Document:

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                                                                   Exhibit 4.9

                                  METLIFE, INC.

                              THE BANK OF NEW YORK

                      as Collateral Agent, Custodial Agent

                           and Securities Intermediary

                                       AND

                          BANK ONE TRUST COMPANY, N.A.

                           as Purchase Contract Agent

                                PLEDGE AGREEMENT

                         Dated as of ____________, 2000

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                      Page

                                    ARTICLE I

                                   Definitions

<S>                                                                                                    <C>
Section 1.1     Definitions..............................................................................2

                                   ARTICLE II

                         Pledge; Control and Perfection

Section 2.1     The Pledge...............................................................................6
Section 2.2     Control and Perfection...................................................................7

                                   ARTICLE III

                       Distributions on Pledged Collateral

                                   ARTICLE IV

                   Substitution, Release, Repledge and Settlement of Capital Securities

Section 4.1     Substitution for Capital Securities or Treasury Consideration and the
                Creation of Stripped Units..............................................................11
Section 4.2     Substitution for Treasury Securities and the Creation of Normal Units...................11
Section 4.3     Termination Event.......................................................................12
Section 4.4     Early Settlement; Merger Early Settlement...............................................13
Section 4.5     Remarketing; Application of Proceeds; Settlement........................................13

                                    ARTICLE V

                       Voting Rights -- Capital Securities
</TABLE>

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<TABLE>
                                   ARTICLE VI

               Rights and Remedies; Distribution of the Debentures

<S>                                                                                                    <C>
Section 6.1     Rights and Remedies of the Collateral Agent.............................................16
Section 6.2     Distribution of the Debentures..........................................................17
Section 6.3     Substitutions...........................................................................18

                                   ARTICLE VII

                    Representations and Warranties; Covenants

Section 7.1     Representations and Warranties..........................................................18
Section 7.2     Covenants...............................................................................19

                                  ARTICLE VIII

                              The Collateral Agent

Section 8.1     Appointment, Powers and Immunities......................................................19
Section 8.2     Instructions of the Company.............................................................21
Section 8.3     Reliance by Collateral Agent............................................................21
Section 8.4     Rights in Other Capacities..............................................................21
Section 8.5     Non-Reliance on Collateral Agent........................................................22
Section 8.6     Compensation and Indemnity..............................................................22
Section 8.7     Failure to Act..........................................................................23
Section 8.8     Resignation of Collateral Agent.........................................................23
Section 8.9     Right to Appoint Agent or Advisor.......................................................24
Section 8.10    Survival................................................................................24
Section 8.11    Exculpation.............................................................................24

                                   ARTICLE IX

                                    Amendment

Section 9.1     Amendment Without Consent of Holders....................................................25
Section 9.2     Amendment with Consent of Holders.......................................................25
Section 9.3     Execution of Amendments.................................................................26
Section 9.4     Effect of Amendments....................................................................26
Section 9.5     Reference to Amendments.................................................................26
</TABLE>

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<TABLE>
                                    ARTICLE X

                                  Miscellaneous

<S>                                                                                                   <C>
Section 10.1    No Waiver...............................................................................27
Section 10.2    GOVERNING LAW...........................................................................27
Section 10.3    Notices.................................................................................28
Section 10.4    Successors and Assigns..................................................................28
Section 10.5    Counterparts............................................................................28
Section 10.6    Severability............................................................................28
Section 10.7    Expenses, Etc...........................................................................28
Section 10.8    Security Interest Absolute..............................................................29

EXHIBIT A
Instruction from Purchase Contract Agent to Collateral Agent...........................................A-1

EXHIBIT B
Instruction to Purchase Contract Agent.................................................................B-1

EXHIBIT C
Instruction to Custodial Agent Regarding Remarketing...................................................C-1

EXHIBIT D
Instruction to Custodial Agent Regarding Withdrawal from Remarketing...................................D-1
</TABLE>

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                                PLEDGE AGREEMENT

           PLEDGE AGREEMENT, dated as of __________, 2000 (this "Agreement"),
among MetLife, Inc., a Delaware corporation (the "Company"), The Bank of New
York, a New York banking corporation, not individually but solely as collateral
agent (in such capacity, together with its successors in such capacity, the
"Collateral Agent"), as custodial agent (in such capacity, together with its
successors in such capacity, the "Custodial Agent") and as "securities
intermediary" as defined in Section 8-102(a)(14) of the Code (as defined herein)
(in such capacity, together with its successors in such capacity, the
"Securities Intermediary"), and Bank One Trust Company, N.A., not individually
but solely as purchase contract agent and as attorney-in-fact of the Holders (as
defined in the Purchase Contract Agreement) from time to time of the Securities
(as hereinafter defined) (in such capacity, together with its successors in such
capacity, the "Purchase Contract Agent") under the Purchase Contract Agreement
(as hereinafter defined).

                                    RECITALS

           The Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there may be issued up to - Units of the Company
(- if the Underwriters' over-allotment option pursuant to the Underwriting
Agreement (as defined in the Declaration) is exercised in full), having a Stated
Amount of $50 per Unit, all of which will initially be Normal Units.

           Each Normal Unit will be comprised of (a) a stock purchase contract
(the "Purchase Contract") under which the holder will be required to purchase
from the Company and the Company will be required to sell to such holder not
later than __________, 2003 (the "Stock Purchase Date"), for $50.00, a number of
shares of common stock, $0.01 par value per share (the "Common Stock"), of the
Company equal to the Settlement Rate (as defined below), and (b) either
beneficial ownership of (x) a Capital Security (as defined below) or (y)
following the remarketing of the Capital Securities in accordance with the
Purchase Contract Agreement and the Remarketing Agreement (as defined below),
the appropriate Treasury Consideration (as defined below).

           In accordance with the terms of the Purchase Contract Agreement, a
holder of Normal Units may separate the Capital Securities or the appropriate
Treasury Consideration, as applicable, from the related Purchase Contracts by
substituting for such Capital Securities or the appropriate Treasury
Consideration, as the case may be, Treasury Securities (as defined below) that
will pay in the aggregate an amount equal to the

<PAGE>   6
aggregate Stated Amount (as defined below) of such Normal Units. Upon such
separation, the Normal Units will become Stripped Units. Each Stripped Unit will
be comprised of (a) a Purchase Contract under which the holder will purchase
from the Company not later than the Stock Purchase Date, for $50.00, a number of
shares of Common Stock of the Company equal to the Settlement Rate, and (b) a
1/20 undivided beneficial interest in a zero-coupon U.S. Treasury Security
(CUSIP No. -) maturing on__________, 2003 that will pay $1,000 on such maturity
date (the "Treasury Securities").

           Pursuant to the terms of the Declaration (as defined below), MetLife
Capital Trust I, a statutory business trust formed under the laws of the State
of Delaware (the "Trust"), will issue - (- if the Underwriters' over-allotment
option pursuant to the Underwriting Agreement and Pricing Agreement is exercised
in full) -% Capital Securities, (the "Capital Securities") and -% common
securities (the "Common Securities"), in each case having a stated liquidation
value equal to the Stated Amount.

           Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Securities have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
such Holders and to grant the pledge provided hereby of the Capital Securities,
any Treasury Consideration and any Treasury Securities delivered in exchange
therefor to secure each Holder's obligations under the related Purchase
Contract, as provided herein and subject to the terms hereof. Upon such pledge,
the Capital Securities, any Treasury Consideration and the Treasury Securities
will be beneficially owned by the Holders but will be owned of record by the
Purchase Contract Agent subject to the Pledge hereunder.

           Accordingly, the Company, the Collateral Agent, the Securities
Intermediary, the Custodial Agent and the Purchase Contract Agent, on its own
behalf and as attorney-in-fact of the Holders from time to time of the
Securities, agree as follows:

                                    ARTICLE I

                                   Definitions

           Section 1.1 Definitions. For all purposes of this agreement, except
as otherwise expressly provided or unless the context otherwise requires:

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

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

           (c) the following terms have the meanings assigned to them in the
      Purchase Contract Agreement: (i) Act, (ii) Certificate, (iii) Debentures,
      (iv) Early Settlement, (v) Early Settlement Amount, (vi) Failed
      Remarketing, (vii) First Supplemental Indenture, (viii) Holder, (ix)
      Indenture, (x) Merger Early Settlement, (xi) Merger Early Settlement
      Amount, (xii) Normal Unit, (xiii) Opinion of Counsel, (xiv) Outstanding
      Securities, (xv) Remarketing Agent, (xvi) Remarketing Agreement, (xvii)
      Settlement Rate, (xviii) Stated Amount, (xix) Stripped Unit, (xx)
      Subsequent Remarketing Date, (xxi) Treasury Consideration, (xxii)
      Termination Event, and (xxiii) Unit;

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

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

           "Business Day" means any day that is not a Saturday, Sunday or day on
which banking institutions and trust companies in The City of New York or at a
place of payment are authorized or required by law, regulation or executive
order to close.

           "Capital Securities" has the meaning specified in the Recitals.

           "Code" has the meaning specified in Section 6.1 hereof.

           "Collateral" has the meaning specified in Section 2.1 hereof.

           "Collateral Account" means the securities account (number - )
maintained at The Bank of New York in the name "Bank One Trust Company, N.A., as
Purchase Contract Agent on behalf of the holders of certain securities of
MetLife Capital Trust I, Collateral Account subject to the security interest of
The Bank of New York, as Collateral Agent, for the benefit of MetLife, Inc., as
pledgee" and any successor account.

         "Collateral Agent" has the meaning specified in the first paragraph of
this Agreement.

         "Common Stock" has the meaning specified in the Recitals.

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

           "Custodial Agent" has the meaning specified in the Recitals.

           "Debenture Trustee" means The Bank of New York, as trustee under the
Indenture and First Supplemental Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.

           "Declaration" means the Amended and Restated Declaration of Trust,
dated as of _________, 2000 among the Company, as sponsor, the trustees named
therein and the holders from time to time of undivided beneficial interests in
the assets of the Trust.

           "Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.

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

           "Pledge" has the meaning specified in Section 2.1 hereof.

           "Pledged Capital Securities" has the meaning specified in Section 2.1
hereof.

           "Pledged Treasury Consideration" has the meaning specified in Section
2.1 hereof.

           "Pledged Treasury Securities" has the meaning specified in Section
2.1 hereof.

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

           "Purchase Contract" has the meaning specified in the Recitals.

           "Purchase Contract Agent" has the meaning specified in the first
paragraph of this Agreement.

           "Purchase Contract Agreement" has the meaning specified in the
Recitals.

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           "Remarketing Underwriting Agreement" means the Remarketing
Underwriting Agreement attached as Exhibit A to the Remarketing Agreement.

           "Securities" means the Normal Units and Stripped Units collectively.

           "Securities Intermediary" has the meaning specified in the first
paragraph of this Agreement.

           "Security Entitlement" has the meaning set forth in Section 8-102(a)
(17) of the Code.

           "Separate Capital Securities" means any Capital Securities that are
not Pledged Capital Securities.

           "Stock Purchase Date" has the meaning specified in the  Recitals.

           "TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.

           "TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.

           "Transfer" means, with respect to the Collateral and in accordance
with the instructions of the Collateral Agent, the Purchase Contract Agent or
the Holder, as applicable:

           (i) in the case of Collateral consisting of securities which cannot
      be delivered by book-entry or which the parties agree are to be delivered
      in physical form, delivery in appropriate physical form to the recipient
      accompanied by any duly executed instruments of transfer, assignments in
      blank, transfer tax stamps and any other documents necessary to constitute
      a legally valid transfer to the recipient;

           (ii) in the case of Collateral consisting of securities maintained in
      book-entry form by causing a "securities intermediary" (as defined in
      Section 8-102(a)(14) of the Code) to (a) credit a "security entitlement"
      (as defined in Section 8-102(a)(17) of the Code) with respect to such
      securities to a "securities account" (as defined in Section 8-501(a) of
      the Code) maintained by or on behalf of the recipient and (b) to issue a
      confirmation to the recipient with respect to such credit. In the case of
      Collateral to

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      be delivered to the Collateral Agent, the securities intermediary shall be
      the Securities Intermediary and the securities account shall be the
      Collateral Account.

           "Treasury Security" has the meaning specified in the Recitals.

           "Trust" has the meaning specified in the Recitals.

                                   ARTICLE II

                         Pledge; Control and Perfection

           Section 2.1 The Pledge. The Holders from time to time acting through
the Purchase Contract Agent, as their attorney-in-fact, and the Purchase
Contract Agent, as such attorney-in-fact, hereby pledge and grant to the
Collateral Agent, for the benefit of the Company, as collateral security for the
performance when due by such Holders of their respective obligations under the
related Purchase Contracts, a security interest in all of the right, title and
interest of the Purchase Contract Agent and such Holders (a) in (i) the Capital
Securities, Treasury Consideration and Treasury Securities constituting a part
of the Securities, (ii) any Treasury Securities delivered in exchange for any
Capital Securities or Treasury Consideration, as applicable, in accordance with
Section 4.1 hereof, and (iii) any Capital Securities or Treasury Consideration,
as applicable, delivered in exchange for any Treasury Securities in accordance
with Section 4.2 hereof, in each case that have been Transferred to or otherwise
received by the Collateral Agent and not released by the Collateral Agent to
such Holders under the provisions of this Agreement; (b) in the Collateral
Account and all securities, financial assets, security entitlements, cash and
other property credited thereto and all Security Entitlements related thereto;
(c) in any Debentures delivered to the Collateral Agent upon the occurrence of a
liquidation of the Trust as provided in Section 6.2; and (d) all Proceeds of the
foregoing (all of the foregoing, collectively, the "Collateral"). Prior to or
concurrently with the execution and delivery of this Agreement, the Purchase
Contract Agent, on behalf of the initial Holders of the Securities, shall cause
the Capital Securities or Treasury Consideration, as applicable, comprising a
part of the Normal Units to be Transferred to the Collateral Agent for the
benefit of the Company. Such Capital Securities shall be Transferred by
physically delivering such securities to the Securities Intermediary indorsed in
blank and causing the Securities Intermediary to credit the Collateral Account
with such securities and sending the Collateral Agent a confirmation of the
deposit of such securities. Treasury Securities and Treasury Consideration, as
applicable, shall be Transferred to the Collateral Account maintained by the
Collateral Agent at the Securities Intermediary by book-entry transfer to the
Collateral Account in accordance with the TRADES Regulations and other
applicable law and by the notation by the Securities Intermediary on

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its books that a Security Entitlement with respect to such Treasury Securities
or Treasury Consideration, has been credited to the Collateral Account. For
purposes of perfecting the pledge under applicable law, including, to the extent
applicable, the TRADES Regulations or the Uniform Commercial Code as adopted and
in effect in any applicable jurisdiction, the Collateral Agent shall be the
agent of the Company as provided herein. The pledge provided in this Section 2.1
is herein referred to as the "Pledge" and the Capital Securities (or the
Debentures that are delivered pursuant to Section 6.2 hereof), Treasury
Consideration or Treasury Securities subject to the Pledge, excluding any
Capital Securities (or the Debentures that are delivered pursuant to Section 6.2
hereof), Treasury Consideration or Treasury Securities released from the Pledge
as provided in Sections 4.1 and 4.2 hereof, respectively, are hereinafter
referred to as "Pledged Capital Securities," "Pledged Treasury Consideration" or
the "Pledged Treasury Securities," respectively. Subject to the Pledge and the
provisions of Section 2.2 hereof, the Holders from time to time shall have full
beneficial ownership of the Collateral. Whenever directed by the Collateral
Agent acting on behalf of the Company, the Securities Intermediary shall have
the right to reregister the Capital Securities or any other Securities held in
physical form in its name.

