Document:

<PAGE>   1
                                                                     EXHIBIT 4.1

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

                             KERR-MCGEE CORPORATION

                                       TO

                                 CITIBANK, N.A.,
                                   AS TRUSTEE

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

                          FIFTH SUPPLEMENTAL INDENTURE

                             DATED FEBRUARY __, 2000

                    SUPPLEMENTING AND AMENDING THE INDENTURE
                           DATED AS OF AUGUST 1, 1982

--------------------------------------------------------------------------------
<PAGE>   2

                  THIS FIFTH SUPPLEMENTAL INDENTURE, dated February __, 2000
(hereinafter called the "Supplemental Indenture"), is between KERR-McGEE
CORPORATION, a Delaware corporation (hereinafter called the "Corporation"), and
CITIBANK, N.A., a national banking association duly organized and existing under
the laws of the United States of America, as Trustee under the Indenture
referred to below (hereinafter called the "Trustee").

                                    RECITALS

                  The Company and the Trustee are parties to an Indenture, dated
as of August 1, 1982, as amended (the "Indenture"), relating to the issuance
from time to time by the Company of its Securities on terms to be specified at
the time of issuance. Capitalized terms used herein and not otherwise defined
shall have the meanings assigned to them in the Indenture.

                  The Company has duly authorized the creation of a series of
its Securities denominated its "___% Convertible Subordinated Debentures due
2010" (such Securities being referred to herein as the "Debentures").

                  The Company has duly authorized the execution and delivery of
this Supplemental Indenture in order to provide for the issuance of the
Debentures.

                  The Company has requested the Trustee and the Trustee has
agreed to join with it in the execution and delivery of this Supplemental
Indenture.

                  Section 901(e) of the Indenture provides that the Company,
acting pursuant to a Board Resolution, and the Trustee, at any time and from
time to time, may enter into an indenture supplemental to the Indenture to
establish the form and terms of Securities of any series as permitted by
Sections 201 and 301 of the Indenture.

                  The Company has determined that this Supplemental Indenture
complies with Section 901(f) and does not require the consent of any Holders of
Securities. On the basis of the foregoing, the Trustee has determined that this
Supplemental Indenture is in form satisfactory to it.

                  The Company has furnished the Trustee with an Officers'
Certificate and an Opinion of Counsel complying with the requirements of Section
905 of the Indenture, stating that the execution of this Supplemental Indenture
is authorized or permitted by the Indenture, and has delivered to the Trustee a
Board Resolution authorizing the execution and delivery of this Supplemental
Indenture, together with such other documents as may have been required by
Section 303 of the Indenture.

                  All things necessary to make this Supplemental Indenture a
valid agreement of the Company and the Trustee and a valid amendment of and
supplement to the Indenture have been done.

<PAGE>   3
                                                                               2

                  The entry into this Supplemental Indenture by the parties
hereto is in all respects authorized by the provisions of the Indenture.

                  The Company has duly authorized the execution and delivery of
this Supplemental Indenture, and all things necessary have been done to make the
Debentures, when executed by the Company and authenticated and delivered
hereunder and duly issued by the Company, the valid obligations of the Company,
and to make this Supplemental Indenture a valid agreement of the Company, in
accordance with their and its terms.

                  NOW THEREFORE:

                  It is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Debentures, as follows:

                                    ARTICLE I

                  SECTION 1.01. Definitions.

                  For all purposes of the Indenture and this Supplemental
Indenture as they relate to the Debentures, except as otherwise expressly
provided or unless the context otherwise requires:

                  (1) the terms defined in this Article have the meanings
         assigned to them in this Article;

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

                  (3) capitalized terms used but not defined herein are used as
         they are defined in the Indenture.

                  "Change in Control" means:

                           (i) the acquisition by any Person (including any
syndicate or group deemed to be a "person" under Section 13(d)(3) of the
Exchange Act as in effect on the date of the original execution of this
Supplemental Indenture) of beneficial ownership (as determined in accordance
with Rule 13d-3 promulgated by the Commission under the Exchange Act), directly
or indirectly, through a purchase, merger or other acquisition transaction or
series of transactions, of shares of capital stock of the Company entitling such
Person to exercise 50% or more of the total voting power of all shares of
capital stock of the Company entitled to vote generally in the elections of
directors (or persons holding a similar function), other than any such
acquisition by the Company, any Subsidiary of the Company or any employee
benefit plan of the Company or any Subsidiary of the Company; or

<PAGE>   4
                                                                               3

                           (ii) any consolidation of the Company with, or merger
of the Company into, any other Person, any merger of another Person into the
Company, or any conveyance, sale, transfer, lease or other disposition of all or
substantially all of the assets of the Company to another Person (other than (a)
any such transaction (x) which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of capital stock of
the Company and (y) pursuant to which the holders of the Common Stock
immediately prior to such transaction have the entitlement to exercise, directly
or indirectly, 50% or more of the total voting power of all shares of capital
stock of the Company entitled to vote generally in the election of directors (or
persons holding a similar function) of the continuing or surviving Person
immediately after such transaction and (b) any merger which is effected solely
to change the jurisdiction of incorporation of the Company and results in a
reclassification, conversion or exchange of outstanding shares of Common Stock
into solely shares of common stock of the surviving Person); provided, however,
that a Change in Control shall not be deemed to have occurred if (a) the Closing
Price per share of the Common Stock for any five Trading Days within the period
of 10 consecutive Trading Days ending immediately after the later of the Change
in Control or the public announcement of the Change in Control (in the case of a
Change in Control under clause (i) above) or the period of 10 consecutive
Trading Days ending immediately before the Change in Control (in the case of
Change in Control under clause (ii) above) shall equal or exceed 105% of the
Conversion Price of the Securities in effect on each such Trading Day or (b) at
least 90% of the consideration in the transaction or transactions constituting a
Change in Control consists of shares of common stock traded or to be traded
immediately following such Change in Control on a national securities exchange
or the Nasdaq National Market and, as a result of such transaction or
transactions, the Debentures become exercisable solely into such common stock
(and any rights attached thereto).

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

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

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

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

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

<PAGE>   5
                                                                               4

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

                  "Common Stock" means the Company's common stock, par value
$1.00 per share, as it exists on the date of this Supplemental Indenture and any
shares of any class or classes of capital stock of the Company resulting from
any reclassification or reclassifications thereof and which have no preference
in respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and which are
not subject to redemption by the Company; provided however, that if any time
there shall be more than one such resulting class, the shares of each such class
then so issuable on conversion of Debentures shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the number of shares of all such classes
resulting from all such reclassifications.

                  "Conversion Agent" means any Person authorized by the Company
to convert the Debentures in accordance with Article V.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

                  "Securities Act" means the Securities Act of 1933, as amended.

                  "Senior Debt" means the principal of, premium, if any,
interest on, and any other payment due pursuant to any of the following, whether
outstanding at the date hereof or hereafter incurred, created or assumed:

                  (a) all indebtedness of the Company for money borrowed
         (including any indebtedness secured by a mortgage or other lien which
         is given to secure all or part of the purchase price of property
         subject thereto, whether given to the vendor of such property or to
         another, or (ii) existing on property at the time of acquisition
         thereof);

                  (b) all indebtedness of the Company evidenced by notes,
         debentures, bonds or other securities;

                  (c) all lease obligations of the Company which are capitalized
         on the books of the Company in accordance with generally accepted
         accounting principles;

                  (d) all indebtedness of others of the kinds described in
         either of the preceding clauses (a) or (b) and all lease obligations of
         others of the kind described in the preceding clause (c) assumed by or
         guaranteed in any manner by the Company or
<PAGE>   6
                                                                               5

         in effect guaranteed by the Company through an agreement to purchase,
         contingent or otherwise;

                  (e) all obligations of the Company with respect to letters of
         credit issued in connection with indebtedness of others of the kind
         described in the preceding clauses (a) or (b) or leased obligations of
         the kind described in the preceding clause (c); and

                  (f) all renewals, extensions or refundings of indebtedness of
         the kinds described in any of the preceding clauses (a), (b) and (d),
         all renewals or extensions of lease obligations of the kinds described
         in either of the preceding clauses (c) and (d) and all renewals or
         extensions of obligations with respect to letters of credit of the kind
         described in the preceding clause (e);

unless, in the case of any particular indebtedness, lease, obligation, renewal,
extension or refunding, the instrument or lease creating or evidencing the same
or the assumption or guarantee of the same expressly provides that such
indebtedness, lease, obligation, renewal, extension or refunding is not superior
in right of payment to or is pari passu with the Debentures. Senior Debt shall
also not include any Debentures, any indebtedness or other obligations of the
Company to its Subsidiaries or the Company's 7.5% Convertible Subordinated
Debentures Due 2000 through 2014.

                  "Trading Day" means:

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

                          (2) if the applicable security is quoted on the Nasdaq
                  National Market, a day on which trades may be made thereon; or

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

                  Section 1.02. Effect of Headings.

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

                  Section 1.03. Successors and Assigns.

<PAGE>   7
                                                                               6

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

                  Section 1.04. Separability.

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

                  Section 1.05. Conflict with Trust Indenture Act.

                  If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Supplemental
Indenture by any of the provisions of the Trust Indenture Act of 1939, as
amended, such required provisions shall control.

                  Section 1.06. Benefits of Supplemental Indenture.

                  Nothing in this Supplemental Indenture, expressed or implied,
shall give to any person, other than the parties hereto and their successors
hereunder, holders of Senior Debt and the Holders of the Debentures any benefit
or any legal or equitable right, remedy or claim under this Supplemental
Indenture.

                  Section 1.07. Application of Supplemental Indenture.

                  This Supplemental Indenture shall take effect on the date
hereof, and shall, except with respect to Section 1.09, apply only to the
Debentures. This Supplemental Indenture shall have no effect on any other
Securities, whether originally issued prior to the date hereof or thereafter. If
any provision of this Supplemental Indenture is inconsistent with any provision
of the Indenture, then, to the extent permitted by the Indenture, the provision
in this Supplemental Indenture shall control.

                  SECTION 1.08. Governing Law.

                  THIS SUPPLEMENTAL INDENTURE AND THE DEBENTURES SHALL BE DEEMED
TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND THIS
SUPPLEMENTAL INDENTURE AND EACH SUCH DEBENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                  Section 1.09.     Amendments to Indenture.

<PAGE>   8
                                                                               7

                  Section 301 of the Indenture is hereby amended by deleting the
word "and" at the end of clause (13), by renumbering clause (14) of Section 301
as clause (15), and by inserting a new clause (14) as follows:

                          (14) whether the Securities of the series will be
                  subordinated to any other series; and

                  Section 901 of the Indenture is hereby amended by substituting
";or" for the period at the end of clause (g) and by inserting a new clause (h)
as follows:

                          (h) to comply with the provisions of Section 4.04 and
         5.11 of the Fifth Supplemental Indenture dated February __, 2000,
         between the Company and the Trustee.

                                   ARTICLE II
                                 The Debentures

                  Section 2.01. Title and Terms.

                  There is hereby created under the Indenture a series of
Securities known and designated as the "__% Convertible Subordinated Debentures
due 2010" of the Company. The aggregate principal amount of Debentures that may
be authenticated and delivered under this Indenture is limited to $
million, except for Debentures authenticated and delivered upon reregistration
of, transfer of, or in exchange for, or in lieu of, other Debentures pursuant to
Sections 305, 306, 307, 904 and 1103 of the Indenture.

                  The Stated Maturity for payment of principal of the Debentures
shall be ________, 2010 and the Debentures shall bear interest (computed on the
basis of a 360-day year of twelve 30-day months) at the rate of __% of the
principal amount per annum, from _______, 2000 or the most recent Interest
Payment Date to which interest has been paid or duly provided for, until the
principal amount thereof is paid at Maturity. Interest on the Debentures shall
be payable semi-annually in arrears on __________, and __________ of each year,
commencing ___________, 2000 (each, an "Interest Payment Date"), to the Persons
in whose names the Debentures (or any Predecessor Securities) are registered at
the close of business on the _________________ and __________ immediately
preceding such Interest Payment Date. Except as provided in this paragraph, if a
Holder converts its Debentures into Common Stock on any day other than an
Interest Payment Date, such Holder shall receive no interest that has accrued on
such Debentures. A Holder who converts a Debenture after a Regular Record Date
for an interest payment but prior to the corresponding Interest Payment Date,
shall be entitled to receive on the Interest Payment Date interest accrued and
paid on such Debentures, notwithstanding the conversion of such Debentures prior
to such Interest Payment Date. However, at the time such Holder surrenders such
Debentures for conversion, such Holder must pay to the

<PAGE>   9
                                                                               8

Company an amount equal to the interest that has accrued and will be paid on the
Interest Payment Date on the Debentures being converted. However, the preceding
sentence shall not apply to Debentures that are converted after being called by
the Company for redemption. In addition, if the Redemption Date is prior to a
Regular Record Date for an Interest Payment Date, and prior to such Redemption
Date such Holder chooses to convert such Holder's Debentures, such Holder will
receive on the date that has been fixed for redemption the amount of interest
such Holder would have received if such Holder had not converted its Debentures.

                  The Debentures shall be initially issued in the form of one
or more Global Securities and the U.S. Depositary for the Debentures shall be
The Depository Trust Company, New York, New York.

                  The Debentures shall not be subject to any sinking fund.

                  The Debentures shall be issuable in denominations of $1000 and
integral multiples thereof.

                  The Debentures shall not be issued as Original Issue Discount
Securities or subject to defeasance as provided in Article Fifteen of the
Indenture.

                  The form of Debentures attached hereto as Exhibit A is hereby
adopted, as a form of Securities of a series that consists of Debentures.
Certain terms of the Debentures are set forth in the form of the Debentures.

