Document:

<PAGE>

                                                                     Exhibit 4.1

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                        NATURAL MICROSYSTEMS CORPORATION

                                     Issuer

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

                                    INDENTURE

                          Dated as of October 11, 2000

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

                       STATE STREET BANK AND TRUST COMPANY

                                     Trustee

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

             Providing for the Issuance of Debt Securities in Series

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

<PAGE>

                              CROSS-REFERENCE TABLE

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         TIA SECTION                           INDENTURE SECTION

------------------------------------ ---------------------------------------
          310(a)(1)                                   7.10
------------------------------------ ---------------------------------------
          310(a)(2)                                   7.10
------------------------------------ ---------------------------------------
          310(a)(3)                                   N.A.
------------------------------------ ---------------------------------------
          310(a)(4)                                   N.A.
------------------------------------ ---------------------------------------
          310(a)(5)                                   N.A.
------------------------------------ ---------------------------------------
            310(b)                                 7.08; 7.10
------------------------------------ ---------------------------------------
            310(c)                                    N.A.
------------------------------------ ---------------------------------------
            311(a)                                    7.11
------------------------------------ ---------------------------------------
            311(b)                                    7.11
------------------------------------ ---------------------------------------
            312(a)                                    2.05
------------------------------------ ---------------------------------------
            312(b)                                   13.03
------------------------------------ ---------------------------------------
            312(c)                                   13.03
------------------------------------ ---------------------------------------
            313(a)                                    7.06
------------------------------------ ---------------------------------------
          313(b)(1)                                   N.A.
------------------------------------ ---------------------------------------
          313(b)(2)                                   7.06
------------------------------------ ---------------------------------------
            313(c)                                    7.06
------------------------------------ ---------------------------------------
            313(d)                                    7.06
------------------------------------ ---------------------------------------
            314(a)                                    4.04
------------------------------------ ---------------------------------------
            314(b)                                    N.A.
------------------------------------ ---------------------------------------
          314(c)(1)                                  13.04
------------------------------------ ---------------------------------------
          314(c)(2)                                  13.04
------------------------------------ ---------------------------------------
          314(c)(3)                                   N.A.
------------------------------------ ---------------------------------------
            314(d)                                    N.A.
------------------------------------ ---------------------------------------
            314(e)                                   13.05
------------------------------------ ---------------------------------------
            314(f)                                    N.A.
------------------------------------ ---------------------------------------
            314(a)                                  7.01(b)
------------------------------------ ---------------------------------------
            315(b)                                    7.05
------------------------------------ ---------------------------------------

<PAGE>

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         TIA SECTION                           INDENTURE SECTION

------------------------------------ ---------------------------------------
            315(c)                                  7.01(a)
------------------------------------ ---------------------------------------
            315(d)                                  7.01(c)
------------------------------------ ---------------------------------------
            315(e)                                    6.12
------------------------------------ ---------------------------------------
    316(a) (last sentence)                           13.06
------------------------------------ ---------------------------------------
         316(a)(1)(A)                                 6.09
------------------------------------ ---------------------------------------
         316(a)(1)(B)                                 6.10
------------------------------------ ---------------------------------------
          316(a)(2)                                   N.A.
------------------------------------ ---------------------------------------
            316(b)                                    6.07
------------------------------------ ---------------------------------------
          317(a)(1)                                   6.04
------------------------------------ ---------------------------------------
          317(a)(2)                                   6.04
------------------------------------ ---------------------------------------
            317(b)                                    2.04
------------------------------------ ---------------------------------------
            318(a)                                   13.01
------------------------------------ ---------------------------------------

N.A.  means Not Applicable

Note: This cross-reference table is not part of the Indenture.

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                             Page
<S>                                                                                          <C>
ARTICLE ONE             DEFINITIONS AND INCORPORATION BY REFERENCE                              1
   Section 1.01.  Definitions                                                                   1
   Section 1.02.  Incorporation by Reference of Trust Indenture Act                             6
   Section 1.03.  Rules of Construction                                                         7

ARTICLE TWO             THE SECURITIES                                                          7
   Section 2.01.  Terms and Form                                                                7
   Section 2.02.  Execution and Authentication                                                 11
   Section 2.03.  Registrar Paying Agent and Conversion Agent.                                 13
   Section 2.04.  Paying Agent to Hold Money in Trust                                          14
   Section 2.05.  Securityholder Lists                                                         14
   Section 2.06.  Transfer, Registration and Exchange                                          14
   Section 2.07.  Replacement Securities                                                       17
   Section 2.08.  Outstanding Securities                                                       17
   Section 2.09.  Temporary Securities                                                         18
   Section 2.10.  Securities in Global Form                                                    19
   Section 2.11.  Cancellation                                                                 19
   Section 2.12.  Defaulted Interest                                                           19
   Section 2.13.  Persons Deemed Owners                                                        20
   Section 2.14.  CUSIP Numbers                                                                20

ARTICLE THREE             REDEMPTION                                                           21
   Section 3.01.  Applicability of Article                                                     21
   Section 3.02.  Notice to Trustee                                                            21
   Section 3.03.  Selection of Securities to Be Redeemed                                       21
   Section 3.04.  Notice of Redemption                                                         22
   Section 3.05.  Effect of Notice of Redemption                                               23
   Section 3.06.  Deposit of Redemption Price or Securities                                    24
   Section 3.07.  Securities Redeemed in Part                                                  24

ARTICLE FOUR            COVENANTS                                                              25
   Section 4.01.  Payment of Securities                                                        25
   Section 4.02.  Maintenance of Office or Agency                                              25
   Section 4.03.  Money for Securities Payments to Be Held in Trust                            26
   Section 4.04.  SEC Reports                                                                  28
   Section 4.05.  Statement as to Compliance                                                   28
   Section 4.08.  Additional Amounts.                                                          28
   Section 4.10.  Information Regarding Original Issue Discount                                29

                                       i

<PAGE>

ARTICLE FIVE            SUCCESSOR CORPORATION AND ASSUMPTION                                   30
   Section 5.01.  When Company May Merge, etc.                                                 30
   Section 5.02.  Successor Corporation Substituted                                            30

ARTICLE SIX             DEFAULTS AND REMEDIES                                                  31
   Section 6.01.  Events of Default                                                            31
   Section 6.02.  Collection of Indebtedness by Trustee; Trustee May Prove Debt                33
   Section 6.03.  Application of Proceeds                                                      35
   Section 6.04.  Suits for Enforcement                                                        36
   Section 6.05.  Restoration of Rights on Abandonments of Proceedings                         36
   Section 6.06.  Limitations on Suits by Securityholders                                      36
   Section 6.07.  Unconditional Right of Securityholder to Institute Certain Suits             37
   Section 6.08.  Powers and Remedies Cumulative; Delay or Omission Not Waiver of
                    Default                                                                    37
   Section 6.09.  Control by Holders of Securities                                             37
   Section 6.10.  Waiver of Past Defaults                                                      38
   Section 6.11.  Trustee to Give Notice of Default, But May Withhold in Certain
                    Circumstances                                                              39
   Section 6.12.  Right of Court to Require Filing of Undertaking to Pay Costs                 39

ARTICLE SEVEN             TRUSTEE                                                              40
   Section 7.01.  Duties of Trustee                                                            40
   Section 7.02.  Rights of Trustee                                                            41
   Section 7.03.  Individual Rights of Trustee                                                 42
   Section 7.04.  Trustee's Disclaimer                                                         42
   Section 7.05.  Notice of Defaults                                                           43
   Section 7.06.  Reports by Trustee to Holders                                                43
   Section 7.07.  Compensation and Indemnity                                                   43
   Section 7.08.  Replacement of Trustee                                                       44
   Section 7.09.  Successor Trustee by Merger, etc.                                            45
   Section 7.10.  Eligibility; Disqualification                                                45
   Section 7.11.  Preferential Collection of Claims against Company                            45

ARTICLE EIGHT            DISCHARGE OF INDENTURE                                                46
   Section 8.01.  Discharge                                                                    46
   Section 8.02.  Defeasance and Covenant Defeasance                                           47
   Section 8.03.  Application of Trust Money                                                   48
   Section 8.04.  Repayment to Company                                                         48
   Section 8.05.  Reinstatement                                                                49
   Section 8.06.  Indemnity for Government Obligations                                         49

                                       ii

<PAGE>

ARTICLE NINE            AMENDMENTS, SUPPLEMENTS AND WAIVERS                                    49
   Section 9.01.  Without Consent of Holders                                                   49
   Section 9.02.  With Consent of Holders                                                      51
   Section 9.03.  Compliance with Trust Indenture Act                                          52
   Section 9.04.  Revocation and Effect of Consents                                            52
   Section 9.05.  Notation on or Exchange of Securities                                        53
   Section 9.06.  Trustee to Sign Amendments, etc.                                             53

ARTICLE TEN             REPAYMENT AT THE OPTION OF HOLDERS                                     54
   Section 10.01.  Applicability of Article                                                    54

ARTICLE ELEVEN              CONCERNING THE SECURITYHOLDERS                                     54
   Section 11.01.  Evidence of Action Taken by Securityholders                                 54
   Section 11.02.  Proof of Execution of Instruments and of Holding of Securities              55
   Section 11.03.  Holders to be Treated as Owners                                             56
   Section 11.04.  Securities Owned by Company Deemed Not Outstanding                          56
   Section 11.05.  Right of Revocation of Action Taken                                         57
   Section 11.06.  Meetings of Holders                                                         57
   Section 11.07.  Call, Notice and Place of Meetings                                          57
   Section 11.08.  Persons Entitled to Vote at Meetings                                        58
   Section 11.09.  Quorum; Action                                                              58
   Section 11.10.  Determination of Voting Rights; Conduct and Adjournment of Meetings         59
   Section 11.11.  Counting Votes and Recording Action of Meetings                             60

ARTICLE TWELVE              SINKING FUNDS                                                      60
   Section 12.01.  Applicability of Article                                                    60
   Section 12.02.  Satisfaction of Sinking Fund Payments with Securities                       61
   Section 12.03.  Redemption of Securities for Sinking Fund                                   61

ARTICLE THIRTEEN               MISCELLANEOUS                                                   62
   Section 13.01.  Trust Indenture Act Controls                                                62
   Section 13.02.  Notices                                                                     62
   Section 13.03.  Communication by Holders with Other Holders                                 64
   Section 13.04.  Certificate and Opinion as to Conditions Precedent                          64
   Section 13.05.  Statements Required in Certificate or Opinion                               64
   Section 13.06.  When Treasury Securities Disregarded                                        64
   Section 13.07.  Legal Holidays                                                              65
   Section 13.08.  Governing Law                                                               65
   Section 13.09.  No Adverse Interpretation of Other Agreements                               65
   Section 13.10.  Successors                                                                  65
   Section 13.11.  No Recourse Against Others                                                  65
   Section 13.12.  Duplicate Originals                                                         66
   Section 13.13.  Separability                                                                66
   Section 13.14.  Securities in Foreign Currencies                                            66
</TABLE>

                                       iii

<PAGE>

         INDENTURE dated as of October 11, 2000, between Natural MicroSystems
Corporation, a corporation incorporated under the laws of Delaware (the
"Company"), and State Street Bank and Trust Company, a Massachusetts banking
corporation, as trustee hereunder ("Trustee").

         Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company's Securities
issued hereunder:

                                    RECITALS

         The Company has authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its unsecured debentures, notes
or other evidences of indebtedness ("Securities") to be issued in one or more
series as herein provided.

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

                                   ARTICLE ONE
                   DEFINITIONS AND INCORPORATION BY REFERENCE

         Section 1.01.  DEFINITIONS.

         "Additional Amounts" means any additional amounts which are required by
a Security or by or pursuant to a Board Resolution, under circumstances
specified therein, to be paid by the Company in respect of certain taxes imposed
on Holders who are not United States Persons, or as otherwise specified in the
terms of a Security established pursuant to Section 2.01, and which are owing to
such Holders.

         "Agent" means any Registrar, Paying Agent or co-Registrar or agent for
service of notice and demands. See Section 2.03.

         "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 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 the meanings correlative to
the foregoing.

         "Authorized Newspaper" means a newspaper printed in the official
language or in the English language of the country of publication and
customarily published at least once a day on each Business Day in each calendar
week and of general circulation in New York, New York or in any other place as
required in this Indenture, whether or not such newspaper is published on

                                       1
<PAGE>

Legal Holidays, or, with respect to the Securities of any series, such other
newspaper(s), as may be specified in or pursuant to the Board Resolution of the
Company or supplement to this Indenture pursuant to which such series of
Securities is issued. Whenever, under the provisions of this Indenture or such
Board Resolutions, two or more publications of a notice or other communication
are required or permitted, such publications may be in the same or different
newspapers. If, because of temporary or permanent suspension of publication or
general circulation of any newspaper or for any other reason, it is impossible
or impracticable to publish any notices required by this Indenture or a Board
Resolution in the manner provided, then such publication in lieu thereof or such
other notice as shall be made with the approval of the Trustee shall constitute
a sufficient publication of such notice.

         "Bankruptcy Law" shall have the meaning set forth in Section 7.07.

         "Bearer Security" means any Security in the form established pursuant
to Section 2.01 which is payable to bearer.

         "Board of Directors" means the Board of Directors of the Company or the
Executive Committee or any other committee of the Board of Directors duly
authorized to act for the Company hereunder.

         "Board Resolution" means a copy of the resolutions certified by the
Secretary or an Assistant Secretary of the Company as properly adopted by the
Board of Directors of the Company and in full force and effect and delivered to
the Trustee.

         "Business Day", except as may otherwise be provided in the form of
Securities of any particular series pursuant to the provisions of this
Indenture, with respect to any Place of Payment means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a Legal Holiday in that Place of
Payment.

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

         "Company" means the party named in the first paragraph of this
Indenture until a successor replaces it pursuant to the Indenture and thereafter
means such successor.

         "Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by the Chairman of the Board,
the President, the Chief Financial Officer or the Treasurer thereof or any other
officer specifically authorized to act by the Board of Directors of the Company
as certified to the Trustee, and delivered to the Trustee.

         "Conversion Agent" shall have the meaning set forth in Section 2.03.

                                       2
<PAGE>

         "Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date hereof is located at 2 Avenue de
Lafayette, Boston, Massachusetts, 02111, Attention: Corporate Trust
Administration, Re: Natural MicroSystems Corporation.

         "Corporation" includes corporations, associations, companies and
business trusts.

         "Coupon" means any interest coupon appertaining to a Bearer Security.

         "Covenant Defeasance" shall have the meaning set forth in Section 8.02.

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

         "Defeasance" shall have the meaning set forth in Section 8.02.

         "Discount Security" means any Security which provides for an amount
less than the principal amount thereof to be due and payable upon a declaration
of acceleration of the maturity thereof pursuant to Section 6.01.

         "Event of Default" shall have the meaning set forth in Section 6.01.

         "Government Obligations" with respect to any series of Securities means
direct noncallable obligations of the government which issued the currency in
which the Securities of that series are denominated, noncallable obligations the
payment of the principal of and interest on which is fully guaranteed by such
government, and noncallable obligations on which the full faith and credit of
such government is pledged to the payment of the principal thereof and interest
thereon, and shall also include a depositary receipt issued by a bank or trust
company as custodian with respect to any such Government Obligation or a
specific payment of interest on or principal of any such Government Obligation
held by such custodian for the account of the holder of such depositary receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary
receipt from any amount received by the custodian in respect of the Government
Obligation or the specific payment of interest on or principal of the Government
Obligation evidenced by such depositary receipt.

         "Holder" or "Securityholder" means, with respect to a Registered
Security, a Person in whose name such Security is registered on the Security
Register and, with respect to a Bearer Security or any coupon, the bearer
thereof.

                                       3
<PAGE>

         "Indenture" means this Indenture, as it may from time to time be
amended or supplemented and shall include the forms and terms of particular
series of Securities established as contemplated herein.

         "Independent Public Accountants" means independent public accountants
or a firm of independent public accountants who may be the independent public
accountants regularly retained by the Company or who may be other independent
public accountants. Such public accountants or firm shall be entitled to rely
upon any Opinion of Counsel as to the interpretation of any legal matters
relating to the Indenture or certificates required to be provided hereunder.

         "Legal Holiday" shall have the meaning set forth in Section 13.07.

         "Lien" means any mortgage, pledge, security interest or lien, or other
encumbrance of any nature whatsoever.

         "Notice of Default" shall have the meaning set forth in Section 6.01.

         "Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or Secretary thereof or any other officer specifically
authorized to act by the Board of Directors of the Company.

         "Officers' Certificate" means a certificate signed by two Officers or
by an Officer other than the Secretary and an Assistant Treasurer or an
Assistant Secretary of the Company.

         "Opinion of Counsel" means a written opinion of legal counsel, who
(except as otherwise expressly provided in this Indenture) may be an employee of
or counsel to or for the Company, or any other legal counsel acceptable to the
Trustee.

         "Outstanding", when used with respect to Securities or a series, shall
have the meaning set forth in Section 2.08.

         "Paying Agent" shall have the meaning set forth in Section 2.03.

         "Periodic Offering" means an offering of Securities of a series from
time to time the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the maturity or
maturities thereof, the original issue date or dates thereof, the redemption
provisions, if any, and any other terms specified as contemplated by Section
2.01 with respect thereto, are to be determined by the Company, or one or more
of the Company's agents designated in an Officers' Certificate, upon the
issuance of such Securities.

                                       4
<PAGE>

         "Person" means any individual, Corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

         "Place of Payment" when used with respect to the Securities of any
series, means the place or places where the principal of and interest and any
Additional Amounts on the Securities of that series are payable as specified as
provided pursuant to Section 2.01.

         "Principal" whenever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include "and premium, if
any," and, whenever used with reference to any Security which by its terms
provides (or as to which mandatory provisions of law provide) that less than the
principal amount thereof shall be due and payable upon a declaration of the
acceleration of the maturity thereof, and in the contexts of such a declaration,
of proving a claim under bankruptcy, insolvency or similar laws, or of
determining whether the holders of the requisite aggregate principal amount of
the Securities of any or all series then Outstanding have concurred in any
request, demand, authorization, direction, notice, consent, waiver or other
action by Securityholders hereunder, shall mean the portion of such principal
amount so provided to be due and payable upon a declaration of acceleration of
the maturity thereof.

         "Redemption Date" means the date fixed for redemption of any Security
to be redeemed pursuant to this Indenture.

         "Redemption Price" means the principal amount of any Security to be
redeemed.

         "Registered Security" means any Security registered in the Security
Register.

         "Registrar" shall have the meaning set forth in Section 2.03.

         "SEC" means the Securities and Exchange Commission as from time to time
constituted, created under the Securities Exchange Act of 1934, as amended, or
if at any time after the execution of this instrument such Commission is not
existing and performing the duties assigned to it under the TIA, then the body
performing such duties at such time.

         "Securities" means the debt securities, as amended or supplemented from
time to time pursuant to this Indenture, that are issued under this Indenture.

         "Security Register" shall have the meaning set forth in Section 2.03.

         "Subsidiary" means any corporation of which at the time of
determination the Company and/or one or more Subsidiaries owns or controls
directly or indirectly more than 50% of the shares of Voting Stock.

                                       5
<PAGE>

         "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Section
77aaa-77bbbb), as amended from time to time.

         "Trustee" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.

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

         "United States" means the United States of America (including the
States and the District of Columbia), its territories and possessions and other
areas subject to its jurisdiction.

         "U.S. Depository" or "Depository" means, with respect to the Securities
of any series issuable or issued in whole or in part in the form of one or more
global Securities, the Person designated as U.S. Depository pursuant to Section
2.01, which must be a clearing agency registered under the Securities Exchange
Act of 1934, as amended, and, if so provided pursuant to Section 2.01 with
respect to the Securities of any series, any successor to such Person. If at any
time there is more than one such Person, "U.S. Depository" shall mean, with
respect to any series of Securities, the qualifying entity which has been
appointed with respect to the Securities of that series.

         "Voting Stock" means stock of a Corporation of the class or classes
having general voting power under ordinary circumstances in the election of
directors, managers or trustees of such Corporation (irrespective of whether or
not at the time stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).

         "Yield to Maturity" means the yield to maturity on a series of
Securities at the most recent redetermination of interest on such series, and
calculated in accordance with accepted financial practice.

         Section 1.02.  INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.

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

         "Commission" means the SEC.

                                       6
<PAGE>

         "Indenture Securities" means the Securities.

         "Indenture Security Holder" means a Securityholder.

         "Indenture to be Qualified" means this Indenture.

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

         "Obligor" on the indenture securities means the Company or any other
obligor on the Securities.

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

         Section 1.03.  RULES OF CONSTRUCTION.

         Unless the context otherwise requires:

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

                  (2)      "or" is not exclusive;

                  (3)      words in the singular include the plural, and in the
                           plural include the singular;

                  (4) an accounting term not otherwise defined has the meaning
assigned to it in accordance with United States generally accepted accounting
principles; and

                  (5) the Article and Section headings herein and in the Table
of Contents are for convenience only and do not constitute a part of this
Indenture and shall not affect the meaning, construction or effect of this
Indenture.

                                       7
<PAGE>

                                   ARTICLE TWO
                                 THE SECURITIES

         Section 2.01.  TERMS AND FORM.

         The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is unlimited. The Securities may be issued in
one or more series of Securities and shall bear the title, interest, if any, at
the rates and from the dates, shall mature at the times, may be redeemable at
the prices and upon the terms, shall be denominated and payable at the place or
places and in the currency or currencies (which may be other than United States
dollars), including composite currencies, and shall contain or be subject to
such other terms as shall be approved by or pursuant to a Board Resolution of
the Company, Officers' Certificate, or in one or more supplements to this
Indenture.

         The Securities of each series hereunder shall be in one or more forms
approved from time to time by or pursuant to a Board Resolution of the Company,
Officers' Certificate, or in one or more supplements to this Indenture
establishing the following:

                  (1) the title or designation of the Securities and the series
in which such Securities shall be included (which, unless such Securities
constitute part of a series of Securities previously issued, shall distinguish
the Securities of the series from all other Securities);

                  (2) any limit upon the aggregate principal amount of the
Securities of such title or the Securities of such series which may be
authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration or transfer of, or in exchange
for, or in lieu of, other Securities of the series pursuant to Sections 2.06,
2.07, 2.09 or 3.07);

                  (3) whether Securities of the series are to be issuable as
Registered Securities, Bearer Securities (with or without coupons) or both; any
restrictions applicable to the offer, sale or delivery of Bearer Securities and
the terms upon which Bearer Securities of the series may be exchanged for
Registered Securities of the series; and whether any Securities of the series
are to be issuable initially in global form and, if so, (i) whether beneficial
owners of interests in any such global Security may exchange such interest for
Securities of such series and of like tenor of any authorized form and
denomination and the circumstances under which any such exchanges may occur, if
other than in the manner specified in Section 2.09 and (ii) the name of the
Depository or the U.S. Depository, as the case may be, with respect to any
global Security;

                  (4) the date as of which any Bearer Securities of the series
and any temporary global Security representing Outstanding Securities of the
series shall be dated if other than the date of original issuance of the first
Security of the series to be issued;

                                       8
<PAGE>

                  (5) if Securities of the series are to be issuable as Bearer
Securities, whether interest in respect of any portion of a temporary Bearer
Security in global form (representing all of the Outstanding Bearer Securities
of the series) payable in respect of any date or dates prior to the exchange of
such temporary Bearer Security for definitive Securities of the series shall be
paid to any clearing organization with respect to the portion of such temporary
Bearer Security held for its account and, in such event, the terms and
conditions (including any certification requirements) upon which any such
interest payment received by a clearing organization will be credited to the
Persons entitled to interest payable on such date or dates;

                  (6) the date or dates on which the principal, and premium, if
applicable, of such Securities is payable;

                  (7) the rate or rates (including the rate or rates at which
overdue principal shall bear interest, if different from the rate or rates at
which such Securities shall bear interest prior to maturity and, if applicable,
the rate or rates at which overdue premium or interest shall bear interest, if
any) at which such Securities shall bear interest, if any, or the method in
which such rate or rates are determined, the date or dates from which such
interest shall accrue, the dates on which such interest shall be payable and the
record date for Holders entitled to the interest payable on Registered
Securities on any such date, whether and under what circumstances Additional
Amounts on such Securities shall be payable and, if so, whether the Company has
the option to redeem the affected Securities rather than pay such Additional
Amounts, and the basis upon which interest shall be calculated if other than as
otherwise provided in this Indenture;

                  (8) the place or places, if any, in addition to or other than
Boston, Massachusetts, where the principal of and interest on or Additional
Amounts, if any, payable in respect of such Securities shall be payable;

                  (9) the period or periods within which, the price or prices at
which and the terms and conditions upon which such Securities may be redeemed,
in whole or in part, at the option of the Company;

                  (10) the terms of any sinking fund and the obligation, if any,
of the Company to redeem or purchase such Securities pursuant to a sinking fund,
at the option of a Holder thereof or otherwise and the period or periods within
which, the price or prices at which and the terms and conditions upon which such
Securities shall be redeemed or purchased in whole or in part, pursuant to such
obligation, and any provisions for the remarketing of such Securities;

                  (11) the denominations in which Registered Securities of the
series, if any, shall be issuable, and the denominations in which Bearer
Securities of the series, if any, shall be issuable, in either case if other
than as otherwise provided in this Indenture;

                                       9
<PAGE>

                  (12) if other than the principal amount thereof, the portion
of the principal amount of such Securities which shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.01;

                  (13) if other than such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public or
private debts, the coin or currency, including composite currencies, in which
payment of the principal of or interest, if any, and any Additional Amounts in
respect of such Securities shall be payable and whether the Securities of the
series may be discharged other than as provided in Article 8;

                  (14) if the principal of or interest, if any, and any
Additional Amounts in respect of such Securities are to be payable, at the
election of the Company or a Holder thereof, in a coin or currency, including
composite currencies, other than that in which the Securities are stated to be
payable, the period or periods within which, and the terms and conditions upon
which, such election may be made;

                  (15) if the amount of payments of principal of or interest, if
any, or any Additional Amounts in respect of such Securities may be determined
with reference to an index, formula or other method based on a coin or currency
other than that in which the Securities are stated to be payable, the manner in
which such amounts shall be determined including the purpose of determining the
principal amount of such Securities deemed to be outstanding at any time;

                  (16) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a temporary
Security of such series) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, then the form and terms of such
certificates, documents or conditions;

                  (17) the terms, if any, pursuant to which the Securities of
such series may be converted into or exchanged for shares of capital stock or
other securities of the Company or any other Person.

                  (18) any events of default, other than those set forth in
Section 6.01, or covenants, other than those set forth in Article 4, with
respect to Securities of such series;

                  (19) the terms and conditions, if any, upon which the
Securities shall be subordinated in right of payment to other indebtedness of
Natural MicroSystems;

                  (21) the terms applicable to any Securities issued at a
discount from their stated principal amount;

                                       10
<PAGE>

                  (22) the trustees, depositaries, authenticating or paying
agents, transfer agents or registrars of the Securities; and

                  (23) any other terms of the Securities (which terms shall not
be inconsistent with the provisions of this Indenture).

         If the form of the Security of any series is approved by or pursuant to
a Board Resolution of the Company, an Officers' Certificate or in one or more
supplements to this Indenture, an Officers' Certificate of the Company delivered
to the Trustee shall state that all conditions precedent relating to the
authentication and delivery of such Security have been complied with and shall
be accompanied by a copy of the Board Resolution of the Company by or pursuant
to which the form of such Security has been approved. The Securities may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Security shall be dated the date of its authentication. Each
Security may contain any other terms as are not inconsistent with the provisions
of this Indenture.

         All Securities of any one series and coupons appertaining to Bearer
Securities of such series, if any, shall be substantially identical except as to
denomination and the rate or rates of interest, if any, the time or times at
which the principal thereof may be payable, the date from which interest, if
any, shall accrue and except as may otherwise be provided in or pursuant to such
Board Resolution, Officers' Certificate or in one or more supplements to this
Indenture, and set forth in the Officers' Certificate hereinabove described or
in any such indenture supplemental hereto. All Securities of any one series need
not be issued at the same time and, unless otherwise provided, a series may be
reopened for issuances of additional Securities of such series or to establish
additional terms of such series of Securities.

         The Securities of each series may be issued as Registered Securities
without coupons or, if provided by the terms of the instrument establishing such
series of Securities, as Bearer Securities, with or without coupons and, in
either case, may be issued initially, temporarily or permanently in global form
(as provided in Section 2.10). Unless the form of a Security for a series
provides otherwise, the Registered Securities shall be issued in denominations
of $1,000 or integral multiples thereof and Bearer Securities shall be issuable
in the denomination of $5,000.

         Except as otherwise specified as contemplated by this Section 2.01 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.

                                       11
<PAGE>

         Section 2.02.  EXECUTION AND AUTHENTICATION.

         An Officer of the Company shall sign the Securities and the coupons for
the Company by manual or facsimile signature. The Company's seal, if any, may be
reproduced on the Securities, but the Company's seal shall not be required to be
included on the Securities.

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

         The aggregate principal amount of Securities Outstanding hereunder at
any time shall be unlimited except that such Outstanding amount (exclusive of
any premium) may not exceed the amount authorized from time to time by the Board
of Directors of the Company and except as provided in Section 2.07. Upon receipt
of a Company Order for the authentication and delivery of Securities of a
series, the Trustee shall authenticate and deliver for original issue Securities
of a series as to which an Officers' Certificate of the Company or a
supplemental indenture has been delivered to the Trustee pursuant to Section
2.01.

