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                             INTERCREDITOR AGREEMENT

                                            INTERCREDITOR AGREEMENT, dated as of
                                    July   22,   2003,   among   FLEET   CAPITAL
                                    CORPORATION,  as  Credit  Agent,  U.S.  Bank
                                    Trust  National  Association,   as  Trustee,
                                    COLUMBUS   MCKINNON   CORPORATION  and  each
                                    SUBSIDIARY  GUARANTOR  listed on  Schedule I
                                    hereto.

                              W I T N E S S E T H :

                  WHEREAS,  the  Company  (such term and each other  capitalized
term used herein  having the meanings set forth in Section 1 below),  certain of
its Subsidiaries,  certain lenders, Fleet Capital Corporation, as administrative
agent, Fleet National Bank, as Issuing Lender,  Congress  Financial  Corporation
(New England),  as Co-Syndication  Agent, Key Bank N.A., as Co-Syndication Agent
and Merrill Lynch Capital,  as  Documentation  Agent, are parties to the Amended
and Restated  Credit and Security  Agreement,  dated as of November 21, 2002, as
amended (as further  amended,  supplemented  or otherwise  modified from time to
time, the "CREDIT AGREEMENT");

                  WHEREAS,  the  Obligations  of the  Company  under the  Credit
Agreement are secured by various assets of the Company and certain  Subsidiaries
thereof;

                  WHEREAS, the Company,  certain Subsidiaries of the Company and
the  Trustee  have  entered  into the  Indenture  dated as of July 22,  2003 (as
amended, supplemented or otherwise modified from time to time, the "INDENTURE"),
pursuant to which the Notes shall be governed;

                  WHEREAS,  the  Company and  certain  lenders  under the Credit
Agreement have entered into a Second  Amendment,  dated as of July 22, 2003 (the
"AMENDMENT"), to the Credit Agreement that, among other things, permits, subject
to certain  terms and  conditions,  (a) the  issuance of up to  $125,000,000  in
aggregate principal amount of the Notes by the Company and (b) a second-priority
Lien  (subject  to the Lien in  favor of the  Credit  Agent)  on the  Noteholder
Collateral to secure the Noteholder Claims; and

                  WHEREAS,  it is a condition  precedent to the effectiveness of
the Amendment that the parties hereto enter into this Agreement;

                  Now, THEREFORE, in consideration of the foregoing,  the mutual
covenants  and  obligations  herein  set forth and for other  good and  valuable
consideration, the sufficiency and receipt of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:

                  SECTION 1. (A)  DEFINITIONS.  As used in this  Agreement,  the
following terms have the meanings specified below:

                  "AGREEMENT"  means  this  Agreement,   as  amended,   renewed,
extended,  supplemented  or otherwise  modified  from time to time in accordance
with the terms hereof.

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                                                                               2

                  "AMENDMENT" has the meaning set forth in the recitals hereto.

                  "BANKRUPTCY  LAW" means Title 11 of the United States Code and
any similar Federal, state or foreign law for the relief of debtors.

                  "BUSINESS  DAY" means any day other than a Saturday,  a Sunday
or a day that is a legal  holiday  under the laws of the State of New York or on
which  banking  institutions  in the  State of New York or the  Commonwealth  of
Massachusetts are required or authorized by law or other governmental  action to
close.

                  "CASH  MANAGEMENT  OBLIGATIONS"  means,  with  respect  to any
Person,  all  obligations  of such Person in respect of  overdrafts  and related
liabilities  owed to any other Person that arise from  treasury,  depositary  or
cash management  services,  including any automated  clearing house transfers of
funds or any similar transactions.

                  "COMMON  COLLATERAL"  means all of the assets of any  Grantor,
whether real, personal or mixed,  constituting both Senior Lender Collateral and
Noteholder Collateral.

                  "COMPANY"  means  Columbus  McKinnon  Corporation,  a New York
corporation, and its successors.

                  "COMPARABLE NOTEHOLDER COLLATERAL DOCUMENT" means, in relation
to any Common Collateral subject to any Lien created under any Senior Collateral
Document,  that Noteholder  Collateral  Document that creates a Lien on the same
Common Collateral, granted by the same Grantor.

                  "CREDIT  AGENT"  means  Fleet  Capital  Corporation,   in  its
capacity as administrative agent under the Credit Agreement,  and its successors
as  collateral  agent for the Senior  Lenders (or if there is more than one such
successor agent, such agent as is designated as "Credit Agent" by Senior Lenders
holding a majority  of the Senior  Lender  Claims  then  outstanding)  under the
Senior Credit Agreement exercising substantially the same rights and powers.

                  "DEPOSIT  ACCOUNT"  has the  meaning  set forth in the Uniform
Commercial Code.

                  "DEPOSIT  ACCOUNT  COLLATERAL"  means  that part of the Common
Collateral comprised of Deposit Accounts.

                  "DISCHARGE  OF  SENIOR  LENDER  CLAIMS"  means,  except to the
extent  otherwise  provided in Section  5.6,  payment in full in cash of (a) all
Obligations  in respect of all  outstanding  First-Lien  Indebtedness  or,  with
respect to letters of credit outstanding thereunder, delivery of cash collateral
or  backstop  letters  of credit in  respect  thereof  in  compliance  with such
First-Lien Indebtedness,  as applicable, in each case after or concurrently with
termination  of all  commitments  to extend credit  thereunder and (b) any other
Senior Lender Claims that are due and payable or otherwise  accrued and owing at
or prior to the time such principal and interest are paid.

                  "FIRST-LIEN  INDEBTEDNESS"  means  (a)  Indebtedness  Incurred
pursuant to the Credit  Agreement  and (b) any other  Indebtedness  that, in the
case of both clauses (a) and (b), is (i) Incurred pursuant to Section 4.03(b)(1)

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of the Indenture, (ii) secured by a Permitted Lien (as defined in the Indenture)
described  in clause (7) of the  definition  thereof  and (iii)  (except for the
Indebtedness  Incurred  pursuant  to the  Credit  Agreement)  designated  by the
Company as "First-Lien Indebtedness" for purposes of the Indenture.

                  "FUTURE   FIRST-LIEN   INDEBTEDNESS"   means  any   First-Lien
Indebtedness other than Indebtedness Incurred pursuant to the Credit Agreement.

                  "GRANTORS" means the Company and each of the Subsidiaries that
has  executed  and  delivered  a  Noteholder  Collateral  Document  or a  Senior
Collateral Document.

                  "HEDGING  OBLIGATIONS"  means, with respect to any Person, all
obligations  and  liabilities  of such Person in respect of (a) interest rate or
currency swap  agreements,  interest rate or currency cap  agreements,  interest
rate or currency  collar  agreements  or (b) other  agreements  or  arrangements
designed to protect such Person  against  fluctuations  in interest rates and/or
currency exchange rates.

                  "INDEBTEDNESS"   means  and  includes  all  obligations   that
constitute  "Indebtedness"  within the  meaning of the  Indenture  or the Senior
Credit Agreement.

                  "INDENTURE" has the meaning set forth in the recitals hereto.

                  "INSOLVENCY OR LIQUIDATION PROCEEDING" means (a) any voluntary
or involuntary  case or proceeding  under any Bankruptcy Law with respect to any
Grantor,  (b) any other voluntary or involuntary  insolvency,  reorganization or
bankruptcy case or proceeding, or any receivership,  liquidation, reorganization
or other similar case or proceeding  with respect to any Grantor or with respect
to  any  of  their  respective   assets,   (c)  any  liquidation,   dissolution,
reorganization or winding up of any Grantor whether voluntary or involuntary and
whether or not involving  insolvency or bankruptcy or (d) any assignment for the
benefit of creditors or any other  marshalling of assets and  liabilities of any
Grantor.

                  "LIEN" means, with respect to any asset, any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset.

                  "NOTEHOLDER  CLAIMS" means all  Obligations  in respect of the
Notes or arising under the  Noteholder  Documents or any of them,  including all
fees and expenses of the Trustee thereunder.

                  "NOTEHOLDER  COLLATERAL"  means  all  of  the  assets  of  any
Grantor,  whether  real,  personal  or mixed,  with  respect  to which a Lien is
granted as security for any Noteholder Claim.

                  "NOTEHOLDER   COLLATERAL   DOCUMENTS"   means  the  Noteholder
Security  Agreement,   the  Noteholder  Mortgages  and  any  other  document  or
instrument  pursuant  to which a Lien is  granted  by any  Grantor to secure any
Noteholder  Claims or under which  rights or remedies  with  respect to any such
Lien are governed.

                  "NOTEHOLDER DOCUMENTS" means (a) the Indenture, the Notes, the
Noteholder Collateral Documents and (b) any other related document or instrument

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executed and delivered  pursuant to any Noteholder  Document described in clause
(a) above evidencing or governing any Obligations thereunder.

                  "NOTEHOLDER  MORTGAGES"  means a collective  reference to each
mortgage,  deed of trust and any other  document or  instrument  under which any
Lien on real property  owned by any Grantor is granted to secure any  Noteholder
Claims or under  which  rights or  remedies  with  respect to any such Liens are
governed.

                  "NOTEHOLDER   SECURITY   AGREEMENT"   means   the   Collateral
Agreement,  dated as of July 22, 2003, among the Company, the other Grantors and
the Trustee.

                  "NOTEHOLDERS" means the Persons holding Noteholder Claims.

                  "NOTES"  means (a) the initial  $115.0 in principal  amount of
10% Senior  Secured  Notes due 2010 to be issued by the Company  pursuant to the
Indenture, (b) the exchange notes issued in exchange therefor as contemplated by
the  Registration  Rights  Agreement  dated as of July  22,  2003,  between  the
Company,  certain  Subsidiaries  of the Company and the Initial  Purchasers  (as
defined  therein) and (c) any additional notes issued under the Indenture by the
Company, to the extent permitted by the Indenture.

                  "OBLIGATIONS" means, with respect to any Indebtedness, any and
all obligations  with respect to the payment of (a) any principal of or interest
(including  interest  accruing on or after the commencement of any Insolvency or
Liquidation  Proceeding,  whether  or not a claim for  post-filing  interest  is
allowed  in such  proceeding)  or  premium on any  Indebtedness,  including  any
reimbursement  obligation  in respect  of any  letter of  credit,  (b) any fees,
indemnification   obligations,   expense  reimbursement   obligations  or  other
liabilities payable under the documentation governing such Indebtedness, (c) any
obligation to post cash collateral in respect of letters of credit and any other
obligations and/or (d) any Cash Management Obligations or Hedging Obligations in
connection with such Indebtedness.

                  "PERSON"  means  any  natural  person,  corporation,   limited
liability company,  trust,  joint venture,  association,  company,  partnership,
entity or other party,  including any government and any political  subdivision,
agency or instrumentality thereof.

                  "PLEDGED  COLLATERAL"  means (a) the Common  Collateral in the
possession  of the Credit Agent (or its agents or  bailees),  to the extent that
possession  thereof is  necessary  to perfect a Lien  thereon  under the Uniform
Commercial Code and (b) the "Pledged  Collateral"  under, and as defined in, the
Noteholder Security Agreement that is Common Collateral.

                  "PROCEEDS" has the meaning set forth in Section 4.1.

                  "RECOVERY" has the meaning set forth in Section 6.4.

                  "REQUIRED  LENDERS"  means,  with respect to any Senior Credit
Agreement,  those Senior Lenders the approval of which is required to approve an
amendment  or  modification  of,  termination  or waiver of any  provision of or
consent or departure  from the Senior Credit  Agreement (or would be required to
effect such  consent  under this  Agreement  if such  consent were treated as an
amendment of the Senior Credit Agreement).

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                                                                               5

                  "SENIOR COLLATERAL DOCUMENTS" means the Security Documents (as
defined in the Credit Agreement) and any other agreement, document or instrument
pursuant to which a Lien is granted  securing any Senior  Lender Claims or under
which rights or remedies with respect to such Liens are governed.

                  "SENIOR CREDIT  AGREEMENT"  means the Credit Agreement and any
other agreement governing Future First-Lien Indebtedness.

                  "SENIOR  LENDER CASH  MANAGEMENT  OBLIGATIONS"  means any Cash
Management  Obligations  secured  by any  Common  Collateral  under  the  Senior
Collateral Documents.

                  "SENIOR LENDER  CLAIMS" means (a) all First-Lien  Indebtedness
outstanding,  including  any Future  First-Lien  Indebtedness  and (b) all other
Obligations  (not  constituting  Indebtedness)  of any  Grantor  under  any such
First-Lien  Indebtedness,  including all Senior Lender Hedging  Obligations  and
Senior Lender Cash  Management  Obligations.  Senior Lender Claims shall include
all  interest  and  expenses  accrued or  accruing  (or that  would,  absent the
commencement  of an  Insolvency  or  Liquidation  Proceeding,  accrue) after the
commencement  of an Insolvency or Liquidation  Proceeding in accordance with and
at the rate specified in the relevant Senior Lender Document  whether or not the
claim for such interest or expenses is allowed as a claim in such  Insolvency or
Liquidation Proceeding.

                  "SENIOR  LENDER  COLLATERAL"  means  all of the  assets of any
Grantor,  whether  real,  personal  or mixed,  with  respect  to which a Lien is
granted as security for any Senior Lender Claim.

                  "SENIOR LENDER  DOCUMENTS" means the Senior Credit  Agreement,
the Senior Collateral Documents, and each of the other agreements, documents and
instruments  (including each agreement,  document or instrument providing for or
evidencing a Senior Lender Hedging  Obligation or Senior Lender Cash  Management
Obligation)  providing for or evidencing any other  Obligation  under the Credit
Agreement or any Future  First-Lien  Indebtedness and any other related document
or instrument  executed or delivered  pursuant to any Senior Lender  Document at
any time or  otherwise  evidencing  any  Indebtedness  arising  under any Senior
Lender Document.

                  "SENIOR   LENDER  HEDGING   OBLIGATIONS"   means  any  Hedging
Obligations  secured  by any  Common  Collateral  under  the  Senior  Collateral
Documents.

                  "SENIOR  LENDERS"  means the  Persons  holding  Senior  Lender
Claims, including the Credit Agent.

                  "SUBSIDIARY"  means any "Subsidiary" of the Company as defined
in the Indenture.

                  "TRUSTEE" means U.S. Bank Trust National  Association,  in its
capacity  as  trustee  under  the  Indenture  and  collateral  agent  under  the
Noteholder Collateral Documents, and its permitted successors.

                  "UNIFORM   COMMERCIAL   CODE"  or  "UCC"   means  the  Uniform
Commercial Code as from time to time in effect in the State of New York.

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                  (b) TERMS  GENERALLY.  The  definitions  of terms herein shall
apply  equally to the singular and plural forms of the terms  defined.  Whenever
the context may require, any pronoun shall include the corresponding  masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed  by the phrase  "without  limitation".  The word "will"
shall be  construed  to have the same  meaning  and effect as the word  "shall".
Unless the context requires  otherwise (a) any definition of or reference to any
agreement,  instrument or other document  herein shall be construed as referring
to such  agreement,  instrument or other  document as from time to time amended,
supplemented or otherwise  modified in accordance  with this Agreement,  (b) any
reference  herein to any Person  shall be  construed  to include  such  Person's
successors and assigns,  (c) the words "herein",  "hereof" and "hereunder",  and
words of similar  import,  shall be construed to refer to this  Agreement in its
entirety and not to any particular  provision hereof,  (d) all references herein
to Sections  shall be construed to refer to Sections of this  Agreement  and (e)
the words "asset" and "property" shall be construed to have the same meaning and
effect  and to  refer  to  any  and  all  tangible  and  intangible  assets  and
properties, including cash, securities, accounts and contract rights.

                  SECTION 2. Lien Priorities.

                  2.1 SUBORDINATION.  Notwithstanding  the date, time, manner or
order  of  filing  or  recordation  of any  document  or  instrument  or  grant,
attachment or perfection of any Liens granted to the Trustee or the  Noteholders
on the Common  Collateral  or of any Liens  granted  to the Credit  Agent or the
Senior Lenders on the Common Collateral and notwithstanding any provision of the
UCC, or any  applicable  law or the  Noteholder  Documents or the Senior  Lender
Documents or any other circumstance whatsoever, the Trustee, on behalf of itself
and the Noteholders,  hereby agrees that: (a) any Lien on the Common  Collateral
securing any Senior Lender  Claims now or hereafter  held by or on behalf of the
Credit Agent or any Senior Lenders or any agent or trustee  therefor  regardless
of how acquired,  whether by grant,  statute,  operation of law,  subrogation or
otherwise,  shall have  priority over and be senior in all respects and prior to
any Lien on the Common Collateral  securing any of the Noteholder Claims and (b)
any  Lien  on the  Common  Collateral  securing  any  Noteholder  Claims  now or
hereafter held by or on behalf of the Trustee or any Noteholders or any agent or
trustee  therefor  regardless  of  how  acquired,  whether  by  grant,  statute,
operation of law,  subrogation or otherwise,  shall be junior and subordinate in
all respects to all Liens on the Common  Collateral  securing any Senior  Lender
Claims.  All Liens on the Common  Collateral  securing any Senior  Lender Claims
shall be and remain  senior in all respects and prior to all Liens on the Common
Collateral securing any Noteholder Claims for all purposes,  whether or not such
Liens  securing any Senior Lender Claims are  subordinated  to any Lien securing
any other obligation of the Company, any other Grantor or any other Person.

                  2.2 PROHIBITION ON CONTESTING LIENS. Each of the Trustee,  for
itself and on behalf of each Noteholder, and the Credit Agent, for itself and on
behalf of each Senior  Lender,  agrees that it shall not (and hereby  waives any
right to) contest or support any other Person in  contesting,  in any proceeding
(including any Insolvency or Liquidation Proceeding),  the priority, validity or
enforceability  of (a) a Lien  securing any Senior  Lender  Claims held by or on
behalf of any of the  Senior  Lenders  in the  Common  Collateral  or (b) a Lien
securing any Noteholder Claims held by or on behalf of any of the Noteholders in
the  Common  Collateral,  as the  case may be;  PROVIDED  that  nothing  in this

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Agreement shall be construed to prevent or impair the rights of the Credit Agent
or any Senior  Lender to enforce this  Agreement,  including the priority of the
Liens securing the Senior Lender Claims as provided in Section 2.1.

                  2.3 NO NEW LIENS.  Subject to Section 11.03 of the  Indenture,
so long as the Discharge of Senior  Lender Claims has not occurred,  the parties
hereto agree that, after the date hereof,  if the Trustee shall hold any Lien on
any assets of the Company or any other Grantor  securing any  Noteholder  Claims
that are not also  subject to the  first-priority  Lien in respect of the Senior
Lender Claims under the Senior Lender Documents, the Trustee, upon demand by the
Credit  Agent or the  Company,  will  assign  such Lien to the  Credit  Agent as
security  for the Senior  Lender  Claims (in which case the Trustee may retain a
junior lien on such assets subject to the terms hereof).

                  2.4  PERFECTION  OF LIENS.  Neither  the Credit  Agent nor the
Senior  Lenders  shall  be  responsible   for  perfecting  and  maintaining  the
perfection of Liens with respect to the Common Collateral for the benefit of the
Trustee and the Noteholders.  The provisions of this Intercreditor Agreement are
intended  solely to  govern  the  respective  Lien  priorities  as  between  the
respective Senior Lenders and the Noteholders and shall not impose on the Credit
Agent,  the Trustee,  the  Noteholders or the Senior Lenders any  obligations in
respect of the  disposition  of  Proceeds of any Common  Collateral  which would
conflict with prior perfected claims therein in favor of any other Person or any
order or decree of any court or  governmental  authority or any applicable  law.
Each of the Credit Agent, for itself and on behalf of the Senior Lenders and the
Trustee,  for itself and on behalf of the  Noteholders,  agrees that it will not
contest the validity,  perfection,  priority or enforceability of the Liens upon
the Common  Collateral of the Credit Agent, the Trustee,  the Noteholders or the
Senior Lenders.

                  SECTION 3. ENFORCEMENT.

                  3.1 EXERCISE OF REMEDIES.

                  (a) So long as the  Discharge of Senior  Lender Claims has not
occurred,  whether or not any  Insolvency  or  Liquidation  Proceeding  has been
commenced  by or against the Company or any other  Grantor,  (i) the Trustee and
the  Noteholders  will not  exercise or seek to exercise  any rights or remedies
(including  set-off)  with  respect to any Common  Collateral  in respect of any
Noteholder  Claims,  institute  any action or  proceeding  with  respect to such
rights or remedies  (including any action of foreclosure),  contest,  protest or
object to any  foreclosure  proceeding  or action  brought  with  respect to the
Common  Collateral by the Credit Agent or any Senior Lender in respect of Senior
Lender Claims,  the exercise of any right under any lockbox  agreement,  control
agreement,   landlord  waiver  or  bailee's  letter  or  similar   agreement  or
arrangement  to which the  Trustee or any  Noteholder  is a party,  or any other
exercise by any such party,  of any rights and  remedies  relating to the Common
Collateral  under the Senior Lender  Documents or otherwise in respect of Senior
Lender Claims,  or object to the forbearance by the Senior Lenders from bringing
or pursuing any  foreclosure  proceeding or action or any other  exercise of any
rights or remedies relating to the Common Collateral in respect of Senior Lender
Claims and (ii) the Credit Agent and the Senior Lenders shall have the exclusive
right to enforce rights,  exercise remedies  (including set-off and the right to
credit  bid  their  debt)  and  make   determinations   regarding  the  release,
disposition,  or restrictions with respect to the Common Collateral  without any

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consultation  with or the consent of the Trustee or any Noteholder;  and, should
the Credit Agent and the Senior Lenders decide to foreclose on any of the Common
Collateral as part of its  enforcement  of the Senior  Lenders  Claims under the
Senior  Collateral  Documents,  (A) the  Noteholders  and the Trustee  shall not
contest such foreclosure and shall release any and all claims in respect of such
Common Collateral (except for the right to receive the balance of Proceeds after
Discharge of Senior Lender Claims as described in Section 4.1) so that it may be
sold free and  clear of the  Liens of the  Noteholders  and of the  Trustee,  on
behalf of the Noteholders, and the Trustee, for itself and on behalf of any such
Noteholder, shall, within five (5) business days of request by the Credit Agent,
execute and deliver to the Credit Agent such  termination  statements,  releases
and other documents as the Credit Agent may request to effectively  confirm such
release and (B) the Trustee, for itself and on behalf of the Noteholders, hereby
irrevocably  constitutes  and appoints the Credit Agent and any officer or agent
of the Credit  Agent,  with full power of  substitution,  as its true and lawful
attorney-in-fact  with full  irrevocable  power and  authority  in the place and
stead of the Trustee or such holder or in the Credit Agent's own name, from time
to time in the Credit  Agent's  discretion,  for the purpose of carrying out the
terms of this  Section  3.1(a),  to take any and all  appropriate  action and to
execute  any  and  all  documents  and  instruments  that  may be  necessary  to
accomplish  the  purposes of this  Section  3.1(a),  including  any  termination
statements,  endorsements or other instruments of transfer or release; PROVIDED,
that (A) in any Insolvency or Liquidation Proceeding commenced by or against the
Company or any other  Grantor,  the  Trustee  may file a claim or  statement  of
interest with respect to the Noteholder  Claims and (B) the Trustee may take any
action (not  adverse to the prior Liens on the Common  Collateral  securing  the
Senior Lender Claims, or the rights of the Credit Agent or the Senior Lenders to
exercise  remedies in respect  thereof) in order to preserve or protect its Lien
on the Common Collateral.  In exercising rights and remedies with respect to the
Common  Collateral,  the Credit  Agent and the Senior  Lenders  may  enforce the
provisions of the Senior Lender Documents and exercise remedies thereunder,  all
in such order and in such manner as they may  determine in the exercise of their
sole  discretion.  Such exercise and enforcement  shall include the rights of an
agent appointed by them to sell or otherwise  dispose of Common  Collateral upon
foreclosure, to incur expenses in connection with such sale or disposition,  and
to exercise  all the rights and  remedies of a secured  lender under the Uniform
Commercial Code of any applicable  jurisdiction  and of a secured creditor under
Bankruptcy Laws of any applicable jurisdiction.

                  (b) The  Trustee,  on behalf of  itself  and the  Noteholders,
agrees that,  after an event of default  under the First Lien  Indebtedness  has
occurred with respect to which the Credit Agent has provided  written  notice to
the  Trustee,  and until such  event of default is cured or waived,  it will not
take or receive any Common  Collateral  or any Proceeds of Common  Collateral in
respect of  Noteholder  Claims,  unless and until the Discharge of Senior Lender
Claims has occurred.  Without  limiting the generality of the foregoing,  unless
and  until the  Discharge  of  Senior  Lender  Claims  has  occurred,  except as
expressly  provided in the proviso in clause  (ii) of Section  3.1(a),  the sole
right of the Trustee and the Noteholders  with respect to the Common  Collateral
is to hold a Lien on the  Common  Collateral  in respect  of  Noteholder  Claims
pursuant to the  Noteholder  Documents for the period and to the extent  granted
therein  and to  receive  a share of the  Proceeds  thereof,  if any,  after the
Discharge of the Senior Lender Claims has occurred.

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                  (c) Subject to the  proviso in clause (ii) of Section  3.1(a),
(i) the Trustee,  for itself and on behalf of the  Noteholders,  agrees that the
Trustee  and the  Noteholders  will not take any action  that  would  hinder any
exercise of remedies  undertaken by the Credit Agent or the Senior  Lenders with
respect to the Common Collateral under the Senior Loan Documents,  including any
sale, lease,  exchange,  transfer or other disposition of the Common Collateral,
whether by  foreclosure  or otherwise,  and (ii) the Trustee,  for itself and on
behalf  of  the  Noteholders,  hereby  waives  any  and  all  rights  it or  the
Noteholders  may have as a junior lien  creditor or  otherwise  to object to the
manner in which the  Credit  Agent or the  Senior  Lenders  seek to  enforce  or
collect  the  Senior  Lender  Claims or the Liens  granted  in any of the Common
Collateral in respect of Senior Lender Claims,  regardless of whether any action
or  failure  to act by or on behalf of the  Credit  Agent or Senior  Lenders  is
adverse to the interest of the Noteholders.

                  (d)  The  Trustee  hereby  acknowledges  and  agrees  that  no
covenant, agreement or restriction contained in any Noteholder Document shall be
deemed to restrict in any way the rights and remedies of the Credit Agent or the
Senior  Lenders  with  respect  to the  Common  Collateral  as set forth in this
Agreement and the Senior Lender Documents.

                  3.2  COOPERATION.  Subject to the  proviso  in clause  (ii) of
Section 3.1(a),  the Trustee,  on behalf of itself and the  Noteholders,  agrees
that,  unless and until the Discharge of Senior  Lender Claims has occurred,  it
will not commence,  or join with any Person  (other than the Senior  Lenders and
the Credit  Agent upon the request  thereof)  in  commencing,  any  enforcement,
collection,  execution, levy or foreclosure action or proceeding with respect to
any  Lien  held  by it in the  Common  Collateral  under  any of the  Noteholder
Documents or otherwise in respect of the Noteholder Claims.

                  SECTION 4. PAYMENTS.

                  4.1  APPLICATION OF PROCEEDS.  After an event of default under
the First Lien  Indebtedness has occurred with respect to which the Credit Agent
has provided  written notice to the Trustee,  and until such event of default is
cured or  waived,  so long as the  Discharge  of Senior  Lender  Claims  has not
occurred,  and whether prior to or after the  commencement  of any Insolvency or
Liquidation  Proceeding,  all Common  Collateral  and all  proceeds  thereof (a)
received from the sale, lease, license,  exchange or other disposition of Common
Collateral,  whether such sale, lease,  license, or other disposition is made by
or on behalf of a Grantor,  the Credit  Agent,  the Trustee or any other person,
(b)  collected  on,  or  distributed  on  account  of,  Common  Collateral,  (c)
consisting of rights  arising out of the loss,  nonconformity,  or  interference
with the use of, defects or infringements of rights in, or damage to, the Common
Collateral,  (d) consisting of rights arising out of the Common  Collateral,  or
(e) to the  extent  of the value of the  Common  Collateral,  and to the  extent
payable to the debtor or the secured party,  insurance  payable by reason of the
loss or  nonconformity  of, defects or  infringement of rights in, or damage to,
the Common Collateral  (collectively,  "Proceeds") shall be applied FIRST to the
Senior  Lender  Claims in such order as specified in the relevant  Senior Lender
Documents  until the  Discharge of Senior Lender Claims has occurred and SECOND,
to the Noteholder  Claims.  Upon the Discharge of the Senior Lender Claims,  the
Credit Agent shall deliver to the Trustee any Proceeds of Common Collateral held
by it in the same form as  received,  with any  necessary  endorsements  or as a
court of  competent  jurisdiction  may  otherwise  direct to be  applied  by the

<PAGE>
                                                                              10

Trustee to the  Noteholder  Claims in such order as  specified  in the  relevant
Noteholder Documents.

                  4.2 PAYMENTS  OVER.  After an event of default under the First
Lien  Indebtedness  has  occurred  with  respect to which the  Credit  Agent has
provided written notice to the Trustee, and until such event of default is cured
or waived,  so long as the  Discharge of Senior  Lender Claims has not occurred,
any  Common  Collateral  or  Proceeds  thereof  received  by the  Trustee or any
Noteholder  relating to the Common  Collateral  shall be segregated  and held in
trust and forthwith  paid over to the Credit Agent for the benefit of the Senior
Lenders in the same form as received,  with any necessary  endorsements  or as a
court of competent jurisdiction may otherwise direct. The Credit Agent is hereby
authorized  to make any such  endorsements  as agent for the Trustee or any such
Noteholder. This authorization is coupled with an interest and is irrevocable.

                  SECTION 5. OTHER AGREEMENTS.

                  5.1 RELEASES.

                  (a) In the  event  of any  release  of  the  Liens  on  Common
Collateral in respect of Noteholder Claims in accordance with the Indenture, the
Trustee, for itself and on behalf of the Noteholders, promptly shall execute and
deliver  to  the  Credit  Agent  or  the  applicable  Grantor  such  termination
statements, releases and other documents as the Credit Agent or such Grantor may
request to effectively confirm such release.

                  (b) The Trustee,  for itself and on behalf of the Noteholders,
hereby irrevocably  constitutes and appoints the Credit Agent and any officer or
agent of the  Credit  Agent,  with full power of  substitution,  as its true and
lawful  attorney-in-fact  with full irrevocable power and authority in the place
and stead of the Trustee or such holder or in the Credit Agent's own name,  from
time to time in the Credit Agent's  discretion,  for the purpose of carrying out
the terms of this  Section  5.1, to take any and all  appropriate  action and to
execute any and all documents and instruments that may be necessary or desirable
to  accomplish  the  purposes of this  Section 5.1,  including  any  termination
statements, endorsements or other instruments of transfer or release.

                  (c) The Trustee,  for itself and on behalf of the Noteholders,
hereby  consents  to the  application,  whether  prior to or after  default,  of
Deposit Account  Collateral or Proceeds of Common Collateral to the repayment of
Senior Lender  Claims  pursuant to the Senior  Credit  Agreement;  PROVIDED that
nothing  in this  Section  5.1(c)  shall be  construed  to prevent or impair the
rights of the Trustee or the Noteholders to receive  Proceeds in connection with
the Noteholder Claims not otherwise in contravention of this agreement.

                  5.2 INSURANCE. Unless and until the Discharge of Senior Lender
Claims has occurred, the Credit Agent and the Senior Lenders shall have the sole
and  exclusive  right,  subject to the rights of the  Grantors  under the Senior
Lender  Documents,  to adjust  settlement for any insurance  policy covering the
Common  Collateral in the event of any loss  thereunder and to approve any award
granted  in  any  condemnation  or  similar  proceeding   affecting  the  Common
Collateral. Unless and until the Discharge of Senior Lender Claims has occurred,

<PAGE>
                                                                              11

all  proceeds  of any such policy and any such award if in respect of the Common
Collateral  shall be paid to the  Credit  Agent for the  benefit  of the  Senior
Lenders to the extent  required under the Senior Lender  Documents in respect of
the Senior  Lender  Claims and  thereafter to the Trustee for the benefit of the
Noteholders to the extent required under the applicable Noteholder Documents and
then  to  the  owner  of  the  subject  property  or  as a  court  of  competent
jurisdiction may otherwise  direct.  If the Trustee or any Noteholder  shall, at
any time, receive any proceeds of any such insurance policy or any such award in
contravention  of this Agreement,  it shall pay such proceeds over to the Credit
Agent in accordance with the terms of Section 4.2.

                  5.3 AMENDMENTS TO NOTEHOLDER COLLATERAL DOCUMENTS.

                  (a) Without the prior written  consent of the Credit Agent and
the  Required  Lenders,  no  Noteholder  Collateral  Document  may  be  amended,
supplemented or otherwise modified or entered into to the extent such amendment,
supplement  or  modification,  or the  terms  of any new  Noteholder  Collateral
Document,  would be prohibited by or inconsistent  with any of the terms of this
Agreement.  The Trustee agrees that each  Noteholder  Collateral  Document shall
include the following  language (or language to similar  effect  approved by the
Credit Agent):

         "Notwithstanding anything herein to the contrary, the lien and security
         interest  granted to the  Trustee  pursuant to this  Agreement  and the
         exercise of any right or remedy by the Trustee hereunder are subject to
         the  provisions of the  Intercreditor  Agreement,  dated as of July 22,
         2003 (as amended, supplemented or otherwise modified from time to time,
         the "INTERCREDITOR  AGREEMENT"),  among Columbus McKinnon  Corporation,
         Fleet  Capital  Corporation,  as  Credit  Agent,  and U.S.  Bank  Trust
         National Association,  as Trustee. In the event of any conflict between
         the terms of the Intercreditor Agreement and this Agreement,  the terms
         of the Intercreditor Agreement shall govern."

In  addition,  the Trustee  agrees that each  Noteholder  Mortgage  covering any
Common  Collateral  shall  contain  such other  language as the Credit Agent may
reasonably  request to reflect the subordination of such Noteholder  Mortgage to
the Senior Collateral Document covering such Common Collateral.

                  (b) In the event that the Credit  Agent or the Senior  Lenders
enter  into any  amendment,  waiver or  consent  in respect of any of the Senior
Collateral  Documents for the purpose of adding to, or deleting from, or waiving
or consenting to any departures  from any  provisions of, any Senior  Collateral
Document or changing  in any manner the rights of the Credit  Agent,  the Senior
Lenders,  the  Company or any other  Grantor  thereunder,  then such  amendment,
waiver or consent shall apply  automatically to any comparable  provision of the
Comparable  Noteholder Collateral Document without the consent of the Trustee or
the Noteholders and without any action by the Trustee,  the Company or any other
Grantor;  PROVIDED,  that (A) if any such  amendment,  waiver or  consent  could
reasonably be expected to be adverse to the  Noteholders  or the interest of the
Noteholders  in the Noteholder  Collateral,  such  amendment,  waiver or consent
shall not apply to any Noteholder  Collateral  Document  unless,  at the time of
such  amendment,   waiver  or  consent,   First  Lien  Indebtedness   (including
commitments in respect  thereof to the extent that such  commitments are subject
only to reasonable and customary funding conditions and are then available to be
funded at the election of the Company) of no less than $40.0 million  secured by
the  first-priority  Liens on the Common Collateral are then outstanding and (B)

<PAGE>
                                                                              12

written notice of such amendment, waiver or consent shall have been given to the
Trustee.  Notwithstanding  the foregoing,  no such amendment,  waiver or consent
shall have the effect of releasing  assets subject to the Lien of the Noteholder
Collateral  Documents,  except  to the  extent  that a  release  of such Lien is
permitted by Section 11.03 of the Indenture.

                  5.4 RIGHTS AS UNSECURED CREDITORS. Notwithstanding anything to
the contrary in this  Agreement,  the Trustee and the  Noteholders  may exercise
rights  and  remedies  as an  unsecured  creditor  against  the  Company  or any
Subsidiary  that has  guaranteed the  Noteholder  Claims in accordance  with the
terms of the Noteholder  Documents and applicable law. Nothing in this Agreement
shall  prohibit  the receipt by the Trustee or any  Noteholders  of the required
payments of interest and  principal so long as such receipt is not the direct or
indirect  result of the exercise by the Trustee or any  Noteholder  of rights or
remedies as a secured creditor in respect of Common Collateral or enforcement in
contravention of this Agreement of any Lien in respect of Noteholder Claims held
by any of them and such payments do not come from Proceeds of Common  Collateral
after an event of default  under the First Lien  Indebtedness  has occurred with
respect to which the Trustee has received  written notice,  and until such event
of default is cured or waived or until the Discharge of Senior Lender Claims. In
the event the  Trustee or any  Noteholder  becomes a judgment  lien  creditor in
respect of Common  Collateral as a result of its enforcement of its rights as an
unsecured creditor in respect of Noteholder Claims,  such judgment lien shall be
subordinated to the Liens securing Senior Lender Claims on the same basis as the
other Liens securing the  Noteholder  Claims are so  subordinated  to such Liens
securing  Senior Lender Claims under this  Agreement.  Nothing in this Agreement
impairs or otherwise  adversely  affects any rights or remedies the Credit Agent
or the Senior Lenders may have with respect to the Senior Lender Collateral.

                  5.5 BAILEE FOR PERFECTION.

                  (a) The Credit  Agent  agrees to hold the  Pledged  Collateral
that is part of the Common  Collateral  in its  possession or control (or in the
possession  or control of its agents or  bailees)  as bailee for the Trustee and
any assignee solely for the purpose of perfecting the security  interest granted
in such  Pledged  Collateral  pursuant  to the  Noteholder  Security  Agreement,
subject to the terms and conditions of this Section 5.5.

                  (b) The  Credit  Agent  agrees  to hold  the  Deposit  Account
Collateral  that is part of the Common  Collateral  and controlled by the Credit
Agent for the Trustee and any assignee  solely for the purpose of perfecting the
security  interest  granted in such Deposit Account  Collateral  pursuant to the
Noteholder  Security  Agreement,  subject  to the terms and  conditions  of this
Section 5.5.

                  (c)  Except  as   otherwise   specifically   provided   herein
(including,  without  limitation,  Sections 3.1 and 4.1), until the Discharge of
Senior Lender  Claims has  occurred,  the Credit Agent shall be entitled to deal
with the Pledged  Collateral in  accordance  with the terms of the Senior Lender
Documents  as if the Liens under the  Noteholder  Collateral  Documents  did not
exist.  The  rights of the  Trustee  and the  Noteholders  with  respect to such
Pledged Collateral shall at all times be subject to the terms of this Agreement.

<PAGE>
                                                                              13

                  (d) The Credit Agent shall have no  obligation  whatsoever  to
the Trustee or any  Noteholder to assure that the Pledged  Collateral is genuine
or owned by any of the Grantors or to protect or preserve  rights or benefits of
any Person or any rights pertaining to the Common Collateral except as expressly
set forth in this  Section  5.5.  The duties or  responsibilities  of the Credit
Agent  under this  Section  5.5 shall be limited  solely to holding  the Pledged
Collateral as bailee for the Trustee for purposes of perfecting the Lien held by
the Trustee.

                  (e)  The  Credit  Agent  shall  not  have  by  reason  of  the
Noteholder  Collateral  Documents  or this  Agreement  or any other  document  a
fiduciary  relationship  in respect of the  Trustee  or any  Noteholder  and the
Trustee and the  Noteholders  hereby waive and release the Credit Agent from all
claims and  liabilities  arising  pursuant to the Credit Agent's role under this
Section 5.5, as agent and bailee with respect to the Common Collateral.

                  (f) Upon the  Discharge of Senior  Lender  Claims,  the Credit
Agent shall deliver to the Trustee,  to the extent that it is legally  permitted
to do so, the  remaining  Pledged  Collateral  (if any) and the Deposit  Account
Collateral (if any) together with any necessary endorsements (or otherwise allow
the Trustee to obtain  control of such Pledged  Collateral  and Deposit  Account
Collateral) or as a court of competent  jurisdiction may otherwise  direct.  The
Company shall take such further action as is required to effectuate the transfer
contemplated  hereto and shall  indemnify  the  Credit  Agent for loss or damage
suffered  by the Credit  Agent as a result of such  transfer  except for loss or
damage suffered by the Credit Agent as a result of its own wilful  misconduct or
bad faith.  The Credit Agent has no obligation to follow  instructions  from the
Trustee in contravention of this Agreement.

                  (g) Neither the Credit Agent nor the Senior  Lenders  shall be
required to marshal any present or future collateral  security for the Company's
or its Subsidiaries' obligations to the Credit Agent or the Senior Lenders under
the Senior Credit Agreement or the Senior  Collateral  Documents or to resort to
such collateral security or other assurances of payment in any particular order,
and all of  their  rights  in  respect  of such  collateral  security  shall  be
cumulative and in addition to all other rights, however existing or arising.

<PAGE>
                                                                              14

                  5.6 WHEN  DISCHARGE OF SENIOR LENDER CLAIMS DEEMED TO NOT HAVE
OCCURRED.  If at any time  after the  Discharge  of  Senior  Lender  Claims  has
occurred the Company incurs and designates any Future  First-Lien  Indebtedness,
then such Discharge of Senior Lender Claims shall automatically be deemed not to
have occurred for all purposes of this Agreement (other than with respect to any
actions  taken  prior  to the  date  of  such  designation  as a  result  of the
occurrence of such first Discharge of Senior Lender Claims),  and the applicable
agreement  governing such Future First-Lien  Indebtedness shall automatically be
treated as the Senior  Credit  Agreement  for all  purposes  of this  Agreement,
including  for purposes of the Lien  priorities  and rights in respect of Common
Collateral  set  forth  herein.  Upon  receipt  of  notice  of such  designation
(including the identity of the new Credit Agent), the Trustee shall promptly (i)
enter into such documents and agreements (including amendments or supplements to
this Agreement) as the Company or such new Credit Agent shall reasonably request
in order to  provide to the new  Credit  Agent the  rights of the  Credit  Agent
contemplated  hereby and (ii) deliver to the Credit Agent the Pledged Collateral
that is Common Collateral together with any necessary endorsements (or otherwise
allow such Credit Agent to obtain control of such Pledged Collateral).