           Except as may be required in order to release Capital Securities or
Treasury Consideration, as applicable, in connection with a Holder's election to
convert its investment from a Normal Unit to a Stripped Unit, or except as
otherwise required to release Capital Securities as specified herein, neither
the Collateral Agent nor the Securities Intermediary shall relinquish physical
possession of any certificate evidencing a Capital Security prior to the
termination of this Agreement. If it becomes necessary for the Securities
Intermediary to relinquish physical possession of a certificate in order to
release a portion of the Capital Securities evidenced thereby from the Pledge,
the Securities Intermediary shall use its best efforts to obtain physical
possession of a replacement certificate evidencing any Capital Securities
remaining subject to the Pledge hereunder registered to it or endorsed in blank
within fifteen days of the date it relinquished possession. The Securities
Intermediary shall promptly notify the Company and the Collateral Agent of the
Securities Intermediary's failure to obtain possession of any such replacement
certificate as required hereby.

           Section 2.2 Control and Perfection. (a) In connection with the Pledge
granted in Section 2.1, and subject to the other provisions of this Agreement,
the Holders from time to time acting through the Purchase Contract Agent, as
their attorney-in-fact, hereby authorize and direct the Securities Intermediary
(without the necessity of obtaining the further consent of the Purchase Contract
Agent or any of the Holders), and the Securities Intermediary agrees, to comply
with and follow any instructions and entitlement orders (as defined in Section
8-102(a)(8) of the Code) that the Collateral Agent may deliver upon the written
direction of the Company with respect to the Collateral Account, the Collateral

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credited thereto and any Security Entitlements with respect to any thereof. Such
instructions and entitlement orders may, without limitation, direct the
Securities Intermediary to transfer, redeem, assign, or otherwise deliver the
Capital Securities, the Treasury Consideration, the Treasury Securities, and any
Security Entitlements with respect thereto or sell, liquidate or dispose of such
assets through a broker designated by the Company, and to pay and deliver any
income, proceeds or other funds derived therefrom to the Company. The Holders
from time to time acting through the Purchase Contract Agent hereby further
authorize and direct the Collateral Agent, as agent of the Company, to, upon
written direction of the Company, itself issue instructions and entitlement
orders, and to otherwise take action, with respect to the Collateral Account,
the Collateral credited thereto and any Security Entitlements with respect
thereto, pursuant to the terms and provisions hereof, all without the necessity
of obtaining the further consent of the Purchase Contract Agent or any of the
Holders. The Collateral Agent shall be the agent of the Company and shall act as
directed in writing by the Company. Without limiting the generality of the
foregoing, the Collateral Agent shall issue entitlement orders to the Securities
Intermediary when and as directed in writing by the Company.

           (b) The Securities Intermediary hereby confirms and agrees that: (i)
all securities or other property underlying any financial assets credited to the
Collateral Account shall be registered in the name of the Securities
Intermediary, or its nominee, indorsed to the Securities Intermediary, or its
nominee, or in blank or credited to another Collateral Account maintained in the
name of the Securities Intermediary and in no case will any financial asset
credited to the Collateral Account be registered in the name of the Purchase
Contract Agent, the Collateral Agent, the Company or any Holder, payable to the
order of, or specially indorsed to, the Purchase Contract Agent, the Collateral
Agent, the Company or any Holder except to the extent the foregoing have been
specially indorsed to the Securities Intermediary or in blank; (ii) all property
delivered to the Securities Intermediary pursuant to this Pledge Agreement
(including, without limitation, any Capital Securities, the Treasury
Consideration or Treasury Securities) will be promptly credited to the
Collateral Account; (iii) the Collateral Account is an account to which
financial assets are or may be credited, and the Securities Intermediary shall,
subject to the terms of this Agreement, treat the Purchase Contract Agent as
entitled to exercise the rights of any financial asset credited to the
Collateral Account; (iv) the Securities Intermediary has not entered into, and
until the termination of this Agreement will not enter into, any agreement with
any other person relating to the Collateral Account and/or any financial assets
credited thereto pursuant to which it has agreed to comply with entitlement
orders (as defined in Section 8-102(a)(8) of the Code) of such other person; and
(v) the Securities Intermediary has not entered into, and until the termination
of this Agreement will not enter into, any agreement with the Company, the
Collateral Agent or the Purchase

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<PAGE>   13

Contract Agent purporting to limit or condition the obligation of the Securities
Intermediary to comply with entitlement orders as set forth in this Section 2.2
hereof.

           (c) The Securities Intermediary hereby agrees that each item of
property (whether investment property, financial asset, security, instrument or
cash) credited to the Collateral Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the Code.

           (d) In the event of any conflict between this Agreement (or any
portion thereof) and any other agreement now existing or hereafter entered into,
the terms of this Agreement shall prevail.

           (e) The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, with full power of substitution,
as the Purchase Contract Agent's attorney-in-fact to take on behalf of, and in
the name, place and stead of the Purchase Contract Agent and the Holders, any
action necessary or desirable to perfect and to keep perfected the security
interest in the Collateral referred to in Section 2.1. The grant of such
power-of-attorney shall not be deemed to require of the Collateral Agent any
specific duties or obligations not otherwise assumed by the Collateral Agent
hereunder. Notwithstanding the foregoing, in no event shall the Collateral Agent
or Securities Intermediary be responsible for the preparation or filing of any
financing or continuation statements in the appropriate jurisdictions or
responsible for maintenance or perfection of any Security Interest hereunder.

                                   ARTICLE III

                       Distributions on Pledged Collateral

           So long as the Purchase Contract Agent is the registered owner of the
Pledged Capital Securities or Pledged Treasury Consideration, it shall receive
all payments thereon. If the Pledged Capital Securities are reregistered, such
that the Collateral Agent becomes the registered holder, all payments of the
Stated Amount of or cash distributions on the Pledged Capital Securities and all
payments of the principal of, or cash distributions on, any Pledged Treasury
Consideration or Pledged Treasury Securities, that are received by

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<PAGE>   14

the Collateral Agent and that are properly payable hereunder shall be paid by
the Collateral Agent by wire transfer in same day funds:

           (i) In the case of (A) quarterly cash distributions on Normal Units
      which include Pledged Capital Securities or Pledged Treasury Consideration
      and (B) any payments with respect to any Capital Securities or Treasury
      Consideration, as the case may be, that have been released from the Pledge
      pursuant to Section 4.3 hereof, to the Purchase Contract Agent, for the
      benefit of the relevant Holders of the Normal Units, to the account
      designated by the Purchase Contract Agent for such purpose, no later than
      2:00 p.m., New York City time, on the Business Day such payment is
      received by the Collateral Agent (provided that in the event such payment
      is received by the Collateral Agent on a day that is not a Business Day or
      after 12:30 p.m., New York City time, on a Business Day, then such payment
      shall be made no later than 10:30 a.m., New York City time, on the next
      succeeding Business Day);

           (ii) In the case of any payments with respect to any Treasury
      Securities that have been released from the Pledge pursuant to Section 4.3
      hereof, to the Holders of the Stripped Units to the accounts designated by
      them in writing for such purpose no later than 2:00 p.m., New York City
      time, on the Business Day such payment is received by the Collateral Agent
      (provided that in the event such payment is received by the Collateral
      Agent on a day that is not a Business Day or after 12:30 p.m., New York
      City time, on a Business Day, then such payment shall be made no later
      than 10:30 a.m., New York City time, on the next succeeding Business Day);
      and

           (iii) In the case of payments in respect of any Pledged Capital
      Securities, Pledged Treasury Consideration or Pledged Treasury Securities,
      to be paid upon settlement of such Holder's obligations to purchase Common
      Stock under the Purchase Contract, to the Company on the Stock Purchase
      Date in accordance with the procedure set forth in Section 4.5(a) or
      4.5(b) hereof, in full satisfaction of the respective obligations of the
      Holders under the related Purchase Contracts.

           All payments received by the Purchase Contract Agent as provided
herein shall be applied by the Purchase Contract Agent pursuant to the
provisions of the Purchase Contract Agreement. If, notwithstanding the
foregoing, the Purchase Contract Agent shall receive any payments of the Stated
Amount on account of any Capital Security or principal of any Treasury
Consideration, as applicable, that, at the time of such payment, is a Pledged
Capital Security or Pledged Treasury Consideration, as the case may be, or a
Holder of a Stripped Unit shall receive any payments of principal on account of
any Treasury Securities that, at the time of such payment, are Pledged Treasury
Securities, the Purchase Contract Agent or such Holder shall hold the same as
trustee of an express trust for the benefit of the Company (and promptly deliver
the same over to the Company) for

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application to the obligations of the Holders under the related Purchase
Contracts, and the Holders shall acquire no right, title or interest in any such
payments of Stated Amount or principal so received.

                                   ARTICLE IV

      Substitution, Release, Repledge and Settlement of Capital Securities

           Section 4.1 Substitution for Capital Securities or Treasury
Consideration and the Creation of Stripped Units. At any time on or prior to the
second Business Day immediately preceding the Stock Purchase Date, a Holder of
Normal Units shall have the right to substitute Treasury Securities for the
Pledged Capital Securities or Pledged Treasury Consideration, as the case may
be, securing such Holder's obligations under the Purchase Contracts comprising a
part of such Normal Units, in integral multiples of 20 Normal Units, or after a
remarketing of the Capital Securities pursuant to the Purchase Contract
Agreement, in integral multiples of Normal Units such that Treasury Securities
to be deposited and the Treasury Consideration to be released are in integral
multiples of $1,000, by (a) Transferring to the Collateral Agent Treasury
Securities having an aggregate principal amount equal to the aggregate Stated
Amount of such Normal Units and (b) delivering such Normal Units to the Purchase
Contract Agent, accompanied by a notice, substantially in the form of Exhibit B
hereto, to the Purchase Contract Agent stating that such Holder has Transferred
Treasury Securities to the Collateral Agent pursuant to clause (a) above
(stating the principal amount, the maturities and the CUSIP numbers of the
Treasury Securities Transferred by such Holder) and requesting that the Purchase
Contract Agent instruct the Collateral Agent to release from the Pledge the
Pledged Capital Securities or Pledged Treasury Consideration, as the case may
be, related to such Normal Units, whereupon the Purchase Contract Agent shall
promptly give such instruction to the Collateral Agent in the form provided in
Exhibit A. Upon receipt of Treasury Securities from a Holder of Normal Units and
the related instruction from the Purchase Contract Agent, the Collateral Agent
shall release the Pledged Capital Securities or Pledged Treasury Consideration,
as the case may be, and shall promptly Transfer such Pledged Capital Securities
or Pledged Treasury Consideration, as the case may be, free and clear of any
lien, pledge or security interest created hereby, to the Purchase Contract
Agent. All items Transferred and/or substituted by any Holder pursuant to this
Section 4.1, Section 4.2 or any other Section of this Agreement shall be
Transferred and/or substituted free and clear of all liens, claims and
encumbrances.

           Section 4.2 Substitution for Treasury Securities and the Creation of
Normal Units. At any time on or prior to the second Business Day immediately
preceding the Stock Purchase Date, a Holder of Stripped Units shall have the
right to reestablish Normal

                                       11
<PAGE>   16

Units (a) consisting of the Purchase Contracts and Capital Securities in
integral multiples of 20 Normal Units, or (b) after a remarketing of the Capital
Securities pursuant to the Purchase Contract Agreement, consisting of the
Purchase Contracts and the appropriate Treasury Consideration in integral
multiples of Stripped Units such that the Treasury Consideration to be deposited
and the Treasury Securities to be released are in integral multiples of $1,000,
by (x) Transferring to the Collateral Agent Capital Securities or the
appropriate Treasury Consideration, as the case may be, then comprising such
number of Normal Units as is equal to such Stripped Units and (y) delivering
such Stripped Units to the Purchase Contract Agent, accompanied by a notice,
substantially in the form of Exhibit B hereto, to the Purchase Contract Agent
stating that such Holder has transferred Capital Securities or Treasury
Consideration to the Collateral Agent pursuant to clause (a) above and
requesting that the Purchase Contract Agent instruct the Collateral Agent to
release from the Pledge the Pledged Treasury Securities related to such Stripped
Units, whereupon the Purchase Contract Agent shall give such instruction to the
Collateral Agent in the form provided in Exhibit A. Upon receipt of the Capital
Securities or the Treasury Consideration, as the case may be, from such Holder
and the instruction from the Purchase Contract Agent, the Collateral Agent shall
release the Pledged Treasury Securities and shall promptly Transfer such
Treasury Securities, free and clear of any lien, pledge or security interest
created hereby, to the Purchase Contract Agent.

           Section 4.3 Termination Event. Upon receipt by the Collateral Agent
of written notice from the Company or the Purchase Contract Agent that there has
occurred a Termination Event, the Collateral Agent shall release all Collateral
from the Pledge and shall promptly Transfer any Pledged Capital Securities or
Pledged Treasury Consideration, as the case may be, and Pledged Treasury
Securities to the Purchase Contract Agent for the benefit of the Holders of the
Normal Units and the Stripped Units, respectively, free and clear of any lien,
pledge or security interest or other interest created hereby.