         No Security or any coupon appertaining thereto shall be valid until the
Trustee or the authenticating agent referred to below manually signs the
certificate of authentication on the Security. Each Registered Security shall be
dated the date of its authentication. Bearer Securities and any temporary Bearer
Security in global form shall be dated as specified in the Officers' Certificate
of the Company or in the supplements to this Indenture contemplated by Section
2.01. The signature of the Trustee or the authenticating agent referred to below
shall be conclusive evidence that the Security has been authenticated under this
Indenture.

         The Trustee may appoint an authenticating agent to authenticate
Securities. An authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate thereof.

         Except as permitted by Section 2.07, the Trustee shall not authenticate
and deliver any Bearer Security unless all appurtenant coupons for interest then
matured have been detached and canceled.

                                       12
<PAGE>

         The Trustee's authentication shall be in the following form:

Dated:

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the series designated herein and
referred to in the within-mentioned Indenture as supplemented by a First
Supplemental Indenture.

                                          STATE STREET BANK AND TRUST COMPANY,
                                          as Trustee

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

         If the forms and terms of the Securities of the series and any related
coupons have been established in or pursuant to one or more Officers'
Certificates as permitted by Section 2.01 and 2.02, in authenticating such
Securities and accepting the additional responsibilities under this Indenture in
relating to such Securities the Trustee shall be entitled to receive, and
(subject to Section 7.01) shall be fully protected in relying upon an Opinion of
Counsel to the effect that:

         (a) the form and terms of such Securities and coupons, if any, have
been duly authorized and established pursuant to Sections 2.01 and 2.02 and
comply with this Indenture, and

         (b) such Securities, when authenticated and delivered by the Trustee
and issued by the Company, and such coupons, if any, when issued by the Company,
in the manner and subject to any conditions specified in such Opinion of
Counsel, will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to customary exceptions,
provided, however, that, with respect to Securities of a series subject to a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel only once at or prior to the time of the first authentication of
Securities of such series and that the Opinion of Counsel above may state:

                           (x) that the forms of such Securities have been, and
                  the terms of such Securities (when established in accordance
                  with such procedures as may be specified from time to time in
                  a Company Order, all as contemplated by and in accordance with
                  a Board Resolution or any Officers' Certificate pursuant to
                  Section 2.01, as the case may be) will have been, duly
                  authorized by the Company and established in conformity with
                  the provisions of this Indenture; and

                           (y) that such Securities, together with the coupons,
                  if any, appertaining thereto, when (1) executed by the
                  Company, (2) completed, authenticated and

                                       13
<PAGE>

                  delivered by the Trustee in accordance with this Indenture,
                  and (3) issued by the Company in the manner and subject to any
                  conditions specified in such Opinion of Counsel, will
                  constitute valid and legally binding obligations of the
                  Company, enforceable in accordance with their terms, subject
                  to customary exceptions.

         (c) With respect to Securities of a series subject to a Periodic
Offering, the Trustee may conclusively rely, as to the authorization by the
Company of any of such Securities, the form and terms thereof and the legality,
validity, binding effect and enforceability thereof, upon the Opinion of Counsel
and other documents delivered pursuant to Section 2.01 and this Section, as
applicable, at or prior to the time of the first authentication of Securities of
such series unless and until it has received written notification that such
opinion or other documents have been superseded or revoked. In connection with
the authentication and delivery of Securities of a series subject to a Periodic
Offering, the Trustee shall be entitled to assume that the Company's
instructions to authenticate and deliver such Securities do not violate any
rules, regulations or orders of any governmental agency or commission having
jurisdiction over the Company.

         Section 2.03.  REGISTRAR PAYING AGENT AND CONVERSION AGENT.

         The Company shall designate (a) a Registrar who shall maintain an
office or agency where Securities may be presented for registration of transfer
and where each series of Registered Securities may be presented for exchange
("Registrar"), (b) a Paying Agent who shall maintain an office or agency where
Securities and coupons may be presented for payment ("Paying Agent") and an
office or agency where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served and, if applicable, (c) a
Conversion Agent who shall maintain an office or agency where Securities may be
presented for conversion ("Conversion Agent"). The Registrar shall keep a
register ("Security Register") of each series of Registered Securities and of
their transfer and exchange. The Company may have one or more co-Registrars and
one or more additional Paying Agents and shall maintain the Registrar or a
co-Registrar and a Paying Agent in each place required by Section 4.02. The term
"Paying Agent" includes any additional paying agent. In the event that the
Trustee shall not be the Registrar, it shall have the right to examine the
Security Register at all reasonable times.

         The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee of the name and address of any such Agent. If the Company fails to
maintain a Registrar Paying Agent or Conversion Agent, if applicable, or the
Company fails to maintain an agent for service of notices, process and demands,
or the Company fails to give the foregoing notice, the Trustee shall act as
such.

         The Company initially appoints the Trustee to be the Registrar, Paying
Agent and agent for services of notices and demands.

                                       14
<PAGE>

         Section 2.04.  PAYING AGENT TO HOLD MONEY IN TRUST.

         Each Paying Agent shall hold in trust for the benefit of
Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal of or any interest or Additional Amounts on the Securities,
and shall notify the Trustee of any default by the Company (or any other obligor
on the Securities) in making any such payment. If the Company or a Subsidiary
acts as Paying Agent, it shall on or before each due date of the principal of or
any interest or Additional Amounts on any Securities segregate the money and
hold it as a separate trust fund. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee and the Trustee may at any time
during the continuance of any payment default, upon written request to a Paying
Agent, require such Paying Agent to pay to the Trustee all sums so held in trust
by such Paying Agent. Upon doing so the Paying Agent shall have no further
liability for the money.

         Section 2.05.  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 Registered Securities. If the Trustee is not the Registrar, the
Company shall furnish to the Trustee from information in the possession or
control of the Company (a) at least 5 days before each interest payment date, as
of the relevant record date, for any series of Securities, (b) pursuant to the
form of Security for each series of non-interest bearing Securities and (c) 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 Securityholders, provided that if the provisions of (a) or (b) do not provide
for the furnishing of such information at stated intervals of not more than six
months, at least as frequently as semiannually, not later than May 15 and
November 15 of each year.

         Section 2.06.  TRANSFER, REGISTRATION AND EXCHANGE.

         When a Registered Security is presented at an office or agency
maintained for that series pursuant to Section 4.02 in proper form for
registration of transfer with a request to register a transfer, the Registrar or
co-Registrar at that office shall register the transfer as requested.

         At the option of the Securityholder, Registered Securities of any
series may be exchanged upon surrender to the Registrar or a co-Registrar for
Registered Securities of the same series of like aggregate principal amount,
stated maturity and tenor and of other authorized denominations upon surrender
at any office or agency maintained for that series pursuant to Section 4.02.

         If so provided with respect to Securities of a series, at the option of
the Holder, Bearer Securities of any such series may be exchanged for Registered
Securities of the same series containing identical terms and provisions, of any
authorized denominations and aggregate principal amount, upon surrender of the
Bearer Securities to be exchanged at any office or

                                       15
<PAGE>

agency maintained for that series pursuant to Section 4.02, with all unmatured
coupons and all matured coupons appertaining thereto in default. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, such exchange may be effected if the
Bearer Securities are accompanied by payment in funds acceptable to the Company
and the Trustee in an amount equal to the face amount of such missing coupon or
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there is furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent for that series
harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agent for that series any such missing coupon in respect of which such a
payment shall have been made, such Holder shall be entitled to receive the
amount of such payment; provided, however, that except as otherwise provided in
Section 4.02, interest represented by coupons shall be payable only upon
presentation and surrender of those coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case a Bearer
Security of any series is surrendered at any such office or agency maintained
for that series pursuant to Section 4.02 in exchange for a Registered Security
of the same series and like tenor after the close of business at such office or
agency on any record date for the payment of interest and any Additional Amounts
thereon and before the opening of business at such office or agency on the
relevant payment date therefore, such Bearer Security shall be surrendered
without the coupon relating to such payment date or proposed date of payment, as
the case may be (or if such coupon is so surrendered with such Bearer Security,
such coupon shall be returned to the person so surrendering the Bearer
Security), and interest will not be payable on such payment date or proposed
date for payment, as the case may be, in respect of the Registered Security
issued in exchange for such Bearer Security, but will be payable only to the
Holder of such coupon when due in accordance with the provisions of this
Indenture.

         Every Security presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Registrar or co-Registrar)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit transfers and
exchanges, the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's or co-Registrar's request.

         Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 2.01, any global Security shall be exchangeable only if
(i) the Securities Depository is at any time unwilling, unable or ineligible to
continue as Securities Depository and a successor Depository is not appointed by
the Company within 90 days of the date the Company and the Trustee is so
informed in writing, (ii) the Company executes and delivers to the Trustee a
Company Order to the effect that such global Security shall be so exchangeable,
or (iii) an Event of Default has occurred and is continuing with respect to the
Securities. If the beneficial owners of interests in a global Security are
entitled to exchange such interests for Securities of such series and of like
tenor and principal amount of any authorized form and denomination, as

                                       16
<PAGE>

specified as contemplated by Section 2.01, then without unnecessary delay but in
any event not later than the earliest date on which such interests may be so
exchanged, Company shall deliver to the Trustee definitive Securities of that
series in aggregate principal amount equal to the principal amount of such
global Security, executed by the Company. On or after the earliest date on which
such interests may be so exchanged, such global Securities shall be surrendered
from time to time by the U.S. Depository or such other Depository as shall be
specified in the Company Order with respect thereto, and in accordance with
instructions given to the Trustee and the U.S. Depository or such Depository, as
the case may be, which instructions shall be in writing but need not be
accompanied by an Officers' Certificate of the Company or an Opinion of Counsel,
as shall be specified in the Company Order with respect thereto to the Trustee,
as the Company's agent for such purpose, to be exchanged, in whole or in part,
for definitive Securities of the same series without charge. The Trustee shall
authenticate and make available for delivery, in exchange for each portion of
such surrendered global Security, a like aggregate principal amount of
definitive Securities of the same series of authorized denominations and of like
tenor as the portion of such global Security to be exchanged which shall be in
the form of Bearer Securities or Registered Securities, or any combination
thereof, as shall be specified by the beneficial owner thereof (unless the
Securities of the series are not issuable both as Bearer Securities and as
Registered Securities, in which case the definitive Securities exchanged for the
global Security shall be issuable only in the form in which the Securities are
issuable, as specified as contemplated by Section 2.01); provided, however, that
no such exchanges may occur during a period beginning at the opening of business
15 days before any selection of Securities of that series to be redeemed and
ending on the relevant Redemption Date; and provided, further, that (unless
otherwise specified as contemplated by Section 2.01) no Bearer Security
delivered in exchange for a portion of a global Security shall be mailed or
otherwise delivered to any location in the United States. Promptly following any
such exchange in part, such global Security shall be returned by the Trustee to
such depository or the U.S. Depository referred to above in accordance with the
instructions of the Company referred to above. If a Registered Security is
issued in exchange for any portion of a global Security after the close of
business at the office or agency where such exchange occurs on any record date
for the payment of interest or any Additional Amounts thereon, and before the
opening of business at such office or agency on the relevant payment date
therefore, interest and any Additional Amounts in respect of such Registered
Security will not be payable on such payment date, but will be payable on such
payment date only to the Person to whom interest or any Additional Amounts in
respect of such portion of such global Security is payable in accordance with
the provisions of this Indenture.

         No service charge shall be made for any registration of transfer or
exchange, or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 2.09, 3.07 or 9.05 not involving any
transfer.

                                       17
<PAGE>

         The Company and the Trustee shall not be required (a) to issue,
register the transfer of, or exchange any Securities of any series for a period
of 15 days next preceding the day of any selection of Securities of such series
to be redeemed pursuant to Section 3.03, or (b) to register the transfer of or
exchange any Securities of any series selected, called or being called for
redemption in whole or in part except, in the case of any Registered Security to
be redeemed in part, the portion thereof not so to be redeemed or (c) to
exchange any Bearer Security so selected for redemption except, to the extent
provided with respect to Securities of a series, that such a Bearer Security may
be exchanged for a Registered Security of that series, provided that such
Registered Security shall be immediately surrendered for redemption with written
instruction for payment consistent with the provisions of this Indenture.

         All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
endorsed thereon surrendered upon such registration of transfer or exchange.

         Section 2.07.  REPLACEMENT SECURITIES.

         If the Holder of a mutilated or defaced Security or a Security with a
mutilated or defaced coupon appertaining to it surrenders such Security to the
Trustee or if the Holder of a Security presents evidence to the satisfaction of
the Company and the Trustee that the Security has been lost, destroyed or
wrongfully taken or that a coupon has been lost, stolen or wrongfully taken and
surrenders the Security to which such coupon appertains with all appurtenant
coupons not so lost, stolen or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security of the same series and of like
tenor, with coupons corresponding to the coupons, if any, appertaining to the
surrendered Security. In case any such mutilated, defaced, lost, destroyed or
wrongfully taken Security or coupon has or is about to become due and payable,
the Company may pay the Security or coupon instead of issuing a new Security or
coupon; provided, however, that payment of principal of and any interest on and
Additional Amounts with respect to Bearer Securities shall, except as otherwise
provided in Section 4.02, be payable only at an office or agency located outside
the United States and, unless otherwise specified as contemplated by Section
2.01, any interest on Bearer Securities shall be payable only upon presentation
and surrender of the coupons appertaining thereto. If required by the Trustee or
the Company, an indemnity bond must be provided which is sufficient in the
judgment of the Company and the Trustee to protect the Company and the Trustee
or any Agent from any loss which any of them may suffer if a Security is
replaced. The Company and the Trustee may charge the Holder for their fees and
expenses in replacing a Security and for payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto.

         Every replacement Security of any series, with its coupons, if any, is
an additional obligation of the Company and shall be entitled to all of the
benefits of this Indenture equally and proportionately with any and all other
Securities of that series and their coupons, if any, duly issued under this
Indenture.

                                       18
<PAGE>

         Section 2.08.  OUTSTANDING SECURITIES.

         Securities Outstanding at any time are all Securities authenticated by
the Trustee except for those canceled by it and those described in this Section.
A Security does not cease to be Outstanding because the Company or one of its
Affiliates holds the Security except as provided in Section 13.06.

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

         If the Paying Agent holds on a Redemption Date or maturity date money
sufficient to pay Securities payable on that date, then on and after that date
such Securities cease to be Outstanding and interest on them ceases 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 therefore
satisfactory to the Trustee has been made.

         If the Company is deemed to be discharged from its obligations with
respect to the Securities of any series pursuant to Section 8.01 or 8.02, the
Securities of such series shall cease to be Outstanding.

         In determining whether the Holders of the requisite principal amount of
Outstanding Securities of any or all series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a declaration
of acceleration of the maturity thereof pursuant to Section 6.01, as adjusted
pursuant to Section 13.12 if applicable.

         Section 2.09.  TEMPORARY SECURITIES.

         Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities and, if Bearer Securities, temporary coupons shall be substantially
in the form of definitive Securities and, if Bearer Securities, definitive
coupons but may have variations in form that the Company considers appropriate
for temporary Securities. In the case of Bearer Securities of any series, such
temporary Securities may be in global form representing all of the Outstanding
Bearer Securities of such series. Except in the case of temporary Securities in
global form (which shall be exchanged in accordance with the provisions
thereof), without unreasonable delay, the Company

                                       19
<PAGE>

shall prepare definitive Securities (accompanied by any unmatured coupons
pertaining thereto) of like tenor as the temporary Securities.

         After the preparation of definitive Securities of a series, the
temporary Securities of such series shall be exchangeable upon request for
definitive Securities of such series containing identical terms and provisions
upon surrender of the temporary Securities of such series at an office or agency
of the Company maintained for such purpose pursuant to Section 4.02, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series (accompanied by any unmatured coupons
appertaining thereto), the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefore a like principal amount of
definitive Securities of authorized denominations of the same series containing
identical terms and provisions; provided, however, that no definitive Bearer
Security, except as provided pursuant to Section 2.01, shall be delivered in
exchange for a temporary Registered Security; and provided, further, that a
definitive Bearer Security shall be delivered in exchange for a temporary Bearer
Security only in compliance with the conditions set forth therein. Unless
otherwise specified as contemplated by Section 2.01 with respect to a temporary
global Security, until so exchanged the temporary Securities of any series shall
in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series.

         Section 2.10.  SECURITIES IN GLOBAL FORM.

         If Securities of a series are issuable in global form, any such
Security may provide that it shall represent the aggregate amount of Outstanding
Securities from time to time endorsed thereon and may also provide that the
aggregate amount of Outstanding Securities represented thereby may from time to
time be reduced to reflect exchanges. Any endorsement of a Security in global
form to reflect the amount, or any increase or decrease in the amount, or
changes in the rights of Holders, of Outstanding Securities represented thereby
shall be made in such manner and by such Person or Persons as shall be specified
therein.

         Section 2.11.  CANCELLATION.

         The Company at any time may deliver Securities or coupons to the
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Securities surrendered to them for transfer, exchange or payment and
all coupons surrendered for payment. The Trustee shall cancel all Securities
surrendered for transfer, exchange, payment or cancellation and all coupons
surrendered for payment and return such canceled Securities to the Company upon
Company Order, provided, however, that the Trustee shall dispose of canceled
Securities in accordance with its procedures for the disposition of canceled
securities in effect as of the date of such disposition unless the Company
directs their return to the Company. The Company may not issue new Securities to
replace Securities that it has paid or delivered to the Trustee for
cancellation.

                                       20
<PAGE>

         Section 2.12.  DEFAULTED INTEREST.

         If the Company defaults in a payment of interest or any Additional
Amounts on any series of Registered Securities, the Company shall pay the
defaulted interest and any Additional Amounts to Persons who are Holders of
Registered Securities of such series in any lawful manner. The Company may also
pay the defaulted interest to the persons who are Security holders on a
subsequent special record date in the following manner. The Company shall fix
the special record date (which shall be between 10 and 30 days before the
payment date) for the payment of such defaulted interest and any Additional
Amounts on such Securities and the payment date for such defaulted interest. At
least 15 days before the special record date, the Company shall mail each Holder
of Registered Securities, with a copy to the Trustee, a notice that states the
special record date, the payment date and the amount of defaulted interest and
any Additional Amounts to be paid, provided the Company has made arrangements
satisfactory to the Trustee for payment of the aggregate amount to be paid on
such payment date. On such payment date the Trustee shall pay out of funds
provided by the Company such defaulted interest and any Additional Amounts. In
case a Bearer Security of any series is surrendered at the office or agency of
the Company maintained pursuant to Section 4.02 in a Place of Payment for such
series in exchange for a Registered Security of such series after the close of
business at such office or agency on any special record date and before the
opening of business at such office or agency on the related proposed date for
payment of defaulted interest and any Additional Amounts, such Bearer Security
shall be surrendered without the coupon relating to such proposed date of
payment and defaulted interest and any Additional Amounts will not be payable on
such proposed date of payment in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon on or after such payment date in accordance with the provisions of
this Indenture. The Company may pay defaulted interest and any Additional
Amounts in any other lawful manner.

         Section 2.13.  PERSONS DEEMED OWNERS.

         Prior to due presentment of a Registered 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 Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payments of
principal of and (subject to Sections 2.06 and 4.01) interest on and Additional
Amounts with respect to such Registered Security and for all other purposes
whatsoever, whether or not such Registered Security shall 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.

         The Company, the Trustee and any agent of the Company or the Trustee
may treat the bearer of any Bearer Security and the bearer of any coupon as the
absolute owner of such Security or coupon for the purpose of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether or
not such Security or coupon shall be overdue, and neither

                                       21
<PAGE>

the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

         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.

                                  ARTICLE THREE
                                   REDEMPTION

         Section 3.01.  APPLICABILITY OF ARTICLE.

         Unless otherwise provided in a Board Resolution of the Company, an
indenture supplemental hereto or an Officers' Certificate establishing the terms
of a series of Securities, this Article shall apply to the Securities of each
series, if any, that by their terms are subject to redemption at the option of
the Company or pursuant to the operation of a sinking fund or otherwise are
required to be redeemed pursuant to the terms of the Securities. If the terms of
any Security shall conflict with any provision of this Article, the terms of
such Security shall govern.

         Section 3.02.  NOTICE TO TRUSTEE.

         The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution. If the Company wants to redeem Securities of any series
in whole or in part pursuant to the terms of the Securities of that series, the
Company shall notify the Trustee of the Redemption Date therefore and the
principal amount and other terms and provisions of the Securities to be
redeemed. Each such notice shall be accompanied by an Officers' Certificate of
the Company stating that any conditions to such redemption as provided in such
Security and in this Article have been complied with. If the Company elects to
redeem less than all of the Securities of a series with the same terms and
provisions, the Company shall notify the Trustee of such Redemption Date and of
the principal amount of such Securities to be redeemed and shall deliver to the
Trustee such documentation and records as shall enable the Trustee to select the
Securities to be redeemed pursuant to Section 3.03.

         If Securities of any series by their terms are redeemable pursuant to
the operation of a sinking fund or pursuant to another mandatory redemption
provision of the Securities, the Company shall notify the Trustee by an
Officers' Certificate of the amount of the next sinking

                                       22
<PAGE>

fund payment or amount required to satisfy such mandatory redemption payment and
the portion of such payment which is to be satisfied by delivering and crediting
Securities of the same series pursuant to Section 3.06.

         If the Company wants to reduce, pursuant to the terms of such
Securities, the principal amount of Securities to be redeemed, it shall notify
the Trustee by Officers' Certificate of the amount of the reduction and the
basis for it. If the Company wants to credit against any such redemption
Securities of the same series it has not previously delivered to the Trustee for
cancellation, it shall deliver the Securities with such Officers' Certificate.

         The Company shall give each notice and an Officers' Certificate
provided for in this Section at least 60 days before the applicable Redemption
Date (unless shorter notice is satisfactory to the Trustee or a shorter or
longer notice is required by the applicable Security).

         Section 3.03.  SELECTION OF SECURITIES TO BE REDEEMED.

         If less than all the Securities of a series with the same terms and
provisions are to be redeemed, the Trustee shall select the Securities to be
redeemed by a method the Trustee considers fair and appropriate. The Trustee
shall make the selection from such Securities Outstanding not previously called
for redemption. The Trustee may select for redemption portions of the principal
of Registered Securities of such series that have denominations larger than the
minimum authorized denominations for Registered Securities of that series.
Securities and portions thereof the Trustee selects shall be in amounts equal to
the smallest authorized denominations or an integral multiple thereof.
Provisions of this Indenture that apply to Securities called for redemption also
apply to portions of Registered Securities called for redemption.

         The Trustee shall promptly notify the Company and the Registrar (if
other than itself) in writing of the Securities selected for redemption and, in
the case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed.

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

         Section 3.04.  NOTICE OF REDEMPTION.

         At least 30 days but not more than 60 days before a Redemption Date
(unless a shorter or longer period is specified in the Securities to be
redeemed), the Company shall give notice of such redemption to the Holders of
the Securities to be redeemed as a whole or in part, with a copy to the Trustee,
with respect to Registered Securities, by mailing a notice of such redemption

                                       23
<PAGE>

by first-class mail to each Holder of Registered Securities to be redeemed and,
with respect to Bearer Securities, by publishing in an Authorized Newspaper
notice of such redemption on two separate days.

         The notice shall identify the Securities to be redeemed and shall
state:

                  (1) the Redemption Date;

                  (2) the Redemption Price, including premium, if any, accrued
interest and Additional Amounts, if any;

                  (3) if less than all Securities of a series Outstanding are to
be redeemed, the identification (and, if any Security is to be redeemed in part,
the principal amount) of the particular Securities to be redeemed;

                  (4) the then current conversion price, the name or names and
address or addresses of the Paying Agent and the Conversion Agent, if any;

                  (5) that Securities called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price, including premium, if any,
accrued interest and Additional Amounts, if any;

                  (6) that interest on Securities called for redemption ceases
to accrue on and after the Redemption Date;

                  (7) that the redemption is pursuant to a sinking fund, if
such is the case;

                  (8) the Place or Places of Payment where such Securities are
to be surrendered for payment for the Redemption Price;

                  (9)  the CUSIP number, if any, of the Securities; and

                  (10) such other matters as the Company shall deem desirable or
appropriate.

         At the Company's request delivered to the Trustee at least 10 days
prior to the date proposed for the giving of such notice, the Trustee shall give
the notice of redemption in the Company's name and at the Company's expense.

         Section 3.05.  EFFECT OF NOTICE OF REDEMPTION.

         Once notice of redemption is given pursuant to Section 3.04, Securities
called for redemption shall become due and payable on the Redemption Date
therefore and at the

                                       24
<PAGE>

applicable Redemption Price. Any failure to mail notice of redemption or any
defect therein shall not affect the redemption of any other Securities called
for redemption. Upon surrender to the Paying Agent for such Securities of such
Securities together with all unmatured coupons, if any, appertaining thereto,
such Securities shall be paid at the applicable Redemption Price, plus accrued
interest to the Redemption Date and any Additional Amounts payable with respect
thereto; provided, however, that any regular payment of interest and any
Additional Amounts payable with respect thereto becoming due on the Redemption
Date shall be payable, in the case of Bearer Securities, to bearers of the
coupons for such interest and Additional Amounts upon surrender thereof and in
the case of Registered Securities to the Holders of such Securities in
accordance with their terms.

         If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of each missing
coupon or coupons may be waived by the Company and the Trustee if there shall be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent for such Security harmless. If thereafter the Holder
of such Security shall surrender to the Trustee or any Paying Agent for such
Security any such missing coupon in respect of which a deduction shall have been
made from the Redemption Price, such Holder shall be entitled to receive the
amount so deducted; provided, however, that interest (and any Additional
Amounts) represented by coupons shall be payable only upon presentation and
surrender of these coupons at an office or agency located outside of the United
States except as otherwise provided in Section 4.02.

         Section 3.06.  DEPOSIT OF REDEMPTION PRICE OR SECURITIES.

         By 10:00 a.m. eastern standard time, on or before the Redemption Date,
the Company shall deposit with the applicable Paying Agent (or if the Company is
its own Paying Agent, shall segregate and hold in trust) money sufficient to pay
the Redemption Price of and accrued interest and Additional Amounts, if any, on
all Securities to be redeemed on that date.

         If any Security by its terms permits any sinking fund payment
obligation to be satisfied by delivering and crediting Securities, the Company
shall deliver such Securities to the Trustee for crediting against such payment
obligation in accordance with the terms of such Securities and this Indenture.

         Section 3.07.  SECURITIES REDEEMED IN PART.

         Upon surrender of a Security that is redeemed in part at any office or
agency maintained by the Company pursuant to Section 4.02, the Company shall
execute and Trustee shall authenticate for the Holder a new Security of the same
series equal in principal amount to the unredeemed portion of the Security
surrendered.

                                       25
<PAGE>

         If a Security in global form is surrendered upon redemption in part,
the Company shall execute, and the Trustee shall authenticate and deliver to the
U.S. Depository or other Depository for such Security in global form as shall be
specified in the Company Order to the Trustee with respect thereto, without
service charge, a new Security in global form in a denomination equal to and in
exchange for the unredeemed portion of the principal of the Security in global
form so surrendered.

                                  ARTICLE FOUR
                                    COVENANTS

         Section 4.01.  PAYMENT OF SECURITIES.

         The Company shall pay the principal of and any interest or Additional
Amounts, if any, and premium, if any, on the Securities of each series on the
dates and in the manner provided in the Securities, any coupons appertaining
thereto and this Indenture. At the Company's option, it can pay any interest or
Additional Amounts, if any, or premium, if any, on Registered Securities of any
series by mailing checks or drafts to the Holders of such Securities at their
addresses as shown in the Security Register or by any such other payment method
permitted by a supplemental indenture or by an Officers' Certificate
establishing the terms of a series of Securities. Any interest due on and any
Additional Amounts payable in respect of Bearer Securities on or before their
maturity, in respect of the principal of such a Security shall be payable only
upon presentation and surrender of the several coupons for such interest
installments as are evidenced thereby as they severally mature.

         The Company shall pay interest on overdue principal of any Security at
the rate borne by such Security; it shall pay interest on overdue installments
of interest or Additional Amounts, if any, or premium, if any, at the same rate
to the extent lawful.

         In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any record date established
to determine the Person to whom interest or Additional Amounts are payable on
the next following interest payment date therefore and before the opening of
business (at such office or agency) on such interest payment date, such Bearer
Security shall be surrendered without the coupon relating to such interest
payment date and interest will not be payable on such interest payment date in
respect of the Registered Security issued in exchange of such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture.

                                       26
<PAGE>

         Section 4.02.  MAINTENANCE OF OFFICE OR AGENCY.

         The Company shall maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series (but not Bearer
Securities, except as otherwise provided below, unless such Place of Payment is
located outside the United States) may be presented or surrendered for payment,
where Securities of that series may be surrendered for registration of transfer
or exchange and where notices and demands to or upon the Company in respect of
the Securities of that series and this Indenture may be served.

         If Securities of a series are issuable as Bearer Securities, the
Company shall maintain, subject to any laws or regulations applicable thereto,
an office or agency in a Place of Payment for such series which is located
outside the United States where Securities of such series and the related
coupons may be presented and surrendered for payment (including payment of any
Additional Amounts payable on Securities of such series); provided, however,
that if the Securities of such series are listed on The International Stock
Exchange of the United Kingdom and the Republic of Ireland Limited or the
Luxembourg Stock Exchange or any other stock exchange located outside the United
States and such stock exchange shall so require, the Company will maintain a
Paying Agent in London, Luxembourg or any other city so required located outside
the United States, as the case may be, so long as the Securities of such series
are listed on such exchange. 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, except that Bearer Securities of that
series and the related coupons may be presented and surrendered for payment
(including payment of any Additional Amounts payable on Bearer Securities of
that series) at the place specified for that purpose pursuant to Section 2.01.