                  SECTION 6. INSOLVENCY OR LIQUIDATION PROCEEDINGS.

                  6.1  FINANCING  ISSUES.  If the  Company or any other  Grantor
shall be subject to any  Insolvency  or  Liquidation  Proceeding  and the Credit
Agent shall desire to permit the use of cash collateral or to permit the Company
or any other  Grantor to obtain  financing  under  Section 363 or Section 364 of
Title  11 of  the  United  States  Code  or any  similar  Bankruptcy  Law  ("DIP
FINANCING"),  then the Trustee, on behalf of itself and the Noteholders,  agrees
that it will raise no objection to such use of cash  collateral or DIP Financing
and will not  request  adequate  protection  or any other  relief in  connection
therewith  (except  to the extent  permitted  by the  proviso in clause  (ii) of
Section 3.1(a) and Section 6.3) and, to the extent the Liens securing the Senior
Lender  Claims  under the  Senior  Credit  Agreement  or,  if no  Senior  Credit
Agreement  exists,  under the other Senior Lender  Documents are subordinated or
PARI PASSU with such DIP  Financing,  will  subordinate  its Liens in the Common
Collateral to such DIP Financing (and all Obligations  relating  thereto) on the
same basis as the other Liens securing the Noteholder Claims are so subordinated
to Liens Securing Senior Lender Claims under this Agreement.

                  6.2 RELIEF FROM THE  AUTOMATIC  STAY.  Until the  Discharge of
Senior  Lender  Claims has  occurred,  the Trustee,  on behalf of itself and the
Noteholders,  agrees that none of them shall seek relief from the automatic stay
or any other stay in any Insolvency or Liquidation  Proceeding in respect of the
Common Collateral, without the prior written consent of the Credit Agent and the
Required Lenders.

                  6.3 ADEQUATE PROTECTION.  The Trustee, on behalf of itself and
the  Noteholders,  agrees that none of them shall  contest (or support any other
Person contesting) (a) any request by the Credit Agent or the Senior Lenders for
adequate  protection  or (b) any  objection  by the  Credit  Agent or the Senior
Lenders to any motion,  relief, action or proceeding based on the Credit Agent's
or the Senior Lenders' claiming a lack of adequate  protection.  Notwithstanding
the foregoing,  in any Insolvency or Liquidation  Proceeding,  (i) if the Senior
Lenders (or any subset thereof) are granted  adequate  protection in the form of
additional  collateral  in  connection  with  any DIP  Financing  or use of cash
collateral  under  Section 363 or Section  364 of Title 11 of the United  States

<PAGE>
                                                                              15

Code or any similar  Bankruptcy  Law, then the Trustee,  on behalf of itself and
any of the Noteholders, may seek or request adequate protection in the form of a
replacement  Lien on such additional  collateral,  which Lien is subordinated to
the Liens  securing the Senior  Lender  Claims and such DIP  Financing  (and all
Obligations  relating thereto) on the same basis as the other Liens securing the
Noteholder Claims are so subordinated to the Liens securing Senior Lender Claims
under this Agreement and (ii) in the event the Trustee,  on behalf of itself and
the  Noteholders,  seeks or  requests  adequate  protection  and  such  adequate
protection is granted in the form of additional collateral, then the Trustee, on
behalf of itself or any of the  Noteholders,  agrees that the Credit Agent shall
also be granted a senior Lien on such additional  collateral as security for the
Senior  Lender  Claims  and any  such  DIP  Financing  and that any Lien on such
additional  collateral  securing the Noteholder  Claims shall be subordinated to
the Liens on such collateral  securing the Senior Lender Claims and any such DIP
Financing (and all Obligations  relating thereto) and any other Liens granted to
the Senior  Lenders as adequate  protection on the same basis as the other Liens
securing the Noteholder Claims are so subordinated to such Liens securing Senior
Lender Claims under this Agreement.

                  6.4 PREFERENCE ISSUES. If any Senior Lender is required in any
Insolvency or Liquidation  Proceeding or otherwise to turn over or otherwise pay
to the estate of the Company or any other  Grantor (or any trustee,  receiver or
similar person therefor),  because the payment of such amount was declared to be
fraudulent or preferential in any respect or for any other reason, any amount (a
"Recovery"),  whether received as proceeds of security, enforcement of any right
of set-off or  otherwise,  then the Senior  Lender Claims shall be reinstated to
the extent of such Recovery and deemed to be  outstanding as if such payment had
not occurred and the Senior  Lenders  shall be entitled to a Discharge of Senior
Lender  Claims with respect to all such  recovered  amounts.  If this  Agreement
shall have been  terminated  prior to such  Recovery,  this  Agreement  shall be
reinstated  in full  force and  effect,  and such  prior  termination  shall not
diminish,  release, discharge, impair or otherwise affect the obligations of the
parties hereto.

                  6.5  APPLICATION.  This Agreement shall be applicable prior to
or after the  commencement  of any  Insolvency or  Liquidation  Proceeding.  All
references  herein to any Grantor shall apply to any trustee for such Person and
such Person as debtor in  possession.  The relative  rights as to the Collateral
and Proceeds  thereof shall  continue after the filing thereof on the same basis
as prior to the date of the petition,  subject to any court order  approving the
financing of, or use of cash collateral by, any Grantor.

                  SECTION 7. RELIANCE; WAIVERS; ETC.

                  7.1  RELIANCE.  The  consent  by  the  Senior  Lenders  to the
execution and delivery of the  Noteholder  Documents to which the Senior Lenders
have consented and all loans and other  extensions of credit made or deemed made
on and after  the date  hereof  by the  Senior  Lenders  to the  Company  or any
Subsidiary  shall be deemed to have been  given and made in  reliance  upon this
Agreement.  The Trustee,  on behalf of itself and the Noteholders,  acknowledges
that it and the  Noteholders  have,  independently  and without  reliance on the
Credit Agent or any Senior Lender, and based on documents and information deemed
by them  appropriate,  made their own credit analysis and decision to enter into
the  Indenture,  this  Agreement and the  transactions  contemplated  hereby and
thereby and they will  continue  to make their own credit  decision in taking or
not taking any action under the Indenture or this Agreement.

<PAGE>
                                                                              16

                  7.2 NO  WARRANTIES  OR  LIABILITY.  The Trustee,  on behalf of
itself and the  Noteholders,  acknowledges  and  agrees  that each of the Credit
Agent and the Senior Lenders have made no express or implied  representation  or
warranty,   including  with  respect  to  the  execution,   validity,  legality,
completeness,  collectibility  or  enforceability  of any of the  Senior  Lender
Documents,  the ownership of any Common Collateral or the perfection or priority
of any Liens  thereon.  The  Senior  Lenders  will be  entitled  to  manage  and
supervise  their  respective  loans and  extensions  of credit  under the Senior
Lender Documents in accordance with law and as they may otherwise, in their sole
discretion, deem appropriate,  and the Senior Lenders may manage their loans and
extensions of credit  without regard to any rights or interests that the Trustee
or any of the Noteholders have in the Common Collateral or otherwise,  except as
otherwise  provided in this  Agreement.  Neither the Credit Agent nor any Senior
Lender  shall have any duty to the Trustee or any of the  Noteholders  to act or
refrain from acting in a manner that allows,  or results in, the  occurrence  or
continuance  of an event of  default or default  under any  agreements  with the
Company  or  any  Subsidiary  thereof  (including  the  Noteholder   Documents),
regardless  of any  knowledge  thereof  that they may have or be  charged  with.
Except as expressly set forth in this Intercreditor Agreement, the Credit Agent,
the Senior Lenders,  the Trustee and the Noteholders  have not otherwise made to
each  other nor do they  hereby  make to each other any  warranties,  express or
implied,  nor do they assume any liability to each other with respect to (a) the
enforceability,  validity,  value  or  collectibility  of any of the  Noteholder
Claims,  the Senior Lender  Claims or any  guarantee or security  which may have
been granted to any of them in  connection  therewith,  (b) the  Company's,  the
Canadian Borrowers' (as defined in the Senior Credit Agreement), the Guarantors'
(as defined in the Senior  Credit  Agreement)  or any  Subsidiary's  title to or
right to transfer any of the Common  Collateral,  or (c) any other matter except
as expressly set forth in this Intercreditor Agreement.

                  7.3   OBLIGATIONS   UNCONDITIONAL.   All  rights,   interests,
agreements  and  obligations  of the Credit Agent and the Senior Lenders and the
Trustee and the Noteholders,  respectively, hereunder shall remain in full force
and effect irrespective of:

                  (a) any  lack of  validity  or  enforceability  of any  Senior
Lender Documents or any Noteholder Documents;

                  (b) any change in the time,  manner or place of payment of, or
in any other  terms of, all or any of the  Senior  Lender  Claims or  Noteholder
Claims, or any amendment or waiver or other modification, including any increase
in the amount thereof,  whether by course of conduct or otherwise,  of the terms
of the Senior  Credit  Agreement or any other Senior  Lender  Document or of the
terms of the Indenture or any other Noteholder Document;

                  (c)  any  exchange  of any  security  interest  in any  Common
Collateral  or  any  other  collateral,  or  any  amendment,   waiver  or  other
modification, whether in writing or by course of conduct or otherwise, of all or
any of the Senior Lender Claims or Noteholder Claims or any guarantee thereof;

<PAGE>
                                                                              17

                  (d)  the   commencement   of  any  Insolvency  or  Liquidation
Proceeding in respect of the Company or any other Grantor; or

                  (e) any other  circumstances that otherwise might constitute a
defense  available  to, or a discharge  of, the Company or any other  Grantor in
respect of the Senior  Lender  Claims,  or of the Trustee or any  Noteholder  in
respect of this Agreement.

                  SECTION 8. MISCELLANEOUS.

                  8.1  CONFLICTS.  Subject to Section  8.20, in the event of any
conflict  between the  provisions of this  Agreement  and the  provisions of the
Senior Lender  Documents or the  Noteholder  Documents,  the  provisions of this
Agreement shall govern.

                  8.2 CONTINUING  NATURE OF THIS AGREEMENT;  SEVERABILITY.  This
Agreement  shall  continue to be effective  until the Discharge of Senior Lender
Claims shall have occurred. This is a continuing agreement of lien subordination
and the Senior  Lenders  may  continue,  at any time and  without  notice to the
Trustee or any Noteholder,  to extend credit and other financial  accommodations
and lend  monies to or for the  benefit  of the  Company  or any  other  Grantor
constituting  Senior  Lender  Claims  in  reliance  hereon.  The  terms  of this
Agreement  shall survive,  and shall  continue in full force and effect,  in any
Insolvency or  Liquidation  Proceeding.  Any provision of this Agreement that is
prohibited  or  unenforceable  in any  jurisdiction  shall  not  invalidate  the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.

                  8.3 AMENDMENTS; WAIVERS. No amendment,  modification or waiver
of any of the  provisions  of this  Agreement by the Trustee or the Credit Agent
shall be deemed to be made unless the same shall be in writing  signed on behalf
of the party making the same or its  authorized  agent and each waiver,  if any,
shall be a waiver only with respect to the specific  instance involved and shall
in no way impair the rights of the parties making such waiver or the obligations
of the other  parties to such party in any other  respect or at any other  time.
The Company and other Grantors shall not have any right to consent to or approve
any amendment,  modification or waiver of any provision of this Agreement except
to the extent their rights are affected.

                  8.4 INFORMATION  CONCERNING FINANCIAL CONDITION OF THE COMPANY
AND THE SUBSIDIARIES.  The Credit Agent and the Senior Lenders, on the one hand,
and  the  Trustee  and  the  Noteholders,  on the  other  hand,  shall  each  be
responsible for keeping  themselves  informed of (a) the financial  condition of
the Company and the  Subsidiaries  and all  endorsers  and/or  guarantors of the
Noteholder  Claims or the Senior Lender  Claims and (b) all other  circumstances
bearing  upon the risk of  nonpayment  of the  Noteholder  Claims or the  Senior
Lender  Claims.  The Credit Agent and the Senior  Lenders  shall have no duty to
advise  the  Trustee  or any  Noteholder  of  information  known  to it or  them
regarding such condition or any such  circumstances  or otherwise.  In the event
that  the  Credit  Agent or any of the  Senior  Lenders,  in its or  their  sole
discretion,  undertakes  at any time or from  time to time to  provide  any such
information  to the  Trustee  or any  Noteholder,  it or they  shall be under no
obligation  (w) to make,  and the Credit Agent and the Senior  Lenders shall not
make, any express or implied representation or warranty,  including with respect
to the accuracy, completeness,  truthfulness or validity of any such information

<PAGE>
                                                                              18

so provided,  (x) to provide any  additional  information or to provide any such
information on any subsequent  occasion,  (y) to undertake any  investigation or
(z) to disclose  any  information  that,  pursuant  to  accepted  or  reasonable
commercial finance practices,  such party wishes to maintain  confidential or is
otherwise required to maintain confidential.

                  8.5  SUBROGATION.  The  Trustee,  on behalf of itself  and the
Noteholders,  hereby waives any rights of subrogation it may acquire as a result
of any  payment  hereunder  until the  Discharge  of Senior  Lender  Claims  has
occurred.

                  8.6  APPLICATION  OF PAYMENTS.  Except as  otherwise  provided
herein, all payments received by the Senior Lenders may be applied, reversed and
reapplied,  in whole or in part, to such part of the Senior Lender Claims as the
Senior Lenders, in their sole discretion, deem appropriate,  consistent with the
terms of the Senior Lender Documents.  Except as otherwise  provided herein, the
Trustee, on behalf of itself and the Noteholders,  assents to any such extension
or  postponement  of the time of payment of the Senior Lender Claims or any part
thereof and to any other indulgence with respect thereto,  to any  substitution,
exchange or release of any security  that may at any time secure any part of the
Senior  Lender  Claims  and to the  addition  or  release  of any  other  Person
primarily or secondarily liable therefor.

                  8.7  CONSENT TO  JURISDICTION;  WAIVERS.  The  parties  hereto
consent to the  jurisdiction  of any state or federal court located in New York,
New York, and consent that all service of process may be made by registered mail
directed to such party as  provided  in Section  8.8 for such party.  Service so
made shall be deemed to be  completed  three days after the same shall be posted
as aforesaid.  The parties  hereto waive any objection to any action  instituted
hereunder in any such court based on FORUM NON CONVENIENS,  and any objection to
the venue of any action  instituted  hereunder  in any such  court.  Each of the
parties  hereto  waives any right it may have to trial by jury in respect of any
litigation  based  on,  or  arising  out of,  under or in  connection  with this
Agreement,  or any  course of  conduct,  course of  dealing,  verbal or  written
statement or action of any party hereto in  connection  with the subject  matter
hereof.

                  8.8  NOTICES.  All notices to the  Noteholders  and the Senior
Lenders  permitted or required  under this  Agreement may be sent to the Trustee
and the Credit  Agent,  respectively.  Unless  otherwise  specifically  provided
herein,  any notice or other  communication  herein  required or permitted to be
given  shall  be  in  writing  and  may  be   personally   served,   telecopied,
electronically  mailed  or sent by  courier  service  or U.S.  mail and shall be
deemed to have been given when delivered in person or by courier  service,  upon
receipt of a telecopy or electronic  mail or four Business Days after deposit in
the U.S.  mail  (registered  or  certified,  with  postage  prepaid and properly
addressed).  For the purposes hereof,  the addresses of the parties hereto shall
be as set forth below each party's name on the signature pages hereto, or, as to
each  party,  at such  other  address  as may be  designated  by such party in a
written notice to all of the other parties.

                  8.9  FURTHER  ASSURANCES.  Each of the  Trustee,  on behalf of
itself and the  Noteholders,  and the Credit Agent,  on behalf of itself and the
Senior  Lenders,  agrees  that each of them shall take such  further  action and
shall  execute  and  deliver to the Credit  Agent and the  Senior  Lenders  such
additional  documents and instruments (in recordable  form, if requested) as the

<PAGE>
                                                                              19

Credit Agent or the Senior  Lenders may  reasonably  request to  effectuate  the
terms of and the lien priorities contemplated by this Agreement.

                  8.10  GOVERNING  LAW. This  Agreement  has been  delivered and
accepted  at and shall be  deemed  to have  been made at New York,  New York and
shall be interpreted, and the rights and liabilities of the parties bound hereby
determined, in accordance with the laws of the State of New York.

                  8.11 BINDING ON SUCCESSORS AND ASSIGNS.  This Agreement  shall
be  binding  upon the  Credit  Agent,  the  Senior  Lenders,  the  Trustee,  the
Noteholders, the Company and their respective permitted successors and assigns.

                  8.12  SPECIFIC  PERFORMANCE.   The  Credit  Agent  may  demand
specific performance of this Agreement. The Trustee, on behalf of itself and the
Noteholders,  hereby  irrevocably  waives any defense based on the adequacy of a
remedy at law and any other  defense that might be asserted to bar the remedy of
specific performance in any action that may be brought by the Credit Agent.

                  8.13  SECTION  TITLES.  The section  titles  contained in this
Agreement  are and shall be without  substantive  meaning or content of any kind
whatsoever and are not a part of this Agreement.

                  8.14  COUNTERPARTS.  This  Agreement may be executed in one or
more  counterparts,  each of which shall be an  original  and all of which shall
together constitute one and the same document.

                  8.15  AUTHORIZATION.  By its signature,  each Person executing
this Agreement on behalf of a party hereto  represents and warrants to the other
parties hereto that it is duly authorized to execute this Agreement.  The Credit
Agent  represents  and warrants that this Agreement is binding upon the Lenders.
The Trustee  represents  and  warrants  that this  Agreement is binding upon the
Noteholders.

                  8.16 NO THIRD PARTY  BENEFICIARIES;  SUCCESSORS  AND  ASSIGNS.
This Agreement and the rights and benefits hereof shall inure to the benefit of,
and be binding upon, each of the parties hereto and their respective  successors
and assigns and shall inure to the benefit of each of, and be binding upon,  the
holders of Senior Lender  Claims and  Noteholder  Claims.  No other Person shall
have or be entitled to assert rights or benefits hereunder.

                  8.17 EFFECTIVENESS. This Agreement shall become effective when
executed and delivered by the parties hereto.  This Agreement shall be effective
both  before  and  after  the  commencement  of any  Insolvency  or  Liquidation
Proceeding. All references to the Company or any other Grantor shall include the
Company or any other Grantor as debtor and debtor-in-possession and any receiver
or  trustee  for the  Company or any other  Grantor  (as the case may be) in any
Insolvency or Liquidation Proceeding.

                  8.18 CREDIT AGENT AND  TRUSTEE.  It is  understood  and agreed
that (a) Fleet  Capital  Corporation  is  entering  into this  Agreement  in its
capacity as administrative  agent and the provisions of Article 10 of the Credit
Agreement  applicable  to Fleet  Capital  Corporation  as  administrative  agent
thereunder  shall  also  apply to Fleet  Capital  Corporation  as  Credit  Agent

<PAGE>
                                                                              20

hereunder  and (b) U.S.  Bank Trust  National  Association  is  entering in this
Agreement  in its  capacity  as Trustee and the  provisions  of Article 7 of the
Indenture  applicable to the Trustee  thereunder shall also apply to the Trustee
hereunder.

                  8.19  DESIGNATIONS.  For purposes of the provisions hereof and
the Indenture  requiring the Company to designate  Indebtedness for the purposes
of the term "First-Lien Indebtedness",  any such designation shall be sufficient
if the  relevant  designation  is set forth in writing,  signed on behalf of the
Company by an officer thereof and delivered to the Trustee and the Credit Agent.
For all purposes  hereof and the Indenture,  the Company  hereby  designates the
Indebtedness  Incurred  pursuant  to the  Credit  Agreement  as  the  First-Lien
Indebtedness.

                  8.20  RELATIVE  RIGHTS.   Notwithstanding   anything  in  this
Agreement to the contrary,  nothing in this Agreement is intended to or will (a)
amend,  waive or otherwise  modify the provisions of the Senior Credit Agreement
or the  Indenture or any other Senior Lender  Documents or Noteholder  Documents
entered into in connection with the Senior Credit  Agreement or the Indenture or
permit the Company or any  Subsidiary  to take any  action,  or fail to take any
action, to the extent such action or failure would otherwise constitute a breach
of, or default  under,  the Senior  Credit  Agreement or any other Senior Lender
Documents  entered into in connection  with the Senior  Credit  Agreement or the
Indenture or any other Noteholder  Documents entered into in connection with the
Indenture, (b) change the relative priorities of the Senior Lender Claims or the
Liens granted under the Senior Lender Documents on the Common Collateral (or any
other assets) as among the Senior  Lenders,  (c)  otherwise  change the relative
rights of the Senior  Lenders in respect of the Common  Collateral as among such
Senior Lenders or (d) obligate the Company or any Subsidiary to take any action,
or fail to take any  action,  that would  otherwise  constitute  a breach of, or
default under,  the Senior Credit  Agreement or any other Senior Lender Document
entered into in connection with the Senior Credit  Agreement or the Indenture or
any other Noteholder Documents entered into in connection with the Indenture.

<PAGE>

                  IN WITNESS  WHEREOF,  the parties  hereto have  executed  this
Agreement as of the date first written above.

                                  CREDIT AGENT:
                                  FLEET CAPITAL CORPORATION, as Credit Agent,
                                  By:  /S/ DANIEL P. CORCORAN
                                       ----------------------
                                  Name: Daniel P. Corcoran
                                  Title: Senior Vice President

                                  Address:

                                  Fleet Capital Corporation
                                  One Federal Street
                                  Mail Stop:  MA DE 10307X
                                  Boston, MA  02110
                                  Attention:  Daniel P. Corcoran, Jr.
                                  Senior Vice President
                                  Tel:  617-654-1163
                                  Fax:  617-654-1167
                                  e-mail:  daniel_corcoran@fleetcapital.com

<PAGE>

                  IN WITNESS  WHEREOF,  the parties  hereto have  executed  this
Agreement as of the date first written above.

                                  TRUSTEE:
                                  U.S. BANK TRUST NATIONAL ASSOCIATION,
                                  as Trustee,
                                  By:  /S/ CHERYL L. CLARKE
                                       --------------------
                                  Name: Cheryl L. Clarke
                                  Title: Trust Officer

                                  Address:

                                  100 Wall Street, 16th Floor
                                  New York, NY 10005
                                  Attention: Cheryl L. Clarke
                                  Tel:  212-361-6159
                                  Fax:  212-361-6153
                                  e-mail: cheryl.clarke@usbank.com

<PAGE>

                  The foregoing  Intercreditor Agreement is hereby confirmed and
accepted as of the date first above written.

                                  COLUMBUS MCKINNON CORPORATION
                                  By:  /S/ ROBERT L. MONTGOMERY, JR.
                                       -----------------------------
                                  Name: Robert L. Montgomery, Jr.
                                  Title: Executive Vice President and Chief
                                            Financial Officer

                                  Address:
                                  140 John James Audubon Parkway
                                  Amherst, NY 14228-1197
                                  Attention: Lois H. Demler
                                  Telecopy No.: (716) 689-5509

                                  AUDUBON EUROPE S.AR.L.
                                  By:  /S/ ROBERT L. MONTGOMERY, JR.
                                       -----------------------------
                                  Name: Robert L. Montgomery, Jr.
                                  Title: Manager - A Category

                                  Address:
                                  140 John James Audubon Parkway
                                  Amherst, NY 14228-1197
                                  Attention: Lois H. Demler
                                  Telecopy No.: (716) 689-5509

                                  AUDUBON WEST, INC.
                                  By: /S/ ROBERT L. MONTGOMERY, JR.
                                      -----------------------------
                                  Name: Robert L. Montgomery, Jr.
                                  Title: Vice President and Treasurer

                                  Address:
                                  140 John James Audubon Parkway
                                  Amherst, NY 14228-1197
                                  Attention: Lois H. Demler
                                  Telecopy No.: (716) 689-5509

<PAGE>

                                  CRANE EQUIPMENT & SERVICE, INC.
                                  By: /S/ ROBERT L. MONTGOMERY, JR.
                                       -----------------------------
                                  Name: Robert L. Montgomery, Jr.
                                  Title: Vice President and Treasurer

                                  Address:
                                  140 John James Audubon Parkway
                                  Amherst, NY 14228-1197
                                  Attention: Lois H. Demler
                                  Telecopy No.: (716) 689-5509

                                  YALE INDUSTRIAL PRODUCTS, INC.
                                  By: /S/ ROBERT L. MONTGOMERY, JR.
                                      -----------------------------
                                  Name: Robert L. Montgomery, Jr.
                                  Title: Vice President and Treasurer

                                  Address:
                                  140 John James Audubon Parkway
                                  Amherst, NY 14228-1197
                                  Attention: Lois H. Demler
                                  Telecopy No.: (716) 689-5509

<PAGE>

                                   SCHEDULE I

                              SUBSIDIARY GUARANTORS

1. Audubon Europe S.ar.l.

2. Audubon West, Inc.

3. Crane Equipment & Service, Inc.

4. Yale Industrial Products, Inc.EXHIBIT 4.1

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

                                DST SYSTEMS, INC.

             4.125% Series A Convertible Senior Debentures due 2023
             3.625% Series B Convertible Senior Debentures due 2023

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

                                    INDENTURE

                           Dated as of August 12, 2003

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

                               JPMORGAN CHASE BANK

                                     TRUSTEE

================================================================================
<PAGE>

                                TABLE OF CONTENTS

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

                                    ARTICLE 1
             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.01.  CERTAIN TERMS DEFINED...........................................1
SECTION 1.02.  FORMS OF DOCUMENTS DELIVERED TO TRUSTEE........................10
SECTION 1.03.  ACTS OF HOLDERS................................................10
SECTION 1.04.  CONFLICT WITH TRUST INDENTURE ACT OF 1939......................11
SECTION 1.05.  EFFECT OF HEADINGS AND TABLE OF CONTENTS.......................11
SECTION 1.06.  SEPARABILITY CLAUSE............................................11
SECTION 1.07.  BENEFITS OF INDENTURE..........................................12
SECTION 1.08.  LEGAL HOLIDAYS.................................................12

                                    ARTICLE 2
                                 THE SECURITIES

SECTION 2.01.  DESIGNATION, FORM AND DATING...................................12
SECTION 2.02.  EXECUTION AND AUTHENTICATION...................................13
SECTION 2.03.  REGISTRAR, PAYING AGENT, CONVERSION AGENT AND TRUSTEE..........14
SECTION 2.04.  PAYING AGENT TO HOLD MONEY AND SECURITIES IN TRUST.............14
SECTION 2.05.  TRANSFER AND EXCHANGE..........................................15
SECTION 2.06.  REPLACEMENT SECURITIES.........................................16
SECTION 2.07.  OUTSTANDING SECURITIES; DETERMINATIONS OF HOLDERS'
        ACTIONS...............................................................17
SECTION 2.08.  TEMPORARY SECURITIES...........................................18
SECTION 2.09.  CANCELLATION...................................................19
SECTION 2.10.  PERSONS DEEMED OWNERS..........................................19
SECTION 2.11.  GLOBAL SECURITIES..............................................19
SECTION 2.12.  LEGENDS........................................................21
SECTION 2.13.  PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.................22
SECTION 2.14.  CUSIP NUMBERS..................................................23
SECTION 2.15.  SECURITYHOLDER LISTS...........................................23

                                    ARTICLE 3
                           SATISFACTION AND DISCHARGE

SECTION 3.01.  DISCHARGE OF LIABILITY ON SECURITIES...........................24
SECTION 3.02.  REPAYMENT OF MONEYS HELD BY TRUSTEE............................24

                                    ARTICLE 4
                                    REMEDIES

SECTION 4.01.  EVENTS OF DEFAULT..............................................24
SECTION 4.02.  ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.............26
SECTION 4.03.  COLLECTION SUIT BY TRUSTEE.....................................26
SECTION 4.04.  OTHER REMEDIES.................................................26
SECTION 4.05.  TRUSTEE MAY FILE PROOFS OF CLAIM...............................27
SECTION 4.06.  APPLICATION OF MONEY COLLECTED.................................27
SECTION 4.07.  LIMITATION ON SUITS............................................27
SECTION 4.08.  UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL
        AND INTEREST..........................................................28
SECTION 4.09.  RESTORATION OF RIGHT AND REMEDIES..............................28
SECTION 4.10.  RIGHTS AND REMEDIES CUMULATIVE.................................29
SECTION 4.11.  DELAY OR OMISSION NOT WAIVER...................................29
SECTION 4.12.  CONTROL BY HOLDERS.............................................29
SECTION 4.13.  WAIVER OF PAST DEFAULTS........................................29
SECTION 4.14.  UNDERTAKING FOR COSTS..........................................30
SECTION 4.15.  WAIVER OF STAY OR EXTENSION LAWS...............................30

                                    ARTICLE 5
                                   THE TRUSTEE

SECTION 5.01.  DUTIES OF TRUSTEE..............................................31
SECTION 5.02.  RIGHTS OF TRUSTEE..............................................32
SECTION 5.03.  INDIVIDUAL RIGHTS OF TRUSTEE, ETC..............................32
SECTION 5.04.  TRUSTEE'S DISCLAIMER...........................................32
SECTION 5.05.  NOTICE OF DEFAULTS.............................................33
SECTION 5.06.  REPORTS BY TRUSTEE TO HOLDERS..................................33
SECTION 5.07.  COMPENSATION AND INDEMNITY.....................................33
SECTION 5.08.  REPLACEMENT OF TRUSTEE.........................................34
SECTION 5.09.  SUCCESSOR TRUSTEE BY MERGER, ETC...............................35
SECTION 5.10.  ELIGIBILITY; DISQUALIFICATION..................................35
SECTION 5.11.  PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY..............35

                                    ARTICLE 6
                                   [RESERVED]

                                    ARTICLE 7
                    CONSOLIDATION, MERGER, SALE OR CONVEYANCE

SECTION 7.01.  CONSOLIDATIONS AND MERGERS OF COMPANY PERMITTED
        SUBJECT TO CERTAIN CONDITIONS.........................................35
SECTION 7.02.  RIGHTS AND DUTIES OF SUCCESSOR ENTITY..........................36

                                    ARTICLE 8
                             SUPPLEMENTAL INDENTURES

SECTION 8.01.  SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.............36
SECTION 8.02.  SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS................37
SECTION 8.03.  EXECUTION OF SUPPLEMENTAL INDENTURES...........................39
SECTION 8.04.  EFFECT OF SUPPLEMENTAL INDENTURES..............................39
SECTION 8.05.  NOTATION ON OR EXCHANGE OF SECURITIES..........................39

                                    ARTICLE 9
                            COVENANTS OF THE COMPANY

SECTION 9.01.  PAYMENT OF PRINCIPAL AND INTEREST..............................40
SECTION 9.02.  COMPLIANCE CERTIFICATE.........................................40
SECTION 9.03.  MAINTENANCE OF OFFICE OR AGENCY................................40
SECTION 9.04.  CALCULATION OF TAX ORIGINAL ISSUE DISCOUNT.....................41
SECTION 9.05.  FURTHER INSTRUMENTS AND ACTS...................................41
SECTION 9.06.  NOTICE OF LIQUIDATED DAMAGES...................................41
SECTION 9.07.  CONTINGENT DEBT TREATMENT......................................41
SECTION 9.08.  REPORTS BY COMPANY.............................................42

                                   ARTICLE 10
                            REDEMPTION OF SECURITIES

SECTION 10.01.  RIGHT TO REDEEM; NOTICES TO TRUSTEE...........................43
SECTION 10.02.  SELECTION OF SECURITIES TO BE REDEEMED........................43
SECTION 10.03.  NOTICE OF REDEMPTION..........................................43
SECTION 10.04.  EFFECT OF NOTICE OF REDEMPTION................................44
SECTION 10.05.  DEPOSIT OF REDEMPTION PRICE...................................45
SECTION 10.06.  SECURITIES REDEEMED IN PART...................................45

                                   ARTICLE 11
                                   CONVERSION

SECTION 11.01.  RIGHT TO CONVERT..............................................45
SECTION 11.02.  CONVERSION PROCEDURES.........................................48
SECTION 11.03.  PAYMENT OF CASH IN LIEU OF COMMON STOCK.......................49
SECTION 11.04.  FRACTIONAL SHARES.............................................51
SECTION 11.05.  TAXES ON CONVERSION...........................................51
SECTION 11.06.  RESERVATION OF SHARES, SHARES TO BE FULLY PAID;
        COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS; LISTING OF
        COMMON STOCK..........................................................52

SECTION 11.07.  ADJUSTMENT OF CONVERSION RATE.................................53
SECTION 11.08.  WHEN NO ADJUSTMENT REQUIRED...................................62
SECTION 11.09.  NOTICE OF CERTAIN TRANSACTIONS................................63
SECTION 11.10.  EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER
        OR SALE ON CONVERSION PRIVILEGE.......................................63
SECTION 11.11.  TRUSTEE'S DISCLAIMER..........................................64
SECTION 11.12.  RIGHTS ISSUED IN RESPECT OF COMMON STOCK
        ISSUED UPON CONVERSION................................................65
SECTION 11.13.  COMPANY DETERMINATION FINAL...................................65

                                   ARTICLE 12
                          PURCHASE AT OPTION OF HOLDERS

SECTION 12.01.  RIGHT TO REQUIRE PURCHASE.....................................65
SECTION 12.02.  PURCHASE PROCEDURES...........................................67
SECTION 12.03.  THE COMPANY'S RIGHT TO ELECT MANNER OF
        PAYMENT OF THE PURCHASE PRICE.........................................68
SECTION 12.04.  EFFECT OF PURCHASE NOTICE.....................................71
SECTION 12.05.  DEPOSIT OF PURCHASE PRICE.....................................72
SECTION 12.06.  SECURITIES PURCHASED IN PART..................................72
SECTION 12.07.  REPAYMENT TO THE COMPANY......................................73
SECTION 12.08.  COVENANT TO COMPLY WITH SECURITIES LAWS
        UPON PURCHASE OF SECURITIES.......................................... 73

                                   ARTICLE 13
             PURCHASE AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE

SECTION 13.01.  RIGHT TO REQUIRE PURCHASE.....................................74
SECTION 13.02.  THE COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT
        OF FUNDAMENTAL CHANGE PURCHASE PRICE..................................79
SECTION 13.03.  EFFECT OF FUNDAMENTAL CHANGE PURCHASE NOTICE..................82
SECTION 13.04.  DEPOSIT OF FUNDAMENTAL CHANGE PURCHASE PRICE..................83
SECTION 13.05.  SECURITIES PURCHASED IN PART..................................83
SECTION 13.06.  REPAYMENT TO THE COMPANY......................................84
SECTION 13.07.  COVENANT TO COMPLY WITH SECURITIES LAWS UPON
        PURCHASE OF SECURITIES............................................... 84

                                   ARTICLE 14
                               CONTINGENT INTEREST

SECTION 14.01.  CONTINGENT INTEREST...........................................84
SECTION 14.02.  PAYMENT OF CONTINGENT INTEREST................................85
SECTION 14.03.  NOTICE OF CONTINGENT INTEREST.................................85

                                   ARTICLE 15
                                   [RESERVED]

                                   ARTICLE 16
   IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES

SECTION 16.01.  EXEMPTION FROM INDIVIDUAL LIABILITY...........................86

                                   ARTICLE 17
                            MISCELLANEOUS PROVISIONS

SECTION 17.01.  SUCCESSORS AND ASSIGNS OF COMPANY BOUND BY INDENTURE..........86
SECTION 17.02.  ACTS OF BOARD, COMMITTEE OR OFFICER OF SUCCESSOR
        COMPANY VALID.........................................................86
SECTION 17.03.  REQUIRED NOTICES OR DEMANDS...................................87
SECTION 17.04.  CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT............87
SECTION 17.05.  STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.................88
SECTION 17.06.  GOVERNING LAW.................................................88
SECTION 17.07.  INDENTURE MAY BE EXECUTED IN COUNTERPARTS.....................88

Exhibit A-1.......Form of 4.125% Series A Convertible Senior Debenture
Exhibit A-2.......Form of 3.625% Series B Convertible Senior Debenture

<PAGE>

     INDENTURE,  dated as of the 12th day of August,  2003, between DST SYSTEMS,
INC., a Delaware  corporation  (the  "COMPANY"),  and JPMORGAN CHASE BANK, a New
York banking corporation (the "TRUSTEE").

     WHEREAS, for its lawful corporate purposes,  the Company deems it necessary
to issue its  securities  and has duly  authorized the execution and delivery of
this  Indenture to provide for the issuance of its 4.125%  Series A  Convertible
Senior Debentures due 2023 and 3.625% Series B Convertible Senior Debentures due
2023.

     NOW, THEREFORE, THIS INDENTURE WITNESSETH:

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

                                   Article 1
             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

     Section 1.01. CERTAIN TERMS DEFINED.

     (a) Definitions.

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

     "ACCRETED  PRINCIPAL  AMOUNT"  means  for any  Security  as of any  date of
determination, the sum of (i) the Original Principal Amount of such Security and
(ii) the  portion  of the  excess  of the  Accreted  Principal  Amount at Stated
Maturity of such Security over such Original  Principal  Amount which shall have
been accreted  thereon  through such date, such amount to be accreted on a daily
basis at the Applicable Yield for such Security, compounded semiannually on each
Interest  Payment  Date  through the date of  determination  and computed on the
basis of a 360-day year of twelve 30-day months.

     "ACCRETED  PRINCIPAL  AMOUNT AT  STATED  MATURITY"  means (i) for  Series A
Debentures,  $1,700.28 and (ii) for Series B Debentures,  $1,714.09,  unless, in
each case, such Securities are earlier redeemed, purchased or converted.

     "APPLICABLE  YIELD" means (i) for Series A Debentures,  (x) prior to August
15, 2010, 0% and (y) from and after August 15, 2010, for any Interest  Period, a
rate per annum  equal to 4.125% and (ii) for Series B  Debentures,  (x) prior to
August 15, 2008,  0% and (y) from and after  August 15,  2008,  for any Interest
Period, a rate per annum equal to 3.625%.

     "BANKRUPTCY LAW" means Title 11, United States Code, or any similar Federal
or state law for the relief of debtors.

     "BOARD OF DIRECTORS"  means either the board of directors of the Company or
any duly authorized committee of such board.

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

     "BUSINESS  DAY"  means any day other  than a  Saturday,  a Sunday,  a legal
holiday or a day on which banking institutions or trust companies in The City of
New York are  authorized or required by law,  regulation  or executive  order to
close.

     "CASH"  means such coin of currency of the United  States as at any time of
payment is legal tender for the payment of public and private debts.

     "CASH  DIVIDEND"  means any cash dividend paid by the Company in accordance
with the Company's stated dividend policy as in effect from time to time.

     "COMMISSION" means the Securities and Exchange Commission.

     "COMMON STOCK" shall mean the shares of Common Stock,  $0.01 par value,  of
the Company as it exists on the date of this  Indenture  or any other  shares of
capital  stock of the Company into which the Common Stock shall be  reclassified
or changed.

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

     "COMPANY  REQUEST"  or  "COMPANY  ORDER"  means a written  request or order
signed in the name of the Company by any Officer and delivered to the Trustee.

     "CONTINGENT  INTEREST"  means,  for any  series  of  Securities,  such cash
interest payable as described in Article 14.

     "CONVERSION  SETTLEMENT  DATE"  means (i) on or prior to the  Final  Notice
Date,  (x) the third  Business Day following the  Conversion  Date or (y) if the
Company elects to pay any portion of the Conversion  Obligation in Cash pursuant
to  Section  11.03,  the  Business  Day  following  the  final  day of the  Cash
Settlement  Averaging Period and (ii) after the Final Notice Date, (x) the first
Business Day following the Conversion  Date or (y) subject to Section  11.03(b),
if the Company  elects to pay any portion of the  Conversion  Obligation in Cash
pursuant to Section 11.03,  the Business Day following the final day of the Cash
Settlement Averaging Period.

     "CONVERSION PRICE" means, for any Security of any series, as of any date of
determination, a dollar amount derived by dividing the Accreted Principal Amount
for such Security as of such date by the Conversion Rate then in effect for such
Security.

     "CONVERSION  RATE"  means (i) for Series A  Debentures,  20.3732  shares of
Common Stock per $1,000  Original  Principal  Amount of such Securities and (ii)
for Series B  Debentures,  20.3732  shares of Common  Stock per $1,000  Original
Principal Amount of such  Securities,  each as may be adjusted from time to time
pursuant to Section 11.07.

     "CORPORATE TRUST OFFICE" means the principal office of the Trustee at which
at any time its corporate trust business shall be administered,  which office at
the date  hereof is  located  at 4 New York  Plaza,  New York,  New York  10004,
Attention:  Institutional  Trust Services,  or such other address as the Trustee
may designate from time to time by notice to the Holders and the Company, or the
principal corporate trust office of any successor Trustee (or such other address
as a successor  Trustee may designate from time to time by notice to the Holders
and the Company).

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

     "DEPOSITARY"  means the clearing agency  registered  under the Exchange Act
that is  designated  to act as the  Depositary  for the Global  Debentures.  The
Depository Trust Company shall be the initial Depositary until a successor shall
have been  appointed  and become such pursuant to the  applicable  provisions of
this  Indenture,  and,  thereafter,  "DEPOSITARY"  shall  mean or  include  such
successor.

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

     "EX-DIVIDEND  DATE"  means,  with  respect  to  an  issuance,  dividend  or
distribution  for any security,  the first date on which such  security  trades,
regular way, on the New York Stock  Exchange or such other  national or regional
exchange or market on which such  security is then listed or quoted  without the
right to receive such issuance, dividend or distribution.

     "HOLDER"  means a person in whose  name a  Security  is  registered  on the
Registrar's books.

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

     "INTEREST  PAYMENT  DATE"  means  February  15 and  August 15 of each year,
subject to Section 1.08, commencing on February 15, 2004.