           If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Capital Securities, Pledged Treasury Consideration or of the Pledged Treasury
Securities, as the case may be, as provided by this Section 4.3, the Purchase
Contract Agent shall (i) use its best efforts to obtain an opinion of a
nationally recognized law firm reasonably acceptable to the Collateral Agent to
the effect that, as a result of the Company's being the debtor in such a
bankruptcy case, the Collateral Agent will not be prohibited from releasing or
Transferring the Collateral as provided in this Section 4.3, and shall deliver
such opinion to the Collateral Agent within ten days after the occurrence of
such Termination Event, and if (y) the Purchase Contract Agent shall be unable
to obtain such opinion within ten days after the occurrence of such Termination
Event or (z) the Collateral Agent shall continue, after delivery of such
opinion, to refuse to effectuate the release and Transfer of all Pledged Capital
Securities,

                                       12
<PAGE>   17

Pledged Treasury Consideration or Pledged Treasury Securities, as the case may
be, as provided in this Section 4.3, then the Purchase Contract Agent shall
within fifteen days after the occurrence of such Termination Event commence an
action or proceeding in the court with jurisdiction of the Company's case under
the Bankruptcy Code seeking an order requiring the Collateral Agent to
effectuate the release and transfer of all Pledged Capital Securities, Pledged
Treasury Consideration or Pledged Treasury Securities, as the case may be, as
provided by this Section 4.3 or (ii) commence an action or proceeding like that
described in subsection (i)(z) hereof within ten days after the occurrence of
such Termination Event.

           Section 4.4 Early Settlement; Merger Early Settlement. Upon written
notice to the Collateral Agent by the Purchase Contract Agent that one or more
Holders of Securities have elected to effect Early Settlement or Merger Early
Settlement of their respective obligations under the Purchase Contracts forming
a part of such Securities in accordance with the terms of the Purchase Contracts
and the Purchase Contract Agreement (setting forth the number of such Purchase
Contracts as to which such Holders have elected to effect Early Settlement or
Merger Early Settlement), and that the Purchase Contract Agent has received from
such Holders, and paid to the Company as confirmed in writing by the Company,
the related Early Settlement Amounts or Merger Early Settlement Amounts, as the
case may be, pursuant to the terms of the Purchase Contracts and the Purchase
Contract Agreement and that all conditions to such Early Settlement or Merger
Early Settlement, as the case may be, have been satisfied, then the Collateral
Agent shall release from the Pledge, (a) Pledged Capital Securities or Pledged
Treasury Consideration, as the case may be, in the case of a Holder of Normal
Units or (b) Pledged Treasury Securities, in the case of a Holder of Stripped
Units, relating to such Purchase Contracts as to which such Holders have elected
to effect Early Settlement or Merger Early Settlement, and shall Transfer all
such Pledged Capital Securities, Pledged Treasury Consideration or Pledged
Treasury Securities, as the case may be, free and clear of the Pledge created
hereby, to the Purchase Contract Agent for the benefit of the Holders.

           Section 4.5 Remarketing; Application of Proceeds; Settlement. (a)
Pursuant to the Purchase Contract Agreement, the Purchase Contract Agent shall
notify, by 10:00 a.m., New York City time, on the third Business Day immediately
preceding the Remarketing Date or any Subsequent Remarketing Date, as the case
may be, the Remarketing Agent and the Collateral Agent of the aggregate number
of Capital Securities to be remarketed. The Collateral Agent shall, by 10:00
a.m., New York City time, on the first Business Day immediately preceding the
Remarketing Date or any Subsequent Remarketing Date, as the case may be, without
any instruction from Holders of Normal Units, deliver (i) the Pledged Capital
Securities to be remarketed to the Remarketing Agent for remarketing and (ii)
the remaining Pledged Capital Securities to the Purchase Contract Agent for
distribution to the Holders that have elected not to participate in the

                                       13
<PAGE>   18

remarketing in accordance with the Purchase Contract Agreement. The Remarketing
Agent will deliver the Treasury Consideration purchased from the proceeds of the
remarketing to the Purchase Contract Agent, which shall thereupon deliver such
Treasury Consideration to the Collateral Agent. Upon receipt of the appropriate
Treasury Consideration from the Purchase Contract Agent following a successful
remarketing, the Collateral Agent, for the benefit of the Company, shall
thereupon apply such Treasury Consideration to secure such Holders' obligations
under the Purchase Contracts. On the Stock Purchase Date, the Collateral Agent
shall apply that portion of the payments received in respect of the Pledged
Treasury Consideration equal to the aggregate Stated Amount of the related
Normal Units to satisfy in full the obligations of such Holders of Normal Units
to pay the Purchase Price under the related Purchase Contracts. The remaining
portion of such Proceeds, if any, shall be distributed by the Collateral Agent
to the Purchase Contract Agent for payment to such Holders.

           Within three Business Days following a Failed Remarketing, the
Capital Securities delivered to the Remarketing Agent and the Purchase Capital
Agent pursuant to Section 4.5(a) shall be returned to the Collateral Agent,
together with written notice from the Remarketing Agent of the Failed
Remarketing. The Collateral Agent, for the benefit of the Company, shall
thereupon apply such Capital Securities to secure the Normal Units Holders'
obligations under the Purchase Contracts. The Remarketing Agent may make one or
more attempts to remarket the Capital Securities in accordance with the
procedures set forth in the Purchase Contract Agreement and the Remarketing
Agreement between the Remarketing Date and the Stock Purchase Date. If by the
Stock Purchase Date the Remarketing Agent has failed to remarket the Capital
Securities at 100.5% of the Remarketing Value, the Remarketing Agent shall
advise the Collateral Agent in writing that it cannot remarket the related
Pledged Capital Securities of such Holders of Normal Units. The Collateral
Agent, for the benefit of the Company will, at the written direction of the
Company, retain or dispose of the Pledged Capital Securities in accordance with
applicable law and satisfy in full, from any such disposition or retention, such
Holders' obligations to pay the Purchase Price for the Common Stock; provided,
that if upon a Failed Remarketing, the Collateral Agent exercises such rights
for the benefit of the Company with respect to such Capital Securities, any
accumulated and unpaid distributions on such Capital Securities will become
payable by the Company to the Purchase Contract Agent for payment to the Holder
of the Normal Units to which such Capital Securities relates in accordance with
the Purchase Contract Agreement.

           (b) In the event a Holder of Stripped Units has not made an Early
Settlement or Merger Early Settlement of the Purchase Contracts underlying its
Stripped Units, such Holder shall be deemed to have elected to pay for the
shares of Common Stock to be issued under such Purchase Contracts from the
payments received in respect of the related Pledged Treasury Securities. Without
receiving any instruction from any such Holder of

                                       14
<PAGE>   19

Stripped Units, the Collateral Agent shall apply such payments to the settlement
of such Purchase Contracts on the Stock Purchase Date. In the event the payments
received in respect of the related Pledged Treasury Securities is in excess of
the aggregate Purchase Price of the Purchase Contracts being settled thereby,
the Collateral Agent shall distribute such excess, when received, to the
Purchase Contract Agent for the benefit of the Holders.

           (c) Pursuant to the Remarketing Agreement and subject to the terms of
the Remarketing Underwriting Agreement, on or prior to the fourth Business Day
immediately preceding the Remarketing Date, but no earlier than the Payment Date
immediately preceding the Remarketing Date, holders of Separate Capital
Securities may elect to have their Separate Capital Securities remarketed by
delivering their Separate Capital Securities, together with a notice of such
election, substantially in the form of Exhibit C hereto, to the Custodial Agent.
The Custodial Agent will hold such Separate Capital Securities in an account
separate from the Collateral Account. A holder of Separate Capital Securities
electing to have its Separate Capital Securities remarketed will also have the
right to withdraw such election by written notice to the Custodial Agent,
substantially in the form of Exhibit D hereto, on or prior to the first Business
Day immediately preceding the Remarketing Date and any Subsequent Remarketing
Date, upon which notice the Custodial Agent will return such Separate Capital
Securities to such holder. On the first Business Day immediately preceding the
Remarketing Date and any Subsequent Remarketing Date, the Custodial Agent will
deliver to the Remarketing Agent for remarketing all Separate Capital Securities
delivered to the Custodial Agent pursuant to this Section 4.5(c) and not
withdrawn pursuant to the terms hereof prior to such date. The portion of the
proceeds from such remarketing equal to the aggregate Value of such Separate
Capital Securities will automatically be remitted by the Remarketing Agent to
the Custodial Agent for the benefit of the holders of such Separate Capital
Securities. In addition, after deducting as the remarketing fee an amount not
exceeding 25 basis points (.25%) of the total proceeds of such remarketing, the
Remarketing Agent will remit to the Custodial Agent the remaining portion of the
proceeds, if any, for the benefit of such holders. If, despite using its
reasonable best efforts, the Remarketing Agent advises the Custodial Agent in
writing that there has been a Failed Remarketing, the Remarketing Agent will
promptly return such Capital Securities to the Custodial Agent for redelivery to
such holders. In the event of a dissolution of the Trust and the distribution of
the Debentures as described in the Declaration, all references to "Separate
Capital Securities" in this Section 4.5(c) shall be deemed to be references to
Debentures which are not pledged hereunder or required to be part of the
Collateral.

                                       15
<PAGE>   20

                                    ARTICLE V

                       Voting Rights -- Capital Securities

           The Purchase Contract Agent may exercise, or refrain from exercising,
any and all voting and other consensual rights pertaining to the Pledged Capital
Securities or any part thereof for any purpose not inconsistent with the terms
of this Agreement and in accordance with the terms of the Purchase Contract
Agreement; provided, that the Purchase Contract Agent shall not exercise or, as
the case may be, shall not refrain from exercising such right if, in the
judgment of the Company, such action would impair or otherwise have a material
adverse effect on the value of all or any of the Pledged Capital Securities; and
provided, further, that the Purchase Contract Agent shall give the Company and
the Collateral Agent at least five days' prior written notice of the manner in
which it intends to exercise, or its reasons for refraining from exercising, any
such right. Upon receipt of any notices and other communications in respect of
any Pledged Capital Securities, including notice of any meeting at which holders
of Capital Securities are entitled to vote or solicitation of consents, waivers
or proxies of holders of Capital Securities, the Collateral Agent shall use
reasonable efforts to send promptly to the Purchase Contract Agent such notice
or communication, and as soon as reasonably practicable after receipt of a
written request therefor from the Purchase Contract Agent, execute and deliver
to the Purchase Contract Agent such proxies and other instruments in respect of
such Pledged Capital Securities (in form and substance satisfactory to the
Collateral Agent) as are prepared by the Purchase Contract Agent with respect to
the Pledged Capital Securities.

                                   ARTICLE VI

               Rights and Remedies; Distribution of the Debentures

           Section 6.1 Rights and Remedies of the Collateral Agent. (a) In
addition to the rights and remedies available at law or in equity, after an
event of default hereunder, the Collateral Agent shall have all of the rights
and remedies with respect to the Collateral of a secured party under the Uniform
Commercial Code (or any successor thereto) as in effect in the State of New York
from time to time (the "Code") (whether or not the Code is in effect in the
jurisdiction where the rights and remedies are asserted) and the TRADES
Regulations and such additional rights and remedies to which a secured party is
entitled under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted. Wherever reference is made in this Agreement
to any section of the Code, such reference shall be deemed to include a
reference to any provision of the Code which is a successor to, or amendment of,
such section. Without limiting the generality of the

                                       16
<PAGE>   21

foregoing, such remedies may include, to the extent permitted by applicable law,
(i) retention of the Pledged Capital Securities or other Collateral in full
satisfaction of the Holders' obligations under the Purchase Contracts or (ii)
sale of the Pledged Capital Securities or other Collateral in one or more public
or private sales at the written direction of the Company.

           (b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of any Pledged Treasury Consideration
or Pledged Treasury Securities as provided in Article III hereof in satisfaction
of the obligations of the Holder of the Securities of which such Pledged
Treasury Consideration or Pledged Treasury Securities, as applicable, is a part
under the related Purchase Contracts, the inability to make such payments shall
constitute an event of default hereunder and the Collateral Agent shall have and
may exercise, with reference to such Pledged Treasury Securities or such Pledged
Treasury Consideration, as applicable, and such obligations of such Holder, any
and all of the rights and remedies available to a secured party under the Code
and the TRADES Regulations after default by a debtor, and as otherwise granted
herein or under any other law.

           (c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the Stated Amount of or,
cash distributions on, the Pledged Capital Securities, or (ii) the principal
amount of the Pledged Treasury Consideration or Pledged Treasury Securities,
subject, in each case, to the provisions of Section 3, and as otherwise granted
herein.

           (d) The Purchase Contract Agent, individually and as attorney-in-fact
for each Holder of Securities, agrees that, from time to time, upon the written
request of the Company or the Collateral Agent (acting upon the written request
of the Company), the Purchase Contract Agent or such Holder shall execute and
deliver such further documents and do such other acts and things as the Company
or the Collateral Agent (acting upon the written request of the Company) may
reasonably request in order to maintain the Pledge, and the perfection and
priority thereof, and to confirm the rights of the Collateral Agent hereunder.
The Purchase Contract Agent shall have no liability to any Holder for executing
any documents or taking any such acts requested by the Company or the Collateral
Agent (acting upon the written request of the Company) hereunder, except for
liability for its own negligent act, its own negligent failure to act, its bad
faith or its own willful misconduct.

           Section 6.2 Distribution of the Debentures. Upon the occurrence of a
voluntary or involuntary dissolution of the Trust, a principal amount of the
Debentures constituting

                                       17
<PAGE>   22

the assets of the Trust and underlying the Capital Securities equal to the
aggregate stated liquidation amount of the Pledged Capital Securities shall be
delivered to the Collateral Agent in exchange for the Pledged Capital
Securities. In the event the Collateral Agent receives such Debentures in
respect of Pledged Capital Securities upon the occurrence of a voluntary or
involuntary dissolution of the Trust, the Collateral Agent shall Transfer such
Debentures to the Collateral Account in the manner specified herein (including,
without limitation, physical delivery thereof as set forth in Section 2.1) for
Pledged Capital Securities to secure the obligations of the Holders of Normal
Units to purchase the Company's Common Stock under the related Purchase
Contracts. Thereafter, the Collateral Agent shall have such security interests,
rights and obligations with respect to such Debentures as it had in respect of
the Pledged Capital Securities as provided in Articles II, III, IV, V and VI
hereof, and any reference herein to the Capital Securities or Pledged Capital
Securities shall be deemed to be referring to such Debentures.

           Section 6.3 Substitutions. Whenever a Holder has the right to
substitute Treasury Securities, Capital Securities or Treasury Consideration, as
the case may be, for Collateral held by the Collateral Agent, such substitution
shall not constitute a novation of the security interest created hereby.