         Except as otherwise provided in the form of Bearer Security of any
particular series pursuant to the provisions of this Indenture, no payment of
principal or interest or Additional Amounts on Bearer Securities shall be made
at any office or agency of the Company in the United States or by check mailed
to any address in the United States or by transfer to an account maintained with
a bank located in the United States; provided, however, payment of principal of
and interest in U.S. dollars (including Additional Amounts payable in respect
thereof) on any Bearer Security may be made at the office of the Paying Agent in
Boston, Massachusetts, if (but only if) payment of the full amount of such
principal, interest or Additional Amounts at all offices outside the United
States maintained for that purpose by the Company in accordance with this
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions.

         The Company may from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain

                                       27
<PAGE>

an office or agency in each Place of Payment for Securities of any series for
such purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.

         Section 4.03.  MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.

         If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it shall, on or before each due date of the
principal of, or interest or Additional Amounts on, any of the Securities of
that series, segregate and hold in trust for the benefit of the Person entitled
thereto a sum sufficient to pay the principal or interest or Additional Amounts
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and shall promptly notify the Trustee of its
action or failure so to act.

         Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, by 10:00 a.m. New York City time, on or prior to
each due date of the principal of, or interest or Additional Amounts on, any
Securities of that series, deposit with any Paying Agent a sum sufficient to pay
the principal or interest and Additional Amounts so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal,
interest or Additional Amounts, and (unless such Paying Agent is the Trustee)
the Company shall promptly notify the Trustee of its action or failure so to
act.

         The Company shall cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent shall:

                  (1) hold all sums held by it for the payment of the principal
of or interest or any Additional Amounts on Securities of that series in trust
for the benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;

                  (2) give the Trustee notice of any Default by the Company in
the making of any payment of principal or interest or any Additional Amounts on
the Securities of that series; and

                  (3) at any time during the continuance of any such Default,
upon the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.

         The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
direct any Paying Agent to pay, to the Trustee all sums held in trust by the
Company or such Paying Agent, such sums to be held by the Trustee upon the same
terms as those upon which such sums were held by the Company or

                                       28
<PAGE>

such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.

         Except as otherwise provided in the form of Securities of any
particular series pursuant to the provisions of this Indenture, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of or interest or any Additional Amounts
on any Security of any series and remaining unclaimed for two years after such
principal or interest has or Additional Amounts have become due and payable
shall be paid to the Company upon receipt of a Company Order to that effect, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such Security or any coupon appertaining thereto shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in an Authorized Newspaper in each Place of Payment or to be
mailed to Holders of Registered Securities, or both, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication or mailing nor shall it be
later than two years after such principal or interest or Additional Amount has
become due and payable, any unclaimed balance of such money then remaining shall
be repaid to the Company.

         Section 4.04.  SEC REPORTS.

         The Company shall file with the Trustee within 15 days after it files
them with the SEC copies of the annual reports and of the information, documents
and other reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) which the Company is required to file
with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended. 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).

         Section 4.05.  STATEMENT AS TO COMPLIANCE.

         (a) The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year, commencing April 30, 2001 (no more than one year after
closing), a written statement, which need not comply with Section 13.05 hereof,
signed by a principal executive

                                       29
<PAGE>

officer, principal financial officer or principal accounting officer, stating,
as to the signer thereof, that

                  (1) a review of the activities of the Company during such year
and of performance under this Indenture has been made under his supervision, and

                  (2) to the best of his knowledge, based on such review, (a)
the Company has fulfilled its obligations under this Indenture throughout such
year, or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to him and the nature and status thereof, and
(b) no event has occurred and is continuing which is, or after notice or lapse
of time or both would become, an Event of Default, or, if such an event has
occurred and is continuing, specifying each such event known to him and the
nature and status thereof.

         (b) The Company shall deliver to the Trustee within ten days after the
Company obtains knowledge of the occurrence thereof, written notice of any
Default.

         Section 4.06.  ADDITIONAL AMOUNTS.

         If any Securities of a series provide for the payment of Additional
Amounts, the Company agrees to pay to the Holder of any such Security or any
Coupon appertaining thereto Additional Amounts as provided in or pursuant to
this Indenture or such Securities. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal of or any premium or
interest on, or in respect of, any Security of any series or any Coupon or the
net proceeds received on the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided by the terms of such series established hereby or pursuant
hereto to the extent that, in such context, Additional Amounts are, were or
would be payable in respect thereof pursuant to such terms, and express mention
of the payment of Additional Amounts (if applicable) in any provision hereof
shall not be construed as excluding the payment of Additional Amounts in those
provisions hereof where such express mention is not made.

         Except as otherwise provided in or pursuant to this Indenture or the
Securities of the applicable series, if the Securities of a series provide for
the payment of Additional Amounts, at least 10 days prior to the first interest
payment date with respect to such series of Securities (or if the Securities of
such series shall not bear interest prior to maturity, the first day on which a
payment of principal is made), and at least 10 days prior to each date of
payment of principal or interest if there has been any change with respect to
the matters set forth in the below-mentioned Officers' Certificate, the Company
shall furnish to the Trustee and the principal Paying Agent or Paying Agents, if
other than the Trustee, an Officers' Certificate instructing the Trustee and
such Paying Agent or Paying Agents whether such payment of principal of and
premium, if any, or interest on the Securities of such series shall be made to
Holders of Securities of such series or the Coupons appertaining thereto who are
United States Aliens without withholding for or on

                                       30
<PAGE>

account of any tax, assessment or other governmental charge described in the
Securities of such series. If any such withholding shall be required, then such
Officers' Certificate shall specify by country the amount, if any, required to
be withheld on such payments to such Holders of Securities or Coupons, and the
Company agrees to pay to the Trustee or such Paying Agent the Additional Amounts
required by the terms of such Securities. The Company covenants to indemnify the
Trustee and any Paying Agent for, and to hold them harmless against, any loss,
liability or expense reasonably incurred without negligence or bad faith on
their part arising out of or in connection with actions taken or omitted by any
of them in reliance on any Officers' Certificate furnished pursuant to this
Section.

         Section 4.07.  INFORMATION REGARDING ORIGINAL ISSUE DISCOUNT.

         The Company shall provide to the Trustee on a timely basis such
information as the Trustee requires to enable the Trustee to prepare and file
any form required to be submitted by the Company with the Internal Revenue
Service and the Holders of Discount Securities relating to original issue
discount, including, without limitation, Form 1099-OID or any successor form.

                                  ARTICLE FIVE
                      SUCCESSOR CORPORATION AND ASSUMPTION

         Section 5.01.  WHEN COMPANY MAY MERGE, ETC.

         The Company shall not consolidate with or merge into, or sell, lease
(for a term extending beyond the last stated maturity of the Securities then
Outstanding) or convey all or substantially all of its assets to, another Person
unless the successor or transferee Person expressly assumes by supplemental
indenture, in form satisfactory to the Trustee, all the obligations of the
Company with respect to the Securities and this Indenture, and the Company or
successor Corporation, as the case may be, (i) shall be a Corporation organized
under the laws of one of the states in the United States and (ii) shall not,
immediately after such consolidation or merger or sale, lease or conveyance, be
in default in the performance of any covenant or condition with respect to the
Securities or the Indenture. The Company shall deliver to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture comply with
this Indenture. Thereafter all such obligations of the predecessor corporation
shall terminate.

         Section 5.02.  SUCCESSOR CORPORATION SUBSTITUTED.

         Upon any consolidation or merger, or any sale, lease or conveyance of
all or substantially all of the assets of the Company in accordance with Section
5.01, the successor Corporation formed by such consolidation or into which the
Company is merged or to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the

                                       31
<PAGE>

Company under this Indenture with the same effect as if such successor
Corporation had been named as the Company herein.

         Section 5.03.  LIMITATION.

         Nothing in this Indenture shall be deemed to prevent or restrict: (a)
any consolidation or merger after the consummation of which the Company would be
the surviving or resulting entity or any conveyance or other transfer or lease
of any part of the properties of the Company which does not constitute the
entirety, or substantially the entirety, thereof; or (b) the approval by the
Company of, or the consent by the Company to, any consolidation or merger to
which any Subsidiary (or any such other subsidiary or affiliate of the Company)
may be a party or any conveyance, transfer or lease by any Subsidiary (or any
such other subsidiary or affiliate) of any of its assets.

                                   ARTICLE SIX
                              DEFAULTS AND REMEDIES

         Section 6.01.  EVENTS OF DEFAULT.

         Unless otherwise provided in a Board Resolution of the Company, an
indenture supplemental hereto or an Officers' Certificate establishing the terms
of a series of Securities, an "Event of Default" with respect to the Securities
of any series means any one of the following events, unless such event is either
inapplicable to a particular series of Securities or it is specifically deleted
or modified in or pursuant to the supplemental indenture, Board Resolution or
Officers' Certificate creating such series of Securities or in the form of
Security for such series:

         (a) default in the payment of any installment of interest upon or any
Additional Amounts payable in respect of any of the Securities of such series as
and when the same shall become due and payable, and continuance of such default
for a period of 30 days; or

         (b) default in the payment of all or any part of the principal of or
premium, if any, on any of the Securities of such series as and when the same
shall become due and payable either at maturity, upon redemption, by declaration
or otherwise

         (c) default in the payment of any sinking fund installment as and when
the same shall become due and payable by the terms of the Securities of such
series; or

         (d) default in the performance, or breach, of any covenant or warranty
of the Company in respect of the Securities of such series (other than a
covenant or warranty in respect of the Securities of such series 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 60

                                       32
<PAGE>

days after there has been given, by registered or certified mail, to the Company
by the Trustee or to the Company and Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities (determined pursuant to Section
2.08) of all series affected thereby, 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) a court having jurisdiction in the premises entering a decree or
order for relief in respect of the Company in an involuntary case under the
Bankruptcy Law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee or sequestrator (or similar official) of the
Company or for any substantial part of its property or ordering the winding up
or liquidation of its affairs, and such decree or order shall remain unstayed
and in effect for a period of 60 consecutive days; or

         (f) the Company commencing a voluntary case under any applicable
Bankruptcy Law now or hereafter in effect, or consent to the entry of an order
for relief in an involuntary case under any such law, or consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or similar official) of the Company or for
any substantial part of its property, or making any general assignment for the
benefit of creditors; or

         (g) any other Event of Default provided in the supplemental indenture,
Board Resolutions or Officers' Certificate under which such series of Securities
is issued or in the form of Security for such series.

         If an Event of Default described in clause (a), (b), (c), (d) (if the
Event of Default under clause (d) is with respect to less than all series of
Securities then Outstanding) or (g) (if the supplemental indenture, Board
Resolution or Officers' Certificate does not provide otherwise) occurs and is
continuing, then, and in each and every such case, unless the principal of all
of the Securities of such series shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Securities of such series then Outstanding hereunder (each such
series voting as a separate class) by notice in writing to the Company (and to
the Trustee if given by Securityholders), may declare the entire principal (or,
if the Securities of such series are Discount Securities, such portion of the
principal amount as may be specified in the terms of such series) of all
Securities of such series and the interest accrued thereon and Additional
Amounts payable in respect thereof, if any, to be due and payable immediately,
and upon any such declaration the same shall become immediately due and payable.
If an Event of Default described in Clause (d) (if the Event of Default under
clause (d) is with respect to all series of Securities then Outstanding), occurs
and is continuing, then and in each and every such case, unless the principal of
all the Securities shall have already become due and payable, either the Trustee
or the Holders of not less than 25% in aggregate principal amount of all the
Securities then Outstanding hereunder (treated as one class), by notice in
writing to the Company (and to the Trustee if given by Securityholders), may
declare the entire principal (or, if

                                       33
<PAGE>

any Securities are Discount Securities, such portion of the principal as may be
specified in the terms thereof) of all the Securities then Outstanding and
interest accrued thereon and Additional Amounts payable in respect thereof, if
any, to be due and payable immediately, and upon any such declaration the same
shall become immediately due and payable, provided, however, that a supplemental
indenture, Board Resolution or Officers' Certificate may provide otherwise with
respect to a particular series. If an Event of Default described in clause (e)
or (f) occurs and is continuing, all unpaid principal and interest accrued
thereon and Additional Amounts, if any, payable in respect thereof shall IPSO
FACTO become immediately due and payable without any declaration or other act on
the part of the Trustee or any Securityholder. A supplemental indenture, Board
Resolution or Officers' Certificate providing for an event of default under
clause (g) above may specify the consequences of such Event of Default.

         The foregoing provisions, however are subject to the condition that if,
at any time after the principal (or, if the Securities are Discount Securities,
such portion of the principal as may be specified in the terms thereof) of the
Securities of any series (or of all the Securities, as the case may be) shall
have been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon and any Additional
Amounts payable in respect of all the Securities of such series (or of all the
Securities, as the case may be) and the principal of any and all Securities of
such series (or of all the Securities, as the case may be) which shall have
become due otherwise than by acceleration (with interest upon such principal
and, to the extent that payment of such interest is enforceable under applicable
law, on overdue installments of interest or any Additional Amounts, at the same
rate as the rate of interest or Yield to Maturity (in the case of Discount
Securities) specified in the Securities of such series (or at the respective
rates of interest or Yields to Maturity of all the securities, as the case may
be, to the date of such payment or deposit) and such amount as shall be
sufficient to cover reasonable compensation to the Trustee, its agents,
attorneys and counsel, and all other expenses and liabilities incurred, and all
advances made, by the Trustee except as a result of negligence or bad faith, and
if any and all Events of Default under the Indenture, other than the non-payment
of the principal of Securities which shall have become due by acceleration,
shall have been cured, waived or otherwise remedied as provided herein -- then
the Holders of a majority in aggregate principal amount of all the Securities of
such series, each series voting as a separate class (or of all the Securities,
as the case may be, voting as a single class) then Outstanding, by written
notice to the Company and to the Trustee, may waive all defaults with respect to
such series (or with respect to all the Securities, as the case may be) and
rescind and annul such declaration and its consequences, but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent default
or shall impair any right consequent thereon.

         For all purposes under this Indenture, if a portion of the principal of
any Discount Securities shall have been accelerated and declared due and payable
pursuant to the provisions hereof, then, from and after such declaration, unless
such declaration has been rescinded and

                                       34
<PAGE>

annulled, the principal amount of such Discount Securities shall be deemed, for
all purposes hereunder, to be such portion of the principal thereof as shall be
due and payable as a result of such acceleration, and payment of such portion of
the principal thereof as shall be due and payable as a result of such
acceleration, together with interest, if any, thereon and all other amounts
owing thereunder, shall constitute payment in full of such Discount Securities.

         Section 6.02. COLLECTION OF INDEBTEDNESS BY TRUSTEE; TRUSTEE MAY PROVE
DEBT.

         The Company covenants that (a) in the case default shall be made in the
payment of any installment of interest on or any Additional Amounts payable in
respect of any of the Securities of any series or (b) in case principal shall
have become due and payable, and such default shall be made in the payment of
all or any part of the principal of any of the Securities of any series when the
same shall have become due and payable, whether upon maturity of the Securities
of such series, or upon any redemption or by declaration or otherwise -- then,
upon demand of the Trustee, the Company will pay to the Trustee for the benefit
of the Holders of the Securities of such series the whole amount that then shall
have become due and payable on all Securities of such series, and such coupons,
for principal, interest or Additional Amounts, if any, as the case may be (with
interest to the date of such payment upon the overdue installments of interest
or any Additional Amounts at the same rate as the rate of interest or Yield to
Maturity (in the case of Discount Securities) specified in the Securities of
such series); and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection including reasonable
compensation to the Trustee and each predecessor Trustee, their respective
agents, attorneys and counsel, and any expenses and liabilities incurred, and
all advances made, by the Trustee and predecessor Trustee except as a result of
its negligence or bad faith.

         In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceeding at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon such
Securities and collect in the manner provided by law out of the property of the
Company or other obligor upon such Securities, wherever situated, the moneys
adjudged or decreed to be payable.

         In case there shall be pending proceedings relative to the Company or
any other obligor upon the Securities under Bankruptcy Law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or its property or such other obligor, or in case of
any other comparable judicial proceedings relative to the Company or other
obligor upon the Securities or any series, or to the creditors or property of
the Company or such other obligor, the Trustee, irrespective of whether the
principal of any Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Trustee shall

                                       35
<PAGE>

have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:

         (a) to file and prove a claim or claims for the whole amount of
principal, interest (or, if the Securities of any series are Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series) and any Additional Amounts owing and unpaid in respect of
the Securities of any series, and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee (including
any claim for reasonable compensation to the Trustee and each predecessor
Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee, except as a result of negligence or
bad faith) and of the Securityholders allowed in any judicial proceedings
relative to the Company or other obligor upon the Securities of any series, or
to the creditors or property of the Company or such other obligor,

         (b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of the Securities of any series in any election of a
trustee or a standby trustee in arrangement, reorganization, liquidation or
other bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and

         (c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Securityholders and of the Trustee on their behalf;
and any trustee, receiver, or liquidator, custodian or other similar official is
hereby authorized by each of the Securityholders to make payments to the
Trustee, and in the event that the Trustee shall consent to the making of
payments directly to the Securityholders, to pay to the Trustee such amounts as
shall be sufficient to cover reasonable compensation to the Trustee, each
predecessor trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the trustee
and each predecessor Trustee except as a result of negligence or bad faith and
all other amounts due to the Trustee or any predecessor Trustee under this
Indenture.

         Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any series or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar person.

         All rights of action and of asserting claims under this Indenture, or
under any of the Securities of any series or coupons appertaining to such
Securities, may be enforced by the Trustee without the possession of any of the
Securities of such series or coupons appertaining to

                                       36
<PAGE>

such Securities or the production thereof at any trial or other proceedings
relative thereto, and any such action or proceedings instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery or judgment, subject to the payment of the expenses, disbursements and
compensation of the Trustee, each predecessor Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of the
Securities or of coupons appertaining to such Securities in respect of which
action was taken.

         In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
of the Securities or coupons appertaining to such Securities in respect to which
such action was taken, and it shall not be necessary to make any Holders of such
Securities or coupons appertaining to such Securities parties to any such
proceedings.

         Section 6.03.  APPLICATION OF PROCEEDS.

         Unless otherwise provided in a Board Resolution of the Company, an
indenture supplemental hereto or an Officers' Certificate establishing the terms
of a series of Securities, any moneys collected by the Trustee pursuant to this
Article with respect to the Securities of any series shall be applied in the
following order at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys on account of principal, interest or any Additional
Amounts, upon presentation of the several Securities and coupons appertaining to
such Securities in respect of which monies have been collected and stamping (or
otherwise noting) thereof the payment, or issuing Securities of such series in
reduced principal amounts in exchange for the presented Securities of like
series if only partially paid, or upon surrender thereof if fully paid.

         FIRST: to the Trustee and any predecessor Trustee for amounts due under
Section 7.07.

         SECOND: to the Holders of Securities of such series or coupons
appertaining thereto for amounts due and unpaid on the Securities and coupons
for principal, interest and Additional Amounts, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Securities
and coupons for principal, interest and Additional Amounts, respectively; and

         THIRD:  to the Person or Persons lawfully entitled thereto.

         Section 6.04.  SUITS FOR ENFORCEMENT.

         In case an Event of Default has occurred, has not been waived and is
continuing, the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either at law or in equity or in bankruptcy or otherwise,

                                       37
<PAGE>

whether for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this Indenture
or to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.

         Section 6.05.  RESTORATION OF RIGHTS ON ABANDONMENTS OF PROCEEDINGS.

         In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discounted or abandoned for
any reason, or shall have been determined adversely to the Trustee, then and in
every such case the Company and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights, remedies and powers
of the Company, the Trustee and the Securityholders shall continue as though no
such proceedings had been taken.

         Section 6.06.  LIMITATIONS ON SUITS BY SECURITYHOLDERS.

         No Holder of any Security of any series or of any coupon appertaining
thereto shall have any right by virtue or by availing of any provision of this
Indenture to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to this Indenture, or for
the appointment of a trustee, receiver, liquidator, custodian or other similar
official or for any other remedy hereunder, unless such Holder previously shall
have given to the Trustee written notice of a continuing Event of Default, and
unless also the Holders of not less than 25% in aggregate principal amount of
the Securities of such series then Outstanding shall have made written request
upon the Trustee to institute such action or proceedings in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby and the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity shall have failed to institute any
such action or proceeding and the Holders of a majority in principal amount of
the outstanding Securities of such series shall have not given the Trustee a
direction inconsistent with such request, it being understood and intended, and
being expressly covenanted by the taker and Holder of every Security or coupon
with every other taker and Holder and the Trustee, that no one or more Holders
of Securities of any series or coupons appertaining to such Securities shall
have any right in any manner whatever by virtue or by availing of any provision
of this Indenture to affect, disturb or prejudice the rights of any other such
Holder of Securities or coupons appertaining to such Securities, or to obtain or
seek to obtain priority over or preference to any other such Holder or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal, ratable and common benefit of all Holders of Securities of the
applicable series and coupons appertaining to such Securities. For the
protection and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.

                                       38
<PAGE>

         Section 6.07. UNCONDITIONAL RIGHT OF SECURITYHOLDER TO INSTITUTE
CERTAIN SUITS.

         Notwithstanding any other provision in this Indenture and any provision
of any Security, the right of any Holder of any Security or coupon to receive
payment of the principal of, interest on and any Additional Amounts in respect
of such Security or coupon on or after the respective due dates expressed in
such Security or coupon, or to institute suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.

         Section 6.08. POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER OF DEFAULT.

         Except as provided in Section 6.06, no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders of Securities or coupons 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.

         No delay or omission of the Trustee or of any Holder of Securities or
coupons to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to Section 6.06, every power and remedy given
by this Indenture or by law to the Trustee or to the Holders of Securities or
coupons may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Holders of Securities or coupons.

         Section 6.09.  CONTROL BY HOLDERS OF SECURITIES.

         The Holders of a majority in aggregate principal amount of the
Securities of each series affected (with each series voting as a separate class)
at the time Outstanding 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 the
Securities of such series by this Indenture; provided that such direction shall
not be otherwise than in accordance with law and the provisions of this
Indenture and provided further that (subject to the provisions of Section 6.01)
the Trustee shall have the right to decline to follow any such direction if the
Trustee, being advised by counsel, shall determine that the action or proceeding
so directed may not lawfully be taken or if the Trustee in good faith by its
board of directors, the executive committee, or a trust committee of two or more
directors or responsible officers of the Trustee, which may include Trust
Officers, shall determine that the action or proceedings so directed would
involve the Trustee in personal liability or if the Trustee in good faith shall
so determine that the actions or forbearances specified in or pursuant to such
direction would be unduly prejudicial to the interests of Holders of the
Securities of all series so affected

                                       39
<PAGE>

not joining in the giving of said direction, it being understood that the
Trustee shall have no duty to ascertain whether or not such actions or
forbearances are unduly prejudicial to such Holders.

         Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Securityholders.

         Section 6.10.  WAIVER OF PAST DEFAULTS.

         Unless otherwise provided in a Board Resolution of the Company, an
indenture supplemental hereto or an Officers' Certificate establishing the terms
of a series of Securities, prior to the declaration of the acceleration of the
maturity of the Securities of any series as provided in Section 6.01, the
Holders of a majority in aggregate principal amount of the Securities of such
series at the time Outstanding may on behalf of the Holders of all the
securities of such series waive any past default or Event of Default described
in clause (c) of Section 6.01 (or, in the case of an event specified in clause
(d) of Section 6.01 which relates to less than all series of Securities then
Outstanding, the Holders of a majority in aggregate principal amount of the
Securities then Outstanding affected thereby (each series voting as a separate
class) may waive any such default or Event of Default), or, in the case of an
event specified in clause (d) (if the Event of Default under clause (d) relates
to all series of Securities then Outstanding), (e) or (f) of Section 6.01 the
Holders of Securities of a majority in principal amount of all the Securities
then Outstanding (voting as one class) may waive any such default or Event of
Default), and its consequences except a default in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of the
Holder of each Security affected. In the case of any such waiver, the Company,
the Trustee and the Holders of the Securities of such series 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.

         Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.

         Section 6.11. TRUSTEE TO GIVE NOTICE OF DEFAULT, BUT MAY WITHHOLD IN
CERTAIN CIRCUMSTANCES.

         The Trustee shall, within ninety days after the occurrence of a default
with respect to the Securities of any series, give notice of all defaults with
respect to that series known to the Trustee (i) if any Bearer Securities of that
series are then Outstanding, to the Holders thereof, by publication at least
once in an Authorized Newspaper in the Place of Payment, (ii) if any Bearer
Securities of that series are then Outstanding, to all Holders thereof who have
filed their names

                                       40
<PAGE>

and addresses with the Trustee, by mailing such notice to such Holders at such
addresses and (iii) to all Holders of then Outstanding Registered Securities of
that series, by mailing such notice to such Holders at their addresses as they
shall appear in the registry books, unless in each case such defaults shall have
been cured before the mailing or publication of such notice (the term "defaults"
for the purpose of this Section being hereby defined to mean any event or
condition which is, or with notice or lapse of time or both would become, an
Event of Default); provided that, except in the case of default in the payment
of the principal of or interest or Additional Amounts, if any, on any of the
Securities of such series or in the payment of any sinking or purchase fund
installment, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a trust committee
comprised of two or more directors or trustees and/or responsible officers of
the Trustee, which may include Trust Officers, in good faith determines that the
withholding of such notice is in the interests of the Securityholders of such
series.

         Section 6.12. RIGHT OF COURT TO REQUIRE FILING OF UNDERTAKING TO PAY
COSTS.

         All parties to this Indenture agree, and each Holder of any Security or
coupon 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 (other than the Trustee) 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, 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 Trustee, to any suit instituted by any Securityholder or
group of Securityholders of any series holding in the aggregate more than 10% in
aggregate principal amount of the Outstanding Securities of such series, or, in
the case of any suit relating to or arising under clause (d) of Section 6.01 (if
the suit relates to Securities of more than one but less than all series), 10%
in aggregate principal amount of Securities Outstanding affected thereby, or in
the case of any suit relating to or arising under clause (d) (if the suit under
clause (d) relates to all the Securities then Outstanding), (e) or (f) of
Section 6.01, 10% in aggregate principal amount of all Securities Outstanding,
or to any suit instituted by any Securityholder for the enforcement of the
payment of the principal of or interest on any Security on or after the due date
expressed in such Security or any date fixed for redemption.

         The Holders of a majority in principal amount of the Outstanding
Securities of such series by notice to the Company and the Trustee may rescind
an acceleration and its consequences if (i) all existing Events of Default with
respect to the Securities of such series, other than the non-payment of the
principal of the Securities which have become due solely by such declaration of
acceleration, have been cured or waived, (ii) the Company has paid or deposited
with the Trustee a sum sufficient to pay the whole amount then due and payable
on such Securities and any coupons appertaining thereto for principal and
interest and

                                       41
<PAGE>

Additional Amounts, if any, with interest upon the overdue principal and, to the
extent that payment of such interest shall be legally enforceable, upon overdue
installments of interest or any Additional Amounts, at the rate or rates borne
by or provided for in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, and (iii) the rescission would not conflict
with any judgment or decree. No such rescission shall have any effect on any
subsequent default or impair any right consequent thereon.

                                  ARTICLE SEVEN
                                     TRUSTEE

         Section 7.01.  DUTIES OF TRUSTEE.

         (a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise its rights and powers hereunder and use the same degree of care
and skill in its exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.

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

                  (1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.

                  (2) 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 or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. The Trustee,
however, shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other facts stated
therein).

         (c) 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:

                  (1) This paragraph does not limit the effect of paragraph (b)
of this Section.

                  (2) The Trustee shall not be liable for any error of judgment
made in good faith by a responsible officer or officers of the Trustee, which
may include Trust Officers, unless it is proved that the Trustee was negligent
in ascertaining the pertinent facts.

                  (3) 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 6.09.

                                       42
<PAGE>

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

         (e) 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.

         (f) Money held by the Trustee in trust hereunder need not be segregated
except to the extent required by law. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree with the
Company.

         (g) The Trustee shall not be liable with respect to any action taken or
omitted to be taken or with respect to exercising any trust or power conferred
upon the Trustee, under this Indenture, by it in good faith in accordance with
the direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series given pursuant to Section 6.09 of this
Indenture, relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee.

         (h) Every provision in this Indenture relating to the conduct of or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the Trust
Indenture Act.

         Section 7.02.  RIGHTS OF TRUSTEE.

         Except as provided in Section 7.01:

         (a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person or Persons. The
Trustee need not investigate any fact or matter stated in the document.

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

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

         (d) 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.

         (e) Any demand, request, direction or notice from the Company mentioned
herein shall, unless otherwise specifically provided, be sufficiently evidenced
by a Company Request or

                                       43
<PAGE>

Company Order and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution.

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

         (g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine, to
the extent necessary and consistent with each inquiry or investigation, the
books, records and premises of the Company, personally or by agent or attorney.

         (h) the rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and to each agent, custodian and other Person employed to act
hereunder; and

         (i) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles or officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.

         Section 7.03.  INDIVIDUAL RIGHTS OF TRUSTEE.

         The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities or coupons and may otherwise deal with the
Company or its Affiliates with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. The Trustee, however, must
comply with Sections 7.10 and 7.11.

         Section 7.04.  TRUSTEE'S DISCLAIMER.

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

                                       44
<PAGE>

         Section 7.05.  NOTICE OF DEFAULTS.