     "INTEREST  PERIOD" means,  for any Security,  the period from and including
the most recent  Interest  Payment Date for such Security to which  interest has
been paid or duly made  available for payment (or August 12, 2003 if no interest
has been paid or been duly made  available for payment) to, but  excluding,  the
next succeeding Interest Payment Date for such Security.

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

     "LAST  REPORTED SALE PRICE" of the shares of Common Stock on any date means
the closing sale price per share (or, if no closing sale price is reported,  the
average  of the bid and asked  prices or, if more than one in either  case,  the
average  of the  average  bid and the  average  asked  prices)  on such  date as
reported in composite  transactions  on the principal  United States  securities
exchange on which  shares of Common Stock are traded or, if the shares of Common
Stock  are not  listed  on a  United  States  national  or  regional  securities
exchange,  as reported by the Nasdaq  National  Market.  The Last  Reported Sale
Price will be determined  without  reference to after-hours or extended trading.
If the shares of Common  Stock are not listed for trading on a U.S.  national or
regional  securities  exchange and not reported by the Nasdaq National Market on
the relevant  date, the Last Reported Sale Price will be the last quoted bid for
the shares of Common Stock in the  over-the-counter  market on the relevant date
as reported by the National  Quotation  Bureau or similar  organization.  If the
shares of Common Stock are not so quoted,  the Last  Reported Sale Price will be
the average of the  midpoint of the last bid and asked  prices for the shares of
Common  Stock  on the  relevant  date  from  each of at least  three  nationally
recognized independent investment banking firms selected by the Company for this
purpose.

     "LEGAL HOLIDAY" means a day that is not a Business Day.

     "LIQUIDATED  DAMAGES" has the meaning specified in the Registration  Rights
Agreement.

     "MARKET  PRICE"  shall  mean (i) in  respect  of any date of  determination
specified in Section  12.03 and any date of  determination  specified in Section
13.03,  the average of the daily Last  Reported  Sale Prices per share of Common
Stock for the 10 consecutive  Trading Days ending on such date of  determination
(or, if such date of  determination is not a Trading Day, for the 10 consecutive
Trading  Days  ending on the  Trading  Day  immediately  preceding  such date of
determination)  and (ii) for purposes of Section 11.07, the average of the daily
Last  Reported  Sale  Prices  per share of Common  Stock for the 10  consecutive
Trading  Days ending on the earlier of (x) the date of  determination  specified
therein with  respect to an  adjustment  and (y) the day before the  Ex-Dividend
Date immediately  prior to the date in question.  If an issuance,  distribution,
subdivision  or  combination  to which Section  11.07 applies  occurs during the
period  applicable for calculating  "MARKET PRICE" pursuant to the definition in
this  paragraph,  "MARKET PRICE" shall be calculated for such period in a manner
determined  by the Board of  Directors  to reflect the impact of such  issuance,
distribution,  subdivision or combination on the Last Reported Sale Price of the
Common Stock during such period.

     "NASDAQ"  means the National  Association of Securities  Dealers  Automated
Quotation System.

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

     "OFFICERS'   CERTIFICATE"  means  a  written  certificate   containing  the
information specified in Section 17.05, signed in the name of the Company by any
two Officers or any Officer and an Assistant Treasurer or Assistant Secretary of
the Company  and  delivered  to the  Trustee.  An  Officers'  Certificate  given
pursuant to Section 9.02 need not contain the  information  specified in Section
17.05. One of the Officers signing an Officers'  Certificate pursuant to Section
9.02 shall be the principal  executive,  financial or accounting  officer of the
Company.

     "OPINION OF COUNSEL" means a written  opinion  containing  the  information
specified in Section  17.05 from legal counsel that is delivered to the Trustee.
The counsel may be an employee of, or counsel to, the Company.

     "ORIGINAL  PRINCIPAL  AMOUNT"  of a  Security  means  the  stated  Original
Principal Amount as set forth on the face of such Security.

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

     "PREDECESSOR  SECURITY" of any  particular  Security  means every  previous
Security  evidencing all or a portion of the same debt as that evidenced by such
particular  Security;  and,  for the purposes of this  definition,  any Security
authenticated  and delivered  under Section 2.06 in exchange for or in lieu of a
mutilated,  destroyed,  lost or stolen  Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

     "PURCHASE  AGREEMENT"  means the Purchase  Agreement  dated as of August 6,
2003 among the Company and  Citigroup  Global  Markets  Inc. and Banc of America
Securities LLC as representatives of the initial purchasers named therein.

     "REDEMPTION  DATE" means the date  specified for redemption of any Security
in accordance with the terms of such Security and this Indenture.

     "REDEMPTION  PRICE"  means,  when used with  respect to any Security of any
series to be redeemed on any Redemption Date, the Accreted  Principal Amount for
such Security of such series as of such Redemption Date, plus accrued and unpaid
interest (including Contingent Interest, if any, and Liquidated Damages, if any)
on such Security to, but excluding, such Redemption Date.

     "REGISTRATION  RIGHTS  AGREEMENT" means the  Registration  Rights Agreement
dated as of August 12, 2003 among the Company, Citigroup Global Markets Inc. and
Banc of America  Securities  LLC as  representatives  of the initial  purchasers
named in the Purchase Agreement.

     "REGULAR RECORD DATE" for the interest payable on any Interest Payment Date
for  any  Security  means  the  February  1 or  August  1, as the  case  may be,
immediately preceding such Interest Payment Date for such Security.

     "RESPONSIBLE  OFFICER",  when used with respect to the  Trustee,  means any
officer  within the corporate  trust  department  (or any successor  group) with
direct  responsibility  for the administration of this Indenture and also means,
with respect to a particular  corporate trust matter,  any other officer to whom
such matter is referred  because of his  knowledge of and  familiarity  with the
particular subject.

     "RULE  144A"  means Rule 144A under the  Securities  Act (or any  successor
provision),  as it may be amended from time to time.  "SECURITIES"  means any of
the Company's  Series A Debentures and Series B Debentures or any of them (each,
a "SECURITY"),  as amended or  supplemented  from time to time,  that are issued
under this Indenture.

     "SERIES  A  DEBENTURES"   means  any  of  the  Company's  4.125%  Series  A
Convertible  Senior Debentures due 2023, as amended or supplemented from time to
time, that are issued under this Indenture.

     "SERIES  B  DEBENTURES"   means  any  of  the  Company's  3.625%  Series  B
Convertible  Senior Debentures due 2023, as amended or supplemented from time to
time, that are issued under this Indenture.

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

     "SECURITY  REGISTER"  means the register  maintained by the Registrar  that
evidences ownership of the Securities.

     "SPECIAL RECORD DATE" means, for the payment of any Defaulted Interest, the
date fixed by the Trustee pursuant to Section 2.13.

     "STATED  MATURITY"  means,  for any Security  issued under this  Indenture,
August 15, 2023.

     "SUBSIDIARY"  means any corporation more than 50% of the outstanding shares
of Voting Stock, except for directors'  qualifying shares, of which shall at the
time be owned,  directly or indirectly,  by the Company or by one or more of the
Subsidiaries, or by the Company and one or more other Subsidiaries.

     "TAX ORIGINAL ISSUE DISCOUNT" means the amount of ordinary  interest income
on a Security that must be accrued as original  issue discount for United States
federal  income tax  purposes  pursuant  to United  States  Treasury  Regulation
Section 1.1275-4 or any successor provision.

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

     "TRADING  DAY" means a day during  which  trading in  securities  generally
occurs on the New York Stock  Exchange  or, if the Common Stock is not listed on
the New York  Stock  Exchange,  on the  principal  other  national  or  regional
securities  exchange on which the Common  Stock is then listed or, if the Common
Stock is not listed on a national or regional securities exchange, on the Nasdaq
National  Market or, if the Common Stock is not reported by the Nasdaq  National
Market, on the principal other market on which the Common Stock is then traded.

     "TRADING  PRICE" means,  on any date and for any series of Securities,  the
average of the secondary  market bid  quotations per $1,000  Original  Principal
Amount of such series of  Securities  obtained  by the  Trustee for  $10,000,000
Original  Principal  Amount of such series of Securities at  approximately  3:30
p.m.,  New York  City  time,  on such  date from  three  independent  nationally
recognized securities dealers selected by the Company; PROVIDED that if at least
three such bids cannot  reasonably be obtained by the Trustee,  but two bids are
obtained,  then the average of the two bids shall be used,  and if only one such
bid can  reasonably  be  obtained  by the  Trustee,  one bid shall be used;  and
PROVIDED FURTHER that if the Trustee cannot  reasonably  obtain at least one bid
for $10,000,000  Original  Principal  Amount of such series of Securities from a
nationally recognized securities dealer or in the Company's reasonable judgment,
the bid  quotations  are not  indicative of the  secondary  market value of such
series of  Securities,  then the  Trading  Price per $1,000  Original  Principal
Amount of such series of Securities (i) as such term is used in Article 11 shall
be deemed to be less than 95% of the product of the Last  Reported Sale Price on
such date and the Conversion  Rate for such  Securities on such date and (ii) as
such term is used in Article 14,  shall equal the product of (a) the  Conversion
Rate for such  Securities  on such date and (b) the average of the Last Reported
Sale  Prices  of the  Common  Stock for each day of the  applicable  Measurement
Period.

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

     "VOTING STOCK", as applied to the stock (or the equivalent  thereof) of any
corporation,  means stock (or the  equivalent  thereof) of any class or classes,
however designated,  having ordinary voting power for the election of a majority
of the  directors  of such  corporation,  other than stock (or such  equivalent)
having such power only by reason of the happening of a contingency.

     "UNITED  STATES" means the United States of America.  The  Commonwealth  of
Puerto Rico, the Virgin Islands and other  territories  and  possessions are not
part of the United States.

     (b) Other Definitions.

                         TERM                                 DEFINED IN SECTION
------------------------------------------------------        ------------------
"Act".........................................................    1.03
"Adjustment Event"............................................    11.07(n)
"Agent Members" ..............................................    2.11(f)
"Cash Amount" ................................................    11.03(a)
"Cash Settlement Averaging Period" ...........................    11.03(a)
"Cash Settlement Notice Period" ..............................    11.03(a)
"Continuing Director".........................................    13.01(a)
"Conversion Agent"............................................    2.03
"Conversion Date".............................................    11.02
"Conversion Obligation".......................................    11.01(a)
"Conversion Retraction Period" ...............................    11.03(a)
"Conversion Settlement Distribution" .........................    11.03(a)
"Current Market Price"........................................    11.07(j)
"Defaulted Interest" .........................................    2.13
"Determination Date"..........................................    11.07(n)
"Distributed Assets or Securities" ...........................    11.07(d)
"Dividend Threshold Amount" ..................................    11.07(c)
"Event of Default"............................................    4.01
"Expiration Time".............................................    11.07(f)
"Fair Market Value"...........................................    11.07(j)
"Final Notice Date" ..........................................    11.03(a)
"Fundamental Change"..........................................    13.01(a)
"Fundamental Change Purchase Date"............................    13.01(a)
"Fundamental Change Purchase Notice"..........................    13.01(c)
"Fundamental Change Purchase Price"                               13.01(a)
"Global Security".............................................    2.01
"Legend"......................................................    2.05(e)
"Maximum Conversion Rate" ....................................    11.07(h)
"Measurement Period" .........................................    14.01
"Notice of Conversion.........................................    11.02
"Paying Agent"................................................    2.03
"Publicly Traded Securities" .................................    13.01(a)
"Purchase Date"...............................................    12.01(a)
"Purchased Shares" ...........................................    11.07(f)
"Purchase Notice".............................................    12.02(a)
"Purchase Price"..............................................    12.02
"Record Date".................................................    11.07(j)
"Registrar"...................................................    2.03
"Rights"......................................................    11.12
"Rights Agreement"............................................    11.12
"Trigger Event" ..............................................    11.07(d)

     Section 1.02.  FORMS OF DOCUMENTS  DELIVERED TO TRUSTEE.  In any case where
several  matters are required to be  certified  by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or  covered by only one  document,  but one such  Person may  certify or give an
opinion  with  respect to some  matters and one or more other such Persons as to
other  matters,  and any such  Person may  certify or give an opinion as to such
matters in one or several documents.

     Any  certificate  or opinion of an  officer  of the  Company  may be based,
insofar as it relates to legal  matters,  upon a  certificate  or opinion of, or
representations  by,  counsel,  unless  such  officer  actually  knows  that the
certificate or opinion or representations with respect to the matters upon which
his  certificate  or opinion is based are  erroneous.  Any such  certificate  or
Opinion of Counsel may be based, insofar as it relates to factual matters,  upon
a certificate  or opinion of, or  representations  by, an officer or officers of
the Company stating that the information with respect to such factual matters is
in the possession of the Company,  unless such counsel knows, or in the exercise
of reasonable care (but without having made an  investigation  specifically  for
the purpose of rendering  such opinion)  should know,  that the  certificate  or
opinion or representations with respect to such matters are erroneous.

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

     Section  1.03.  ACTS  OF  HOLDERS.  Any  request,  demand,   authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders  may be embodied  in and  evidenced  by one or more
instruments of  substantially  similar tenor signed by such Holders in person or
by an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required,  to the
Company.  Such instrument or instruments  (and the action  embodied  therein and
evidenced  thereby) are herein sometimes referred to as the "ACT" of the Holders
signing  such  instrument  or  instruments.  Proof  of  execution  of  any  such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this  Indenture and (subject to Section 5.01)  conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section.

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

     (b) The ownership of Securities shall be proved by the Security Register.

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

     (d) The Company may,  but shall not be obligated  to, set a record date for
purposes of determining  the identity of Holders  entitled to vote or consent to
any action by vote or consent authorized or permitted under this Indenture. If a
record date is fixed,  those  persons  who were  Holders of  Securities  at such
record date (or their duly designated proxies), and only those persons, shall be
entitled to take such action by vote or consent or to revoke any vote or consent
previously given,  whether or not such persons continue to be Holders after such
record date. No action approved by such vote or consent shall be taken more than
six months after such record date.

     Section 1.04.  CONFLICT WITH TRUST  INDENTURE ACT OF 1939. If any provision
hereof  limits,  qualifies  or  conflicts  with a  provision  of the TIA that is
required  under the TIA to be part of and govern this  Indenture,  the TIA shall
control.  If any provision of this Indenture  modifies or excludes any provision
of the TIA that may be so modified or excluded,  such provision  shall be deemed
either to apply to this Indenture so modified or to be excluded, as the case may
be.

     Section  1.05.  EFFECT OF HEADINGS AND TABLE OF  CONTENTS.  The Article and
Section  headings herein and the Table of Contents are for convenience  only and
shall not affect the construction hereof.

     Section 1.06.  SEPARABILITY CLAUSE. In case any provision in this Indenture
or in any Security  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 1.07.  BENEFITS OF INDENTURE.  Nothing in this  Indenture or in the
Securities, express or implied, shall give to any Person, other than the parties
hereto and their successors  hereunder and the Holders, any benefit or any legal
or equitable right, remedy or claim under this Indenture.

     Section 1.08. LEGAL HOLIDAYS. Subject to the next two succeeding sentences,
if any specified date (including a date for giving notice) on which action is to
be taken under this Indenture is a Legal  Holiday,  the action shall be taken on
the next  succeeding  day  that is not a Legal  Holiday.  In any  case  where an
Interest  Payment Date (other than an Interest  Payment Date coinciding with the
Stated Maturity or earlier Redemption Date,  Purchase Date or Fundamental Change
Purchase  Date) of a Security  falls on a day that is not a Business  Day,  such
Interest Payment Date will be postponed to the next succeeding  Business Day and
no  interest  on such  payment  will  accrue for the  period  from and after the
Interest  Payment Date to such next succeeding  Business Day,  PROVIDED that, if
such  Business Day falls in the next  succeeding  calendar  month,  the Interest
Payment  Date will be the  Business  Day  immediately  preceding  such  Interest
Payment  Date.  If the  Stated  Maturity,  Redemption  Date,  Purchase  Date  or
Fundamental Change Purchase Date of a Security would fall on a day that is not a
Business Day, the required  payment of interest,  if any, and principal  will be
made on the next  succeeding  Business  Day and no interest on such payment will
accrue  for the  period  from and after the Stated  Maturity,  Redemption  Date,
Purchase  Date or  Fundamental  Change  Purchase  Date to such  next  succeeding
Business Day.

                                   Article 2
                                 THE SECURITIES

     Section 2.01. FORM AND DATING. The Securities and the Trustee's certificate
of   authentication   to  be  borne  by  each  series  of  Securities  shall  be
substantially  in the  respective  forms set forth in Exhibits  A-1 and A-2. The
terms and provisions  contained in the form of Security  attached as Exhibit A-1
hereto and the form of Security  attached as Exhibit A-2 shall  constitute,  and
are  hereby  expressly  made,  a part  of  this  Indenture  and,  to the  extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.

     Any of the  Securities  may have such  letters,  numbers or other  marks of
identification  and such  notations,  legends,  endorsements  or  changes as the
officers  executing  the same may approve  (execution  thereof to be  conclusive
evidence of such  approval) and as are not  inconsistent  with the provisions of
this Indenture,  or as may be required by the Trustee,  the Depositary or by the
National Association of Securities Dealers,  Inc. in order for the Securities to
be tradable on The Portal  MarketSM or as may be required for the  Securities to
be tradable on any other market developed for trading of securities  pursuant to
Rule 144A or as may be required to comply  with any  applicable  law or with any
rule or regulation  made pursuant  thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Securities may be
listed,  or to conform to usage,  or to  indicate  any  special  limitations  or
restrictions to which any particular Securities are subject.

     So  long  as a  series  of  the  Securities  are  eligible  for  book-entry
settlement  with  the  Depositary,  or  unless  otherwise  required  by law,  or
otherwise  contemplated by Section 2.11(b), all of the Securities of such series
will be  represented  by one or more  Securities  of such  series in global form
registered  in the name of the  Depositary  or the nominee of the  Depositary (a
"GLOBAL  SECURITY").  The transfer and exchange of  beneficial  interests in any
such Global Security shall be effected through the Depositary in accordance with
this  Indenture  and the  applicable  procedures  of the  Depositary.  Except as
provided in Section 2.11(b), beneficial owners of a Global Security shall not be
entitled to have certificates  registered in their names, will not receive or be
entitled to receive  physical  delivery of  certificates  in definitive form and
will not be considered holders of such Global Security.

     Each Global Security shall represent such of the outstanding  Securities as
shall be specified  therein and each shall  provide that it shall  represent the
aggregate Original Principal Amount of such outstanding  Securities from time to
time endorsed thereon and that the aggregate  Original  Principal Amount of such
outstanding  Securities  represented thereby may from time to time be reduced or
increased,  as  appropriate,  to reflect  exchanges,  redemptions,  purchases or
conversions of such Securities.  Any endorsement of a Global Security to reflect
the amount of any  increase  or  decrease in the  Original  Principal  Amount of
outstanding  Securities  represented  thereby  shall be made by the  Trustee  in
accordance with the standing  instructions  and procedures  existing between the
Depositary and the Trustee.

     Each Security shall be dated the date of its authentication.

     Section 2.02.  EXECUTION AND  AUTHENTICATION.  Two Officers  shall sign the
Securities for the Company by manual or facsimile signature.

     If an Officer whose  signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security,  the Security shall be valid
nevertheless.

     A  Security  shall  not be valid  until  the  Trustee  manually  signs  the
certificate of authentication on the Security. The signature shall be conclusive
evidence that the Security has been authenticated under this Indenture.

     The Trustee shall authenticate and deliver Securities for original issue in
an aggregate Original Principal Amount of up to $540,000,000 Series A Debentures
and up to  $300,000,000  Series B Debentures  upon a Company  Order  without any
further action by the Company. The Securities shall be issued only in registered
form without  coupons and only in  denominations  of $1,000  Original  Principal
Amount and any integral  multiple  thereof.  The  aggregate  Original  Principal
Amount of Securities outstanding at any time may not exceed the amount set forth
in the first sentence of this paragraph, except as provided in Section 2.06.

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

     The  Company  shall  notify the Trustee of the name and address of any such
agent.  If the Company fails to maintain a Registrar,  Paying Agent,  Trustee or
Conversion  Agent,  the  Trustee  shall  act as such and  shall be  entitled  to
appropriate  compensation  therefor pursuant to Section 5.07. The Company or any
Subsidiary or an Affiliate of either of them may act as Paying Agent, Registrar,
Trustee, Conversion Agent or co-registrar.

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

     Section 2.04. PAYING AGENT TO HOLD MONEY AND SECURITIES IN TRUST. Except as
otherwise  provided herein,  on or prior to 10 a.m., New York City time, on each
due date of payments in respect of any Security,  the Company shall deposit with
the Paying Agent a sum of money (in immediately  available funds if deposited on
the due date) or, if applicable,  Common Stock  sufficient to make such payments
when so becoming  due. The Company  shall  require each Paying Agent (other than
the  Trustee) to agree in writing  that the Paying Agent shall hold in trust for
the benefit of Holders and/or the Trustee all money and Common Stock held by the
Paying Agent for the making of payments in respect of the  Securities  and shall
notify the Trustee of any default by the Company in making any such payment.  At
any time during the  continuance  of any such  default,  the Paying Agent shall,
upon the written request of the Trustee,  forthwith pay to the Trustee all money
and Common Stock so held in trust. If the Company,  a Subsidiary or an Affiliate
of either of them acts as Paying Agent,  it shall segregate the money and Common
Stock  held by it as Paying  Agent and hold it as a  separate  trust  fund.  The
Company at any time may require a Paying Agent to pay all money and Common Stock
held  by it to the  Trustee  and to  account  for any  funds  and  Common  Stock
disbursed by it. Upon doing so, the Paying Agent shall have no further liability
for the money or Common Stock.

     Section 2.05.  TRANSFER AND EXCHANGE.  Subject to Section 2.11 hereof, upon
surrender for registration of transfer of any Security,  together with a written
instrument of transfer satisfactory to the Registrar duly executed by the Holder
or such Holder's attorney duly authorized in writing, at the office or agency of
the Company  designated as Registrar or  co-registrar  pursuant to Section 2.03,
the Company shall execute,  and the Trustee shall  authenticate and deliver,  in
the name of the designated transferee or transferees, one or more new Securities
of any authorized  denomination or denominations,  of a like aggregate  Original
Principal  Amount.  The  Company  shall  not  charge a  service  charge  for any
registration of transfer or exchange, but the Company or the Trustee may require
payment of a sum sufficient to pay all taxes,  assessments or other governmental
charges that may be imposed in connection  with the  registration of transfer or
exchange of the  Securities  from the Holder  requesting  such  registration  of
transfer or exchange.

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

     (a)  Notwithstanding  any  provision to the contrary  herein,  so long as a
Global  Security  remains  outstanding  and  is  held  by or on  behalf  of  the
Depositary,  transfers of a Global Security,  in whole or in part, shall be made
only in accordance  with Section 2.11 and this Section  2.05(a).  Transfers of a
Global  Security shall be limited to transfers of such Global Security in whole,
or in part, to nominees of the Depositary or to a successor of the Depositary or
such successor's nominee.

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

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

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

     (e) Prior to the  expiration  of the  holding  period  applicable  to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
if  Securities  are  issued  upon  the  transfer,  exchange  or  replacement  of
Securities  subject to  restrictions  on transfer and bearing the legends on the
form of Securities set forth in Exhibits A-1 and A-2 of this  Indenture  setting
forth such restrictions (collectively, the "LEGEND"), or if a request is made to
remove the Legend on a Security, the Securities so issued shall bear the Legend,
or the  Legend  shall  not be  removed,  as the  case  may be,  unless  there is
delivered to the Company and the Registrar  such  satisfactory  evidence,  which
shall  include an Opinion  of  Counsel,  as may be  reasonably  required  by the
Company  and the  Registrar,  that  neither the Legend nor the  restrictions  on
transfer set forth therein are required to ensure that transfers  thereof comply
with the  provisions of Rule 144A or Rule 144 under the  Securities  Act or that
such  Securities are not  "restricted"  within the meaning of Rule 144 under the
Securities  Act.  Upon (i)  provision  of such  satisfactory  evidence,  or (ii)
notification  by the Company to the Trustee  and  Registrar  of the sale of such
Security  pursuant to a registration  statement that is effective at the time of
such  sale,  the  Trustee,  at  the  written  direction  of the  Company,  shall
authenticate and deliver a Security that does not bear the Legend. If the Legend
is removed from the face of a Security and the Security is subsequently  held by
an  Affiliate  of the Company,  the Legend  shall be  reinstated.  Any shares of
Common Stock issued upon  conversion  of  Securities  that bear the Legend shall
bear a restricted legend substantially identical to the Legend (except that such
Legend shall not refer to any shares of Common Stock issuable upon conversion of
Securities).

     (f) Nothing in this Indenture or in the Securities  shall prohibit the sale
or other transfer of any Securities  (including  beneficial  interests in Global
Securities) to the Company or any of its  Subsidiaries,  which  Securities shall
thereupon be canceled in accordance with Section 2.09 of this Indenture.

     Section  2.06.  REPLACEMENT  SECURITIES.   If  any  mutilated  Security  is
surrendered to the Trustee,  or the Company and the Trustee receive  evidence to
their satisfaction of the destruction,  loss or theft of any Security, and there
is delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each of them  harmless,  then, in the absence of notice
to the  Company  or the  Trustee  that  such  Security  has been  acquired  by a
protected  purchaser  (within  the  meaning  of  Section  8-303  of the  Uniform
Commercial  Code as in effect  in the  State of New  York),  the  Company  shall
execute and upon its written request the Trustee shall authenticate and deliver,
in exchange for any such  mutilated  Security or in lieu of any such  destroyed,
lost or stolen  Security,  a new Security of like tenor and  Original  Principal
Amount, bearing a number not contemporaneously outstanding.

     In case any such mutilated,  destroyed,  lost or stolen Security has become
or is about to  become  due and  payable,  or is  about to be  purchased  by the
Company pursuant to Articles 12 or 13 hereof, the Company in its discretion may,
instead of issuing a new Security,  pay or purchase such  Security,  as the case
may be.

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

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

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

     Section 2.07. OUTSTANDING SECURITIES;  DETERMINATIONS OF HOLDERS' ACTIONS .
Securities  outstanding at any time are all the Securities  authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation,
those  delivered  to it pursuant  to Section  2.06 and those  described  in this
Section 2.07 as not  outstanding.  A Security  does not cease to be  outstanding
because  the  Company or an  Affiliate  thereof  holds the  Security;  PROVIDED,
HOWEVER,  that in  determining  whether  the Holders of the  requisite  Original
Principal  Amount of Securities have given or concurred in any request,  demand,
authorization,  direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the  Securities or any Affiliate of the
Company  or such  other  obligor  shall  be  disregarded  and  deemed  not to be
outstanding,  except that, in determining whether the Trustee shall be protected
in relying upon any such  request,  demand,  authorization,  direction,  notice,
consent or waiver,  only Securities  which a Responsible  Officer of the Trustee
actually knows to be so owned shall be so disregarded. Subject to the foregoing,
only  Securities  outstanding  at  the  time  of  such  determination  shall  be
considered   in  any  such   determination   (including,   without   limitation,
determinations pursuant to Articles 4 and 8).

     If a  Security  is  replaced  pursuant  to  Section  2.06,  it ceases to be
outstanding  unless  the  Trustee  receives  proof  satisfactory  to it that the
replaced  Security  is held by a  protected  purchaser  (within  the  meaning of
Section  8-303 of the Uniform  Commercial  Code as in effect in the State of New
York).

     If the  Paying  Agent  holds,  in  accordance  with  this  Indenture,  on a
Redemption  Date,  or on  the  Business  Day  following  a  Purchase  Date  or a
Fundamental Change Purchase Date, or on Stated Maturity, money or securities, if
permitted  hereunder,  sufficient to pay Securities  payable on that date,  then
immediately  after such  Redemption  Date,  Purchase  Date,  Fundamental  Change
Purchase  Date or Stated  Maturity,  as the case may be, such  Securities  shall
cease to be outstanding and interest (including Contingent Interest, if any, and
Liquidated Damages, if any) on such Securities shall cease to accrue;  PROVIDED,
that if such  Securities are to be redeemed,  notice of such redemption has been
duly given pursuant to this Indenture or provision therefor  satisfactory to the
Trustee has been made.

     If a Security is  converted  in  accordance  with Article 11, then from and
after the time of conversion on the Conversion  Date,  such Security shall cease
to be outstanding and interest  (including  Contingent  Interest,  if any) shall
cease to accrue on such  Security,  unless the Holder of such Security  retracts
the Notice of Conversion pursuant to Section 11.03.

     Section 2.08. TEMPORARY  SECURITIES.  Pending the preparation of definitive
Securities,  the Company may execute,  and upon Company  Order the Trustee shall
authenticate and deliver, temporary Securities which are printed,  lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially  of the tenor of the  definitive  Securities in lieu of which they
are issued and with such appropriate  insertions,  omissions,  substitutions and
other  variations as the officers  executing such  Securities may determine,  as
conclusively evidenced by their execution of such Securities.

     If  temporary  Securities  are issued,  the Company  will cause  definitive
Securities to be prepared without  unreasonable  delay. After the preparation of
definitive  Securities,  the  temporary  Securities  shall be  exchangeable  for
definitive  Securities upon surrender of the temporary  Securities at the office
or agency of the Company  designated for such purpose  pursuant to Section 2.03,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary   Securities   the  Company   shall  execute  and  the  Trustee  shall
authenticate and deliver in exchange  therefor a like Original  Principal Amount
of definitive  Securities of  authorized  denominations.  Until so exchanged the
temporary  Securities  shall in all  respects be  entitled to the same  benefits
under this Indenture as definitive Securities.

     Section  2.09.  CANCELLATION.   All  Securities  surrendered  for  payment,
purchase  by the Company  pursuant  to Article 12 and  Article  13,  conversion,
redemption or  registration of transfer or exchange shall, if surrendered to any
person other than the Trustee, be delivered to the Trustee and shall be promptly
canceled  by it.  The  Company  may at  any  time  deliver  to the  Trustee  for
cancellation any Securities  previously  authenticated  and delivered  hereunder
that the Company may have acquired in any manner whatsoever,  and all Securities
so  delivered  shall be promptly  canceled by the  Trustee.  The Company may not
issue new  Securities  to replace  Securities  it has paid or  delivered  to the
Trustee for  cancellation  or that any Holder has converted  pursuant to Article
11. No  Securities  shall be  authenticated  in lieu of or in  exchange  for any
Securities  canceled as provided in this Section,  except as expressly permitted
by this Indenture. All canceled Securities held by the Trustee shall be disposed
of by the Trustee in accordance with its customary practice.

     Section 2.10. PERSONS DEEMED OWNERS. Prior to due presentment of a Security
for  registration  of transfer,  the  Company,  the Trustee and any agent of the
Company  or the  Trustee  may treat the Person in whose  name such  Security  is
registered as the owner of such Security for the purpose of receiving payment of
principal of the Security or the payment of any Redemption Price, Purchase Price
or Fundamental  Change Purchase Price in respect thereof,  and interest thereon,
for the purpose of conversion and for all other purposes whatsoever,  whether or
not such Security be overdue, and neither the Company, the Trustee nor any agent
of the Company or the Trustee shall be affected by notice to the contrary.

     Section 2.11. GLOBAL SECURITIES.

     (a)   Notwithstanding  any  other  provisions  of  this  Indenture  or  the
Securities,  transfers of a Global Security,  in whole or in part, shall be made
only in accordance  with Section 2.05 and this Section  2.11. A Global  Security
may not be  transferred,  in whole  or in part,  to any  Person  other  than the
Depositary  or a nominee or any successor  thereof,  and no such transfer to any
such other  Person may be  registered;  provided  that this clause (a) shall not
prohibit  any  transfer of a Security  that is issued in  exchange  for a Global
Security but is not itself a Global  Security.  No transfer of a Security to any
Person shall be effective  under this  Indenture  unless and until such Security
has been registered in the name of such Person.

     (b)   Notwithstanding  any  other  provisions  of  this  Indenture  or  the
Securities,  a Global  Security shall not be exchanged in whole or in part for a
Security  registered in the name of any Person other than the  Depositary or one
or more nominees  thereof,  PROVIDED that a Global Security may be exchanged for
Securities registered in the names of any person designated by the Depositary in
the event that (i) such Depositary has notified the Company that it is unwilling
or unable to continue as  Depositary  for such Global  Security  and a successor
Depositary is not appointed by the Company within 90 days,  (ii) such Depositary
has ceased to be a "clearing  agency"  registered  under the  Exchange Act and a
successor  Depositary is not appointed by the Company within 90 days, (iii) such
Depositary defaults in the performance of its duties as a depositary or (iv) the
Company  decides to  discontinue  the use of the system of  book-entry  transfer
through  the  Depositary  (or any  successor  Depositary).  Any Global  Security
exchanged pursuant to clause (a) above shall be so exchanged in whole and not in
part.  Any  Security  issued in  exchange  for a Global  Security or any portion
thereof  shall be a Global  Security;  PROVIDED that any such Security so issued
that is  registered  in the name of a Person  other  than  the  Depositary  or a
nominee thereof shall not be a Global Security.

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

     (d) Subject to the  provisions of Section  2.11(f)  below,  the  registered
Holder may grant proxies and otherwise  authorize  any Person,  including  Agent
Members (as defined  below) and persons that may hold  interests  through  Agent
Members,  to take any  action  which a Holder is  entitled  to take  under  this
Indenture or the Securities.

     (e) In the  event  of the  occurrence  of any of the  events  specified  in
Section 2.11(b) above, the Company will promptly make available to the Trustee a
reasonable  supply of certificated  Securities in definitive,  fully  registered
form, without interest coupons.

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

     Section 2.12. LEGENDS.

     (a) Subject to the succeeding paragraph, every Security shall be subject to
the restrictions on transfer provided in the Legend.

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

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

     Section 2.13.  PAYMENT OF INTEREST;  INTEREST RIGHTS  PRESERVED.  Interest,
including  Contingent  Interest and Liquidated  Damages, if any, on any Security
that is payable,  and is  punctually  paid or duly provided for, on any Interest
Payment  Date for such  Security  shall be paid to the Person in whose name that
Security (or one or more  Predecessor  Securities) is registered at the close of
business on the Regular Record Date for such interest at the office or agency of
the Company maintained for such purpose pursuant to Section 9.03.  However,  the
Company may make such interest  payments by check payable to or upon the written
order of the Person entitled  thereto  pursuant to Section 17.03, to the address
of such Person as it appears on the Security Register;  PROVIDED that payment by
wire transfer of  immediately  available  funds will be required with respect to
principal of and interest (including Contingent Interest and Liquidated Damages,
if any) on all  Global  Securities  and all  Securities  of the same  series  of
Holders of more than  $25,000,000  aggregate  Original  Principal Amount of such
series of  Securities  that have  requested  such method of payment and provided
wire transfer instructions to the Company or the Paying Agent.

     Any interest (including Contingent Interest and Liquidated Damages, if any)
on any Security of which is payable but is not punctually  paid or duly provided
for on any Interest  Payment Date for such Security  (herein  called  "DEFAULTED
INTEREST")  shall  forthwith  cease to be payable to the Holder on the  relevant
Regular  Record Date by virtue of having been such  Holder,  and such  Defaulted
Interest may be paid by the Company,  at its election in each case,  as provided
in clause (a) or (b) below:

     (a) The Company may elect to make payment of any Defaulted  Interest to the
Persons in whose names the Securities (or Predecessor Securities) are registered
at the  close of  business  on a Special  Record  Date for the  payment  of such
Defaulted  Interest,  which shall be fixed in the following manner.  The Company
shall notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each  Security  and the date of the proposed  payment,  and at the
same time the Company shall deposit with the Trustee an amount of money equal to
the aggregate  amount proposed to be paid in respect of such Defaulted  Interest
or shall make  arrangements  satisfactory  to the Trustee for such deposit on or
prior to the date of the proposed payment,  such money when deposited to be held
in trust for the benefit of the Persons  entitled to such Defaulted  Interest as
in this clause  provided.  Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted  Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not less
than 10 days  after the  receipt by the  Trustee  of the notice of the  proposed
payment.  The Trustee shall  promptly  notify the Company of such Special Record
Date and, in the name and at the expense of the  Company,  shall cause notice of
the proposed  payment of such  Defaulted  Interest  and the Special  Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of Securities
at his  address as it appears in the  Security  Register,  not less than 10 days
prior to such  Special  Record  Date.  Notice of the  proposed  payment  of such
Defaulted  Interest and the Special Record Date therefor  having been so mailed,
such  Defaulted  Interest  shall  be paid to the  Persons  in  whose  names  the
Securities (or  Predecessor  Securities) are registered at the close of business
on such  Special  Record  Date and shall no longer be  payable  pursuant  to the
following clause (b).

     (b)  The  Company  may  make  payment  of  any  Defaulted  Interest  on the
Securities in any other lawful manner not inconsistent  with the requirements of
any securities  exchange on which such  Securities may be listed,  and upon such
notice as may be  required  by such  exchange,  if,  after  notice  given by the
Company to the Trustee of the proposed  payment  pursuant to this  clause,  such
manner of payment shall be deemed practicable by the Trustee.

     Subject  to  the  foregoing  provisions  of  this  Section,  each  Security
delivered  under this Indenture upon  registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest  accrued
and unpaid, and to accrue, which were carried by such other Security.

     Section 2.14. CUSIP NUMBERS.  The Company in issuing the Securities may use
"CUSIP"  numbers (if then  generally in use),  and, if so, the Trustee shall use
"CUSIP"  numbers in notices of redemption as a convenience to Holders;  PROVIDED
that  any  such  notice  may  state  that  no  representation  is made as to the
correctness  of such numbers either as printed on the Securities or as contained
in any notice of a redemption  and that reliance may be placed only on the other
identification numbers printed on the Securities,  and any such redemption shall
not be affected by any defect in or omission of such  numbers.  The Company will
promptly notify the Trustee of any change in the CUSIP numbers.

     Section  2.15.  SECURITYHOLDER  LISTS.  The  Trustee  shall  preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Holders of  Securities.  If the Trustee is not the
Registrar,  the Company shall furnish or cause to be furnished to the Trustee on
or before each Interest  Payment Date and at such other times as the Trustee may
request  in writing a list in such form and as of such date as the  Trustee  may
reasonably require of the names and addresses of Holders of Securities.

                                   Article 3
                           SATISFACTION AND DISCHARGE

     Section 3.01.  DISCHARGE OF LIABILITY ON  SECURITIES.  When (a) the Company
delivers to the Trustee or any Paying Agent all  outstanding  Securities  (other
than  Securities  replaced  pursuant  to  Section  2.06  of the  Indenture)  for
cancellation  or (b) all  outstanding  Securities  have become due and  payable,
whether  at  Stated  Maturity,   any  Redemption  Date,  any  Purchase  Date,  a
Fundamental  Change  Purchase  Date, or upon  conversion  or otherwise,  and the
Company  deposits  with the  Trustee or any Paying  Agent Cash or, if  expressly
permitted by the terms of the  Securities,  Common Stock  sufficient  to pay all
amounts  due and owing on all  outstanding  Securities  (other  than  Securities
replaced  pursuant to Section 2.06),  and if in either case the Company pays all
other sums payable hereunder by the Company,  then this Indenture shall, subject
to Section 5.07, cease to be of further effect,  except for the  indemnification
of the Trustee, which shall survive such satisfaction and discharge. The Trustee
shall join in the execution of a document prepared by the Company  acknowledging
satisfaction   and  discharge  of  this  Indenture  on  demand  of  the  Company
accompanied  by an  Officers'  Certificate  and  Opinion of  Counsel  and at the
reasonable cost and expense of the Company.

     Section  3.02.  REPAYMENT OF MONEYS HELD BY TRUSTEE.  Any moneys  deposited
with the  Trustee or any Paying  Agent for the  payment of the  principal  of or
interest on any Security and not applied but remaining  unclaimed by the Holders
for two years after the date upon which the payment for such Security shall have
become due and  payable,  shall be repaid to the  Company by the Trustee or such
Paying  Agent on demand;  and the Holder of any of the  Securities  entitled  to
receive such payment shall  thereafter  look only to the Company for the payment
thereof and all  liability  of the Trustee or such Paying  Agent with respect to
such moneys shall thereupon cease.

                                   Article 4
                                    REMEDIES

     Section 4.01. EVENTS OF DEFAULT.  "EVENT OF DEFAULT",  wherever used herein
with respect to a series of Securities, means any one of the following events:

     (a) default in the payment of any interest  (including  Contingent Interest
and Liquidated Damages, if any) upon any Security of such series when it becomes
due and payable, and continuance of such default for a period of 30 days; or

     (b) a default in the payment of the Accreted  Principal Amount,  Redemption
Price,  Purchase Price or Fundamental  Change Purchase Price with respect to any
Security  of such  series  when such  payment  becomes due and payable at Stated
Maturity or otherwise pursuant to the terms hereof; or

     (c) following the exercise by the Holder of the right to convert a Security
of such series in  accordance  with Article 11 hereof,  the Company (x) fails to
deliver the Cash,  if any,  required to be delivered  as part of the  applicable
Conversion  Settlement  Distribution  pursuant to Section  11.03 or (y) fails to
deliver the Common Stock  required to be delivered  pursuant to Section 11.02 or
11.03,  in each case within five calendar days following the applicable  date of
delivery set forth in Section 11.02 or 11.03; or

     (d) default in the performance,  or breach, of any covenant or agreement of
the Company in this  Indenture  (other than a covenant or agreement a default in
whose  performance  or whose breach is  elsewhere  in this Section  specifically
dealt with),  and  continuance of such default or breach for a period of 90 days
after there as been given, to the Company by the Trustee,  or to the Company and
the  Trustee by the  Holders  of at least 25% in  aggregate  Original  Principal
Amount  of  such  series  of  Securities  then  outstanding,  a  written  notice
specifying  such  default or breach and  requiring it to be remedied and stating
that such notice is a "Notice of Default" hereunder, or

     (e)  acceleration  of  indebtedness  of the Company that, in the aggregate,
exceeds  $25,000,000,  and (x) the  acceleration  is not  rescinded  or (y) such
indebtedness is not paid, in each case within 10 days after there as been given,
to the Company by the Trustee,  or to the Company and the Trustee by the Holders
of at least  25% in  aggregate  Original  Principal  Amount  of such  series  of
Securities then outstanding,  a written notice specifying such default or breach
and  requiring  it to be remedied  and stating  that such notice is a "Notice of
Default" hereunder, or

     (f) the  Company  fails to give  timely  notice  of the  occurrence  of any
Fundamental Change in accordance with Section 13.01(b),  and continuance of such
default for a period of five days; or

     (g) the Company shall commence a voluntary case or other proceeding seeking
liquidation,  reorganization  or other relief with respect to the Company or its
debts  under any  Bankruptcy  Law now or  hereafter  in effect  or  seeking  the
appointment  of a trustee,  receiver,  liquidator,  custodian  or other  similar
official of the Company or any substantial  part of the property of the Company,
or  shall  consent  to any  such  relief  or to  the  appointment  of or  taking
possession  by any such  official  in an  involuntary  case or other  proceeding
commenced  against  the  Company,  or shall  make a general  assignment  for the
benefit of  creditors,  or shall fail  generally to pay its debts as they become
due; or

     (h) an involuntary case or other proceeding shall be commenced  against the
Company seeking liquidation,  reorganization or other relief with respect to the
Company or its debts  under any  Bankruptcy  Law now or  hereafter  in effect or
seeking the appointment of a trustee, receiver,  liquidator,  custodian or other
similar  official of the Company or any substantial  part of the property of the
Company.