                                   ARTICLE VII

                    Representations and Warranties; Covenants

           Section 7.1 Representations and Warranties. The Holders from time to
time, acting through the Purchase Contract Agent as their attorney-in-fact (it
being understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represent
and warrant to the Collateral Agent, which representations and warranties shall
be deemed repeated on each day a Holder Transfers Collateral that:

           (a)  such Holder has the power to grant a security interest in and
      lien on the Collateral;

           (b) such Holder is the sole beneficial owner of the Collateral and,
      in the case of Collateral delivered in physical form, is the sole holder
      of such Collateral and is the sole beneficial owner of, or has the right
      to Transfer, the Collateral it Transfers to the Collateral Agent, free and
      clear of any security interest, lien, encumbrance, call, liability to pay
      money or other restriction other than the security interest and lien
      granted under Section 2.1 hereof;

                                       18
<PAGE>   23

           (c) upon the Transfer of the Collateral to the Collateral Account,
      the Collateral Agent, for the benefit of the Company, will have a valid
      and perfected first priority security interest therein (assuming that any
      central clearing operation or any Intermediary or other entity not within
      the control of the Holder involved in the Transfer of the Collateral,
      including the Collateral Agent, gives the notices and takes the action
      required of it hereunder and under applicable law for perfection of that
      interest and assuming the establishment and exercise of control pursuant
      to Section 2.2 hereof); and

           (d) the execution and performance by the Holder of its obligations
      under this Agreement will not result in the creation of any security
      interest, lien or other encumbrance on the Collateral other than the
      security interest and lien granted under Section 2.1 hereof or violate any
      provision of any existing law or regulation applicable to it or of any
      mortgage, charge, pledge, indenture, contract or undertaking to which it
      is a party or which is binding on it or any of its assets.

           Section 7.2 Covenants. The Holders from time to time, acting through
the Purchase Contract Agent as their attorney-in-fact (it being understood that
the Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so long as
the Collateral remains subject to the Pledge:

           (a) neither the Purchase Contract Agent nor such Holders will create
      or purport to create or allow to subsist any mortgage, charge, lien,
      pledge or any other security interest whatsoever over the Collateral or
      any part of it other than pursuant to this Agreement; and

           (b) neither the Purchase Contract Agent nor such Holders will sell or
      otherwise dispose (or attempt to dispose) of the Collateral or any part of
      it except for the beneficial interest therein, subject to the pledge
      hereunder, transferred in connection with the Transfer of the Securities.

                                  ARTICLE VIII

                              The Collateral Agent

           Section 8.1 Appointment, Powers and Immunities. The Collateral Agent
shall act as Agent for the Company hereunder with such powers as are
specifically vested in the Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. Each of
the Collateral Agent, the Custodial Agent and the

                                       19
<PAGE>   24

Securities Intermediary: (a) shall have no duties or responsibilities except
those expressly set forth in this Agreement and no implied covenants or
obligations shall be inferred from this Agreement against any of them, nor shall
any of them be bound by the provisions of any agreement by any party hereto
beyond the specific terms hereof; (b) shall not be responsible for any recitals
contained in this Agreement, or in any certificate or other document referred to
or provided for in, or received by it under, this Agreement, the Securities or
the Purchase Contract Agreement, or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement (other than as
against the Collateral Agent), the Securities or the Purchase Contract Agreement
or any other document referred to or provided for herein or therein or for any
failure by the Company or any other Person (except the Collateral Agent, the
Custodial Agent or the Securities Intermediary, as the case may be) to perform
any of its obligations hereunder or thereunder or for the perfection, priority
or, except as expressly required hereby, existence, validity, perfection or
maintenance of any security interest created hereunder; (c) shall not be
required to initiate or conduct any litigation or collection proceedings
hereunder (except in the case of the Collateral Agent, pursuant to directions
furnished under Section 8.2 hereof, subject to Section 8.6 hereof); (d) shall
not be responsible for any action taken or omitted to be taken by it hereunder
or under any other document or instrument referred to or provided for herein or
in connection herewith or therewith, except for its own gross negligence, bad
faith or willful misconduct; and (e) shall not be required to advise any party
as to selling or retaining, or taking or refraining from taking any action with
respect to, the Securities or other property deposited hereunder. Subject to the
foregoing, during the term of this Agreement, the Collateral Agent shall take
all reasonable action in connection with the safekeeping and preservation of the
Collateral hereunder.

           No provision of this Agreement shall require the Collateral Agent,
the Custodial Agent or the Securities Intermediary to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder. In no event shall the Collateral Agent, the Custodial
Agent or the Securities Intermediary be liable for any amount in excess of the
value of the Collateral or for any special, indirect, individual, consequential
damages or lost profits or loss of business, arising in connection with this
Agreement. Notwithstanding the foregoing, the Collateral Agent, the Custodial
Agent, the Purchase Contract Agent and Securities Intermediary, each in its
individual capacity, hereby waive any right of setoff, bankers lien, liens or
perfection rights as securities intermediary or any counterclaim with respect to
any of the Collateral.

           The Collateral Agent, Custodian Agent and Securities Intermediary
shall have no liability whatsoever for the action or inaction of the Book-Entry
System or any Clearing Corporation. In no event shall the Book-Entry System or
any Clearing Corporation be deemed an agent or subcustodian of the Collateral
Agent, Custodian Agent and Securities

                                       20
<PAGE>   25

Intermediary. The Collateral Agent, Custodian Agent and Securities Intermediary
shall not be responsible or liable for any failure or delay in the performance
of its obligations under this Agreement arising out of or caused, directly or
indirectly, by circumstances beyond its reasonable control, including, without
limitation, acts of God; earthquakes; fires; floods; wars; civil or military
disturbances; sabotage; epidemics; riots; interruptions, loss or malfunctions of
utilities, computer (hardware or software) or communications service; accidents;
labor disputes; acts of civil or military authority; governmental actions;
inability or obtain labor, material, equipment or transportation.

           Section 8.2 Instructions of the Company. The Company shall have the
right, by one or more instruments in writing executed and delivered to the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, to direct the time, method and place of conducting any proceeding
for the realization of any right or remedy available to the Collateral Agent, or
of exercising any power conferred on the Collateral Agent, the Custodial Agent
or the Securities Intermediary, as the case may be, or to direct the taking or
refraining from taking of any action authorized by this Agreement; provided,
however, that (i) such direction shall not conflict with the provisions of any
law or of this Agreement and (ii) the Collateral Agent, the Custodial Agent and
the Securities Intermediary shall receive indemnity satisfactory to it as
provided herein. Nothing in this Section 8.2 shall impair the right of the
Collateral Agent in its discretion to take any action or omit to take any action
which it deems proper and which is not inconsistent with such direction.

           Section 8.3 Reliance by Collateral Agent. Each of the Securities
Intermediary, the Custodial Agent and the Collateral Agent shall be entitled
conclusively to rely upon any certification, order, judgment, opinion, notice or
other communication (including, without limitation, any thereof by telephone or
facsimile) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon advice and
statements of legal counsel and other experts selected by the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be. As to
any matters not expressly provided for by this Agreement, the Collateral Agent,
the Custodial Agent and the Securities Intermediary shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions given by the Company in accordance with this Agreement.

           Section 8.4 Rights in Other Capacities. The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent, any Holder of
Securities and any holder of Separate Capital Securities

                                       21
<PAGE>   26

(and any of their respective subsidiaries or affiliates) as if it were not
acting as the Collateral Agent, the Custodial Agent or the Securities
Intermediary, as the case may be, and the Collateral Agent, the Custodial Agent
and the Securities Intermediary and their affiliates may accept fees and other
consideration from the Purchase Contract Agent, any Holder of Securities or any
holder of Separate Capital Securities without having to account for the same to
the Company; provided that each of the Securities Intermediary, the Custodial
Agent and the Collateral Agent covenants and agrees with the Company that it
shall not accept, receive or permit there to be created in favor of itself and
shall take no affirmative action to permit there to be created in favor of any
other Person, any security interest, lien or other encumbrance of any kind in or
upon the Collateral and the Collateral shall not be commingled with any other
assets of any such Person.

           Section 8.5 Non-Reliance on Collateral Agent. None of the Securities
Intermediary, the Custodial Agent or the Collateral Agent shall be required to
keep itself informed as to the performance or observance by the Purchase
Contract Agent or any Holder of Securities of this Agreement, the Purchase
Contract Agreement, the Securities or any other document referred to or provided
for herein or therein or to inspect the properties or books of the Purchase
Contract Agent or any Holder of Securities. The Collateral Agent, the Custodial
Agent and the Securities Intermediary shall not have any duty or responsibility
to provide the Company or the Remarketing Agent with any credit or other
information concerning the affairs, financial condition or business of the
Purchase Contract Agent, any Holder of Securities or any holder of Separate
Capital Securities (or any of their respective subsidiaries or affiliates) that
may come into the possession of the Collateral Agent, the Custodial Agent or the
Securities Intermediary or any of their respective affiliates.

           Section 8.6 Compensation and Indemnity. The Company agrees: (i) to
pay each of the Collateral Agent and the Custodial Agent from time to time such
compensation as shall be agreed in writing between the Company and the
Collateral Agent or the Custodial Agent, as the case may be, for all services
rendered by each of them hereunder and (ii) to indemnify the Collateral Agent,
the Custodial Agent and the Securities Intermediary for, and to hold each of
them harmless from and against, any loss, liability or reasonable out-of-pocket
expense incurred without gross negligence, willful misconduct or bad faith on
its part, arising out of or in connection with the acceptance or administration
of its powers and duties under this Agreement, including the reasonable
out-of-pocket costs and expenses (including reasonable fees and expenses of
counsel) of defending itself against any claim or liability in connection with
the exercise or performance of such powers and duties or collecting such
amounts. The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall each promptly notify the Company of any third party claim
which may give rise to the indemnity hereunder and give the Company the
opportunity to participate in the defense of such claim with counsel reasonably
satisfactory to the

                                       22
<PAGE>   27

indemnified party, and no such claim shall be settled without the written
consent of the Company, which consent shall not be unreasonably withheld.

           Section 8.7 Failure to Act. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, the Collateral Agent and the Custodial Agent shall
be entitled, after prompt notice to the Company and the Purchase Contract Agent,
at its sole option, to refuse to comply with any and all claims, demands or
instructions with respect to such property or funds so long as such dispute or
conflict shall continue, and neither the Collateral Agent nor the Custodial
Agent shall be or become liable in any way to any of the parties hereto for its
failure or refusal to comply with such conflicting claims, demands or
instructions. The Collateral Agent and the Custodial Agent shall be entitled to
refuse to act until either (i) such conflicting or adverse claims or demands
shall have been finally determined by a court of competent jurisdiction or
settled by agreement between the conflicting parties as evidenced in a writing,
satisfactory to the Collateral Agent or the Custodial Agent, as the case may be,
or (ii) the Collateral Agent or the Custodial Agent, as the case may be, shall
have received security or an indemnity satisfactory to the Collateral Agent or
the Custodial Agent, as the case may be, sufficient to save the Collateral Agent
or the Custodial Agent, as the case may be, harmless from and against any and
all loss, liability or reasonable out-of-pocket expense which the Collateral
Agent or the Custodial Agent, as the case may be, may incur by reason of its
acting without bad faith, willful misconduct or gross negligence. The Collateral
Agent or the Custodial Agent may in addition elect to commence an interpleader
action or seek other judicial relief or orders as the Collateral Agent or the
Custodial Agent, as the case may be, may deem necessary. Notwithstanding
anything contained herein to the contrary, neither the Collateral Agent nor the
Custodial Agent shall be required to take any action that is in its opinion
contrary to law or to the terms of this Agreement, or which would in its opinion
subject it or any of its officers, employees or directors to liability.

           Section 8.8 Resignation of Collateral Agent. Subject to the
appointment and acceptance of a successor Collateral Agent or Custodial Agent as
provided below, (a) the Collateral Agent and the Custodial Agent may resign at
any time by giving notice thereof to the Company and the Purchase Contract Agent
as attorney-in-fact for the Holders of Securities, (b) the Collateral Agent and
the Custodial Agent may be removed at any time by the Company and (c) if the
Collateral Agent or the Custodial Agent fails to perform any of its material
obligations hereunder in any material respect for a period of not less than 20
days after receiving written notice of such failure by the Purchase Contract
Agent and such failure shall be continuing, the Collateral Agent or the
Custodial Agent may be removed by the Purchase Contract Agent. The Purchase
Contract Agent shall promptly notify the Company of any removal of the
Collateral Agent pursuant to clause (c) of the

                                       23
<PAGE>   28

immediately preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent or
Custodial Agent, as the case may be. If no successor Collateral Agent or
Custodial Agent, as the case may be, shall have been so appointed and shall have
accepted such appointment within 30 days after the retiring Collateral Agent's
or Custodial Agent's giving of notice of resignation or such removal, then the
retiring Collateral Agent or Custodial Agent, as the case may be, may at the
Company's expense petition any court of competent jurisdiction for the
appointment of a successor Collateral Agent or Custodial Agent, as the case may
be. Each of the Collateral Agent and the Custodial Agent shall be a bank which
has an office in New York, New York with a combined capital and surplus of at
least $50,000,000. Upon the acceptance of any appointment as Collateral Agent or
Custodial Agent, as the case may be, hereunder by a successor Collateral Agent
or Custodial Agent, as the case may be, such successor shall thereupon succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Collateral Agent or Custodial Agent, as the case may be, and the
retiring Collateral Agent or Custodial Agent, as the case may be, shall take all
appropriate action to transfer any money and property held by it hereunder
(including the Collateral) to such successor. The retiring Collateral Agent or
Custodial Agent shall, upon such succession, be discharged from its duties and
obligations as Collateral Agent or Custodial Agent hereunder. After any retiring
Collateral Agent's or Custodial Agent's resignation hereunder as Collateral
Agent or Custodial Agent, the provisions of this Section 8.8 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as the Collateral Agent or Custodial Agent. Any
resignation or removal of the Collateral Agent hereunder shall be deemed for all
purposes of this Agreement as the simultaneous resignation or removal of the
Custodial Agent and the Securities Intermediary.

           Section 8.9 Right to Appoint Agent or Advisor. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents (other than legal counsel)
pursuant to this Section 8.9 shall be subject to prior consent of the Company,
which consent shall not be unreasonably withheld.

           Section 8.10 Survival. The provisions of this Article 8 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent or the Custodial Agent.