         If a Default occurs and is continuing with respect to Securities and if
it is actually known to the Trustee, the Trustee shall give to each Holder of
Securities of any series to which such Default relates, in the manner and to the
extent provided in TIA Section 313(c), and otherwise as provided in Section
13.02 of this Indenture, notice of the Default within 90 days after it occurs.
Except in the case of a Default in payment of principal of or interest or
Additional Amounts, if any, on a Security of any series, or in the payment of
any sinking or purchase fund installment, the Trustee may withhold the notice if
and so long as the board of directors of the Trustee, the executive committee or
a trust committee of directors and/or of responsible officers, which may include
Trust Officers, of the Trustee in good faith determines that withholding the
notice is in the interests of Holders of Securities of such series or the coupon
appertaining thereto.

         Section 7.06.  REPORTS BY TRUSTEE TO HOLDERS.

         Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, the Trustee shall mail to each Securityholder a
brief report dated as of such May 15 that complies with TIA Section 313(a). The
Trustee also shall comply with TIA Section 313(b)(2). Reports to Holders
pursuant to this Section 7.06 shall be transmitted in the manner and to the
extent provided in TIA Section 313(c).

         A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange on which any Securities are
listed.

         The Company agrees to notify the Trustee whenever the Securities of any
series become listed on any stock exchange or any delisting thereof.

         Section 7.07.  COMPENSATION AND INDEMNITY.

         The Company shall pay to the Trustee from time to time such
compensation as the Company and the Trustee shall from time to time agree in
writing for all services rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a Trustee of
an express trust). The Company shall reimburse the Trustee and any predecessor
Trustee upon request for all reasonable out-of-pocket expenses and advances
incurred or made by it. Such expenses shall include the reasonable compensation
and expenses of the Trustee's agents and counsel. The Company shall indemnify
each of the Trustee and any predecessor Trustee and their agents against any
loss damage claim, expense or liability (including legal fees and expenses)
incurred by it in connection with the acceptance and administration of the trust
and the performance of its duties hereunder, including the costs and expenses
and disbursements of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Trustee shall notify the Company promptly of any claim asserted
against it for which it may seek indemnity; provided,

                                       45
<PAGE>

however, that the failure to give the Company any notice of any claim shall not
in any way affect the rights of the Trustee hereunder to indemnification for
such claim. The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee or any predecessor Trustee to the
extent due to its own negligence, willful misconduct or bad faith.

         To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay principal of or
interest or Additional Amounts, if any, on the Securities.

         When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01 (e) and (f) occurs, the expenses and the
compensation for services are intended to constitute expenses of administration
under any Bankruptcy Law. The term "Bankruptcy Law" means Title 11, U.S. Code.

         The provisions of this Section 7.07 shall survive termination of this
Indenture or the resignation and removal of the Trustee.

         For purposes of this Section, the term "Trustee" shall include any
predecessor Trustee, provided that any Trustee hereunder shall not be liable for
the willful misconduct, negligence or bad faith of any other Trustee hereunder.

         Section 7.08.  REPLACEMENT OF TRUSTEE.

         The Trustee may resign by so notifying the Company; provided, however,
no such resignation shall be effective until a successor Trustee has accepted
its appointment pursuant to this Section 7.08. The Holders of a majority in
principal amount of the Outstanding Securities may remove the Trustee by so
notifying the Trustee and may appoint a successor Trustee with respect to the
Securities. The Company may by or pursuant to a Board Resolution remove the
Trustee with respect to all Securities if:

                  (1) the Trustee fails to comply with Section 7.10;

                  (2) the Trustee is adjudged bankrupt or insolvent;

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

                  (4) the Trustee 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.

                                       46
<PAGE>

         A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. As soon as possible
after that, the retiring Trustee shall, upon payment of its charges, transfer
all property held by it as Trustee to the successor Trustee, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall give notice of its succession to each
Holder of Securities.

         If a successor Trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, at the Company's
expense, the Company or the Holders of 10% in principal amount of the
Outstanding Securities may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

         If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

         Section 7.09.  SUCCESSOR TRUSTEE BY MERGER, ETC.

         If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee, provided such corporation shall be otherwise qualified and
eligible under this article.

         Section 7.10.  ELIGIBILITY; DISQUALIFICATION.

         The Trustee shall at all times satisfy the requirements of TIA Section
310(a)(1). 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. If any series of Securities is admitted to trading on the New York
Stock Exchange, Inc., or any successor thereto, the Trustee shall maintain an
office or agency in The Borough of Manhattan, The City of New York, New York as
long as such series of Securities shall be so admitted. The Trustee shall comply
with TIA Section 310(b).

         Section 7.11.  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.
For the purposes of Section 311(b) of the Trust Indenture Act: (a) the term
"cash transaction" shall have the meaning provided in Rule 11(b)-4 under the
Trust Indenture Act, and (b) the term "self-liquidating paper" shall have the
meaning provided in Rule 11(b)-6 under the Trust Indenture Act.

                                       47
<PAGE>

                                  ARTICLE EIGHT
                             DISCHARGE OF INDENTURE

         Section 8.01.  DISCHARGE.

         Unless otherwise provided in a Board Resolution of the Company
delivered to the Trustee pursuant to Section 2.01, an indenture supplemental
hereto or an Officers' Certificate establishing the terms of a series of
Securities, the Company may terminate all of its obligations under the
Securities of any series and this Indenture with respect to such series (a) if
all Securities of such series previously authenticated and delivered (other than
destroyed, lost or stolen Securities of such series which have been replaced or
paid) and all coupons appertaining thereto (other than (i) coupons appertaining
to Bearer Securities surrendered for exchange for Registered Securities and
maturing after such exchange, whose surrender is not required or has been waived
as provided in Section 2.06, (ii) Securities and coupons which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 2.07, and (iii) Securities and coupons for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust, as
provided in Section 4.03 or 8.04) have been delivered to the Trustee for
cancellation or (b) if:

                  (1) the Securities of such series mature within one year or
all of them are to be called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption;

                  (2) the Company irrevocably deposits in trust with the Trustee
money or Government Obligations sufficient to pay principal (including any
mandatory sinking fund payments) of and any interest and Additional Amounts on
the Securities of such series to maturity or redemption, as the case may be
(other than moneys paid to the Company or discharged from trust in accordance
with Section 4.03 or 8.04); and

                  (3) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.

         The Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07,
7.07, 7.08, and 8.03 with respect to the Securities of such series, however,
shall survive so long as any principal of, interest, if any, or any Additional
Amounts on the Securities of such series, and coupons appertaining thereto,
remains unpaid. Thereafter the Company's obligations in Section 7.07 shall
survive.

         After a deposit of such moneys, and delivery of the Officers'
Certificate and Opinion of Counsel required by clause (3) above, the Trustee
upon request shall acknowledge in writing the

                                       48
<PAGE>

discharge of the Company's obligations under the Securities of such series and
this Indenture with respect to the Securities of such series except for those
surviving obligations specified above.

         Section 8.02.  DEFEASANCE AND COVENANT DEFEASANCE

         Unless otherwise provided in a Board Resolution of the Company
delivered to the Trustee pursuant to Section 2.01, an indenture supplemental
hereto or an Officers' Certificate establishing the terms of a series of
Securities with respect to the Securities of any series, the Company, at its
option, either (a) shall be deemed to have obtained Defeasance (as defined
below) and been discharged from its obligations with respect to the Securities
of any series, and coupons appertaining thereto, on the ninety-first day after
the applicable conditions set forth below have been satisfied, or (b) shall
cease to be under any obligation to comply with any term, provision or condition
set forth in Sections 4.04, 4.05, 4.06 and 4.07 and Sections 6.01 and 6.02 as
they relate to Section 6.01(d), with respect to the Securities of any series and
any coupons appertaining thereto and any other covenants provided in the Board
Resolution of the Company (except Section 7.07) delivered to the Trustee
pursuant to Section 2.01, an indenture supplemental hereto or an Officers'
Certificate establishing the terms of a series of Securities with respect to the
Securities of such series and any coupons appertaining thereto at any time after
the applicable conditions set forth below have been satisfied ("Covenant
Defeasance"):

                  (1) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of the
Securities of such series and any coupons appertaining thereto (A) money in an
amount, or (B) Government Obligations which through the payment of interest and
principal in respect thereof in accordance with their terms will provide, not
later than one day (or, if such day is a Legal Holiday, the first day preceding
such day which is not a Legal Holiday) before the due date of any payment, money
in an amount, or (C) a combination of (A) and (B), sufficient, in the opinion of
a recognized firm of Independent Public Accountants selected by the Company
expressed in a written certification thereof delivered to the Trustee, to pay
and discharge each installment of principal (including mandatory sinking fund
payments) of, and interest, if any, and Additional Amounts, if any, on the
Outstanding Securities of such series on the dates such installments of
principal, interest, if any, and Additional Amounts, if any, are due (taking
into account any redemption pursuant to optional sinking fund payments notice of
which redemption is provided to the Trustee at the time of the deposit referred
to in this paragraph (1));

                  (2) if the Securities of such series are then listed on the
New York Stock Exchange, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Company's exercise of its option under
this paragraph would not cause such Securities to be delisted;

                                       49
<PAGE>

                  (3) no Event of Default, or event which with the giving of
notice or lapse of time, or both, would become an Event of Default, with respect
to the Securities of such series shall have occurred and be continuing on the
date of such deposit and the Company shall have furnished to the Trustee an
Officers' Certificate to such effect; and

                  (4) the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that Holders of the Securities of such series will not
recognize income, gain or loss for United States Federal income tax purposes as
a result of the exercise of the option under this Section 8.02 and will be
subject to United States Federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such option had not
been exercised, and, in the case of Defeasance, such opinion shall be
accompanied by a private letter ruling to that effect received from the United
States Internal Revenue Service or a revenue ruling pertaining to a comparable
form of transaction to that effect published by the United States Internal
Revenue Service or there has been a change in applicable United States federal
income tax law to that effect.

         "Defeasance" means, for purposes of this Section 8.02, that the Company
shall be deemed to have paid and discharged the entire indebtedness represented
by, and obligations under, the Securities of any series and to have satisfied
all the obligations under this Indenture relating to the Securities of such
series (and the Trustee, at the expense of the Company, shall execute such
instruments as may be requested by the Company acknowledging the same), except
(A) the rights of Holders of Securities of such series or the coupons, if any,
appertaining thereto, as the case may be, to receive, solely from the trust fund
described above, payment of the principal of and interest, if any, and
Additional Amounts, if any, on such Securities when such payments are due; (B)
the Company's obligations with respect to such Securities under Sections 2.03,
2.04, 2.05, 2.06, 2.07, 7.07, 7.08 and 8.03; and (C) the rights, powers, duties
and immunities of the Trustee hereunder. Notwithstanding the satisfaction and
discharge of this Indenture with respect to any series of Securities, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 7.07 shall survive.

         Section 8.03.  APPLICATION OF TRUST MONEY.

         All moneys and Government Obligations deposited with the Trustee
pursuant to Sections 8.01 and 8.02 and, with respect to Government Obligations,
the principal and interest in respect thereof, with respect to Securities of any
series shall be held irrevocably in trust and applied by it to the payment in
accordance with the provisions of the Securities of such series and this
Indenture, either directly or through any Paying Agent for the Securities of
that series (including the Company if acting as its own Paying Agent), to the
Holders of the Securities of such series or the coupons, if any, appertaining
thereto, as the case may be, for the payment or redemption of which such money
has been deposited with the Trustee, of all sums due and to become due thereon
for principal, interest, if any, and Additional Amounts, if any, but such money
need not be segregated from other funds except to the extent required by law.

                                       50
<PAGE>

         Section 8.04.  REPAYMENT TO COMPANY.

         The Trustee and the Paying Agent shall promptly pay to the Company upon
delivery of a Company Order any excess money or securities held by them at any
time under this Article Eight. Any money deposited with the Trustee or any
Paying Agent, or then held by the Company, under this Article Eight in trust for
the payment of the principal of, interest or Additional Amounts, if any, on any
Security and remaining unclaimed for two years after such principal, interest or
Additional Amounts have become due and payable shall be paid to the Company on
request, or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease.

         Section 8.05  REINSTATEMENT.

         If the Trustee or Paying Agent is unable to apply any money or
Government Obligations in accordance with Sections 8.01 or 8.02 by reason of any
legal proceeding or order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Company's obligations under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to this Article 8,
until such time as the Trustee or Paying Agent is permitted to apply all such
money or Government Obligations in accordance with Sections 8.01 or 8.02;
provided, however, that if the Company makes any payment of principal of or
premium or interest on any security following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or Government Obligations
held by the Trustee or Paying Agent after payment in full to the Holders.

         Section 8.06.  INDEMNITY FOR GOVERNMENT OBLIGATIONS.

         The Company shall pay and shall indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against deposited Government
Obligations or the principal and interest received on such Government
Obligations.

                                  ARTICLE NINE
                       AMENDMENTS, SUPPLEMENTS AND WAIVERS

         Section 9.01.  WITHOUT CONSENT OF HOLDERS.

         The Company, when authorized by a Board Resolution, and the Trustee may
amend or supplement this Indenture or the Securities without notice to or
consent of any Securityholder:

                                       51
<PAGE>

         (a) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Securities of one or more series any property or assets;

         (b) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation of
the covenants, agreements and obligations of the Company pursuant to Article
Five;

         (c) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions as its Board of Directors and the Trustee
shall consider to be for the protection of the Holders of Securities or coupons
appertaining thereto, and to make the occurrence, or the occurrence and
continuance, of a default in any such additional covenants, restrictions,
conditions or provisions an Event of Default permitting the enforcement of all
or any of the several remedies provided in this Indenture as herein set forth;
provided, that in respect of any such additional covenant, restriction,
condition or provision such supplemental indenture may provide for a particular
period of grace after default (which period may be shorter or longer than that
allowed in the case of other defaults) or may provide for immediate enforcement
upon such an Event of Default or may limit the remedies available to the Trustee
upon such an Event of Default or may limit the right of the Holders of a
majority in aggregate principal amount of the Securities of such series to waive
such an Event of Default.

         (d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make any other provisions as the Board of Directors may deem
necessary or desirable, provided that no such action shall adversely affect the
interests of the Holders of the Securities or coupons appertaining thereto;

         (e) to make provisions with respect to conversion rights of the Holders
of the Securities, if any;

         (f) to establish the form or terms of Securities of any series or of
the coupons appertaining to such Securities as permitted by Section 2.01;

         (g) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Securities of one or more series;

         (h) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to change or
eliminate any restrictions (including restrictions relating to payment in the
United States) on the payment of principal of any premium or interest on Bearer
Securities, to permit Bearer Securities to be issued in exchange for Registered
Securities, to permit Bearer Securities to be issued in exchange for Bearer
Securities of other authorized denominations or to permit the issuance of
Securities in uncertificated form,

                                       52
<PAGE>

provided that any such actions shall not adversely affect the interest of the
Holders of the Securities of any series or any related coupons in any material
respect; or

         (i) to add to, change or eliminate any of the provisions of this
Indenture (which addition, change or elimination may apply to one or more series
of Securities), provided that any such addition, change or elimination shall
neither (A) apply to any Security or any series created prior to the execution
of such supplemental indenture and entitled to the benefit of such provision nor
(B) modify the rights of the Holder of any such Security with respect to such
provision.

         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,
but the Trustee 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.

         Any supplemental indenture authorized by the provisions of this Section
may be executed without the consent of the Holders of any of the Securities at
the time Outstanding, notwithstanding any of the provisions of Section 9.02.

         Section 9.02.  WITH CONSENT OF HOLDERS.

         With the consent of the Holders of not less than a majority of the
principal amount of the Securities at the time Outstanding in each series
affected by such supplemental indenture (voting as one class), the Company, when
authorized by a resolution of its Board of Directors, and the Trustee may, from
time to time and at any time, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or any supplemental
indenture or of modifying in any manner the rights of the Holders of the
Securities of each such series or of the coupons appertaining to such
Securities; provided, however, that a Board Resolution of the Company, an
indenture supplemental hereto or an Officers' Certificate may provide for
additional consent requirements of a particular series of Securities in addition
to the ones provided in this section; and provided further, that no such
supplemental indenture shall, without the consent of each Securityholder
affected:

                  (1) reduce the amount of Securities whose Holders must consent
to an amendment, supplement or waiver, reduce the requirements of Section 11.09
as to establishing a quorum or voting, or amend this Section 9.02;

                  (2) reduce the rate or rates of or extend the time for payment
of interest or Additional Amounts, if any, on any Security;

                                       53
<PAGE>

                  (3)  reduce the principal of or extend the fixed maturity of
any Security;

                  (4)  make any changes that adversely affects the rights of
Holders with respect to subordination;

                  (5)  make any changes that adversely affects the right to
convert any Security, if any;

                  (6)  reduce any amount payable on redemption;

                  (7)  waive a default in the payment of the principal of or
interest or Additional Amounts, if any, on any Security;

                  (8)  impair the right to institute suit for the enforcement of
any payment on or with respect to any series of Securities;

                  (9)  change a Place of Payment; or

                  (10) make any Security payable in currency other than that
stated in the Security.

         A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of Holders of Securities of such series, or of coupons appertaining
to such Securities, with respect to such covenant or provision, shall be deemed
not to affect the rights under this Indenture of the Holders of Securities of
any other series or of the coupons appertaining to Securities of such other
series.

         It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

         Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall give a notice thereof (i) to the Holders of then Outstanding Registered
Securities of each series affected thereby, by mailing a notice thereof by
first-class mail to such Holders at their addresses as they shall appear on the
Security Register, (ii) if any Bearer Securities of a series affected thereby
are then Outstanding, to the Holders thereof who have filed their names and
addresses with the Trustee, by mailing a notice thereof by first-class mail to
such Holders at such addresses as were so furnished to the Trustee and (iii) if
any Bearer Securities of a series affected thereby are then Outstanding, to all
Holders thereof, by publication of a notice thereof at least once in an
Authorized Newspaper in the Place of Payment, and in each case such notice shall
set forth in general terms the substance

                                       54
<PAGE>

of such supplemental indenture. Any failure the Trustee to give such notice, or
any defect therein, shall not, however, in any way impair or affect the validity
of any such supplemental indenture.

         Section 9.03.  COMPLIANCE WITH TRUST INDENTURE ACT.

         Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.

         Section 9.04.  REVOCATION AND EFFECT OF CONSENTS.

         A consent to an amendment, supplement or waiver to any other action
hereunder by a Holder of a Security of any series shall bind the Holder and
every subsequent Holder of a Security or portion of a Security of that series
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent is not made on any Security. Any such Holder or
subsequent Holder, however, may revoke the consent as to his Security or portion
of a Security. Such revocation shall be effective only if the Trustee receives
the notice of revocation before the date the amendment, supplement or waiver or
other action becomes effective.

         After an amendment, supplement or waiver with respect to a series of
Securities becomes effective, it shall bind every Holder of Securities of that
series.

          The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to take any action under
this Indenture by vote or consent. If such record date is fixed, the Company
shall notify the Trustee of such date.

         Section 9.05.  NOTATION ON OR EXCHANGE OF SECURITIES.

         If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may request the Holder of the Security to deliver it to the Trustee.
The Trustee may then place an appropriate notation on the Security about the
changed terms and return it to the Holder. Alternatively, if the Company so
determines, the Company in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms. Failure to
make the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.

         Section 9.06.  TRUSTEE TO SIGN AMENDMENTS, ETC.

         The Trustee shall sign any amendment or supplement authorized pursuant
to this Article if the amendment or supplement does not adversely affect the
rights, duties, liabilities (present or potential), or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment or supplement, the Trustee shall be entitled to receive and (subject
to

                                       55
<PAGE>

Sections 7.01 and 7.02) shall be fully protected in relying upon an Opinion of
Counsel stating that such amendment or supplement is authorized or permitted by
this Indenture.

                                   ARTICLE TEN
                       REPAYMENT AT THE OPTION OF HOLDERS

         Section 10.01.  APPLICABILITY OF ARTICLE.

         Securities of any series which are repayable at the option of the
Holders thereof before their maturity shall be repaid in accordance with the
terms of the Securities of such series. The repayment of any principal amount of
Securities pursuant to such option of the Holder to require repayment of
Securities before their maturity shall not operate as a payment, redemption or
satisfaction of the indebtedness represented by such Securities unless and until
the Company, at its option, shall deliver or surrender the same to the Trustee
with a directive that such Securities be canceled. Notwithstanding anything to
the contrary contained in this Article Ten, in connection with any repayment of
Securities, the Company may arrange for the purchase of any Securities by an
agreement with one or more investment bankers or other purchasers to purchase
such Securities by paying to the Holders of such Securities on or before the
close of business on the repayment date an amount not less than the repayment
price payable by the Company on repayment of such Securities, and the obligation
of the Company to pay the repayment price of such Securities shall be satisfied
and discharged to the extent such payment is so paid by such purchasers.

                                 ARTICLE ELEVEN
                         CONCERNING THE SECURITYHOLDERS

         Section 11.01.  EVIDENCE OF ACTION TAKEN BY SECURITYHOLDERS.

         Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such specified percentage of Securityholders in person or by
agent duly appointed in writing. If Securities of a series are issuable as
Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of such series may, alternatively, be embodied in and evidenced by
the record of Holders of Securities of such series voting in favor thereof,
either in person or by proxies duly appointed in writing, at any meeting of
Holders of Securities of such series duly called and held in accordance with the
provisions of Sections 11.06 through 11.11, or a combination of such instruments
such record. Except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments or record or both are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments and any such record (and the action
embodied therein

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<PAGE>

and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments and so voting at any such
meeting. Proof of execution of any such instrument or of a writing appointing
any such agent, or of the holding by any Person of a Security, be sufficient for
any purpose of this Indenture and (subject to Section 7.02) conclusive in favor
of the Trustee and the Company, if made in the manner provided in Section 11.02.
The record of any meeting of Holders of Securities shall be proved in the manner
provided in Section 11.11.

         Section 11.02. PROOF OF EXECUTION OF INSTRUMENTS AND OF HOLDING OF
SECURITIES.

         The execution of any instrument by a Securityholder or his agent or
proxy may be proved in the following manner:

         (a) The fact and date of the execution by any Holder of any instrument
may be proved by the certificate of any notary public or other officer of any
jurisdiction authorized to take acknowledgments of deeds or administer oaths
that the person executing such instruments acknowledged to him the execution
thereof, or by an affidavit of a witness to such execution sworn to before any
such notary or other such officer. Where such execution is by or on behalf of
any legal entity other than an individual, such certificate or affidavit shall
also constitute sufficient proof of the authority of the person executing the
same. The fact of the holding by any Holder of a Bearer Security of any series,
and the identifying number of such Security and the date of his holding the
same, may be proved by the production of such Security or by a certificate
executed by any trust company, bank, banker or recognized securities dealer
wherever situated satisfactory to the Trustee, if such certificate shall be
deemed by the Trustee to be satisfactory. Each such certificate shall be dated
and shall state that on the date thereof a Security of such series bearing a
specified identifying number was deposited with or exhibited to such trust
company, bank, banker or recognized securities dealer by the person named in
such certificate. Any such certificate may be issued in respect of one or more
Bearer Securities of one or more series specified therein. The holding by the
person named in any such certificate of any Bearer Security or Securities of any
series specified therein shall be presumed to continue for a period of one year
from the date of such certificate unless at the time of any determination of
such holding (1) another certificate bearing a later date issued in respect of
the same Security or Securities shall be produced, or (2) the Security or
Securities of such series specified in such certificate shall be produced by
some other person, or (3) the Security or Securities of such series specified in
such certificate shall have ceased to be Outstanding. Subject to Section 7.02,
the fact and date of the execution of any such instrument and the amount and
numbers of Securities of any series held by the person so executing such
instrument and the amount and numbers of any Security or Securities for such
series may also be proven in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee for such series or in any other
manner which the Trustee for such series may deem sufficient.

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<PAGE>

         (b) In the case of Registered Securities, the ownership of such
Securities shall be proved by the Security Register or by a certificate of the
Security Registrar.

         (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 therefore 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) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to an Officers' Certificate delivered to the
Trustee, fix in advance a record date for the determination of Holders entitled
to give such request, demand, authorization, direction, notice, consent, waiver
or other Act, but the Company shall have no obligation to do so. If such a
record date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or after such record date, but
only the Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite percentage of Outstanding Securities or Outstanding Securities of a
series, as the case may be, have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other Act,
and for that purpose the Outstanding Securities or Outstanding Securities of the
series, as the case may be, shall be computed as of such record date.

         Section 11.03.  HOLDERS TO BE TREATED AS OWNERS.

         The Company, the Trustee and any agent of the Company or the Trustee
may deem and treat the person in whose name any Security shall be registered
upon the Security Register for such series as the absolute owner of such
Security (whether or not such Security shall be overdue and notwithstanding any
notation of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of and, subject to the provisions of
this Indenture, interest on and any Additional Amounts payable in respect of
such Security and for all other purposes; and neither the Company nor the
Trustee nor any agent of the Company or the Trustee shall be affected by any
notice to the contrary. The Company, the Trustee and any agent of the Company or
the Trustee may treat the Holder of any Bearer Security and the Holder of any
coupon as the absolute owner of such Bearer Security or coupon (whether or not
such Bearer Security or coupon shall be overdue) for the purpose of receiving
payment thereof or on account thereof and for all other purposes and neither the
Company, the Trustee, nor any agent of the Company or the Trustee shall be
affected by any notice to the contrary. All such payments so made to any such
person, or upon his order, shall be valid, and, to the extent of the sum or sums
so paid, effectual to satisfy and discharge the liability for moneys payable
upon any such Security or coupon.

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<PAGE>

         None of the Company, the Trustee or any paying agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.

         Section 11.04.  SECURITIES OWNED BY COMPANY DEEMED NOT OUTSTANDING.

         In determining whether the Holders of the requisite aggregate principal
amount of Outstanding Securities of any or all series have concurred in any
direction, consent or waiver under this Indenture, Securities which are owned by
the Company or any other obligor on the Securities with respect to which such
determination is being made or by any Affiliate of the Company or any such
obligor shall be disregarded and deemed not to be Outstanding for the purpose of
any such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver
only Securities which the Trustee actually knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or any other obligor on the Securities. In case of a
dispute as to such right, the advice of counsel shall be full protection in
respect of any decision made by the Trustee in accordance with such advice. Upon
request of the Trustee, the Company shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all Securities, if any, known by
the Company to be owned or held by or for the account of any of the
above-described persons; and, subject to Section 7.02, the Trustee shall be
entitled to accept such Officers' Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Securities not listed therein
are Outstanding for the purpose of such determination.

         Section 11.05.  RIGHT OF REVOCATION OF ACTION TAKEN.

         At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 11.01, of the taking of any action by the Holders of the
percentage in aggregate principal amount of the Securities of any or all series,
as the case may be, specified in this Indenture in connection with such action,
any Holder of a Security the serial number of which is shown by the evidence to
be included among the serial numbers of the Securities the Holders of which have
consented to such action may, by filing written notice at the Corporate Trust
Office and upon proof of holding as provided in this Article, revoke such action
so far as concerns such Security. Except as aforesaid any such action taken by
the Holder of any Security shall be conclusive and binding upon such Holder and
upon all future Holders and owners of such Security and of any Securities issued
in exchange or substitution therefore or on registration of transfer thereof,
irrespective of whether or not any notation in regard thereto is made upon any
such Security. Any action taken by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action shall be

                                       59
<PAGE>

conclusively binding upon the Company, the Trustee and the Holders of all the
Securities affected by such action.

         Section 11.06.  MEETINGS OF HOLDERS.

         A meeting of Holders of Securities of any series may be called at any
time and from time to time pursuant to this Section 11.06 to make, give or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.

         Section 11.07.  CALL, NOTICE AND PLACE OF MEETINGS.

         (a) The Trustee may at any time call a meeting of Holders of Securities
of any series for any purpose specified in Section 11.06, to be held at such
time and at such place in Boston, Massachusetts as the Trustee shall determine
or, with the approval of the Company, at any other place. Notice of every
meeting of Holders of Securities of any series, setting forth the time and the
place of such meeting and in general terms the action proposed to be taken at
such meeting, shall be given, in the manner provided in Section 13.02 not less
than 21 nor more than 180 days prior to the date fixed for the meeting.

         (b) In case at any time the Company or the Holders of at least 10% in
principal amount of the Outstanding Securities of any series shall have
requested the Trustee to call a meeting of the Holders of Securities of such
series for any purpose specified in Section 11.06, by written request setting
forth in reasonable detail the action proposed to be taken at the meeting, and
the Trustee shall not have made the first publication of the notice of such
meeting within 21 days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein, the Company or the
Holders of Securities of such series in the amount above specified, as the case
may be, may determine the time and the place in the City of Boston,
Massachusetts, or in such other place as shall be determined and approved by the
Company, for such meeting and may call such meeting for such purposes by giving
notice thereof as provided in Subsection (a) of this Section.

         Section 11.08.  PERSONS ENTITLED TO VOTE AT MEETINGS.

         To be entitled to vote at any meeting of Holders of any series, a
Person shall be (1) a Holder of one or more Outstanding Securities of such
series, or (2) a Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities or any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.

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<PAGE>

         Section 11.09.  QUORUM; ACTION.

         The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series. In the absence of a quorum within 30
minutes of the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Securities of such series, be dissolved.
In any other case, the meeting may be adjourned for a period determined by the
chairman of the meeting prior to the adjournment of such meeting. In the absence
of a quorum at any such adjourned meeting, such adjourned meeting may be further
adjourned for a period determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 11.07(a), except that
any such notice by publication need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of an adjourned meeting shall state expressly the percentage, as
provided above, of the principal amount of the Outstanding Securities of such
series which shall constitute a quorum.