     Section 4.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.

     (a) If an Event of Default  with respect to a series of  Securities  (other
than an Event of Default specified in Sections 4.01(g) or 4.01(h)) occurs and is
continuing,  the Trustee by notice to the Company or the Holders of at least 25%
in aggregate  Original Principal Amount of such series of Securities at the time
outstanding  by written  notice to the Company and the Trustee,  may declare the
Accreted  Principal Amount of such series of Securities through the date of such
declaration,  and any accrued and unpaid interest (including Contingent Interest
and Liquidated Damages, if any) through the date of such declaration, on all the
Securities  of such  series  to be  immediately  due and  payable.  Upon  such a
declaration,  such  Accreted  Principal  Amount,  and such  accrued  and  unpaid
interest (including Contingent Interest and Liquidated Damages, if any) shall be
due and  payable  immediately.  If an Event of  Default  specified  in  Sections
4.01(g) or 4.01(h) occurs and is continuing,  the Accreted  Principal  Amount of
such  series of  Securities,  and any  accrued  and unpaid  interest  (including
Contingent  Interest and  Liquidated  Damages,  if any) on all the Securities of
such series to the date of the  occurrence of such Event of Default shall become
and be immediately  due and payable  without any declaration or other act on the
part of the Trustee or any Holders.

     (b) If the Trustee makes a declaration  that the Accreted  Principal Amount
of any series of the  Securities and any accrued or unpaid  interest  (including
Contingent  Interest and  Liquidated  Damages,  if any) shall be due and payable
immediately  pursuant to Section  4.02(a),  the Company shall be prohibited from
purchasing any Security from any Holder pursuant to Article 12 or Article 13.

     Section 4.03. COLLECTION SUIT BY TRUSTEE. If an Event of Default in payment
of  interest  or  principal  specified  in Section  4.01(a) or (b) occurs and is
continuing, subject to Section 4.02 and 4.13 the Trustee may recover judgment in
its own name and as trustee of an express  trust  against  the  Company  for the
whole  amount of  Accreted  Principal  Amount and  interest,  if any,  remaining
unpaid.

     Section  4.04.  OTHER  REMEDIES.  If an Event of Default  with respect to a
series of the Securities  occurs and is  continuing,  the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of the
Accreted Principal Amount,  Redemption Price, Purchase Price, Fundamental Change
Purchase  Price  or  interest  (including  Contingent  Interest  and  Liquidated
Damages,  if any) on the Securities of such series or to enforce the performance
of any provision of such series of Securities or this Indenture.

     The Trustee may  maintain a  proceeding  even if it does not possess any of
such series of the Securities or does not produce any of them in the proceeding.
A delay or  omission  by the  Trustee or any Holder in  exercising  any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute  a waiver  of  acquiescence  in the  Event of  Default.  No remedy is
exclusive of any other  remedy.  All  available  remedies are  cumulative to the
extent permitted by law.

     Section 4.05.  TRUSTEE MAY FILE PROOFS OF CLAIM.  The Trustee may file such
proofs of claim and other  papers or  documents as may be necessary or advisable
in order to have the  claims  of the  Trustee  and the  Holders  allowed  in any
judicial  proceedings  relative  to the  Company,  or any  of its  creditors  or
property,  and unless prohibited by law or applicable  regulations,  may vote on
behalf of the Holders in any election of a trustee in bankruptcy or other person
performing similar functions.

     Section 4.06.  APPLICATION OF MONEY  COLLECTED.  Any money collected by the
Trustee pursuant to this Article shall be applied in the following order:

          FIRST:  To the payment of all amounts  due the Trustee  under  Section
     5.07;

          SECOND: To the payment of the amounts then due and unpaid for Accreted
     Principal Amount,  Redemption  Price,  Purchase Price,  Fundamental  Change
     Purchase Price and interest  (including  Contingent Interest and Liquidated
     Damages,  if any) on the  Securities in respect of which or for the benefit
     of which such money has been  collected,  ratably,  without  preference  or
     priority  of any kind,  according  to the  amounts  due and payable on such
     Securities; and

          THIRD: To the payment of the remainder, if any, to the Company or as a
     court of competent jurisdiction may direct.

     Section  4.07.  LIMITATION  ON SUITS.  No Holder of any series of  Security
shall have any right to institute any  proceeding,  judicial or otherwise,  with
respect to this Indenture,  or for the appointment of a receiver or trustee,  or
for any other remedy hereunder, unless

          (i) such Holder  shall have  previously  given  written  notice to the
     Trustee of a continuing Event of Default with respect to such series of the
     Securities held by that Holder;

          (ii) the Holders of not less than 25% in aggregate  Original Principal
     Amount of such series of the Securities  then  outstanding  shall have made
     written request to the Trustee to institute  proceedings in respect of such
     Event of Default in its own name as Trustee hereunder;

          (iii)  such  Holder or  Holders  shall  have  offered  to the  Trustee
     reasonable  indemnity  satisfactory  to it as it may  require  against  the
     costs,  expenses and  liabilities  to be incurred in  compliance  with such
     request;

          (iv) the Trustee for 60 days after its receipt of such notice, request
     and offer of indemnity shall have failed to institute any such  proceeding;
     and

          (v) no direction  inconsistent  with such written  request  shall have
     been given to the  Trustee  pursuant  to Section  4.12  during  such 60-day
     period by the  Holders of a majority in  Original  Principal  Amount of the
     outstanding Securities of such series;

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

     Section  4.08.  UNCONDITIONAL  RIGHT OF HOLDERS TO  RECEIVE  PRINCIPAL  AND
INTEREST.  Notwithstanding any other provision in this Indenture,  the Holder of
any  Security  shall have the right,  which is absolute  and  unconditional,  to
receive payment of the Accreted  Principal Amount,  Redemption  Price,  Purchase
Price,  Fundamental  Change  Purchase Price and interest  (including  Contingent
Interest and Liquidated  Damages,  if any) on such Security after the respective
due  dates  expressed  in  such  Security,  and to  convert  the  Securities  in
accordance  with Article 11, and to institute  suit for the  enforcement  of any
such  payment on or after such  respective  dates,  and such rights shall not be
impaired without the consent of such Holder.

     Section  4.09.  RESTORATION  OF RIGHT AND  REMEDIES.  If the Trustee or any
Holder has  instituted  any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined  adversely to the Trustee or to such Holder,  then and in
every such case,  subject to any determination in such proceeding,  the Company,
the Trustee and the Holders  shall be restored  severally  and  respectively  to
their former  positions  hereunder and thereafter all rights and remedies of the
Trustee and the Holders  shall  continue as though no such  proceeding  had been
instituted.

     Section 4.10. RIGHTS AND REMEDIES CUMULATIVE.  Except as otherwise provided
with respect to the  replacement  or payment of  mutilated,  destroyed,  lost or
stolen  Securities  in the last  paragraph of Section  2.06,  no right or remedy
herein  conferred  upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy,  and every right and remedy shall,
to the extent  permitted  by law, be  cumulative  and in addition to every other
right and remedy  given  hereunder  or now or  hereafter  existing  at law or in
equity  or  otherwise.  The  assertion  or  employment  of any  right or  remedy
hereunder,  or  otherwise,   shall  not  prevent  the  concurrent  assertion  or
employment of any other appropriate right or remedy.

     Section  4.11.  DELAY OR OMISSION  NOT WAIVER.  No delay or omission of the
Trustee or of any Holder of any series of  Securities  to exercise  any right or
remedy  accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence  therein.
Every right and remedy  given by this Article or by law to the Trustee or to the
Holders  may be  exercised  from  time to time,  and as  often as may be  deemed
expedient, by the Trustee or by the Holders, as the case may be.

     Section  4.12.  CONTROL BY HOLDERS.  The Holders of a majority in aggregate
Original Principal Amount of the outstanding Securities of any series shall have
the right to direct the time,  method and place of conducting any proceeding for
any remedy available to the Trustee,  or exercising any trust or power conferred
on the  Trustee,  with  respect  to such  series  of the  Securities;  PROVIDED,
HOWEVER, that

          (i) such  direction  shall not be in conflict  with any rule of law or
     with this Indenture,

          (ii) the  Trustee  may take any  other  action  deemed  proper  by the
     Trustee which is not inconsistent with such direction,

          (iii)  such  direction  is not  unduly  prejudicial  to the  rights of
     Holders not taking part in such direction, and

          (iv)  such  direction  would  not  involve  the  Trustee  in  personal
     liability,  as the Trustee, upon being advised by counsel, shall reasonably
     determine.

     Section  4.13.  WAIVER  OF PAST  DEFAULTS.  Before a  declaration  that the
Accreted  Principal  Amount of any series of the  Securities  and any accrued or
unpaid interest  (including  Contingent Interest and Liquidated Damages, if any)
shall be due and payable  immediately is made pursuant to Section  4.02(a),  the
Holders of at least a majority in  aggregate  Original  Principal  Amount of the
outstanding  Securities  of such  series may on behalf of the Holders of all the
Securities  of such  series,  by notice to the  Trustee,  waive any past default
hereunder with respect to such series of Securities and its consequences, except
a Default:

          (i)  that is an Event of  Default  described  in  Section  4.01(a)  or
     Section 4.01(b); or

          (ii) in respect of a covenant or provision  hereof which under Article
     8 cannot be modified  or amended  without the consent of the Holder of each
     outstanding  Security of such series.  Upon any such  waiver,  such Default
     shall cease to exist,  and any Event of Default arising  therefrom shall be
     deemed to have been cured,  for every  purpose of this  Indenture,  and the
     Company,  the  Trustee  and  Holders  shall be  restored  to  their  former
     positions  and rights  hereunder,  respectively;  but no such waiver  shall
     extend to any  subsequent or other  Default or impair any right  consequent
     thereon.

     Section 4.14.  UNDERTAKING FOR COSTS.  All parties to this Indenture agree,
and each Holder of any  Security by his  acceptance  thereof  shall be deemed to
have agreed,  that any court may in its discretion  require, in any suit for the
enforcement of any right or remedy under this Indenture,  or in any suit against
the Trustee  for any action  taken,  suffered  or omitted by it as Trustee,  the
filing by any party  litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion  assess  reasonable  costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such  suit,  having  due  regard to the  merits  and good faith of the claims or
defenses made by such party  litigant;  but the provisions of this Section shall
not apply to any suit  instituted by the Company,  to any suit instituted by the
Trustee,  to any suit instituted by any Holder, or group of Holders,  holding in
the  aggregate  more than 10% in Original  Principal  Amount of the  outstanding
Securities of any series,  or to any suit  instituted by any Holder  pursuant to
Section  4.08.  This Section 4.14 shall be in lieu of Section  315(e) of the TIA
and such Section 315(e) is hereby  expressly  excluded from this  Indenture,  as
permitted by the TIA.

     Section 4.15.  WAIVER OF STAY OR EXTENSION LAWS. The Company  covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension  law  wherever  enacted,  now or at any time  hereafter in
force,  which  would  prohibit  or forgive  the  Company  from paying all or any
portion of the Accreted  Principal  Amount,  Redemption  Price,  Purchase Price,
Fundamental Change Purchase Price or interest (including Contingent Interest and
Liquidated  Damages,  if  any)  in  respect  of  Securities  of any  series,  as
contemplated  herein,  or which may affect the covenants or the  performance  of
this  Indenture;  and the  Company  (to the extent  that it may  lawfully do so)
hereby  expressly  waives all benefit or advantage of any such law and covenants
that it will not  hinder,  delay or impede  the  execution  of any power  herein
granted to the Trustee,  but will suffer and permit the  execution of every such
power as though no such law had been enacted.

                                   Article 5
                                   THE TRUSTEE

     Section 5.01. DUTIES OF TRUSTEE. If an Event of Default has occurred and is
continuing, the Trustee shall with respect to Securities exercise its rights and
powers and use the same degree of care and skill in their  exercise as a prudent
man would  exercise  or use under the  circumstances  in the  conduct of his own
affairs.

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

               (i)  the  Trustee   need  perform  only  those  duties  that  are
          specifically set forth in this Indenture and no others; and

               (ii) in the  absence of bad faith on its part,  the  Trustee  may
          conclusively  rely,  as  to  the  truth  of  the  statements  and  the
          correctness  of the opinions  expressed  therein,  upon  certificates,
          notices or opinions  furnished  to the Trustee and  conforming  to the
          requirements of this Indenture. However, the Trustee shall examine the
          certificates,  notices and opinions to  determine  whether or not they
          conform to the requirements of this Indenture.

          (b)  The  Trustee  may  not be  relieved  from  liability  for its own
     negligent  action,  its own  negligent  failure  to act or its own  willful
     misconduct, except that:

               (i) this  paragraph does not limit the effect of paragraph (a) of
          this Section;

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

               (iii) the Trustee  shall not be liable with respect to any action
          it takes or omits to take in good faith in accordance with a direction
          received by it pursuant to Section 4.12.

          (c) Every  provision of this  Indenture that in any way relates to the
     Trustee is subject to paragraphs (a), (b) and (c) of this Section.

          (d) The Trustee  may refuse to perform any duty or exercise  any right
     or power unless it receives indemnity  satisfactory to it against any loss,
     liability or expense.

          (e) The Trustee shall not be liable for interest on any money received
     by it except as the Trustee may agree with the Company.

     Section 5.02.  RIGHTS OF TRUSTEE.  Subject to Section 5.01, the Trustee may
rely on any  document  believed  by it to be genuine  and to have been signed or
presented by the proper  person.  The Trustee need not  investigate  any fact or
matter stated in the document.

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

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

          (c) The  Trustee  shall not be liable for any action it takes or omits
     to take in good faith  which it  believes  to be  authorized  or within its
     rights or powers.

          (d) The permissive  rights of the Trustee  enumerated herein shall not
     be construed as duties.

          (e) The Trustee shall not be charged with  knowledge of any Default or
     Event of  Default  with  respect  to the  Securities,  unless  either (i) a
     Responsible  Office of the  Trustee  shall have  actual  knowledge  of such
     Default or Event of Default or (ii) written notice of such Default or Event
     of Default  shall have been given to the  Trustee by the  Company or by and
     Holder of the Securities.

     Section  5.03.  INDIVIDUAL  RIGHTS OF  TRUSTEE,  ETC.  The  Trustee  in its
individual  or any other  capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or any of its  affiliates  with the same
rights it would have if it were not Trustee. Any Agent may do the same with like
rights. However, the Trustee must comply with Section 5.10 and 5.11.

     Section 5.04. TRUSTEE'S DISCLAIMER. The Trustee makes no representations as
to the validity or adequacy of this Indenture or the Securities, it shall not be
accountable  for the Company's use of the proceeds from the  Securities,  and it
shall not be  responsible  for any  statement in the  Securities  other than its
certificate of authentication.

     Section  5.05.  NOTICE OF DEFAULTS.  If a Default  occurs with respect to a
series of Securities  and is continuing  and if it is known to the Trustee,  the
Trustee  shall mail to each  Holder of such series of  Securities  notice of the
Default  within 90 days  after it  occurs.  Except  in the case of a default  in
payment on any Security, the Trustee may withhold the notice if and so long as a
committee of its Responsible  Officers in good faith determines that withholding
the notice is in the interests of such Holders.

     Section 5.06.  REPORTS BY TRUSTEE TO HOLDERs.  If required  pursuant to TIA
Section  313(a),  the  Trustee,  within 60 days after each May 15, shall mail to
each  Securityholder  a brief report dated as of May 15 that  complies  with TIA
Section 313(a). The Trustee also shall comply with the reporting  obligations of
TIA Section 313(b).

     A copy of each report at the time of its mailing to  Securityholders  shall
be filed with the Commission and each stock exchange on which the Securities are
listed.  The Company agrees to notify the Trustee whenever the Securities become
listed on any stock exchange.

     Section  5.07.  COMPENSATION  AND  INDEMNITY.  The Company shall pay to the
Trustee from time to time reasonable  compensation for its services. The Company
shall  reimburse  the  Trustee  upon  request for all  reasonable  out-of-pocket
expenses incurred by it. Such expenses shall include the reasonable compensation
and expenses of the Trustee's  agents and counsel.  The Company shall  indemnify
the Trustee against any loss or liability  incurred by it in connection with the
administration of this trust and its duties hereunder.  The Trustee shall notify
the Company  promptly of any claim for which it may seek indemnity.  The Company
need not pay for any settlement  made without its consent.  The Company need not
reimburse any expense or indemnify against any loss or liability incurred by the
Trustee through negligence or bad faith.

     To secure the Company's  payment  obligations in this Section,  the Trustee
shall have a senior claim to which the Securities are hereby made subordinate on
all money or property  held or  collected  by the  Trustee,  except that held in
trust to pay principal of and interest, if any, on particular Securities.

     When the  Trustee  incurs  expenses or renders  services  after an Event of
Default   specified  in  4.01(g)  or  4.01(h)  occurs,   the  expenses  and  the
compensation   for  the  services  are  intended  to   constitute   expenses  of
administration under any Bankruptcy Law.

     The  provisions  of this  Section  5.07 shall  survive the  resignation  or
removal of the Trustee and the termination of this Indenture.

     Section 5.08.  REPLACEMENT OF TRUSTEE.  The Trustee may resign with respect
to the  Securities  by so notifying  the  Company.  The Holders of a majority in
principal  amount of the  Securities  may remove the Trustee by so notifying the
removed Trustee and may appoint a successor Trustee with the Company's  consent.
The Company may remove the Trustee if:

          (a) the Trustee fails to comply with Section 5.10;

          (b) the Trustee is adjudged a bankrupt or an insolvent;

          (c) a receiver or other public  officer takes charge of the Trustee or
     its property; or

          (d) the Trustee otherwise becomes incapable of acting.

     If the Trustee  resigns or is removed or if a vacancy  exists in the office
of trustee  for any  reason,  the  Company  shall  promptly  appoint a successor
Trustee.

     A successor  Trustee shall deliver a written  acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee for the benefit of the
series  with  respect to which it is  retiring  to the  successor  Trustee,  the
resignation or removal of the retiring Trustee shall then become effective,  and
the  successor  Trustee  shall  have all the  rights,  powers  and duties of the
Trustee under this  Indenture with respect to that series.  A successor  Trustee
shall mail notice of its succession to each Holder of the Securities.

     If a successor  Trustee with respect to the Securities does not take office
within 60 days after the retiring  Trustee  resigns or is removed,  the retiring
Trustee,  the Company or the Holders of a majority  in  principal  amount of the
Securities may petition any court of competent  jurisdiction for the appointment
of a successor Trustee.

     If the Trustee with respect to the Securities  fails to comply with Section
5.10,  any  Holder  of  Securities  of that  series  may  petition  any court of
competent  jurisdiction  for the removal of the Trustee and the appointment of a
successor Trustee.

     If there are two or more  Trustees at any time under this  Indenture,  each
will be the  Trustee of a separate  trust  held  under  this  Indenture  for the
benefit of the series of  Securities  for which it is acting as Trustee  and the
rights and  obligations  of each Trustee will be determined as if it were acting
under a separate indenture.

     Section 5.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee consolidates
with,  merges  or  converts  into  or  transfers  all or  substantially  all its
corporate  trust  assets to another  corporation,  the  resulting,  surviving or
transferee corporation without any further act shall be the successor Trustee.

     Section 5.10.  ELIGIBILITY;  DISQUALIFICATION.  This Indenture shall always
have a Trustee  that  satisfies  the  requirements  of TIA Section  310(a).  The
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition. The Trustee shall
comply with TIA Section 310(b),  PROVIDED that the question  whether the Trustee
has a conflicting  interest  shall be determined as if each series of Securities
were separate issues of securities issued under separate indentures.

     Section  5.11.  PREFERENTIAL  COLLECTION  OF CLAIMS  AGAINST  COMPANY.  The
Trustee   shall  comply  with  TIA  Section   311(a),   excluding  any  creditor
relationship  listed in TIA Section  311(b).  A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.

                                   Article 6
                                   [RESERVED]

                                   Article 7
                    CONSOLIDATION, MERGER, SALE OR CONVEYANCE

     Section 7.01.  CONSOLIDATIONS  AND MERGERS OF COMPANY  PERMITTED SUBJECT TO
CERTAIN  CONDITIONS.  The Company shall not  consolidate  with or merge into any
other corporation or convey,  transfer or lease all of its assets to any Person,
unless:

     (a) either (1) the Company shall be the continuing Company in the case of a
merger or (2) the  corporation  formed by such  consolidation  or into which the
Company is merged or the Person which  acquires by  conveyance  or transfer,  or
which leases, all of the assets of the Company shall be a corporation  organized
and  existing  under the laws of the United  States of  America,  any  political
subdivision  thereof or any State  thereof  and shall  expressly  assume,  by an
indenture  supplemental  hereto,  executed and delivered to the Trustee, in form
satisfactory  to the  Trustee,  the due and  punctual  payment  of the  Accreted
Principal  Amount,  Redemption  Price,  Purchase  Price  or  Fundamental  Change
Purchase  Price  with  respect  to any  Security  and  any  interest  (including
Contingent  Interest and  Liquidated  Damages,  if any) on all the Securities of
each series and the  performance of every covenant of this Indenture on the part
of the Company to be performed or observed;

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

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

     Section 7.02. RIGHTS AND DUTIES OF SUCCESSOR ENTITY. Upon any consolidation
with or merger into any other corporation, or any conveyance,  transfer or lease
of the  properties  and assets of the  Company  substantially  as an entirety in
accordance with Section 7.01, the successor entity formed by such  consolidation
or into which the  Company is merged or to which such  conveyance,  transfer  or
lease is made shall succeed to, and be  substituted  for, and may exercise every
right and power of, the Company under this  Indenture with the same effect as if
such successor had been named as the Company herein,  and thereafter,  except in
the case of a lease,  the Company  (which term for this  purpose  shall mean the
Person named as the "Company" in the first  paragraph of this  instrument or any
successor  entity  which  shall  theretofore  have  become  such  in the  manner
presented in this Article)  shall be relieved of all  obligations  and covenants
under this Indenture and the Securities.

                                   Article 8
                             SUPPLEMENTAL INDENTURES

     Section  8.01.  SUPPLEMENTAL  INDENTURES  WITHOUT  CONSENT OF HOLDERS.  The
Company, when authorized by a Board Resolution, and the Trustee may from time to
time and at any time enter into an indenture or indentures  supplemental  hereto
(which shall conform to the provisions of the TIA as in force at the date of the
execution thereof) for one or more of the following purposes:

          (i) to evidence the succession of another corporation or entity to the
     Company,  or successive  successions,  under the provisions of Section 7.01
     and the assumption by the successor corporation or entity of the covenants,
     agreements  and  obligations  of the Company under this Indenture and under
     each series of the Securities;

          (ii) to  surrender  any of the  Company's  rights or powers  under the
     Indenture,   to  add  to  the  Company's   covenants   further   covenants,
     restrictions,  conditions,  or provisions for the protection of the Holders
     of any  series  of  Securities,  and  to  make a  default  in any of  these
     additional covenants, restrictions,  conditions, or provisions a Default or
     an Event of Default under the Indenture;

          (iii) to cure any  ambiguity or to make  corrections  to any provision
     herein  or to make  such  other  provisions  with  respect  to  matters  or
     questions  arising  under this  Indenture,  provided  such action shall not
     adversely affect the interests of the Holders of Securities;

          (iv) to modify or amend this Indenture to permit the  qualification of
     this  Indenture  or any  supplemental  indenture  under  the TIA as then in
     effect;

          (v) to add guarantees  with respect to any series of the Securities or
     to secure any series of the Securities;

          (vi) to make any change that does not  adversely  affect the rights of
     any Holder; and

          (vii) to  evidence  and  provide  for the  acceptance  of  appointment
     hereunder by a successor or separate Trustee with respect to the Securities
     and to add to or change any of the provisions of this Indenture as shall be
     necessary to provide for or  facilitate  the  administration  of the trusts
     hereunder.

     Any  amendment  described in clause (iii) above made solely to conform this
Indenture to the final offering  memorandum  provided to investors in connection
with the initial offering of the Securities by the Company will not be deemed to
adversely affect the interests of Holders.

     The Trustee is hereby  authorized to join with the Company in the execution
of any such supplemental  indenture,  to make any further appropriate agreements
and  stipulations  which may be therein  contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder.

     Any  supplemental  indenture  authorized by the  provisions of this Section
8.01 may be executed  by the Company and the Trustee  without the consent of the
Holders  of  any  of  the  outstanding  Securities,  notwithstanding  any of the
provisions of Section 8.02.

     Section 8.02.  SUPPLEMENTAL  INDENTURES  WITH CONSENT OF HOLDERS.  With the
consent of the Holders of at least a majority in  Original  Principal  Amount of
the outstanding  Securities of any series,  by Act of said Holders  delivered to
the Company and the Trustee, the Company, when authorized by a Board Resolution,
and the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the TIA
as in force at the date of  execution  thereof)  for the  purpose  of adding any
provisions to or changing in any manner or eliminating  any of the provisions of
this Indenture or of any  supplemental  indenture with respect to such series of
Securities  or of  modifying  in any manner  the  rights of the  Holders of such
series of Securities;  PROVIDED,  HOWEVER,  that no such supplemental  indenture
shall,  without the consent of the Holder of each outstanding  Security affected
thereby:

     (a) reduce the  percentage in Original  Principal  Amount of the Securities
the consent of whose holders is required for any amendment to this Indenture;

     (b)  reduce the rate of or extend  the time for  payment  of  regular  cash
interest (including  Contingent Interest and Liquidated Damages) or accretion of
principal  on  any  Security  or  reduce  the  amount  of any  interest  payment
(including Contingent Interest and Liquidated Damages) or accretion of principal
on any Security or to alter the manner of  calculation  of interest or accretion
of principal, Contingent Interest or Liquidated Damages payable on any Security;

     (c) reduce the Original Principal Amount of or Accreted Principal Amount of
or change the stated maturity of any payment of Accreted Principal Amount of, or
any installment of principal of or interest on, any Security;

     (d) reduce the  Redemption  Price,  Purchase  Price or  Fundamental  Change
Purchase Price or change the time at which any Security may or shall be redeemed
or purchased;

     (e) make any Security payable in a different currency;

     (f) make any change in provisions of this Indenture  relating to waivers of
defaults or amendments that require unanimous consent;

     (g) change any place of payment  where any Security or interest  thereon is
payable;

     (h) make any change  that  adversely  affects  the right of the  Holders to
convert the Securities  under Article 11 of this Indenture or reduces the amount
payable upon conversion of the Securities;

     (i) impair the right to bring a lawsuit for the  enforcement of any payment
on or after  the  Stated  Maturity  (or in the case of  redemption  pursuant  to
Article 10 hereof or purchase pursuant to Article 12 or Article 13 hereof, on or
after the Redemption Date, Purchase Date or Fundamental Change Purchase Date, as
the case may be); or

     (j) modify any of the  provisions of this Section 8.02,  except to increase
the  percentage in Original  Principal  Amount of Securities  whose holders must
consent to an  amendment or to provide that  certain  other  provisions  of this
Indenture cannot be modified or waived without the consent of the Holder of each
outstanding Security affected by such modification or waiver.

     Upon the request of the Company accompanied by a copy of a Board Resolution
authorizing  the  execution  of any such  supplemental  indenture,  and upon the
filing with the Trustee of evidence of the consent of Holders as aforesaid,  the
Trustee  shall  join with the  Company  in the  execution  of such  supplemental
indenture.  It shall not be necessary  for any Act of Holders under this Section
to approve the particular form of any proposed  supplemental  indenture,  but it
shall be sufficient if such Act shall approve the substance thereof.

     Section  8.03.  EXECUTION OF  SUPPLEMENTAL  INDENTURES.  In  executing,  or
accepting the additional trusts created by, any supplemental indenture permitted
by this  Article or the  modifications  thereby  of the  trusts  created by this
Indenture,  the Trustee  shall be provided  with,  in addition to the  documents
required  by  Section  17.04,  and  (subject  to  Section  5.01)  shall be fully
protected in relying upon,  an Opinion of Counsel  stating that the execution of
such  supplemental  indenture is authorized or permitted by this Indenture.  The
Trustee  may,  but shall not be  obligated  to enter into any such  supplemental
indenture  which affects the Trustee's  own rights,  duties or immunities  under
this Indenture or otherwise.

     Section 8.04. EFFECT OF SUPPLEMENTAL INDENTURES.  Upon the execution of any
supplemental  indenture  pursuant  to  the  provisions  of  this  Article,  this
Indenture  shall be and be deemed  to be  modified  and  amended  in  accordance
therewith, and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee,  the Company and the Holders
shall thereafter be determined,  exercised and enforced hereunder subject in all
respects to such modifications and amendments,  and all the terms and conditions
of any such  supplemental  indenture  shall be and be  deemed  to be part of the
terms and conditions of this Indenture for any and all purposes.

     Section  8.05.  NOTATION  ON OR EXCHANGE OF  SECURITIES.  If an  amendment,
supplement  or waiver  changes the terms of a Security,  the Trustee may require
the Holder of the Security to deliver it to the  Trustee.  The Trustee may place
an appropriate notation on the Security about the changed terms and return it to
the  Holder.  Alternatively,  if the Company or the  Trustee so  determine,  the
Company  in  exchange  for  the  Security  shall  issue  and the  Trustee  shall
authenticate a new Security that reflects the changed terms.

                                   Article 9
                            COVENANTS OF THE COMPANY

     Section 9.01. PAYMENT OF PRINCIPAL AND INTEREST.  The Company covenants and
agrees that it will duly and  punctually pay or cause to be paid all payments in
respect of the  Securities in accordance  with the terms of the  Securities  and
this Indenture.  Any amounts to be given to the Trustee or Paying Agent shall be
deposited  with the Trustee or Paying  Agent by 10:00 a.m. New York City time by
the  Company at the latest on the day such  payment is due.  Accreted  Principal
Amount,  Redemption Price, Purchase Price, Fundamental Change Purchase Price and
interest (including Contingent Interest, if any, and Liquidated Damages, if any)
for such  Securities,  shall be considered paid on the applicable date due if on
such date the  Trustee  or the  Paying  Agent  holds,  in  accordance  with this
Indenture,  money or securities,  if permitted hereunder,  sufficient to pay all
such amounts then due.

     Section  9.02.  COMPLIANCE  CERTIFICATE.  The Company  shall deliver to the
Trustee  within 120 days  after the end of each  fiscal  year of the  Company an
Officers'  Certificate stating whether or not the signers know of any default by
the Company in performing  their covenants in this Article 9. If they do know of
such a default, the certificate shall describe the default. The certificate need
not comply with Section 17.05.

     Section 9.03.  MAINTENANCE OF OFFICE OR AGENCY.  The Company shall maintain
an office or agency of the Trustee,  Registrar,  Paying Agent,  Conversion Agent
and transfer  agent,  where the Securities  may be presented or surrendered  for
payment, where the Securities may be surrendered for registration of transfer or
exchange,  where the Securities may be surrendered  for purchase,  redemption or
conversion  and where  notices  and demands to or upon the Company in respect of
the Securities  and this  Indenture may be served;  PROVIDED that, at all times,
the Company shall  maintain an office or agency of the Paying Agent and transfer
agent in the Borough of Manhattan,  The City of New York.  The Company will give
prompt  written  notice to the  Trustee of the  location,  and any change in the
location,  of such office or agency.  If at any time the  Company  shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof,  such presentations,  surrenders,  notices and demands
may be made or served at the  Corporate  Trust  Office of the  Trustee,  and the
Company  hereby   appoints  the  Trustee  as  its  agent  to  receive  all  such
presentations,  surrenders,  notices and demands.  The Corporate Trust Office of
the Trustee,  shall  initially be such office or agency for all of the aforesaid
purposes.

     The Company may also from time to time  designate one or more other offices
or agencies where the Securities may be presented or surrendered  for any or all
such purposes and may from time to time rescind such designations.

     Section 9.04. CALCULATION OF TAX ORIGINAL ISSUE DISCOUNT. The Company shall
file with the Trustee  promptly at the end of each  calendar  year (i) a written
notice  specifying the amount of Tax Original Issue  Discount  (including  daily
rates and accrual periods) accrued on each series of Securities as of the end of
such year and (ii) such other specific information relating to such Tax Original
Issue  Discount as may then be reasonably  requested by the Trustee and relevant
under the  Internal  Revenue  Code of 1986,  as amended from time to time or the
Treasury Regulations promulgated thereunder.

     Section 9.05.  FURTHER  INSTRUMENTS  AND ACTS. The Company will execute and
deliver such further  instruments  and do such further acts as may be reasonably
necessary or proper or as the Trustee may request to carry out more  effectively
the purposes of this Indenture.

     Section 9.06. NOTICE OF LIQUIDATED DAMAGES.

     (a) As soon as practicable  following the first Business Day of an Interest
Period for which Liquidated  Damages will be payable,  the Company shall issue a
press release  containing  this  information  and publish the information on its
website on the World Wide Web.

     (b) On any Interest Payment Date on which  Liquidated  Damages are payable,
the Company  shall issue a press release  stating the amount of such  Liquidated
Damages and setting  forth the manner in which such amount was  calculated,  and
publish such information on its website on the World Wide Web.

     Section  9.07.  CONTINGENT  DEBT  TREATMENT.  The  Company  agrees,  and by
acceptance  of a  beneficial  interest in a Security of a series each Holder and
any beneficial  owner of such Security shall be deemed to agree,  to treat,  for
United States federal income tax purposes,  such Securities as debt  instruments
that are  subject to  Treasury  Regulation  Section  1.1275-4  or any  successor
provision (the "contingent debt regulations") and to be bound (in the absence of
an  administrative  determination  or judicial  ruling to the  contrary)  by the
Company's  determination of the comparable yield and projected  payment schedule
for such  series  of  Securities  within  the  meaning  of the  contingent  debt
regulations,  and accordingly  shall treat, for United States federal income tax
purposes, the fair market value of the Common Stock received upon the conversion
of a Security  (together with any Cash payment in lieu of fractional  shares) or
Cash or a combination of Cash and Common Stock in lieu thereof,  as a contingent
payment on the Security for purposes of Treasury  Regulation Section 1.1275-4 or
any  successor  provision.  Holders  or  beneficial  owners may obtain the issue
price,  amount of Tax Original Issue  Discount,  issue date,  yield to maturity,
comparable yield and a copy of the projected payment schedule for each series of
Securities,   determined  by  the  Company   pursuant  to  the  contingent  debt
regulations,  by  submitting  a written  request  for it to the  Company  at the
following  address:  DST Systems,  Inc.,  333 West 11th Street,  Kansas City, MO
64105, Attention: DST Corporate Secretary.

     The Company  acknowledges  and agrees,  and by  acceptance  of a beneficial
interest in a Security of a series each Holder and any beneficial  owner of such
Security shall be deemed to acknowledge and agree, that (i) the comparable yield
means the  annual  yield the  Company  would  pay,  as of the issue  date,  on a
noncontingent,   nonconvertible,  fixed-rate  debt  instrument  with  terms  and
conditions  otherwise similar to those of such series of Securities and (ii) the
comparable yield and the projected  payment schedule that a Holder or beneficial
owner may obtain as described  above do not constitute a  representation  by the
Company  regarding  the  actual  amounts  that  will be paid on such  series  of
Securities  or the value of the Common  Stock into which the  Securities  may be
converted.

     Section 9.08. REPORTS BY COMPANY.  The Company shall file with the Trustee,
within 15 days after it files such annual and  quarterly  reports,  information,
documents and other reports with the Commission, copies of its annual report and
of the  information,  documents and other reports (or copies of such portions of
any of the foregoing as the Commission may by rules and  regulations  prescribe)
which the Company is required to file with the Commission pursuant to Section 13
or 15(d) of the Exchange  Act. In the event the Company is at any time no longer
subject to the  reporting  requirements  of Section 13 or 15(d) of the  Exchange
Act,  it  shall  continue  to  provide  the  Trustee  with  reports   containing
substantially  the same information as would have been required to be filed with
the Commission had the Company  continued to have been subject to such reporting
requirements.  In such event,  such  reports  shall be provided at the times the
Company  would have been  required to provide  reports had it  continued to have
been subject to such reporting requirements.  The Company also shall comply with
the other provisions of TIA Section 314(a).

     Delivery of such reports,  information  and documents to the Trustee is for
informational  purposes  only  and  the  Trustee's  receipt  of such  shall  not
constitute   constructive  notice  of  any  information   contained  therein  or
determinable  from  information  contained  therein,   including  the  Company's
compliance  with any of its  covenants  hereunder  (as to which the  Trustee  is
entitled to rely exclusively on Officers' Certificates).

     If at any time  while any of the  Securities  are  "restricted  securities"
within  the  meaning  of Rule  144,  the  Company  is no longer  subject  to the
reporting  requirements  of Section 13 or 15(d) of the Exchange Act, the Company
will prepare and will furnish to any Holder,  any beneficial owner of Securities
and  any  prospective  purchaser  of  Securities  designated  by a  Holder  or a
beneficial owner of Securities,  promptly upon request, the information required
pursuant to Rule 144A(d)(4) (or any successor  thereto) under the Securities Act
in connection with the offer, sale or transfer of Securities.

                                   Article 10
                            REDEMPTION OF SECURITIES

     Section 10.01.  RIGHT TO REDEEM;  NOTICES TO TRUSTEE.  The Company,  at its
option,  may redeem  either series of the  Securities,  in whole or from time to
time in part, in accordance with the provisions of paragraph 7 of that series of
Securities. If the Company elects to redeem Securities of a series in accordance
with paragraph 7 of such  Securities,  it shall notify the Trustee in writing of
the Redemption Date, the Original  Principal Amount of each series of Securities
to be  redeemed  and the  Redemption  Price of each series of  Securities  to be
redeemed.

     Section 10.02. SELECTION OF SECURITIES TO BE REDEEMED. If less than all the
Securities  of a  series  are to be  redeemed,  the  Trustee  shall  select  the
Securities  of such  series  to be  redeemed  pro rata or by lot or by any other
method the Trustee considers fair and appropriate (so long as such method is not
prohibited  by the  rules of any  stock  exchange  on which  such  series of the
Securities  are then  listed).  The Trustee shall make the selection at least 15
days but not more than 60 days before the Redemption  Date from the  outstanding
Securities of such series not previously called for redemption.  The Trustee may
select for redemption  portions of the Original  Principal  Amount of Securities
that have denominations larger than $1,000.  Securities and portions of them the
Trustee selects shall be in Original  Principal Amounts of $1,000 or an integral
multiple of $1,000. Provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities  called for redemption.  The
Trustee  shall  notify the  Company  promptly of the  Securities  or portions of
Securities to be redeemed.

     If any Security selected for partial redemption is converted in part before
Business Day immediately preceding the Redemption Date, the converted portion of
such Security shall be deemed (so far as may be) to be the portion  selected for
redemption.   Securities  which  have  been  converted  during  a  selection  of
Securities to be redeemed may be treated by the Trustee as  outstanding  for the
purpose of such selection.

     Section 10.03. NOTICE OF REDEMPTION.  At least 30 days but not more than 60
days before a Redemption  Date, the Company shall mail a notice of redemption by
first-class  mail,  postage prepaid,  to the Trustee,  the Paying Agent and each
Holder of Securities to be redeemed.

     (a) The notice shall  identify the Securities to be redeemed and shall at a
minimum state:

          (i) the Redemption Date for such Securities;

          (ii) the Redemption Price for such Securities;

          (iii) the Conversion Rate for such Securities;

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

          (v) that Securities called for redemption may be converted at any time
     before the close of business on the Business Day immediately  preceding the
     Redemption Date;

          (vi) that  Holders  who want to convert  Securities  must  satisfy the
     requirements set forth in the applicable provisions of the Securities;

          (vii)  whether  the  Company  will  deliver  Cash,  Common  Stock or a
     combination  of Cash  and  Common  Stock  in the  event a  Holder  converts
     Securities called for redemption;

          (viii) that  Securities  called for redemption  must be surrendered to
     the Paying Agent to collect the Redemption Price;

          (ix) if fewer than all the  outstanding  Securities of such series are
     to be redeemed,  the certificate  number and Original  Principal Amounts of
     the particular Securities to be redeemed;

          (x) that,  unless  the  Company  defaults  in making  payment  of such
     Redemption Price,  interest  (including  Contingent  Interest,  if any, and
     Liquidated  Damages, if any) on Securities called for redemption will cease
     to accrue and principal on Securities  called for redemption  will cease to
     accrete on and after the Redemption Date; and

          (xi) the CUSIP number of the Securities.