           Section 8.11 Exculpation. Anything in this Agreement to the contrary
notwithstanding, in no event shall any of the Collateral Agent, the Custodial
Agent or the Securities Intermediary or their officers, employees or agents be
liable under this Agreement to any third party for indirect, special, punitive,
or consequential loss or

                                       24
<PAGE>   29

damage of any kind whatsoever, including lost profits, whether or not the
likelihood of such loss or damage was known to the Collateral Agent, the
Custodial Agent or the Securities Intermediary, or any of them, incurred without
any act or deed that is found to be attributable to gross negligence, bad faith
or willful misconduct on the part of the Collateral Agent, the Custodial Agent
or the Securities Intermediary.

                                   ARTICLE IX

                                    Amendment

           Section 9.1 Amendment Without Consent of Holders. Without the consent
of any Holders or the holders of any Separate Capital Securities, the Company,
the Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, at any time and from time to time, may amend this
Agreement, in form satisfactory to the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
for any of the following purposes:

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

           (2) to add to the covenants of the Company for the benefit of the
      Holders, or to surrender any right or power herein conferred upon the
      Company so long as such covenants or such surrender do not adversely
      affect the validity, perfection or priority of the security interests
      granted or created hereunder; or

           (3) to evidence and provide for the acceptance of appointment
      hereunder by a successor Collateral Agent, Securities Intermediary or
      Purchase Contract Agent; or

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

           Section 9.2 Amendment with Consent of Holders. With the consent of
the Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
duly authorized, the Purchase Contract Agent, the Collateral Agent, the
Custodial Agent and the Securities Intermediary may amend this Agreement for the
purpose of modifying in any manner the provisions of this Agreement or the
rights of the Holders in respect of the Securities; provided,

                                       25
<PAGE>   30

however, that no such supplemental agreement shall, without the consent of the
Holder of each Outstanding Security adversely affected thereby,

           (1) change the amount or type of Collateral underlying a Security
      (except for the rights of holders of Normal Units to substitute the
      Treasury Securities for the Pledged Capital Securities or the Pledged
      Treasury Consideration, as the case may be, or the rights of Holders of
      Stripped Units to substitute Capital Securities or the appropriate
      Treasury Consideration, as applicable, for the Pledged Treasury
      Securities), impair the right of the Holder of any Security to receive
      distributions on the underlying Collateral or otherwise adversely affect
      the Holder's rights in or to such Collateral; or

           (2) otherwise effect any action that would require the consent of the
      Holder of each Outstanding Security affected thereby pursuant to the
      Purchase Contract Agreement if such action were effected by an agreement
      supplemental thereto; or

           (3) reduce the percentage of Purchase Contracts the consent of whose
      Holders is required for any such amendment.

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

           Section 9.3 Execution of Amendments. In executing any amendment
permitted by this Section, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall receive and
(subject to Section 6.1 hereof, with respect to the Collateral Agent, and
Section 7.1 of the Purchase Contract Agreement, with respect to the Purchase
Contract Agent) shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such amendment is authorized or permitted by this
Agreement and that all conditions precedent, if any, to the execution and
delivery of such amendment have been satisfied and in the case of an amendment
pursuant to Section 9.1, that such amendment does no adversely affect the
validity, perfection or priority of the security interests granted or created
hereunder.

           Section 9.4 Effect of Amendments. Upon the execution of any amendment
under this Article 9, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered under the Purchase Contract Agreement
shall be bound thereby.

           Section 9.5 Reference to Amendments. Security Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any amendment

                                       26
<PAGE>   31

pursuant to this Section may, and shall if required by the Collateral Agent or
the Purchase Contract Agent, bear a notation in form approved by the Purchase
Contract Agent and the Collateral Agent as to any matter provided for in such
amendment. If the Company shall so determine, new Security Certificates so
modified as to conform, in the opinion of the Collateral Agent, the Purchase
Contract Agent and the Company, to any such amendment may be prepared and
executed by the Company and authenticated, executed on behalf of the Holders and
delivered by the Purchase Contract Agent in accordance with the Purchase
Contract Agreement in exchange for outstanding Security Certificates.

                                    ARTICLE X

                                  Miscellaneous

           Section 10.1 No Waiver. No failure on the part of any party hereto or
any of its agents to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by any party hereto or
any of its agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.

           Section 10.2 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO ITS PRINCIPLES OF CONFLICTS OF LAWS. Without limiting the foregoing, the
above choice of law is expressly agreed to by the Securities Intermediary, the
Collateral Agent and the Holders from time to time acting through the Purchase
Contract Agent, as their attorney-in-fact, in connection with the establishment
and maintenance of the Collateral Account. The Company, the Collateral Agent and
the Holders from time to time of the Securities, acting through the Purchase
Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby. The Company, the Collateral Agent and
the Holders from time to time of the Securities, acting through the Purchase
Contract Agent as their attorney-in-fact, irrevocably waive, to the fullest
extent permitted by applicable law, any objection which they may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding brought in such a court has been
brought in an inconvenient forum.

                                       27
<PAGE>   32

           Section 10.3 Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when personally delivered or, in the case of a mailed notice or
notice transmitted by telecopier, upon receipt, in each case given or addressed
as aforesaid.

           Section 10.4 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Purchase Contract Agent, and the Holders from time to time of the
Securities, by their acceptance of the same, shall be deemed to have agreed to
be bound by the provisions hereof and to have ratified the agreements of, and
the grant of the Pledge hereunder by, the Purchase Contract Agent.

           Section 10.5 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.

           Section 10.6 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.

           Section 10.7 Expenses, Etc. The Company agrees to reimburse the
Collateral Agent and the Custodial Agent for: (a) all reasonable out-of-pocket
costs and expenses of the Collateral Agent and the Custodial Agent (including,
without limitation, the reasonable fees and expenses of counsel to the
Collateral Agent and the Custodial Agent), in connection with (i) the
negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement; (b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its obligations
under the Purchase Contracts forming a part of the Securities and (ii) the
enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any other document referred to
herein

                                       28
<PAGE>   33

and all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated hereby.

           Section 10.8 Security Interest Absolute. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:

           (a) any lack of validity or enforceability of any provision of the
      Purchase Contracts or the Securities or any other agreement or instrument
      relating thereto;

           (b) any change in the time, manner or place of payment of, or any
      other term of, or any increase in the amount of, all or any of the
      obligations of Holders of Securities under the related Purchase Contracts,
      or any other amendment or waiver of any term of, or any consent to any
      departure from any requirement of, the Purchase Contract Agreement or any
      Purchase Contract or any other agreement or instrument relating thereto;
      or

           (c) any other circumstance which might otherwise constitute a defense
      available to, or discharge of, a borrower, a guarantor or a pledgor.

           Section 10.9 Waiver of Jury Trial.  EACH PARTY ACKNOWLEDGES AND
AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

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

                                  METLIFE, INC.

                                  By:
                                  Name:
                                  Title:

                                       29
<PAGE>   34

                             Address for Notices:

                             MetLife, Inc.
                             One Madison Avenue
                             New York, New York 10010
                             Attention:
                             Telecopy: (212) 578-____

                             BANK ONE TRUST COMPANY, N.A., as
                             Purchase Contract Agent and as
                             attorney-in-fact of the Holders
                             from time to time of the
                             Securities

                             By:
                             Name:
                             Title:

                             Address for Notices:

                             Bank One Trust Company, N.A.
                             One North State Street, 9th Floor
                             Chicago, Illinois 60602
                             Attention: Corporate Trust Services Division
                             Telecopy:  (312) 407-1708

                             THE BANK OF NEW YORK, as Collateral
                             Agent, Custodial Agent and as Securities
                             Intermediary

                             By:
                             Name:
                             Title:

                                       30
<PAGE>   35

                            Address for Notices:

                            101 Barclay Street, Floor 12 East
                            New York, New York 10286
                            Attention: Dealing and Trading Group,
                            David Kolibachuk
                            Telecopy: (212) 815-7157

                                       31
<PAGE>   36
                                                                       EXHIBIT A

                       INSTRUCTION FROM PURCHASE CONTRACT
                            AGENT TO COLLATERAL AGENT

The Bank of New York
[Address]
Attention:  Corporate Trust Administration

                 Re: Equity Security Units of MetLife, Inc. (the
                     "Company"), and MetLife Capital Trust I

           We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of __________, 2000, (the "Pledge Agreement") among
the Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Normal Units] [Stripped Units] from time to time, that the
holder of Securities listed below (the "Holder") has elected to substitute
[$_____ aggregate principal amount of Treasury Securities (CUSIP No. _____)]
[$_______stated liquidation amount of Capital Securities or $_____ principal
amount of Treasury Consideration (CUSIP No. _____)] in exchange for the related
[Pledged Capital Securities or Pledged Treasury Consideration] [Pledged Treasury
Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Capital Securities or the Treasury Consideration] to you, as
Collateral Agent. We hereby instruct you, upon receipt of such [Pledged Treasury
Securities] [Pledged Capital Securities or Pledged Treasury Consideration], to
release the [Capital Securities or the Treasury Consideration] [Treasury
Securities] related to such [Normal Units] [Stripped Units] to us in accordance
with the Holder's instructions. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.

Date: _____________________

                                               By:Bank One Trust Company, N.A.
                                               Name:
                                               Title:
                                               Signature Guarantee:

                                      A-1
<PAGE>   37
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Capital Securities or Treasury Consideration] for the
[Pledged Capital Securities or the Pledged Treasury Consideration] [Pledged
Treasury Securities]:

Name                                 Social Security or other Taxpayer
                                     Identification Number, if any

Address

                                      A-2
<PAGE>   38
                                                                       EXHIBIT B

                     INSTRUCTION TO PURCHASE CONTRACT AGENT

Bank One Trust Company, N.A.
One North State Street, 9th Floor
Chicago, Illinois 60602
Attention: Corporate Trust Services Division

          Re:  Equity Security Units of MetLife, Inc. (the "Company"), and
               MetLife Capital Trust I

      The undersigned Holder hereby notifies you that it has delivered to The
Bank of New York, as Collateral Agent, [$        aggregate principal amount of
Treasury Securities (CUSIP No.      )] [$        aggregate stated liquidation
amount of Capital Securities or $      principal amount of Treasury
Consideration (CUSIP No.      )] in exchange for the related [Pledged Capital
Securities or Pledged Treasury Consideration] [Pledged Treasury Securities] held
by the Collateral Agent, in accordance with Section 4.1 of the Pledge Agreement,
dated         , 2000 (the "Pledge Agreement"), between you, the Company and the
Collateral Agent. The undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned Holder the
[Pledged Capital Securities or the Pledged Treasury Consideration] [Pledged
Treasury Securities] related to such [Normal Units] [Stripped Units].
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.

Date:
                                                Signature Guarantee:

Please print name and address of Registered Holder:

                Name                   Social Security or other Taxpayer
                                       Identification Number, if any

                Address

                                      B-1

<PAGE>   39

                                                                       EXHIBIT C

              INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING

The Bank of New York
New York, New York 10286
Attention: Corporate Trust Administration

          Re:  Capital Securities of MetLife, Inc. (the "Company") and MetLife
               Capital Trust I

     The undersigned hereby notifies you in accordance with Section 4.5(c) of
the Pledge Agreement, dated as of        , 2000 (the "Pledge Agreement"), among
the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and Bank One Trust Company, N.A., as Purchase Contract Agent
and as attorney-in-fact for the Holders of Normal Units and Stripped Units from
time to time, that the undersigned elects to deliver $       stated liquidation
amount of Capital Securities for delivery to the Remarketing Agent on the fourth
Business Day immediately preceding the Remarketing Date or any Subsequent
Remarketing Date for remarketing pursuant to Section 4.5(c) of the Pledge
Agreement. The undersigned will, upon request of the Remarketing Agent, execute
and deliver any additional documents deemed by the Remarketing Agent or by the
Company to be necessary or desirable to complete the sale, assignment and
transfer of the Capital Securities tendered hereby.

     The undersigned hereby instructs you, upon receipt of the proceeds of such
remarketing from the Remarketing Agent, net of amounts payable to the
Remarketing Agent in accordance with the Pledge Agreement, to deliver such
proceeds to the undersigned in accordance with the instructions indicated herein
under "A. Payment Instructions." The undersigned hereby instructs you, in the
event of Failed Remarketing, upon receipt of the Capital Securities tendered
herewith from the Remarketing Agent, to be delivered to the person(s) and the
address(es) indicated herein under "B. Delivery Instructions."

     With this notice, the undersigned hereby (i) represents and warrants that
the undersigned has full power and authority to tender, sell, assign and
transfer the Capital Securities tendered hereby and that the undersigned is the
record owner of any Capital Securities tendered herewith in physical form or a
participant in The Depositary Trust Company ("DTC") and the beneficial owner of
any Capital Securities tendered herewith by

                                      C-1
<PAGE>   40

book-entry transfer to your account at DTC and (ii) agrees to be bound by the
terms and conditions of Section 4.5(c) of the Pledge Agreement. Capitalized
terms used herein but not defined shall have the meaning set forth in the Pledge
Agreement.

Date:

                                              By:
                                              Name:
                                              Title:
                                              Signature Guarantee:

                Name                          Social Security or other Taxpayer
                                              Identification Number, if any

                Address

A.    PAYMENT INSTRUCTIONS

Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.

Name(s)
                (Please Print)

Address

                (Please Print)

                (Zip Code)

(Tax Identification or Social Security Number)

                                      C-2
<PAGE>   41

B.   DELIVERY INSTRUCTIONS

In the event of a Failed Remarketing, Capital Securities which are in physical
form should be delivered to the person(s) set forth below and mailed to the
address set forth below.

Name(s)
                (Please Print)

Address

                (Please Print)

                (Zip Code)

(Tax Identification or Social Security Number)

In the event of a Failed Remarketing, Capital Securities which are in book-entry
form should be credited to the account at The Depository Trust Company set forth
below.

                                                          DTC Account Number

                           Name of Account Party:

                                      C-3
<PAGE>   42

                                                                       EXHIBIT D

                    INSTRUCTION TO CUSTODIAL AGENT REGARDING
                           WITHDRAWAL FROM REMARKETING

The Bank of New York
[Address]
Attention:  Corporate Trust Administration

          Re:  Capital Securities of MetLife, Inc. (the "Company") and MetLife
               Capital Trust I

     The undersigned hereby notifies you in accordance with Section 4.5(c) of
the Pledge Agreement, dated as of          , 2000 (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and Bank One Trust Company, N.A., as Purchase Contract Agent and
as attorney-in-fact for the Holders of Normal Units and Stripped Units from time
to time, that the undersigned elects to withdraw the $      aggregate stated
liquidation amount of Capital Securities delivered to the Custodial Agent on
           , 2002 for remarketing pursuant to Section 4.5(c) of the Pledge
Agreement. The undersigned hereby instructs you to return such Capital
Securities to the undersigned in accordance with the undersigned's instructions.
With this notice, the Undersigned hereby agrees to be bound by the terms and
conditions of Section 4.5(c) of the Pledge Agreement. Capitalized terms used
herein but not defined shall have the meaning set forth in the Pledge Agreement.