                  With respect to the Debentures only and for the benefit of
only the Holders thereof, the failure on the part of the Company to observe or
perform any of the covenants or agreements on the part of the Company in this
Fifth Supplemental Indenture not otherwise specified in Section 501 of the
Indenture shall be an additional Event of Default with respect to the Debentures
as if and, for all purposes under the Indenture, to the same extent as if the
same were specified in paragraph (d) of such Section 501 of the Indenture.

                                   ARTICLE III
                            Redemption of Debentures

                  Section 3.01. Right to Redeem.

                  At any time on or after ________, 2005, the Company may redeem
some or all of the Debentures on at least 30 but not more than 60 days' notice
given in accordance with Section 1102 of the Indenture, at the following
Redemption Prices (expressed in percentages of the principal amount).

<PAGE>   10
                                                                               9

<TABLE>
<CAPTION>
         During The Twelve Months Commencing                    Redemption Price
         -----------------------------------                    ----------------
         <S>                                                    <C>
         _________, 2005.....................................          %

         _________, 2006.....................................          %

         _________. 2007.....................................          %

         _________, 2008.....................................          %

         _________, 2009.....................................       100%

</TABLE>

                  In addition, the Company shall pay interest on the Debentures
being redeemed. This Interest shall include interest accrued and unpaid to, but
excluding, the Redemption Date. If the Redemption Date is an Interest Payment
Date, the Company shall pay interest on the Debentures being redeemed to the
holder of record thereof on the next preceding Regular Record Date.

                                   ARTICLE IV
                     Repurchase of Securities at the Option
                       of Holders upon a Change in Control

                  Section 4.01. Right to Require Repurchase.

                  In the event that a Change in Control shall occur, then each
Holder shall have the right, at the Holder's option, but subject to the
provisions of Section 4.02 and Section 4.03, to require the Company to
repurchase, and upon the exercise of such right the Company shall repurchase,
all of such Holder's Debentures not theretofore called for redemption, or any
portion of the principal amount thereof that is equal to $1,000 or any integral
multiple of $1,000 in excess thereof (provided that no single Debentures may be
repurchased in part unless the portion of the principal amount of such
Debentures to be Outstanding after such repurchase is equal to $1,000 or
integral multiples of $1,000 in excess thereof), on the date (the "Repurchase
Date") that is 45 days after the date of the Company Notice (as defined in
Section 4.03 hereof) at a purchase price equal to 100% of the principal amount
of the Debentures to be repurchased (the "Repurchase Price") plus interest
accrued and unpaid to, but excluding, the Repurchase Date. At the option of the
Company, the Repurchase Price may be paid in cash or, subject to the fulfillment
by the Company of the conditions set forth Section 4.02, by delivery of shares
of Common Stock having a fair market value equal to the Repurchase Price.

                  Section 4.02. Conditions to the Company's Election to Pay the
Repurchase Price in Common Stock.

                  The Company may elect to pay the Repurchase Price by delivery
of shares of Common Stock pursuant to Section 4.02 if and only if the following
conditions shall have been satisfied:

<PAGE>   11

                                                                              10

                  (1) the shares of Common Stock deliverable in payment of the
Repurchase Price shall have a fair market value as of the Repurchase Date of not
less than the Repurchase Price. The fair market value of shares of Common Stock
shall be determined by the Company and shall be equal to 95% of the average of
the Closing Prices per share of Common Stock for the five consecutive Trading
Days immediately preceding and including the third Trading Day prior to the
Repurchase Date;

                  (2) the shares of Common Stock to be issued upon repurchase of
Debentures hereunder (i) shall not require registration under any federal
securities law before such shares may be freely transferable without being
subject to any transfer restrictions under the Securities Act of 1933, as
amended, upon repurchase or, if such registration is required, such registration
shall be completed and shall become effective prior to the Repurchase Date, and
(ii) shall not require registration with or approval or any governmental
authority under any state law or any other federal law before such shares may be
validly issued or delivered upon repurchase or if such registration is required
or such approval must be obtained, such registration shall be completed or such
approval shall be obtained prior to the Repurchase Date;

                  (3) the shares of Common Stock to be issued upon repurchase of
Debentures hereunder are, or shall have been, approved for quotation on the
Nasdaq National Market or listed on a national securities exchange, in any case,
prior to the Repurchase Date; and

                  (4) all shares of Common Stock which may be issued upon
repurchase of Debentures will be issued out of the Company's authorized but
unissued Common Stock and, will upon issue, be duly and validly issued and fully
paid and non-assessable and free of any preemptive or similar rights.

                  If all of the conditions set forth in this Section 4.02 are
not satisfied in accordance with the terms thereof, the Repurchase Price shall
be paid by the Company only in cash.

                  Section 4.03. Notices; Method of Exercising Repurchase Right,
Etc.

                  (a) Unless the Company shall have theretofore called for
redemption all of the Outstanding Debentures, on or before the 30th day after
the occurrence of a Change in Control, the Company or, at the request and
expense of the Company on or before the 30th day after such occurrence, the
Trustee, shall give to all Holders of Debentures notice (the "Company Notice")
of the occurrence of the Change in Control and of the repurchase right set forth
herein arising as a result thereof. The Company shall also deliver a copy of
such Company Notice to the Trustee.

                  Each Company Notice shall describe such Change in Control and
shall further state:

                          (i) the Repurchase Date,

<PAGE>   12
                                                                              11

                          (ii) the date by which the repurchase right must be
exercised pursuant to Section 4.03(b),

                          (iii) the Repurchase Price, and whether the Repurchase
Price shall be paid by the Company in cash or by delivery of shares of Common
Stock,

                          (iv) a description of the procedure which a Holder
must follow to exercise a repurchase right, and the place or places where such
Debentures, are to be surrendered for payment of the Repurchase Price and
accrued and unpaid interest, if any, to, but excluding, the Repurchase Date,

                          (v) that on the Repurchase Date the Repurchase Price,
and accrued and unpaid interest, if any, will become due and payable upon each
such Debenture designated by the Holder to be repurchased, and that interest
thereon shall cease to accrue on and after said date, and

                          (vi) the Conversion Price (as defined in Section 5.01
hereof) then in effect, the date on which the right to convert the principal
amount of the Debentures to be repurchased will terminate and the place or
places where such Debentures may be surrendered for conversion.

                          No failure of the Company to give the foregoing
notices or defect therein shall limit any Holder's right to exercise a
repurchase right or affect the validity of the proceedings for the repurchase of
Debentures.

                  (b) To exercise a repurchase right, a Holder shall deliver to
the Trustee on or before the 30th day after the date of the Company Notice (i)
written notice of the Holder's exercise of such right, which notice shall set
forth the name of the Holder, the principal amount of the Debentures to be
repurchased (and, if any Debentures are to be repurchased in part, the serial
number thereof, the portion of the principal amount thereof to be repurchased
and the name of the Person in which the portion thereof to remain Outstanding
after such repurchase is to be registered) and a statement that an election to
exercise the repurchase right is being made thereby, and, in the event that the
Repurchase Price shall be paid in shares of Common Stock, the name or names
(with addresses) in which the certificate or certificates for shares of Common
Stock shall be issued, and (ii) the Debentures with respect to which the
repurchase right is being exercised. Such written notice shall be irrevocable,
except that the right of the Holder to convert the Debentures with respect to
which the repurchase right is being exercised shall continue until the close of
business on the Business Day immediately preceding the Repurchase Date.

                  (c) In the event a repurchase right shall be exercised in
accordance with the terms hereof, the Company shall pay or cause to be paid to
the Trustee the Repurchase Price in cash or shares of Common Stock, as provided
above, for payment to the Holder on the Repurchase Date or, if shares of Common
Stock are to be paid, as promptly after the Repurchase Date as practicable,
together with accrued and unpaid interest to, but excluding, the Repurchase Date
payable with respect

<PAGE>   13
                                                                              12

to the Debentures as to which the repurchase right has been exercised; provided,
however, that installments of interest that mature on or prior to the Repurchase
Date shall be payable in cash to the Holders of such Debentures registered as
such at the close of business on the relevant Regular Record Date. The Company
covenants that, if the Repurchase Price is to be paid in cash, at least one
Business Day prior to the Repayment Date it will deposit with the Trustee or
with a Paying Agent an amount of money sufficient to pay the principal of, and
(except if the Repayment Date shall be an Interest Payment Date) accrued and
unpaid interest on, all the Debentures or portions thereof, as the case may be,
to be repaid on such Repayment Date.

                  (d) If any Debenture (or portion thereof) surrendered for
repurchase shall not be so paid on the Repurchase Date, the principal amount of
such Debenture (or portion thereof, as the case may be) shall, until paid,
continue to bear interest to the extent permitted by applicable law from the
Repurchase Date at the rate per annum specified herein, and each Debenture shall
remain convertible into Common Stock until the principal of such Debenture (or
portion thereof, as the case may be) shall have been paid or duly provided for.

                  (e) Any Debentures which are to be repurchased only in part
shall be surrendered to the Trustee (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or such Holder's attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and make available for delivery to
the Holder of such Debentures without service charge, a new Debenture or
Debentures, containing identical terms and conditions, each in an authorized
denomination in aggregate principal amount equal to and in exchange for the
unrepurchased portion of the principal of the Debentures so surrendered.

                  (f) Any issuance of shares of Common Stock in respect of the
Repurchase Price shall be deemed to have been effected immediately prior to the
close of business on the Repurchase Date and the Person or Persons in whose name
or names any certificate or certificates for shares of Common Stock shall be
issuable upon such repurchase shall be deemed to have become on the Repurchase
Date the holder or holders of record of the shares represented thereby;
provided, however, that any surrender for repurchase on a date when the stock
transfer books of the Company shall be closed shall constitute the Person or
Persons in whose name or names the certificate or certificates for such shares
are to be issued as the record holder or holders thereof for all purposes at the
opening of business on the next succeeding day on which such stock transfer
books are open. No payment or adjustment shall be made for dividends or
distributions on any Common Stock issued upon repurchase of any Securities
declared prior to the Repurchase Date.

                  (g) No fractions of shares shall be issued upon repurchase of
Debentures. If more than one Debenture shall be repurchased from the same Holder
and the Repurchase Price shall be payable in shares of Common Stock, the number
of full shares which shall be issuable upon such repurchase shall be computed on
the basis of the aggregate principal amount of the Debentures so repurchased.

<PAGE>   14

                                                                              13

Instead of any fractional share of Common Stock which would otherwise be
issuable on the repurchase of any Debenture or Debentures, the Company will
deliver to the applicable Holder its check for the current market value of such
fractional share. The current market value of a fraction of a share shall be
determined by multiplying the current market price of a full share by the
fraction, and rounding the result to the nearest cent. For purposes of this
Section, the current market price of a share of Common Stock shall be the
Closing Price per share of the Common Stock on the Trading Day immediately
preceding the Repurchase Date.

                  (h) Any issuance and delivery of certificates for shares of
Common Stock on repurchase of Debentures shall be made without charge to the
Holder of Debentures being repurchased for such certificates or for any tax or
duty in respect of the issuance or delivery of such certificates or the
Debentures represented thereby; provided, however, that the Company shall not be
required to pay any tax or duty which may be payable in respect of (i) income of
the Holder or (ii) any transfer involved in the issuance or delivery of
certificates for shares of Common Stock in a name other than that of the Holder
of the Debentures being repurchased, and no such issuance or delivery shall be
made unless and until the Person requesting such issuance or delivery has paid
to the Company the amount of any such tax or duty or has established, to the
satisfaction of the Company, that such tax or duty has been paid.

                  (i) All Debentures delivered for repurchase shall be delivered
to the Trustee to be canceled at the direction of the Trustee, which shall
dispose of the same as provided in Section 310 of the Indenture.

                  Section 4.04. Consolidation, Merger, Etc.

                  In the case of any consolidation, conveyance or sale of all or
substantially all of the assets of the Company or merger to which Article Eight
of the Indenture applies, in which the Common Stock of the Company is changed or
exchanged as a result into the right to receive shares of stock and other
securities or property or assets (including cash) which includes shares of
Common Stock of the Company or common stock of another Person that are, or upon
issuance will be, traded on a United States national securities exchange or
approved for trading on an established automated over-the-counter trading market
in the United States and such shares constitute at the time such change or
exchange becomes effective in excess of 50% of the aggregate fair market value
of such shares of stock and other securities, property and assets (including
cash) (as determined by the Company, which determination shall be conclusive and
binding), then the Person formed by such consolidation or resulting from such
merger of which acquires the properties or assets (including cash) of the
Company, as the case may be, shall execute and deliver to the Trustee a
supplemental indenture modifying the provisions of the Indenture in relation to
the right of Holders to cause the Company to repurchase the Debentures following
a Change in Control, including without limitation the applicable provisions of
this Article IV and the definitions of Common Stock and Change in Control, as
appropriate, and such other related definitions set forth herein and in the
Indenture as determined in good faith by the Company (which determination shall
be conclusive and binding), to make such provisions apply in the event of a

<PAGE>   15
                                                                              14

subsequent Change in Control to the common stock and the issuer thereof if
different from the Company and Common Stock of the Company (in lieu of the
Company and the Common Stock of the Company).

                                    ARTICLE V
                            Conversion of Debentures

                  Section 5.01. Conversion Right and Conversion Price.

                  Subject to and upon compliance with the provisions of this
Article, at the option of the Holder thereof, any Debenture or any portion of
the principal amount thereof which is $1,000 or an integral multiple of $1,000
may be converted at the principal amount thereof, or of such portion thereof,
into duly authorized, fully paid and nonassessable shares of Common Stock, at
the Conversion Price, determined as hereinafter provided, in effect at the time
of conversion. Such conversion right shall expire at the close of business on
_______, 2010.