     (b) At the  Company's  request,  the  Trustee  shall  give  the  notice  of
redemption in the Company's name and at the Company's expense, provided that the
Company makes such request at least three  Business Days prior to such notice of
redemption.

     Section 10.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is
given, Securities called for redemption become due and payable on the Redemption
Date and at the  Redemption  Price stated in the notice,  except for  Securities
which  are  converted  in  accordance  with the  terms of this  Indenture.  Upon
surrender to the Paying Agent,  such Securities  shall be paid at the Redemption
Price stated in the notice.

     Section 10.05.  DEPOSIT OF REDEMPTION PRICE.  Prior to 10:00 a.m., New York
City time on the  Redemption  Date,  the Company  shall  deposit with the Paying
Agent (or if the Company or a  Subsidiary  or an  Affiliate of either of them is
the Paying Agent, shall segregate and hold in trust) money sufficient to pay the
Redemption  Price of all  Securities  to be  redeemed  on that date  other  than
Securities or portions of  Securities  called for  redemption  which on or prior
thereto have been  delivered by the Company to the Trustee for  cancellation  or
have been converted. The Paying Agent shall as promptly as practicable return to
the Company any money not  required for that purpose  because of  conversion  of
Securities  pursuant to Article 11. If such money is then held by the Company in
trust and is not  required  for such  purpose it shall be  discharged  from such
trust.

     Section 10.06.  SECURITIES  REDEEMED IN PART.  Upon surrender of a Security
that is  redeemed  in part,  the Company  shall  execute  and the Trustee  shall
authenticate  and  deliver  to  the  Holder  a new  Security  in  an  authorized
denomination equal in Original Principal Amount to the unredeemed portion of the
Security surrendered.

                                   Article 11
                                   CONVERSION

     Section 11.01. RIGHT TO CONVERT.

     (a) Subject to and upon  compliance  with the  provisions of this Indenture
and  paragraph 10 of the relevant  Securities  the Holder of any Security  shall
have the right,  at such  Holder's  option,  to convert  such  Security,  or any
portion of such Security with an Original Principal Amount that is a multiple of
$1,000,  into  fully  paid and  non-assessable  shares of Common  Stock (as such
shares shall then be  constituted)  at the Conversion  Rate for such Security in
effect at such time, by surrender of the Security so to be converted in whole or
in  part,  together  with any  required  funds,  only  under  the  circumstances
described in this Section 11.01 and in the manner provided in Section 11.02.

     Notwithstanding  any other  provision of the Securities or this  Indenture,
all  Holders'  rights  with  respect to  conversion  of the  Securities  and the
Company's  obligation to deliver shares of Common Stock at the  Conversion  Rate
upon such  conversion  (the  "CONVERSION  OBLIGATION"),  are  subject,  in their
entirety, to the Company's right, in its sole and absolute discretion,  to elect
to satisfy  such  Conversion  Obligation  in any manner  permitted  pursuant  to
Section 11.03.

     (b) Securities of any series may be surrendered  for conversion into shares
of Common Stock in integral  multiples of $1,000  Original  Principal  Amount of
such series of Securities during any calendar quarter commencing after September
30, 2003 (and only during such  calendar  quarter),  if the Last  Reported  Sale
Price of the Common  Stock for at least 20 Trading  Days during the period of 30
consecutive Trading Days ending on the last Trading Day of the previous calendar
quarter is greater than or equal to 120% of the Conversion Price for such series
of Securities as of the last day of such previous calendar quarter.

     The  Company  shall  notify the Trustee in writing on or prior to the fifth
Business Day following the first day of each calendar quarter  (commencing after
September  30,  2003)  whether the  condition  to  conversion  set forth in this
Section  11.01(b)  shall  have been  satisfied  with  respect  to such  calendar
quarter.

     (c) Securities of any series may be surrendered  for conversion into shares
of Common Stock in integral  multiples of $1,000  Original  Principal  Amount of
such series of  Securities at any time during the five Business Day period after
any five  consecutive  Trading  Day  period in which the  Trading  Price of such
series of Securities  for each day of such five Trading Day period would be less
than 95% of the product of the Last Reported Sale Price and the Conversion  Rate
for such series of  Securities as of such Trading Day;  PROVIDED,  that a Holder
may not convert  Securities  of a series in reliance  on this  Section  11.01(c)
after August 15, 2018 if on any Trading Day during such five consecutive Trading
Day period the Last  Reported Sale Price of the Common Stock is between 100% and
120% of the Conversion Price for such series of Securities.

     In connection with any conversion  pursuant to this Section  11.01(c),  the
Trustee  shall not have any  obligation  to determine  the Trading  Price of the
Securities of a series unless the Company has requested  such  determination  in
writing and the Company shall have no  obligation to make such request  unless a
Holder provides the Company with  reasonable  evidence that the Trading Price of
such series of  Securities  be less than 95% of the product of the Last Reported
Sale  Price of the  Common  Stock  and the  Conversion  Rate for such  series of
Securities.  At such time,  the Company shall instruct the Trustee to obtain the
Trading Price of such series of Securities beginning on the next Trading Day and
on each successive  Trading Day until the Trading Price is greater than or equal
to 95% of the product of the Last  Reported  Sale Price of the Common  Stock and
the Conversion Rate for such series of Securities as of such Trading Day.

     (d) Any  Securities  called for  redemption  under Article 10 hereof may be
surrendered for conversion into shares of Common Stock in integral  multiples of
$1,000 Original  Principal  Amount at any time prior to the close of business on
the  Business  Day  immediately  preceding  the  Redemption  Date,  even  if the
Securities are not otherwise convertible at such time.

     (e)  Securities may be  surrendered  for  conversion  into shares of Common
Stock in integral multiples of $1,000 Original Principal Amount

          (i) if the Company elects to distribute to all holders of Common Stock

               (A) rights or warrants  entitling them to purchase,  for a period
          expiring within 60 days of the date of such distribution, Common Stock
          at less than the Market Price on the record date for such distribution
          or

               (B) assets,  debt  securities or rights to purchase the Company's
          securities,  which distribution has a per share value as determined by
          the Board of Directors  exceeding  10% of the Last Reported Sale Price
          of the Common  Stock on the  Trading  Day  immediately  preceding  the
          declaration date for such distribution

     beginning on the date that the Company  gives notice to the Holders of such
     right,  which shall not be less than 20 days prior to the Ex-Dividend  Date
     for such distribution,  and Securities may be surrendered for conversion at
     any time thereafter  until the earlier of close of business on the Business
     Day prior to the Ex-Dividend  Date and the date the Company  announces that
     such dividend or  distribution  will not take place;  PROVIDED that Holders
     shall not have the right to surrender Securities of a series for conversion
     pursuant to this Section 11.01(e)(i) if they will otherwise  participate in
     the  distribution  described above without first  converting  Securities of
     such series into Common Stock; or

          (ii) if the Company is a party to a  consolidation,  merger or binding
     share exchange  pursuant to which shares of Common Stock would be converted
     into cash,  securities or other property as set forth in Section 11.10(ii),
     at any  time  from  and  after  the  date  that  is 15  days  prior  to the
     anticipated  effective  date of the  transaction  until 15 days  after  the
     actual  effective  date  of  such  transaction  (or,  if  such  transaction
     constitutes a Fundamental Change,  until the applicable  Fundamental Change
     Purchase Date) and, at the effective time of the transaction,  the right to
     convert a Security  into  shares of Common  Stock  shall be changed  into a
     right to convert such Security into the kind and amount of cash, securities
     or other  property of the Company or another  person that the Holder  would
     have received if the Holder had converted such Security  immediately  prior
     to the transaction as set forth in Section 11.10.

     Section 11.02. CONVERSION PROCEDURES.  To convert a Security of any series,
a Holder must (a) duly  complete and manually sign the Notice of Conversion or a
facsimile  of the Notice of  Conversion  on the back of the  Securities  of such
series,  in the form  included  in Exhibits  A-1 and A-2 hereto (the  "NOTICE OF
CONVERSION") and deliver such notice to the Conversion  Agent, (b) surrender the
Security to the  Conversion  Agent,  (c) furnish  appropriate  endorsements  and
transfer documents if required by the Registrar or the Conversion Agent, (d) pay
all transfer or similar taxes, if required and (e) if required,  pay funds equal
to the  interest  (including  Contingent  Interest,  if any) payable on the next
Interest  Payment  Date. To convert a beneficial  interest in the Security,  the
holder  thereof  must  comply with  clauses  (c)  through  (e) of the  preceding
sentence and comply with the Depositary's procedures for conversion. The date on
which the Holder satisfies all of those requirements is the "CONVERSION DATE."

     Subject  to  the  next  succeeding  sentence,  the  Company  will,  on  the
applicable  Conversion  Settlement  Date, (i) pay the Cash component  (including
Cash in lieu of any fraction of a share to which such Holder would  otherwise be
entitled), if any, of the Conversion Settlement Distribution determined pursuant
to Section 11.03 to the Holder of a Security surrendered for conversion, or such
Holder's nominee or nominees, and (ii) issue, or cause to be issued, and deliver
to the Conversion Agent or to such Holder, or such Holder's nominee or nominees,
certificates  for the number of full  shares of Common  Stock,  if any, to which
such  Holder   shall  be  entitled  as  part  of  such   Conversion   Settlement
Distribution.

     The Person in whose name the Common Stock  certificate is registered  shall
be  deemed  to be a  shareholder  of  record  at the  close of  business  on the
applicable  Conversion  Settlement Date; PROVIDED HOWEVER, that if any such date
is a date when the stock transfer  books of the Company are closed,  such Person
shall be deemed a  shareholder  of record as of the next date on which the stock
transfer books of the Company are open.

     No  payment  or  adjustment  shall  be made  for  dividends  on,  or  other
distributions  with  respect  to, any Common  Stock  except as  provided in this
Article.  On conversion of a Security,  except for conversion  during the period
from the close of business on any Regular Record Date immediately  preceding any
Interest  Payment Date to the open of business on such Interest Payment Date, in
which case the Holder on such  Regular  Record Date shall  receive the  interest
payable on such  Interest  Payment  Date,  that  portion  of accrued  and unpaid
interest,  including Contingent Interest, if any, and any accretion of principal
on the  converted  Security  attributable  to the  period  from the most  recent
Interest  Payment Date (or, if no Interest  Payment Date has occurred,  from the
Issue Date) through the Conversion Date shall not be cancelled,  extinguished or
forfeited,  but rather shall be deemed to be paid in full to the Holder  thereof
through delivery of the Common Stock (together with the Cash payment, if any, in
lieu of fractional shares), or Cash or a combination of Cash and Common Stock in
lieu  thereof,  in exchange for the  Security  being  converted  pursuant to the
provisions  hereof,  and the fair market  value of such  shares of Common  Stock
(together with any such Cash payment in lieu of fractional shares), or Cash or a
combination  of Cash and  Common  Stock in lieu  thereof,  shall be  treated  as
issued, to the extent thereof, first in exchange for accrued and unpaid interest
(including  Contingent Interest, if any) accrued through the Conversion Date and
the  balance,  if any, of such fair market  value of such Common  Stock (and any
such Cash  payment),  or Cash or a combination  of Cash and Common Stock in lieu
thereof,  shall be  treated as issued in  exchange  for the  Accreted  Principal
Amount of the Security being converted pursuant to the provisions hereof.

     If a Holder  converts  more than one Security of a series at the same time,
the number of shares of Common Stock issuable upon the conversion shall be based
on the  aggregate  Original  Principal  Amount  of  such  series  of  Securities
converted.

     Upon  surrender of a Security that is converted in part,  the Company shall
execute,  and the Trustee shall  authenticate  and deliver to the Holder,  a new
Security of the same series equal in Original  Principal  Amount to the Original
Principal Amount of the unconverted portion of the Security surrendered.

     Securities  of a series or  portions  thereof  surrendered  for  conversion
during  the  period  from the  close of  business  on any  Regular  Record  Date
immediately  preceding any Interest Payment Date to the open of business on such
Interest  Payment  Date shall be  accompanied  by payment to the  Company or its
order,  in New  York  Clearing  House  funds or other  funds  acceptable  to the
Company,  of an amount equal to the interest  payable on such  Interest  Payment
Date with respect to the Original  Principal Amount of Securities of such series
or portions  thereof being  surrendered  for  conversion;  PROVIDED that no such
payment need be made (1) if the Company has specified a Redemption Date for such
series of Securities that occurs during the period from the close of business on
a Regular  Record Date to the open of business on the  Interest  Payment Date to
which such  Regular  Record Date  relates,  (2) if the  Company has  specified a
Fundamental  Change  Purchase  Date for such  series of  Securities  during such
period,  (3) with respect to any  Liquidated  Damages  payable on such  Interest
Payment  Date or (4) if any  overdue  interest  or overdue  Contingent  Interest
exists  on the  Conversion  Date  with  respect  to  the  series  of  Securities
converted, to the extent of such overdue interest.

     Section 11.03. PAYMENT OF CASH IN LIEU OF COMMON STOCK.

     (a) If a Holder  elects to convert  all or any  portion of a Security  of a
series into shares of Common Stock as set forth in Section 11.01 and the Company
receives  such  Holder's  Notice of Conversion on or prior to the day that is 20
days prior to the Stated  Maturity,  or with  respect to  Securities  called for
redemption pursuant to Section 10.01, the applicable Redemption Date (the "FINAL
NOTICE  DATE"),  the  Company  may choose to satisfy  all or any  portion of the
Conversion  Obligation in Cash by notifying  such Holder  through the Trustee of
the dollar  amount to be satisfied  in Cash (which must be  expressed  either as
100% of the Conversion Obligation or as a fixed dollar amount) at any time on or
before the date that is two Business Days following the Company's receipt of the
Notice of Conversion (such period, the "CASH SETTLEMENT NOTICE PERIOD").  If the
Company elects to pay Cash for any portion of the shares  otherwise  issuable to
the Holder,  the Holder may retract the Notice of  Conversion at any time during
the two Business Day period beginning on the day after the final day of the Cash
Settlement  Notice  Period  (the  "CONVERSION  RETRACTION  PERIOD").  If no such
election is made,  no such  retraction  can be made (and a Notice of  Conversion
shall be irrevocable).  With respect to any Notice of Conversion received by the
Company prior to the Final Notice Date, the "CONVERSION SETTLEMENT DISTRIBUTION"
for any Security  subject to such Notice of  Conversion  shall  consist of Cash,
Common Stock or a combination  thereof,  as selected by the Company as set forth
below:

          (i) if the Company elects to satisfy the entire Conversion  Obligation
     in shares of Common Stock, the Conversion Settlement  Distribution shall be
     a number of shares equal to (1) the aggregate  Original Principal Amount of
     the  Securities  to be converted  divided by 1,000,  multiplied  by (2) the
     Conversion  Rate,  plus Cash for any fractional  shares pursuant to Section
     11.04;  PROVIDED  THAT,  if on the  date a Holder  submits  the  Notice  of
     Conversion with respect to Transfer  Restricted  Securities  there exists a
     Registration  Default  affecting  the Common  Stock,  for  purposes of this
     Section 11.03(a)(i) and Section 11.03(a)(iii), the Conversion Rate shall be
     multiplied by 1.03;

          (ii) if the Company elects to satisfy the entire Conversion Obligation
     in Cash, the Conversion Settlement  Distribution shall be Cash in an amount
     equal to the product of:

               (A) a number equal to the product of (x) the  aggregate  Original
          Principal  Amount  of  Securities  to be  converted  divided  by 1,000
          multiplied by (y) the Conversion Rate, and

               (B) the  average of the Last  Reported  Sale Prices of the Common
          Stock for the 10 Trading Days beginning on the Trading Day immediately
          following the final day of the Conversion Retraction Period (the "CASH
          SETTLEMENT AVERAGING PERIOD"); and

          (iii) if the  Company  elects to satisfy a fixed  portion  (other than
     100%) of the  Conversion  Obligation  in Cash,  the  Conversion  Settlement
     Distribution shall consist of such cash amount ("CASH AMOUNT") and a number
     of shares  equal to the greater of (1) zero and (2) the excess,  if any, of
     the number of shares  calculated  as set forth in clause (i) above over the
     number  of  shares  equal to the sum,  for each day of the Cash  Settlement
     Averaging  Period,  of (x) 10% of the Cash Amount,  divided by (y) the Last
     Reported  Sale  Price of the  Common  Stock on such day,  plus Cash for any
     fractional shares pursuant to Section 11.04.

     (b) At any time on or before any Final Notice Date, the Company will notify
the  Trustee in writing  whether it intends to satisfy all or any portion of the
Conversion  Obligation  with respect to  conversions of Securities for which the
Company  receives a Notice of  Conversion  after such Final  Notice Date and the
dollar amount to be satisfied in Cash (which must be expressed either as 100% or
as a fixed dollar amount).  In such case, the applicable  Conversion  Settlement
Distribution  will be  computed  in the same  manner as set forth in clause  (a)
above except that the Cash Settlement  Averaging  Period shall be the 10 Trading
Days  beginning on the first Trading Day following the Company's  receipt of the
Notice of  Conversion,  or in the event  that the  Company  receives a Notice of
Conversion on the Business Day prior to the Stated Maturity, the 10 Trading Days
beginning on the first Trading Day after the Stated Maturity.

     Section 11.04.  FRACTIONAL SHARES. The Company shall not issue a fractional
share of Common Stock upon conversion of a Security.  Instead,  the Company will
deliver Cash for the current market value of the fractional  share.  The current
market value of a fractional  share of Common Stock shall be determined,  to the
nearest  1/1,000th of a share,  by multiplying the Last Reported Sale Price of a
full  share of  Common  Stock  on the  Trading  Day  immediately  preceding  the
Conversion Date by the fractional amount and rounding the product to the nearest
whole cent.

     Section 11.05.  TAXES ON CONVERSION.  If a Holder converts a Security,  the
Company shall pay any documentary,  stamp or similar issue or transfer taxes due
on the issue of shares of Common Stock upon such conversion. However, the Holder
shall pay any such tax which is due because the Holder requests the shares to be
issued in a name other than the Holder's name.  The Conversion  Agent may refuse
to deliver the certificate  representing the Common Stock being issued in a name
other  than  the  Holder's  name  until  the  Conversion  Agent  receives  a sum
sufficient  to pay any tax which will be due because the shares are to be issued
in a name other than the Holder's  name.  Nothing  herein shall preclude any tax
withholding required by law or regulation.

     Section 11.06.  RESERVATION OF SHARES,  SHARES TO BE FULLY PAID; COMPLIANCE
WITH GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK.

     (a) The Company shall  provide,  free from  preemptive  rights,  out of its
authorized but unissued shares or shares held in treasury,  sufficient shares of
Common Stock to provide for the conversion of the  Securities  from time to time
as such Securities are presented for conversion.

     (b) Before taking any action which would cause an adjustment increasing the
Conversion Rate to an amount that would cause the Conversion Price to be reduced
below the then par value,  if any, of the shares of Common Stock  issuable  upon
conversion  of any series of  Securities,  the Company  will take all  corporate
action which may, in the opinion of its counsel,  be necessary in order that the
Company  may  validly and  legally  issue  shares of such  Common  Stock at such
adjusted Conversion Rate.

     (c) (i) The Company  covenants that all shares of Common Stock which may be
issued  upon  conversion  of  Securities  will  upon  issue  be  fully  paid and
non-assessable  by the Company and free from all taxes,  liens and charges  with
respect to the issue thereof.

          (ii) The Company  covenants  that, if any shares of Common Stock to be
     provided for the purpose of  conversion  of  Securities  hereunder  require
     registration  with or  approval  of any  governmental  authority  under any
     federal  or state  law  before  such  shares  may be  validly  issued  upon
     conversion,  the  Company  will  in  good  faith  and as  expeditiously  as
     possible,  to the extent then permitted by the rules and interpretations of
     the Securities and Exchange Commission (or any successor thereto), endeavor
     to secure such registration or approval, as the case may be.

     (d) The Company  further  covenants  that,  if at any time the Common Stock
shall be listed on the New York Stock Exchange or any other national  securities
exchange or automated  quotation  system,  the Company will, if permitted by the
rules of such exchange or automated  quotation system,  list and keep listed, so
long as the  Common  Stock  shall be so listed  on such  exchange  or  automated
quotation  system,  all Common Stock issuable upon conversion of the Securities;
PROVIDED,  HOWEVER,  that, if the rules of such exchange or automated  quotation
system  permit the Company to defer the  listing of such Common  Stock until the
first  conversion of the  Securities  into Common Stock in  accordance  with the
provisions of this  Indenture,  the Company  covenants to list such Common Stock
issuable upon conversion of the Securities in accordance  with the  requirements
of such exchange or automated quotation system at such time.

     Section 11.07.  ADJUSTMENT OF CONVERSION  RATE. The Conversion Rate for any
series of  Securities  shall be  adjusted  from time to time by the  Company  as
follows:

     (a)  In  case  the  Company  shall  hereafter  pay a  dividend  or  make  a
distribution to all holders of the outstanding  Common Stock in shares of Common
Stock, the Conversion Rate for a series of Securities shall be increased so that
the same shall equal the rate  determined by multiplying  the Conversion Rate 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 by a fraction,

          (i) the numerator of which shall be the sum of the number of shares of
     Common Stock outstanding at the close of business on the date fixed for the
     determination  of  stockholders  entitled to receive such dividend or other
     distribution  plus the total number of shares of Common Stock  constituting
     such dividend or other distribution; and

          (ii) the  denominator of which shall be the number of shares of Common
     Stock  outstanding  at the  close of  business  on the date  fixed for such
     determination,

such increase to become effective  immediately  after the opening of business on
the day  following  the date fixed for such  determination.  If any  dividend or
distribution of the type described in this Section  11.07(a) is declared but not
so paid or made, the Conversion  Rate for such series of Securities  shall again
be adjusted to the Conversion Rate for such series of Securities that would then
be in effect if such dividend or distribution had not been declared.

     (b) In case the Company  shall  issue  rights or warrants to all holders of
its  outstanding  shares of Common Stock  entitling them (for a period  expiring
within 60 days  after  the date of  issuance  of such  rights  or  warrants)  to
subscribe for or purchase  shares of Common Stock at a price per share less than
the Market Price as of the record date fixed for  determination  of stockholders
entitled to receive such rights or warrants, the Conversion Rate for a series of
Securities  shall be increased so that the same shall equal the rate  determined
by  multiplying  the  Conversion  Rate for such series of  Securities  in effect
immediately prior to the date fixed for  determination of stockholders  entitled
to receive such rights or warrants by a fraction,

          (i) the  numerator  of which  shall be the  number of shares of Common
     Stock   outstanding  on  the  record  date  fixed  for   determination   of
     stockholders  entitled to receive  such  rights or warrants  plus the total
     number of  additional  shares of Common Stock offered for  subscription  or
     purchase, and

          (ii) the denominator of which shall be the sum of the number of shares
     of Common  Stock  outstanding  at the close of  business on the record date
     fixed for determination of stockholders  entitled to receive such rights or
     warrants plus the number of shares that the aggregate offering price of the
     total  number of shares so offered  would  purchase at a price equal to the
     Market Price as of the date immediately preceding the record date fixed for
     determination of stockholders entitled to receive such rights or warrants.

     Such  adjustment  shall be  successively  made  whenever any such rights or
warrants are issued, and shall become effective immediately after the opening of
business on the day following the date fixed for  determination  of stockholders
entitled to receive such rights or warrants. To the extent that shares of Common
Stock are not delivered  after the  expiration  of such rights or warrants,  the
Conversion  Rate for such  series  of  Securities  shall  be  readjusted  to the
Conversion  Rate for such series of Securities  that would then be in effect had
the  adjustments  made upon the issuance of such rights or warrants been made on
the basis of  delivery  of only the  number of shares of Common  Stock  actually
delivered. If such rights or warrants are not so issued, the Conversion Rate for
such series of Securities shall again be adjusted to be the Conversion Rate that
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 a price less than the  Market  Price as of the record
date fixed for determination of stockholders  entitled to receive such rights or
warrants,  and in  determining  the aggregate  offering  price of such shares of
Common Stock,  there shall be taken into account any  consideration  received by
the Company for such  rights or warrants  and any amount  payable on exercise or
conversion thereof,  the value of such consideration,  if other than cash, to be
determined by the Board of Directors.

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

     (d) In case the Company shall, by dividend or otherwise,  distribute to all
holders of its Common  Stock  assets,  debt  securities,  shares of any class of
capital stock of the Company or rights or warrants to purchase any securities of
the Company  excluding (x) any dividend or distribution or issuance  referred to
in  Section  11.07(a),  (b) or (g) and (y) any  dividend  or  distribution  paid
exclusively in cash (any of the foregoing  hereinafter in this Section  11.07(d)
called the  "DISTRIBUTED  ASSETS OR  SECURITIES"),  then, in each such case, the
Conversion  Rate for a series of Securities  shall be increased so that the same
shall be equal to the rate  determined by multiplying  the  Conversion  Rate for
such  series of  Securities  in effect on the Record  Date with  respect to such
distribution by a fraction,

          (i) the  numerator of which shall be the Current  Market Price on such
     Record  Date  plus the Fair  Market  Value (as  determined  by the Board of
     Directors,  whose  determination  shall be  conclusive,  and described in a
     resolution  of the Board of Directors) on the Record Date of the portion of
     the Distributed Assets or Securities so distributed applicable to one share
     of Common Stock; and

          (ii) the  denominator  of which shall be the Current  Market  Price on
     such Record Date,

such adjustment to become effective immediately prior to the opening of business
on the day following such Record Date;  PROVIDED that if the difference  between
the Current  Market  Price on the Record Date and the then Fair Market Value (as
so  determined)  of the  portion  of the  Distributed  Assets or  Securities  so
distributed  applicable to one share of Common Stock is less than $1.00, in lieu
of the  foregoing  adjustment,  adequate  provision  shall be made so that  each
Holder shall have the right to receive upon conversion the amount of Distributed
Assets or Securities  such holder would have received had such holder  converted
each  Security on the Record Date. If such  dividend or  distribution  is not so
paid or made, the Conversion  Rate for such series of Securities  shall again be
adjusted to be the Conversion Rate for such series of Securities that 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  11.07(d) by  reference  to the actual or when issued
trading  market for any  securities,  it must in doing so consider the prices in
such market over the same period used in computing  the Current  Market Price on
the applicable Record Date.

     Rights or  warrants  distributed  by the  Company to all  holders of Common
Stock  (including,  without  limitation,  Rights  issued  pursuant to any Rights
Agreement)  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  for
purposes of this Section 11.07 (and no adjustment to the Conversion  Rate of any
Securities  under this Section 11.07 will be required)  until the  occurrence of
the earliest  Trigger Event,  whereupon such rights and warrants shall be deemed
to have been  distributed and an appropriate  adjustment (if any is required) to
the Conversion Rate of any series of Securities shall be made under this Section
11.07(d).  If any such right or warrant,  including any such existing  rights or
warrants distributed prior to the date of this Indenture, are subject to events,
upon the  occurrence  of which such rights or  warrants  become  exercisable  to
purchase different  securities,  evidences of indebtedness or other assets, then
the date of the  occurrence of any and each such event shall be deemed to be the
date of distribution and record date with respect to new rights or warrants with
such rights (and a termination or expiration of the existing  rights or warrants
without exercise by any of the holders  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 was counted for  purposes of  calculating  a  distribution
amount  for  which an  adjustment  to the  Conversion  Rate for such  series  of
Securities under this Section 11.07 was made, (1) in the case of any such rights
or warrants that shall all have been redeemed or repurchased without exercise by
any holders thereof,  the Conversion Rate for such series of Securities 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 or holders  of Common  Stock with  respect to such  rights or  warrants
(assuming such holder had retained such rights or warrants), made to all holders
of Common Stock as of the date of such redemption or repurchase,  and (2) in the
case of such  rights or  warrants  that  shall have  expired or been  terminated
without  exercise  thereof,  the  Conversion  Rate for such series of Securities
shall be readjusted as if such expired or terminated rights and warrants had not
been issued.

     For  purposes of this Section  11.07(d)  and Section  11.07(a) and (b), any
dividend or distribution to which this Section  11.07(d) is applicable that also
includes  shares of Common  Stock,  or rights or  warrants to  subscribe  for or
purchase shares of Common Stock described in Section  11.07(b) (or both),  shall
be deemed  instead to be (1) a dividend  or  distribution  of the  evidences  of
assets,  debt  securities  or shares of capital  stock other than such shares of
Common Stock or rights or warrants (and any Conversion Rate adjustment  required
by this Section  11.07(d)  with respect to such dividend or  distribution  shall
then be made)  immediately  followed by (2) a dividend or  distribution  of such
shares of Common  Stock or such rights or warrants  (and any further  Conversion
Rate adjustment  required by Sections 11.07(a) and 11.07(b) with respect to such
dividend or distribution shall then be made), except (A) the Record Date of such
dividend  or  distribution  shall be  substituted  as "the  date  fixed  for the
determination  of  stockholders  entitled  to  receive  such  dividend  or other
distribution", "the date fixed for the determination of stockholders entitled to
receive  such rights or  warrants"  and "the date fixed for such  determination"
within the meaning of Section 11.07(a) and 11.07(b) and (B) any shares of Common
Stock included in such dividend or distribution shall not be deemed "outstanding
at the close of  business on the date fixed for such  determination"  within the
meaning of Section 11.07(a).

     (e) In case the Company shall, by dividend or otherwise, make distributions
consisting exclusively of cash to all holders of its Common Stock, excluding any
Cash  Dividend  on the  Common  Stock  to the  extent  that the  aggregate  Cash
Dividends per share of Common Stock in any quarter does not exceed  $0.0025 (the
"DIVIDEND  THRESHOLD  AMOUNT")  then, in such case,  the  Conversion  Rate for a
series of  Securities  shall be  increased so that the same shall equal the rate
determined by multiplying  the Conversion  Rate for such series of Securities in
effect  immediately  prior to the close of  business  on such  record  date by a
fraction,

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

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

such adjustment to be effective  immediately prior to the opening of business on
the day following  the record date;  PROVIDED that if the portion of the cash so
distributed  applicable to one share of Common Stock is equal to or greater than
the  Current  Market  Price  on the  record  date,  in  lieu  of  the  foregoing
adjustment,  adequate provision shall be made so that each Holder shall have the
right to  receive  upon  conversion  the amount of cash such  holder  would have
received had such holder  converted  each  Security on the Record Date.  If such
dividend or  distribution  is not so paid or made, the Conversion  Rate for such
series of Securities  shall again be adjusted to be the Conversion Rate for such
series  of  Securities  that  would  then  be in  effect  if  such  dividend  or
distribution had not been declared.  If any adjustment is required to be made as
set forth in this Section 11.07(e) as a result of a distribution  that is a Cash
Dividend,  such  adjustment  shall  be  based  upon the  amount  by  which  such
distribution exceeds the Dividend Threshold Amount. If an adjustment is required
to be  made as set  forth  in this  Section  11.07(e)  above  as a  result  of a
distribution  that is not a Cash Dividend,  such adjustment  shall be based upon
the full amount of the distribution.

     (f) In  case a  tender  or  exchange  offer  made  by  the  Company  or any
Subsidiary  for all or any  portion of the Common  Stock  shall  expire and such
tender or exchange offer (as amended upon the expiration  thereof) shall require
the payment to stockholders of consideration  per share of Common Stock having a
Fair Market Value (as determined by the Board of Directors,  whose determination
shall be  conclusive  and  described in a resolution  of the Board of Directors)
that as of the last time (the  "EXPIRATION  TIME")  tenders or exchanges  may be
made  pursuant to such tender or exchange  offer (as it may be amended)  exceeds
the Last  Reported Sale Price of a share of Common Stock on the Trading Day next
succeeding the Expiration  Time, the Conversion  Rate for a series of Securities
shall  be  increased  so that the  same  shall  equal  the  rate  determined  by
multiplying  the  Conversion  Rate for  such  series  of  Securities  in  effect
immediately prior to the Expiration Time by a fraction,

          (i) the  numerator  of which  shall be the sum of (x) the Fair  Market
     Value (determined as aforesaid) of the aggregate  consideration  payable to
     stockholders  based on the acceptance  (up to any maximum  specified in the
     terms of the tender or exchange  offer) of all shares  validly  tendered or
     exchanged and not withdrawn as of the Expiration Time (the shares deemed so
     accepted  up to any  such  maximum,  being  referred  to as the  "PURCHASED
     SHARES")  and (y) the  product  of the  number of  shares  of Common  Stock
     outstanding (less any Purchased Shares) at the Expiration Time and the Last
     Reported  Sale  Price of a share of Common  Stock on the  Trading  Day next
     succeeding the Expiration Time, and

          (ii) the  denominator of which shall be the number of shares of Common
     Stock  outstanding  (including any Purchased Shares) at the Expiration Time
     multiplied  by the Last  Reported  Sale Price of a share of Common Stock on
     the Trading Day next succeeding the Expiration Time,

such adjustment to become effective immediately prior to the opening of business
on the day  following  the  Expiration  Time.  If the  Company is  obligated  to
purchase shares  pursuant to any such tender or exchange offer,  but the Company
is permanently  prevented by applicable law from effecting any such purchases or
all such  purchases  are  rescinded,  the  Conversion  Rate for such  series  of
Securities  shall again be adjusted to be the Conversion Rate for such series of
Securities that would then be in effect if such tender or exchange offer had not
been made.

     (g) If the Company pays a dividend or makes a  distribution  to all holders
of its  Common  Stock  consisting  of capital  stock of any class or series,  or
similar equity interests,  of or relating to a Subsidiary or other business unit
of the  Company,  the  Conversion  Rate  for a  series  of  Securities  shall be
increased so that the same shall be equal to the rate  determined by multiplying
the  Conversion  Rate for such series of Securities in effect on the Record Date
with respect to such distribution by a fraction,

          (i) the  numerator of which shall be the sum of (A) the average of the
     Last  Reported  Sale  Prices of the Common  Stock for the 10  Trading  Days
     commencing on and  including  the fifth  Trading Day after the  Ex-Dividend
     Date for such  dividend or  distribution  PLUS (B) the Fair Market Value of
     the  securities  distributed  in respect of each share of Common  Stock for
     which  this  Section  11.07(g)  applies  and  shall  equal  the  number  of
     securities  distributed in respect of each share of Common Stock multiplied
     by the average of the closing sale prices of those  securities  distributed
     for the 10 Trading Days  commencing  on and including the fifth Trading Day
     after the Ex-Dividend Date; and

          (ii)  the  denominator  of  which  shall  be the  average  of the Last
     Reported Sale Prices of the Common Stock for the 10 Trading Days commencing
     on and including the fifth Trading Day after the Ex-Dividend Date,

such adjustment to become effective immediately prior to the opening of business
on the day following  fifteenth Trading Day after the Ex-Dividend Date; PROVIDED
that if (x) the average of the Last Reported Sale Prices of the Common Stock for
the 10 Trading Days  commencing on and including the fifth Trading Day after the
Ex-Dividend  Date MINUS (y) the Fair Market Value of the securities  distributed
in respect of each share of Common Stock for which this Section 11.07(g) applies
(as  calculated in Section  11.07(g)(i)(B)  above) is less than $1.00,  then the
adjustment  provided by for by this  Section  11.07(g)  shall not be made and in
lieu thereof the provisions of Section 11.10 shall apply to such distribution.

     (h) Notwithstanding anything to the contrary, in the event of an adjustment
to the  Conversion  Rate  for any  series  of  Securities  pursuant  to  Section
11.07(d),  (e), (f) or (g), in no event with the Conversion  Rate for any series
of  Securities  exceed  28.5225 (the  "MAXIMUM  CONVERSION  RATE").  The Maximum
Conversion  Rate is subject  to the same  proportional  adjustments  made to the
Conversion Rate pursuant to Section 11.07(a), (b) or (c).

     (i) If any  adjustment  or  readjustment  is  made to the  Conversion  Rate
pursuant to this Section  11.07 (other than any  adjustment  pursuant to Section
11.07(e)),  the  same  proportional  adjustment  shall  be made to the  Dividend
Threshold  Amount;  PROVIDED  THAT,  (x) in the  event  the  Conversion  Rate is
increased  (other than  pursuant to Section  11.07(e)),  the Dividend  Threshold
Amount shall be  proportionally  decreased,  and (y) in the event the Conversion
Rate is  decreased  (other than  pursuant  to Section  11.07(e)),  the  Dividend
Threshold Amount shall be proportionally increased.

     (j) For purposes of this Section 11.07,  the following terms shall have the
meaning indicated:

          (i) "CURRENT MARKET PRICE" shall mean, for purposes of any dividend or
     distribution   requiring  adjustment  under  Section  11.07(d)  or  Section
     11.07(e),  the average of the daily Last  Reported Sale Prices per share of
     Common  Stock  for  the  10  consecutive  Trading  Days  beginning  on  the
     Ex-Dividend Date for such dividend or distribution.

     If another  dividend or  distribution to which Section 11.07 applies occurs
     during  the  period  applicable  for  calculating  "CURRENT  MARKET  PRICE"
     pursuant to the  definition in the  preceding  paragraph,  "CURRENT  MARKET
     PRICE" shall be  calculated  for such period in a manner  determined by the
     Board of  Directors to reflect the impact of such  issuance,  distribution,
     subdivision  or  combination  on the Last Reported Sale Price of the Common
     Stock during such period.

          (ii) "FAIR MARKET  VALUE" shall mean the amount which a willing  buyer
     would pay a willing seller in an arm's-length transaction.

          (iii)  "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).

     (k) The  Company may make such  increases  in the  Conversion  Rate for any
series of Securities  in addition to those  required by Section  11.07(a),  (b),
(c), (d), (e), (f) or (g) 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.

     To the extent  permitted by  applicable  law, the Company from time to time
may increase the Conversion  Rate for any series of Securities by any amount for
any period of time if the period is at least 20 Business  Days,  the increase is
irrevocable  during  the  period  and the Board of  Directors  shall have made a
determination  that such increase would be in the best interests of the Company,
which  determination  shall be conclusive.  Whenever the  Conversion  Rate for a
series of  Securities  is  increased  pursuant to the  preceding  sentence,  the
Company shall mail to Holders a notice of the increase at least 15 days prior to
the date the increased Conversion Rate takes effect, and such notice shall state
the increased Conversion Rate and the period during which it will be in effect.

     (l) No adjustment in the Conversion Rate for any series of Securities shall
be required unless such  adjustment  would require an increase or decrease of at
least one  percent  (1%) in such rate;  PROVIDED  that any  adjustments  that by
reason of this  Section  11.07(l)  are not  required to be made shall be carried
forward and taken into account in any subsequent  adjustment.  All  calculations
under  this  Article  11 shall be made by the  Company  and shall be made to the
nearest cent or to the nearest one-ten thousandth  (1/10,000) of a share, as the
case may be. To the extent the  Securities of a series become  convertible  into
cash,  assets or property,  subject to Section 11.10, no adjustment need be made
thereafter as to the cash,  assets or property.  Interest will not accrue on any
cash into which the Securities are convertible.

     (m) Whenever the Conversion  Rate for a series of Securities is adjusted as
herein  provided,  the  Company  shall  promptly  file with the  Trustee and any
Conversion Agent other than the Trustee an Officers'  Certificate  setting forth
the  Conversion  Rate for such series of Securities  after such  adjustment  and
setting forth a brief statement of the facts requiring such  adjustment.  Unless
and until a Responsible  Officer of the Trustee or  Conversion  Agent shall have
received such Officers'  Certificate,  the Trustee or Conversion  Agent,  as the
case may be,  shall not be deemed to have  knowledge  of any  adjustment  of the
Conversion  Rate for such  series of  Securities  and may  assume  that the last
Conversion Rate for such series of Securities of which it has knowledge is still
in effect.  Promptly  after  delivery of such  certificate,  the  Company  shall
prepare a notice of such  adjustment of the  Conversion  Rate for such series of
Securities  setting  forth  the  adjusted  Conversion  Rate for such  series  of
Securities  and the date on which each  adjustment  becomes  effective and shall
mail such notice of such  adjustment of the  Conversion  Rate for such series of
Securities  to the Holder of each  Security of such  series at his last  address
appearing  on the  Security  Register  within 20 days after  execution  thereof.
Failure to deliver  such notice shall not affect the legality or validity of any
such adjustment.

     (n) In any case in which this Section  11.07  provides  that an  adjustment
shall become effective immediately after (1) a record date or Record Date for an
event,  (2) the date fixed for the  determination  of  stockholders  entitled to
receive a dividend  or  distribution  pursuant to Section  11.07(a),  (3) a date
fixed for the  determination  of  stockholders  entitled  to  receive  rights or
warrants pursuant to Section 11.07(b), or (4) the Expiration Time for any tender
or exchange offer pursuant to Section  11.07(f) (each a  "DETERMINATION  DATE"),
the Company may elect to defer until the occurrence of the applicable Adjustment
Event (as  hereinafter  defined)  (x)  issuing  to the  holder  of any  Security
converted  after  such  Determination  Date and before  the  occurrence  of such
Adjustment  Event,  the  additional  shares of Common Stock or other  securities
issuable  upon  such  conversion,  or Cash in lieu  thereof,  by  reason  of the
adjustment  required by such  Adjustment  Event over and above the Common  Stock
issuable upon such conversion,  or Cash in lieu thereof, before giving effect to
such  adjustment and (y) paying to such holder any amount in Cash in lieu of any
fraction pursuant to Section 11.04. For purposes of this Section  11.07(n),  the
term "ADJUSTMENT EVENT" shall mean:

          (i) in any case  referred to in clause (1) hereof,  the  occurrence of
     such event,

          (ii) in any case  referred to in clause (2) hereof,  the date any such
     dividend or distribution is paid or made,

          (iii)  in any case  referred  to in  clause  (3)  hereof,  the date of
     expiration of such rights or warrants, and

          (iv) in any case referred to in clause (4) hereof,  the date a sale or
     exchange of Common  Stock  pursuant  to such  tender or  exchange  offer is
     consummated and becomes irrevocable.