Date:

                                              By:
                                              Name:
                                              Title:
                                              Signature Guarantee:

                Name                          Social Security or other Taxpayer
                                              Identification Number, if any

                Address

                                      D-1

<PAGE>   43

A.   DELIVERY INSTRUCTIONS

In the event of a Failed Remarketing, Capital Securities which are in physical
form should be delivered to the person(s) set forth below and mailed to the
address set forth below.

Name(s)
                (Please Print)

Address

                (Please Print)

                (Zip Code)

(Tax Identification or Social Security Number)

In the event of a Failed Remarketing, Capital Securities which are in book-entry
form should be credited to the account at The Depository Trust Company set forth
below.

                                                          DTC Account Number

                           Name of Account Party:

                                      D-2<PAGE>   1
                                                                   EXHIBIT 10.74

                                                                  Execution Copy

                          IMCLONE SYSTEMS INCORPORATED

                                       and

                              THE BANK OF NEW YORK

                                   as Trustee

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

                                    INDENTURE

                                   Dated as of
                                February 29, 2000

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

                  5 1/2% Convertible Subordinated Notes due 2005
<PAGE>   2
Reconciliation and Tie Between the Trust Indenture Act of 1939 and Indenture,
dated as of February 29, 2000, between ImClone Systems Incorporated and The Bank
of New York as Trustee.

<TABLE>
<CAPTION>
TRUST INDENTURE ACT SECTION                                                     INDENTURE SECTION
<S>             <C>                                                          <C>
Section 310     (a)(1)........................................................................8.9
                (a)(2)........................................................................8.9
                (a)(3).......................................................................N.A.
                (a)(4).......................................................................N.A.
                (a)(5)........................................................................8.9
                (b)..........................................................8.8; 8.9; 8.10; 8.11
Section 311     (a)..........................................................................8.13
                (b)..........................................................................8.13
                (b)(2).......................................................................8.13
Section 312     (a)...................................................................6.1; 6.2(a)
                (b)........................................................................6.2(b)
                (c)........................................................................6.2(c)
Section 313     (a)........................................................................6.3(a)
                (b)........................................................................6.3(a)
                (c)........................................................................6.3(a)
                (d)........................................................................6.3(b)
Section 314     (a)...........................................................................6.4
                (b)..........................................................................N.A.
                (c)(1).......................................................................16.5
                (c)(2).......................................................................16.5
                (c)(3).......................................................................N.A.
                (d)..........................................................................N.A.
                (e)..........................................................................16.5
Section 315     (a)...........................................................................8.1
                (b)...........................................................................7.8
                (c)...........................................................................8.1
                (d)...........................................................................8.1
                (d)(1).....................................................................8.1(a)
                (d)(2).....................................................................8.1(b)
                (d)(3).....................................................................8.1(c)
                (e)...........................................................................7.9
Section 316     (a)...........................................................................7.7
                (a)(1)(A).....................................................................7.7
                (a)(1)(B).....................................................................7.7
                (a)(2).......................................................................N.A.
                (b)...........................................................................7.4
Section 317     (a)(1)........................................................................7.5
                (a)(2)........................................................................7.5
                (b)...........................................................................5.4
</TABLE>

                                       i
<PAGE>   3
<TABLE>
<S>             <C>                                                                          <C>
Section 318     (a)..........................................................................16.7
</TABLE>

*    Note:  This reconciliation and tie shall not, for any purpose, be deemed
            to be a part of the Indenture.
**   Note:  N.A. means Not Applicable.
<PAGE>   4
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                             PAGE
                                                                                             ----

                              ARTICLE 1 DEFINITIONS

<S>           <C>                                                                            <C>
SECTION 1.01.  Definitions.......................................................................2

   ARTICLE 2 ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

SECTION 2.01.  Designation Amount and Issue of Notes.............................................9
SECTION 2.02.  Form of Notes....................................................................10
SECTION 2.03.  Date and Denomination of Notes; Payments of Interest..............................10
SECTION 2.04.  Execution of Notes...............................................................13
SECTION 2.05.  Exchange and Registration of Transfer of Notes; Restrictions on
                Transfer; Depositary ..........................................................13
SECTION 2.06.  Mutilated, Destroyed, Lost or Stolen Notes.......................................22
SECTION 2.07.  Temporary Notes..................................................................23
SECTION 2.08.  Cancellation of Notes Paid, Etc..................................................24
SECTION 2.09.  CUSIP Numbers....................................................................24

                          ARTICLE 3 REDEMPTION OF NOTES

SECTION 3.01.  Optional Redemption by the Company...............................................24
SECTION 3.02.  Notice of Redemptions; Selection of Notes........................................26
SECTION 3.03.  Payment of Notes Called for Redemption...........................................28
SECTION 3.04.  Conversion Arrangement on Call for Redemption....................................29
SECTION 3.05.  Redemption at Option of Holders..................................................30

                         ARTICLE 4 SUBORDINATION OF NOTES

SECTION 4.01.  Agreement of Subordination.......................................................32
SECTION 4.02.  Payments to Noteholders..........................................................33
SECTION 4.03.  Subrogation of Notes.............................................................37
SECTION 4.04.  Authorization to Effect Subordination............................................38
SECTION 4.05.  Notice to Trustee................................................................38
</TABLE>

<PAGE>   5
<TABLE>
<S>           <C>                                                                              <C>
SECTION 4.06.  Trustee's Relation to Senior Indebtedness........................................39
SECTION 4.07.  No Impairment of Subordination...................................................40
SECTION 4.08.  Certain Conversions Not Deemed Payment...........................................40
SECTION 4.09.  Article Applicable to Paying Agents..............................................41
SECTION 4.10.  Senior Indebtedness Entitled to Rely.............................................41
SECTION 4.11.  Reliance on Judicial Order or Certificate of Liquidating Agent...................41

                  ARTICLE 5 PARTICULAR COVENANTS OF THE COMPANY

SECTION 5.01.  Payment of Principal, Premium and Interest.......................................41
SECTION 5.02.  Maintenance of Office or Agency..................................................42
SECTION 5.03.  Appointments to Fill Vacancies in Trustee's Office...............................42
SECTION 5.04.  Provisions as to Paying Agent....................................................43
SECTION 5.05.  Existence........................................................................44
SECTION 5.06.  Maintenance of Properties........................................................44
SECTION 5.07.  Payment of Taxes and Other Claims................................................44
SECTION 5.08.  Rule 144A Information Requirement................................................45
SECTION 5.09.  Stay, Extension and Usury Laws...................................................45
SECTION 5.10.  Compliance Certificate...........................................................46
SECTION 5.11.  Liquidated Damages Notice........................................................46

    ARTICLE 6 NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

SECTION 6.01.  Noteholders' Lists...............................................................47
SECTION 6.02.  Preservation and Disclosure of Lists.............................................47
SECTION 6.03.  Reports by Trustee...............................................................47
SECTION 6.04.  Reports by Company...............................................................48

    ARTICLE 7 REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF DEFAULT

SECTION 7.01.  Events of Default................................................................48
SECTION 7.02.  Payments of Notes on Default; Suit Therefor......................................50
SECTION 7.03.  Application of Monies Collected by Trustee.......................................52
SECTION 7.04.  Proceedings by Noteholder........................................................53
SECTION 7.05.  Proceedings by Trustee...........................................................54
SECTION 7.06.  Remedies Cumulative and Continuing...............................................54
SECTION 7.07.  Direction of Proceedings and Waiver of Defaults by Majority of Noteholders.......55
</TABLE>
<PAGE>   6
<TABLE>
<S>            <C>                                                                              <C>
SECTION 7.08.  Notice of Defaults...............................................................55
SECTION 7.09.  Undertaking to Pay Costs.........................................................56

                              ARTICLE 8 THE TRUSTEE

SECTION 8.01.  Duties and Responsibilities of Trustee...........................................56
SECTION 8.02.  Reliance on Documents, Opinions, Etc.............................................58
SECTION 8.03.  No Responsibility for Recitals, Etc..............................................59
SECTION 8.04.  Trustee, Paying Agents, Conversion Agents or Registrar May Own Notes.............59
SECTION 8.05.  Monies to Be Held in Trust.......................................................59
SECTION 8.06.  Compensation and Expenses of Trustee.............................................60
SECTION 8.07.  Officers' Certificate as Evidence................................................60
SECTION 8.08.  Conflicting Interests of Trustee.................................................61
SECTION 8.09.  Eligibility of Trustee...........................................................61
SECTION 8.10.  Resignation or Removal of Trustee................................................61
SECTION 8.11.  Acceptance by Successor Trustee..................................................63
SECTION 8.12.  Succession by Merger, Etc........................................................63
SECTION 8.13.  Preferential Collection of Claims................................................64
SECTION 8.14.  Trustee's Application for Instructions from the Company..........................64

                            ARTICLE 9 THE NOTEHOLDERS

SECTION 9.01.  Action by Noteholders............................................................65
SECTION 9.02.  Proof of Execution by Noteholders................................................65
SECTION 9.03.  Who Are Deemed Absolute Owners...................................................65
SECTION 9.04.  Company-owned Notes Disregarded..................................................66
SECTION 9.05.  Revocation of Consents; Future Holders Bound.....................................66

                        ARTICLE 10 MEETINGS OF NOTEHOLDERS

SECTION 10.01.  Purpose of Meetings.............................................................67
SECTION 10.02.  Call of Meetings by Trustee.....................................................67
SECTION 10.03.  Call of Meetings by Company or Noteholders......................................67
SECTION 10.04.  Qualifications for Voting.......................................................68
SECTION 10.05.  Regulations.....................................................................68
SECTION 10.06.  Voting..........................................................................69
SECTION 10.07.  No Delay of Rights by Meeting...................................................69
</TABLE>

                       ARTICLE 11 SUPPLEMENTAL INDENTURES
<PAGE>   7
<TABLE>
<S>             <C>                                                                             <C>
SECTION 11.01.  Supplemental Indentures Without Consent of Noteholders..........................69
SECTION 11.02.  Supplemental Indenture with Consent of Noteholders..............................71
SECTION 11.03.  Effect of Supplemental Indenture................................................72
SECTION 11.04.  Notation on Notes...............................................................72
SECTION 11.05.  Evidence of Compliance of Supplemental Indenture to Be Furnished to Trustee.....73

          ARTICLE 12 CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

SECTION 12.01.  Company May Consolidate, Etc on Certain Terms...................................73
SECTION 12.02.  Successor Corporation to Be Substituted.........................................73
SECTION 12.03.  Opinion of Counsel to Be Given Trustee..........................................74

               ARTICLE 13 SATISFACTION AND DISCHARGE OF INDENTURE

SECTION 13.01.  Discharge of Indenture..........................................................75
SECTION 13.02.  Deposited Monies to Be Held in Trust by Trustee.................................75
SECTION 13.03.  Paying Agent to Repay Monies Held...............................................76
SECTION 13.04.  Return of Unclaimed Monies......................................................76
SECTION 13.05.  Reinstatement...................................................................76

   ARTICLE 14 IMMUNITY OF INCORPORATIONS, STOCKHOLDERS, OFFICERS AND DIRECTORS

SECTION 14.01.  Indenture and Notes Solely Corporate Obligations................................77

                         ARTICLE 15 CONVERSION OF NOTES

SECTION 15.01.  Right to Convert................................................................77
SECTION 15.02.  Exercise of Conversion Privilege; Issuance of Common Stock on Conversion;
                  No Adjustment for Interest or Dividends........................................78
SECTION 15.03.  Cash Payments in Lieu of Fractional Shares......................................79
SECTION 15.04.  Conversion Price................................................................80
SECTION 15.05.  Adjustment of Conversion Price..................................................80
SECTION 15.06.  Effect of Reclassification, Consolidation, Merger or Sale.......................91
SECTION 15.07.  Taxes on Shares Issued..........................................................92
</TABLE>
<PAGE>   8
<TABLE>
<S>             <C>                                                                            <C>
SECTION 15.08.  Reservation of Shares; Shares to Be Fully Paid; Compliance with Governmental
                  Requirements; Listing of Common Stock.........................................92
SECTION 15.09.  Responsibility of Trustee.......................................................93
SECTION 15.10.  Notice to Holders Prior to Certain Actions......................................94

                       ARTICLE 16 MISCELLANEOUS PROVISIONS

SECTION 16.01.  Provisions Binding on Company's Successors......................................95
SECTION 16.02.  Official Acts by Successor Corporation..........................................95
SECTION 16.03.  Addresses for Notices, Etc......................................................95
SECTION 16.04.  Governing Law...................................................................96
SECTION 16.05.  Evidence of Compliance with Conditions Precedent; Certificates to Trustee.......96
SECTION 16.06.  Legal Holidays..................................................................96
SECTION 16.07.  Trust Indenture Act.............................................................96
SECTION 16.08.  No Security Interest Created....................................................97
SECTION 16.09.  Benefits of Indenture...........................................................97
SECTION 16.10.  Table of Contents, Headings, Etc................................................97
SECTION 16.11.  Authenticating Agent............................................................97
SECTION 16.12.  Execution in Counterparts.......................................................98
SECTION 16.13.  Severability....................................................................98
</TABLE>
<PAGE>   9
                                                                        PAGE
                                                                        ----

                                       vi
<PAGE>   10
                                                                        PAGE
                                                                        ----

                                       vii
<PAGE>   11
                                                                        PAGE
                                                                        ----

                                      viii
<PAGE>   12
                                    INDENTURE

         INDENTURE, dated as of February 29, 2000, between ImClone Systems
Incorporated, a Delaware corporation (hereinafter called the "Company"), having
its principal office at 180 Varick Street, 7th Floor, New York, New York 10014,
and The Bank of New York , as trustee hereunder (hereinafter called the
"Trustee"), having its principal corporate trust office at 101 Barclay Street,
Floor 21 West, New York, New York, 10286.