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

                  The price at which shares of Common Stock shall be delivered
upon conversion (the "Conversion Price") shall be initially equal to $_________
per share of Common Stock. The Conversion Price shall be adjusted in certain
instances as provided in paragraphs (a), (b), (c), (d), (e), (f), (h) and (1) of
Section 5.04 hereof.

                  Section 5.02. Exercise of Conversion Right.

                  The Company shall maintain in the Borough of Manhattan, the
City of New York, an office or agency where Debentures may be presented for
conversion (the "Conversion Agent").

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

<PAGE>   16

                                                                              15

                  Debentures surrendered for conversion during the period from
the close of business on any Regular Record Date to the opening of business on
the next succeeding Interest Payment Date (except in the case of any Debenture
whose Maturity is prior to such Interest Payment Date) shall be accompanied by
payment in New York Clearing House funds or other funds acceptable to the
Company of an amount equal to the interest to be received on such Interest
Payment Date on the principal amount of Debentures being surrendered for
conversion.

                  Debentures shall be deemed to have been converted immediately
prior to the close of business on the day of surrender of such Debentures for
conversion in accordance with the foregoing provisions, and at such time the
rights of the Holders of such Debentures as Holders shall cease, and the Person
or Persons entitled to receive the Common Stock issuable upon conversion shall
be treated for all purposes as the record holder or holders of such Common Stock
at such time. As promptly as practicable on or after the conversion date, the
Company shall cause to be issued and delivered to such Conversion Agent a
certificate or certificates for the number of full shares of Common Stock
issuable upon conversion, together with payment in lieu of any fraction of a
share as provided in Section 5.03 hereof.

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

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

                  Section 5.03. Fractions of Shares.

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

                  Section 5.04. Adjustment of Conversion Price.

                  The Conversion Price shall be subject to adjustments,
calculated by the Company, from time to time as follows:

<PAGE>   17
                                                                              16

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

                          (i) the numerator of which shall be the number of
                  shares of Common Stock outstanding at the close of business on
                  the Record Date (as defined in Section 5.04(g)) fixed for such
                  determination, and

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

         Such reduction shall become effective immediately after the opening of
         business on the day following the Record Date. If any dividend or
         distribution of the type described in this Section 5.04(a) is declared
         but not so paid or made, the Conversion Price shall again be adjusted
         to the Conversion Price which would then be in effect if such dividend
         or distribution had not been declared.

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

                  (c) In case the Company shall issue rights or warrants (other
         than any rights or warrants referred to in Section 5.04(d)) to all
         holders of its outstanding shares of Common Stock entitling them to
         subscribe for or purchase shares of Common Stock (or securities
         convertible into Common Stock) at a price per share (or having a
         conversion price per share) less than the Current Market Price (as
         defined in Section 5.04(g)) on the Record Date fixed for the
         determination of stockholders entitled to receive such rights or
         warrants, the Conversion Price shall be adjusted so that the same shall
         equal the price determined by multiplying the Conversion Price in
         effect at the opening of business on the date after such Record Date by
         a fraction:

                          (i) the numerator of which shall be the number of
                  shares of Common Stock outstanding at the close of business on
                  the Record Date plus the number of

<PAGE>   18

                                                                              17

                  shares which the aggregate offering price of the total number
                  of shares so offered for subscription or purchase (or the
                  aggregate conversion price of the convertible securities so
                  offered) would purchase at such Current Market Price, and

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

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

                  (d) In case the Company shall, by dividend or otherwise,
         distribute to all holders of its Common Stock shares of any class of
         capital stock of the Company (other than any dividends or distributions
         to which Section 5.04(a) applies) or evidences of its indebtedness,
         cash or other assets, including securities, but excluding (1) any
         rights or warrants referred to in Section 5.04(c), (2) any stock,
         securities or other property or assets (including cash) distributed in
         connection with a reclassification, change, merger, consolidation,
         statutory share exchange, combination, sale or conveyance to which
         Section 5.11 hereof applies and (3) dividends and distributions paid
         exclusively in cash (the capital stock, evidences of indebtedness, cash
         and other assets described in foregoing clauses (1), (2) and (3)
         hereinafter in this Section 5.04(d) called the "assets"), then, in each
         such case, subject to the second succeeding paragraph of this Section
         5.04(d), the Conversion Price shall be reduced so that the same shall
         be equal to the price determined by multiplying the Conversion Price in
         effect immediately prior to the close of business on the Record Date
         (as defined in Section 5.04(g)) with respect to such distribution by a
         fraction:

<PAGE>   19
                                                                              18

                          (i) the numerator of which shall be the Current Market
                  Price (determined as provided in Section 5.04(g)) on such date
                  less the fair market value (as determined by the Board of
                  Directors, whose determination shall be conclusive and set
                  forth in a Board Resolution) on such date of the portion of
                  the assets so distributed applicable to one share of Common
                  Stock (determined on the basis of the number of shares of the
                  Common Stock outstanding on the Record Date), and

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

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

                           If the Board of Directors determines the fair market
         value of any distribution for purposes of this Section 5.04(d) by
         reference to the actual or when issued trading market for any
         securities comprising all or part of such distribution, it must in
         doing so consider the prices in such market over the same period (the
         "Reference Period") used in computing the Current Market Price pursuant
         to Section 5.04(g) to the extent possible, unless the Board of
         Directors in a Board Resolution determines in good faith that
         determining the fair market value during the Reference Period would not
         be in the best interest of the Holders.

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

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

                          (ii) are not exercisable; and

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

         shall be deemed not to have been distributed (and no adjustment to the
         Conversion Price will be required) until the occurrence of the earliest
         Trigger Event. If such right or warrant is subject

<PAGE>   20
                                                                              19

         to subsequent events, upon the occurrence of which such right or
         warrant shall become exercisable to purchase different securities,
         evidences of indebtedness or other assets or entitle the holder to
         purchase a different number or amount of the foregoing or to purchase
         any of the foregoing at a different purchase price, then the occurrence
         of each such event shall be deemed to be the date of issuance and
         Record Date with respect to a new right or warrant (and a termination
         or expiration of the existing right or warrant without exercise by the
         holder thereof). In addition, in the event of any distribution (or
         deemed distribution) of rights or warrants, or any Trigger Event or
         other event (of the type described in the preceding sentence) with
         respect thereto, that resulted in an adjustment to the Conversion
         Price:

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

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

                  (e) In case the Company shall, by dividend or otherwise,
         distribute to all holders of its Common Stock cash (excluding any cash
         that is distributed upon a reclassification, change, merger,
         consolidation, statutory share exchange, combination, sale or
         conveyance to which Section 5.11 hereof applies or as part of a
         distribution referred to in Section 5.04(d) hereof), in an aggregate
         amount that, combined together with:

                           (1) the aggregate amount of any other such
                  distributions to all holders of Common Stock made exclusively
                  in cash within the 12 months preceding the date of payment of
                  such distribution, and in respect of which no adjustment
                  pursuant to this Section 5.04(e) has been made, and

                           (2) the aggregate of any cash plus the fair market
                  value (as determined by the Board of Directors, whose
                  determination shall be conclusive and set forth in a Board
                  Resolution) of consideration payable in respect of any tender
                  offer by the Company or any of its Subsidiaries for all or any
                  portion of the Common Stock concluded within the 12 months
                  preceding the date of such distribution, and in respect of
                  which no adjustment pursuant to Section 5.04(f) hereof has
                  been made,

<PAGE>   21
                                                                              20

         exceeds 15% of the product of the Current Market Price (determined as
         provided in Section 5.04(g)) on the Record Date with respect to such
         distribution times the number of shares of Common Stock outstanding on
         such date, then and in each such case, immediately after the close of
         business on such date, the Conversion Price shall be reduced so that
         the same shall equal the price determined by multiplying the Conversion
         Price in effect immediately prior to the close of business on such
         Record Date by a fraction:

                          (i) the numerator of which shall be equal to the
                  Current Market Price on the Record Date less an amount equal
                  to the quotient of (x) the excess of such combined amount over
                  such 15% and (y) the number of shares of Common Stock
                  outstanding on the Record Date, and

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

         However, in the event that the excess of such combined amount over such
         15% applicable to one share of Common Stock is equal to or greater than
         the Current Market Price on the Record Date, in lieu of the foregoing
         adjustment, adequate provision shall be made so that each Holder shall
         have the right to receive upon conversion of a Security (or any portion
         thereof) the amount of cash such Holder would have received had such
         Holder converted such Security (or portion thereof) immediately prior
         to such Record Date. In the event that such dividend or distribution is
         not so paid or made, the Conversion Price shall again be adjusted to be
         the Conversion Price which would then be in effect if such dividend or
         distribution had not been declared.

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

                          (1) the aggregate of the cash plus the fair market
                  value (as determined by the Board of Directors, whose
                  determination shall be conclusive and set forth in a Board
                  Resolution), as of the expiration of such tender offer, of
                  consideration payable in respect of any other tender offers,
                  by the Company or any of its Subsidiaries for all or any
                  portion of the Common Stock expiring within the 12 months
                  preceding the expiration of such tender offer and in respect
                  of which no adjustment pursuant to this Section 5.04(f) has
                  been made, and

<PAGE>   22
                                                                              21

                          (2) the aggregate amount of any distributions to all
                  holders of the Company's Common Stock made exclusively in cash
                  within 12 months preceding the expiration of such tender offer
                  and in respect of which no adjustment pursuant to Section
                  5.04(e) has been made,

         exceeds 15% of the product of the Current Market Price (determined as
         provided in Section 5.04(g)) as of the last time (the "Expiration
         Time") tenders could have been made pursuant to such tender offer (as
         it may be amended) times the number of shares of Common Stock
         outstanding (including any tendered shares) at the Expiration Time,
         then, and in each such case, immediately prior to the opening of
         business on the day after the date of the Expiration Time, the
         Conversion Price shall be adjusted so that the same shall equal the
         price determined by multiplying the Conversion Price in effect
         immediately prior to close of business on the date of the Expiration
         Time by a fraction:

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

                          (ii) the denominator shall be the sum of (x) the fair
                  market value (determined as aforesaid) of the aggregate
                  consideration payable to stockholders based on the acceptance
                  (up to any maximum specified in the terms of the tender offer)
                  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") and (y)
                  the product of the number of shares of Common Stock
                  outstanding (less any Purchased Shares) at the Expiration Time
                  and the Current Market Price of the Common Stock on the
                  Trading Day next succeeding the Expiration Time.

         Such reduction (if any) shall become effective immediately prior to the
         opening of business on the day following the Expiration Time. In the
         event that the Company is obligated to purchase shares pursuant to any
         such tender offer, but the Company is permanently prevented by
         applicable law from effecting any such purchases or all such purchases
         are rescinded, the Conversion Price shall again be adjusted to be the
         Conversion Price which would then be in effect if such tender offer had
         not been made. If the application of this Section 5.04(f) to any tender
         offer would result in an increase in the Conversion Price, no
         adjustment shall be made for such tender offer under this Section
         5.04(f).

                  (g) For purposes of this Section 5.04, the following terms
         shall have the meanings indicated:

<PAGE>   23
                                                                              22

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

                                    (i) the "ex" date (as hereinafter defined)
                           for any event (other than the issuance or
                           distribution requiring such computation) that
                           requires an adjustment to the Conversion Price
                           pursuant to Section 5.04(a), (b), (c), (d), (e) or
                           (f) occurs during such ten consecutive Trading Days,
                           the Closing Price for each Trading Day prior to the
                           "ex" date for such other event shall be adjusted by
                           multiplying such Closing Price by the same fraction
                           by which the Conversion Price is so required to be
                           adjusted as a result of such other event;

                                    (ii) the "ex" date for any event (other than
                           the issuance or distribution requiring such
                           computation) that requires an adjustment to the
                           Conversion Price pursuant to Section 5.04(a), (b),
                           (c), (d), (e) or (f) occurs on or after the "ex" date
                           for the issuance or distribution requiring such
                           computation and prior to the day in question, the
                           Closing Price for each Trading Day on and after the
                           "ex" date for such other event shall be adjusted by
                           multiplying such Closing Price by the reciprocal of
                           the fraction by which the Conversion Price is so
                           required to be adjusted as a result of such other
                           event; and

                                    (iii) the "ex" date for the issuance or
                           distribution requiring such computation is prior to
                           the day in question, after taking into account any
                           adjustment required pursuant to clause (i) or (ii) of
                           this proviso, the Closing Price for each Trading Day
                           on or after such "ex" date shall be adjusted by
                           adding thereto the amount of any cash and the fair
                           market value (as determined by the Board of Directors
                           in a manner consistent with any determination of such
                           value for purposes of Section 5.04(d) or (f), whose
                           determination shall be conclusive and set forth in a
                           Board Resolution) of the evidences of indebtedness,
                           shares of capital stock or assets being distributed
                           applicable to one share of Common Stock as of the
                           close of business on the day before such "ex" date.

                  For purposes of any computation under Section 5.04(f), the
                  Current Market Price of the Common Stock on any date shall be
                  deemed to be the average of the daily Closing Prices per share
                  of Common Stock for such day and the next two succeeding
                  Trading Days; provided, however, that if the "ex" date for any
                  event (other than the tender offer requiring such computation)
                  that requires an adjustment to the Conversion Price pursuant
                  to Section 5.04(a), (b), (c), (d), (e) or (f) occurs on or
                  after the Expiration Time for the tender or exchange offer
                  requiring such computation and prior to the day in question,
                  the Closing Price for each Trading Day on and after the "ex"
                  date for such

<PAGE>   24

                                                                              23

                  other event shall be adjusted by multiplying such Closing
                  Price by the reciprocal of the fraction by which the
                  Conversion Price is so required to be adjusted as a result of
                  such other event. For purposes of this paragraph, the term
                  "ex" date, when used:

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

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

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

                  Notwithstanding the foregoing, whenever successive adjustments
                  to the Conversion Price are called for pursuant to this
                  Section 5.04, such adjustments shall be made to the Current
                  Market Price as may be necessary or appropriate to effectuate
                  the intent of this Section 5.04 and to avoid unjust or
                  inequitable results as determined in good faith by the Board
                  of Directors.