     (o) For  purposes  of this  Section  11.07,  the number of shares of Common
Stock at any time  outstanding  shall not include shares held in the treasury of
the Company,  unless such treasury  shares  participate in any  distribution  or
dividend that requires an adjustment  pursuant to this Section 11.07,  but shall
include  shares  issuable  in  respect of scrip  certificates  issued in lieu of
fractions of shares of Common Stock.

     Section 11.08. WHEN NO ADJUSTMENT REQUIRED. No adjustment to the Conversion
Rate for any series of Securities need be made:

     (a) upon the issuance of any shares of Common Stock pursuant to any present
or future plan providing for the  reinvestment of dividends or interest  payable
on securities of the Company and the investment of additional  optional  amounts
in shares of Common Stock under any plan;

     (b) upon the issuance of any shares of Common Stock or options or rights to
purchase or acquire  those  shares  pursuant to any present or future  employee,
director or  consultant  benefit plan or program of or assumed by the Company or
any of its Subsidiaries;

     (c) upon the issuance of any shares of Common Stock pursuant to any option,
warrant,  right,  or  exercisable,  exchangeable  or  convertible  security  not
described  in  paragraph  (b)  above  and  outstanding  as of the  date  of this
Indenture;

     (d) for a change in the par value or no par value of the Common Stock; or

     (e) for accrued and unpaid interest (including Contingent Interest, if any,
or  Liquidated  Damages,  if any) or  accretion on the  principal  amount of the
Securities.

     Section 11.09. NOTICE OF CERTAIN TRANSACTIONS. In the event that:

          (i) the Company  takes any action which would require an adjustment in
     the Conversion Rate;

          (ii) the  Company  takes  any  action  that  requires  a  supplemental
     indenture pursuant to Section 11.10; or

          (iii) there is a dissolution or liquidation of the Company;

the Company shall mail to Holders and file with the Trustee a notice stating the
proposed  record or effective  date,  as the case may be. The Company shall mail
the notice at least  fifteen days before such date.  Failure to mail such notice
or any defect therein shall not affect the validity of any transaction  referred
to in clause (i), (ii) or (iii) of this Section 11.09.

     Section 11.10. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE ON
CONVERSION  PRIVILEGE.  If any of the  following  events  occur,  namely (i) any
reclassification or change of the outstanding shares of Common Stock (other than
a subdivision  or  combination  to which  Section  11.07(c)  applies),  (ii) any
consolidation, merger, binding share exchange or combination of the Company with
another Person as a result of which holders of Common Stock shall be entitled to
receive stock,  other  securities or other property or assets  (including  cash)
with  respect to or in  exchange  for such  Common  Stock,  or (iii) any sale or
transfer of all or substantially all of the properties and assets of the Company
to any other  Person  as a result of which  holders  of  Common  Stock  shall be
entitled  to  receive  stock,  other  securities  or other  property  or  assets
(including cash) with respect to or in exchange for such Common Stock,  then the
Company or the successor or purchasing Person, as the case may be, shall execute
with the Trustee a supplemental indenture (which shall comply with the TIA as in
force at the date of execution of such  supplemental  indenture)  providing that
each Security shall be convertible  into the kind and amount of shares of stock,
other  securities or other property or assets  (including  cash) receivable upon
such  reclassification,  change,  consolidation,  merger, binding share exchange
combination,  sale or transfer by a holder of a number of shares of Common Stock
issuable upon  conversion of such  Securities  (assuming,  for such purposes,  a
sufficient  number of authorized shares of Common Stock are available to convert
all  such  Securities)  immediately  prior  to  such  reclassification,  change,
consolidation,  merger,  combination,  binding share exchange,  sale or transfer
assuming such holder of Common Stock did not exercise his rights of election, if
any, as to the kind or amount of stock,  other  securities or other  property or
assets   (including  cash)  receivable  upon  such   reclassification,   change,
consolidation,  merger,  binding share exchange,  combination,  sale or transfer
(provided  that,  if the kind or  amount  of stock,  other  securities  or other
property  or assets  (including  cash)  receivable  upon such  reclassification,
change,  consolidation,  merger, combination, sale or conveyance is not the same
for each share of Common Stock in respect of which such rights of election shall
not have been exercised  ("NON-ELECTING  SHARE"),  then for the purposes of this
Section 11.10 the kind and amount of stock,  other  securities or other property
or  assets  (including  cash)  receivable  upon such  reclassification,  change,
consolidation, merger, binding share exchange, combination, sale or transfer for
each non-electing  share shall be deemed to be the kind and amount so receivable
per  share  by a  plurality  of  the  non-electing  shares).  Such  supplemental
indenture shall provide for adjustments  which shall be as nearly  equivalent as
may be practicable to the adjustments provided for in this Article 11.

     The  Company  shall  cause  notice of the  execution  of such  supplemental
indenture to be mailed to each Holder of Securities, at its address appearing on
the Security Register,  within 20 days after execution thereof and shall issue a
press release  containing such  information and publish such  information on its
website on the World Wide Web.  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,  changes,  consolidations,  mergers, combinations,  sales and
conveyances.

     If this Section  11.10  applies to any event or  occurrence,  Section 11.07
shall not apply.

     Section  11.11.  TRUSTEE'S  DISCLAIMER.  The Trustee  shall have no duty to
determine when an adjustment under this Article should be made, how it should be
made or what such adjustment should be, but may accept as conclusive evidence of
that fact or the correctness of any such  adjustment,  and shall be protected in
relying upon, an Officers'  Certificate including the Officers' Certificate with
respect thereto which the Company is obligated to file with the Trustee pursuant
to Section  11.07(m).  The Trustee makes no representation as to the validity or
value of any securities or assets issued upon conversion of Securities,  and the
Trustee shall not be  responsible  for the Company's  failure to comply with any
provisions of this Article.

     The  Trustee  shall  not be  under  any  responsibility  to  determine  the
correctness of any provisions  contained in any supplemental  indenture executed
pursuant  to  Section  11.10,  but may  accept  as  conclusive  evidence  of the
correctness thereof, and shall be fully protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 11.07(m).

     Section  11.12.  RIGHTS  ISSUED IN  RESPECT  OF COMMON  STOCK  ISSUED  UPON
CONVERSION.  Each share of Common Stock  issued upon  conversion  of  Securities
pursuant to this Article 11 shall be entitled to receive the appropriate  number
of common  stock or preferred  stock  purchase  rights,  as the case may be (the
"RIGHTS"),  if any,  that shares of Common Stock are entitled to receive and the
certificates  representing  the Common Stock issued upon such  conversion  shall
bear such  legends,  if any, in each case as may be provided by the terms of any
shareholder rights agreement adopted by the Company,  as the same may be amended
from time to time (in each  case,  a  "RIGHTS  AGREEMENT").  Provided  that such
Rights Agreement requires that each share of Common Stock issued upon conversion
of Securities  at any time prior to the  distribution  of separate  certificates
representing   the  Rights  be   entitled   to  receive   such   Rights,   then,
notwithstanding  anything  else to the  contrary in this Article 11, there shall
not be any adjustment to the conversion privilege or Conversion Rate as a result
of the issuance of Rights,  but an  adjustment to the  Conversion  Rate shall be
made  pursuant to Section  11.07(d)  upon the  separation of the Rights from the
Common Stock.

     Section 11.13.  COMPANY  DETERMINATION  FINAL. Any  determination  that the
Company or the Board of Directors must make pursuant to Sections  11.02,  11.03,
11.04, 11.07 or 11.10 shall be conclusive.

                                   Article 12
                          PURCHASE AT OPTION OF HOLDERS

     Section 12.01. RIGHT TO REQUIRE PURCHASE.

     (a)  Subject to Section  4.02(b),  each Holder has the right to require the
Company,  at the option of the Holder  thereof  pursuant  to  paragraph 9 of the
relevant Securities, to purchase all or a portion of the Securities held by such
Holder,  in the case of Series A Debentures  on August 15,  2010,  2015 and 2020
and,  in the case of Series B  Debentures,  on August  15,  2008,  2013 and 2018
(each, a "PURCHASE DATE").

     (b) Not later  than 20  Business  Days  prior to each  Purchase  Date,  the
Company  shall  give  notice  to each  Holder  at its  address  set forth in the
Security  Register,  to the Trustee and to the Paying Agent,  that shall briefly
state, as applicable:

          (i) the date by which the  Purchase  Notice must be  delivered  to the
     Paying Agent in order for a Holder to exercise the purchase right;

          (ii) the Purchase Date;

          (iii) the Purchase Price;

          (iv) whether the Purchase  Price will be paid in Cash or, if permitted
     hereunder,  in shares of Common Stock, or in a combination  thereof and, in
     the case of a combination, the percentage of each;

          (v) if the  Company  elects  to pay the  Purchase  Price in  shares of
     Common Stock or a combination of Cash and shares of Common Stock,  that the
     number of shares of Common  Stock each Holder will  receive  will equal the
     portion of the Purchase  Price to be paid in shares of Common Stock divided
     by 97.5% of the Market  Price of one share of Common  Stock  measured as of
     the third Business Day immediately preceding the Purchase Date;

          (vi) if the  Company  elects  to pay the  Purchase  Price in shares of
     Common Stock or in a combination  of Cash and shares of Common  Stock,  the
     method of calculating the Market Price of the shares of Common Stock;

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

          (viii) the Conversion Rate and any adjustments thereto;

          (ix) that the Securities as to which a Purchase  Notice has been given
     may be converted if they are otherwise  convertible  pursuant to Article 11
     only if the Purchase Notice has been withdrawn in accordance with the terms
     of this Indenture;

          (x) that the  Securities  must be  surrendered  to the Paying Agent to
     collect payment;

          (xi) that the  Purchase  Price for any Security as to which a Purchase
     Notice  has  been  duly  given  and not  withdrawn  will  be paid  promptly
     following  the later of the Purchase Date and the time of surrender of such
     Security;

          (xii) the  procedures set forth in Section 12.02 that each Holder must
     follow to exercise its purchase right;

          (xiii) the procedures for withdrawing a Purchase  Notice,  including a
     form of notice of withdrawal;

          (xiv)  that,  unless the Company  defaults  in making  payment of such
     Purchase Price,  interest and Contingent  Interest,  if any, and Liquidated
     Damages, if any, on Securities surrendered for purchase by the Company will
     cease to accrue on and after the Purchase Date; and

          (xv) the CUSIP number of the Securities.

     If any of the  Securities  is in the  form of a Global  Security,  then the
Company  shall  modify  such notice to the extent  necessary  to accord with the
procedures of the Depositary applicable to the purchase of Global Securities.

     In connection  with  provided such notice,  the Company shall issue a press
release and  publish a notice  containing  this  information  in a newspaper  of
general  circulation  in The City of New York or publish the  information on its
website on the World Wide Web or through such other public  medium as it may use
at that time.

     Section  12.02.  PURCHASE  PROCEDURES.  The  Company  shall  purchase  such
Securities at a Purchase Price equal to the Accreted  Principal  Amount for such
series of  Securities,  plus  accrued  and unpaid  interest  for such  series of
Securities  (including  Contingent  Interest and Liquidated Damages, if any) to,
but excluding, the Purchase Date (the "PURCHASE PRICE") upon:

     (a)  delivery  to the  Paying  Agent by the  Holder of a written  notice of
purchase (which shall be in substantially  the form included in Exhibits A-1 and
A-2 hereto,  as  applicable,  and which may be  delivered  by letter,  overnight
courier, hand delivery, facsimile transmission or in any other written form and,
in the case of Global  Securities,  may be delivered  electronically or by other
means in accordance with the Depositary's  customary procedures) of the exercise
of such rights (a  "PURCHASE  NOTICE") to any Paying  Agent at any time prior to
the close of business on the Business  Day  immediately  preceding  the Purchase
Date for such series of  Securities;  PROVIDED that, if a Holder of any Security
fails to indicate in such Purchase Notice its election to withdraw such Purchase
Notice or receive Cash in the event that the Company elects, pursuant to Section
12.03, to pay the Purchase Price, in whole or in part, in shares of Common Stock
but such portion of the Purchase  Price shall  ultimately be paid to such Holder
entirely in Cash because any of the  conditions to payment of the Purchase Price
in shares of Common  Stock is not  satisfied  prior to 5:00 p.m.,  New York City
time, on the Business Day immediately  preceding the Purchase Date, as set forth
in Section  12.03,  such Holder shall be deemed to have elected to receive Cash;
and

     (b) delivery of such Security to the Paying Agent prior to, on or after the
Purchase Date (together with all necessary  endorsements)  at the offices of the
Paying Agent,  such  delivery  being a condition to receipt by the Holder of the
Purchase Price therefor; PROVIDED, HOWEVER, that such Purchase Price shall be so
paid  pursuant to this  Article  only if the Security so delivered to the Paying
Agent shall  conform in all respects to the  description  thereof in the related
Purchase Notice.

     The  Company  shall  purchase  from the Holder  thereof,  pursuant  to this
Article,  a portion  of a  Security  if the  Original  Principal  Amount of such
portion  is  $1,000  or an  integral  multiple  of  $1,000.  Provisions  of this
Indenture  that apply to the  purchase  of all of a  Security  also apply to the
purchase of such portion of such Security.

     Any purchase by the Company contemplated pursuant to the provisions of this
Article shall be consummated by the payment of the Purchase Price to be received
by the Holder promptly  following the later of the Purchase Date and the time of
delivery of the Security as set forth in Section 12.05.

     Notwithstanding  anything herein to the contrary,  any Holder delivering to
the Paying Agent the Purchase  Notice  contemplated  by this Section 12.02 shall
have the right to withdraw such  Purchase  Notice at any time prior to the close
of business on the  Business Day  immediately  preceding  the  Purchase  Date by
delivery of a written  notice of  withdrawal  to the Paying Agent in  accordance
with Section 12.04.

     The Paying Agent shall promptly  notify the Company of the receipt by it of
any Purchase Notice or written notice of withdrawal thereof.

     Anything  herein  to the  contrary  notwithstanding,  in the case of Global
Securities,  any  Purchase  Notice  may  be  delivered  or  withdrawn  and  such
Securities may be  surrendered or delivered for purchase in accordance  with the
applicable procedures of the Depositary as in effect from time to time.

     Section  12.03.  THE  COMPANY'S  RIGHT TO ELECT  MANNER OF  PAYMENT  OF THE
PURCHASE PRICE.

     (a) If the  Securities are to be purchased,  pursuant to Section 12.01,  on
August 15, 2010, in the case of Series A Debentures,  and on August 15, 2008, in
the case of Series B Debentures, the Purchase Price must be paid in Cash. If the
Securities to be  purchased,  pursuant to Section  12.01,  on August 15, 2015 or
August 15, 2020, in the case of Series A  Debentures,  and on August 15, 2013 or
August 15, 2018, in the case of Series B Debentures,  the Purchase  Price may be
paid for at the election of the Company,  in Cash or shares of Common Stock,  or
in any combination of Cash and shares of Common Stock, subject to the conditions
set forth in  Section  12.03(b).  For each  Purchase  Date,  the  Company  shall
designate,  in the  notice of  purchase  right  delivered  pursuant  to  Section
12.03(b),  whether the Company  will  purchase  the  Securities  for Cash or, if
permitted  hereunder,  shares of Common Stock, or, if a combination thereof, the
percentages  of the  Purchase  Price in  respect of which it will pay in Cash or
shares of Common Stock;  provided,  HOWEVER,  that the Company will pay Cash for
fractional  interests in a share of Common Stock.  Each Holder whose  Securities
are purchased  pursuant to Section  12.01 shall  receive the same  percentage of
Cash or,  if  permitted  hereunder,  shares of Common  Stock in  payment  of the
Purchase Price for such Securities on such Purchase Date, (i) except as provided
in  this  Section  12.03(a)  with  regard  to the  payment  of  Cash  in lieu of
fractional  shares of Common Stock, (ii) in the event that the Company is unable
to purchase the  Securities  of the Holder or Holders for shares of Common Stock
because any necessary  qualifications  or  registration  of the shares of Common
Stock  under  applicable  securities  laws cannot be  obtained,  the Company may
purchase the  Securities of such Holder or Holders for Cash. The Company may not
change  its  election  with  respect  to the  consideration  (or  components  or
percentages  of  components  thereof) to be paid on any  Purchase  Date once the
Company has given its notice of purchase right to Holders except in the event of
a failure to satisfy,  prior to 5:00 p.m.,  New York City time,  on the Business
Day  immediately  preceding  such Purchase Date, any condition to the payment of
the  Purchase  Price for such  Purchase  Date in whole or in part,  in shares of
Common Stock.

     (b) If the Company  elects to pay all or a portion of the Purchase Price of
Securities in respect of which a Purchase  Notice  pursuant to Section  12.02(a)
has been given in shares of Common  Stock,  the number of shares of Common Stock
to be issued shall be equal to the portion of such Purchase  Price to be paid in
shares of Common  Stock  divided  by 97.5% of the  Market  Price of one share of
Common Stock  measured as of the third  Business Day  immediately  preceding the
Purchase Date, subject to satisfaction of the conditions set forth in the second
succeeding paragraph.

     The  Company  will not issue  any  fraction  of a share of Common  Stock in
payment of the  Purchase  Price.  Instead,  the Company will make a Cash payment
(calculated to the nearest cent) equal to such fraction multiplied by the Market
Price of one share of  Common  Stock.  If a Holder  elects to have more than one
Security  purchased on any Purchase  Date,  the number of shares of Common Stock
shall be based on the  aggregate  amount of  Securities  to be purchased on such
Purchase Date.

     The Company's right to exercise its election to purchase Securities through
the issuance of shares of Common Stock shall be conditioned upon:

          (i)  the  registration  of such  shares  of  Common  Stock  under  the
     Securities Act and the Exchange Act, in each case, if required;

          (ii) any  qualification or registration of such shares of Common Stock
     under applicable  state securities laws, if necessary,  or the availability
     of an exemption from such qualification and registration;

          (iii) the  listing of such shares of Common  Stock on a United  States
     national  securities  exchange  or the  quotation  of such shares of Common
     Stock in an inter-dealer  quotation system of any registered  United States
     national securities association;

          (iv) the  publication  of the  information  necessary to calculate the
     Market Price in a daily newspaper of national circulation;

          (v) the receipt by the Trustee of an  Officers'  Certificate  stating:
     (A) that the terms of the  issuance  of the  shares of Common  Stock are in
     conformity with this  Indenture;  (B) that the shares of Common Stock to be
     issued in payment of the Purchase Price in respect of Securities  have been
     duly  authorized  and, when issued and  delivered  pursuant to the terms of
     this  Indenture in payment of the Purchase  Price in respect of Securities,
     will be validly issued, fully paid, non-assessable and free from preemptive
     rights;  (C) that the conditions  above, the conditions in clauses (i)-(iv)
     above  and the  condition  set  forth  in the  second  succeeding  sentence
     regarding  issuance of a press release have been  satisfied in all material
     respects;  and (D) the  number of shares of Common  Stock to be issued  for
     each $1,000 Original  Principal  Amount of Securities and the Last Reported
     Sale Price of a share of Common Stock on each Trading Day during the period
     commencing  on the first  Trading Day of the period during which the Market
     Price is calculated and ending on the Trading Day immediately preceding the
     Purchase Date; and

          (vi) the receipt by the Trustee of an Opinion of Counsel stating that:
     (A) the  shares of Common  Stock to be issued in  payment  of the  Purchase
     Price in respect of Securities have been duly  authorized,  and when issued
     and  delivered  pursuant to the terms of this  Indenture  in payment of the
     Purchase Price in respect of Securities, will be validly issued, fully paid
     and non-assessable and, to the best of such counsel's knowledge,  free from
     preemptive  rights;  and (B) the  conditions  in clauses (i) through  (iii)
     above have been satisfied in all material respects.

     If the foregoing  conditions  are not satisfied with respect to a Holder or
Holders prior to 5:00 p.m., New York City time, on the Business Day  immediately
preceding  the  Purchase  Date,  and the Company  has  elected to  purchase  the
Securities  pursuant to this Section 12.03 through the issuance of Common Stock,
the Company shall pay the entire Purchase Price of the Securities of such Holder
or Holders in Cash.

     Upon  determination  of the actual  number of shares of Common  Stock to be
issued upon purchase of Securities, the Company shall be required to disseminate
a press  release  through  a  public  medium  as is  customary  for such a press
release.

     (c) All shares of Common Stock  delivered  upon purchase of the  Securities
shall be newly issued shares,  shall be duly authorized,  validly issued,  fully
paid and nonassessable, and shall be free from preemptive rights and free of any
lien or adverse claim.

     (d) If a Holder of a purchased  Security is paid in shares of Common Stock,
the Company  shall pay any  documentary,  stamp or similar issue or transfer tax
due on such issue of shares of Common Stock.  However,  the Holder shall pay any
such tax which is due because the Holder  requests the shares of Common Stock to
be issued in a name other than the Holder's name. The Paying Agent may refuse to
deliver the certificates representing the shares of Common Stock being issued in
a name  other than the  Holder's  name  until the  Paying  Agent  receives a sum
sufficient  to pay any tax which will be due because the shares of Common  Stock
are to be issued in a name  other  than the  Holder's  name.  Nothing  contained
herein shall preclude any income tax withholding required by law or regulations.

     Section 12.04.  EFFECT OF PURCHASE NOTICE. Upon receipt by the Paying Agent
of the Purchase Notice specified in Section 12.02(a), the Holder of the Security
in respect of which such  Purchase  Notice was given shall (unless such Purchase
Notice is withdrawn as specified in the following two paragraphs)  thereafter be
entitled to receive  solely the Purchase  Price with  respect to such  Security.
Such  Purchase  Price shall be paid to such  Holder,  subject to receipt of Cash
and/or Common Stock by the Paying Agent, promptly following the later of (x) the
Purchase Date with respect to such Security  (provided the conditions in Section
12.02 have been  satisfied) and (y) the time of delivery of such Security to the
Paying  Agent by the Holder  thereof in the manner  required  by Section  12.02.
Securities  in respect  of which a Purchase  Notice has been given by the Holder
thereof may not be converted  pursuant to Article 11 hereof on or after the date
of the delivery of such Purchase  Notice  unless such Purchase  Notice has first
been validly withdrawn as specified in the following two paragraphs.

     A  Purchase  Notice  may be  withdrawn  by means  of a  written  notice  of
withdrawal  delivered to the office of the Paying Agent at any time prior to the
close of business on the applicable Purchase Date specifying:

          (i) the series of the  Securities  in respect of which such  notice of
     withdrawal is being submitted;

          (ii) if  certificated  Securities  have been issued,  the  certificate
     number of the  Security  in respect of which such notice of  withdrawal  is
     being  submitted,  or if not,  such  information  as may be required  under
     appropriate procedures of the Depositary;

          (iii) the Original  Principal Amount, in integral multiples of $1,000,
     of the series of Securities with respect to which such notice of withdrawal
     is being submitted; and

          (iv)  the  Original  Principal  Amount,  if  any,  of such  series  of
     Securities  that remain  subject to the original  Purchase  Notice and have
     been or will be delivered for purchase by the Company.

     The Paying Agent will promptly return to the respective Holders thereof any
Securities  with  respect  to which a  Purchase  Notice  has been  withdrawn  in
compliance  with this Indenture,  in which case, upon such return,  the Purchase
Notice with respect thereto shall be deemed to have been withdrawn.

     Section  12.05.  DEPOSIT OF PURCHASE  PRICE.  Prior to 10:00 a.m. (New York
City time) on the Purchase  Date,  the Company shall deposit with the Trustee or
with the  Paying  Agent an amount  of Cash (in  immediately  available  funds if
deposited  on such  Purchase  Date)  and/or a number of  shares of Common  Stock
sufficient  to pay the  aggregate  Purchase  Price of all of the  Securities  or
portions  thereof which are to be purchased as of the Purchase  Date. The manner
in which the deposit required by this Section 12.05 is made by the Company shall
be at the option of the Company,  PROVIDED,  HOWEVER, that such deposit shall be
made in a manner such that the Trustee or a Paying Agent shall have  immediately
available funds on the date of deposit.

     If a Paying Agent holds, in accordance  with the terms hereof,  Cash and/or
Common Stock  sufficient  to pay the Purchase  Price of any Security for which a
Purchase  Notice has been  tendered and not  withdrawn in  accordance  with this
Indenture on the Purchase Date then,  immediately after such Purchase Date, such
Security will cease to be outstanding,  interest (including  Contingent Interest
and Liquidated  Damages,  if any) will cease to accrue and principal shall cease
to  accrete  and the rights of the Holder in  respect  thereof  shall  terminate
(other than the right to receive the Purchase Price as  aforesaid).  The Company
shall  publicly  announce the Original  Principal  Amount of  Securities of such
series  purchased on such Purchase Date on or as soon as practicable  after such
Purchase Date.

     Section  12.06.  SECURITIES  PURCHASED IN PART. Any Security which is to be
purchased  only in part shall be  surrendered  at the office of the Paying Agent
(with,  if the  Company,  the  Paying  Agent or the  Trustee  so  requires,  due
endorsement by, or a written  instrument of transfer in form satisfactory to the
Company, the Paying Agent or the Trustee duly executed by, the Holder thereof or
such Holder's attorney duly authorized in writing) and the Company shall execute
and the Trustee,  shall authenticate and deliver to the Holder of such Security,
without  service  charge  except  for any taxes to be paid by the  Holder in the
event a Security is registered  under a new name, a new Security or  Securities,
of any authorized denomination as requested by such Holder in aggregate Original
Principal  Amount  equal to, and in exchange  for,  the portion of the  Original
Principal Amount of the Security so surrendered that is not purchased.

     Section 12.07.  REPAYMENT TO THE COMPANY.  The Trustee and the Paying Agent
shall return to the Company,  upon written request, any Cash and/or Common Stock
that remains unclaimed for two years,  subject to applicable  unclaimed property
law, together with interest, if any, thereon held by them for the payment of the
Purchase Price, PROVIDED,  HOWEVER, that to the extent that the aggregate amount
of Cash or Common  Stock  deposited  by the Company  pursuant  to Section  12.05
exceeds the aggregate Purchase Price of the Securities or portions thereof which
the  Company is  obligated  to  purchase as of the  Purchase  Date,  then on the
Business Day following the Purchase  Date,  the Trustee or the Paying Agent,  as
applicable,  shall return any such excess to the Company. Thereafter, any Holder
entitled to payment  must look to the Company for payment as general  creditors,
unless an applicable abandoned property law designates another Person.

     Section  12.08.  COVENANT TO COMPLY WITH  SECURITIES  LAWS UPON PURCHASE OF
SECURITIES. When complying with the provisions of Section 12.01 hereof (provided
that such offer or purchase constitutes an "issuer tender offer" for purposes of
Rule 13e-4  (which  term,  as used  herein,  includes  any  successor  provision
thereto)  under the  Exchange  Act at the time of such offer or  purchase),  and
subject to any exemptions available under applicable law, the Company shall:

     (a)  comply  with Rule 13e-4 and Rule  14e-1 (or any  successor  provision)
under the Exchange Act;

     (b)  file the  related  Schedule  TO (or any  successor  schedule,  form or
report) under the Exchange Act; and

     (c) otherwise  comply with all federal and state  securities  laws so as to
permit the rights and  obligations  under this Article 12 to be exercised in the
time and in the manner specified therein.

     To the extent that the  provisions of any  securities  laws or  regulations
conflict with the provisions of this Article 12, the Company's  compliance  with
such  laws and  regulations  shall  not in and of  itself  cause a breach of its
obligations under this Article 12.

                                   Article 13
             PURCHASE AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE

     Section 13.01. RIGHT TO REQUIRE PURCHASE.

     (a)  Subject to Section  4.02(b),  if at any time prior to Stated  Maturity
that  Securities  remain  outstanding  there shall occur a  Fundamental  Change,
Securities  of a series shall be purchased by the Company in integral  multiples
of $1,000 Original  Principal  Amount at the option of the Holders thereof as of
the date specified by the Company for such series of Securities that is not less
than 20  Business  Days nor more  than 35  Business  Days  after the date of the
Company's  notice,  pursuant  to clause  (b)  below,  of the  occurrence  of the
Fundamental   Change  (the  "FUNDAMENTAL   CHANGE  PURCHASE  DATE")  subject  to
satisfaction  by or on behalf of any  Holder  of the  requirements  set forth in
subsection (c) of this Section 13.01. The purchase price of such Securities (the
"FUNDAMENTAL  CHANGE PURCHASE  PRICE") shall be equal to the Accreted  Principal
Amount for the series of the  Securities to be purchased plus accrued and unpaid
interest (including Contingent Interest and Liquidated Damages, if any) for such
series of Securities to, but excluding, the Fundamental Change Purchase Date for
such series of Securities,  unless such  Fundamental  Change Purchase Date falls
after a  Regular  Record  Date  and on or prior  to the  corresponding  Interest
Payment Date, in which case the Company shall pay the full amount of accrued and
unpaid interest  (including  Contingent Interest and Liquidated Damages, if any)
payable on such  Interest  Payment  Date to the holder of record at the close of
business on such Regular Record Date.

     A "FUNDAMENTAL  CHANGE" shall be deemed to have occurred at such time after
the original issuance of the Securities as any of the following occurs:

          (i) the Common Stock or other  common stock into which the  Securities
     are  convertible is neither listed for trading on a United States  national
     securities  exchange nor approved for trading on the Nasdaq National Market
     or another  established  automated  over the counter  trading market in the
     United States;

          (ii) a "person" or "group"  within the meaning of Section 13(d) of the
     Exchange Act, other than the Company,  any Subsidiary of the Company or any
     employee  benefit  plan of the  Company  or any  such  Subsidiary,  files a
     Schedule TO (or any other schedule,  form or report under the Exchange Act)
     disclosing  that such  person or group has become  the  direct or  indirect
     ultimate beneficial owner (as defined in Rule 13d-3 under the Exchange Act)
     of Voting  Stock of the  Company  representing  more than 50% of the voting
     power of the Company's Voting Stock;

          (iii)  consummation of any share exchange,  consolidation or merger of
     the Company pursuant to which the Common Stock will be converted into cash,
     securities or other  property or any sale,  lease or other transfer (in one
     transaction or a series of transactions) of all or substantially all of the
     consolidated assets of the Company and its Subsidiaries,  taken as a whole,
     to any  Person  (other  than the  Company  or one or more of the  Company's
     Subsidiaries);  PROVIDED,  HOWEVER, that a transaction where the holders of
     the  Company's  Voting Stock  immediately  prior to such  transaction  own,
     directly or indirectly,  more than 50% of the aggregate voting power of all
     classes of Voting  Stock of the  continuing  or  surviving  corporation  or
     transferee immediately after such event shall not be a Fundamental Change;

          (iv)  Continuing  Directors cease to constitute at least a majority of
     the Board of Directors;

PROVIDED,  HOWEVER,  that a  Fundamental  Change  shall  not be  deemed  to have
occurred in respect of any of the foregoing if either (x) the Last Reported Sale
Price per share of Common  Stock for any five  Trading Days within the period of
10  consecutive  Trading  Days  ending  immediately  before  the  later  of  the
Fundamental Change or the public announcement thereof shall equal or exceed 105%
of the  Conversion  Price of the  applicable  series  of  Securities  in  effect
immediately before the Fundamental Change or the public announcement thereof; or
(y) all or substantially all of the  consideration  (excluding cash payments for
fractional   shares)  in  the  transaction  or  transactions   constituting  the
Fundamental  Change  consists  of shares of capital  stock  traded on a national
securities  exchange or quoted on the Nasdaq  National Market (or which shall be
so traded or quoted when issued or exchanged in connection with such Fundamental
Change) (such securities being referred to as "PUBLICLY TRADED  SECURITIES") and
as  a  result  of  such  transaction  or  transactions  the  Securities   become
convertible  into such Publicly Traded  Securities  (excluding cash payments for
fractional  shares).  For purposes of the  foregoing  proviso the term  "CAPITAL
STOCK" of any Person  means any and all  shares,  interests,  participations  or
other  equivalents  however  designated  of  corporate  stock  or  other  equity
participations,  including partnership interests, whether general or limited, of
such  Person  and  any  rights  (other  than  debt  securities   convertible  or
exchangeable into an equity interest),  warrants or options to acquire an equity
interest in such Person.

          A "CONTINUING  DIRECTOR" shall mean a director who either was a member
     of the Board of  Directors on August 6, 2003 or who becomes a member of the
     Board of Directors subsequent to that date and whose appointment,  election
     or nomination for election by the Company's  stockholders  is duly approved
     by a majority of the Continuing  Directors on the Board of Directors at the
     time of such  approval,  either by a specific  vote or by  approval  of the
     proxy  statement  issued by the Company on behalf of the Board of Directors
     in which such individual is named as nominee for director.

     (b) On or before the 30th day after the occurrence of a Fundamental Change,
the Company shall mail a written notice of the Fundamental Change to the Trustee
and any Paying Agent and to each Holder of Securities.

     The  notice  for each  series of  Securities  shall  include  the form of a
Fundamental  Change  Purchase  Notice to be  completed  by the  Holder and shall
state:

          (i) the events  causing such  Fundamental  Change and the date of such
     Fundamental Change;

          (ii) the date by which the Fundamental Change Purchase Notice for such
     series of Securities pursuant to Section 13.01(c) must be given;

          (iii)  the  Fundamental  Change  Purchase  Date  for  such  series  of
     Securities;

          (iv)  the  Fundamental  Change  Purchase  Price  for  such  series  of
     Securities;

          (v) whether the  Fundamental  Change Purchase Price for such series of
     Securities will be paid in Cash or shares of Common Stock, or a combination
     thereof and, in the case of a combination, the percentage of each;

          (vi) if the  Company  elects to pay the  Fundamental  Change  Purchase
     Price  for such  series  of  Securities  in  shares  of  Common  Stock or a
     combination  of Cash and shares of Common Stock,  that the number of shares
     of Common  Stock each  Holder  will  receive  will equal the portion of the
     Fundamental  Change  Purchase Price of such series of Securities to be paid
     in shares of Common Stock divided by 97.5% of the Market Price of one share
     of Common Stock measured as of the third Business Day immediately preceding
     the Fundamental Change Purchase Date for such series of Securities;

          (vii) if the Company  elects to pay the  Fundamental  Change  Purchase
     Price  for such  series  of  Securities  in  shares  of  Common  Stock or a
     combination  of Cash and shares of Common Stock,  the method of calculating
     the Market Price of the shares of Common Stock;

          (viii)  briefly,   the  conversion   rights  of  such  series  of  the
     Securities;

          (ix) the name and address of each Paying Agent and Conversion Agent;

          (x)  the  Conversion  Rate  for  such  series  of  Securities  and any
     adjustments thereto;

          (xi) that Securities as to which a Fundamental  Change Purchase Notice
     has been given may be converted  into Common  Stock  pursuant to Article 11
     only to the extent that the  Fundamental  Change  Purchase  Notice has been
     withdrawn in accordance with the terms of this Indenture;

          (xii) the  procedures  that the Holder must follow to exercise  rights
     under this Section 13.01;

          (xiii) the procedures for  withdrawing a Fundamental  Change  Purchase
     Notice, including a form of notice of withdrawal;

          (xiv) that the Holder must satisfy the  requirements  set forth in the
     Securities in order to convert the Securities; and

          (xv) the CUSIP number of the Securities.

     If any of the  Securities  is in the  form of a Global  Security,  then the
Company  shall  modify  such notice to the extent  necessary  to accord with the
procedures of the Depositary applicable to the purchase of Global Securities.

     In connection  with  provided such notice,  the Company shall issue a press
release and  publish a notice  containing  this  information  in a newspaper  of
general  circulation  in The City of New York or publish the  information on its
website on the World Wide Web or through such other public  medium as it may use
at that time.

     (c) A Holder may exercise its rights  specified in  subsection  (a) of this
Section 13.01 upon delivery of a written notice (which shall be in substantially
the form included in Exhibits A-1 and A-2 hereto,  as applicable,  and which may
be delivered by letter, overnight courier, hand delivery, facsimile transmission
or in any other  written  form and,  in the case of  Global  Securities,  may be
delivered  electronically  or by other means in accordance with the Depositary's
customary  procedures)  of the  exercise of such rights (a  "FUNDAMENTAL  CHANGE
PURCHASE NOTICE") to any Paying Agent at any time prior to the close of business
on the Business Day immediately  preceding the Fundamental  Change Purchase Date
for such series of Securities;  PROVIDED that, if a Holder of any Security fails
to indicate in such Fundamental  Change Purchase Notice its election to withdraw
such  Fundamental  Change  Purchase Notice or receive Cash in the event that the
Company  elects,  pursuant  to  Section  13.02,  to pay the  Fundamental  Change
Purchase  Price, in whole or in part, in shares of Common Stock but such portion
of the Fundamental Change Purchase Price shall ultimately be paid to such Holder
entirely in Cash  because any of the  conditions  to payment of the  Fundamental
Change  Purchase Price in shares of Common Stock is not satisfied  prior to 5:00
p.m.,  New York  City  time,  on the  Business  Day  immediately  preceding  the
Fundamental  Change  Purchase Date, as set forth in Section  13.02,  such Holder
shall be deemed to have elected to receive Cash.

     The  delivery  of such  Security  to any Paying  Agent  (together  with all
necessary  endorsements) at the office of such Paying Agent shall be a condition
to the receipt by the Holder of the  Fundamental  Change Purchase Price for such
Security.

     The  Company  shall  purchase  from the Holder  thereof,  pursuant  to this
Section  13.01,  a portion of a Security of a series if the  Original  Principal
Amount of such portion is $1,000 or an integral  multiple of $1,000.  Provisions
of this  Indenture  that apply to the  purchase of all of a Security of a series
pursuant to Section  13.01  through  Section 13.06 also apply to the purchase of
such portion of such Security.

     Any purchase by the Company contemplated pursuant to the provisions of this
Section 13.01 shall be consummated by the delivery of the consideration (whether
Cash,  Common Stock or a combination of Cash and Common Stock) to be received by
the Holder promptly  following the later of the Fundamental Change Purchase Date
for such series of  Securities  and the time of delivery of the  Security to the
Paying  Agent in  accordance  with this  Section  13.01 as set forth in  Section
13.03.

     Notwithstanding anything herein to the contrary, any Holder delivering to a
Paying  Agent  the  Fundamental  Change  Purchase  Notice  contemplated  by this
subsection (c) shall have the right to withdraw such Fundamental Change Purchase
Notice in whole or as to a portion thereof that is an Original  Principal Amount
of $1,000 or an  integral  multiple  thereof  at any time  prior to the close of
business on the  Business  Day  immediately  preceding  the  Fundamental  Change
Purchase Date for such series of  Securities by delivery of a written  notice of
withdrawal to the Paying Agent in accordance with Section 13.03.

     A Paying  Agent shall  promptly  notify the Company of the receipt by it of
any Fundamental Change Purchase Notice or written withdrawal thereof.

     Anything  herein  to the  contrary  notwithstanding,  in the case of Global
Securities, any Fundamental Change Purchase Notice may be delivered or withdrawn
and such  Securities  may be surrendered or delivered for purchase in accordance
with the applicable procedures of the Depositary as in effect from time to time.

     Section  13.02.   THE  COMPANY'S  RIGHT  TO  ELECT  MANNER  OF  PAYMENT  OF
FUNDAMENTAL CHANGE PURCHASE PRICE.

     (a) The Securities to be repurchased with respect to any Fundamental Change
Purchase Date for such series of Securities  pursuant to Section 13.01(a) may be
paid for at the election of the Company in Cash or shares of Common Stock, or in
any  combination  of Cash and shares of Common Stock,  subject to the conditions
set forth in Section 13.02(b). The Company shall designate, in the notice of the
Fundamental Change delivered  pursuant to Section 13.01(b),  whether the Company
will purchase the Securities of a series for Cash or shares of Common Stock, or,
if a combination  thereof,  the percentages of the  Fundamental  Change Purchase
Price for such series of  Securities  in respect of which it will pay in Cash or
shares of Common Stock;  PROVIDED,  HOWEVER,  that the Company will pay Cash for
fractional  interests in shares of Common Stock. Each Holder whose Securities of
a series  are  purchased  pursuant  to  Section  13.01  shall  receive  the same
percentage  of Cash or shares  of Common  Stock in  payment  of the  Fundamental
Change Purchase Price for such series of such Securities, except (i) as provided
in  this  Section  13.02(a)  with  regard  to the  payment  of  Cash  in lieu of
fractional  shares of Common  Stock and (ii) in the event  that the  Company  is
unable to purchase  the  Securities  of a Holder or Holders for shares of Common
Stock because any necessary  qualifications  or  registrations  of the shares of
Common Stock under  applicable  securities laws cannot be obtained,  the Company
may purchase the  Securities  of such series of such Holder or Holders for Cash.
The Company may not change its election  with respect to the  consideration  (or
components  or  percentages  of  components  thereof) to be paid in respect of a
series of Securities once the Company has given its notice of Fundamental Change
to  Holders  pursuant  to Section  13.01(b)  except in the event of a failure to
satisfy, prior to 5:00 p.m., New York City time, on the Business Day immediately
preceding the  Fundamental  Change  Purchase Date for such series of Securities,
any condition to the payment of the  Fundamental  Change Purchase Price for such
series of Securities in whole or in part, in shares of Common Stock.

     (b) If the Company elects to pay all or a portion of the Fundamental Change
Purchase  Price of a series of  Securities  in  respect  of which a  Fundamental
Change  Purchase  Notice  pursuant to Section  13.01(c) has been given in Common
Stock,  the number of shares of Common  Stock to be issued shall be equal to (i)
the  portion  of the  Fundamental  Change  Purchase  Price  of  such  series  of
Securities  to be paid in Common Stock divided by (ii) 97.5% of the Market Price
of one share of Common Stock measured as of the third  Business Day  immediately
preceding the Fundamental  Change Purchase Date,  subject to satisfaction of the
conditions set forth in the second succeeding paragraph.