         Any resolution presented to a meeting or adjourned meeting duly
reconvened at which a quorum is present as aforesaid may be adopted by the
affirmative vote of the Holders of a majority in principal amount of the
Outstanding Securities of that series; provided, however, that any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of a series may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Securities of that
series.

         Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.

         Section 11.10. DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT
OF MEETINGS.

         (a) Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holdings
of Securities shall be proved in the manner specified in Section 11.02 and the
appointment of any proxy shall be provided in the manner specified in Section
11.02 or by having the signature of the person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section 11.02 to

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<PAGE>

certify to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 11.02 or other proof.

         (b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 11.07(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.

         (c) At any meeting each Holder of a Security of such series or proxy
shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect to any
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of Securities of such series or proxy.

         (d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 11.07 at which a quorum is present may be adjourned from
time to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.

         Section 11.11.  COUNTING VOTES AND RECORDING ACTION OF MEETINGS.

         The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed signatures of the Holders of Securities of such series or their
representatives by proxy and the principal amounts and serial numbers of the
Outstanding Securities of such series held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record, at least in duplicate, of
the proceedings of each meeting of Holders of Securities of any series shall be
prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more persons having knowledge of the
facts setting forth a copy of the notice of the meeting and showing that said
notice was given as provided in Section 11.07 and, if applicable, Section 11.09.
Each copy shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one such copy shall be delivered to
the Company, and another to the Trustee to be preserved by the Trustee, the
latter to have attached thereto the ballots voted at the

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<PAGE>

meeting. Any record so signed and verified shall be conclusive evidence of the
matters therein stated.

                                 ARTICLE TWELVE
                                  SINKING FUNDS

         Section 12.01.  APPLICABILITY OF ARTICLE.

         Unless otherwise provided in a Board Resolution of the Company, an
indenture supplement or an Officers' Certificate establishing the terms of a
series of Securities, the provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of a series, except as otherwise
permitted or required by any form of Security of such series issued pursuant to
this Indenture.

         The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is referred to in this Article Twelve as a
"mandatory sinking fund payment," and any payment in excess of such minimum
amount provided for by the terms of Securities of such series is herein referred
to as an "optional sinking fund payment." If provided for by the terms of
Securities of any series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 12.02. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of Securities of such series.

         Section 12.02.  SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.

         The Company may, in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series to be made pursuant to the
terms of such Securities as provided for by the terms of such series (1) deliver
Outstanding Securities of such series (other than any of such Securities
previously called for redemption or any of such Securities in respect of which
cash shall have been released to the Company), together in the case of any
Bearer Securities of such series with all unmatured coupons appertaining
thereto, and (2) apply as a credit Securities of such series which have been
redeemed either at the election of the Company pursuant to the terms of such
series of Securities or through the application of permitted optional sinking
fund payments pursuant to the terms of such Securities, provided that such
series of Securities have not been previously so credited. Such Securities shall
be received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
If as a result of the delivery or credit of Securities of any series in lieu of
cash payments pursuant to this Section 12.02, the principal amount of Securities
of such series to be redeemed in order to exhaust the aforesaid cash payment
shall be less than $100,000, the Trustee need not call Securities of such series
for redemption, except upon Company request, and such cash payment shall be held
by the Trustee or a Paying Agent for Securities of that series and

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<PAGE>

applied to the next succeeding sinking fund payment, provided, however, that the
Trustee or such Paying Agent shall at the request of the Company from time to
time pay over and deliver to the Company any cash payment so being held by the
Trustee or such Paying Agent upon delivery by the Company to the Trustee of
Securities purchased by the Company having an unpaid principal amount equal to
the cash payment requested to be released to the Company.

         Section 12.03.  REDEMPTION OF SECURITIES FOR SINKING FUND.

         Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that series pursuant to Section 12.02, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
will also deliver to the Trustee any Securities to be so credited and not
theretofore delivered. If such Officers' Certificate shall specify an optional
amount to be added in cash to the next ensuing mandatory sinking fund payment,
the Company shall thereupon be obligated to pay the amount therein specified.

         Not less than 30 days before each such sinking fund payment date the
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 3.03 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 3.04. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 3.05 and 3.06.

                                ARTICLE THIRTEEN
                                  MISCELLANEOUS

         Section 13.01.  TRUST INDENTURE ACT CONTROLS.

         If any provision of this Indenture limits, qualifies, or conflicts with
the duties which are required to be included in this Indenture by the TIA
Section 310 to 317, inclusive, such duties set forth in the TIA shall control.

         Section 13.02.  NOTICES.

         Except as otherwise expressly provided herein or in the form of
Securities of any particular series pursuant to the provisions of this
Indenture, any notice or communication shall be sufficiently given if in writing
and delivered in Person, sent by facsimile (with original to follow by
first-class mail) or mailed by first-class mail, postage prepaid, addressed as
follows:

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<PAGE>

         if to the Company:

         Natural MicroSystems Corporation
         100 Crossing Boulevard
         Framingham, MA  01702
         Attention:  Chief Financial Officer

         with a copy to:

         Choate, Hall & Stewart
         Exchange Place
         53 State Street
         Boston, Massachusetts  02109-2891
         Attention:  Richard N. Hoehn, Esq.

         if to the Trustee:

         State Street Bank and Trust Company
         2 Avenue de Lafayette
         Boston, Massachusetts  02111
         Attention: Corporate Trust Trustee Administration
         Re:  Natural MicroSystems Corporation

         The Company or the Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications.

         Any notice or communication mailed to a Holder of a Registered Security
shall be mailed to him by first class mail at his address as it appears on the
Security Register and shall be sufficiently given to him if so mailed within the
time prescribed. Failure to mail a notice or communication to a Holder of any
Registered Security or any defect in it shall not affect its sufficiency with
respect to other Securityholders. If a notice or communication is mailed in the
manner provided above, it is duly given, whether or not the addressee receives
it.

         In case, by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impossible to mail any notice as required
by this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.

         Any notice required or permitted to be given to a Holder of Bearer
Securities of any series shall be deemed to be properly given if such notice is
published in an Authorized Newspaper on two separate days within the time
prescribed.

                                       65
<PAGE>

         In case, by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause, it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of any notice mailed to
Holders of Registered Securities as provided above.

         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 of Securities 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.

         Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language, except that, if the Company so elects, any published notice
may be in an official language of the country of publication.

         Section 13.03.  COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.

         Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).

         Section 13.04.  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 (except that, in the case of any request or
application as to which the furnishing of such documents is specifically
required by any provision of this Indenture relating to such particular request
or application, no additional certificate or opinion need be furnished), the
Company shall furnish to the Trustee:

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

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

                                       66
<PAGE>

         Section 13.05.  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:

                  (1) a statement that the Person making such certificate or
opinion has read such covenant or condition and the definitions relating
thereto;

                  (2) 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;

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

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

         Section 13.06.  WHEN TREASURY SECURITIES DISREGARDED.

         In determining whether the Holders of the required principal amount of
Securities or a series thereof have concurred in any direction, waiver or
consent, Securities owned by the Company or any other obligor upon the
Securities or by any Affiliate of the Company or such obligor shall be
disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee actually knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good faith shall not
be disregarded if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to the Securities and that the pledgee is
not the Company or any other obligor upon the Securities or any Affiliate of the
Company or such obligor.

         Section 13.07.  LEGAL HOLIDAYS.

         A "Legal Holiday", except as otherwise provided in the form of Security
of any particular series pursuant to the provisions of this Indenture, with
respect to any Place of Payment means a Saturday, a Sunday or a day on which
banking institutions or trust companies in that Place of Payment are not
required to be open. Except as provided otherwise in the applicable Security, if
a payment date with respect to such payment is a Legal Holiday at any Place of
Payment, payment due on such Security with respect to such Security may be made
at such place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue with respect to such payment for the intervening period.

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<PAGE>

         Section 13.08.  GOVERNING LAW.

         The laws of the State of Massachusetts applicable to contracts made and
performed in said state shall govern this Indenture and the Securities and
coupons, without regard to choice of law principles. Unless the form of Security
provides otherwise, all money or dollar amounts expressed herein or in the
Securities refer to United States dollars.

         Section 13.09.  NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.

         This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.

         Section 13.10.  SUCCESSORS.

         All agreements of the Company in this Indenture and the Securities
shall bind its successor and assigns, whether so expressed or not. All
agreements of the Trustee in this Indenture shall bind its successor.

         Section 13.11.  NO RECOURSE AGAINST OTHERS.

         A director, officer, employee, incorporator 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.

         Section 13.12.  DUPLICATE ORIGINALS.

         The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.

         Section 13.13.  SEPARABILITY.

         In case any provision in this Indenture or in the Securities 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 13.14.  SECURITIES IN FOREIGN CURRENCIES.

         Wherever this Indenture provides for any action by, or the
determination of any of the rights of, Holders of Securities of any series in
which not all of such Securities are denominated in the same currency, or any
distribution to Holders of Securities, in the absence of any provision to the
contrary in the form of Security of any particular series, any amount in respect
of any

                                       68
<PAGE>

Security denominated in a currency other than United States dollars shall be
treated for any such action, determination or distribution as that amount of
United States dollars that could be obtained for such amount on such reasonable
basis of exchange and as of such date as the Company may specify in a written
notice to the Trustee, or in the absence of such notice, as the Trustee may
determine.

                                    * * * * *

                                       69
<PAGE>

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

                                       NATURAL MICROSYSTEMS CORPORATION

                                       By: /s/ Robert E. Hult
                                           -----------------------------------
                                       Name:  Robert E. Hult
                                       Title: Sr. VP Finance & Operations, CFO

                                       STATE STREET BANK AND TRUST COMPANY,
                                       as Trustee

                                       By: /s/ David Ganss
                                           -----------------------------------
                                       Name:  David Ganss
                                       Title: Assistant Vice President<PAGE>

                                                                     Exhibit 4.2

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

                          FIRST SUPPLEMENTAL INDENTURE

                                     between

                        NATURAL MICROSYSTEMS CORPORATION

                                       and

                       STATE STREET BANK AND TRUST COMPANY

                          Dated as of October 11, 2000

                           SUPPLEMENTING THE INDENTURE
                          DATED AS OF OCTOBER 11, 2000

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

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<S>                      <C>                                                                                     <C>
ARTICLE ONE              DEFINITIONS..............................................................................1
   SECTION 1.01.         DEFINITIONS..............................................................................1

ARTICLE TWO              THE NOTES................................................................................5
   SECTION 2.01.         DESIGNATION, FORM AND DATING.............................................................5
   SECTION 2.02.         EXECUTION AND AUTHENTICATION.............................................................5
   SECTION 2.03.         REGISTRAR, PAYING AGENT AND CONVERSION AGENT.............................................5
   SECTION 2.04.         PAYING AGENT TO HOLD MONEY IN TRUST......................................................6
   SECTION 2.05.         TRANSFER AND EXCHANGE....................................................................6
   SECTION 2.06.         TREASURY NOTES...........................................................................8

ARTICLE THREE            REDEMPTION AND REPURCHASE................................................................8
   SECTION 3.01.         COMPANY'S RIGHT OF OPTIONAL REDEMPTION...................................................8
   SECTION 3.02.         ELECTION TO REDEEM; NOTICE TO TRUSTEE....................................................9
   SECTION 3.03.         SELECTION OF NOTES TO BE REDEEMED........................................................9
   SECTION 3.04.         NOTICE OF REDEMPTION.....................................................................9
   SECTION 3.05.         DEPOSIT OF REDEMPTION PRICE.............................................................10
   SECTION 3.06.         NOTES PAYABLE ON REDEMPTION DATE........................................................10
   SECTION 3.07.         CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION...........................................10
   SECTION 3.08.         REPURCHASE OF NOTES AT OPTION OF THE HOLDER UPON CHANGE IN CONTROL......................11
   SECTION 3.09.         NOTICE; METHOD OF EXERCISING REPURCHASE RIGHT...........................................14
   SECTION 3.10.         EFFECT OF REPURCHASE NOTICE.............................................................16
   SECTION 3.11.         DEPOSIT OF REPURCHASE PRICE.............................................................16
   SECTION 3.12.         NOTES REPURCHASED IN PART...............................................................17
   SECTION 3.13.         COMPLIANCE WITH SECURITIES LAWS UPON REPURCHASE OF NOTES................................18
   SECTION 3.14.         REPAYMENT TO THE COMPANY................................................................18

ARTICLE FOUR             CONVERSION..............................................................................18
   SECTION 4.01.         CONVERSION PRIVILEGE....................................................................18
   SECTION 4.02.         CONVERSION PROCEDURE....................................................................19
   SECTION 4.03.         ADJUSTMENTS BELOW PAR VALUE.............................................................20
   SECTION 4.04.         TAXES ON CONVERSION.....................................................................20
   SECTION 4.05.         COMPANY TO PROVIDE STOCK................................................................20
   SECTION 4.06.         ADJUSTMENT OF CONVERSION PRICE..........................................................21
   SECTION 4.07.         NO ADJUSTMENT...........................................................................25
   SECTION 4.08.         EQUIVALENT ADJUSTMENTS..................................................................26
   SECTION 4.09.         ADJUSTMENT FOR TAX PURPOSES.............................................................26
   SECTION 4.10.         NOTICE OF ADJUSTMENT....................................................................26
   SECTION 4.11.         NOTICE OF CERTAIN TRANSACTIONS..........................................................26
   SECTION 4.12.         EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE ON CONVERSION PRIVILEGE.......27
   SECTION 4.13.         TRUSTEE'S DISCLAIMER....................................................................28
   SECTION 4.14.         VOLUNTARY REDUCTION.....................................................................28

                                       i

<PAGE>

ARTICLE FIVE             SUBORDINATION...........................................................................29
   SECTION 5.01.         NOTES SUBORDINATED TO SENIOR INDEBTEDNESS...............................................29
   SECTION 5.02.         NOTES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR INDEBTEDNESS ON DISSOLUTION,
                         LIQUIDATION, REORGANIZATION, ETC., OF THE COMPANY.......................................29
   SECTION 5.03.         NOTEHOLDERS TO BE SUBROGATED TO RIGHT OF HOLDERS OF SENIOR INDEBTEDNESS.................30
   SECTION 5.04.         OBLIGATIONS OF THE COMPANY UNCONDITIONAL................................................31
   SECTION 5.05.         COMPANY NOT TO MAKE PAYMENT WITH RESPECT TO NOTES IN CERTAIN CIRCUMSTANCES..............31
   SECTION 5.06.         NOTICE TO TRUSTEE.......................................................................32
   SECTION 5.07.         APPLICATION BY TRUSTEE OF MONIES DEPOSITED WITH IT......................................33
   SECTION 5.08.         SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF COMPANY OR HOLDERS OF SENIOR
                         INDEBTEDNESS............................................................................33
   SECTION 5.09.         TRUSTEE TO EFFECTUATE SUBORDINATION.....................................................34
   SECTION 5.10.         RIGHT OF TRUSTEE TO HOLD SENIOR INDEBTEDNESS............................................34
   SECTION 5.11.         ARTICLE 5 NOT TO PREVENT EVENTS OF DEFAULT..............................................34
   SECTION 5.12.         NO FIDUCIARY DUTY CREATED TO HOLDERS OF SENIOR INDEBTEDNESS.............................34
   SECTION 5.13.         ARTICLE APPLICABLE TO PAYING AGENTS.....................................................34
   SECTION 5.14.         CERTAIN CONVERSION DEEMED PAYMENT.......................................................34

ARTICLE SIX              COVENANTS...............................................................................35
   SECTION 6.01.         PAYMENT OF NOTES........................................................................35
   SECTION 6.02.         LIQUIDATION.............................................................................35
   SECTION 6.03.         NOTICE OF DEFAULTS......................................................................36
   SECTION 6.04.         CORPORATE EXISTENCE.....................................................................36
   SECTION 6.05.         FURTHER INSTRUMENTS AND ACTS............................................................36

ARTICLE SEVEN            DEFAULT AND REMEDIES....................................................................37
   SECTION 7.01.         EVENTS OF DEFAULT.......................................................................37

ARTICLE EIGHT            DISCHARGE OF INDENTURE..................................................................37
   SECTION 8.01.         DISCHARGE...............................................................................37
</TABLE>

                                       ii

<PAGE>

FIRST SUPPLEMENTAL INDENTURE, dated as of October 11, 2000 (the "First
Supplemental Indenture"), between Natural MicroSystems Corporation, a Delaware
corporation (the "Company"), and State Street Bank and Trust Company, as trustee
(the "Trustee"), under the Indenture dated as of October 11, 2000 between the
Company and the Trustee (the "Indenture").

WHEREAS, the Company executed and delivered the Indenture to the Trustee to
provide for the future issuance of the Company's unsecured debentures, notes or
other evidences of indebtedness (the "Securities") to be issued from time to
time in one or more series as may be determined by the Company under the
Indenture, in an unlimited aggregate principal amount which may be authenticated
and delivered as provided in the Indenture;

WHEREAS, pursuant to the terms of the Indenture, the Company desires to provide
for the establishment and issuance of a new series of its Securities to be known
as its 5% Convertible Subordinated Notes due 2005 (the "Notes"), in the initial
aggregate principal amount of up to $201,250,000, the form and substance of such
Notes and the terms, provisions and conditions thereof to be set forth as
provided in the Indenture and this First Supplemental Indenture; and

WHEREAS, all requirements necessary to make this First Supplemental Indenture a
valid instrument in accordance with its terms, and to make the Notes, when
executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed, and the execution and
delivery of this First Supplemental Indenture has been duly authorized in all
respects and the Company has requested that the Trustee execute and deliver this
First Supplemental Indenture:

NOW THEREFORE, in consideration of the purchase and acceptance of the Notes by
the Holders thereof, and for the purpose of setting forth, as provided in the
Indenture, the form and substance of the Notes and the terms, provisions and
conditions thereof, the Company covenants and agrees with the Trustee as
follows:

                                   ARTICLE ONE

                                   DEFINITIONS

SECTION 1.01.       DEFINITIONS.

         Unless the context otherwise requires:

         (a)      a term defined in the Indenture has the same meaning when used
                  in this First Supplemental Indenture;

         (b)      a term defined anywhere in this First Supplemental Indenture
                  has the same meaning throughout;

         (c)      the singular includes the plural and vice versa;

                                       1

<PAGE>

         (d)      except as otherwise provided, a reference to a Section or
                  Article is to a Section or Article of this First Supplemental
                  Indenture;

         (e)      headings are for convenience of reference only and do not
                  affect interpretation;

         (f)      the following terms have the meanings given to them in this
                  Section 1.01(f) or in the Section referenced:

                  "Aggregate Market Premium" shall have the meaning set forth in
         Section 4.06(d).

                  "Adjusted Market Value" shall have the meaning set forth in
         Section 3.08(b).

                  "Beneficial owner" shall have the meaning set forth in Section
         3.08(c).

                  "Change in Control" shall have the meaning set forth in
         Section 3.08(c).

                  "Closing Price" shall have the meaning set forth in Section
         4.06(e).

                  "Common Stock" means any stock of any class of the Company
         which has no preference in respect of dividends or of amounts payable
         in the event of any voluntary or involuntary liquidation, dissolution
         or winding up of the Company and which is not subject to redemption by
         the Company. Subject to the provisions of Section 4.12, however, shares
         issuable on conversion of Notes shall include only shares of Common
         Stock, $0.01 par value per share (which is the class designated as
         Common Stock of the Company at the date of this First Supplemental
         Indenture), or shares of any class or classes resulting from any
         reclassification or reclassifications thereof and which have no
         preference in respect of dividends or of amounts payable in the event
         of any voluntary or involuntary liquidation, dissolution or winding up
         of the Company and which are not subject to redemption by the Company;
         PROVIDED that if at any time there shall be more than one such
         resulting class, the shares of each such class then so issuable shall
         be substantially in the proportion to which the total number of shares
         of such class resulting from all such reclassifications bears to the
         total number of shares of all such classes resulting from all such
         reclassifications.

                  "Company Benefit Plan" shall have the meaning set forth in
         Section 4.06(c).

                  "Company Notice" shall have the meaning set forth in Section
         3.09(a).

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

                  "Consolidated Net Worth" shall have the meaning set forth in
         Section 6.02.

                  "Continuing Directors" shall have the meaning set forth in
         Section 3.08(c).

                  "Conversion Price" shall have the meaning set forth in Section
         4.06.

                                       2

<PAGE>

                  "Conversion Shares" shall have the meaning set forth in
         Section 4.01.

                  "Custodian" means State Street Bank and Trust Company, as
         custodian with respect to the Notes in global form, or any successor
         entity thereto.

                  "Depositary" means, with respect to the Notes issuable or
         issued in whole or in part in global form, The Depository Trust Company
         as the Depositary with respect to the Notes, until a successor shall
         have been appointed and becomes such pursuant to the applicable
         provisions of this First Supplemental Indenture or the Indenture, and
         thereafter, "Depositary" shall mean or include such successor.

                  "Distribution Date" shall have the meaning set forth in
         Section 4.06(c).

                  "Event of Default" shall have the meaning set forth in Section
         7.01.

                  "First Supplemental Indenture" shall have the meaning set
         forth in the preamble.

                  "Global Note" shall have the meaning set forth in Section
         2.05(a).

                  "Group" shall have the meaning set forth in Section 3.08(c).

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

                  "junior securities" shall have the meaning set forth in
         Section 5.14.

                  "Market Capitalization" means an amount determined by
         multiplying the number of shares of Common Stock outstanding on the
         applicable date by the current market price of the Common Stock
         (determined as provided in Section 4.6(e)) as of such date.

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

                  "Optional Redemption" shall have the meaning set forth in
         Section 3.01.

                  "Payment Blockage Period" shall have the meaning set forth in
         Section 5.05.

                  "Payment Default" means any default in the payment of
         principal of (or premium, if any) or interest on Senior Indebtedness.

                  "Payment of the Notes" shall have the meaning set forth in
         Section 5.05.

                  "Purchase Option" means the option to purchase up to
         $26,250,000 in aggregate principal amount of Notes granted by the
         Company to the Underwriters pursuant to the Underwriting Agreement.

                  "Redemption Price" shall have the meaning set forth in Section
         3.01.

                                       3

<PAGE>

                  "Representative" means the indenture trustee or other trustee,
         agent or representative for any class of Senior Indebtedness.

                  "Repurchase Date" shall have the meaning set forth in Section
         3.08(a).

                  "Repurchase Notice" shall have the meaning set forth in
         Section 3.09(b).

                  "Repurchase Price" shall have the meaning set forth in Section
         3.08(a).

                  "Rights" shall have the meaning set forth in Section 4.06(c).

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

                  "Senior Agent" means, on any date, the Representative of the
         class of Senior Indebtedness having the highest principal amount
         (including all revolving credit, letter of credit and other working
         capital commitments) then outstanding.

                  "Senior Indebtedness" means the following, whether outstanding
         upon issuance of the Notes or thereafter incurred or created: (a) the
         principal of and premium, if any, and interest on, and fees, costs,
         enforcement expenses, collateral protection expenses and other
         reimbursement or indemnity obligations in respect of all indebtedness
         or obligations of the Company to any Person for money borrowed that is
         evidenced by a note, bond, debenture, loan agreement, or similar
         instrument or agreement; (b) commitment or standby fees due and payable
         to lending institutions with respect to credit facilities available to
         the Company; (c) all noncontingent obligations of the Company (i) for
         the reimbursement of any obligor on any letter of credit, banker's
         acceptance, or similar credit transaction, (ii) under interest rate
         swaps, caps, collars, options, and similar arrangements, and (iii)
         under any foreign exchange contract, currency swap agreement, futures
         contract, currency option contract, or other foreign currency hedge;
         (d) all obligations of the Company for the payment of money relating to
         capitalized lease obligations; (e) any liabilities of others described
         in the preceding clauses that the Company has guaranteed or which are
         otherwise its legal liability; and (f) renewals, extensions,
         refundings, refinancings, restructurings, amendments, and modifications
         of any such indebtedness or guarantee; other than any indebtedness or
         other obligation of the Company that by its terms is not superior in
         right of payment to the Notes.

                  "Trading Days" shall have the meaning set forth in Section
         4.06(e).

                  "Trigger Event" shall have the meaning set forth in Section
         4.06(f).

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

                  "Underwriters" means Deutsche Banc Alex. Brown, U.S. Bancorp
         Piper Jaffray, and Dain Rauscher Wessels.

                                       4

<PAGE>

                                   ARTICLE TWO

                                    THE NOTES

SECTION 2.01.       DESIGNATION, FORM AND DATING.

         (a)  The Notes shall be designated as the "5% Convertible
Subordinated Notes Due 2005." Other than as provided in Section 2.05, the Notes
and the Trustee's certificate of authentication to be borne by the Notes shall
be substantially in the form of EXHIBIT A attached hereto, which is incorporated
in and made part of this First Supplemental Indenture. The Company and the
Trustee, by their execution and delivery of this First Supplemental Indenture,
expressly agree to the terms and provisions of the Notes and to be bound
thereby. Any of the Notes may have imprinted thereon such legends or
endorsements as the officers executing the same may approve (execution thereof
to be conclusive evidence of such approval) and as are not inconsistent with the
provisions of this First Supplemental Indenture, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Notes may be listed or any
trading system in which the Notes may be admitted, or to conform to usage. Each
Note shall be dated the date of its authentication.

SECTION 2.02.       EXECUTION AND AUTHENTICATION.

         The Trustee shall authenticate and make available for delivery Notes
for original issue in the initial aggregate principal amount of up to
$175,000,000, upon a Company Order. The Company Order shall specify the amount
of Notes to be authenticated and the date on which the original issue of Notes
is to be authenticated. Upon the exercise of the Purchase Option by the
Underwriters, additional Notes in the aggregate principal amount of up to
$26,250,000 shall be executed by the Company in the aforementioned manner and
delivered to the Trustee for authentication, and shall thereupon be
authenticated and delivered by the Trustee upon Company Order.

         The Trustee shall act as the initial authenticating agent.

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

SECTION 2.03.       REGISTRAR, PAYING AGENT AND CONVERSION AGENT.

         The Company or any Affiliate of the Company may act as Paying Agent
(except for the purposes of Section 6.02 of this First Supplemental Indenture
and Article 8 of the Indenture), Registrar or Conversion Agent.

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

                                       5

<PAGE>

SECTION 2.04.       PAYING AGENT TO HOLD MONEY IN TRUST.

         Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of and premium, if any, or interest on
any Notes, deposit with a Paying Agent a sum sufficient to pay such amount, such
sum to be held in trust for the benefit of the Persons entitled to such
principal, premium, if any, or interest, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or failure
so to act.

         The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section 2.04,
that such Paying Agent will, subject to Section 5.07:

         (a)  hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided;

         (b)  give the Trustee written notice of any default by the Company
(or any other obligor upon the Notes) in the making of any payment of principal,
premium, if any, or interest; and

         (c)  at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.

         Any money deposited with the Trustee or any Paying Agent, or then held
by the Company in trust for the payment of the principal of, and premium, if
any, or interest on any Note and remaining unclaimed for two years after such
principal and premium, if any, or interest has become due and payable shall be
paid to the Company on written request of the Company, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper selected by
the Company and published in the English language, customarily published on each
Business Day and of general circulation in Boston, Massachusetts, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.

SECTION 2.05.       TRANSFER AND EXCHANGE.

         (a) So long as the Notes are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, all Notes will be
represented by a Note in global form registered in the name of the Depositary or
the nominee of the Depositary (the "Global Note"). The transfer and exchange of
beneficial interests in the Global Note shall be effected through the Depositary
in accordance with this First Supplemental Indenture and the procedures of the

                                       6

<PAGE>

Depositary therefore. The Trustee shall make appropriate endorsements to reflect
increases or decreases in the principal amounts of the Global Note as set forth
on the face of the Note to reflect any such transfers. Except as provided below,
beneficial owners of the Global Note 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 Notes in global form.

         (b) Notwithstanding any other provisions of this First Supplemental
Indenture, the Global Note may not be transferred as a whole or in part except
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.

                  The Depositary shall be a clearing agency registered under the
Exchange Act. The Company initially appoints The Depository Trust Company to act
as Depositary with respect to the Global Note. Initially, the Global Note shall
be issued to the Depositary, registered in the name of Cede & Co., as the
nominee of the Depositary, and deposited with the Custodian for Cede & Co.

                  If at any time the Depositary for the Global Note notifies the
Company that it is unwilling or unable to continue as Depositary for such Global
Note, the Company may appoint a successor Depositary with respect to such Global
Note. If a successor Depositary is not appointed by the Company within ninety
(90) days after the Company receives such notice, the Company will execute, and
the Trustee, upon receipt of an Officers' Certificate for the authentication and
delivery of Notes, will authenticate and deliver, Notes in certificated form, in
aggregate principal amount equal to the principal amount of the Global Note, in
exchange for such Global Note.

                  Notes in certificated form issued in exchange for all or a
part of the Global Note pursuant to this Section 2.05 shall be registered in
such names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and authentication, the Trustee shall
deliver such Notes in certificated form to the persons in whose names such Notes
in certificated form are so registered.

                  At such time as all interests in the Global Note have been
redeemed, converted, canceled, exchanged for Notes in certificated form, or
transferred to a transferee who receives Notes in certificated form thereof,
such Global Note shall, upon receipt thereof, be canceled by the Trustee in
accordance with standing procedures and instructions existing between the
Depositary and the Custodian. At any time prior to such cancellation, if any
interest in the Global Note is redeemed, converted, repurchased or canceled, the
principal amount of the Global Note shall, in accordance with the standing
procedures and instructions existing between the Depositary and the Custodian,
be appropriately reduced and an endorsement shall be made on such Global Note,
by the Trustee or the Custodian, at the direction of the Trustee, to reflect
such reduction.