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

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

                  (h) The Company may make such reductions in the Conversion
         Price, in addition to those required by Sections 5.04(a), (b), (c),
         (d), (e) or (f), as the Board of Directors considers to be advisable to
         avoid or diminish any income tax to holders of Common Stock or rights
         to purchase Common Stock resulting from any dividend or distribution of
         stock (or rights to acquire stock) or from any event treated as such
         for income tax purposes.

<PAGE>   25

                                                                              24

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

                  (i) No adjustment in the Conversion Price shall be required
         unless such adjustment would require an increase or decrease of at
         least 1% in such price; provided, however, that any adjustments which
         by reason of this Section 5.04(i) are not required to be made shall be
         carried forward and taken into account in any subsequent adjustment.
         All calculations under this Article V shall be made by the Company and
         shall be made to the nearest cent or to the nearest one hundredth of a
         share, as the case may be. No adjustment need be made for a change in
         the par value or no par value of the Common Stock. To the extent the
         Debentures become convertible into the right to receive cash, no
         adjustment need be made thereafter as to the cash. Interest shall not
         accrue on the cash.

                  (j) In any case in which this Section 5.04 provides that an
         adjustment shall become effective immediately after a Record Date for
         an event, the Company may defer until the occurrence of such event (i)
         issuing to the Holder of any Debenture converted after such Record Date
         and before the occurrence of such event the additional shares of Common
         Stock issuable upon such conversion by reason of the adjustment
         required by such event over and above the Common Stock issuable upon
         such conversion before giving effect to such adjustment and (ii) paying
         to such Holder any amount in cash in lieu of any fraction pursuant to
         Section 5.03 hereof.

                  (k) For purposes of this Section 5.04, the number of shares of
         Common Stock at any time outstanding shall not include shares held in
         the treasury of the Company but shall include shares issuable in
         respect of scrip certificates issued in lieu of fractions of shares of
         Common Stock. The Company will not pay any dividend or make any
         distribution on shares of Common Stock held in the treasury of the
         Company.

                  (l) If the distribution date for the rights provided in the
         Company's rights agreement, if any, occurs prior to the date a
         Debenture is converted, the Holder of the Debenture who converts such
         Debenture after the distribution date shall not be entitled to receive
         the rights that would otherwise be attached (but for the date of
         conversion) to the shares of Common Stock received upon such
         conversion; provided, however, that an adjustment shall be made to the
         Conversion Price pursuant to clause 5.04(c) as if the rights

<PAGE>   26
                                                                              25

         were being distributed to the common stockholders of the Company
         immediately prior to such conversion. If such an adjustment is made and
         the rights are later redeemed, invalidated or terminated, then a
         corresponding reversing adjustment shall be made to the Conversion
         Price, on an equitable basis, to take account of such event.

                  Section 5.05. Notice of Adjustments of Conversion Price.

                  Whenever the Conversion Price is adjusted as herein provided
(other than in the case of an adjustment pursuant to the second paragraph of
Section 5.04(h) for which the notice required by such paragraph has been
provided), the Company shall promptly file with the Trustee and the Conversion
Agent other than the Trustee an Officers' Certificate setting forth the adjusted
Conversion Price and showing in reasonable detail the facts upon which such
adjustment is based. Promptly after delivery of such Officers' Certificate, the
Company shall prepare a notice stating that the Conversion Price has been
adjusted and setting forth the adjusted Conversion Price and the date on which
each adjustment becomes effective, and shall mail such notice to each Holder at
the address of such Holder as it appears in the Security Register within 20 days
of the effective date of such adjustment. Failure to deliver such notice shall
not effect the legality or validity of any such adjustment.

                  Section 5.06. Notice Prior to Certain Actions.

                  In case at any time after the date hereof:

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

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

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

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

<PAGE>   27

                                                                              26

the Company shall cause to be filed with the Conversion Agent, and shall cause
to be provided to the Trustee and all Holders, at least 20 days (or 10 days in
any case specified in clause (1) or (2) above) prior to the applicable record or
effective date hereinafter specified, a notice stating:

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

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

                  Neither the failure to give such notice nor any defect therein
shall affect the legality or validity of the proceedings or actions described in
clauses (1) through (4) of this Section 5.06.

                  Section 5.07. Company to Reserve Common Stock.

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

                  Section 5.08. Taxes on Conversions.

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

                  Section 5.09. Covenant as to Common Stock.

<PAGE>   28

                                                                              27

                  The Company covenants that all shares of Common Stock which
may be issued upon conversion of Debentures will upon issue be fully paid and
nonassessable and, except as provided in Section 5.08, the Company will pay all
taxes, liens and charges with respect to the issue thereof.

                  Section 5.10. Cancellation of Converted Debentures.

                  All Debentures delivered for conversion shall be delivered by
the Conversion Agent to the Trustee to be canceled and thereafter destroyed.

                  Section 5.11. Effect of Reclassification, Consolidation,
Merger or Sale.

                  If any of following events occur, namely:

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

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

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

the Company or the successor or purchasing corporation, as the case may be,
shall execute with the Trustee a supplemental indenture providing that each
Debenture shall be convertible into the kind and amount of shares of stock and
other securities or property or assets (including cash) which the Holder would
have been entitled to receive upon such reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance had
such Debenture been converted into Common Stock immediately prior to such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance assuming the holder of such Common Stock did not
exercise its rights of election, if any, as to the kind or amount of securities,
cash or other property receivable upon such merger, consolidation, statutory
share exchange, sale or conveyance (provided that, if the kind or amount of
securities, cash or other property receivable upon such merger, consolidation,
statutory share exchange, sale or conveyance is not the same for each share of
Common Stock in respect of which such rights of election shall not have been
exercised ("Non-Electing Share"), then for the purposes of this Section 5.11 the
kind and amount of securities, cash or other property receivable upon such
merger, consolidation, statutory share exchange, sale or conveyance for each

<PAGE>   29

                                                                              28

Non-Electing Share shall be deemed to be the kind and amount so receivable per
share by a plurality of the Non-Electing Shares). Such supplemental indenture
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article V. If, in the case
of any such reclassification, change, merger, consolidation, statutory share
exchange, combination, sale or conveyance, the stock or other securities and
assets receivable thereupon by a holder of shares of Common Stock includes
shares of stock or other securities and assets of a corporation other than the
successor or purchasing corporation, as the case may be, in such
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance, then such supplemental indenture shall also be
executed by such other corporation and shall contain such additional provisions
to protect the interests of the Holders of the Debentures as the Board of
Directors shall reasonably consider necessary by reason of the foregoing.

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

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

                  If this Section 5.11 applies to any event or occurrence,
Section 5.04 hereof shall not apply.

         Section 5.12. Responsibility of Trustee for Conversion Provisions.

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

<PAGE>   30

                                                                              29
                                   ARTICLE VI
                                 SUBORDINATION

                  6.01. Section Agreement of Subordination.

                  The Company covenants and agrees, and each holder of
Debentures issued hereunder by his acceptance thereof likewise covenants and
agrees, that all Debentures shall be issued subject to the provisions of this
Article VI; and each Person holding any Debenture, whether upon original issue
or upon transfer or assignment thereof, accepts and agrees to be bound by such
provisions.

                  The payment of the principal of, premium, if any, and interest
on all Debentures issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and subject in right of payment to the
prior payment in full of all Senior Debt, whether outstanding at the date of
this Supplemental Indenture or thereafter incurred, and the priorities expressed
in Section 704 of the Indenture shall be deemed, in relation to the Debentures,
to be amended so that, if the Trustee collects any moneys pursuant to Article
Five of the Indenture, then it shall pay out the moneys to the holders of Senior
Debt to the extent required by this Article VI as a second priorty.

                  No provision of this Article Six shall prevent the occurrence
of any default or Event of Default hereunder.

                  6.02. Section Payments to Debentureholders.

                  In the event and during the continuation of any default in the
payment of principal, premium, interest or any other payment due on any Senior
Debt continuing beyond the period of grace, if any, specified in the instrument
or lease evidencing such Senior Debt, unless and until such default shall have
been cured or waived or shall have ceased to exist, and in the event that the
maturity of any Senior Debt has been accelerated because of a default, then no
payment shall be made by the Company with respect to the principal (including
redemption and repurchase payments) of, or premium, if any, or interest on the
Debentures.

                  During the continuance of any other event of default with
respect to Senior Debt for which maturity may be accelerated immediately, upon
receipt by the Trustee of written notice from the trustee or other
representative for the holders of such Senior Debt, no payment which would be
prohibited if any Senior Debt has not been paid (as set out in the immediately
preceding paragraph) may be made by or on behalf of the Company upon or in
respect of the Debentures for a period commencing on the date of receipt of such
notice and ending 90 days thereafter (unless such period shall be terminated by
written notice to the Trustee from such trustee or other representative or such
holders); however, if the maturity of any such Senior Debt is not accelerated
within 90 days following the due date of payments prevented by such event of
default and notice, the Company may resume payments on the Debentures.

<PAGE>   31

                                                                              30

                  Upon any payment by the Company, or distribution of assets of
the Company of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution or winding-up or liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Debt shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made on account of the
principal (and premium, if any) or interest on the Debentures; and upon any such
dissolution or winding-up or liquidation or reorganization any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the holders of the Debentures
or the Trustee would be entitled, except for the provisions of this Article VI,
shall (except as provided in the final paragraph of this Section 6.02) be paid
by the Company or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the holders of
the Debentures or by the Trustee if received by them or it, directly to the
holders of Senior Debt (pro rata to such holders on the basis of the respective
amounts of Senior Debt held by such holders, as calculated by the Company).

                  In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing paragraphs of this
Section 6.02, shall be received by the Trustee or the Holders of the Debentures
before all Senior Debt is paid in full, or provision is made for such payment in
money in accordance with its terms, such payment or distribution (subject to the
provisions of Section 6.05) shall be held in trust for the benefit of and shall
be paid over or delivered to the holders of Senior Debt or their representative
or representatives, or to the trustee or trustees under any indenture pursuant
to which any instruments evidencing any Senior Debt may have been issued, as
their respective interests may appear, as calculated by the Company, for
application to the payment of all Senior Debt remaining unpaid to the extent
necessary to pay all Senior Debt in full in money in accordance with its terms,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Debt.

                  For purposes of this Article VI, the words, cash, property or
securities shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article VI with respect
to the Debentures to the payment of all Senior Debt which may at the time be
outstanding; provided that the Senior Debt is assumed by the new corporation, if
any, resulting from any such reorganization or readjustment, and the rights of
the holders of the Senior Debt (other than leases) and of leases which are
assumed are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article Eight of the Indenture shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of this Section 6.02 if such other corporation shall, as a

<PAGE>   32

                                                                              31

part of such consolidation, merger, conveyance or transfer, comply with the
conditions stated in Article Eight of the Indenture.

                  Section 6.03. Subrogation of Debentures.

                  Subject to the payment in full of all Senior Debt then due,
the rights of the holders of the Debentures shall be subrogated to the rights of
the holders of Senior Debt to receive payments or distributions of cash,
property or securities of the Company applicable to the Senior Debt until the
principal of (and premium, if any) and interest on the Debentures shall be paid
in full; and, for the purposes of such subrogation, no payments or distributions
to the holders of the Senior Debt of any cash, property or securities to which
the Holders of the Debentures or the Trustee would be entitled except for the
provisions of this Article VI, and no payment over pursuant to the provisions of
this Article VI, to or for the benefit of the holders of Senior Debt by holders
of the Debentures or the Trustee, shall, as between the Company, its creditors
other than holders of Senior Debt, and the Holders of the Debentures, be deemed
to be a payment by the Company to or on account of the Senior Debt. It is
understood that the provisions of this Article VI are and are intended solely
for the purpose of defining the relative rights of the Holders of the
Debentures, on the one hand, and the holders of the Senior Debt, on the other
hand.

                  Nothing containing in this Article VI or elsewhere in this
Supplemental Indenture or the Indenture or in the Debentures is intended to or
shall impair, as between the Company, its creditors other than the holders of
Senior Debt, and the Holders of the Debentures, the obligation of the Company,
which is absolute and unconditional, to pay to the Holders of the Debentures the
principal of (and premium, if any) and interest on the Debentures as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the Debentures
and creditors of the Company other than the holders of the Senior Debt, nor
shall anything herein or therein prevent the Trustee or the Holder of any
Debenture from exercising all remedies otherwise permitted by applicable law
upon default under the Indenture, subject to the rights, if any, under this
Article VI of the holders of Senior Debt in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.

                  Upon any payment or distribution of assets of the Company
referred to in this Article VI, the Trustee and the Holders of the Debentures
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the Holders of the
Debentures, for the purpose of ascertaining the Persons entitled to participate
in such distribution, the holders of the Senior Debt and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
VI.

<PAGE>   33
                                                                              32

                  Section 6.04. Authorization by Debentureholders.

                  Each Holder of a Debenture by his acceptance thereof
authorizes and directs the Trustee in his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article VI and appoints the Trustee his attorney-in-fact for any and all such
purposes.