     The  Company  will not issue  any  fraction  of a share of Common  Stock in
payment of the  Fundamental  Change  Purchase  Price for a series of Securities.
Instead,  the Company will make a Cash payment  (calculated to the nearest cent)
equal to such  fraction  multiplied  by the Market  Price of one share of Common
Stock on or prior to the  Fundamental  Change  Purchase  Date for such series of
Securities.  If a Holder  elects  to have  more  than one  Security  of a series
purchased,  the number of shares of Common Stock shall be based on the aggregate
amount of Securities of such series to be purchased.

     The Company's right to exercise its election to repurchase  Securities of a
series through the issuance of shares of Common Stock shall be conditioned upon:

          (i)  the  registration  of such  shares  of  Common  Stock  under  the
     Securities Act and the Exchange Act, in each case, if required;

          (ii) any  qualification or registration of such shares of Common Stock
     under applicable  state securities laws, if necessary,  or the availability
     of an exemption from such qualification and registration;

          (iii) the  listing of such shares of Common  Stock on a United  States
     national  securities  exchange  or the  quotation  of such shares of Common
     Stock in an inter-dealer  quotation system of any registered  United States
     national securities association;

          (iv) the  publication  of the  information  necessary to calculate the
     Market Price in a daily newspaper of national circulation;

          (v) the receipt by the  Trustee of an  Officers'  Certificate  stating
     (A):  that the terms of the  issuance of the shares of Common  Stock are in
     conformity with this  Indenture;  (B) that the shares of Common Stock to be
     issued in payment of the  Fundamental  Change  Purchase Price in respect of
     such series of Securities  have been duly  authorized  and, when issued and
     delivered  pursuant  to the  terms  of this  Indenture  in  payment  of the
     Fundamental  Change Purchase Price in respect of such  Securities,  will be
     validly issued, fully paid, non-assessable and free from preemptive rights;
     (C) that the conditions above, the conditions in clauses (i)-(iv) above and
     the  condition  set  forth  in the  second  succeeding  sentence  regarding
     issuance of a press release have been  satisfied in all material  respects;
     and (D) the number of shares of Common  Stock to be issued for each  $1,000
     Original  Principal  Amount of such  Securities  and the Last Reported Sale
     Price of a share of Common  Stock on each  Trading  Day  during  the period
     commencing  on the first  Trading Day of the period during which the Market
     Price is calculated and ending on the Trading Day immediately preceding the
     Fundamental Change Purchase Date for such series of Securities; and

          (vi) the receipt by the Trustee of an Opinion of Counsel stating that:
     (A) the  shares of Common  Stock to be issued by the  Company in payment of
     the  Fundamental  Change  Purchase  Price  in  respect  of such  series  of
     Securities  have  been  duly  authorized,  and when  issued  and  delivered
     pursuant  to the terms of this  Indenture  in  payment  of the  Fundamental
     Change  Purchase  Price in respect of such  series of  Securities,  will be
     validly  issued,  fully paid and  non-assessable  and,  to the best of such
     counsel's knowledge, free from preemptive rights; and (B) the conditions in
     clauses (i) and (iii) above have been satisfied in all material respects.

     If the foregoing  conditions  are not satisfied with respect to a Holder or
Holders prior to 5:00 p.m., New York City time, on the Business Day  immediately
preceding the  Fundamental  Change Purchase Date, and the Company has elected to
purchase the Securities of any series pursuant to this Section 13.02 through the
issuance of shares of Common Stock, the Company shall pay the entire Fundamental
Change  Purchase Price of such series of Securities of such Holder or Holders in
Cash.

     Upon  determination  of the actual  number of shares of Common  Stock to be
issued upon purchase of Securities, the Company shall be required to disseminate
a press  release  through  a  public  medium  as is  customary  for such a press
release.

     (c) All shares of Common  Stock  delivered  upon  purchase of any series of
Securities  shall be newly  issued  shares,  shall be duly  authorized,  validly
issued,  fully paid and nonassessable,  and shall be free from preemptive rights
and free of any lien or adverse claim.

     (d) If a Holder of a purchased  Security is paid in shares of Common Stock,
the Company  shall pay any  documentary,  stamp or similar issue or transfer tax
due on such issue of Common  Stock.  However,  the Holder shall pay any such tax
which is due because the Holder requests the Common Stock to be issued in a name
other  than the  Holder's  name.  The Paying  Agent may  refuse to  deliver  the
certificates  representing  the shares of Common  Stock  being  issued in a name
other than the Holder's name until the Paying Agent receives a sum sufficient to
pay any tax which  will be due  because  the  shares  of Common  Stock are to be
issued in a name other than the Holder's name.  Nothing  contained  herein shall
preclude any income tax withholding required by law or regulations.

     Section 13.03. EFFECT OF FUNDAMENTAL CHANGE PURCHASE NOTICE.

     Upon receipt by any Paying Agent of the Fundamental  Change Purchase Notice
specified  in Section  13.01(c),  the Holder of the Security in respect of which
such Fundamental Change Purchase Notice was given shall (unless such Fundamental
Change Purchase Notice is withdrawn as specified  below)  thereafter be entitled
to receive the Fundamental  Change Purchase Price with respect to such Security.
Such  Fundamental  Change  Purchase Price shall be paid to such Holder  promptly
following the later of (a) the Fundamental  Change Purchase Date with respect to
such Security  (provided the conditions in Section 13.01(c) have been satisfied)
and (b) the time of  delivery of such  Security to a Paying  Agent by the Holder
thereof in the manner required by Section 13.01(c).  Securities of any series in
respect  of which a  Fundamental  Change  Purchase  Notice has been given by the
Holder  thereof may not be  converted  into Common Stock on or after the date of
the delivery of such Fundamental  Change Purchase Notice unless such Fundamental
Change  Purchase  Notice has first been  validly  withdrawn  as specified in the
following paragraph.

     A Fundamental  Change  Purchase  Notice for any series of Securities may be
withdrawn by means of a written notice of withdrawal  delivered to the office of
the Paying  Agent at any time prior to the close of business on the Business Day
immediately   preceding  the  applicable   Fundamental   Change   Purchase  Date
specifying:

          (i) the series of the  Securities  in respect of which such  notice of
     withdrawal is being submitted;

          (ii) if  certificated  Securities  have been issued,  the  certificate
     numbers for  Securities  in respect of which such notice of  withdrawal  is
     being submitted, or if not, such information as required by the Depositary;

          (iii) the Original  Principal Amount, in integral multiples of $1,000,
     of the series of Securities with respect to which such notice of withdrawal
     is being submitted; and

          (iv)  the  Original  Principal  Amount,  if  any,  of such  series  of
     Securities that remain subject to the original  Fundamental Change Purchase
     Notice and have been or will be delivered for purchase by the Company.

          The  Paying  Agent  will  promptly  return to the  respective  Holders
     thereof any Securities with respect to which a Fundamental  Change Purchase
     Notice has been withdrawn in compliance with this Indenture, in which case,
     upon such  return,  the  Fundamental  Change  Purchase  Notice with respect
     thereto shall be deemed to have been withdrawn.

     Section 13.04.  DEPOSIT OF FUNDAMENTAL  CHANGE PURCHASE PRICE. On or before
10:00 a.m.  New York City time on the  Fundamental  Change  Purchase  Date for a
series of  Securities,  the  Company  shall  deposit  with the Trustee or with a
Paying Agent an amount of Cash (in  immediately  available funds if deposited on
such Fundamental Change Purchase Date) and/or Common Stock sufficient to pay the
aggregate Fundamental Change Purchase Price of all the Securities of such series
or portions  thereof  that are to be  purchased  as of such  Fundamental  Change
Purchase Date. The manner in which the deposit required by this Section 13.04 is
made by the Company  shall be at the option of the Company,  PROVIDED,  HOWEVER,
that such  deposit  shall be made in a manner  such that the Trustee or a Paying
Agent shall have immediately available funds on the date of such deposit.

     If a Paying Agent holds, in accordance  with the terms hereof,  Cash and/or
Common Stock  sufficient to pay the  Fundamental  Change  Purchase  Price of any
Security for which a Fundamental  Change  Purchase  Notice has been tendered and
not  withdrawn  in  accordance  with this  Indenture on the  Fundamental  Change
Purchase  Date for such Security  then,  immediately  following the  Fundamental
Change  Purchase  Date  for  such  Security,  such  Security  will  cease  to be
outstanding,  interest (including Contingent Interest and Liquidated Damages, if
any) will cease to accrue and principal shall cease to accrete and the rights of
the Holder in respect thereof shall  terminate  (other than the right to receive
the  Fundamental  Change  Purchase Price for such  Security).  The Company shall
publicly  announce the Original  Principal  Amount of such series of  Securities
purchased as a result of such  Fundamental  Change on or as soon as  practicable
after the Fundamental Change Purchase Date for such series of Securities.

     Section  13.05.  SECURITIES  PURCHASED IN PART.  Any Security that is to be
purchased  only in part shall be surrendered at the office of a Paying Agent and
promptly after the  Fundamental  Change  Purchase Date the Company shall execute
and the Trustee, or any Authenticating  Agent, shall authenticate and deliver to
the Holder of such  Security,  without  service charge (other than amounts to be
paid in respect of applicable  transfer  taxes), a new Security or Securities of
the same series,  of such  authorized  denomination  as may be requested by such
Holder,  in aggregate  Original  Principal Amount equal to, and in exchange for,
the portion of the Original Principal Amount of the Security so surrendered that
is not purchased.

     Section 13.06.  REPAYMENT TO THE COMPANY.  The Trustee and the Paying Agent
shall return to the Company,  upon written request, any Cash and/or Common Stock
that remains unclaimed for two years,  subject to applicable  unclaimed property
law, together with interest, if any, thereon held by them for the payment of the
Fundamental  Change  Purchase  Price in  respect  of any  series of  Securities;
PROVIDED,  HOWEVER,  that to the extent that the aggregate amount of Cash and/or
Common Stock  deposited  by the Company  pursuant to Section  13.04  exceeds the
aggregate  Fundamental  Change  Purchase  Price of a  series  of  Securities  or
portions  thereof  which  the  Company  is  obligated  to  purchase  as  of  the
Fundamental  Change  Purchase  Date  for a  series  of  Securities,  then on the
Business Day following the  Fundamental  Change Purchase Date for such series of
Securtiies,  the Trustee or Paying Agent,  as applicable,  shall return any such
excess to the Company.  Thereafter,  any Holder entitled to payment must look to
the Company for payment as general  creditors,  unless an  applicable  abandoned
property law designates another Person.

     Section  13.07.  COVENANT TO COMPLY WITH  SECURITIES  LAWS UPON PURCHASE OF
SECURITIES. When complying with the provisions of Section 13.01 hereof (provided
that such offer or purchase constitutes an "issuer tender offer" for purposes of
Rule 13e-4  (which  term,  as used  herein,  includes  any  successor  provision
thereto)  under the  Exchange  Act at the time of such offer or  purchase),  and
subject to any exemptions available under applicable law, the Company shall:

          (a) comply with Rule 13e-4 and Rule 14e-1 (or any successor provision)
     under the Exchange Act;

          (b) file the related Schedule TO (or any successor  schedule,  form or
     report) under the Exchange Act; and

          (c) otherwise  comply with all federal and state securities laws so as
     to permit the rights and obligations  under this Article 13 to be exercised
     in the time and in the manner specified therein.

          To  the  extent  that  the  provisions  of  any  securities   laws  or
     regulations  conflict with the provisions of this Article 13, the Company's
     compliance with such laws and regulations  shall not in and of itself cause
     a breach of its obligations under this Article 13.

                                   Article 14
                               CONTINGENT INTEREST

     Section  14.01.  CONTINGENT  INTEREST.  (a) The Company will pay Contingent
Interest  (i) to Holders of Series A  Debentures  for the period from August 20,
2010 to February 14, 2011, and thereafter for any Interest Period  commencing on
or after  February 14, 2011,  if the average  Trading  Price of such  Securities
during the five Trading Day measurement  period ending on the second Trading Day
immediately  preceding the first day of the applicable  period (the "MEASUREMENT
PERIOD")  equals  120%  or  more  of the  Accreted  Principal  Amount  for  such
Securities and (ii) to Holders of Series B Debentures for the period from August
20, 2008 to February 14, 2009, and thereafter for any Interest Period commencing
on or after February 15, 2009, if the average  Trading Price of such  Securities
during the  applicable  Measurement  Period  equals 120% or more of the Accreted
Principal Amount for such Securities.  For any series of Securities,  the amount
of Contingent  Interest payable for any Interest Period pursuant to this Section
14.01  shall  equal  0.19%  of the  average  Trading  Price  of such  series  of
Securities for the applicable Measurement Period.

     (b) The Trustee shall have no duty to determine  Contingent  Interest under
this  Article,  but may  accept  as  conclusive  evidence  of  that  fact or the
correctness of any payment of such Contingent  Interest,  and shall be protected
in relying upon, an Officers'  Certificate of the Company. The Trustee shall not
be responsible  for the Company's  failure to comply with any provisions of this
Article.

     Section  14.02.  PAYMENT OF  CONTINGENT  INTEREST.  The  Company  shall pay
Contingent  Interest owed  pursuant to Section 14.01 for any Interest  Period on
the Interest Payment Date immediately succeeding the applicable Interest Period,
to Holders of  Securities  for which  Contingent  Interest  is payable as of the
Regular Record Date relating to such Interest Payment Date.

     Section 14.03. NOTICE OF CONTINGENT INTEREST.

     (a) As soon as practicable  following the first Business Day of an Interest
Period for which Contingent Interest will be payable in respect of any series of
Securities  pursuant to Section  14.01,  the Company shall issue a press release
and publish a notice  containing  this  information  in a  newspaper  of general
circulation in The City of New York or publish the information on its website on
the World Wide Web or through  such  other  public  medium as it may use at that
time.

     (b) On any Interest Payment Date on which Contingent Interest is payable in
respect of any series of  Securities  pursuant  to this  Article 14, the Company
shall  issue a press  release  and  publish a notice  stating the amount of such
Contingent  Interest  and  setting  forth the  manner in which  such  amount was
calculated  in a  newspaper  of general  circulation  in The City of New York or
publish  such  information  on its website on the World Wide Web or through such
other public medium as it may use at that time.

                                   Article 15
                                   [RESERVED]

                                   Article 16
   IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES

     Section 16.01.  EXEMPTION FROM INDIVIDUAL  LIABILITY.  No recourse under or
upon  any  obligation,  covenant  or  agreement  of  this  Indenture,  or of any
Security, or for any claim based thereon or otherwise in respect thereof,  shall
be had against any incorporator,  stockholder, officer, director or employee, as
such, past,  present or future, of the Company or of any successor  corporation,
either directly or through the Company,  whether by virtue of any  constitution,
statute or rule of law, or by the  enforcement  of any  assessment or penalty or
otherwise; it being expressly understood that this Indenture and the obligations
issued  hereunder are solely corporate  obligations of the Company,  and that no
such personal liability whatever shall attach to, or is or shall be incurred by,
the incorporators,  stockholders,  officers, directors or employees, as such, of
the  Company or of any  successor  corporation,  or any of them,  because of the
creation of the  indebtedness  hereby  authorized,  or under or by reason of the
obligations,  covenants or agreements  contained in this  Indenture or in any of
the  Securities  or  implied  therefrom;  and  that  any and all  such  personal
liability,  either at common law or in equity or by constitution or statute, of,
and any and all  such  rights  and  claims  against,  every  such  incorporator,
stockholders, officer, director or employee, as such, because of the creation of
the indebtedness  hereby  authorized,  or under or by reason of the obligations,
covenants or agreements  contained in this Indenture or in any of the Securities
or implied  therefrom,  are hereby  expressly waived and released as a condition
of, and as a consideration for, the execution of this Indenture and the issue of
such Securities.

                                   Article 17
                            MISCELLANEOUS PROVISIONS

     Section 17.01.  SUCCESSORS  AND ASSIGNS OF COMPANY BOUND BY INDENTURE.  All
the covenants, stipulations, promises and agreements in this Indenture contained
by or in behalf of the Company shall bind its successors and assigns, whether so
expressed or not.

     Section  17.02.  ACTS OF BOARD,  COMMITTEE OR OFFICER OF SUCCESSOR  COMPANY
VALID.  Any act or proceeding by any provision of this  Indenture  authorized or
required  to be done or  performed  by any  board,  committee  or officer of the
Company  shall and may be done and  performed  with like force and effect by the
like board,  committee or officer of any corporation  that shall at that time be
the successor of the Company.

     Section 17.03.  REQUIRED NOTICES OR DEMANDS.  Any notice or demand which by
any  provision of this  Indenture is required or permitted to be given or served
by the  Trustee or by the Holders to or on the Company may be given or served by
being mailed  postage  prepaid in the United  States  addressed  (until  another
address is filed by the Company  with the  Trustee),  as follows:  DST  Systems,
Inc.,  333 West  11th  Street,  Kansas  City,  Missouri  64105,  Attention:  DST
Corporate Secretary. Any notice, direction,  request or demand by the Company or
by any Holder to or upon the Trustee may be given or made, for all purposes,  by
being mailed  postage  prepaid in the United  States  addressed to the Corporate
Trust Office of the Trustee.  Any notice required or permitted to be mailed to a
Holder  by the  Company  or the  Trustee  pursuant  to the  provisions  of  this
Indenture  shall be deemed to be properly mailed by being mailed postage prepaid
in the United  States  addressed to such Holder at the address of such Holder as
shown on the Security Register. In any case, where notice to Holders is given by
mail,  neither the failure to mail such notice,  nor any defect in any notice so
mailed,  to any  particular  Holder shall affect the  sufficiency of such notice
with respect to other Holders.

     Where this Indenture provides for notice in any manner,  such notice may be
waived in writing by the Person  entitled to receive such notice,  either before
or after the event,  and such waiver  shall be the  equivalent  of such  notice.
Waivers of notice by Holders  shall be filed with the  Trustee,  but such filing
shall not be a  condition  precedent  to the  validity  of any  action  taken in
reliance upon such waiver.

     In case, by reason of the suspension of or  irregularities  in regular mail
service,  it shall be  impractical  to mail notice of any event to Holders  when
such notice is required to be given pursuant to any provision of this Indenture,
then any manner of giving  such notice as shall be  satisfactory  to the Trustee
shall be deemed to be a sufficient giving of such notice.

     Section 17.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any
request or  application  by the Company to the Trustee to take any action  under
this Indenture, the Company shall furnish to the Trustee:

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

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

     Section  17.05.   STATEMENTS  REQUIRED  IN  CERTIFICATE  OR  OPINION.  Each
certificate  or opinion with respect to compliance  with a condition or covenant
provided for in this Indenture shall include:

     (a) a statement that the person making such certificate or opinion has read
such covenant or condition;

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

     (c) a statement  that,  in the opinion of such person,  the person has made
such  examination  or  investigation  as is  necessary  to enable  the person to
express an informed  opinion as to whether such  covenant or condition  has been
complied with;

     (d) a statement as to whether or not, in the opinion of such  person,  such
condition or covenant has been complied with.

     Section  17.06.  GOVERNING  LAW.  THE LAWS OF THE  STATE OF NEW YORK  SHALL
GOVERN THIS  INDENTURE  AND THE  SECURITIES,  WITHOUT  REGARD TO  PRINCIPLES  OF
CONFLICT OF LAWS.

     Section 17.07.  INDENTURE MAY BE EXECUTED IN  COUNTERPARTS.  This Indenture
may be  executed in any number of  counterparts,  each of which when so executed
shall be deemed an original; and all such counterparts shall together constitute
but one and the same instrument.

<PAGE>

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

                                     DST SYSTEMS, INC.

                                     By:       /s/ Kenneth V. Hager
                                               ---------------------------------
                                               Name:   Kenneth V. Hager
                                               Title:

                                     JPMORGAN CHASE BANK, as Trustee

                                     By:       /s/ Carol Ng
                                               ---------------------------------
                                               Name:   Carol Ng
                                               Title:  Vice President

<PAGE>
                                                                     EXHIBIT A-1

     FOR PURPOSES OF SECTIONS 1272,  1273 AND 1275 OF THE INTERNAL  REVENUE CODE
OF 1986,  AS AMENDED,  THIS  DEBENTURE IS BEING  ISSUED WITH TAX ORIGINAL  ISSUE
DISCOUNT AND THE ISSUE DATE OF THIS  DEBENTURE IS AUGUST 12, 2003.  IN ADDITION,
THIS DEBENTURE IS SUBJECT TO THE UNITED STATES  FEDERAL  INCOME TAX  REGULATIONS
GOVERNING  CONTINGENT  PAYMENT DEBT INSTRUMENTS.  FOR PURPOSES OF SECTIONS 1272,
1273  AND  1275 OF THE  INTERNAL  REVENUE  CODE,  THE  COMPARABLE  YIELD OF THIS
DEBENTURE IS 8.4%,  COMPOUNDED  SEMIANNUALLY (WHICH WILL BE TREATED AS THE YIELD
TO MATURITY FOR UNITED STATES FEDERAL INCOME TAX PURPOSES).

     DST SYSTEMS,  INC. (THE  "COMPANY")  AGREES,  AND BY ACCEPTING A BENEFICIAL
OWNERSHIP  INTEREST IN THIS DEBENTURE  EACH HOLDER AND ANY  BENEFICIAL  OWNER OF
THIS DEBENTURE  WILL BE DEEMED TO HAVE AGREED,  FOR UNITED STATES FEDERAL INCOME
TAX PURPOSES (1) TO TREAT THIS DEBENTURE AS A DEBT INSTRUMENT THAT IS SUBJECT TO
U.S. TREAS. REG. SEC. 1.1275-4 OR ANY SUCCESSOR  PROVISION (THE "CONTINGENT DEBT
REGULATIONS")  AND  (2)  TO BE  BOUND  (IN  THE  ABSENCE  OF  AN  ADMINISTRATIVE
DETERMINATION OR JUDICIAL RULING TO THE CONTRARY) BY THE COMPANY'S DETERMINATION
OF THE "COMPARABLE YIELD" AND "PROJECTED PAYMENT SCHEDULE" WITHIN THE MEANING OF
THE CONTINGENT DEBT  REGULATIONS,  WITH RESPECT TO THIS  DEBENTURE.  THE COMPANY
AGREES TO  PROVIDE  PROMPTLY  TO THE  HOLDER  OF THIS  DEBENTURE,  UPON  WRITTEN
REQUEST,  THE ISSUE PRICE,  AMOUNT OF TAX ORIGINAL ISSUE  DISCOUNT,  ISSUE DATE,
YIELD TO MATURITY,  COMPARABLE YIELD AND PROJECTED  PAYMENT  SCHEDULE.  ANY SUCH
WRITTEN  REQUEST  SHOULD BE SENT TO THE COMPANY AT THE  FOLLOWING  ADDRESS:  DST
SYSTEMS, INC., 333 West 11th Street, Kansas City, Missouri 64105, ATTENTION: DST
CORPORATE SECRETARY.

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

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

     [Insert if  restricted  Security:]  [THIS  DEBENTURE  AND ANY COMMON  STOCK
ISSUABLE UPON THE CONVERSION OF THIS DEBENTURE  HAVE NOT BEEN  REGISTERED  UNDER
THE U.S.  SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT
BE SOLD OR  OTHERWISE  TRANSFERRED  IN THE  ABSENCE OF SUCH  REGISTRATION  OR AN
APPLICABLE  EXEMPTION  THEREFROM.  EACH  PURCHASER  OF THIS  DEBENTURE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS  DEBENTURE MAY BE RELYING ON THE EXEMPTION FROM
THE  PROVISIONS  OF  SECTION  5 OF THE  SECURITIES  ACT  PROVIDED  BY RULE  144A
THEREUNDER.

     THIS  DEBENTURE AND ANY COMMON STOCK  ISSUABLE UPON THE  CONVERSION OF THIS
DEBENTURE MAY NOT BE OFFERED,  SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1)
TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER"  WITHIN THE MEANING OF RULE 144A UNDER THE  SECURITIES  ACT ACQUIRING FOR
ITS OWN  ACCOUNT OR FOR THE  ACCOUNT  OF A  QUALIFIED  INSTITUTIONAL  BUYER IN A
TRANSACTION  MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION
FROM  REGISTRATION  UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE),  (3) TO DST SYSTEMS,  INC. OR ANY SUBSIDIARY THEREOF OR (4) PURSUANT
TO AN EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE SECURITIES  ACT, AND IN EACH
CASE IN  ACCORDANCE  WITH ALL  APPLICABLE  SECURITIES  LAWS OF THE STATES OF THE
UNITED STATES AND OTHER JURISDICTIONS.

     THIS DEBENTURE, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION AND
ANY RELATED  DOCUMENTATION  MAY BE AMENDED OR SUPPLEMENTED  FROM TIME TO TIME TO
MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS DEBENTURE AND ANY
SUCH  SHARES TO  REFLECT  ANY CHANGE IN  APPLICABLE  LAW OR  REGULATION  (OR THE
INTERPRETATION  THEREOF) OR IN  PRACTICES  RELATING TO THE RESALE OR TRANSFER OF
RESTRICTED  SECURITIES  GENERALLY.  THE HOLDER OF THIS DEBENTURE AND SUCH SHARES
SHALL BE DEEMED BY THE  ACCEPTANCE OF THIS DEBENTURE AND ANY SUCH SHARES TO HAVE
AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.]

<PAGE>

                                DST SYSTEMS, INC.

             4.125% Series A Convertible Senior Debentures due 2023

No. 1                                   Original Principal Amount:  $540,000,000
Issue Date: August 12, 20                                     CUSIP: 233326 AA 5

     DST  SYSTEMS,  INC.,  a Delaware  corporation  (the  "COMPANY"),  for value
received,  hereby  promises to pay to  __________,  or registered  assigns,  the
Accreted  Principal  Amount (as  defined  in the  Indenture  referred  to on the
reverse side of this Security) on August 15, 2023.

     This Security  shall bear regular cash interest and the Original  Principal
Amount (as defined in the Indenture) of this Security shall accrete as specified
on the reverse side of this Security and in the Indenture.  Contingent Interest,
if any, on this  Security,  will be payable as  specified on the reverse side of
this Security and in the Indenture. This Security is convertible,  is subject to
redemption  at the option of the Company or purchase at the option of the Holder
hereof,  all as  specified  on the  reverse  side  of this  Security  and in the
Indenture.

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

<PAGE>

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

                                     DST SYSTEMS, INC.
                                     By:
                                               ---------------------------------
                                               Name:
                                               Title:

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

<PAGE>

         TRUSTEE'S CERTIFICATE OF AUTHENTICATION

JPMORGAN CHASE BANK, as Trustee,
certifies that this is one of the Securities referred
to in the within-mentioned Indenture.

By:
   ----------------------------------------------------
     Authorized Officer

Dated:  ___________________

<PAGE>

                       [FORM OF REVERSE SIDE OF SECURITY]

             4.125% Series A Convertible Senior Debentures due 2023

     This  Security  is one of a duly  authorized  issue  of  securities  of the
Company (herein called the "SECURITIES") limited in aggregate Original Principal
Amount to $540,000,000  Original  Principal  Amount,  issued under an Indenture,
dated as of August 12, 2003 (the "INDENTURE"),  between the Company and JPMorgan
Chase Bank, as Trustee (the "TRUSTEE", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective  rights,  limitations
of rights,  duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities  and of the terms upon which the  Securities  are, and
are to be, authenticated and delivered. Capitalized terms used and not otherwise
defined in this Security are used as defined in the Indenture.

1. INTEREST.

     This  Security  will bear  interest  from  August 12, 2003 or from the most
recent date to which interest has been paid or duly provided for,  semi-annually
in arrears on February 15 and August 15 of each year (each, an "INTEREST PAYMENT
DATE"), subject to Section 1.08 of the Indenture,  commencing February 15, 2004,
at the rate per  annum  equal to  4.125%,  to but  excluding  August  15,  2010.
Interest on this  Security  shall be  calculated  on the basis of a 360-day year
composed  of twelve  30-day  months.  Interest  payable on this  Security on any
Interest  Payment  Date will  include  interest  for the  immediately  preceding
Interest  Period.  The interest so payable and punctually  paid or duly provided
for on any Interest Payment Date will, as provided in such Indenture, be paid to
the Person in whose name this Security (or one or more  Predecessor  Securities)
is  registered  at the close of  business  on the  Regular  Record Date for such
interest,  which  shall  be the  February  1 or  August  1, as the  case may be,
immediately  preceding the relevant Interest Payment Date. Any interest which is
payable,  but is not  punctually  paid or duly  provided  for,  on any  Interest
Payment Date shall forthwith cease to be payable to the registered Holder hereof
on the relevant  Regular  Record Date by virtue of having been such Holder,  and
may be  paid  to the  Person  in  whose  name  this  Security  (or  one or  more
Predecessor  Securities)  is  registered  at the close of  business on a Special
Record  Date  for the  payment  of such  Defaulted  Interest  to be fixed by the
Company,  notice  whereof shall be given to the Holders of  Securities  not less
than 10 days prior to such Special  Record  Date,  or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities  may be listed,  and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.

     From and after August 15,  2010,  the Company will no longer be required to
pay cash interest.  The Original Principal Amount of this Security shall accrete
daily at the  Applicable  Yield on a semiannual  bond  equivalent  basis using a
360-day year composed of twelve 30-day months.  The Applicable Yield shall be 0%
prior to August 15, 2010 and 4.125% per annum on and after April 15, 2010, until
Stated Maturity.  At Stated  Maturity,  the Holder of this Security will receive
$1,700.28 for each $1,000 Original Principal Amount of Securities,  which is the
fully  Accreted  Principal  Amount of this  Security  on such  date,  unless the
Security has been earlier redeemed, purchased or converted.

2. CONTINGENT INTEREST.

     From and after August 20, 2010, the Company will pay Contingent Interest on
this Security under the circumstances and in the amounts described in Article 14
of  the  Indenture.   Such  Contingent  Interest,   if  any,  shall  be  payable
semiannually  in arrears  on each  Interest  Payment  Date to the Holder of this
Security as of the close of business on the Regular Record Date relating to such
Interest Payment Date.

3. INTEREST ON OVERDUE AMOUNTS.

     If the Accreted  Principal  Amount  hereof or any portion of such  Accreted
Principal  Amount is not paid when due (whether  upon  acceleration  pursuant to
Section 4.02 of the Indenture,  upon the dates set for payment of the Redemption
Price,  Purchase Price or Fundamental  Change Purchase Price, or upon the Stated
Maturity of this  Security)  or if  interest  due hereon  (including  Contingent
Interest and Liquidated Damages,  if any) (or any portion of such interest),  is
not paid when  due,  then in each such case the  overdue  amount  shall,  to the
extent  permitted by law,  bear interest at the rate then borne by this Security
or, if any overdue  amount exists on or after August 15, 2010, at the Applicable
Yield of this  Security,  which interest shall accrue from the date such overdue
amount was originally due to the date payment of such amount, including interest
thereon,  has been made or duly provided for. All such interest shall be payable
as set forth in the Indenture.

4. METHOD OF PAYMENT.

     Subject to the terms and conditions of the Indenture, the Company will make
payments in respect of Redemption  Price,  Purchase  Price,  Fundamental  Change
Purchase Price and at Stated  Maturity to Holders who surrender  Securities to a
Paying Agent to collect such payments in respect of the Securities.  The Company
will pay cash amounts in money of the United  States that at the time of payment
is legal tender for payment of public and private  debts.  However,  the Company
may make such cash  payments  by check  payable  in such  money;  PROVIDED  that
payment by wire transfer of  immediately  available  funds will be required with
respect  to  principal  of  and  interest  (including  Contingent  Interest  and
Liquidated  Damages,  if any) on all Global  Securities  and all  Securities  of
Holders  of  more  than  $25,000,000  aggregate  Original  Principal  Amount  of
Securities that have requested such method of payment and provided wire transfer
instructions  to the Company or the Paying Agent.  If any Interest  Payment Date
(other than an Interest  Payment  Date  coinciding  with the Stated  Maturity or
earlier  Redemption  Date,  Purchase Date, or Fundamental  Change Purchase Date)
falls on a day that is not a Business Day,  such  Interest  Payment Date will be
postponed  to the next  succeeding  Business Day and no interest on such payment
will accrue for the period from and after the Interest Payment Date to such next
succeeding  Business Day,  PROVIDED that, if such Business Day falls in the next
succeeding  calendar month,  the Interest  Payment Date will be the Business Day
immediately  preceding  such  Interest  Payment  Date.  If the Stated  Maturity,
Redemption  Date,  Purchase  Date or  Fundamental  Change  Purchase Date of this
Security would fall on a day that is not a Business Day, the required payment of
interest, if any, and principal will be made on the next succeeding Business Day
and no interest on such payment  will accrue and no  principal  will accrete for
the period from and after the Stated Maturity, Redemption Date, Purchase Date or
Fundamental Change Purchase Date to such next succeeding Business Day.

5. PAYING AGENT, CONVERSION AGENT AND REGISTRAR.

     Initially,  the  Trustee  will act as Paying  Agent,  Conversion  Agent and
Registrar.  The  Company may  appoint  and change any Paying  Agent,  Conversion
Agent,  Registrar  or  co-registrar  without  notice,  other than  notice to the
Trustee.  The Company or any of its  Subsidiaries or any of their Affiliates may
act as Paying Agent, Conversion Agent, Registrar or co-registrar.

6. INDENTURE.

     The terms of the Securities include those stated in the Indenture and those
made part of the  Indenture by reference to the Trust  Indenture Act of 1939, as
in effect from time to time (the "TIA").  The Securities are subject to all such
terms,  and Holders are referred to the Indenture and the TIA for a statement of
those terms.

     The Securities are general  unsecured  obligations.  The Indenture does not
limit other indebtedness of the Company.

7. REDEMPTION AT THE OPTION OF THE COMPANY.

     No sinking fund is provided for the  Securities.  Prior to August 20, 2010,
the Securities  shall not be redeemable at the option of the Company.  Beginning
on August 20, 2010 and until the Stated Maturity,  the Securities are redeemable
for Cash as a whole,  or from time to time in part, at the option of the Company
at the applicable Redemption Price.

     If the Company  redeems less than all of the  outstanding  Securities,  the
Trustee will select the  Securities to be redeemed (i) by lot; (ii) pro rata; or
(iii) by another  method the  Trustee  considers  fair and  appropriate.  If the
Trustee  selects a portion of a Holder's  Securities for partial  redemption and
the Holder  converts a portion of the same  Securities,  the  converted  portion
shall be deemed to be from the portion selected for redemption.

8. NOTICE OF REDEMPTION.

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

9. PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER.

     Each Holder has the right to require the Company to purchase the Securities
held by such Holder on August 15, 2010, 2015 and 2020 (each, a "PURCHASE DATE").
If required  by any Holder,  the Company  shall  purchase  Securities  for Cash,
Common Stock or any  combination  of Cash and Common  Stock at a Purchase  Price
equal to the Accreted  Principal  Amount  thereof,  plus accrued and unpaid cash
interest (including  Contingent Interest and Liquidated Damages, if any) to, but
excluding,  the Purchase Date, upon delivery of a Purchase Notice containing the
information set forth in the Indenture, at any time from the opening of business
on the date that is 20 Business Days prior to such Purchase Date until the close
of business on the Business Day  immediately  preceding  such  Purchase Date and
upon  delivery of the  Securities to the Paying Agent by the Holder as set forth
in the Indenture.

     At the option of the Holder and subject to the terms and  conditions of the
Indenture,  the Company shall purchase for Cash, Common Stock or any combination
of Cash and Common Stock all or a portion of the Securities  held by such Holder
as of the date that is not less than 20 nor more than 35 Business Days after the
date of the  Company's  notice to Holders  of the  occurrence  of a  Fundamental
Change  occurring  prior to Stated  Maturity for a Fundamental  Change  Purchase
Price equal to the Accreted  Principal  Amount thereof,  plus accrued and unpaid
cash interest (including Contingent Interest and Liquidated Damages, if any) to,
but excluding,  the Fundamental  Change Purchase Date,  unless such  Fundamental
Change  Purchase  Date falls after a Regular  Record Date and on or prior to the
corresponding  Interest  Payment  Date,  in which case the Company shall pay the
full amount of accrued and unpaid cash interest  (including  Contingent Interest
and  Liquidated  Damages,  if any) payable on such Interest  Payment Date to the
Holder at the close of business on such Regular Record Date.

     Holders  have the right to  withdraw  any  Purchase  Notice or  Fundamental
Change Purchase Notice,  as the case may be, by delivering to the Paying Agent a
written notice of withdrawal in accordance with the provisions of the Indenture.

     As provided in the Indenture,  if Cash or Common Stock (or any  combination
of Cash and Common Stock)  sufficient to pay the Purchase  Price or  Fundamental
Change Purchase Price, as the case may be, of all Securities or portions thereof
to be purchased as of the Purchase Date or the Fundamental Change Purchase Date,
as the case may be, is deposited  with the Paying Agent on the Purchase  Date or
the  Fundamental  Change  Purchase  Date,  as the  case  may  be,  all  interest
(including  Contingent Interest and Liquidated Damages, if any) ceases to accrue
and  principal  ceases to  accrete  on such  Securities  (or  portions  thereof)
immediately after such Purchase Date or Fundamental Change Purchase Date, as the
case may be, and the Holder  thereof  shall have no other  rights as such (other
than the right to receive the  Purchase  Price or  Fundamental  Change  Purchase
Price, as the case may be, upon surrender of such Security).

10. CONVERSION.

     Subject to the terms of the Indenture, the Holder of a Security may convert
the  Security  into  shares of Common  Stock at the  Conversion  Rate  under the
circumstances  set forth in Section 11.01 of the Indenture;  PROVIDED,  HOWEVER,
the Company may satisfy its obligation with respect to any demand for conversion
by delivering  Common Stock, Cash or a combination of Cash and Common Stock. The
Conversion Rate for the Securities on any Conversion Date shall be determined as
set forth in the  Indenture.  Upon  conversion of a Security,  the Company shall
deliver the Conversion Settlement Distribution within the time periods set forth
in Section 11.02 of the Indenture.

     A Security in respect of which a Holder has delivered a Purchase  Notice or
a Fundamental  Change  Purchase  Notice  exercising the option of such Holder to
require the Company to purchase  such  Security  may be  converted  only if such
notice of exercise is withdrawn in accordance with the terms of the Indenture.

     The Company shall deliver Cash or a check in lieu of any  fractional  share
of Common Stock.

     A Holder's right to convert the Securities into Common Stock of the Company
is also subject to the Company's right to elect pursuant to Section 11.03 of the
Indenture  to pay such  Holder  Cash in lieu of  delivering  all or part of such
Common Stock.

     A Holder  may  convert a portion of a Security  if the  Original  Principal
Amount of such portion is $1,000 or an integral  multiple of $1,000.  No payment
or adjustment shall be made for dividends on the Common Stock except as provided
in the Indenture. On conversion of a Security,  except for conversion during the
period  from the  close of  business  on any  Regular  Record  Date  immediately
preceding any Interest  Payment Date to the opening of business on such Interest
Payment Date, in which case the Holder on such Regular Record Date shall receive
the interest  payable on such Interest Payment Date, that portion of accrued and
unpaid interest  (including  Contingent  Interest,  if any) and any accretion of
principal on the  converted  Security  attributable  to the period from the most
recent Interest Payment Date (or, if no Interest Payment Date has occurred, from
the Issue Date) through the Conversion Date shall not be cancelled, extinguished
or  forfeited,  but  rather  shall be  deemed  to be paid in full to the  Holder
thereof through delivery of the Common Stock (together with the Cash payment, if
any, in lieu of fractional  shares), or Cash or a combination of Cash and Common
Stock in lieu thereof,  in exchange for the Security being converted pursuant to
the provisions hereof.

     Securities or portions thereof surrendered for conversion during the period
from the close of business on any Regular Record Date immediately  preceding any
Interest  Payment Date to the opening of business on such Interest  Payment Date
shall be  accompanied  by  payment  to the  Company  or its  order,  in New York
Clearing  House funds or other funds  acceptable  to the  Company,  of an amount
equal to the interest  payable on such Interest Payment Date with respect to the
Original  Principal Amount of Securities or portions  thereof being  surrendered
for  conversion;  PROVIDED  that no such payment need be made (1) if the Company
has specified a Redemption  Date that occurs during the period from the close of
business on a Regular  Record  Date to the  opening of business on the  Interest
Payment Date to which such Regular  Record Date relates,  (2) if the Company has
specified a  Fundamental  Change  Purchase  Date during  such  period,  (3) with
respect to any Liquidated  Damages payable on such Interest  Payment Date or (4)
if any overdue interest or overdue Contingent  Interest exists on the Conversion
Date with  respect to the  Securities  converted,  to the extent of such overdue
interest.

     No fractional  shares will be issued upon conversion;  in lieu thereof,  an
amount will be paid in Cash pursuant to Section 11.04 of the Indenture.

     The  Company  agrees,  and by  acceptance  of a  beneficial  interest  in a
Security each Holder and any  beneficial  owner of a Security shall be deemed to
agree to be bound (in the absence of an administrative determination or judicial
ruling to the contrary) by the Company's  determination  of the comparable yield
and  projected  payment  schedule  within  the  meaning of the  contingent  debt
regulations,  and accordingly  shall treat, for United States federal income tax
purposes, the fair market value of the Common Stock received upon the conversion
of a Security  (together with any Cash payment in lieu of fractional  shares) or
Cash in lieu thereof,  or a combination of Cash and Common Stock as a contingent
payment on the Security for purposes of Treasury  Regulation Section 1.1275-4 or
any successor provision.

     To convert a Security,  a Holder must fulfill the  conditions  set forth in
Section 11.02 of the Indenture.

     The  Conversion  Rate will be  adjusted  as set forth in  Article 11 of the
Indenture.

11. DENOMINATIONS; TRANSFER; EXCHANGE.

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

12. PERSONS DEEMED OWNERS.

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

13. UNCLAIMED MONEY OR SECURITIES.

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

14. AMENDMENT; WAIVER.

     Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Securities  may be amended with the written  consent of the Holders of at
least a majority in aggregate Original Principal Amount of the Securities at the
time  outstanding  and (ii)  certain  Defaults  may be waived  with the  written
consent of the Holders of a majority in aggregate  Original  Principal Amount of
the  Securities at the time  outstanding.  The Company and the Trustee may amend
the Indenture under certain circumstances without the consent of the Holders, as
described in the Indenture.