                                       7

<PAGE>

         (c)  Each Holder of a Note agrees to indemnify the Company and the
Trustee against any liability that may result from the transfer, exchange or
assignment of such Holder's Note in violation of any provision of this First
Supplemental Indenture and/or applicable United States Federal or state
securities law.

         The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
First Supplemental Indenture or under applicable law with respect to any
transfer of any interest in any Note (including any transfers between or among
Depositary Participants or beneficial owners of interests in the Global Note)
other than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by the terms of, this First Supplemental Indenture, and to examine the
same to determine substantial compliance as to form with the express
requirements hereof.

SECTION 2.06.       TREASURY NOTES.

         In determining whether the Holders of the required principal amount of
Notes have concurred in any notice, direction, waiver or consent, Notes owned by
the Company or any other obligor on the Notes or by any Affiliate of the Company
or of such other obligor shall be disregarded, except that for purposes of
determining whether the Trustee shall be protected in relying on any such
notice, direction, waiver or consent, only Notes which the Trustee knows are so
owned shall be so disregarded. Notes so owned which have been pledged in good
faith shall not be disregarded if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to the Notes and that the
pledgee is not the Company or any other obligor upon the Notes or any Affiliate
of the Company or of such other obligor.

                                  ARTICLE THREE

                            REDEMPTION AND REPURCHASE

SECTION 3.01.       COMPANY'S RIGHT OF OPTIONAL REDEMPTION.

         At any time on or after October 16, 2003, and prior to maturity, if the
closing price of the Common Stock shall have exceeded 130% of the Conversion
Price then in effect for at least 20 Trading Days in the consecutive 30-Trading
Day period ending on the Trading Day prior to the date of mailing of a notice of
redemption pursuant to Section 3.04, the Company may, at its option (an
"Optional Redemption"), redeem all or from time to time any part of the Notes on
any date prior to maturity, upon notice as set forth in Section 3.04, and at the
applicable optional redemption price set forth in paragraph 5 of the form of
Note attached as EXHIBIT A hereto, together with accrued interest to, but
excluding, the date fixed for redemption (the "Redemption Price").

                                       8

<PAGE>

SECTION 3.02.       ELECTION TO REDEEM; NOTICE TO TRUSTEE.

         If the Company elects to redeem Notes pursuant to paragraph 5 of the
Notes, it shall notify the Trustee at least 60 days prior to the redemption date
as fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee) of the redemption date and the principal amount of Notes to be
redeemed. If fewer than all of the Notes are to be redeemed, the record date
relating to such redemption shall be selected by the Company and given to the
Trustee, which record date shall not be less than 10 days after the date of
notice to the Trustee.

SECTION 3.03.       SELECTION OF NOTES TO BE REDEEMED.

         If less than all of the Notes are to be redeemed, the Trustee shall,
not more than 60 days prior to the redemption date, select the Notes to be
redeemed by lot, pro rata or by another method the Trustee considers fair and
appropriate; provided that such method is not prohibited by any stock exchange
or market on which the Notes are then listed. The Trustee shall make the
selection from the Notes outstanding and not previously called for redemption.
Notes in denominations of $1,000 may only be redeemed in whole. The Trustee may
select for redemption portions (equal to $1,000 or any multiple thereof) of the
principal of Notes that have denominations larger than $1,000. Provisions of
this Supplemental Indenture that apply to Notes called for redemption also apply
to portions of Notes called for redemption.

SECTION 3.04.       NOTICE OF REDEMPTION.

         At least 30 days but not more than 60 days before a redemption date,
the Company shall mail or cause to be mailed a notice of redemption by
first-class mail to each Holder of Notes to be redeemed at such Holder's address
as it appears on the Registrar's books.

         The notice shall identify the Notes to be redeemed and shall state:

         (a) the redemption date;

         (b) the Redemption Price;

         (c) the then current conversion price;

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

         (e)  that Notes called for redemption must be presented and
              surrendered to the Paying Agent to collect the Redemption Price;

         (f)  that the Notes called for redemption may be converted at any time
              before 5:00 p.m. (Boston time) on the third Business Day
              immediately preceding the redemption date;

         (g)  that Holders who wish to convert Notes must satisfy the
              requirements in paragraph 8 of the Notes;

                                       9

<PAGE>

         (h)  that, unless the Company defaults in making the redemption
              payment, interest on Notes called for redemption ceases to accrue
              on and after the redemption date and the only remaining right of
              the Holder is to receive payment of the Redemption Price upon
              presentation and surrender to the Paying Agent of the Notes;

         (i)  if any Note is being redeemed in part, the portion of the
              principal amount of such Note to be redeemed and that, after the
              redemption date, upon presentation and surrender of such Note, a
              new Note or Notes in principal amount equal to the unredeemed
              portion thereof will be issued; and

         (j)  subject to Section 2.14 of the Indenture, the CUSIP number of the
              Notes called for redemption.

         At the Company's written request delivered at least 10 days prior to
the date of the mailing of the notice of redemption, the Trustee shall give the
notice of redemption in the Company's name and at the Company's expense.

SECTION 3.05.       DEPOSIT OF REDEMPTION PRICE.

         If any Note called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent or segregated and held in trust for
the redemption of such Note shall (subject to any right of the Holder of such
Note or any predecessor security to receive interest) be paid to the Company as
soon as practicable upon written request by the Company or, if then held by the
Company, shall be released from such trust.

SECTION 3.06.       NOTES PAYABLE ON REDEMPTION DATE.

         Notice of redemption having been given as aforesaid, the Notes so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest, if any)
such Notes shall cease to bear or accrue any interest. Upon surrender of any
such Note for redemption in accordance with said notice, such Note shall be paid
by the Company at the Redemption Price, together with accrued interest to (but
not including) the Redemption Date; PROVIDED, HOWEVER, that installments of
interest whose stated maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Notes registered as such at the close of business
on the relevant Record Dates according to their terms.

         If the Company shall fail to deposit the Redemption Price with the
Trustee and any security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear and accrue interest from the Redemption Date at the rate borne
by the Note.

SECTION 3.07.       CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.

         In connection with any redemption of Notes, the Company may arrange for
the purchase and conversion of any Notes by an agreement with one or more
investment bankers or other purchasers to purchase such Notes by paying to the
Trustee in trust for the Holders, on or before

                                       10

<PAGE>

the Redemption Date, an amount not less than the applicable Redemption Price of
such Notes, together with interest accrued to the Redemption Date.
Notwithstanding anything to the contrary contained in this Article 3 or in
Article 3 of the Indenture, the obligation of the Company to pay the Redemption
Price of such Notes, together with interest accrued to, but excluding, the
Redemption Date shall be deemed to be satisfied and discharged to the extent
such amount is so paid by such purchasers. If such an agreement is entered into,
a copy of which shall be filed with the Trustee prior to the Redemption Date,
any Notes not duly surrendered for conversion by the Holders thereof, may, at
the option of the Company, be deemed, to the fullest extent permitted by law,
acquired by such purchasers from such Holders and (notwithstanding anything to
the contrary contained in Article 4) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the
Redemption Date (and the right to convert any such Notes shall be deemed to have
been extended through such time), subject to payment of the above amount as
aforesaid. At the direction of the Company, the Trustee shall hold and dispose
of any such amount paid to it in the same manner as it would monies deposited
with it by the Company for the redemption of Notes. Without the Trustee's prior
written consent, no arrangement between the Company and such purchasers for the
purchase and conversion of any Notes shall increase or otherwise affect any of
the powers, duties, responsibilities or obligations of the Trustee as set forth
in this First Supplemental Indenture or in the Indenture, and the Company agrees
to indemnify the Trustee from, and hold it harmless against, any loss, liability
or expense arising out of or in connection with any such arrangement for the
purchase and conversion of any Notes between the Company and such purchasers,
including the costs and expenses incurred by the Trustee in the defense of any
claim or liability arising out of or in connection with the exercise or
performance of any of its powers, duties, responsibilities or obligations under
this First Supplemental Indenture or in the Indenture. Nothing in the preceding
sentence shall be deemed to limit the rights and protections afforded to the
Trustee in Article 7 of the Indenture, including, but not limited to, the right
to the indemnification pursuant to Section 7.07 of the Indenture.

SECTION 3.08.   REPURCHASE OF NOTES AT OPTION OF THE HOLDER UPON CHANGE IN
                CONTROL.

         (a) If at any time that Notes remain outstanding there shall have
occurred a Change in Control (as hereinafter defined), Notes shall be
repurchased by the Company at the option of the Holder thereof, at a purchase
price (the "Repurchase Price") equal to the principal amount thereof plus
accrued interest up to and including the Repurchase Date (as hereinafter
defined), on the date (the "Repurchase Date") fixed by the Company that is not
less than 45 days nor more than 60 days after the date of the Company Notice (as
hereinafter defined), subject to satisfaction by or on behalf of the Holder of
the requirements set forth in Section 3.09(b). At the option of the Company, the
Repurchase Price may be paid in cash or, subject to the fulfillment by the
Company of the conditions set forth in Section 3.08(b), by delivery of shares of
Common Stock, the Adjusted Market Value of which shall be equal to the
Repurchase Price.

         Whenever in this First Supplemental Indenture there is a reference to
the principal of any Note as of any time, such reference shall be deemed to
include reference to the Repurchase Price payable in respect of such Note to the
extent that such Repurchase Price is, was or would be so payable at such time,
and express mention of the Repurchase Price in any provision of this First
Supplemental Indenture shall not be construed as excluding the Repurchase Price
in those provisions of this First Supplemental Indenture when such express
mention is not made.

                                       11

<PAGE>

         Any rights of Holders, contractual or otherwise, arising under or
pursuant to any offer to repurchase Notes made by the Company under this Section
3.08 shall be subordinated in right of payment to all Senior Indebtedness to the
same extent as the Notes are subordinated to Senior Indebtedness under the
provisions of Article 5 and such offer to repurchase shall provide that, if at
the time the Notes are required to be repurchased pursuant to such offer,
payment of the Notes is not permitted pursuant to the provisions of Article 5,
the Company shall use its best efforts to obtain all necessary waivers from, or
to repay in full, the holders of Senior Indebtedness in order to permit such
repurchase. Notwithstanding the foregoing, any failure by the Company to comply
with this Section 3.08 to offer to repurchase, or to repurchase, the Notes shall
be a default in the performance by the Company hereunder.

         (b) The Company may elect to pay the Repurchase Price by delivery of
shares of Common Stock pursuant to Section 3.08(a) if:

                  (1)      The shares of Common Stock deliverable in payment of
                           the Repurchase Price shall have an Adjusted Market
                           Value as of the Repurchase Date of not less than the
                           Repurchase Price. For purposes of Section 3.08(a) and
                           this Section 3.08(b), the Adjusted Market Value of
                           shares of Common Stock shall be determined by the
                           Company and shall be equal to 95% of the average of
                           the Closing Prices of the Common Stock for the five
                           consecutive Trading Days immediately preceding and
                           including the third Trading Day prior to the
                           Repurchase Date;

                  (2)      The shares of Common Stock to be issued and delivered
                           upon repurchase of Notes hereunder

                           (i)      shall not require registration under any
                                    federal securities law before such shares
                                    may be freely transferable by persons who
                                    are not affiliates (as defined in Rule 144
                                    of the Securities Act) of the Company
                                    without being subject to any transfer
                                    restrictions under the Securities Act upon
                                    repurchase or, if such registration is
                                    required, such registration shall be
                                    completed and shall become effective prior
                                    to the Repurchase Date, and

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

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

                                       12

<PAGE>

                  (4)      All shares of Common Stock which may be issued upon
                           repurchase of Notes will be newly issued shares or
                           treasury shares of the Company and, will upon issue,
                           be duly authorized and validly issued and fully paid
                           and non-assessable and free of any preemptive or
                           similar rights, liens or adverse claims.

If all of the conditions set forth in this Section 3.08(b) are not satisfied in
accordance with the terms thereof, the Repurchase Price shall be paid by the
Company only in cash.

         (c)      For purposes of this First Supplemental Indenture,

                  (1)      a "Change in Control" shall be deemed to have
                           occurred at such time after the original issuance of
                           the Notes as any of the following occur:

                           (i)      any sale, lease, exchange or other transfer
                                    (in one transaction or a series of related
                                    transactions) of all or substantially all of
                                    the assets of the Company and its
                                    subsidiaries, taken as a whole, to any
                                    person or group of related persons, as
                                    defined in Section 13(d) of the Exchange Act
                                    (a "Group");

                           (ii)     the approval by the holders of capital stock
                                    of the Company of any plan or proposal for
                                    the liquidation or dissolution of the
                                    Company (whether or not otherwise in
                                    compliance with the provisions of the
                                    applicable indenture); or

                           (iii)    any person or Group shall become the owner,
                                    directly or indirectly, beneficially or of
                                    record, of shares representing more than 50%
                                    of the aggregate ordinary voting power
                                    represented by the Company's issued and
                                    outstanding voting stock or of any successor
                                    to all or substantially all of the Company's
                                    assets; or

                           (iv)     the first day on which a majority of the
                                    members of the Company's Board of Directors
                                    are not Continuing Directors.

                  (2)      "Beneficial owner" shall be determined in accordance
                           with Rule 13d-3 promulgated by the SEC under the
                           Exchange Act, as in effect on the date of execution
                           of this Indenture, except that a person shall be
                           deemed to be the "beneficial owner" of all securities
                           that such person has the right to acquire, whether
                           such right is exercisable immediately or only after
                           the passage of time.

                  (3)      "Closing Price" shall be determined in accordance
                           with Section 4.06(e).

                  (4)      "Continuing Directors" means, as of any date of
                           determination, any member of the Board of Directors
                           of the Company who (i) was a member

                                       13

<PAGE>

                           of such Board of Directors on the date of the
                           original issuance of the Notes or (ii) was nominated
                           for election or elected to such Board of Directors
                           with the approval of a majority of the Continuing
                           Directors who were members of such Board of Directors
                           at the time of such nomination or election.

SECTION 3.09.       NOTICE; METHOD OF EXERCISING REPURCHASE RIGHT.

         (a) Within 30 days after the occurrence of a Change in Control, the
Company shall mail a written notice (the "Company Notice") by first-class mail
to the Trustee and to each Holder (and to beneficial owners as required by
applicable law) and shall cause a copy of such notice to be published in a daily
newspaper of national circulation. The notice shall include the form of a
Repurchase Notice (as defined below) to be completed by the Holder and shall
state:

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

                  (2)      the date by which the Repurchase Notice pursuant to
                           this Section 3.09 must be given;

                  (3)      the Repurchase Date;

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

                  (5)      briefly, the conversion rights of the Notes
                           including, without limitation, the current Conversion
                           Price and any adjustments thereto;

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

                  (7)      whether the holders of Senior Indebtedness will
                           permit the payment of the Repurchase Price;

                  (8)      that Notes as to which a Repurchase Notice has been
                           given may be converted into Common Stock only to the
                           extent that the Repurchase Notice has been withdrawn
                           in accordance with the terms of this First
                           Supplemental Indenture and the Indenture;

                  (9)      the procedures that the Holder must follow to
                           exercise rights under Section 3.08;

                  (10)     the procedures for withdrawing a Repurchase Notice,
                           including a form of notice of withdrawal;

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

                                       14

<PAGE>

                  (12)     the CUSIP number of the Notes as to which a
                           Repurchase Notice has been given.

         (b) A Holder may exercise its rights specified in Section 3.08 upon
delivery of a written notice of the exercise of such rights (a "Repurchase
Notice") to the Paying Agent at any time prior to 5:00 p.m. (Boston time) on the
third Business Day prior to the Repurchase Date, stating:

                  (1)      the certificate number of each Note that the Holder
                           will deliver to be repurchased,

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

                  (3)      that such Note shall be repurchased pursuant to the
                           terms and conditions specified in this First
                           Supplemental Indenture; and

                  (4)      in the event that the Repurchase Price shall be paid
                           in shares of Common Stock, the name or names (with
                           addresses) in which the certificate or certificates
                           for shares of Common Stock shall be issued.

         The delivery of such Note to the Paying Agent prior to, on or after the
Repurchase Date (together with all necessary endorsements) at the office of the
Paying Agent shall be a condition to the receipt by the Holder of the Repurchase
Price therefore; PROVIDED, HOWEVER, that such Repurchase Price shall be so paid
pursuant to Section 3.08 only if the Note so delivered to the Paying Agent shall
conform in all respects to the description thereof set forth in the related
Repurchase Notice.

         The Company shall repurchase from the Holder thereof, pursuant to
Section 3.08, a portion of a Note if the principal amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this First Supplemental
Indenture that apply to the repurchase of all of a Note pursuant to Sections
3.08 through 3.14 also apply to the repurchase of such portion of such Note.

         Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Repurchase Notice contemplated by this Section 3.09(b)
shall have the right to withdraw such Repurchase Notice in whole or in a portion
thereof that is $1,000 or an integral multiple thereof at any time prior to 5:00
p.m. (Boston time) on the Business Day prior to the Repurchase Date by delivery
of a written notice of withdrawal to the Paying Agent in accordance with Section
3.10.

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

                                       15

<PAGE>

SECTION 3.10.       EFFECT OF REPURCHASE NOTICE.

         Upon receipt by the Paying Agent of the Repurchase Notice specified in
Section 3.09(b), the Holder of the Note in respect of which such Repurchase
Notice was given shall (unless such Repurchase Notice is withdrawn as specified
below) thereafter be entitled to receive solely the Repurchase Price with
respect to such Note. Such Repurchase Price shall be paid to such Holder
promptly following the later of (i) the Repurchase Date with respect to such
Note (provided the conditions in Section 3.09(b) have been satisfied) and (ii)
the time of delivery of such Note to the Paying Agent by the Holder thereof in
the manner required by Section 3.09(b). Notes in respect of which a Repurchase
Notice has been given by the Holder thereof may not be converted into shares of
Common Stock on or after the date of the delivery of such Repurchase Notice
unless such Repurchase Notice has first been validly withdrawn.

         A Repurchase Notice may be withdrawn by means of a written notice of
withdrawal delivered by the Holder, with such Holder's signature guaranteed in a
manner satisfactory to the Paying Agent, to the office of the Paying Agent at
any time prior to 5:00 p.m. (Boston time) on the Business Day prior to the
Repurchase Date to which it relates, specifying:

         (a) the certificate number of each Note in respect of which such notice
of withdrawal is being submitted;

         (b) the principal amount of the Note or portion thereof with respect to
which such notice of withdrawal is being submitted; and

         (c) the principal amount, if any, of such Note that remains subject to
the original Repurchase Notice and that has been or will be delivered for
repurchase by the Company.

SECTION 3.11.       DEPOSIT OF REPURCHASE PRICE.

         On or before the Repurchase Date, the Company shall deposit with the
Trustee or with the Paying Agent (or, if the Company is acting as the Paying
Agent, shall segregate and hold in trust as provided in Section 2.4) an amount
of money or a number of shares of Common Stock, as provided herein, sufficient
to pay the aggregate Repurchase Price of all the Notes or portions thereof that
are to be repurchased as of such Repurchase Date or, if shares of Common Stock
are to be paid, as promptly as practicable after the Repurchase Date. The manner
in which the deposit required by this Section 3.11 is made by the Company shall
be at the option of the Company; PROVIDED that such deposit shall be made in a
manner such that the Trustee or the Paying Agent shall have immediately
available funds on the Repurchase Date; PROVIDED FURTHER, that if such payment
is made on the Repurchase Date it must be received by the Trustee or Paying
Agent, as the case may be, by 10:00 a.m. (Boston time) on such date.

         If the Paying Agent holds, in accordance with the terms hereof, money
or shares of Common Stock, as applicable, sufficient to pay the Repurchase Price
of any Note tendered for repurchase as of 5:00 p.m. (Boston time) on the
Business Day prior to the Repurchase Date, then, on and after the Repurchase
Date, such Note will cease to be outstanding and interest on such Note will
cease to accrue and will be deemed paid, whether or not such Note is delivered
to the

                                       16

<PAGE>

Paying Agent, and all other rights of the Holder in respect thereof shall
terminate (other than the right to receive the Repurchase Price upon delivery of
such Note).

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

         No fractions of shares shall be issued upon repurchase of Notes. If
more than one Note shall be repurchased from the same Holder and the Repurchase
Price shall be payable in shares of Common Stock, the number of full shares
which shall be issuable upon such repurchase shall be computed on the basis of
the aggregate principal amount of the Notes so repurchased. Instead of any
fractional share of Common Stock which would otherwise be issuable on the
repurchase of any Note or Notes, the Company will deliver to the applicable
Holder its check for the current market value of such fractional share which is
determined by multiplying the current market price of a full share by the
applicable fraction, and rounding the result to the nearest cent. For purposes
of this Section, the current market price of a share of Common Stock is the
Closing Price of the Common Stock on the first day (which is not a Legal
Holiday) immediately preceding the Repurchase Date.

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

SECTION 3.12.       NOTES REPURCHASED IN PART.

         Any Note that is to be repurchased only in part shall be surrendered at
the office of the Paying Agent (with due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or such Holder's attorney duly authorized in writing),
and the Company shall execute and the Trustee shall authenticate and deliver to
the Holder of such Note, without service charge, a new Note or Notes, or such
authorized denomination or denominations as may be requested by such Holder, in
aggregate

                                       17

<PAGE>

principal amount equal to, and in exchange for, the portion of the principal
amount of the Note so surrendered that is not repurchased.

SECTION 3.13.       COMPLIANCE WITH SECURITIES LAWS UPON REPURCHASE OF NOTES.

         In connection with any offer to repurchase or repurchase of Notes under
Section 3.08 hereof (PROVIDED that such offer or repurchase constitutes an
"issuer tender offer" for purposes of Rule 13e-4 (which term, as used herein,
includes any successor provision thereto) at the time of such offer or
repurchase), the Company shall (i) comply with Rule 13e-4 and Rule 14e-1 under
the Exchange Act, (ii) file the related Schedule 13E-4 (or any successor
schedule, form or report) under the Exchange Act, and (iii) otherwise comply
with all federal and state securities laws so as to permit the rights of the
Holders and obligations of the Company under Sections 3.08 through 3.14 to be
exercised in the time and in the manner specified therein.

SECTION 3.14.       REPAYMENT TO THE COMPANY.

         Subject to the provisions of Section 5.7, to the extent that the
aggregate amount of cash or the number of shares of Common Stock deposited by
the Company pursuant to Section 3.11 exceeds the aggregate Repurchase Price of
the Notes or portions thereof to be repurchased, then, promptly after the
Business Day following the Repurchase Date, the Trustee or the Paying Agent, as
the case may be, shall return any such excess to the Company.

                                  ARTICLE FOUR

                                   CONVERSION

SECTION 4.01.       CONVERSION PRIVILEGE.

At any time after 90 days following the latest date of original issuance of the
Notes and prior to the close of business on October 14, 2005, a Holder of a Note
may convert such Note into Common Stock (the shares of Common Stock issuable
upon such conversion, the "Conversion Shares"), at the conversion price then in
effect, together with those rights specified in Section 4.06 hereof; PROVIDED
that, if such Note is called for redemption pursuant to Article 3, such
conversion right shall terminate at the close of business on the third Business
Day before the redemption date for such Note (unless such Note is called for
redemption pursuant to Article 3 during the period commencing on October 16,
2003 and ending on (including) October 24, 2003 in which case such conversion
right shall terminate on the close of business on the first Business Day before
the redemption date for such Note or unless the Company shall default in making
the redemption payment then due, in which case the conversion right shall
terminate on the date such default is cured and such Note is redeemed). The
number of shares of Common Stock issuable upon conversion of a Note shall be
determined by dividing the principal amount of the Note or portion thereof
surrendered for conversion by the conversion price in effect on the conversion
date. The initial conversion price is set forth in paragraph 8 of the Notes and
is subject to adjustment as provided in this Article 4.

                                       18

<PAGE>

         A Holder may convert a portion of a Note equal to $1,000 or any
integral multiple thereof. Provisions of this First Supplemental Indenture that
apply to conversion of all of a Note also apply to conversion of a portion of a
Note.

         A Note in respect of which a Holder has delivered a Repurchase Notice
pursuant to Section 3.09(b) exercising the option of such Holder to require the
Company to repurchase such Note may be converted only if such Repurchase Notice
is withdrawn by a written notice of withdrawal delivered to the Paying Agent
prior 5:00 p.m. (Boston time) on the Repurchase Date in accordance with Section
3.10.

         A Holder of Notes is not entitled to any rights of a holder of Common
Stock until such Holder has converted his Notes into Common Stock and, upon such
conversion, only to the extent such Notes are deemed to have been converted into
Common Stock pursuant to this Article 4.

SECTION 4.02.       CONVERSION PROCEDURE.

         To convert a Note, a Holder must:

         (1) complete and manually sign the conversion notice on the back of the
Note and deliver such notice to the Conversion Agent,

         (2) surrender the Note to the Conversion Agent,

         (3) furnish appropriate endorsements and transfer documents to the
Registrar or the Conversion Agent,

         (4) pay any transfer or other tax, if required by Section 4.04, and

         (5) if the Note is held in book-entry form, complete and deliver to the
Depositary appropriate instructions pursuant to the Depositary's book-entry
conversion programs.

         The date on which the Holder satisfies all of the foregoing
requirements is the conversion date. As soon as practicable after the conversion
date, the Company shall deliver to the Holder through the Conversion Agent a
certificate for the number of whole shares of Common Stock issuable upon the
conversion and cash in lieu of any fractional shares pursuant to Section 4.05.

         The person in whose name the certificate is registered shall be deemed
to be a stockholder of record on the conversion date; PROVIDED, HOWEVER, that no
surrender of a Note on any date when the stock transfer books of the Company
shall be closed shall be effective to constitute the person or persons entitled
to receive the shares of Common Stock upon such conversion as the record holder
or holders of such shares of Common Stock on such date, but such surrender shall
be effective to constitute the person or persons entitled to receive such shares
of Common Stock as the record holder or holders thereof for all purposes at the
close of business on the next succeeding day on which such stock transfer books
are open; PROVIDED, FURTHER, that such conversion shall be at the Conversion
Price in effect on the date that such Note shall have been surrendered for
conversion, as if the stock transfer books of the Company had

                                       19

<PAGE>

not been closed. Upon conversion of a Note, such person shall no longer be a
Holder of such Note.

         No payment or adjustment will be made for accrued interest on a
converted Note or for dividends or distributions on shares of Common Stock
issued upon conversion of a Note, but if any Holder surrenders a Note for
conversion between the record date for the payment of an installment of interest
and the next interest payment date, then, notwithstanding such conversion, the
interest payable on such interest payment date shall be paid to the Holder of
such Note on such record date. In such event, such Note, when surrendered for
conversion, must be accompanied by delivery of a check or draft payable to the
Conversion Agent in an amount equal to the interest payable on such interest
payment date on the portion so converted. If such payment does not accompany
such Note, the Note shall not be converted; PROVIDED, HOWEVER, that no such
check or draft shall be required if such Note has been called for redemption on
a redemption date within the period between and including such record date and
such interest payment date, or if such Note is surrendered for conversion on the
interest payment date. If the Company defaults in the payment of interest
payable on the interest payment date, the Conversion Agent shall repay such
funds to the Holder.

         Upon surrender of a Note that is converted in part, the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder, a new
Note equal in principal amount to the unconverted portion of the Note
surrendered.

SECTION 4.03.       ADJUSTMENTS BELOW PAR VALUE.

         Before taking any action which would cause an adjustment decreasing the
Conversion Price so that the shares of Common Stock issuable upon conversion of
the Notes would be issued for less than the par value of such Common Stock, the
Company will take all corporate action which may be necessary in order that the
Company may validly and legally issue fully paid and nonassessable shares of
such Common Stock at such adjusted Conversion Price.

SECTION 4.04.       TAXES ON CONVERSION.

         If a Holder converts a Note, the Company shall pay any documentary,
stamp or similar issue or transfer tax 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 certificates
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 regulations.

SECTION 4.05.       COMPANY TO PROVIDE STOCK.

         The Company shall, prior to issuance of any Notes hereunder, and from
time to time as may be necessary, reserve, out of its authorized but unissued
Common Stock a sufficient number of shares of Common Stock to permit the
conversion of all outstanding Notes for shares of Common Stock.

                                       20

<PAGE>

         No fractional shares of Common Stock or scrip representing fractional
shares shall be issued upon conversion of Notes. If more than one Note shall be
surrendered for conversion at one time by the same holder, the number of full
shares which shall be issuable upon conversion shall be computed on the basis of
the aggregate principal amount of the Notes (or specified portions thereof to
the extent permitted hereby) so surrendered. If any fractional share of Common
Stock would be issuable upon the conversion of any Note or Notes, the Company
shall make an adjustment thereof in cash at the current market value thereof.
For these purposes, the current market value of a share of Common Stock shall be
the Closing Price (as defined in Section 4.06(e))on the first day (which is not
a Legal Holiday) immediately preceding the day on which the Notes (or specified
portions thereof) are deemed to have been converted.

         The Company covenants that all shares of Common Stock delivered upon
conversion of the Notes shall be newly issued shares or treasury shares, shall
be duly authorized, validly issued, fully paid and non-assessable and shall be
free from preemptive rights and free of any lien or adverse claim.

         The Company will endeavor promptly to comply with all federal and state
securities laws regulating the offer and delivery of shares of Common Stock upon
conversion of Notes, if any, and will list or cause to have quoted such shares
of Common Stock on each national securities exchange or in the over-the-counter
market or such other market on which the Common Stock is then listed or quoted.