                  Section 6.05. Notice to Trustee.

                  The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment of
monies to or by the Trustee in respect of the Debentures pursuant to the
provisions of this Article VI. Notwithstanding the provisions of this Article VI
or any other provision of this Supplemental Indenture or the Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts which
would prohibit the making of any payment of monies to or by the Trustee in
respect of the Debentures pursuant to the provisions of the Article VI, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder or holders of Senior Debt or from any representative or
trustee therefor; and before the receipt of any such written notice, the Trustee
shall be entitled in all respects to assume that no such facts exist; provided
that if on a date not fewer than three business days prior to the date upon
which by the terms hereof any such monies may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Debenture) the Trustee shall not have received, with
respect to such monies, the notice provided for in this Section 6.05, then,
anything contained in this Supplemental Indenture or the Indenture to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may be
received by it on or after such prior date.

                  Notwithstanding anything to the contrary set forth in this
Supplemental Indenture or the Indenture, nothing shall prevent any payment by
the Company or the Trustee to the Debentureholders of monies in connection with
a redemption of Debentures if notice of such redemption has been given prior to
the receipt by the Trustee of written notice as aforesaid, and such notice of
redemption is given not earlier than 60 days before the Redemption Date.

                  The Trustee shall be entitled to rely on the delivery to it of
a written notice by a Person representing himself to be a holder of Senior Debt
(or a representative or trustee on behalf of such holder) to establish that such
notice has been given by a holder of Senior Debt or a representative or trustee
on behalf of any such holder or holders. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Debt to participate in any payment or
distribution pursuant to this Article VI, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Debt held by such Person, the extent to which such Person is entitled
to participate in such payment or

<PAGE>   34
                                                                              33

distribution and any other facts pertinent to the rights of such Person under
this Article VI, and if such evidence is not furnished the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.

                  Section 6.06. Trustees Relation to Senior Debt.

                  The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article VI in respect of any Senior Debt at any
time held by it, to the same extent as any other holder of Senior Debt.

                  With respect to the holders of Senior Debt, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article VI, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt and the Trustee shall not be liable
to any holder of Senior Indebtedness if it shall pay over or deliver to holders
of Debentures, the Company or any other Person, money or assets to which any
holder of Senior Debt shall be entitled by virtue of this Article VI or
otherwise.

                  Section 6.07. No Impairment of Subordination.

                  No right of any present or future holder of any Senior Debt to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Supplemental Indenture or the Indenture, regardless of any knowledge thereof
which any such holder may have or otherwise be charged with.

                  Section 6.08. Acceleration of Payment of Debentures.

                  If payment of the Debentures is accelerated because of an
Event of Default, the Company shall, or shall cause the Trustee to, promptly
notify holders of Senior Debt of the acceleration. The Company may not pay the
Debentures until 30 days after the acceleration occurs (if any Senior Debt
remains outstanding) and thereafter may pay the Debentures only if otherwise
permitted by this Article VI.

                                  ARTICLE VII
                                 Miscellaneous

                  Section 7.01. Confirmation of Indenture.

<PAGE>   35
                                                                              34

                  The Indenture, as supplemented and amended by this Fifth
Supplemental Indenture and all other indentures supplemental thereto, is in all
respects ratified and confirmed, and the Indenture, this Fifth Supplemental
Indenture and all other indentures supplemental thereto shall be read, taken and
construed as one and the same instrument.

                  Section 7.02. Concerning the Trustee.

                  The Trustee assumes no duties, responsibilities or liabilities
by reason of this Fifth Supplemental Indenture other than as set forth in the
Indenture.

                  The recitals contained herein shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for the correctness of
same, except for the recital indicating the Trustee's approval of the form of
this Fifth Supplemental Indenture. The Trustee makes no representation as to the
validity of this Fifth Supplemental Indenture.

                  The Trustee accepts the trust created by the Indenture, as
supplemented by this Fifth Supplemental Indenture, and agrees to perform the
same upon the terms and conditions in the Indenture, as supplemented by this
Fifth Supplemental Indenture.

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

                  This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.

<PAGE>   36

                                                                              35

                  IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.

                                      KERR-McGEE CORPORATION

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

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

                                      CITIBANK, N.A.,
                                      as Trustee

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

<PAGE>   37
STATE OF OKLAHOMA                     )
                                      )   SS.:
COUNTY OF OKLAHOMA                    )

                  On the ___ day of __________, 2000, before me personally came
____________, to me known, who, being by me duly sworn, did depose and say that
she/he is the _________ of KERR-McGEE CORPORATION, one of the corporations
described in and which executed the foregoing instrument; that she/he knows the
seal of said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation, and that she/he signed her/his name thereto by like authority.

                                      -----------------------
                                      Notary Public

SEAL
<PAGE>   38
                                                                       EXHIBIT A

                  THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITARY OR A NOMINEE OF THE DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN
WHOLE OR IN PART FOR THE INDIVIDUAL DEBT SECURITIES REPRESENTED HEREBY, THIS
GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

                  UNLESS THIS SECURITY 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 SECURITY 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. OR SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

<PAGE>   39

                             KERR-McGEE CORPORATION

                ____% Convertible Subordinated Debenture due 2010

CUSIP No. 492386 AP 2                                         $
                                                               ----------------

                  KERR-McGEE CORPORATION, a Delaware corporation (the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ___________________,
or its registered assigns, the principal sum of ________________ U.S. Dollars
[or such greater or lesser amount as is indicated on the Schedule of Exchanges
attached hereto](1) ($_____________) on , 2010.

                  Interest Payment Dates:    and      , commencing        , 2000

                  Regular Record Dates:      and

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

-------------------
(1) This phrase should be included only if the Debenture is issued in global
    form.
<PAGE>   40

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

                                      KERR-McGEE CORPORATION

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

                                      Attest:

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

Trustee's Certificate of Authentication

This is one of the              % Convertible Subordinated Debentures due 2010
described in the within-named Indenture.

CITIBANK, N.A.,
as Trustee

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

Dated:                            , 2000

<PAGE>   41
                             [REVERSE OF DEBENTURE]

                             KERR-McGEE CORPORATION

                  % Convertible Subordinated Debenture due 2010

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

1.       Principal and Interest.

                  Kerr-McGee Corporation, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Debenture
at a rate of ___% per annum from _______, 2000 or the most recent Interest
Payment Date to which interest has been duly paid or provided for until
repayment at Stated Maturity, redemption or repurchase. The Company will pay
interest on this Debenture semiannually in arrears on              and
of each year, commencing          , 2000.

                  The Company shall pay interest (including post-petition
interest in any proceeding under Title 11, U.S.C., or any similar federal or
state law for the relief of debts) on overdue principal on this Debenture and
premium, if any, from time to time on demand at the rate per annum specified in
the next preceding paragraph, and it shall pay interest (including post-petition
interest in any proceeding under Title 11, U.S.C., or any similar federal or
state law for the relief of debts) on overdue installments of interest hereon
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful.

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

                  Except as provided in this paragraph, if a Holder converts its
Debentures into Common Stock on any day other than an Interest Payment Date,
such Holder shall receive no interest that has accrued on such Debentures. A
Holder who converts a Debenture after a Regular Record Date for an interest
payment but prior to the corresponding Interest Payment Date, shall be entitled
to receive on the Interest Payment Date interest accrued and paid on such
Debentures, notwithstanding the conversion of such Debentures prior to such
Interest Payment Date. However, at the time such Holder surrenders such
Debentures for conversion, such Holder must pay to the Company an amount equal
to the interest that has accrued and will be paid on the Interest Payment Date
on the Debentures being converted. However, the preceding sentence shall not
apply to Debentures that are converted after being called by the Company for
redemption. In addition, if the Redemption Date is prior to a Regular Record
Date for an Interest Payment Date, and prior to such Redemption Date such Holder
chooses to convert such Holder's Debentures, such Holder will receive on the
date that has been fixed for redemption the amount of interest such Holder would
have received if such Holder had not converted its Debentures.

<PAGE>   42
                                                                               2

2.       Method of Payment.

                  Interest on any Debenture which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Debenture (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.

                  Principal of, and premium, if any, and interest on, Global
Securities will be payable to the U.S. Depositary in immediately available
funds.

                  Principal and premium, if any, on definitive securities will
be payable at the office or agency of the Company maintained for such purpose,
initially the Corporate Trust Office of the Trustee. Interest on definitive
securities will be payable by (i) U.S. Dollar check drawn on a bank in The City
of New York mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register, or (ii) upon application to the Security
Registrar by a Holder of an aggregate principal amount in excess of $5,000,000,
wire transfer in immediately available funds.

3.       Paying Agent, Conversion Agent and Security Registrar.

                  Initially, Citibank, N.A., the Trustee under the Indenture,
will act as Paying Agent, Conversion Agent and Security Registrar. The Company
may change the Paying Agent, Conversion Agent or Security Registrar without
notice to any Holder.

4.       Indenture.

                  The Company issued this Debenture under an Indenture, dated as
of August 1, 1982, as amended (the "Indenture"), between the Company and
Citibank, N.A., as trustee (the "Trustee"). The terms of the Debenture include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act. This Debenture is subject to all such terms, and
Holders are referred to the Indenture and the Trust Indenture Act for a
statement of all such terms. To the extent permitted by applicable law, in the
event of any inconsistency between the terms of this Debenture and the terms of
the Indenture, the terms of the Indenture shall control.

5.       Optional Redemption.

                  At any time on or after ________, 2005, the Company may redeem
some or all of the Debentures on at least 30 but not more than 60 days' notice,
at the following redemption prices (expressed in percentages of the principal
amount).

<PAGE>   43

                                                                               3

<TABLE>
<CAPTION>
         During The Twelve Months Commencing                    Redemption Price
         -----------------------------------                    ----------------

         <S>                                                    <C>
         _________, 2005.....................................          %

         _________, 2006.....................................          %

         _________. 2007.....................................          %

         _________, 2008.....................................          %

         _________, 2009.....................................       100%
</TABLE>

                  In addition, the Company shall pay interest on the Debentures
being redeemed.

                  Debentures in original denominations larger than $1,000 may be
redeemed in part. If any Debenture selected for partial redemption is converted
in part before termination of the conversion right with respect to the portion
of the Debenture so selected, the converted portion of such Debenture shall be
deemed to be the portion selected for redemption (provided, however, that the
Holder of such Debenture so converted and deemed redeemed shall not be entitled
to any additional interest payment as a result of such deemed redemption than
such Holder would have otherwise been entitled to receive upon conversion of
such Debenture). Debentures which have been converted during a selection of
Debentures to be redeemed may be treated by the Trustee as Outstanding for the
purpose of such selection.

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

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

6.       Repurchase Right Upon a Change in Control.

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

                  Subject to the conditions provided in the Indenture, the
Company may elect to pay the Repurchase Price by delivering a number of shares
of Common Stock equal to (i) the Repurchase Price divided by (ii) 95% of the
average of the Closing Prices per share for the five consecutive Trading Days
immediately preceding and including the third Trading Day prior to the
Repurchase Date.

<PAGE>   44

                                                                               4

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

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

7.       Conversion Rights.

                  Subject to and upon compliance with the provisions of the
Indenture, each Holder of Debentures is entitled, at such Holder's option, at
any time before the close of business on         , 2010, to convert the Holder's
Debentures (or any portion of the principal amount hereof which is $1,000 or an
integral multiple thereof), at the principal amount thereof or of such portion,
into duly authorized, fully paid and nonassessable shares of Common Stock of the
Company at the Conversion Price in effect at the time of conversion.

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

                  The Conversion Price shall be initially equal to $       per
share of Common Stock. The Conversion Price shall be adjusted under certain
circumstances as provided in the Indenture.

                  To exercise the conversion right, the Holder must surrender
the Debenture (or portion thereof) duly endorsed or assigned to the Company or
in blank, at the office of the Conversion Agent, accompanied by a duly signed
conversion notice to the Company.

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

8.       Subordination.

                  The Indebtedness evidenced by this Debenture is, to the extent
and in the manner provided in the Indenture, subordinated and subject in right
of payment to the prior payment in full of all

<PAGE>   45

                                                                               5

amounts then due on all Senior Debt of the Company, and this Debenture is issued
subject to such provisions of the Indenture with respect thereto. Each Holder of
this Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on such Holder's behalf to
take such action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee such Holder's
attorney-in-fact for any and all such purposes.

9.       Events of Default and Remedies.

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

10.      Amendments and Waivers.

                  The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights of the
Holders of the Debentures at any time by the Company and the Trustee with the
consent of the Holders of 66 2/3% in aggregate principal amount of the
Outstanding Debentures. The Indenture also contains provisions permitting the
Holders of a majority in aggregate principal amount of the Debentures at the
time Outstanding, on behalf of the Holders of all the Debentures, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Debenture shall be conclusive and binding upon such
Holder and upon all future Holders of this Debenture and of any Debenture issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Debenture.

11.      Denominations; Transfer; Exchange.

                  The Debentures are issuable in registered form, without
coupons, in denominations of $1,000 and integral multiples of $1,000 in excess
thereof. A Holder may register the transfer or exchange of Debentures in
accordance with the Indenture. The Security Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture.

                  In the event of a redemption in part, the Company will not be
required (a) to register the transfer of, or exchange, Debentures for a period
of 15 days immediately preceding any selection of Debentures for such
redemption, or (b) to register the transfer of, or exchange, any such
Debentures, or portion thereof, called for redemption.

<PAGE>   46

                                                                               6

                  In the event of redemption, conversion or repurchase of the
Debentures in part only, a new Debenture or Debentures for the unredeemed,
unconverted or unrepurchased portion thereof will be issued in the name of the
Holder hereof.

