York City time) on the fourth
Business Day immediately preceding the Stock Purchase Date (in lawful money of
the United States by [certified or cashiers check or] wire transfer, in each
case in immediately available funds), $_________ as the Purchase Price for the
shares of Common Stock issuable to such Holder by the Company under the related
Purchase Contract on the Stock Purchase Date. The undersigned Holder hereby
instructs you to notify promptly the Collateral Agent of the undersigned
Holder's election to make such cash settlement with respect to the Purchase
Contracts related to such Holder's Normal Units.

Dated:_____________                 __________________________________

                                    Signature

                                    Signature Guarantee:______________

Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

Please print name and address of Registered Holder:

Social Security or other Taxpayer Identification Number, if any:
___________________

                                       E-1

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