SECTION 4.06.       ADJUSTMENT OF CONVERSION PRICE.

         The conversion price (the "Conversion Price") shall be that price set
forth in paragraph 8 of the form of Note attached hereto as EXHIBIT A and shall
be adjusted from time to time by the Company as follows:

         (a)      In case the Company shall

                  (1)      pay a dividend or other distribution in shares of
                           Common Stock to holders of Common Stock,

                  (2)      subdivide its outstanding Common Stock into a greater
                           number of shares,

                  (3)      combine its outstanding Common Stock into a smaller
                           number of shares, or

                  (4)      reclassify its outstanding Common Stock,

the Conversion Price in effect immediately prior thereto shall be adjusted so
that the Holder of any Note thereafter surrendered for conversion shall be
entitled to receive the number of shares of Common Stock which it would have
owned or have been entitled to receive had such Note been converted immediately
prior to the happening of such event. An adjustment made pursuant to this
subsection (a) shall become effective immediately after the record date in the
case of a

                                       21

<PAGE>

dividend or distribution and shall become effective immediately after the
effective date in the case of subdivision or combination.

         (b) In case the Company shall issue rights, warrants or options to all
or substantially all holders of its Common Stock, entitling them (for a period
commencing no earlier than the record date described below and expiring not more
than 45 days after such record date) to subscribe for or purchase shares of
Common Stock (or securities convertible into Common Stock) at a price per share
less than the current market price per share of Common Stock (as determined in
accordance with subsection (e) below), at the record date for the determination
of stockholders entitled to receive such rights, warrants or options, the
Conversion Price in effect immediately prior thereto shall be adjusted so that
the Conversion Price shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to such record date by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding
on such record date, plus the number of shares which the aggregate subscription
or purchase price for the total number of shares of Common Stock offered by the
rights, warrants or options so issued (or the aggregate conversion price of the
convertible securities offered by such rights, warrants or options) would
purchase at such current market price, and of which the denominator shall be the
number of shares of Common Stock outstanding on such record date plus the number
of additional shares of Common Stock offered by such rights, warrants or options
(or into which the convertible securities so offered by such rights, warrants or
options are convertible). Such adjustment shall be made successively whenever
any such rights, warrants or options are issued, and shall become effective
immediately after such record date. If at the end of the period during which
such rights, warrants or options are exercisable not all rights, warrants or
options shall have been exercised, the adjusted Conversion Price shall be
immediately readjusted to what it would have been upon application of the
foregoing adjustment substituting the number of additional shares of Common
Stock actually issued (or the number of shares of Common Stock issuable upon
conversion of convertible securities actually issued) for the total number of
shares of Common Stock offered (or the convertible securities offered).

         (c) In case the Company shall distribute to all or substantially all
holders of its Common Stock any shares of capital stock of the Company (other
than Common Stock) or evidences of its indebtedness, cash, other securities or
other assets, or shall distribute to all or substantially all holders of its
Common Stock rights, warrants or options to subscribe for or purchase any of its
securities (excluding (i) those rights, warrants or options referred to in
subsection (b) above; (ii) those dividends, distributions, subdivisions and
combinations referred to in subsection (a) above; and (iii) dividends and
distributions paid in cash in an aggregate amount that, combined together with
(A) all other such cash distributions made within the preceding 12 months in
respect of which no adjustment has been made under this Section 4.06 and (B) the
fair market value of consideration payable in respect of any repurchases
(including by way of tender offers) by the Company or any of its Subsidiaries or
Affiliates, or any employee benefit plan for the benefit of employees of the
Company or any of its Subsidiaries or Affiliates (a "Company Benefit Plan"), of
Common Stock concluded within the preceding 12 months, in each case in respect
of which no adjustment has been made under this Section 4.06, does not exceed
10% of Market Capitalization as of the record date for such distribution), then
in each such case the Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the date of such

                                       22

<PAGE>

distribution or purchase by a fraction of which the numerator shall be the
current market price per share (as defined in subsection (e) below) of the
Common Stock on the record date mentioned below less the fair market value on
such record date (as determined by the Board of Directors of the Company, whose
determination shall be conclusive evidence of such fair market value) of the
portion of the capital stock or evidences of indebtedness, securities or assets
so distributed or of such rights, warrants or options, in each case as
applicable to one share of Common Stock, and of which the denominator shall be
the current market price per share (as defined in subsection (e) below) of the
Common Stock on such record date. Such adjustment shall become effective
immediately after the record date for the determination of stockholders entitled
to receive such distribution. Notwithstanding the foregoing, in the event that
the Company shall distribute rights, warrants or options (other than those
referred to in subsection (b) above) ("Rights") PRO RATA to holders of Common
Stock, the Company may, in lieu of making any adjustment pursuant to this
Section 4.06, make proper provision so that each Holder of a Note who converts
such Note (or any portion thereof) after the record date for such distribution
and prior to the expiration or redemption of the Rights shall be entitled to
receive upon such conversion, in addition to the Conversion Shares, a number of
Rights to be determined as follows: (x) if such conversion occurs on or prior to
the date for the distribution to the holders of Rights of separate certificates
evidencing such Rights (the "Distribution Date"), the same number of Rights to
which a holder of a number of shares of Common Stock equal to the number of
Conversion Shares is entitled at the time of such conversion in accordance with
the terms and provisions of and applicable to the Rights; and (y) if such
conversion occurs after the Distribution Date, the same number of Rights to
which a holder of the number of shares of Common Stock into which the principal
amount of the Note so converted was convertible immediately prior to the
Distribution Date would have been entitled on the Distribution Date in
accordance with the terms and provisions of, and applicable to, the Rights. If
the Company implements a new stockholder rights plan, the Company agrees that
such rights plan will provide that upon conversion of the Notes, the Holders
holding Common Stock issued upon conversion shall receive the rights issued
under such plan, whether or not such rights have separated from the Common Stock
at the time of such conversion. If the rights under such new plan have become
separated from the Common Stock prior to the conversion of a Note, the Holders
holding Common Stock issued upon conversion shall receive the Rights that they
would have received if the Note had been converted immediately prior to the
separation of the Rights.

         (d) In case the Company or any of its Subsidiaries or any Company
Benefit Plan shall repurchase (including by way of tender offer) shares of
Common Stock, and the fair market value of the sum of (i) the aggregate
consideration paid for such Common Stock, (ii) the aggregate fair market value
of cash dividends and distributions of the type described in clause (iii) of the
preceding paragraph (c) paid within the twelve (12) months preceding the date of
purchase of such shares of Common Stock in respect of which no adjustment
pursuant to this Section 4.06 previously has been made, and (iii) the aggregate
fair market value of any amounts previously paid for the repurchase of Common
Stock of a type described in this paragraph (d) within the twelve (12) months
preceding the date of purchase of such shares of Common Stock in respect of
which no adjustment pursuant to this Section 4.6 previously has been made,
exceeds 10% of Market Capitalization on the date of, and after giving effect to,
such repurchase, then the Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the date of such distribution or

                                       23

<PAGE>

purchase by a fraction of which the numerator shall be the current market price
per share (as defined in subsection (e) below) of the Common Stock on the date
of such repurchase, less the quotient obtained by dividing the Aggregate Market
Premium involved in such repurchase (as defined hereinafter) by the difference
between the number of shares of Common Stock outstanding before such repurchase
and the number of shares of Common Stock the subject of such repurchase, and of
which the denominator shall be the current market price per share (as defined in
subsection (e) below) of the Common Stock on the date of such repurchase. Such
adjustment shall become effective immediately after the date of such repurchase.
For purposes of this subsection (d), the "Aggregate Market Premium" is the
excess, if any, of the aggregate repurchase price paid for all such Common Stock
over the aggregate current market value per share (as defined in subsection (e)
below) of all such repurchased stock, determined with respect to each share
involved in each such repurchase as of the date of repurchase with respect to
such share.

         (e) For the purpose of any computation under subsections (b), (c) and
(d) above, the current market price per share of Common Stock on any date shall
be deemed to be the average of the Closing Prices for 20 consecutive Trading
Days commencing 30 Trading Days before the record date with respect to any
distribution, issuance or other event requiring such computation. The Closing
Price for each day shall be (i) the last sale price, or the closing bid price if
no sale occurred, of such class of stock on the principal securities exchange on
which such class of stock is listed, if the Common Stock is listed or admitted
for trading on any national securities exchange, (ii) the last reported sale
price of Common Stock on The Nasdaq Stock Market, or any similar system of
automated dissemination of quotations of securities prices then in common use,
if so quoted, or (iii) if not quoted as described in clause (i), the mean
between the high bid and low asked quotations for Common Stock as reported by
the National Quotation Bureau Incorporated if at least two securities dealers
have inserted both bid and asked quotations for such class of stock on at least
5 of the 10 preceding days. If the Common Stock is quoted on a national
securities or central market system, in lieu of a market or quotation system
described above, the Closing Price shall be determined in the manner set forth
in clause (iii) of the preceding sentence if bid and asked quotations are
reported but actual transactions are not, and in the manner set forth in clause
(ii) of the preceding sentence if actual transactions are reported. If none of
the conditions set forth above is met, the Closing Price of Common Stock on any
day or the average of such last reported sale prices for any period shall be the
fair market value of such class of stock as determined by a member firm of the
New York Stock Exchange, Inc. selected by the Company. As used herein the term
"Trading Days" with respect to Common Stock means (i) if the Common Stock is
listed or admitted for trading on any national securities exchange, days on
which such national securities exchange is open for business or (ii) if the
Common Stock is quoted on The Nasdaq Stock Market or any similar system of
automated dissemination of quotations of securities prices, days on which trades
may be made on such system.

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

                  (1)      are deemed to be transferred with such shares of
                           Common Stock,

                                       24

<PAGE>

                  (2)      are not exercisable, and

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

shall not be deemed distributed for purposes of this Section 4.06 until the
occurrence of the earliest Trigger Event. In addition, in the event of any
distribution of rights, warrants or options, or any Trigger Event with respect
thereto, that shall have resulted in an adjustment to the Conversion Price under
this Section 4.06, (1) in the case of any such rights, warrants or options which
shall all have been redeemed or repurchased without exercise by any holders
thereof, the Conversion Price shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Trigger Event, as the case may
be, as though it were a cash distribution, equal to the per share redemption or
repurchase price received by a holder of Common Stock with respect to such
rights, warrants or options (assuming such holder had retained such rights,
warrants or options), made to all holders of Common Stock as of the date of such
redemption or repurchase, and (2) in the case of any such rights, warrants or
options all of which shall have expired without exercise by any holder thereof,
the Conversion Price shall be readjusted as if such issuance had not occurred.

         (g) In any case in which this Section 4.06 shall require that an
adjustment be made immediately following a record date established for purposes
of Section 4.06, the Company may elect to defer (but only until five Business
Days following the filing by the Company with the Trustee of the certificate
described in Section 4.10) issuing to the holder of any Note converted after
such record date the shares of Common Stock and other capital stock of the
Company issuable upon such conversion over and above the shares of Common Stock
and other capital stock of the Company issuable upon such conversion only on the
basis of the Conversion Price prior to adjustment; and, in lieu of the shares
the issuance of which is so deferred, the Company shall issue or cause its
transfer agents to issue due bills or other appropriate evidence of the right to
receive such shares.

SECTION 4.07.       NO ADJUSTMENT.

         No adjustment in the Conversion Price shall be required unless the
adjustment would require an increase or decrease of at least 1% in the
Conversion Price as last adjusted; PROVIDED, HOWEVER, that any adjustments which
by reason of this Section 4.07 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Article 4 shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be, with the exception of the
calculation of the Conversion Price, which shall be made to the nearest
one-hundredth of a cent.

         No adjustment need be made for rights to purchase Common Stock or
issuances of Common Stock pursuant to a Company plan for reinvestment of
dividends or interest.

         No adjustment need be made for a change in the par value or a change to
no par value of the Common Stock.

                                       25

<PAGE>

         To the extent that the Notes become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.

SECTION 4.08.       EQUIVALENT ADJUSTMENTS.

         In the event that, as a result of an adjustment made pursuant to
Section 4.06 above, the holder of any Note thereafter surrendered for conversion
shall become entitled to receive any shares of capital stock of the Company
other than shares of its Common Stock, thereafter the Conversion Price of such
other shares so receivable upon conversion of any Notes shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock contained in this
Article 4.

SECTION 4.09.       ADJUSTMENT FOR TAX PURPOSES.

         The Company shall be entitled to make such reductions in the Conversion
Price, in addition to those required by Section 4.06, as it in its discretion
shall determine to be advisable in order that any stock dividends, subdivision
of shares, distribution of rights to purchase stock or securities, or a
distribution or securities convertible into or exchangeable for stock hereafter
made by the Company to its stockholders shall not be taxable.

SECTION 4.10.       NOTICE OF ADJUSTMENT.

         Whenever the Conversion Price is adjusted, or Noteholders become
entitled to other Notes or due bills, the Company shall promptly mail to
Noteholders a notice of the adjustment and file with the Trustee an Officers'
Certificate briefly stating the facts requiring the adjustment and the manner of
computing it. The certificate shall be conclusive evidence of the correctness of
such adjustment and the Trustee may conclusively assume that, unless and until
such certificate is received by it, no such adjustment is required.

SECTION 4.11.       NOTICE OF CERTAIN TRANSACTIONS.

         In case:

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

         (b) the Company shall authorize the granting to the holders of its
Common Stock of rights, warrants or options to subscribe for or purchase any
share of any class or any other rights, warrants or options; or

         (c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding Common Stock, or a change
in par value, or from par value to no par value, or from no par value to par
value), or of any consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of the
sale or transfer of all or substantially all of the assets of the Company; or

                                       26

<PAGE>

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

the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at its address appearing on the list provided for in Section 2.5
of the Indenture, as promptly as possible but in any event at least fifteen days
prior to the applicable date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of such dividend,
distribution or rights, warrants or options, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to
such dividend, distribution or rights are to be determined, or (y) the date on
which such reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up is expected to become effective or occur, and the date
as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such dividend,
distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.

SECTION 4.12.       EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE ON
                    CONVERSION PRIVILEGE.

       If any of the following shall occur, namely:

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

       (b) any consolidation, combination or merger to which the Company is a
party other than a merger in which the Company is the continuing corporation and
which does not result in any reclassification of, or change (other than a change
in name, or par value, or from par value to no par value, or from no par value
to par value, or as a result of a subdivision or combination) in, outstanding
shares of Common Stock; or

       (c) any sale or conveyance of all or substantially all of the property or
business of the Company,

then the Company, or such successor or purchasing corporation, as the case may
be, shall, as a condition precedent to such reclassification, change,
consolidation, merger, sale or conveyance, execute and deliver to the Trustee a
supplemental indenture providing that the Holder of each Note then outstanding
shall have the right to convert such Note into the kind and amount of shares of
stock and other securities and property (including cash) receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of shares of Common Stock deliverable upon conversion of such Note
immediately prior to such reclassification, change, consolidation, merger, sale
or conveyance. Such supplemental indenture shall provide for adjustments of the
Conversion Price which shall be as nearly equivalent as may be practicable to
the adjustments of the Conversion Price provided for in this Article 4. The
foregoing, however, shall not in any way affect the right a holder of a Note may

                                       27

<PAGE>

otherwise have, pursuant to clause (2) of the last sentence of subsection (c) of
Section 4.06, to receive Rights upon conversion of a Note. If, in the case of
any such consolidation, merger, sale or conveyance, the stock or other
securities and property (including cash) receivable thereupon by a holder of
Common Stock includes shares of stock or other securities and property of a
corporation other than the successor or purchasing corporation, as the case may
be, in such consolidation, merger, sale or conveyance, then such supplemental
indenture shall also be executed by such other corporation and shall contain
such additional provisions to protect the interests of the Holders of the Notes
as the Board of Directors of the Company shall reasonably consider necessary by
reason of the foregoing. The provision of this Section 4.12 shall similarly
apply to successive consolidations, mergers, sales or conveyances.
Notwithstanding the foregoing, a distribution by the Company to all or
substantially all holders of its Common Stock for which an adjustment to the
Conversion Price or provision for conversion of the Notes may be made pursuant
to Section 4.06 shall not be deemed to be a sale or conveyance of all or
substantially all of the property or business of the Company for purposes of
this Section 4.12.

         In the event the Company shall execute a supplemental indenture
pursuant to this Section 4.12, the Company shall promptly file with the Trustee
an Opinion of Counsel stating that such supplemental indenture is authorized or
permitted by this First Supplemental Indenture and an Officers' Certificate
briefly stating the reasons therefore, the kind or amount of shares of stock or
securities or property (including cash) receivable by Holders of the Notes upon
the conversion of their Notes after any such reclassification, change,
consolidation, merger, sale or conveyance, any adjustment to be made with
respect thereto and that all conditions precedent have been complied with.

SECTION 4.13.       TRUSTEE'S DISCLAIMER.

         The Trustee has no duty to determine when an adjustment under this
Article 4 should be made, how it should be made or what such adjustment should
be made, but may accept as conclusive evidence of the correctness of any such
adjustment, and shall be protected in relying upon, the Officers' Certificate
with respect thereto which the Company is obligated to file with the Trustee
pursuant to Section 4.10. The Trustee shall not be accountable for and makes no
representation as to the validity or value of any securities or assets issued
upon conversion of Notes, and the Trustee shall not be responsible for the
Company's failure to comply with any provisions of this Article 4. Each
Conversion Agent (other than the Company or an Affiliate of the Company) shall
have the same protection under this Section 4.13 as the Trustee.

         The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 4.12, but may accept as conclusive evidence of the
correctness thereof, and shall be protected in relying upon, the Officers'
Certificate with respect thereto which the Company is obligated to file with the
Trustee pursuant to Section 4.12.

SECTION 4.14.       VOLUNTARY REDUCTION.

         The Company from time to time may reduce the Conversion Price by any
amount for any period of time if the period is at least 20 days or such longer
period as may be required by law

                                       28

<PAGE>

and if the reduction is irrevocable during the period; PROVIDED that in no event
may the Conversion Price be less than the par value of a share of Common Stock.

                                  ARTICLE FIVE

                                  SUBORDINATION

SECTION 5.01.       NOTES SUBORDINATED TO SENIOR INDEBTEDNESS.

         The Company covenants and agrees, and each holder of Notes by his
acceptance thereof likewise covenants and agrees, that all Notes are subject to
the provisions of this Article 5; and each Person holding any Note, whether upon
original issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions and acknowledges that such provisions are for the
benefit of, and shall be enforceable directly by, the holders of Senior
Indebtedness.

         Each Holder of Notes authorizes and directs the Trustee on such
Holder's behalf to take such action as may be necessary or appropriate, in the
sole discretion of the Trustee, to acknowledge or effectuate the subordination
between the Holders of Notes and the Holders of Senior Indebtedness as provided
in this Article and appoints the Trustee as such Holder's attorney-in-fact for
any and all such purposes.

         The payment of the principal of, premium, if any, and interest on and
any other payment due pursuant to this First Supplemental Indenture or any Notes
issued under the First Supplemental Indenture (including, without limitation,
the payment or deposit of the Redemption Price or Repurchase Price pursuant to
Article 3 and any deposit pursuant to Section 6.02) shall, to the extent and in
the manner hereinafter set forth, be subordinated and subject in right of
payment to the prior payment in full of all Senior Indebtedness, whether
outstanding at the date of this First Supplemental Indenture or thereafter
created, incurred, assumed or guaranteed.

SECTION 5.02.       NOTES SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR
                    INDEBTEDNESS ON DISSOLUTION, LIQUIDATION, REORGANIZATION,
                    ETC., OF THE COMPANY.

         Upon any payment or distribution of the assets of the Company of any
kind or character, whether in cash, property or securities (including any
collateral at any time securing the Notes), to creditors upon any dissolution,
winding-up, total or partial liquidation, or reorganization of the Company
(whether voluntary or involuntary, or in bankruptcy, insolvency, reorganization,
liquidation, or receivership proceedings, or upon an assignment for the benefit
of creditors, or any marshalling of the assets and liabilities of the Company,
or otherwise), then in such event:

         (a) all Senior Indebtedness (including principal thereof and interest
thereon) shall first be paid in full before any Payment of the Notes (as defined
in Section 5.05) is made;

         (b) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (including any collateral at
any time securing the Notes)

                                       29

<PAGE>

(other than Reorganization Notes), to which the Holders or the Trustee on behalf
of the Holders would be entitled except for the provisions of this Article 5,
including any such payment or distribution which may be payable or deliverable
by reason of the payment of another debt of the Company being subordinated to
the payment of the Notes, shall be paid or delivered by any debtor, Custodian or
other person making such payment or distribution, directly to the holders of the
Senior Indebtedness or their Representative or Representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any of such Senior Indebtedness may have been issued, ratably
according to the aggregate amounts remaining unpaid on account of the principal
of and interest on the Senior Indebtedness held or represented by each, for
application to payment of all Senior Indebtedness remaining unpaid, to the
extent necessary to pay all Senior Indebtedness in full after giving effect to
any concurrent payment or distribution, or provision therefore, to the holders
of such Senior Indebtedness; and

         (c) in the event that, notwithstanding the foregoing provisions of this
Section 5.02, any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (other than Reorganization
Notes), shall be received by the Trustee or the Holders before all Senior
Indebtedness is paid in full, such payment or distribution (subject to the
provisions of Sections 5.06 and 5.07) shall be held in trust for the benefit of,
and shall be immediately paid or delivered by the Trustee or such Holders, as
the case may be, to the holders of Senior Indebtedness remaining unpaid, or
their Representative or Representatives, ratably according to the aggregate
amounts remaining unpaid on account of the principal of and interest on the
Senior Indebtedness held or represented by each, for application to the payment
of all Senior Indebtedness remaining unpaid, to the extent necessary to pay all
Senior Indebtedness in full after giving effect to any concurrent payment or
distribution, or provision therefore, to or for the holders of such Senior
Indebtedness.

         The Company shall give prompt notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of the Company.

         Upon any distribution of assets of the Company referred to in this
Article 5, the Trustee, subject to the provisions of Sections 7.01 and 7.02 of
the Indenture, and the Holders shall be entitled to conclusively rely upon any
order or decree by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceeding is pending, or
a certificate of the liquidating trustee or agent or other person making any
distribution to the Trustee or to the Holders, for the purpose of ascertaining
the persons entitled to participate in such distribution, the holders of the
Senior Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article 5; PROVIDED that the foregoing shall
apply only if such court, trustee, liquidating trustee or other person has been
fully apprised of the provisions of this Article.

SECTION 5.03.       NOTEHOLDERS TO BE SUBROGATED TO RIGHT OF HOLDERS OF SENIOR
                    INDEBTEDNESS.

         Subject to the prior payment in full of all Senior Indebtedness, the
Holders shall be subrogated (equally and ratably with the holders of all
indebtedness of the Company which by its express terms is subordinated to
indebtedness of the Company to substantially the same extent as the Notes are
subordinated and is entitled to like rights of subrogation) to the rights of the

                                       30

<PAGE>

holders of Senior Indebtedness to receive payments or distributions of assets of
the Company applicable to the Senior Indebtedness until the principal of and
interest on the Notes shall be paid in full, and for purposes of such
subrogation, no payments or distributions to the holders of Senior Indebtedness
of assets, whether in cash, property or securities, distributable to the holders
of Senior Indebtedness under the provisions hereof to which the Holders would be
entitled except for the provisions of this Article 5, and no payment pursuant to
the provisions of this Article 5 to the holders of Senior Indebtedness by the
Holders shall, as among the Company, its creditors other than the holders of
Senior Indebtedness, and the Holders, be deemed to be a payment by the Company
to or on account of Senior Indebtedness, it being understood that the provisions
of this Article 5 are, and are intended, solely for the purpose of defining the
relative rights of the Holders, on the one hand, and the holders of Senior
Indebtedness, on the other hand.

SECTION 5.04.       OBLIGATIONS OF THE COMPANY UNCONDITIONAL.

         Nothing contained in this Article 5 or elsewhere in this First
Supplemental Indenture or in any Note is intended to or shall impair the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders the principal of and interest on the Notes, as and when the same shall
become due and payable in accordance with the terms of the Notes, or to affect
the relative rights of the Holders and other creditors of the Company other than
the holders of Senior Indebtedness, nor shall anything herein or therein prevent
the Trustee or any Holder from exercising all remedies otherwise permitted by
applicable law upon the happening of an Event of Default under this First
Supplemental Indenture or the Indenture, subject to the provisions of Article 6
of the Indenture, and the rights, if any, under this Article 5 of the holders of
Senior Indebtedness in respect of assets, whether in cash, property or
securities, of the Company received upon the exercise of any such remedy.

SECTION 5.05.       COMPANY NOT TO MAKE PAYMENT WITH RESPECT TO NOTES IN CERTAIN
                    CIRCUMSTANCES.

         Upon the occurrence of a Payment Default on Senior Indebtedness, unless
and until the amount of such Senior Indebtedness then due shall have been paid
in full, or such default shall have been cured or waived or shall have ceased to
exist, the Company shall not pay principal of, premium, if any, or interest on
the Notes or any other amount due pursuant to this First Supplemental Indenture
or any Notes or make any deposit pursuant to Article 3 or Section 6.02 or
Section 8.01 of the Indenture and shall not repurchase, redeem or otherwise
retire any Notes (other than a repurchase of Notes with shares of Common Stock
pursuant to the provisions of Section 3.08) (collectively, "Payment of the
Notes").

         Unless Section 5.02 shall be applicable, upon (1) the occurrence of a
default on Senior Indebtedness (other than a Payment Default) that occurs and is
continuing that permits the holders of such Senior Indebtedness (or their
Representative or Representatives) to accelerate its maturity and (2) receipt by
the Company and the Trustee from the Senior Agent of written notice of such
occurrence and the imposition of a Payment Blockage Period hereunder, then the
Company shall not make any Payment of the Notes for a period (the "Payment
Blockage Period") commencing on the earlier of the date of receipt by the
Company or the Trustee of such notice from the Senior Agent and ending on the
earlier of (subject to any blockage of payments that may then be in effect under
this Section 5.05) (x) the date 179 days after such date, (y) the

                                       31

<PAGE>

date such default shall have been cured or waived in writing or shall have
ceased to exist or such Senior Indebtedness shall have been discharged, or (z)
the date such Payment Blockage Period shall have been terminated by written
notice to the Company or the Trustee from the Senior Agent, after which, in case
of clause (x), (y) or (z), as the case may be, the Company shall resume making
any and all required payments. Notwithstanding any other provision of this
Agreement, only one Payment Blockage Period may be commenced within any
consecutive 365-day period, and no event of default with respect to any Senior
Indebtedness which existed or was continuing on the date of the commencement of
any Payment Blockage Period with respect to such Senior Indebtedness shall be,
or can be made, the basis for the commencement of a second Payment Blockage
Period whether or not within a period of 365 consecutive days unless such event
of default shall have been cured or waived for a period of not less than 90
consecutive days. In no event will a Payment Blockage Period extend beyond 179
days.

         In the event that, notwithstanding the foregoing provisions of this
Section 5.05, any Payment of the Notes shall be made by or on behalf of the
Company and received by the Trustee, any Holder or any Paying Agent (or, if the
Company is acting as its own Paying Agent, money for any such payment shall be
segregated and held in trust), which payment was prohibited by this Section
5.05, then, unless and until the amount of Senior Indebtedness then due, as to
which a default shall have occurred, shall have been paid in full, or such
default shall have been cured or waived, such payment (subject, in each case, to
the provisions of Sections 5.06 and 5.07) shall be held in trust for the benefit
of, and shall be immediately paid over to, the holders of Senior Indebtedness or
their Representative or Representatives, ratably according to the aggregate
amounts remaining unpaid on account of the principal of and interest on the
Senior Indebtedness held or represented by each, for application to the payment
of all Senior Indebtedness remaining unpaid to the extent necessary to pay all
Senior Indebtedness in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the benefit of the holders of
Senior Indebtedness. The Company shall give prompt written notice to the Trustee
of any default under any Senior Indebtedness or under any agreement pursuant to
which Senior Indebtedness may have been issued.

SECTION 5.06.       NOTICE TO TRUSTEE.

         The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Notes. Notwithstanding the provisions of this Article
5 or any other provision of this First Supplemental Indenture, the Trustee shall
not at any time be charged with knowledge of the existence of any facts which
would prohibit the making of any payment to or by the Trustee, unless and until
the Trustee shall have received written notice thereof from the Company or from
the holder or holders of Senior Indebtedness or from their Representative or
Representatives; and, prior to the receipt of any such notice, the Trustee,
subject to the provisions of Sections 7.01 and 7.02 of the Indenture, shall be
entitled to assume conclusively that no such facts exist.

         The Trustee shall be entitled to conclusively rely on the delivery to
it of a written notice by a person representing himself to be a holder of Senior
Indebtedness (or a Representative of such holder) to establish that such notice
has been given by a holder of Senior Indebtedness or a Representative of any
such holder. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a holder of
Senior

                                       32

<PAGE>

Indebtedness to participate in any payment or distribution pursuant to this
Article 5, the Trustee may request such person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
each person under this Article 5, and if such evidence is not furnished, the
Trustee may defer any payment to such person pending judicial determination as
to the right of such person to receive such payment.

SECTION 5.07.       APPLICATION BY TRUSTEE OF MONIES DEPOSITED WITH IT.