12.      Persons Deemed Owners.

                  The registered Holder of this Debenture shall be treated as
its owner for all purposes.

13.      Abbreviations.

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

14.      CUSIP Numbers.

                  Pursuant to a recommendation promulgated by the Committee on
Uniform Debenture Identification Procedures, the Company has caused a CUSIP
number to be printed on this Debenture and the Trustee may use CUSIP numbers in
notices of redemption or repurchase as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
this Debenture or as contained in any notice of redemption or repurchase and
reliance may be placed only on the other identification numbers placed thereon.

15.      Governing Law.

                  The Indenture and this Debenture shall be governed by, and
construed in accordance with, the law of the State of New York.

<PAGE>   47

                                 ASSIGNMENT FORM

         To assign this Debenture, fill in the form below and have your
signature guaranteed: (I) or (we) assign and transfer this Debenture to:

--------------------------------------------------------------------------------
                  (Insert assignee's soc. sec. or tax I.D. no.)

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

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

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

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

and irrevocably appoint ________________________________________________________
to transfer this Debenture on the books of the Company. The agent may
substitute another to act for him.

Dated:                            Your Name:
       ---------------------                  ---------------------------------
                                  (Print your name exactly as it appears on the
                                   face of this Debenture)

                                  Your Signature:
                                                  -----------------------------
                                  (Sign exactly as your name appears on the
                                   face of this Debenture)

                                  Signature Guarantee*:
                                                        -----------------------

         * Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

<PAGE>   48

                               CONVERSION NOTICE

TO:      KERR-McGEE CORPORATION
         Kerr-McGee Center
         Oklahoma City, Oklahoma  73125

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

Dated:                            Your Name:
       ---------------------                  ---------------------------------
                                  (Print your name exactly as it appears on the
                                   face of this Debenture)

                                  Your Signature:
                                                  -----------------------------
                                  (Sign exactly as your name appears on the
                                   face of this Debenture)

                                  Signature Guarantee*:
                                                        -----------------------

                                  Social Security or other Taxpayer
                                  Identification Number:
                                                         ----------------------

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

         * Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

<PAGE>   49
                                                                               2

Fill in for registration of shares (if to be issued) and Debentures (if to be
delivered) other than to and in the name of the registered holder:

                  --------------------------------------------
                  (Name)

                  --------------------------------------------
                  (Street Address)

                  --------------------------------------------
                  (City, State and Zip Code)

                  --------------------------------------------
                  (Taxpayer Identification Number)
<PAGE>   50

                     NOTICE OF EXERCISE OF REPURCHASE RIGHT

TO:      KERR-McGEE CORPORATION
         Kerr-McGee Center
         Oklahoma City, Oklahoma  73125

                  The undersigned registered owner of this Debenture hereby
irrevocably acknowledges receipt of a notice from Kerr-McGee Corporation (the
"Company") as to the occurrence of a Change in Control with respect to the
Company and requests and instructs the Company to repay the entire principal
amount of this Debenture, or the portion thereof (which is $1,000 principal
amount or an integral multiple thereof) below designated, in accordance with the
terms of the Indenture referred to in this Debenture, together with interest
accrued and unpaid to, but excluding, such date, to the registered holder
hereof, in cash or, at the Company's option, in Common Stock, unless a different
name has been indicated below. If shares or any portion of this Debenture not
repurchased are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.

Dated:                            Your Name:
       ---------------------                  ---------------------------------
                                  (Print your name exactly as it appears on the
                                   face of this Debenture)

                                  Your Signature:
                                                  -----------------------------
                                  (Sign exactly as your name appears on the
                                   face of this Debenture)

                                  Signature Guarantee*:
                                                        -----------------------

                                  Social Security or other Taxpayer
                                  Identification Number:
                                                         ----------------------

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

         * Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).

<PAGE>   51

Fill in for registration of shares (if to be issued) and Debentures (if to be
delivered) other than to and in the name of the registered holder:

                  --------------------------------------------
                  (Name)

                  --------------------------------------------
                  (Street Address)

                  --------------------------------------------
                  (City, State and Zip Code)

<PAGE>   52

                            SCHEDULE OF EXCHANGES(2)

         The following exchanges, redemptions, repurchases or conversions of a
part of this Global Security for Definitive Debentures have been made:

<TABLE>
<CAPTION>
                                                                    Principal Amount of this      Signature of
                      Amount of decrease in  Amount of increase in       Global Security           authorized
                       Principal Amount of    Principal Amount of    following such decrease      signatory of
Date of Exchange      this Global Security    this Global Security        (or increase)              Trustee
--------------------  --------------------- ----------------------- -------------------------     -------------
<S>                   <C>                  <C>                      <C>                          <C>

</TABLE>

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

         (2) This schedule should be included only if the Debenture is issued in
global form.<PAGE>

                               PURCHASE AGREEMENT

         PURCHASE AGREEMENT, dated as of December 15, 1999 (this "Agreement"),
by and between Cendant Corporation, a Delaware corporation ("Cendant"), and
Liberty Media Corporation, a Delaware corporation ("Liberty").

         WHEREAS, Liberty desires to purchase from Cendant, and Cendant desires
to sell to Liberty, 18,000,000 shares (the "Shares") of the common stock, par
value $.01 per share, of Cendant ( the "Common Stock"), as well as
non-transferable warrants (in substantially the form of Exhibit A hereto) to
purchase up to 28,956,000 shares of Common Stock for an exercise price of $23.00
per share (subject to the anti-dilution adjustments set forth in the Warrants
(as hereinafter defined)) at any time during the period beginning on the Closing
Date and ending on the second anniversary thereof (the "Warrants").

         NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties hereby agree
as follows:

                                    ARTICLE I

                                  THE PURCHASE

         Section 1.1 Purchase and Sale. Upon the terms and subject to the
conditions of this Agreement, at the Closing (as hereinafter defined), Cendant
will issue to Liberty, and Liberty will purchase from Cendant (x) the Shares, in
consideration for which, at the Closing, Liberty will pay to Cendant an amount
equal to three hundred million dollars ($300,000,000) in cash (the "Shares
Purchase Price"), and (y) the Warrant, in consideration for which, at the
Closing, Liberty will pay to Cendant an amount equal to one hundred million
dollars ($100,000,000) in cash (the "Warrant Purchase Price" and, together with
the Shares Purchase Price, the "Purchase Price"). Upon the Closing, Liberty
shall pay the Purchase Price to Cendant by wire transfer of immediately
available funds to an account or accounts designated by Cendant in writing for
such purpose prior to the Closing.

         Section 1.2 Time and Place of Closing. Upon the terms and subject to
the conditions of this Agreement, the closing of the transactions contemplated
by

<PAGE>

this Agreement (the "Closing") will take place at the offices of Skadden, Arps,
Slate, Meagher & Flom LLP, 919 Third Avenue, New York, New York 10022, at 9:00
a.m. (New York City time) on the third business day following the satisfaction
or waiver of the conditions set forth in Article V, unless another time or date
is agreed to by the parties hereto (the "Closing Date").

         Section 1.3 Deliveries by Cendant. Subject to the terms and conditions
hereof, at the Closing, Cendant will deliver the following to Liberty:

                  (a) A certificate or certificates, duly registered on the
stock books of Cendant in the name of Liberty, representing the Shares;

                  (b) The Warrants; and

                  (c) The officer's certificate provided for in Section 5.3(c).

         Section 1.4 Deliveries by Liberty. Subject to the terms and conditions
hereof, at the Closing, Liberty will deliver the following to Cendant:

                  (a) The Purchase Price, in immediately available funds, in the
manner set forth in Section 1.1 hereof; and

                  (b) The officer's certificate provided for in Section 5.2(c).

                                   ARTICLE II

                    REPRESENTATIONS AND WARRANTIES OF CENDANT

         Section 2.1 Organization. Cendant is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and authority to carry on its business
substantially as it is now being conducted.

         Section 2.2 Authority. Cendant has the corporate power and authority to
execute and deliver this Agreement and the Warrants and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Warrants and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized by all requisite
corporate

                                       2

<PAGE>

action on the part of Cendant. Each of this Agreement has been (and upon the
Closing the Warrants will be) validly executed and delivered by Cendant and
(assuming this Agreement has been duly authorized, executed and delivered by
Liberty) constitutes (or in the case of the Warrants, will constitute) a valid
and binding agreement of Cendant, enforceable against Cendant in accordance with
its terms, except that (a) such enforcement may be subject to any bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other laws, now
or hereafter in effect, relating to or limiting creditors' rights generally and
(b) enforcement of this Agreement and the Warrants, including, among other
things, the remedy of specific performance and injunctive and other forms of
equitable relief, may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.

         Section 2.3 The Shares. The Shares have been duly and validly
authorized and, when a certificate evidencing the Shares is issued and delivered
against payment of the Shares Purchase Price in accordance with the terms of
this Agreement, the Shares shall be duly and validly issued, fully paid and
non-assessable. Delivery of the certificate(s) for the Shares will pass valid
title to the Shares, free and clear of any claim, lien, charge, security
interest, encumbrance, restriction on transfer or voting or other defect in
title whatsoever ("Liens"), other than Liens resulting from any action(s)
relating to Liberty. As of the Closing, the sale of the Shares to Liberty will
be registered under an effective shelf registration statement filed by Cendant
with the Securities and Exchange Commission (the "SEC").

         Section 2.4 The Warrant Shares. The shares of Common Stock issuable
upon exercise of the Warrants (the "Warrant Shares") (a) are duly and validly
authorized, (b) at the Closing Date, will be reserved for issuance upon exercise
of the Warrants in accordance with their terms, including by reason of the
anti-dilution provisions thereof, (c) assuming issuance in accordance with the
terms of the Warrants, will at the time of exercise of the Warrants be duly and
validly issued, fully paid and nonassessable, and (d) at the time of exercise of
the Warrants, will be registered under an effective registration statement filed
by Cendant with the SEC. Delivery of the certificate(s) for the Warrant Shares
upon exercise of the Warrants will pass valid title to the Warrant Shares, free
and clear of all Liens whatsoever, other than Liens resulting from any action(s)
relating to Liberty. At the time of the Closing, the Warrant Shares will be
registered under an effective shelf registration statement filed by Cendant with
the SEC.

                                       3

<PAGE>

         Section 2.5 Capitalization. The authorized capital of Cendant consists
of 2,000,000,000 shares of Common Stock and 10,000,000 shares of preferred
stock, par value $.01 per share (the "Preferred Stock"). As of October 26, 1999,
there were 711,025,187 shares of Common Stock issued and outstanding and no
shares of Preferred Stock issued and outstanding.

         Section 2.6 Consents and Approvals; No Violations. Neither the
execution and delivery of this Agreement or the Warrants by Cendant, nor the
consummation by Cendant of the transactions contemplated hereby or thereby will
(a) conflict with or result in any breach of any provision of the amended and
restated certificate of incorporation (the "Cendant Charter") or amended and
restated by-laws of Cendant, (b) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, or
require any consent under, any indenture, license, contract, agreement or other
instrument or obligation to which the Cendant is a party, (c) violate any order,
writ, injunction, decree or award rendered by any Governmental Entity (as
hereinafter defined) or any statute, rule or regulation (collectively, "Laws"
and, individually, a "Law") applicable to Cendant, or (d) require any filing
with, or the obtaining of any permit, authorization, consent or approval of, any
governmental or regulatory authority or court, domestic or foreign (a
"Governmental Entity"), except in the case of clauses (c) and (d) of this
Section 2.6, for the applicable requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act").

         Section 2.7 SEC Reports. Since January 1, 1999, Cendant has filed all
required reports, schedules, forms, statements and other documents, including
exhibits and all other information incorporated therein (the "SEC Documents"),
with the SEC. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, as the case may be,
and the rules and regulations of the SEC promulgated thereunder applicable to
such SEC Documents, and none of the SEC Documents when filed (as amended and
restated and as supplemented by subsequently filed SEC Documents) contained any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

         Section 2.8 Shareholder Vote. The delivery and sale of the Shares and
the Warrants, and the exercise of the Warrants and the delivery of the Warrant

                                       4

<PAGE>

Shares in accordance with the terms thereof, will not require any vote of
Cendant's shareholders pursuant to the terms of the Cendant Charter or the rules
of the New York Stock Exchange (the "NYSE").

         Section 2.9 Approval of Disinterested Directors. Notwithstanding the
foregoing representations, on the date hereof Cendant has not obtained the
approval of a majority of its disinterested directors for the issuance of the
Warrant Shares pursuant to the Warrants, which approval shall be obtained prior
to the Closing.

                                   ARTICLE III

                    REPRESENTATIONS AND WARRANTIES OF LIBERTY

         Section 3.1 Organization. Liberty is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and authority to carry on its business
substantially as it is now being conducted.

         Section 3.2 Authority Relative to this Agreement. Liberty has the
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all requisite corporate action on the part
of Liberty. This Agreement has been duly and validly executed and delivered by
Liberty and (assuming this Agreement has been duly authorized, executed and
delivered by Cendant) constitutes a valid and binding agreement of Liberty,
enforceable against Liberty in accordance with its terms, except that (a) such
enforcement may be subject to any bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other laws, now or hereafter in effect,
relating to or limiting creditors' rights generally and (b) enforcement of this
Agreement, including, among other things, the remedy of specific performance and
injunctive and other forms of equitable relief, may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.