15. DEFAULTS AND REMEDIES.

     If an Event of  Default  occurs  and is  continuing,  the  Trustee,  or the
Holders of at least 25% in aggregate Original Principal Amount of the Securities
then  outstanding,  may  declare  all  the  Securities  to be  due  and  payable
immediately.  Certain  events of bankruptcy or insolvency  are Events of Default
which will result in the Securities  becoming due and payable  immediately  upon
the occurrence of such Events of Default.

     Holders may not enforce the Indenture or the Securities  except as provided
in the  Indenture.  The  Trustee  may refuse to  enforce  the  Indenture  or the
Securities  unless it receives  reasonable  indemnity  or  security.  Subject to
certain  limitations,  Holders of a majority  in  aggregate  Original  Principal
Amount of the Securities at the time  outstanding  may direct the Trustee in its
exercise of any trust or power.  The Trustee may withhold from Holders notice of
any  continuing  Default  (except a Default in payment  on any  Security)  if it
determines that withholding notice is in their interests.

16. TRUSTEE DEALINGS WITH THE COMPANY.

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

17. NO RECOURSE AGAINST OTHERS.

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

18. AUTHENTICATION.

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

19. ABBREVIATIONS.

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

20. GOVERNING LAW.

     THE LAWS OF THE  STATE OF NEW YORK  SHALL  GOVERN  THE  INDENTURE  AND THIS
SECURITY, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

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

     The Company  will  furnish to any Holder upon  written  request and without
charge a copy of the Indenture.

                  DST Systems, Inc.
                  333 West 11th Street
                  Kansas City, MO 64105
                  Attention:  DST Corporate Secretary

<PAGE>
                                                                      Schedule I
<TABLE>
<CAPTION>

                 [Include Schedule I only for a Global Security]

                                DST SYSTEMS, INC.
              4.125% Series A Convertible Senior Debenture Due 2023

No.  1

=========== ======================================== ===================================== =========================
                                                     Notation Explaining Original          Authorized Signature of
Date        Original Principal Amount                Principal Amount Recorded             Trustee or Trustee

<S>         <C>                                      <C>                                   <C>
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</TABLE>

<PAGE>

                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

     For value received  ______________________________hereby sell(s), assign(s)
and transfer(s) unto  ___________________________________  (Please insert social
security  or other  Taxpayer  Identification  Number  of  assignee)  the  within
Security,     and    hereby     irrevocably     constitutes     and     appoints
______________________________________ attorney to transfer said Security on the
books of the Company, with full power of substitution in the premises.

     In connection  with any transfer of the Security prior to the expiration of
the holding  period  applicable  to sales  thereof  under Rule 144(k)  under the
Securities Act (or any successor provision),  the undersigned confirms that such
Security is being transferred:

       [  ]    To DST Systems, Inc. (the "Company") or a subsidiary thereof; or

       [  ]    To a "QUALIFIED INSTITUTIONAL BUYER" in compliance with Rule 144A
               under the Securities Act of 1933, as amended; or

       [  ]    Pursuant  to a  Registration  Statement  which has been  declared
               effective under the Securities Act of 1933, as amended, and which
               continues to be effective at the time of transfer; or

       [  ]    Pursuant to and in compliance  with another  available  exemption
               from the registration requirements of the Securities Act of 1933,
               as amended.

     UNLESS ONE OF THE BOXES IS CHECKED, THE TRUSTEE OR REGISTRAR WILL REFUSE TO
REGISTER ANY OF THE SECURITIES  EVIDENCED BY THIS CERTIFICATE IN THE NAME OF ANY
PERSON OTHER THAN THE REGISTERED HOLDER THEREOF.

Dated: ______________________

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

                                           ------------------------------
                                           Signature(s)

               Signature(s)  must  be  guaranteed  by  an  "ELIGIBLE   GUARANTOR
               INSTITUTION"  meeting the requirements of the Security registrar,
               which  requirements  include  membership or  participation in the
               Security Transfer Agent Medallion Program ("STAMP") or such other
               "SIGNATURE  GUARANTEE  PROGRAM"  as  may  be  determined  by  the
               Security registrar in addition to, or in substitution for, STAMP,
               all in accordance  with the  Securities  Exchange Act of 1934, as
               amended.

                                           ------------------------------
                                           SIGNATURE GUARANTEE

<PAGE>

                                CONVERSION NOTICE

To convert this Security pursuant to Article 11 of the Indenture, check the box:

To convert only part of this Security, state the Original Principal Amount to be
converted  (which  must  be  $1,000  or  an  integral  multiple  of  $1,000): $
___________________________

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

             ------------------------------------------------------
                 (Insert other person's soc. sec. or tax ID no.)

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

Your
Signature: _____________________________________________

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

<PAGE>

                                 PURCHASE NOTICE

             4.125% SERIES A CONVERTIBLE SENIOR DEBENTURES DUE 2023

TO:      DST SYSTEMS, INC.
         JPMORGAN CHASE BANK

     The  undersigned  registered  owner  of  this  Series  A  Debenture  hereby
irrevocably  acknowledges  receipt  of a notice  from  DST  Systems,  Inc.  (the
"COMPANY")  regarding  the right of holders to elect to require  the  Company to
purchase the  Securities  and requests and instructs the Company to purchase the
entire Original Principal Amount of this Security,  or portion thereof (which is
$1,000 Original  Principal Amount or an integral  multiple  thereof)  designated
below,  in  accordance  with the  terms  of the  Indenture  at the  price of the
Accreted Principal Amount or proportional portion thereof, together with accrued
cash interest (including Contingent Interest and Liquidated Damages, if any) to,
but excluding,  the Purchase Date, to the registered holder hereof.  Capitalized
terms used herein but not defined shall have the meanings ascribed to such terms
in the  Indenture.  The  Securities  shall be purchased by the Company as of the
applicable  Purchase Date pursuant to the terms and conditions  specified in the
Indenture.  This election is made pursuant to: Article 12, Purchase at Option of
Holders.

     Dated:

     Signature(s):

     NOTICE:  The above  signatures of the holder(s) hereof must correspond with
the name as written  upon the face of the Security in every  particular  without
alteration or enlargement or any change whatever.

     Security Certificate Number (if applicable):

     Original   Principal   Amount  to  be   purchased   (if  less  than   all):
$_____________________.

     In  the  event  the  Company  elects,  pursuant  to  Section  12.03  of the
Indenture,  to pay the Purchase  Price, in whole or in part, in shares of Common
Stock but such portion of the Purchase  Price shall  ultimately  be paid to such
Holder entirely in Cash because any of the conditions to payment of the Purchase
Price in shares of Common Stock is not  satisfied  prior to 5:00 p.m.,  New York
City time, on the Business Day  immediately  preceding the Purchase Date, as set
forth in Section 12.03 of the Indenture, I hereby elect to:

    [  ] withdraw this Purchase Notice as to $____________ in Original Principal
Amount      of      Securities      with     the      following      certificate
numbers:________________________________ to which this Purchase Notice relates;

    [  ] receive Cash in respect of the entire Purchase Price for all Securities
(or portions thereof) to which this Purchase Notice relates.

<PAGE>

            OPTION OF HOLDER TO ELECT PURCHASE ON FUNDAMENTAL CHANGE

             4.125% SERIES A CONVERTIBLE SENIOR DEBENTURES DUE 2023

TO:      DST SYSTEMS, INC.
         JPMORGAN CHASE BANK

     The  undersigned  registered  owner  of  this  Series  A  Debenture  hereby
irrevocably  acknowledges  receipt  of a notice  from  DST  Systems,  Inc.  (the
"COMPANY")  regarding  the right of holders to elect to require  the  Company to
purchase the Securities upon a Fundamental Change and requests and instructs the
Company  pursuant to Section  13.01 to purchase  the entire  Original  Principal
Amount of this Security,  or portion thereof (which is $1,000 Original Principal
Amount or an integral multiple thereof) designated below, in accordance with the
terms of the Indenture at the price of 100% of the Accreted  Principal Amount or
proportional   portion  thereof,   together  with  accrued  interest  (including
Contingent  Interest and  Liquidated  Damages,  if any) to, but  excluding,  the
Fundamental  Change Purchase Date, to the registered holder hereof.  Capitalized
terms used herein but not defined shall have the meanings ascribed to such terms
in the  Indenture.  The  Securities  shall be purchased by the Company as of the
Fundamental Change Purchase Date pursuant to the terms and conditions  specified
in the Indenture.

     Dated:

     Signature(s):

     NOTICE:  The above  signatures of the holder(s) hereof must correspond with
the name as written  upon the face of the Security in every  particular  without
alteration or enlargement or any change whatever.

     Security Certificate Number (if applicable):

     Original   Principal   Amount  to  be   purchased   (if  less  than   all):
$_____________________.

     In  the  event  the  Company  elects,  pursuant  to  Section  13.02  of the
Indenture, to pay the Fundamental Change Purchase Price, in whole or in part, in
shares of Common Stock but such portion of the Fundamental Change Purchase Price
shall  ultimately  be paid to such Holder  entirely  in Cash  because any of the
conditions  to payment of the  Fundamental  Change  Purchase  Price in shares of
Common Stock is not  satisfied  prior to 5:00 p.m.,  New York City time,  on the
Business Day  immediately  preceding the Purchase  Date, as set forth in Section
13.02 of the Indenture, I hereby elect to:

    [  ] withdraw this Fundamental Change Purchase Notice as to $____________ in
Original   Principal  Amount  of  Securities  with  the  following   certificate
numbers:________________________________   to  which  this  Fundamental   Change
Purchase Notice relates;

    [  ] receive Cash in respect of the entire Fundamental Change Purchase Price
for all  Securities  (or  portions  thereof)  to which this  Fundamental  Change
Purchase Notice relates.

<PAGE>

     FOR PURPOSES OF SECTIONS 1272,  1273 AND 1275 OF THE INTERNAL  REVENUE CODE
OF 1986,  AS AMENDED,  THIS  DEBENTURE IS BEING  ISSUED WITH TAX ORIGINAL  ISSUE
DISCOUNT AND THE ISSUE DATE OF THIS  DEBENTURE IS AUGUST 12, 2003.  IN ADDITION,
THIS DEBENTURE IS SUBJECT TO THE UNITED STATES  FEDERAL  INCOME TAX  REGULATIONS
GOVERNING  CONTINGENT  PAYMENT DEBT INSTRUMENTS.  FOR PURPOSES OF SECTIONS 1272,
1273  AND  1275 OF THE  INTERNAL  REVENUE  CODE,  THE  COMPARABLE  YIELD OF THIS
DEBENTURE IS 8.4%,  COMPOUNDED  SEMIANNUALLY (WHICH WILL BE TREATED AS THE YIELD
TO MATURITY FOR UNITED STATES FEDERAL INCOME TAX PURPOSES).

     DST SYSTEMS,  INC. (THE  "COMPANY")  AGREES,  AND BY ACCEPTING A BENEFICIAL
OWNERSHIP  INTEREST IN THIS DEBENTURE  EACH HOLDER AND ANY  BENEFICIAL  OWNER OF
THIS DEBENTURE  WILL BE DEEMED TO HAVE AGREED,  FOR UNITED STATES FEDERAL INCOME
TAX PURPOSES (1) TO TREAT THIS DEBENTURE AS A DEBT INSTRUMENT THAT IS SUBJECT TO
U.S. TREAS. REG. SEC. 1.1275-4 OR ANY SUCCESSOR  PROVISION (THE "CONTINGENT DEBT
REGULATIONS")  AND  (2)  TO BE  BOUND  (IN  THE  ABSENCE  OF  AN  ADMINISTRATIVE
DETERMINATION OR JUDICIAL RULING TO THE CONTRARY) BY THE COMPANY'S DETERMINATION
OF THE "COMPARABLE YIELD" AND "PROJECTED PAYMENT SCHEDULE" WITHIN THE MEANING OF
THE CONTINGENT DEBT  REGULATIONS,  WITH RESPECT TO THIS  DEBENTURE.  THE COMPANY
AGREES TO  PROVIDE  PROMPTLY  TO THE  HOLDER  OF THIS  DEBENTURE,  UPON  WRITTEN
REQUEST,  THE ISSUE PRICE,  AMOUNT OF TAX ORIGINAL ISSUE  DISCOUNT,  ISSUE DATE,
YIELD TO MATURITY,  COMPARABLE YIELD AND PROJECTED  PAYMENT  SCHEDULE.  ANY SUCH
WRITTEN  REQUEST  SHOULD BE SENT TO THE COMPANY AT THE  FOLLOWING  ADDRESS:  DST
SYSTEMS, INC., 333 West 11th Street, Kansas City, Missouri 64105, ATTENTION: DST
CORPORATE SECRETARY.

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

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

     [Insert if  restricted  Security:]  [THIS  DEBENTURE  AND ANY COMMON  STOCK
ISSUABLE UPON THE CONVERSION OF THIS DEBENTURE  HAVE NOT BEEN  REGISTERED  UNDER
THE U.S.  SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT
BE SOLD OR  OTHERWISE  TRANSFERRED  IN THE  ABSENCE OF SUCH  REGISTRATION  OR AN
APPLICABLE  EXEMPTION  THEREFROM.  EACH  PURCHASER  OF THIS  DEBENTURE IS HEREBY
NOTIFIED THAT THE SELLER OF THIS  DEBENTURE MAY BE RELYING ON THE EXEMPTION FROM
THE  PROVISIONS  OF  SECTION  5 OF THE  SECURITIES  ACT  PROVIDED  BY RULE  144A
THEREUNDER.

     THIS  DEBENTURE AND ANY COMMON STOCK  ISSUABLE UPON THE  CONVERSION OF THIS
DEBENTURE MAY NOT BE OFFERED,  SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1)
TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER"  WITHIN THE MEANING OF RULE 144A UNDER THE  SECURITIES  ACT ACQUIRING FOR
ITS OWN  ACCOUNT OR FOR THE  ACCOUNT  OF A  QUALIFIED  INSTITUTIONAL  BUYER IN A
TRANSACTION  MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION
FROM  REGISTRATION  UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE),  (3) TO DST SYSTEMS,  INC. OR ANY SUBSIDIARY THEREOF OR (4) PURSUANT
TO AN EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE SECURITIES  ACT, AND IN EACH
CASE IN  ACCORDANCE  WITH ALL  APPLICABLE  SECURITIES  LAWS OF THE STATES OF THE
UNITED STATES AND OTHER JURISDICTIONS.

     THIS DEBENTURE, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION AND
ANY RELATED  DOCUMENTATION  MAY BE AMENDED OR SUPPLEMENTED  FROM TIME TO TIME TO
MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS DEBENTURE AND ANY
SUCH  SHARES TO  REFLECT  ANY CHANGE IN  APPLICABLE  LAW OR  REGULATION  (OR THE
INTERPRETATION  THEREOF) OR IN  PRACTICES  RELATING TO THE RESALE OR TRANSFER OF
RESTRICTED  SECURITIES  GENERALLY.  THE HOLDER OF THIS DEBENTURE AND SUCH SHARES
SHALL BE DEEMED BY THE  ACCEPTANCE OF THIS DEBENTURE AND ANY SUCH SHARES TO HAVE
AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.]

<PAGE>

                                DST SYSTEMS, INC.

             3.625% Series B Convertible Senior Debentures due 2023

No. 1                                   Original Principal Amount:  $300,000,000
Issue Date: August 12, 2003                                   CUSIP: 233326 AC 1

     DST  SYSTEMS,  INC.,  a Delaware  corporation  (the  "COMPANY"),  for value
received,  hereby  promises to pay to  __________,  or registered  assigns,  the
Accreted  Principal  Amount (as  defined  in the  Indenture  referred  to on the
reverse side of this Security) on August 15, 2023.

     This Security  shall bear regular cash interest and the Original  Principal
Amount (as defined in the Indenture) of this Security shall accrete as specified
on the reverse side of this Security and in the Indenture.  Contingent Interest,
if any, on this  Security,  will be payable as  specified on the reverse side of
this Security and in the Indenture. This Security is convertible,  is subject to
redemption  at the option of the Company or purchase at the option of the Holder
hereof,  all as  specified  on the  reverse  side  of this  Security  and in the
Indenture.

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

<PAGE>

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

                                     DST SYSTEMS, INC.
                                     By:
                                               ---------------------------------
                                               Name:
                                               Title:

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

<PAGE>

      TRUSTEE'S CERTIFICATE OF AUTHENTICATION

JPMORGAN CHASE BANK, as Trustee,
certifies that this is one of the Securities referred
to in the within-mentioned Indenture.

By:
   --------------------------------------------------
     Authorized Officer

Dated:  ___________________

<PAGE>

                       [FORM OF REVERSE SIDE OF SECURITY]

             3.625% Series B Convertible Senior Debentures due 2023

     This  Security  is one of a duly  authorized  issue  of  securities  of the
Company (herein called the "SECURITIES") limited in aggregate Original Principal
Amount to $300,000,000  Original  Principal  Amount,  issued under an Indenture,
dated as of August 12, 2003 (the "INDENTURE"),  between the Company and JPMorgan
Chase Bank, as Trustee (the "TRUSTEE", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective  rights,  limitations
of rights,  duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities  and of the terms upon which the  Securities  are, and
are to be, authenticated and delivered. Capitalized terms used and not otherwise
defined in this Security are used as defined in the Indenture.

1. INTEREST.

     This  Security  will bear  interest  from  August 12, 2003 or from the most
recent date to which interest has been paid or duly provided for,  semi-annually
in arrears on February 15 and August 15 of each year (each, an "INTEREST PAYMENT
DATE"), subject to Section 1.08 of the Indenture,  commencing February 15, 2004,
at the rate per  annum  equal to  3.625%,  to but  excluding  August  15,  2008.
Interest on this  Security  shall be  calculated  on the basis of a 360-day year
composed  of twelve  30-day  months.  Interest  payable on this  Security on any
Interest  Payment  Date will  include  interest  for the  immediately  preceding
Interest  Period.  The interest so payable and punctually  paid or duly provided
for on any Interest Payment Date will, as provided in such Indenture, be paid to
the Person in whose name this Security (or one or more  Predecessor  Securities)
is  registered  at the close of  business  on the  Regular  Record Date for such
interest,  which  shall  be the  February  1 or  August  1, as the  case may be,
immediately  preceding the relevant Interest Payment Date. Any interest which is
payable,  but is not  punctually  paid or duly  provided  for,  on any  Interest
Payment Date shall forthwith cease to be payable to the registered Holder hereof
on the relevant  Regular  Record Date by virtue of having been such Holder,  and
may be  paid  to the  Person  in  whose  name  this  Security  (or  one or  more
Predecessor  Securities)  is  registered  at the close of  business on a Special
Record  Date  for the  payment  of such  Defaulted  Interest  to be fixed by the
Company,  notice  whereof shall be given to the Holders of  Securities  not less
than 10 days prior to such Special  Record  Date,  or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities  may be listed,  and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.

     From and after August 15,  2008,  the Company will no longer be required to
pay cash interest.  The Original Principal Amount of this Security shall accrete
daily at the  Applicable  Yield on a semiannual  bond  equivalent  basis using a
360-day year composed of twelve 30-day months.  The Applicable Yield shall be 0%
prior to August 15, 2008 and 3.625% per annum on and after April 15, 2008, until
Stated Maturity.  At Stated  Maturity,  the Holder of this Security will receive
$1,714.09 for each $1,000 Original Principal Amount of Securities,  which is the
fully  Accreted  Principal  Amount of this  Security  on such  date,  unless the
Security has been earlier redeemed, purchased or converted.

2. CONTINGENT INTEREST.

     From and after August 20, 2008, the Company will pay Contingent Interest on
this Security under the circumstances and in the amounts described in Article 14
of  the  Indenture.   Such  Contingent  Interest,   if  any,  shall  be  payable
semiannually  in arrears  on each  Interest  Payment  Date to the Holder of this
Security as of the close of business on the Regular Record Date relating to such
Interest Payment Date.

3. INTEREST ON OVERDUE AMOUNTS.

     If the Accreted  Principal  Amount  hereof or any portion of such  Accreted
Principal  Amount is not paid when due (whether  upon  acceleration  pursuant to
Section 4.02 of the Indenture,  upon the dates set for payment of the Redemption
Price,  Purchase Price or Fundamental  Change Purchase Price, or upon the Stated
Maturity of this  Security)  or if  interest  due hereon  (including  Contingent
Interest and Liquidated Damages,  if any) (or any portion of such interest),  is
not paid when  due,  then in each such case the  overdue  amount  shall,  to the
extent  permitted by law,  bear interest at the rate then borne by this Security
or, if any overdue  amount exists on or after August 15, 2008, at the Applicable
Yield of this  Security,  which interest shall accrue from the date such overdue
amount was originally due to the date payment of such amount, including interest
thereon,  has been made or duly provided for. All such interest shall be payable
as set forth in the Indenture.

4. METHOD OF PAYMENT.

     Subject to the terms and conditions of the Indenture, the Company will make
payments in respect of Redemption  Price,  Purchase  Price,  Fundamental  Change
Purchase Price and at Stated  Maturity to Holders who surrender  Securities to a
Paying Agent to collect such payments in respect of the Securities.  The Company
will pay cash amounts in money of the United  States that at the time of payment
is legal tender for payment of public and private  debts.  However,  the Company
may make such cash  payments  by check  payable  in such  money;  PROVIDED  that
payment by wire transfer of  immediately  available  funds will be required with
respect  to  principal  of  and  interest  (including  Contingent  Interest  and
Liquidated  Damages,  if any) on all Global  Securities  and all  Securities  of
Holders  of  more  than  $25,000,000  aggregate  Original  Principal  Amount  of
Securities that have requested such method of payment and provided wire transfer
instructions  to the Company or the Paying Agent.  If any Interest  Payment Date
(other than an Interest  Payment  Date  coinciding  with the Stated  Maturity or
earlier  Redemption  Date,  Purchase Date, or Fundamental  Change Purchase Date)
falls on a day that is not a Business Day,  such  Interest  Payment Date will be
postponed  to the next  succeeding  Business Day and no interest on such payment
will accrue for the period from and after the Interest Payment Date to such next
succeeding  Business Day,  PROVIDED that, if such Business Day falls in the next
succeeding  calendar month,  the Interest  Payment Date will be the Business Day
immediately  preceding  such  Interest  Payment  Date.  If the Stated  Maturity,
Redemption  Date,  Purchase  Date or  Fundamental  Change  Purchase Date of this
Security would fall on a day that is not a Business Day, the required payment of
interest, if any, and principal will be made on the next succeeding Business Day
and no interest on such payment  will accrue and no  principal  will accrete for
the period from and after the Stated Maturity, Redemption Date, Purchase Date or
Fundamental Change Purchase Date to such next succeeding Business Day.

5. PAYING AGENT, CONVERSION AGENT AND REGISTRAR.

     Initially,  the  Trustee  will act as Paying  Agent,  Conversion  Agent and
Registrar.  The  Company may  appoint  and change any Paying  Agent,  Conversion
Agent,  Registrar  or  co-registrar  without  notice,  other than  notice to the
Trustee.  The Company or any of its  Subsidiaries or any of their Affiliates may
act as Paying Agent, Conversion Agent, Registrar or co-registrar.

6. INDENTURE.

     The terms of the Securities include those stated in the Indenture and those
made part of the  Indenture by reference to the Trust  Indenture Act of 1939, as
in effect from time to time (the "TIA").  The Securities are subject to all such
terms,  and Holders are referred to the Indenture and the TIA for a statement of
those terms.

     The Securities are general  unsecured  obligations.  The Indenture does not
limit other indebtedness of the Company.

7. REDEMPTION AT THE OPTION OF THE COMPANY.

     No sinking fund is provided for the  Securities.  Prior to August 20, 2008,
the Securities  shall not be redeemable at the option of the Company.  Beginning
on August 20, 2008 and until the Stated Maturity,  the Securities are redeemable
for Cash as a whole,  or from time to time in part, at the option of the Company
at the applicable Redemption Price.

     If the Company  redeems less than all of the  outstanding  Securities,  the
Trustee will select the  Securities to be redeemed (i) by lot; (ii) pro rata; or
(iii) by another  method the  Trustee  considers  fair and  appropriate.  If the
Trustee  selects a portion of a Holder's  Securities for partial  redemption and
the Holder  converts a portion of the same  Securities,  the  converted  portion
shall be deemed to be from the portion selected for redemption.

8. NOTICE OF REDEMPTION.

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

9. PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER.

     Each Holder has the right to require the Company to purchase the Securities
held by such Holder on August 15, 2008, 2013 and 2018 (each, a "PURCHASE DATE").
If required  by any Holder,  the Company  shall  purchase  Securities  for Cash,
Common Stock or any  combination  of Cash and Common  Stock at a Purchase  Price
equal to the Accreted  Principal  Amount  thereof,  plus accrued and unpaid cash
interest (including  Contingent Interest and Liquidated Damages, if any) to, but
excluding,  the Purchase Date, upon delivery of a Purchase Notice containing the
information set forth in the Indenture, at any time from the opening of business
on the date that is 20 Business Days prior to such Purchase Date until the close
of business on the Business Day  immediately  preceding  such  Purchase Date and
upon  delivery of the  Securities to the Paying Agent by the Holder as set forth
in the Indenture.

     At the option of the Holder and subject to the terms and  conditions of the
Indenture,  the Company shall purchase for Cash, Common Stock or any combination
of Cash and Common Stock all or a portion of the Securities  held by such Holder
as of the date that is not less than 20 nor more than 35 Business Days after the
date of the  Company's  notice to Holders  of the  occurrence  of a  Fundamental
Change  occurring  prior to Stated  Maturity for a Fundamental  Change  Purchase
Price equal to the Accreted  Principal  Amount thereof,  plus accrued and unpaid
cash interest (including Contingent Interest and Liquidated Damages, if any) to,
but excluding,  the Fundamental  Change Purchase Date,  unless such  Fundamental
Change  Purchase  Date falls after a Regular  Record Date and on or prior to the
corresponding  Interest  Payment  Date,  in which case the Company shall pay the
full amount of accrued and unpaid cash interest  (including  Contingent Interest
and  Liquidated  Damages,  if any) payable on such Interest  Payment Date to the
Holder at the close of business on such Regular Record Date.

     Holders  have the right to  withdraw  any  Purchase  Notice or  Fundamental
Change Purchase Notice,  as the case may be, by delivering to the Paying Agent a
written notice of withdrawal in accordance with the provisions of the Indenture.

     As provided in the Indenture,  if Cash or Common Stock (or any  combination
of Cash and Common Stock)  sufficient to pay the Purchase  Price or  Fundamental
Change Purchase Price, as the case may be, of all Securities or portions thereof
to be purchased as of the Purchase Date or the Fundamental Change Purchase Date,
as the case may be, is deposited  with the Paying Agent on the Purchase  Date or
the  Fundamental  Change  Purchase  Date,  as the  case  may  be,  all  interest
(including  Contingent Interest and Liquidated Damages, if any) ceases to accrue
and  principal  ceases to  accrete  on such  Securities  (or  portions  thereof)
immediately after such Purchase Date or Fundamental Change Purchase Date, as the
case may be, and the Holder  thereof  shall have no other  rights as such (other
than the right to receive the  Purchase  Price or  Fundamental  Change  Purchase
Price, as the case may be, upon surrender of such Security).

10. CONVERSION.

     Subject to the terms of the Indenture, the Holder of a Security may convert
the  Security  into  shares of Common  Stock at the  Conversion  Rate  under the
circumstances  set forth in Section 11.01 of the Indenture;  PROVIDED,  HOWEVER,
the Company may satisfy its obligation with respect to any demand for conversion
by delivering  Common Stock, Cash or a combination of Cash and Common Stock. The
Conversion Rate for the Securities on any Conversion Date shall be determined as
set forth in the  Indenture.  Upon  conversion of a Security,  the Company shall
deliver the Conversion Settlement Distribution within the time periods set forth
in Section 11.02 of the Indenture.

     A Security in respect of which a Holder has delivered a Purchase  Notice or
a Fundamental  Change  Purchase  Notice  exercising the option of such Holder to
require the Company to purchase  such  Security  may be  converted  only if such
notice of exercise is withdrawn in accordance with the terms of the Indenture.

     The Company shall deliver Cash or a check in lieu of any  fractional  share
of Common Stock.

     A Holder's right to convert the Securities into Common Stock of the Company
is also subject to the Company's right to elect pursuant to Section 11.03 of the
Indenture  to pay such  Holder  Cash in lieu of  delivering  all or part of such
Common Stock.

     A Holder  may  convert a portion of a Security  if the  Original  Principal
Amount of such portion is $1,000 or an integral  multiple of $1,000.  No payment
or adjustment shall be made for dividends on the Common Stock except as provided
in the Indenture. On conversion of a Security,  except for conversion during the
period  from the  close of  business  on any  Regular  Record  Date  immediately
preceding any Interest  Payment Date to the opening of business on such Interest
Payment Date, in which case the Holder on such Regular Record Date shall receive
the interest  payable on such Interest Payment Date, that portion of accrued and
unpaid interest  (including  Contingent  Interest,  if any) and any accretion of
principal on the  converted  Security  attributable  to the period from the most
recent Interest Payment Date (or, if no Interest Payment Date has occurred, from
the Issue Date) through the Conversion Date shall not be cancelled, extinguished
or  forfeited,  but  rather  shall be  deemed  to be paid in full to the  Holder
thereof through delivery of the Common Stock (together with the Cash payment, if
any, in lieu of fractional  shares), or Cash or a combination of Cash and Common
Stock in lieu thereof,  in exchange for the Security being converted pursuant to
the provisions hereof.

     Securities or portions thereof surrendered for conversion during the period
from the close of business on any Regular Record Date immediately  preceding any
Interest  Payment Date to the opening of business on such Interest  Payment Date
shall be  accompanied  by  payment  to the  Company  or its  order,  in New York
Clearing  House funds or other funds  acceptable  to the  Company,  of an amount
equal to the interest  payable on such Interest Payment Date with respect to the
Original  Principal Amount of Securities or portions  thereof being  surrendered
for  conversion;  PROVIDED  that no such payment need be made (1) if the Company
has specified a Redemption  Date that occurs during the period from the close of
business on a Regular  Record  Date to the  opening of business on the  Interest
Payment Date to which such Regular  Record Date relates,  (2) if the Company has
specified a  Fundamental  Change  Purchase  Date during  such  period,  (3) with
respect to any Liquidated  Damages payable on such Interest  Payment Date or (4)
if any overdue interest or overdue Contingent  Interest exists on the Conversion
Date with  respect to the  Securities  converted,  to the extent of such overdue
interest.

     No fractional  shares will be issued upon conversion;  in lieu thereof,  an
amount will be paid in Cash pursuant to Section 11.04 of the Indenture.

     The  Company  agrees,  and by  acceptance  of a  beneficial  interest  in a
Security each Holder and any  beneficial  owner of a Security shall be deemed to
agree to be bound (in the absence of an administrative determination or judicial
ruling to the contrary) by the Company's  determination  of the comparable yield
and  projected  payment  schedule  within  the  meaning of the  contingent  debt
regulations,  and accordingly  shall treat, for United States federal income tax
purposes, the fair market value of the Common Stock received upon the conversion
of a Security  (together with any Cash payment in lieu of fractional  shares) or
Cash in lieu thereof,  or a combination of Cash and Common Stock as a contingent
payment on the Security for purposes of Treasury  Regulation Section 1.1275-4 or
any successor provision.

     To convert a Security,  a Holder must fulfill the  conditions  set forth in
Section 11.02 of the Indenture.

     The  Conversion  Rate will be  adjusted  as set forth in  Article 11 of the
Indenture.

11. DENOMINATIONS; TRANSFER; EXCHANGE.

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

12. PERSONS DEEMED OWNERS.

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

13. UNCLAIMED MONEY OR SECURITIES.

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

14. AMENDMENT; WAIVER.

     Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Securities  may be amended with the written  consent of the Holders of at
least a majority in aggregate Original Principal Amount of the Securities at the
time  outstanding  and (ii)  certain  Defaults  may be waived  with the  written
consent of the Holders of a majority in aggregate  Original  Principal Amount of
the  Securities at the time  outstanding.  The Company and the Trustee may amend
the Indenture under certain circumstances without the consent of the Holders, as
described in the Indenture.

15. DEFAULTS AND REMEDIES.

     If an Event of  Default  occurs  and is  continuing,  the  Trustee,  or the
Holders of at least 25% in aggregate Original Principal Amount of the Securities
then  outstanding,  may  declare  all  the  Securities  to be  due  and  payable
immediately.  Certain  events of bankruptcy or insolvency  are Events of Default
which will result in the Securities  becoming due and payable  immediately  upon
the occurrence of such Events of Default.

     Holders may not enforce the Indenture or the Securities  except as provided
in the  Indenture.  The  Trustee  may refuse to  enforce  the  Indenture  or the
Securities  unless it receives  reasonable  indemnity  or  security.  Subject to
certain  limitations,  Holders of a majority  in  aggregate  Original  Principal
Amount of the Securities at the time  outstanding  may direct the Trustee in its
exercise of any trust or power.  The Trustee may withhold from Holders notice of
any  continuing  Default  (except a Default in payment  on any  Security)  if it
determines that withholding notice is in their interests.

16. TRUSTEE DEALINGS WITH THE COMPANY.

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

17. NO RECOURSE AGAINST OTHERS.

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

18. AUTHENTICATION.

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

19. ABBREVIATIONS.

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

20. GOVERNING LAW.

     THE LAWS OF THE  STATE OF NEW YORK  SHALL  GOVERN  THE  INDENTURE  AND THIS
SECURITY, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

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

     The Company  will  furnish to any Holder upon  written  request and without
charge a copy of the Indenture.

                  DST Systems, Inc.
                  333 West 11th Street
                  Kansas City, MO 64105
                  Attention:  DST Corporate Secretary

<PAGE>

<TABLE>
<CAPTION>
                                                                      Schedule I

                 [Include Schedule I only for a Global Security]

                                DST SYSTEMS, INC.
              3.625% Series B Convertible Senior Debenture Due 2023

No. 1

=========== ======================================== ===================================== =========================
                                                     Notation Explaining Original          Authorized Signature of
Date        Original Principal Amount                Principal Amount Recorded             Trustee or Trustee
<S>         <C>                                      <C>                                   <C>
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</TABLE>

<PAGE>

                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

     For value received  ______________________________hereby sell(s), assign(s)
and transfer(s) unto  ___________________________________  (Please insert social
security  or other  Taxpayer  Identification  Number  of  assignee)  the  within
Security,     and    hereby     irrevocably     constitutes     and     appoints
______________________________________ attorney to transfer said Security on the
books of the Company, with full power of substitution in the premises.

     In connection  with any transfer of the Security prior to the expiration of
the holding  period  applicable  to sales  thereof  under Rule 144(k)  under the
Securities Act (or any successor provision),  the undersigned confirms that such
Security is being transferred:

       [  ]    To DST Systems, Inc. (the "Company") or a subsidiary thereof; or

       [  ]    To a "QUALIFIED INSTITUTIONAL BUYER" in compliance with Rule 144A
               under the Securities Act of 1933, as amended; or

       [  ]    Pursuant  to a  Registration  Statement  which has been  declared
               effective under the Securities Act of 1933, as amended, and which
               continues to be effective at the time of transfer; or

       [  ]    Pursuant to and in compliance  with another  available  exemption
               from the registration requirements of the Securities Act of 1933,
               as amended.

     UNLESS ONE OF THE BOXES IS CHECKED, THE TRUSTEE OR REGISTRAR WILL REFUSE TO
REGISTER ANY OF THE SECURITIES  EVIDENCED BY THIS CERTIFICATE IN THE NAME OF ANY
PERSON OTHER THAN THE REGISTERED HOLDER THEREOF.

Dated: ______________________
                                            ------------------------------

                                            ------------------------------
                                            Signature(s)

                    Signature(s)  must be guaranteed  by an "ELIGIBLE  GUARANTOR
                    INSTITUTION"   meeting  the  requirements  of  the  Security
                    registrar,   which   requirements   include   membership  or
                    participation  in  the  Security  Transfer  Agent  Medallion
                    Program   ("STAMP")  or  such  other  "SIGNATURE   GUARANTEE
                    PROGRAM" as may be determined  by the Security  registrar in
                    addition  to,  or  in  substitution   for,  STAMP,   all  in
                    accordance  with the  Securities  Exchange  Act of 1934,  as
                    amended.

                                            ------------------------------
                                             SIGNATURE GUARANTEE

<PAGE>

                                CONVERSION NOTICE

To convert this Security pursuant to Article 11 of the Indenture, check the box:

To convert only part of this Security, state the Original Principal Amount to be
converted   (which  must  be  $1,000  or  an   integral   multiple  of  $1,000):
$___________________________

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

--------------------------------------------------------------------------------
                 (Insert other person's soc. sec. or tax ID no.)

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

Your
Signature: _____________________________________________

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

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

<PAGE>

                                 PURCHASE NOTICE

             3.625% SERIES B CONVERTIBLE SENIOR DEBENTURES DUE 2023

TO:      DST SYSTEMS, INC.
         JPMORGAN CHASE BANK

     The  undersigned  registered  owner  of  this  Series  B  Debenture  hereby
irrevocably  acknowledges  receipt  of a notice  from  DST  Systems,  Inc.  (the
"COMPANY")  regarding  the right of holders to elect to require  the  Company to
purchase the  Securities  and requests and instructs the Company to purchase the
entire Original Principal Amount of this Security,  or portion thereof (which is
$1,000 Original  Principal Amount or an integral  multiple  thereof)  designated
below,  in  accordance  with the  terms  of the  Indenture  at the  price of the
Accreted Principal Amount or proportional portion thereof, together with accrued
cash interest (including Contingent Interest and Liquidated Damages, if any) to,
but excluding,  the Purchase Date, to the registered holder hereof.  Capitalized
terms used herein but not defined shall have the meanings ascribed to such terms
in the  Indenture.  The  Securities  shall be purchased by the Company as of the
applicable  Purchase Date pursuant to the terms and conditions  specified in the
Indenture.  This election is made pursuant to: Article 12, Purchase at Option of
Holders.

     Dated:

     Signature(s):

     NOTICE:  The above  signatures of the holder(s) hereof must correspond with
the name as written  upon the face of the Security in every  particular  without
alteration or enlargement or any change whatever.

     Security Certificate Number (if applicable):

     Original   Principal   Amount  to  be   purchased   (if  less  than   all):
$_____________________.

     In  the  event  the  Company  elects,  pursuant  to  Section  12.03  of the
Indenture,  to pay the Purchase  Price, in whole or in part, in shares of Common
Stock but such portion of the Purchase  Price shall  ultimately  be paid to such
Holder entirely in Cash because any of the conditions to payment of the Purchase
Price in shares of Common Stock is not  satisfied  prior to 5:00 p.m.,  New York
City time, on the Business Day  immediately  preceding the Purchase Date, as set
forth in Section 12.03 of the Indenture, I hereby elect to:

     [ ] withdraw this Purchase Notice as to $____________ in Original Principal
Amount      of      Securities      with     the      following      certificate
numbers:________________________________ to which this Purchase Notice relates;

     [ ] receive Cash in respect of the entire Purchase Price for all Securities
(or portions thereof) to which this Purchase Notice relates.

<PAGE>

            OPTION OF HOLDER TO ELECT PURCHASE ON FUNDAMENTAL CHANGE

             3.625% SERIES B CONVERTIBLE SENIOR DEBENTURES DUE 2023

TO:      DST SYSTEMS, INC.
         JPMORGAN CHASE BANK

     The  undersigned  registered  owner  of  this  Series  B  Debenture  hereby
irrevocably  acknowledges  receipt  of a notice  from  DST  Systems,  Inc.  (the
"COMPANY")  regarding  the right of holders to elect to require  the  Company to
purchase the Securities upon a Fundamental Change and requests and instructs the
Company  pursuant to Section  13.01 to purchase  the entire  Original  Principal
Amount of this Security,  or portion thereof (which is $1,000 Original Principal
Amount or an integral multiple thereof) designated below, in accordance with the
terms  of the  Indenture  at the  price  of the  Accreted  Principal  Amount  or
proportional  portion  thereof,  together with accrued cash interest  (including
Contingent  Interest and  Liquidated  Damages,  if any) to, but  excluding,  the
Fundamental  Change Purchase Date, to the registered holder hereof.  Capitalized
terms used herein but not defined shall have the meanings ascribed to such terms
in the  Indenture.  The  Securities  shall be purchased by the Company as of the
Fundamental Change Purchase Date pursuant to the terms and conditions  specified
in the Indenture.

     Dated:

     Signature(s):

     NOTICE:  The above  signatures of the holder(s) hereof must correspond with
the name as written  upon the face of the Security in every  particular  without
alteration or enlargement or any change whatever.

     Security Certificate Number (if applicable):

     Original   Principal   Amount  to  be   purchased   (if  less  than   all):
$_____________________.

     In  the  event  the  Company  elects,  pursuant  to  Section  13.02  of the
Indenture, to pay the Fundamental Change Purchase Price, in whole or in part, in
shares of Common Stock but such portion of the Fundamental Change Purchase Price
shall  ultimately  be paid to such Holder  entirely  in Cash  because any of the
conditions  to payment of the  Fundamental  Change  Purchase  Price in shares of
Common Stock is not  satisfied  prior to 5:00 p.m.,  New York City time,  on the
Business Day  immediately  preceding the Purchase  Date, as set forth in Section
13.02 of the Indenture, I hereby elect to:

     [ ] withdraw this Fundamental Change Purchase Notice as to $____________ in
Original   Principal  Amount  of  Securities  with  the  following   certificate
numbers:________________________________   to  which  this  Fundamental   Change
Purchase Notice relates;

     [ ] receive Cash in respect of the entire Fundamental Change Purchase Price
for all  Securities  (or  portions  thereof)  to which this  Fundamental  Change
Purchase Notice relates.

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