         Money or U.S. Government Obligations deposited in trust with the
Trustee pursuant to Section 6.02 of this First Supplemental Indenture and
Section 8.01 of the Indenture and not in violation of this Article 5 shall be
for the sole benefit of Noteholders and shall thereafter not be subject to the
subordination provisions of this Article 5. Otherwise, any deposit of monies by
the Company with the Trustee or any Paying Agent (whether or not in trust) for
the payment of the principal of or interest on any Notes shall be subject to the
provisions of Sections 5.01, 5.02, 5.03 and 5.05; except that, if at least three
Business Days prior to the date on which by the terms of this Indenture any such
monies may become payable for any purpose (including, without limitation, the
payment of either the principal of or interest on any Note), a Trust Officer of
the Trustee shall not have received with respect to such monies the notice
provided for in Section 5.06, then the Trustee or any Paying Agent shall have
full power and authority to receive such monies and to apply such monies to the
purpose for which they were received, and shall not be affected by any notice to
the contrary which may be received by it within three Business Days prior to or
after such date. This Section 5.07 shall be construed solely for the benefit of
the Trustee and the Paying Agent and shall not otherwise affect the rights that
holders of Senior Indebtedness may have to recover any such payments from the
Holders in accordance with the provisions of this Article 5.

SECTION 5.08.       SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF
                    COMPANY OR HOLDERS OF SENIOR INDEBTEDNESS.

         No right of any present or future holders of any Senior Indebtedness to
enforce subordination, as herein provided, shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
First Supplemental Indenture, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with. The holders of any Senior
Indebtedness may extend, renew, modify or amend the terms of such Senior
Indebtedness or any security therefore and release, sell or exchange such
security and otherwise deal freely with the Company, all without affecting the
liabilities and obligations of the parties to this First Supplemental Indenture
or the Holders. No amendment of this Article 5 or any defined terms used herein
or any other Sections referred to in this Article 5 which adversely affects the
rights hereunder of holders of Senior Indebtedness, shall be effective unless
the holders of such Senior Indebtedness (required pursuant to the terms of such
Senior Indebtedness to give such consent) have consented thereto.

                                       33

<PAGE>

SECTION 5.09.       TRUSTEE TO EFFECTUATE SUBORDINATION.

         Each holder of a Note by his acceptance thereof authorizes and directs
the Trustee in his behalf to take such action as may be necessary or appropriate
to acknowledge and effectuate the subordination provided in this Article 5 and
appoints the Trustee his attorney-in-fact for any and all such purposes.

SECTION 5.10.       RIGHT OF TRUSTEE TO HOLD SENIOR INDEBTEDNESS.

         The Trustee, in its individual capacity, shall be entitled to all of
the rights set forth in this Article 5 in respect of any Senior Indebtedness at
any time held by it to the same extent as any other holder of Senior
Indebtedness, and nothing in this First Supplemental Indenture shall be
construed to deprive the Trustee of any of its rights as such holder. Nothing in
this Article 5 shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 7.07 of the Indenture.

SECTION 5.11.       ARTICLE 5 NOT TO PREVENT EVENTS OF DEFAULT.

         The failure to make a Payment of the Notes by reason of any provision
in this Article 5 shall not be construed as preventing the occurrence of an
Event of Default under Section 7.01 of this First Supplemental Indenture or
under Section 6.01 of the Indenture.

SECTION 5.12.       NO FIDUCIARY DUTY CREATED TO HOLDERS OF SENIOR INDEBTEDNESS.

         Notwithstanding any other provision in this Article 5, the Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness by virtue of the provisions of this Article 5 or otherwise. With
respect to the holders of Senior Indebtedness, the Trustee undertakes to perform
or to observe only such of its covenants or obligations as are specifically set
forth in this Article 5 and no implied covenants or obligations with respect to
holders of Senior Indebtedness shall be read into this First Supplemental
Indenture against the Trustee.

SECTION 5.13.       ARTICLE APPLICABLE TO PAYING AGENTS.

         In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 5 shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully for all intents and purposes as if such Paying Agent were named
in this Article 5 in addition to or in place of the Trustee; PROVIDED, HOWEVER,
that Sections 5.06, 5.10 and 5.12 shall not apply to the Company if it acts as
Paying Agent.

SECTION 5.14.       CERTAIN CONVERSION DEEMED PAYMENT.

         For the purposes of this Article only, (1) the issuance and delivery of
junior securities upon conversion of Notes in accordance with Article 4 shall
not be deemed to constitute a payment or distribution on account of the
principal of or premium or interest on Notes or on account of the purchase or
other acquisition of Notes, (2) the issuance and delivery of Common Stock upon
repurchase of notes in accordance with Section 3.08 shall not be deemed to
constitute

                                       34

<PAGE>

a payment or distribution on account of the principal of or premium or interest
on the Notes or on account of the purchase or other acquisition of Notes, and
(3) the payment, issuance or delivery of cash, property or securities (other
than junior securities) upon conversion of a Note shall be deemed to constitute
payment on account of principal of such Note. For the purposes of this Section,
the term "junior securities" means (a) shares of any stock of any class of the
Company and (b) securities of the Company which are subordinated in right of
payment to all Senior Indebtedness which may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent as, or
to a greater extent than, the Notes are so subordinated as provided in this
Article. Nothing contained in this Article or elsewhere in this First
Supplemental Indenture or in the Notes is intended to or shall impair, as among
the Company, its creditors other than holders of Senior Indebtedness and the
Holders of the Notes, the right, which is absolute and unconditional, of the
Holder of any Note to convert such Note in accordance with Article 4.

                                   ARTICLE SIX

                                    COVENANTS

SECTION 6.01.       PAYMENT OF NOTES.

         The Company covenants and agrees that it will duly and punctually pay
or cause to be paid the principal amount at maturity, Redemption Price,
Repurchase Price and interest, in respect of each of the Notes at the places, at
the respective times and in the manner provided herein and in the Notes. Each
installment of interest on the Notes may be paid by mailing checks for the
interest payable to or upon the written order of the holders of Notes entitled
thereto as they shall appear on the registry books of the Company; PROVIDED that
with respect to any holder of Notes with an aggregate principal amount equal to
or in excess of $5 million, at the request of such Holder in writing the Company
shall pay interest on such Holder's Notes by wire transfer in immediately
available funds.

SECTION 6.02.       LIQUIDATION.

         Subject to the provisions of Article 5 of the Indenture, insofar as
they may be applicable hereto, the Board of Directors or the stockholders of the
Company may not adopt a plan of liquidation which plan provides for,
contemplates, or the effectuation of which is preceded by (a) the sale, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company otherwise than substantially as an entirety (Article 5 of the Indenture
being the Article which governs any such sale, lease, conveyance or other
disposition substantially as an entirety), and (b) the distribution of all or
substantially all of the proceeds of such sale, lease, conveyance or other
disposition and of the remaining assets of the Company to the holders of the
capital stock of the Company, unless the Company shall in connection with the
adoption of such plan make provision for, or agree that prior to making any
liquidating distributions to the holders of capital stock of the Company it will
make provision for, the satisfaction of the Company's obligations hereunder and
under the Notes as to the payment of principal and interest. The Company shall
be deemed to have made provision for such payments only if (1) the Company

                                       35

<PAGE>

irrevocably deposits in trust with the Trustee money or U.S. Government
Obligations maturing as to principal and interest in such amounts and at such
times as are sufficient, without consideration of any reinvestment of such
interest, to pay the principal of and interest on the Notes then outstanding to
maturity and to pay all other sums payable by it hereunder, or (2) there is an
express assumption of the due and punctual payment of the Company's obligations
hereunder and under the Notes and the performance and observance of all
covenants and conditions to be performed by the Company hereunder, by the
execution and delivery of a supplemental indenture in form reasonably
satisfactory to the Trustee by a person who acquires, or will acquire (otherwise
than pursuant to a lease) a portion of the assets of the Company, and which
person will have Consolidated Net Worth (immediately after the acquisition)
equal to not less than the Consolidated Net Worth of the Company (immediately
preceding such acquisition), and which is a corporation organized under the laws
of the United States, any State thereof or the District of Columbia; PROVIDED,
HOWEVER, that the Company shall not make any liquidating distribution to the
holders of capital stock of the Company described in the first sentence of this
Section 6.02 until after the Company shall have certified to the Trustee with an
Officers' Certificate at least five days prior to the making of any liquidating
distribution that it has complied with the provisions of this Section 6.02. For
purposes of this Section 6.02, "Consolidated Net Worth" means, at any date of
determination with respect to the Company, the total stockholders' equity
(including capital stock, additional paid-in capital and retained earnings after
deducting any treasury stock) of the Company appearing on its most recent
consolidated balance sheet prepared in accordance with generally accepted
accounting principles applied on a consistent basis.

SECTION 6.03.       NOTICE OF DEFAULTS.

         The Company will give notice to the Trustee, promptly, and in any event
within five days, upon becoming aware thereof, of the existence of any Event of
Default or an event which, with notice or the lapse of time or both would
constitute an Event of Default hereunder.

SECTION 6.04.       CORPORATE EXISTENCE.

         Subject to Section 6.02, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and rights (charter and statutory); PROVIDED, HOWEVER, that the
Company shall not be required to preserve any right if the Company shall
determine that the preservation is no longer desirable in the conduct of the
Company's business and that the loss thereof is not, and will not be, adverse in
any material respect to the Holders.

SECTION 6.05.       FURTHER INSTRUMENTS AND ACTS.

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

                                       36

<PAGE>

                                  ARTICLE SEVEN

                              DEFAULT AND REMEDIES

SECTION 7.01.       EVENTS OF DEFAULT.

         In addition to the events that constitute an Event of Default in
Section 6.01 of the Indenture, an "Event of Default" occurs if:

         (1) the Company fails to pay when due the principal of or interest on
indebtedness for money borrowed by the Company or its subsidiaries in excess of
$20.0 million, or the acceleration of that indebtedness that is not withdrawn
within 15 days after the date of written notice to the Company by the Trustee or
to the Company and the Trustee by the holders of at least 25% in principal
amount of the outstanding Notes.

                                  ARTICLE EIGHT

                             DISCHARGE OF INDENTURE

SECTION 8.01.       DISCHARGE.

         In addition to the obligations set forth in Section 8.01 of the
Indenture, the Company's obligations in paragraphs 9 and 12 of the Notes shall
survive until the Notes are no longer outstanding. Thereafter, the Company's
obligations in such paragraph 12 shall survive.

                                       37

<PAGE>

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

                                    NATURAL MICROSYSTEMS CORPORATION

                                    By:      /s/ Robert E. Hult
                                          ------------------------------------
                                    Name:    Robert E. Hult
                                    Title:   Sr. VP Finance & Operations, CFO

                                    STATE STREET BANK AND TRUST COMPANY,
                                    as Trustee

                                    By:      /s/ David Ganss
                                          ------------------------------------
                                    Name:    David Ganss
                                    Title:   Assistant Vice President

<PAGE>

                                                                       EXHIBIT A

                                FORM OF SECURITY

                              [GLOBAL NOTE LEGEND:

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO NATURAL
MICROSYSTEMS CORPORATION 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 DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

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

                           [FORM OF FACE OF SECURITY]

                        NATURAL MICROSYSTEMS CORPORATION

Number R-1                                                          $175,000,000
CUSIP No.  638882AA8

                    5% Convertible Subordinated Note Due 2005

         Natural MicroSystems Corporation, a Delaware corporation, promises to
pay to Cede & Co. or registered assigns, the principal sum of One Hundred
Seventy-Five Million Dollars ($175,000,000) on October 15, 2005 and to pay
interest on the principal amount of this Note beginning the most recent date to
which interest has been paid or, if no interest has been paid, beginning October
11, 2000 at the rate of 5% per annum.
Interest Payment Dates:    April 15 and October 15
Record Dates:              April 1 and October 1

         This Note is convertible at such times and as specified on the other
side of this Note. Additional provisions of this Note are set forth on the other
side of this Note.

                                      A-1

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this 5% Convertible
Subordinated Note due 2005 to be signed by its duly authorized officers.

Dated:  October 11, 2000         NATURAL MICROSYSTEMS CORPORATION

                                 By:
                                          --------------------------------------
                                          Robert P. Schechter
                                          Chairman of the Board, President,
                                          and Chief Executive Officer

                                 By:
                                          --------------------------------------
                                          Robert E. Hult
                                          Senior Vice President of Finance and
                                          Operations, Chief Financial Officer,
                                          and Treasurer

Dated:  October 11, 2000

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Securities of the series designated herein and
referred to in the within-mentioned Indenture as supplemented by a First
Supplemental Indenture.

                                 STATE STREET BANK AND TRUST COMPANY, as Trustee

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

                                      A-2

<PAGE>

                       [FORM OF REVERSE SIDE OF SECURITY]

                        NATURAL MICROSYSTEMS CORPORATION

                    5% Convertible Subordinated Note Due 2005

1.       INTEREST.

         Natural MicroSystems Corporation, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above. The Company shall pay interest semi-annually on
April 15 and October 15 of each year, commencing April 15, 2001. Interest on the
Notes will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from October 11, 2000. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.

2.       METHOD OF PAYMENT.

         The Company will pay interest on this Note (except defaulted interest)
to the person who is the registered Holder of this Note at the close of business
on the April 1 and October 1 next preceding the interest payment date. The
Holder must surrender this Note to the Paying Agent to collect payment of
principal. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. The Company, however, may pay principal and interest by its check
payable in such money, except that with respect to any Holder of Notes with an
aggregate principal amount equal to or in excess of $5 million, at the request
of such Holder in writing the Company shall pay interest on such Holder's Notes
by wire transfer in immediately available funds. It may mail an interest check
to the Holder's registered address.

3.       PAYING AGENT, REGISTRAR AND CONVERSION AGENT.

         Initially, State Street Bank and Trust Company (the "Trustee") will act
as Paying Agent, Registrar and Conversion Agent. The Company may change any
Paying Agent, Registrar or Conversion Agent without notice to the Holder. The
Company or any of its Subsidiaries may act as Paying Agent, Registrar or
Conversion Agent.

4.       INDENTURE; LIMITATIONS.

         This Note is one of a duly authorized issue of Notes of the Company
designated as its 5% Convertible Subordinated Notes Due 2005 (the "Notes"),
issued under an Indenture dated as of October 11, 2000 (the "Indenture") and a
First Supplemental Indenture dated as of October 11, 2000 (the "First
Supplemental Indenture"), between the Company and the Trustee. The terms of this
Note include those stated in the First Supplemental Indenture and in the
Indenture and those made part of the First Supplemental Indenture and the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb), as amended by the Trust Indenture Reform Act of 1990, as in
effect on the date hereof or, from and after the date that the First
Supplemental Indenture and the Indenture shall be qualified thereunder, as in
effect on such date. This Note is

                                      A-3

<PAGE>

subject to all such terms, and the Holder of this Note is referred to the First
Supplemental Indenture and the Indenture and said Act for a statement of them.

         The Notes are subordinated unsecured obligations of the Company
initially limited to up to $175,000,000 aggregate principal amount plus an
additional principal amount not exceeding $26,250,000 in the aggregate as may be
issued upon the exercise by the Underwriters, in whole or in part, of the
Purchase Option.

5.       OPTIONAL REDEMPTION.

                  At any time on and after October 16, 2003, and prior to
maturity, if the closing price of the Common Stock shall have exceeded 130% of
the conversion price then in effect for at least 20 trading days in the
consecutive 30-trading day period ending on the trading day prior to the date of
mailing of a notice of optional redemption, the Company may, at its option,
redeem all or any part of the Notes, upon mailing a notice of such redemption
not less than thirty (30) days before the date fixed for redemption to the
Holders of Notes, at the following optional redemption prices (expressed as
percentages of the principal amount):

         If redeemed during the period beginning October 16, 2003 and ending on
October 14, 2004, at a redemption price of 102%, and if redeemed during the
period beginning October 15, 2004 and ending on October 15, 2005, at a
redemption price of 101%, together in the case of any such redemption with
accrued interest to the date of redemption, but any interest payment that is due
and payable on or prior to such date of redemption will be payable to the
Holders of such Notes, or one or more predecessor Notes, of record at the close
of business on the relevant record dates referred to on the face hereof, all as
provided in the First Supplemental Indenture and the Indenture.

6.       NOTICE OF REDEMPTION.

         Notice of redemption will be mailed by first class mail at least 30
days but not more than 60 days before the redemption date to each Holder of
Notes to be redeemed at his registered address. Notes in denominations larger
than $1,000 may be redeemed in part, but only in whole multiples of $1,000. On
and after the redemption date, subject to the deposit with the Paying Agent of
funds sufficient to pay the redemption price, interest ceases to accrue on Notes
or portions of them called for redemption.

7. REPURCHASE OF NOTES AT OPTION OF HOLDER UPON A CHANGE IN CONTROL.

         If at any time that Notes remain outstanding there shall have occurred
a Change in Control (as defined in the First Supplemental Indenture and in the
Indenture), at the option of the Holder and subject to the terms and conditions
of the First Supplemental Indenture and the Indenture, the Company shall become
obligated to repurchase all or any part specified by the Holder (so long as the
principal amount of such part is $1,000 or an integral multiple thereof) of the
Notes held by such Holder on the Repurchase Date. The Holder shall have the
right to withdraw any Repurchase Notice by delivering a written notice of
withdrawal to the Paying Agent in accordance with the terms of the First
Supplemental Indenture and the Indenture. At

                                      A-4

<PAGE>

the option of the Company, the Repurchase Price may be paid in cash or, subject
to the fulfillment by the Company of the conditions set forth in Section 3.08(b)
of the First Supplemental Indenture, by delivery of shares of Common Stock
having, the Adjusted Market Value of which shall be equal to the Repurchase
Price.

8.       CONVERSION.

         At any time after 90 days following the latest date of original
issuance of the Notes and prior to the close of business on October 14, 2005, a
Holder of a Note may convert such Note into shares of Common Stock of the
Company; PROVIDED, HOWEVER, that if the Note is called for redemption, the
conversion right will terminate at the close of business on the third Business
Day before the redemption date of such Note (unless the Note is called for
redemption pursuant to Article 3 during the period commencing on October 16,
2003 and ending on (including) October 24, 2003 in which case the conversion
right shall terminate on the close of business on the first Business Day before
the redemption date or unless the Company shall default in making the redemption
payment when due, in which case the conversion right shall terminate at the
close of business on the date such default is cured and such Note is redeemed).
The initial conversion price is $63.125 per share, subject to adjustment under
certain circumstances as described in the First Supplemental Indenture and the
Indenture. The number of shares issuable upon conversion of a Note is determined
by dividing the principal amount converted by the conversion price in effect on
the conversion date. Upon conversion, no adjustment for interest or dividends
will be made. No fractional shares will be issued upon conversion; in lieu
thereof, an amount will be paid in cash based upon the current market price (as
defined in the First Supplemental Indenture and the Indenture) of the Common
Stock on the last trading day prior to the date of conversion.

         To convert a Note, a Holder must (a) complete and sign the conversion
notice set forth below and deliver such notice to the Conversion Agent, (b)
surrender the Note to the Conversion Agent, if certificated, (c) furnish
appropriate endorsements and transfer documents if required by the Registrar or
the Conversion Agent, (d) pay any transfer or similar tax, if required and (e)
if the Note is held in book-entry form, complete and deliver to the Depositary
appropriate instructions pursuant to the Depositary's book-entry conversion
programs. If a Holder surrenders a Note for conversion between the record date
for the payment of an installment of interest and the next interest payment
date, the Note must be accompanied by payment of an amount equal to the interest
payable on such interest payment date on the principal amount of the Note or
portion thereof then converted; PROVIDED, HOWEVER, that no such payment shall be
required if such Note has been called for redemption on a redemption date within
the period between and including such record date and such interest payment
date, or if such Note is surrendered for conversion on the interest payment
date. A Holder may convert a portion of a Note equal to $1,000 or any integral
multiple thereof.

         A Note in respect of which a Holder had delivered a Repurchase Notice
exercising the option of such Holder to require the Company to repurchase such
Note may be converted only if the Repurchase Notice is withdrawn as provided
above and in accordance with the terms of the Indenture.

                                      A-5

<PAGE>

9.       SUBORDINATION.

         The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the First Supplemental Indenture and the Indenture,
subordinate and junior in right of payment to the prior payment in full of all
Senior Indebtedness of the Company, as defined in the First Supplemental
Indenture. Any Holder by accepting this Note agrees to and shall be bound by
such subordination provisions and authorizes the Trustee to give them effect.

         In addition to all other rights of Senior Indebtedness described in the
First Supplemental Indenture and the Indenture, the Senior Indebtedness shall
continue to be Senior Indebtedness and entitled to the benefits of the
subordination provisions irrespective of any amendment, modification or waiver
of any terms of any instrument relating to the Senior Indebtedness or any
extension or renewal of the Senior Indebtedness.

10.      DENOMINATIONS, TRANSFER, EXCHANGE.

         The Notes are in registered form without coupons in denominations of
$1,000 and integral multiples thereof. A Holder may register the transfer of or
exchange Notes in accordance with the First Supplemental Indenture and the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes or other
governmental charges that may be imposed by law or permitted by the First
Supplemental Indenture and the Indenture.

         [Global Note Insert:
         The aggregate principal amount of the Note in global form represented
         hereby may from time to time be reduced to reflect conversions or
         redemptions of a part of this Note in global form or cancellations of a
         part of this Note in global form, in each case, and in any such case,
         by means of notations on the Global Note Transfer Schedule on the last
         page hereof. Notwithstanding any provision of this Note to the
         contrary, conversions or redemptions of a part of this Note in global
         form and cancellations of a part of this Note in global form, may be
         effected without the surrendering of this Note in global form, PROVIDED
         that appropriate notations on the Global Note Transfer Schedule are
         made by the Trustee, or the Custodian at the direction of the Trustee,
         to reflect the appropriate reduction or increase, as the case may be,
         in the aggregate principal amount of this Note in a global form
         resulting therefrom or as a consequence thereof.]

11.      PERSONS DEEMED OWNERS.

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

12.      UNCLAIMED MONEY.

         If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent will pay the money back to the Company at
its request. After that, Holders entitled to money must look to the Company for
payment unless an abandoned property law designates another person.

                                      A-6

<PAGE>

13.      AMENDMENT, SUPPLEMENT, WAIVER.

         Subject to certain exceptions, the First Supplemental Indenture, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of a majority in aggregate principal amount of the Notes then
outstanding and any past default or compliance with any provision may be waived
in a particular instance with the consent of the Holders of a majority in
aggregate principal amount of the Notes then outstanding. Without the consent of
or notice to any Holder, the Company and the Trustee may amend or supplement the
First Supplemental Indenture, the Indenture or the Notes to, among other things,
cure any ambiguity, omission, defect or inconsistency or make any other change
that does not adversely affect the rights of any Holder.

14.      SUCCESSOR CORPORATION.

         When a successor corporation assumes all the obligations of its
predecessor under the Notes, the First Supplemental Indenture and the Indenture,
the predecessor corporation will be released from those obligations.

15.      DEFAULTS AND REMEDIES.

         An Event of Default is: default for 30 days in payment of interest on
the Notes; default in payment of principal or premium on the Notes when due;
failure by the Company for 60 days after notice to it to comply with any of its
other agreements contained in the First Supplemental Indenture, the Indenture or
the Notes; default by the Company or any Subsidiary with respect to its
obligation to pay principal of or interest on indebtedness for borrowed money
aggregating more than $20.0 million or the acceleration of such indebtedness if
not withdrawn within 15 days from the date of such acceleration; and certain
events of bankruptcy, insolvency or reorganization of the Company or any of its
subsidiaries, all as and to the extent provided in the First Supplemental
Indenture and the Indenture. If an Event of Default (other than as a result of
certain events of bankruptcy, insolvency or reorganization) occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the Notes then outstanding may declare all unpaid principal of and accrued
interest to the date of acceleration on the Notes then outstanding to be due and
payable immediately, all as and to the extent provided in the First Supplemental
Indenture and the Indenture. If an Event of Default occurs as a result of
certain events of bankruptcy, insolvency or reorganization, all unpaid principal
of and accrued interest on the Notes then outstanding shall become due and
payable immediately without any declaration or other act on the part of the
Trustee or any Holder, all as and to the extent provided in the First
Supplemental Indenture and the Indenture. Holders may not enforce the First
Supplemental Indenture, the Indenture or the Notes except as provided in the
First Supplemental Indenture and the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the First Supplemental
Indenture, the Indenture or the Notes. Subject to certain limitations, Holders
of a majority in principal amount of the Notes then 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 of
principal or interest) if it determines that withholding notice is in

                                      A-7

<PAGE>

their interests. The Company is required to file periodic reports with the
Trustee as to the absence of default.

16.      TRUSTEE DEALINGS WITH THE COMPANY.

         State Street Bank and Trust Company, the Trustee under the First
Supplemental Indenture and the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from, and perform services for the
Company or an Affiliate of the Company, and may otherwise deal with the Company
or an Affiliate of the Company, as if it were not the Trustee.

17.      NO RECOURSE AGAINST OTHERS.

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

18.      DISCHARGE PRIOR TO MATURITY.

         If the Company deposits with the Trustee or the Paying Agent money or
U.S. Government Obligations sufficient to pay the principal of and interest on
the Notes to maturity as provided in the First Supplemental Indenture and the
Indenture, the Company will be discharged from the First Supplemental Indenture
and the Indenture except for certain Sections thereof.

19.      AUTHENTICATION.

         This Note shall not be valid until the Trustee or an authenticating
agent signs the certificate of authentication on the other side of this Note.

20.      ABBREVIATIONS AND DEFINITIONS.

         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 Gifts to Minors
Act).

         All capitalized terms used in this Note and not specifically defined
herein are defined in the First Supplemental Indenture or in the Indenture and
are used herein as so defined.

21.      INDENTURE TO CONTROL.

         In the case of any conflict between the provisions of this Note and the
First Supplemental Indenture and the Indenture, the provisions of the First
Supplemental Indenture and the Indenture shall control.

                                      A-8

<PAGE>

        The Company will furnish to any Holder, upon written request and without
charge, a copy of the First Supplemental Indenture and the Indenture. Requests
may be made to: Natural MicroSystems Corporation, 100 Crossing Boulevard,
Framingham, Massachusetts 01702, Attention: Chief Financial Officer.

            [The remainder of this page is left blank intentionally]

                                      A-9

<PAGE>

                                 TRANSFER NOTICE

This Transfer Notice relates to $__________ principal amount of the 5%
Convertible Subordinated Notes Due 2005 of Natural MicroSystems Corporation, a
Delaware corporation, held by ______________________________ (the "Transferor").

                  (I) or (we) assign and transfer this Note to

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

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

--------------------------------------------------------------------------------
               (Insert assignee's social security or tax I.D. no.)

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

Your Signature:
               -----------------------------------------------------------------
               (Sign exactly as your name appears on the other side of this
               Convertible Note)

         Date:
              ------------------------------------------------------------------
         Signature Guarantee:(1)
                                ------------------------------------------------

----------------
(1)      Signature must be guaranteed by a commercial bank, trust company or
         member firm of the New York Stock Exchange.

                                      A-10

<PAGE>

                                CONVERSION NOTICE

To Natural MicroSystems Corporation:

         The undersigned owner of this Note hereby irrevocably exercises the
option to convert this Note, or the portion below designated, into Common Stock
of Natural MicroSystems Corporation in accordance with the terms of the First
Supplemental Indenture and the Indenture referred to in this Note, and directs
that the shares issuable and deliverable upon conversion, together with any
check in payment for fractional shares, be issued in the name of and delivered
to the undersigned, unless a different name has been indicated in the assignment
below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.

/ /  Convert whole                     / /  Convert in part
                                            Amount of Note to be converted
                                            ($1,000 or integral multiples
                                            thereof):
                                            $
                                             -------------------------

                                            Signature (sign exactly as name
                                            appears on the other side of this
                                            Note)

                                            --------------------------
                                            Signature Guarantee:(2)

----------------------------
(2)      Signature must be guaranteed by a commercial bank, trust company or
         member firm of the New York Stock Exchange.

                                      A-11

<PAGE>

If you want the stock certificate made out in another person's name, complete
the following for such person:

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

-------------------------------------------------------
Social Security or Taxpayer Identification Number

-------------------------------------------------------
Street Address

-------------------------------------------------------
City, State and Zip Code

                                      A-12

<PAGE>

                      OPTION OF HOLDER TO ELECT REPURCHASE

         If you want to elect to have this Note repurchased by the Company
pursuant to Section 3.08 of the First Supplemental Indenture, check the box:

                                      / /

         If you want to elect to have only part of this Note repurchased by the
Company pursuant to Section 3.08 of the First Supplemental Indenture, state the
principal amount (which shall be $1,000 or a multiple thereof) to be
repurchased: $____________________

Dated:
       ----------------------  -------------------------------------------------
                               Signature (sign exactly as name appears on
                               the other side of this Note)

-----------------------------
Signature Guarantee:(3)

----------------------
(3)       Signature must be guaranteed by a commercial bank, trust company or
          member firm of the New York Stock Exchange.

                                      A-13

<PAGE>

                            [Schedule A to Exhibit A

                          GLOBAL NOTE TRANSFER SCHEDULE

                   Changes to Principal Amount of Global Note

<TABLE>
<CAPTION>
===================================================================================================================
     Date          Principal Amount of Notes by       Remaining Principal Amount of this     Authorized Signature
                  which this Global Note Is to Be                 Global Note               of officer of Trustee
                 Reduced and Reason for Reduction            (following decrease)             or Note Custodian
-------------------------------------------------------------------------------------------------------------------
<S>              <C>                                  <C>                                   <C>

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

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

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

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

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

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

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

===================================================================================================================
</TABLE>

Schedule to be maintained by Depositary in cooperation with Trustee.]

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