         Section 3.3 Consents and Approvals; No Violations. Neither the
execution and delivery of this Agreement by Liberty, nor the consummation by
Liberty of the transactions contemplated hereby will (a) conflict with or result
in any breach of any provision of the certificate of incorporation or by-laws
(or similar

                                       5

<PAGE>

organizational documents) of Liberty, (b) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, or
require any consent under, any indenture, license, contract, agreement or other
instrument or obligation to which the Liberty is a party, (c) violate any order,
writ, injunction, decree or award rendered by any Governmental Entity or Law
applicable to Liberty, or (d) require any filing with, or the obtaining of any
permit, authorization, consent or approval of, any Governmental Entity, except
in the case of clauses (c) and (d) of this Section 3.3, for the applicable
requirements of the HSR Act.

         Section 3.4 Liberty Acknowledgment. Liberty has conducted its own
independent investigation, review and analysis of Cendant. In entering into this
Agreement, Liberty acknowledges that it has relied solely upon the
aforementioned investigation, review and analysis, and, other than with respect
to the representations and warranties made in Article II of this Agreement,
Liberty acknowledges that none of Cendant, or any of its directors, officers,
employees, affiliates, controlling persons, agents, advisors or representatives
makes or has made any representation or warranty, either express or implied.

                                   ARTICLE IV

                                    COVENANTS

         Section 4.1 Consents; Cooperation. Each of Cendant and Liberty shall
cooperate, and use its best efforts, to prepare and file all necessary materials
with the appropriate Governmental Entities pursuant to the HSR Act within five
business days of the date of this Agreement. Each party covenants to (x) furnish
the other party with such necessary or appropriate information and reasonable
assistance as such other party may reasonably request in connection with its
preparation of necessary filings and submission pursuant to the HSR Act and (y)
use its commercially reasonable efforts to comply as promptly as possible with
requests for additional information issued by applicable Governmental Entities
pursuant to the HSR Act.

         Section 4.2 Future Development Efforts. (a) From and after the Closing,
each of Cendant and Liberty agree to work together to develop Internet and
related opportunities associated with Cendant's travel, mortgage, real estate
and membership businesses. These efforts may include the creation of joint
ventures among Liberty, Cendant and others, as well as equity investments by
either Liberty

                                       6

<PAGE>

and Cendant in businesses owned by the other, subject, in all cases, to the
negotiation of mutually agreeable terms between the parties.

                  (b) In addition, Cendant agrees to assist Liberty in creating
a new venture that will seek to provide broadband video, voice and data services
and content to hotels and their guests on a worldwide basis, in consideration
for which Cendant will receive an equity participation interest in such venture,
subject to the negotiation of mutually agreeable terms between the parties.

                  (c) Cendant and Liberty covenant to pursue opportunities
within the cable industry to leverage Cendant's direct marketing resources and
capabilities, subject to the negotiation of mutually agreeable terms between the
parties with respect to any specific transaction.

                  (d) The provisions of this Section 4.2 shall not prohibit nor
in any way interfere with the right of Liberty or Cendant, or any of their
respective affiliates, to engage in any business or pursue any business
opportunity (including entering into any agreement in connection therewith),
anywhere in the world, including those that may be in competition with, or
complimentary to, any business engaged in by the other or any of its affiliates.

         Section 4.3 Public Announcements. Prior to the Closing, except as
otherwise agreed to by the parties, the parties shall not issue any report,
statement or press release or otherwise make any public statements with respect
to this Agreement and the transactions contemplated hereby, except as in the
reasonable judgment of a party (or, in the case of Liberty, AT&T Corporation)
may be required by law or in connection with its obligations as a publicly-held,
exchange-listed company, in which case the parties will use their reasonable
best efforts to reach mutual agreement as to the language of any such report,
statement or press release. Upon execution hereof and upon the Closing, Cendant
and Liberty will consult with each other with respect to the issuance of a joint
report, statement or press release with respect to this Agreement and the
transactions contemplated hereby.

                                    ARTICLE V

                           CONDITIONS AND TERMINATION

         Section 5.1 Conditions to Each Party's Obligations to Consummate the
Transactions Under this Agreement. The respective obligations of each party to

                                       7

<PAGE>

consummate the transactions contemplated hereby is subject to the satisfaction
at or prior to the Closing of the following conditions:

                  (a) Any waiting periods applicable to the transactions
contemplated by this Agreement under the HSR Act shall have expired or been
terminated; and

                  (b) Neither Cendant nor Liberty shall be subject to any order,
decree or injunction of a court of competent jurisdiction, and no statute, rule
or regulation shall have been enacted, promulgated or issued, which enjoins or
prohibits the consummation of any of the transactions contemplated by this
Agreement or the Warrants.

         Section 5.2 Conditions to Cendant's Obligations to Consummate the
Transactions Under this Agreement. The obligation of Cendant to consummate the
transactions contemplated hereby are further subject to the satisfaction or
waiver of the following conditions:

                  (a) The representations and warranties of Liberty contained in
this Agreement shall be true and correct at and as of the Closing Date in all
material respects as though such representations and warranties were made at and
as of such date (except to the extent expressly made as of an earlier date, in
which case, as of such date);

                  (b) Liberty shall have performed and complied in all material
respects with all agreements and obligations required by this Agreement to be
performed or complied with by it on or prior to the Closing; and

                  (c) Liberty shall have delivered to Cendant an officer's
certificate to the effect that each of the conditions specified above in
Sections 5.2(a) and (b) is satisfied.

         Section 5.3 Conditions to Liberty's Obligations to Consummate the
Transactions Under this Agreement. The obligation of Liberty to consummate the
transactions contemplated hereby are further subject to satisfaction or waiver
of the following conditions:

                  (a) The representations and warranties of Cendant contained in
this Agreement shall be true and correct at and as of the Closing Date in all

                                       8

<PAGE>

material respects as though such representations and warranties were made at and
as of such date (except to the extent expressly made as of an earlier date, in
which case, as of such date);

                  (b) Cendant shall have performed and complied in all
material respects with all agreements and obligations required by this Agreement
to be performed or complied with by it on or prior to the Closing;

                  (c) Cendant shall have delivered to Liberty an officer's
certificate to the effect that each of the conditions specified above in
Sections 5.3(a) and (b) is satisfied;

                  (d) The Shares and the Warrant Shares shall have been approved
for listing on the NYSE, subject only to official notice of issuance;

                  (e) The sale of the Shares to Liberty shall have been
registered under an effective shelf registration statement filed by Cendant with
the SEC; and

                  (f) Cendant shall have obtained the approval of a majority of
its disinterested directors for the issuance of the Warrant Shares pursuant to
the Warrant.

                                   ARTICLE VI

                                   TERMINATION

         Section 6.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing Date:

                  (a) by mutual agreement of the parties; or

                  (b) by Cendant or Liberty at any time after 60 days from the
date of this Agreement if the Closing shall not have occurred by such date;
provided, however, that the right to terminate this Agreement under this Section
6.1(b) shall not be available to a party, if it has breached any of its
representations, warranties or covenants hereunder in any material respect and
such breach has been the cause of or resulted in the failure of the Closing to
occur on or before such date.

                                       9

<PAGE>

         Section 6.2 Procedure for and Effect of Termination. In the event of
termination of this Agreement and the abandonment of the transactions
contemplated hereby by the parties pursuant to Section 6.1 hereof, written
notice thereof shall be given by a party so terminating to the other party and
this Agreement shall forthwith terminate and shall become null and void and of
no further effect, and the transactions contemplated hereby shall be abandoned
without further action by Cendant or Liberty. If this Agreement is terminated
pursuant to Section 6.1 hereof:

                  (a) all filings, applications and other submissions made
pursuant hereto shall, to the extent practicable, be withdrawn from the
Governmental Entity to which made; and

                  (b) there shall be no liability or obligation hereunder on the
part of Cendant or Liberty or any of their respective directors, officers,
employees, affiliates, controlling persons, agents or representatives, except
that Cendant or Liberty, as the case may be, may have liability to the other
party if the basis of termination is a breach by Cendant or Liberty, as the case
may be, of one or more of the provisions of this Agreement, and except that the
obligations provided for in this Section 6.2 shall survive any such termination.

                                   ARTICLE VII

                                  MISCELLANEOUS

         Section 7.1 Entire Agreement. This Agreement constitutes the entire
agreement of the parties relating to the subject matter hereof and supersedes
other prior agreements and understandings between the parties both oral and
written regarding such subject matter.

         Section 7.2 Severability. Any provision of this Agreement that is held
by a court of competent jurisdiction to violate applicable law shall be limited
or nullified only to the extent necessary to bring the Agreement within the
requirements of such law.

         Section 7.3 Notices. Any notice required or permitted by this Agreement
must be in writing and must be sent by facsimile, by nationally recognized
commercial overnight courier, or mailed by United States registered or certified
mail, addressed to the other party at the address below or to such other

                                       10

<PAGE>

address for notice (or facsimile number, in the case of a notice by facsimile)
as a party gives the other party written notice of in accordance with this
Section 8.3. Any such notice will be effective as of the date of receipt:

                  (a)  if to Cendant, to

                               Cendant Corporation
                               9 West 57th Street
                               37th Floor
                               New York, New York 10019
                               Fax: (212) 413-1922/23
                               Attention: General Counsel

                               with a copy to:

                               Skadden, Arps, Slate, Meagher & Flom LLP
                               919 Third Avenue
                               New York, New York 10022
                               Fax:  (212) 735-2000
                               Attention: David Fox, Esq.

                  (b)  if to Liberty, to

                               Liberty Media Corporation
                               9197 South Peoria Street
                               Englewood, Colorado
                               Fax: (720) 875-5882
                               Attention: General Counsel

         Section 7.4 Governing Law; Jurisdiction. This Agreement shall be
governed by, enforced under and construed in accordance with the laws of the
State of New York, without giving effect to any choice or conflict of law
provision or rule thereof. Each of the parties hereto hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of New York and of the United States of America in each case
located in the County of New York for any litigation arising out of or relating
to this Agreement and the transactions contemplated hereby (and agrees not to
commence any litigation relating thereto except in such courts) and further
agrees that service of any process, summons, notice or document by U.S.
registered mail to its respective address set forth in Section 7.3 (or

                                       11

<PAGE>

to such other address for notice that such party has given the other party
written notice of in accordance with Section 7.3) shall be effective service of
process for any litigation brought against it in any such court. Each of the
parties hereto hereby irrevocably and unconditionally waives any objection to
the laying of venue of any litigation arising out of this Agreement or the
transactions contemplated hereby in the courts of the State of New York or of
the United States of America in each case located in the County of New York and
hereby further irrevocably and unconditionally waives and agrees not to plead
or claim in any such court that any such litigation brought in any such court
has been brought in an inconvenient forum.

         Section 7.5 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and shall in no way be construed to
define, limit, describe, explain, modify, amplify, or add to the interpretation,
construction or meaning of any provision of, or scope or intent of, this
Agreement nor in any way affect this Agreement.

         Section 7.6 Counterparts. This Agreement may be signed in counterparts
and all signed copies of this Agreement will together constitute one original of
this Agreement. This Agreement shall become effective when each party hereto
shall have received counterparts thereof signed by all the other parties hereto.

         Section 7.7 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other party, except that Liberty may cause the Shares and/or the
Warrants and Warrant Shares to be sold to, and registered in the name of, a
wholly owned direct or indirect subsidiary of Liberty. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.

         Section 7.8 Definition of "Shares." As used in this Agreement, the term
"Shares" includes (a) all dividends (other than ordinary cash dividends with a
record date prior to the Closing) and distributions declared by Cendant on the
Shares subsequent to the date hereof and prior to the Closing and (b) shall be
appropriately adjusted to give effect to any subdivision, combination or
reclassification of the Shares effected prior to the Closing.

                                       12

<PAGE>

         IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be duly signed as of the date first above written.

                                   CENDANT CORPORATION

                                   By: /s/ David M. Johnson
                                       ---------------------------------------
                                       Name: David M. Johnson
                                       Title: Senior Executive Vice President
                                              and Chief Financial Officer

                                   LIBERTY MEDIA CORPORATION

                                   By: /s/ Robert R. Bennett
                                       ---------------------------------------
                                       Name:  Robert R. Bennett
                                       Title: President

<PAGE>

                                                                       EXHIBIT A

                               CENDANT CORPORATION

             (Incorporated under the laws of the State of Delaware)

       VOID AFTER 5:00 P.M., NEW YORK CITY TIME, ON ________ __, 2002 (1)

                 Warrant to Purchase 28,956,000
                 Shares of Common Stock

               WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK

         FOR VALUE RECEIVED, CENDANT CORPORATION (the "Company"), a Delaware
corporation, hereby certifies that Liberty Media Corporation ("Liberty") or its
permitted transferees (the "Holder") is entitled, subject to the provisions of
this warrant (the "Warrant"), to purchase from the Company, at any time, or from
time to time during the period commencing at 9:00 a.m. New York City local time,
on _______ __, 2000 (the "Closing Date") (2), and expiring, unless earlier
terminated as hereinafter provided, at 5:00 p.m. New York City local time on
_______ __, 2002 (the "Expiration Date"), up to 28,956,000 fully paid and
nonassessable shares of Common Stock (as hereinafter defined) at a price of
$23.00 per share (such exercise price per share, as adjusted proportionately in
the case of an adjustment described in Section 7 hereto, being hereinafter
referred to as the "Exercise Price").

         The term "Common Stock" means the shares of Common Stock, $.01 par
value, of the Company as constituted on December 15, 1999 (the "Base Date"),
together with any other equity securities that may be issued by the Company in
addition thereto or in substitution therefor. The aggregate number of shares of
Common Stock issuable upon the exercise of this Warrant shall be adjusted from
time to time as hereinafter set forth. The shares of Common Stock deliverable
upon such exercise, and as adjusted from time to time, are hereinafter sometimes
referred to as "Warrant Stock".

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

1   Date will be the second anniversary of the Closing Date.

2   This will be the Closing Date.

<PAGE>

         Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant is lost, stolen, destroyed
or mutilated, which shall be at any time enforceable by anyone.