                              W I T N E S S E T H:
                              --------------------

         WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 5 1/2% Convertible Subordinated Notes due 2005
(hereinafter called the "Notes"), in an aggregate principal amount not to exceed
$200,000,000 ($240,000,000, if the option is fully exercised by the Initial
Purchasers) and, to provide the terms and conditions upon which the Notes are to
be authenticated, issued and delivered, the Company has duly authorized the
execution and delivery of this Indenture; and

         WHEREAS, the Notes, the certificate of authentication to be borne by
the Notes, a form of assignment, a form of option to elect repayment upon a
Fundamental Change, and a form of conversion notice to be borne by the Notes are
to be substantially in the forms hereinafter provided for; and

         WHEREAS, all acts and things necessary to make the Notes, when executed
by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute this Indenture a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.

                   NOW, THEREFORE, THIS INDENTURE WITNESSETH:

         That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and in consideration of
the premises and of the purchase and acceptance of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:

                                    ARTICLE 1
<PAGE>   13
                                   DEFINITIONS

         SECTION 1.1. Definitions. The terms defined in this Section 1.1 (except
as herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section 1.1. All other
terms used in this Indenture that are defined in the Trust Indenture Act or
which are by reference therein defined in the Securities Act (except as herein
otherwise expressly provided or unless the context otherwise requires) shall
have the meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this Indenture. The
words "herein", "hereof", "hereunder", and words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
Subdivision. The terms defined in this Article include the plural as well as the
singular.

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

         "ADDITIONAL PAYMENT" has the meaning specified in Section 3.1(a).

         "BOARD OF DIRECTORS" means the Board of Directors of the Company or a
committee of such Board duly authorized to act for it hereunder.

         "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which the banking institutions in The City of New
York or the city in which the Corporate Trust Office is located are authorized
or obligated by law or executive order to close or be closed.

         "CLOSING PRICE" has the meaning specified in Section 15.5(h)(1).

         "COMMISSION" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this Indenture such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.

                                       2
<PAGE>   14
         "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 15.6, however, shares issuable on conversion of Notes shall include
only shares of the class designated as common stock of the Company at the date
of this Indenture (namely, the Common Stock, par value $.001 per share) 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, however, 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 which the total number of shares of such
class resulting from all such reclassifications bears to the total number of
shares of all such classes resulting from all such reclassifications.

         "COMPANY" means the corporation named as the "Company" in the first
paragraph of this Indenture, and, subject to the provisions of Article Twelve,
shall include its successors and assigns.

         "COMPANY NOTICE" has the meaning specified in Section 3.5(b).

         "CONVERSION PRICE" has the meaning specified in Section 15.4.

         "CORPORATE TRUST OFFICE" or other similar term, means the designated
office of the Trustee at which at any particular time its corporate trust
business shall be administered, which office is, at the date as of which this
Indenture is dated, located at 101 Barclay Street, 21st Floor West, New York,
New York, 10286, Attention: Corporate Trust Trustee Administration.

         "CUSTODIAN" means The Bank of New York, as custodian with respect to
the Notes in global form, or any successor entity thereto.

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

         "DEFAULTED INTEREST" has the meaning specified in Section 2.3.

         "DEPOSITARY" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.5(d) as the
Depositary with respect to such Notes, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, "Depositary" shall mean or include such successor.

                                       3
<PAGE>   15
         "DESIGNATED SENIOR INDEBTEDNESS" means all Indebtedness existing on the
date hereof and Senior Indebtedness incurred after the date hereof. If any
payment made to any holder of any Designated Senior Indebtedness or its
Representative with respect to such Designated Senior Indebtedness is rescinded
or must otherwise be returned by such holder or Representative upon the
insolvency, bankruptcy or reorganization of the Company or otherwise, the
reinstated Indebtedness of the Company arising as a result of such rescission or
return shall constitute Designated Senior Indebtedness effective as of the date
of such rescission or return.

         "EVENT OF DEFAULT" means any event specified in Section 7.1(a), (b),
(c), (d) or (e).

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

         "FUNDAMENTAL CHANGE" means the occurrence of any transaction or event
in connection with which all or substantially all of the Common Stock shall be
exchanged for, converted into, acquired for or constitute solely the right to
receive consideration (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) which is not all or substantially all common
stock listed (or, upon consummation of or immediately following such transaction
or event, which will be listed) on a United States national securities exchange
or approved for quotation on the Nasdaq National Market or any similar United
States system of automated dissemination of quotations of securities prices.

         "GLOBAL NOTE" has the meaning set forth in Section 2.5(b).

         "INDEBTEDNESS" means, with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such Person for borrowed money (including obligations of the
Company in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such Person or to only a portion
thereof), other than any account payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the
obtaining of materials or services; (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers" acceptances; (c) all obligations and
liabilities (contingent

                                       4
<PAGE>   16
or otherwise) in respect of capital leases and real or personal property leases
of such Person required, in conformity with generally accepted accounting
principles, to be accounted for as capitalized lease obligations on the balance
sheet of such Person and all obligations and other liabilities (contingent or
otherwise) under any lease or related document (including a purchase agreement)
in connection with the lease of real property which provides that such Person is
contractually obligated to purchase or cause a third party to purchase the
leased property and thereby guarantee a minimum residual value of the leased
property to the lessor and the obligations of such Person under such lease or
related document to purchase or to cause a third party to purchase such leased
property; (d) all obligations of such Person (contingent or otherwise) with
respect to an interest rate or other swap, cap or collar agreement or foreign
currency hedge, exchange, purchase or similar instrument or agreement; (e) all
direct or indirect guaranties or similar agreement by such Person in respect of,
and obligations or liabilities (contingent or otherwise) of such Person to
purchase or otherwise acquire or otherwise assure a creditor against loss in
respect of, indebtedness, obligations or liabilities of another Person of the
kind described in clauses (a) through (d); (f) any indebtedness or other
obligations described in clauses (a) through (e) secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held by
such Person, regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person; and (g) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any indebtedness, obligation or liability of the kind described
in clauses (a) through (f).

         "INDENTURE" means this instrument as originally executed or, if amended
or supplemented as herein provided, as so amended or supplemented.

         "INITIAL PURCHASERS" means Morgan Stanley & Co. Incorporated and
Merrill Lynch, Pierce, Fenner & Smith Incorporated.

         "INSTITUTIONAL ACCREDITED INVESTOR" means an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.

         "LIQUIDATED DAMAGES" has the meaning specified for "Liquidated Damages
Amount" in Section 2(e) of the Registration Rights Agreement.

         "NON-PAYMENT DEFAULT" has the meaning specified in Section 4.2(ii).

         "NON-PROVISIONAL REDEMPTION" has the meaning specified in Section
3.1(b).

                                       5
<PAGE>   17
         "NON-PROVISIONAL REDEMPTION DATE" has the meaning specified in Section
3.1(b).

         "NOTE" or "NOTES" means any Note or Notes, as the case may be,
authenticated and delivered under this Indenture, including the Global Note.

         "NOTE REGISTER" has the meaning specified in Section 2.5(a).

         "NOTE REGISTRAR" has the meaning specified in Section 2.5(a).

         "NOTEHOLDER" or "HOLDER" as applied to any Note, or other similar terms
(but excluding the term "beneficial holder"), means any Person in whose name at
the time a particular Note is registered on the Note registrar"s books.

         "NOTICE DATE" means the date of mailing of the notice of redemption
pursuant to Section 3.2.

         "OFFICERS' CERTIFICATE" means a written certificate containing the
information specified in Section 16.5 signed in the name of the Company by its
Chairman of the Board, Chief Executive Officer, President or any Vice President
and by its Treasurer or any Assistant Treasurer, Controller or any Assistant
Controller, or Secretary or any Assistant Secretary of the Company, and
delivered to the Trustee.

         "OPINION OF COUNSEL" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or other counsel
reasonably acceptable to the Trustee.

         "NON-PROVISIONAL REDEMPTION" has the meaning specified in Section
3.1(b).

         "OUTSTANDING", when used with reference to Notes and subject to the
provisions of Section 9.4, means, as of any particular time, all Notes
authenticated and delivered by the Trustee under this Indenture, except:

                  (a)    Notes theretofore canceled by the Trustee or delivered
         to the Trustee for cancellation;

                  (b) Notes, or portions thereof, (i) for the redemption of
         which monies in the necessary amount shall have been deposited in trust
         with the Trustee or with any paying agent (other than the Company) or
         (ii) which shall have been otherwise defeased in accordance with
         Article Thirteen;

                                       6
<PAGE>   18
                 (c) Notes paid pursuant to Section 2.6 or in lieu of which, or
         in substitution for which, other Notes shall have been authenticated
         and delivered pursuant to the terms of Section 2.6; and

                  (d) Notes converted into Common Stock pursuant to Article
         Fifteen and Notes deemed not outstanding pursuant to Article Three.

         "PAYMENT BLOCKAGE NOTICE" has the meaning specified in Section 4.2(ii).

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

         "PORTAL MARKET" means The Portal Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.

         "PREDECESSOR NOTE" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note, and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.6 in lieu of a lost, destroyed or
stolen Note shall be deemed to evidence the same debt as the lost, destroyed or
stolen Note that it replaces.

         "PROVISIONAL REDEMPTION" means has the meaning specified in Section
3.1(a).

         "PROVISIONAL REDEMPTION DATE" means has the meaning specified in
Section 3.1(a).

         "QIB" means a "qualified institutional buyer" as defined in Rule 144A.

         "REGISTRATION RIGHTS AGREEMENT" means that certain Registration Rights
Agreement, dated as of February 29, 2000, among the Company and the Initial
Purchasers, as amended from time to time in accordance with its terms.

         "REPRESENTATIVE" means (a) the indenture trustee or other trustee,
agent or representative for holders of Senior Indebtedness or (b) with respect
to any Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued pursuant to
an agreement providing for voting arrangements as among the holders or owners of
such

                                       7
<PAGE>   19
Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.

         "RESPONSIBLE OFFICER", when used with respect to the Trustee, means an
officer of the Trustee in the Corporate Trust Office assigned and duly
authorized by the Trustee to administer this Indenture.

         "RESTRICTED SECURITIES" has the meaning specified in Section 2.5(d).

         "RULE 144A" means Rule 144A as promulgated under the Securities Act.

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

         "SENIOR INDEBTEDNESS" means the principal, premium, if any, interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and rent payable on or
in connection with, and all fees, costs, expenses and other amounts accrued or
due on or in connection with, Indebtedness of the Company, whether outstanding
on the date of this Indenture or thereafter created, incurred, assumed,
guaranteed or in effect guaranteed by the Company (including all deferrals,
renewals, extensions or refundings of, or amendments, modifications or
supplements to, the foregoing), unless in the case of any particular
Indebtedness the instrument creating or evidencing the same or the assumption or
guarantee thereof expressly provides that such Indebtedness shall not be senior
in right of payment to the Notes or expressly provides that such Indebtedness is
"pari passu" or "junior" to the Notes. Notwithstanding the foregoing, the term
Senior Indebtedness shall not include any Indebtedness of the Company to any
subsidiary of the Company, a majority of the voting stock of which is owned,
directly or indirectly, by the Company. If any payment made to any holder of any
Senior Indebtedness or its Representative with respect to such Senior
Indebtedness is rescinded or must otherwise be returned by such holder or
Representative upon the insolvency, bankruptcy or reorganization of the Company
or otherwise, the reinstated Indebtedness of the Company arising as a result of
such rescission or return shall constitute Senior Indebtedness effective as of
the date of such rescission or return.

         "SIGNIFICANT SUBSIDIARY" means, as of any date of determination, a
Subsidiary of the Company, if as of such date of determination either (a) the
assets of such subsidiary equal 10% or more of the Company"s total consolidated
assets or (b) the total revenue of which represented 10% or more of the
Company"s consolidated total revenue for the most recently completed fiscal
year.

                                       8
<PAGE>   20
         "SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such Person or a
subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more subsidiaries of such Person (or any combination
thereof).

         "TRADING DAY" has the meaning specified in Section 15.5(g)(5).

         "TRIGGER EVENT" has the meaning specified in Section 15.5(d).

         "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended, as it was in force at the date of this Indenture, except as provided in
Sections 11.3 and 15.6; provided, however, that, in the event the Trust
Indenture Act of 1939 is amended after the date hereof, the term "Trust
Indenture Act" shall mean, to the extent required by such amendment, the Trust
Indenture Act of 1939 as so amended.

         "TRUSTEE" means The Bank of New York and its successors and any
corporation resulting from or surviving any consolidation or merger to which it
or its successors may be a party and any successor trustee at the time serving
as successor trustee hereunder.

         The definitions of certain other terms are as specified in Sections 2.5
and 3.5 and Article Fifteen.

                                    ARTICLE 2

        ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

         SECTION 2.1. Designation Amount and Issue of Notes. The Notes shall be
designated as "51/2% Convertible Subordinated Notes due 2005". Notes not to
exceed the aggregate principal amount of $200,000,000 ($240,000,000, if the
option is fully exercised by the Initial Purchasers) (except pursuant to
Sections 2.5, 2.6, 3.3, 3.5 and 15.2 hereof) upon the execution of this
Indenture, or from time to time thereafter, may be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and

                                       9
<PAGE>   21
deliver said Notes to or upon the written order of the Company, signed by its
Chairman of the Board, Chief Executive Officer, President or any Vice President
and by its Treasurer or any Assistant Treasurer, Controller or any Assistant
Controller or Secretary or any Assistant Secretary, without any further action
by the Company hereunder.

         SECTION 2.2. Form of Notes. The Notes and the Trustee"s certificate of
authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A, which is incorporated in and made a part of this Indenture.

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

         Any Global Note shall represent such of the outstanding Notes as shall
be specified therein and shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be increased or reduced to reflect transfers or exchanges permitted hereby. Any
endorsement of a Global Note to reflect the amount of any increase or decrease
in the amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in such manner and
upon instructions given by the holder of such Notes in accordance with this
Indenture. Payment of principal of and interest and premium, if any, on any
Global Note shall be made to the holder of such Note.

         The terms and provisions contained in the form of Note attached as
Exhibit A hereto shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.

         SECTION 2.3. Date and Denomination of Notes; Payments of Interest. The
Notes shall be issuable in registered form without coupons in denominations of
$1,000 principal amount and integral multiples thereof. Every Note shall be
dated the date of its authentication and shall bear interest from the applicable
date in each case as specified on the face of the form of Note attached as
Exhibit A

                                       10
<PAGE>   22
hereto. Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve (12) 30-day months.