         The Holder agrees with the Company that this Warrant is issued, and all
the rights hereunder shall be held, subject to all of the conditions,
limitations and provisions set forth herein.

         1. Exercise of Warrant. This Warrant may be exercised in whole or in
part at any time, or from time to time, during the period commencing at 9:00
a.m., New York City local time, on the Closing Date, and expiring at 5:00 p.m.,
New York City local time, on _______ __, 2002 (subject to Section 7.2 hereof)
or, if such day is a day on which banking institutions in the City of New York
are authorized by law to close, then on the next succeeding day that shall not
be such a day. This Warrant may be exercised by presentation and surrender
hereof to the Company at its principal office, with the Warrant Exercise Form
attached hereto duly executed and accompanied by payment (either in cash or by
certified or official bank check, payable to the order of the Company) of the
Exercise Price for the number of shares specified in such Form and instruments
of transfer, if appropriate, duly executed by the Holder or his or her duly
authorized attorney. If this Warrant should be exercised in part only, the
Company shall, upon surrender of this Warrant for cancellation, execute and
deliver a new Warrant evidencing the rights of the Holder thereof to purchase
the balance of the shares purchasable hereunder. Upon receipt by the Company of
this Warrant, together with the Exercise Price, at its office, or by the stock
transfer agent of the Company at its office, in proper form for exercise, the
Holder shall be deemed to be the holder of record of the shares of Common Stock
issuable upon such exercise, notwithstanding that the stock transfer books of
the Company shall then be closed or that certificates representing such shares
of Common Stock shall not then be actually delivered to the Holder. The Company
shall pay any and all documentary stamp or similar issue or transfer taxes
payable in respect of the issue or delivery of shares of Common Stock on
exercise of this Warrant.

         2. Reservation of Shares. The Company will at all times reserve for
issuance and delivery upon exercise of this Warrant all shares of Common Stock
or other shares of capital stock of the Company (and other securities and
property) from time to time receivable upon exercise of this Warrant. All such
shares (and other

                                        2

<PAGE>

securities and property) shall be duly authorized and, when issued upon such
exercise shall be validly issued, fully paid and nonassessable and free of all
preemptive rights.

         3. Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. In lieu of
fractional shares, there shall be paid to the Holder of this Warrant at the
time the Warrant is surrendered pursuant to Section 1 an amount in cash equal to
the same fraction of the Current Market Price of a share of Common Stock on the
trading day immediately prior to the date of such exercise. "Current Market
Price" means the closing sale price of the Common Stock (regular way) on the New
York Stock Exchange.

         4. Non-Transferability of Warrant. This Warrant cannot be sold,
transferred or assigned, except to a direct or indirect wholly-owned subsidiary
of Liberty; provided, however, that the Holder must at all times be either
Liberty or a direct or indirect wholly-owned subsidiary of Liberty.

         5. Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder of the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed in this
Warrant.

         6. Redemption. This Warrant is not redeemable by the Company.

         7. Anti-Dilution Provisions.

                  7.1 Adjustment for Dividends in Other Securities, Property,
Etc.; Reclassification, Etc. (a) In case at any time or from time to time after
the Base Date the holders of Common Stock (or any other securities at the time
receivable upon the exercise of this Warrant) shall have received, or on or
after the record date fixed for the determination of eligible stockholders,
shall have become entitled to receive without payment therefor: (i) other or
additional securities or property (other than cash) by way of dividend or
distribution (other than distributions referred to in Section 7.1(b) below),
(ii) any cash paid or payable except cash paid out of earned surplus of the
Company at the Base Date as increased (decreased) by subsequent credits
(charges) thereto (other than credits as a result of a revaluation of property)
and that does not constitute an Extraordinary Cash Dividend (as defined below),
or (iii) other or additional (or less) securities or property (including cash)
by way of stock-split, spin-off, split-up, reclassification, combination of
shares or similar corporate rearrangement, then, and in each such case, the
Holder of this Warrant, upon the exercise thereof as provided in Section 1,
shall be entitled to receive the amount of securities and property (including
cash in the cases referred to in clauses (ii) and (iii) above) which such Holder
would hold on the date of such exercise or then be entitled to receive if on the
Base Date it had been the holder of record of the number of shares of Common
Stock (as constituted on the Base Date) subscribed for

                                        3

<PAGE>

upon such exercise as provided in Section 1 and had thereafter, during the
period from the Base Date to and including the date of such exercise, retained
such shares and/or all other additional (or less) securities and property
(including cash in the cases referred to in clauses (b) and (c) above)
receivable by it as aforesaid during such period, giving effect to all
adjustments called for during such period by Section 7.2.

                  (b) If the Company shall distribute to all holders of Common
Stock subscription rights or warrants that (i) expire prior to the Expiration
Date (and in the case of subscription rights or warrants for Common Stock, the
exercise price thereof is less than the Current Market Price on the
Determination Date) and (ii) are generally not taxable to the recipients, then
the Exercise Price shall be adjusted by multiplying the Exercise Price in effect
immediately prior to the record date for the determination of stockholders
entitled to receive such distribution by a fraction, of which the numerator
shall be the Current Market Price on the Determination Date, less the fair
market value (as determined in good faith by the Board of Directors of the
Company) of such subscription rights or warrants distributed per share of Common
Stock to the holders of Common Stock, and of which the denominator shall be such
Current Market Price. The "Determination Date" means the earlier of (A) the
record date for the determination of stockholders entitled to receive the
subscription rights or warrants to which this paragraph (b) applies and (B) the
"ex-dividend" date for the issuance of such subscription rights or warrants. The
adjustment pursuant to the foregoing provisions of this paragraph (b) shall be
made successively whenever any distribution to which this paragraph (b) applies,
and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution. Upon each
adjustment to the Exercise Price as a result of this paragraph (b), this Warrant
shall thereafter evidence the right to purchase, at the adjusted Exercise Price,
that number of shares of Common Stock (calculated to the nearest hundredth)
obtained by (x) multiplying the number of shares of Common Stock purchasable
upon exercise of this Warrant prior to such adjustment by the Exercise Price in
effect immediately prior to the adjustment of the Exercise Price and (y)
dividing the product so obtained by the Exercise Price in effect immediately
after such adjustment of the Exercise Price.

                  (c) The term "Extraordinary Cash Dividend" means any cash
dividend with respect to the Common Stock the amount of which, together with the
aggregate amount of cash dividends on the Common Stock to be aggregated with
such cash dividend in accordance with the following provisions of this
paragraph, equals or exceeds the threshold percentage set forth in the following
sentence. If, upon the date prior to the "ex-dividend" date with respect to a
cash dividend on the Common Stock, the aggregate of the amount of such cash
dividend together with the amount of all cash dividends on the Common Stock with
"ex-dividend" dates occurring in the 365 consecutive day period ending on the
date prior to the "ex-

                                        4

<PAGE>

dividend" date with respect to the cash dividend to which this provision is
being applied (other than any such other cash dividends with "ex dividend" dates
occurring in such period for which a prior adjustment under this Section 7.1 was
made) equals or exceeds on a per share basis 15% of the average of the Current
Market Prices during the period beginning on the date after the first such
"ex-dividend" date in such period and ending on the date prior to the
"ex-dividend" date with respect to a cash dividend to which this provision is
being applied (except that if no other cash dividend has had an "ex-dividend"
date occurring in such period, the period for calculating the average of such
closing sale prices shall be the period commencing 365 days prior to the date
immediately prior to the "ex-dividend" date with respect to the cash dividend to
which this provision is being applied), such cash dividend together with each
other cash dividend with an "ex-dividend" date occurring in such 365-day period
that is aggregated with such cash dividend in accordance with this paragraph
shall be deemed be deemed to be an Extraordinary Cash Dividend.

                  7.2 Adjustment for Reorganization, Consolidation, Merger, Etc.
In case of (i) any reorganization of the Company (or any other corporation or
entity, the securities of which are at the time receivable on the exercise of
this Warrant) after the Base Date or (ii) the Company (or any such other
corporation or entity) shall consolidate with or merge into another corporation
or entity or convey all or substantially all of its assets to another
corporation or other entity or (iii) the Company is a party to a merger or
binding share exchange which reclassifies or changes all of its outstanding
Common Stock, then, and in each such case, the Holder of this Warrant upon the
exercise thereof as provided in Section 1 at any time after the consummation of
such reorganization, consolidation, merger, conveyance or binding share
exchange, shall be entitled to receive, in lieu of the securities and property
receivable upon the exercise of this Warrant prior to such consummation, the
securities or property to which such Holder would have been entitled upon
consummation if said Holder had exercised this Warrant immediately prior
thereto, all subject to further adjustment as provided in Section 7.1; in each
such case, the terms of this Warrant shall be applicable to the securities or
property receivable upon the exercise of this Warrant after such consummation.
In case the Company (or any other corporation or other entity, the securities of
which are at the time receivable on exercise of this Warrant) shall consolidate
with or merge into another corporation or convey all or substantially all of its
assets to another corporation, then, if and only if the consideration per share
of Common Stock received in such transaction is comprised solely of cash ("Cash
Consideration") and such Cash Consideration is equal to or less than the
Exercise Price then the Warrants shall automatically expire upon consummation of
such transaction provided that, in each case, the Warrants shall survive
consummation of such transaction and the terms of this Section 7.2 shall apply.
The Company shall not effect any such consolidation, merger, transfer or binding
share exchange of all of its shares of Common Stock unless prior to or
simultaneously with the consummation thereof the successor (if other than the
Company) resulting from such

                                        5

<PAGE>

consolidation or merger or the entity purchasing such assets or other
appropriate entity shall assume, by written agreement, the obligation to deliver
to the Holder of this Warrant such securities, cash or other property as, in
accordance with the foregoing provisions, such Holder may be entitled to
purchase and the other obligations under this Warrant.

                  7.3 Certificate as to Adjustments. In each case of an
adjustment in the number of shares of Common Stock (or other securities or
property) receivable on the exercise of the Warrant, the Company at its expense
will promptly compute such adjustment in accordance with the terms of the
Warrant and prepare a certificate setting forth such adjustment and showing in
detail the facts upon which such adjustment is based, including a statement of
the pro forma adjusted Exercise Price. The Company will forthwith mail a copy of
each such certificate to the Holder of this Warrant.

                  7.4 Notices of Record Date, Etc.

                    In case:

                  (a) the Company shall take a record of the holders of its
Common Stock (or other securities at the time receivable upon the exercise of
the Warrant) for the purpose of entitling them to receive any dividend (other
than a cash dividend that is not an Extraordinary Cash Dividend) or other
distribution, or any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities, or to receive any other
right;

                  (b) of any capital reorganization of the Company (other than a
stock split or reverse stock split), any reclassification of the capital stock
of the Company, any consolidation or merger of the Company with or into another
corporation or entity (other than a merger for purposes of change of domicile)
or any conveyance of all or substantially all of the assets of the Company to
another corporation or entity;

                  (c) of any voluntary of involuntary dissolution, liquidation
or winding-up of the Company; or

                  (d) the Company proposes to take any other action that would
require adjustment to the Exercise Price or the number of shares of Common Stock
issuable upon exercise of this Warrant pursuant to this Section 7,

                  then, and in such case, the Company shall mail or cause to be
mailed to the Holder of the Warrant at the time outstanding a notice specifying,
as the case may be, (i) the date on which a record is to be taken for the
purpose of such dividend,

                                        6

<PAGE>

distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, binding share exchange, conveyance,
dissolution, liquidation or winding-up is to take place, and the time, if any,
is to be fixed, as to which the holders of record of Common Stock (or such other
securities at the time receivable upon the exercise of the Warrant) shall be
entitled to exchange their shares of Common Stock (or such other securities) for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up. Such notice shall be mailed at least twenty (20) days prior to the
date therein specified.

                  7.5 De Minimus Adjustments. No adjustment to the Exercise
Price shall be required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however, that any adjustments
which by reason of this Section 7.5 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 7 shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.

         8. Applicable Law. The Warrant is issued under and shall for all
purposes be governed by and construed in accordance with the laws of the State
of Delaware.

         9. Notice. Notices and other communications to be given to the Holder
of the Warrant evidenced by this certificate shall be deemed to have been
sufficiently given, if delivered or mailed, addressed in the name and at the
address of such owner appearing on the records of the Company, and if mailed,
sent registered or certified mail, postage prepaid. Notices or other
communications to the Company shall be deemed to have been sufficiently given if
delivered by hand or mailed, by registered or certified mail, postage prepaid,
to the Company at 9 West 57th Street, 37th Floor, New York 10019, Attn: General
Counsel, or at such other address as the Company shall have designated by
written notice to such registered owner as herein provided, Notice by mail shall
be deemed given when deposited in the United States mail as herein provided.

         10. Registration. At the time of the exercise of this Warrant, the
shares of Common Stock issuable pursuant thereto shall be registered under an
effective registration statement filed by Cendant with the Securities and
Exchange Commission.

                                        7

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on
its behalf, in its corporate name, by its duly authorized officer, all as of the
day and year first above written.

                                             CENDANT CORPORATION

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

                                        8

<PAGE>

                              WARRANT EXERCISE FORM

The undersigned hereby irrevocably elects to exercise the within Warrant to the
extent of purchasing __________________________ shares of Common Stock of
Cendant Corporation and hereby makes payment at the rate of $____ per share, or
an aggregate if $______, in payment therefor.

                                             ----------------------------
                                             Name of Registered Holder

                                             ----------------------------
                                             Signature

                                             ---------------------------
                                             Signature, if held jointly

                                                                          Date
                                             ----------------------------

                                        9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}]]