         The Person in whose name any Note (or its Predecessor Note) is
registered on the Note register at the close of business on any record date with
respect to any interest payment date shall be entitled to receive the interest
payable on such interest payment date, except (i) that the interest payable upon
redemption (unless the date of redemption is an interest payment date) will be
payable to the Person to whom principal is payable and (ii) as set forth in the
next succeeding sentence. In the case of any Note (or portion thereof) that is
converted into Common Stock during the period from (but excluding) a record date
to (but excluding) the next succeeding interest payment date either (x) if such
Note (or portion thereof) has been called for redemption on a redemption date
which occurs during such period, or is to be redeemed in connection with a
Fundamental Change on a Repurchase Date (as defined in Section 3.5) that occurs
during such period, the Company shall not be required to pay interest on such
interest payment date in respect of any such Note (or portion thereof) except to
the extent required to be paid upon redemption of such Note or portion thereof
pursuant to Section 3.3 or 3.5 hereof or (y) if such Note (or portion thereof)
has not been called for redemption on a redemption date that occurs during such
period and is not to be redeemed in connection with a Fundamental Change on a
Repurchase Date that occurs during such period, such Note (or portion thereof)
that is submitted for conversion during such period shall be accompanied by
funds equal to the interest payable on such succeeding interest payment date on
the principal amount so converted, as provided in the penultimate paragraph of
Section 15.2 hereof. Interest shall be payable at the office of the Company
maintained by the Company for such purposes in New York, New York, which shall
initially be an office or agency of the Trustee and may, as the Company shall
specify to the paying agent in writing by each record date, be paid either (i)
by check mailed to the address of the Person entitled thereto as it appears in
the Note register (provided that the holder of Notes with an aggregate principal
amount in excess of $2,000,000 shall, at the written election of such holder, be
paid by wire transfer in immediately available funds) or (ii) by transfer to an
account maintained by such Person located in the United States; provided,
however, that payments to the Depositary will be made by wire transfer of
immediately available funds to the account of the Depositary or its nominee. The
term "record date" with respect to any interest payment date shall mean the
February 15 or August 15 preceding the relevant March 1 or September 1,
respectively.

         Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any March 1 or September 1 (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Noteholder on the relevant
record date by virtue of his having been such Noteholder, and such Defaulted

                                       11
<PAGE>   23
Interest shall be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:

                  (1) The Company may elect to make payment of any Defaulted
         Interest to the Persons in whose names the Notes (or their respective
         Predecessor Notes) are registered at the close of business on a special
         record date for the payment of such Defaulted Interest, which shall be
         fixed in the following manner. The Company shall notify the Trustee in
         writing of the amount of Defaulted Interest to be paid on each Note and
         the date of the payment (which shall be not less than twenty-five (25)
         days after the receipt by the Trustee of such notice, unless the
         Trustee shall consent to an earlier date), and at the same time the
         Company shall deposit with the Trustee an amount of money equal to the
         aggregate amount to be paid in respect of such Defaulted Interest or
         shall make arrangements satisfactory to the Trustee for such deposit
         prior to the date of the proposed payment, such money when deposited to
         be held in trust for the benefit of the Person entitled to such
         Defaulted Interest as in this clause provided. Thereupon the Trustee
         shall fix a special record date for the payment of such Defaulted
         Interest which shall be not more than fifteen (15) days and not less
         than ten (10) days prior to the date of the proposed payment, and not
         less than ten (10) days after the receipt by the Trustee of the notice
         of the proposed payment, the Trustee shall promptly notify the Company
         of such special record date and, in the name and at the expense of the
         Company, shall cause notice of the proposed payment of such Defaulted
         Interest and the special record date therefor to be mailed, first-class
         postage prepaid, to each Noteholder at his address as it appears in the
         Note register, not less than ten (10) days prior to such special record
         date. Notice of the proposed payment of such Defaulted Interest and the
         special record date therefor having been so mailed, such Defaulted
         Interest shall be paid to the Persons in whose names the Notes (or
         their respective Predecessor Notes) were registered at the close of
         business on such special record date and shall no longer be payable
         pursuant to the following clause (2) of this Section 2.3.

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

                                       12
<PAGE>   24

         SECTION 2.4. Execution of Notes. The Notes shall be signed in the name
and on behalf of the Company by the manual or facsimile signature of its
Chairman of the Board, Chief Executive Officer, President or any Vice President
and attested by the manual or facsimile signature of its Secretary or any of its
Assistant Secretaries or its Treasurer or any of its Assistant Treasurers (which
may be printed, engraved or otherwise reproduced thereon, by facsimile or
otherwise). Only such Notes as shall bear thereon a certificate of
authentication substantially in the form set forth on the form of Note attached
as Exhibit A hereto, manually executed by the Trustee (or an authenticating
agent appointed by the Trustee as provided by Section 16.11), shall be entitled
to the benefits of this Indenture or be valid or obligatory for any purpose.
Such certificate by the Trustee (or such an authenticating agent) upon any Note
executed by the Company shall be conclusive evidence that the Note so
authenticated has been duly authenticated and delivered hereunder and that the
holder is entitled to the benefits of this Indenture.

         In case any officer of the Company who shall have signed any of the
Notes shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company, and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.

         SECTION 2.5. Exchange and Registration of Transfer of Notes;
Restrictions on Transfer; Depositary.

          (a) The Company shall cause to be kept at the Corporate Trust Office a
register (the register maintained in such office and in any other office or
agency of the Company designated pursuant to Section 5.2 being herein sometimes
collectively referred to as the "Note register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Notes and of transfers of Notes. The Note register shall be in
written form or in any form capable of being converted into written form within
a reasonably prompt period of time. The Trustee is hereby appointed "Note
registrar" for the purpose of registering Notes and transfers of Notes as herein
provided. The Company may appoint one or more co-registrars in accordance with
Section 5.2.

         Upon surrender for registration of transfer of any Note to the Note
registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.5, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more

                                       13
<PAGE>   25
new Notes of any authorized denominations and of a like aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture.

         Notes may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant to
Section 5.2. Whenever any Notes are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Notes which
the Noteholder making the exchange is entitled to receive bearing registration
numbers not contemporaneously outstanding.

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

         All Notes presented or surrendered for registration of transfer or for
exchange, redemption or conversion shall (if so required by the Company or the
Note registrar) be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company, and the Notes shall
be duly executed by the Noteholder thereof or his attorney duly authorized in
writing.

         No service charge shall be made to any holder for any registration of
transfer or exchange of Notes, but the Company may require payment by the holder
of a sum sufficient to cover any tax, assessment or other governmental charge
that may be imposed in connection with any registration of transfer or exchange
of Notes.

         Neither the Company nor the Trustee nor any Note registrar shall be
required to exchange or register a transfer of (a) any Notes for a period of
fifteen (15) days next preceding the mailing of a notice of redemption of Notes
to be redeemed, (b) any Notes or portions thereof called for redemption pursuant
to Section 3.2, (c) any Notes or portions thereof surrendered for conversion
pursuant to Article Fifteen or (d) any Notes or portions thereof tendered for
redemption (and not withdrawn) pursuant to Section 3.5.

          (b) So long as the Notes are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, all Notes that, upon
initial issuance are beneficially owned by QIBs or as a result of a sale or
transfer after initial issuance are beneficially owned by QIBs, will be
represented by one or more Notes in global form registered in the name of the
Depositary or the nominee of the Depositary (the "Global Note"), except as
otherwise specified

                                       14
<PAGE>   26
below. The transfer and exchange of beneficial interests in any such Global Note
shall be effected through the Depositary in accordance with this Indenture and
the procedures of the Depositary therefor. The Trustee shall make appropriate
endorsements to reflect increases or decreases in the principal amounts of any
such Global Note as set forth on the face of the Note ("Principal Amount") to
reflect any such transfers. Except as provided below, beneficial owners of a
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
Global Note.

          (c) So long as the Notes are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, upon any transfer of a
definitive Note to a QIB in accordance with Rule 144A, and upon receipt of the
definitive Note or Notes being so transferred, together with a certification,
substantially in the form on the reverse of the Note, from the transferor that
the transfer is being made in compliance with Rule 144A (or other evidence
satisfactory to the Trustee), the Trustee shall make an endorsement on the
Global Note to reflect an increase in the aggregate Principal Amount of the
Notes represented by such Global Note, and the Trustee shall cancel such
definitive Note or Notes in accordance with the standing instructions and
procedures of the Depositary, the aggregate Principal Amount of the Notes
represented by such Global Note to be increased accordingly; provided, however,
that no definitive Note, or portion thereof, in respect of which the Company or
an Affiliate of the Company held any beneficial interest shall be included in
such Global Note until such definitive Note is freely tradable in accordance
with Rule 144(k) under the Securities Act, provided further that the Trustee
shall issue Notes in definitive form upon any transfer of a beneficial interest
in the Global Note to the Company or any Affiliate of the Company.

         Upon any sale or transfer of a Note to an Institutional Accredited
Investor (other than pursuant to a registration statement that has been declared
effective under the Securities Act), such Institutional Accredited Investor
shall, prior to such sale or transfer, furnish to the Company and/or the Trustee
a signed letter containing representations and agreements relating to
restrictions on transfer substantially in the form set forth in Exhibit B to
this Indenture. Upon any transfer of a beneficial interest in the Global Note to
an Institutional Accredited Investor, the Trustee shall make an endorsement on
the Global Note to reflect a decrease in the aggregate Principal Amount of the
Notes represented by such Global Note, and the Company shall execute a
definitive Note or Notes in exchange therefore, and the Trustee, upon receipt of
such definitive Note or Notes and the written order of the Company, shall
authenticate and deliver such, definitive Note or Notes.

                                       15
<PAGE>   27
         Any Global Note may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with the provisions
of this Indenture as may be required by the Custodian, the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Notes to be
tradeable on The Portal Market or as may be required for the Notes to be
tradeable on any other market developed for trading of securities pursuant to
Rule 144A or required to comply with any applicable law or any regulation
thereunder or with the rules and regulations of any securities exchange or
automated quotation system upon which the Notes may be listed or traded or to
conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular Notes are subject.

          (d) Every Note that bears or is required under this Section 2.5(d) to
bear the legend set forth in this Section 2.5(d) (together with any Common Stock
issued upon conversion of the Notes and required to bear the legend set forth in
Section 2.5(e), collectively, the "Restricted Securities") shall be subject to
the restrictions on transfer set forth in this Section 2.5(d) (including those
set forth in the legend set forth below) unless such restrictions on transfer
shall be waived by written consent of the Company, and the holder of each such
Restricted Security, by such Noteholder"s acceptance thereof, agrees to be bound
by all such restrictions on transfer. As used in Sections 2.5(d) and 2.5(e), the
term "transfer" encompasses any sale, pledge, loan, transfer or other
disposition whatsoever of any Restricted Security.

         Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Note (and all securities issued in exchange therefor
or substitution thereof, other than Common Stock, if any, issued upon conversion
thereof, which shall bear the legend set forth in Section 2.5(e), if applicable)
shall bear a legend in substantially the following form, unless such Note has
been sold pursuant to a registration statement that has been declared effective
under the Securities Act (and which continues to be effective at the time of
such transfer), or unless otherwise agreed by the Company in writing, with
written notice thereof to the Trustee:

                           THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED
                  STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
                  ACT"), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT
                  BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
                  ACCOUNT OR BENEFIT OF, U.S. PERSONS

                                       16
<PAGE>   28
                  EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
                  ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
                  "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
                  THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
                  INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER
                  THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR"); (2)
                  AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING
                  PERIOD APPLICABLE TO SALES OF THIS NOTE UNDER RULE 144(K)
                  UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL
                  OR OTHERWISE TRANSFER THIS NOTE OR THE COMMON STOCK ISSUABLE
                  UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO IMCLONE SYSTEMS
                  INCORPORATED OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
                  STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
                  RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
                  STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
                  SUCH TRANSFER, FURNISHES TO THE BANK OF NEW YORK, AS TRUSTEE
                  (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER
                  CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
                  THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH
                  LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR
                  TRUSTEE, AS APPLICABLE), AND IF SUCH TRANSFER IS IN RESPECT OF
                  AN AGGREGATE PRINCIPAL AMOUNT OF NOTES OF LESS THAN $100,000,
                  AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
                  TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE
                  THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
                  SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
                  REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
                  AVAILABLE) OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH
                  HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND
                  WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER);
                  (3) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO
                  CLAUSE (2)(F) ABOVE), IT WILL FURNISH TO THE BANK OF NEW YORK,
                  AS TRUSTEE (OR A

                                       17
<PAGE>   29
                  SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
                  OPINIONS OR OTHER INFORMATION AS THE TRUSTEE MAY REASONABLY
                  REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
                  TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
                  REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (4)
                  AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE
                  IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
                  LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE PRIOR TO
                  THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF
                  THIS NOTE UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
                  SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE
                  BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF
                  SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE BANK OF NEW
                  YORK AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). IF
                  THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
                  INVESTOR OR IS A PURCHASER WHO IS NOT A U.S. PERSON, THE
                  HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE BANK OF
                  NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE),
                  SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
                  SUCH TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
                  TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
                  TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
                  THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE
                  EARLIER OF THE TRANSFER OF THIS NOTE PURSUANT TO CLAUSE (2)(F)
                  ABOVE OR UPON ANY TRANSFER OF THIS NOTE UNDER RULE 144(K)
                  UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED
                  HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE
                  MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
                  ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE
                  TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION
                  OF THE FOREGOING RESTRICTION.

                                       18
<PAGE>   30
         Any Note (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance with
their terms or as to conditions for removal of the foregoing legend set forth
therein have been satisfied may, upon surrender of such Note for exchange to the
Note registrar in accordance with the provisions of this Section 2.5, be
exchanged for a new Note or Notes, of like tenor and aggregate principal amount,
which shall not bear the restrictive legend required by this Section 2.5(d).

         Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in the second paragraph of Section 2.5(c) and in this
Section 2.5(d)), a 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 Notes in global form. 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 a Global Note notifies the Company
that it is unwilling or unable to continue as Depositary for such Note, the
Company may appoint a successor Depositary with respect to such 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 such Global Note, in
exchange for such Global Note.

         If a Note in certificated form is issued in exchange for any portion of
a Global Note after the close of business at the office or agency where such
exchange occurs on any record date and before the opening of business at such
office or agency on the next succeeding interest payment date, interest will not
be payable on such interest payment date in respect of such certificated Note,
but will be payable on such interest payment date, subject to the provisions of
Section 2.3, only to the Person to whom interest in respect of such portion of
such Global Note is payable in accordance with the provisions of this Indenture.

         Notes in certificated form issued in exchange for all or a part of a
Global Note pursuant to this Section 2.5 shall be registered in such names and
in such

                                       19
<PAGE>   31
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 a 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 a Global
Note is exchanged for Notes in certificated form, redeemed, converted,
repurchased or canceled, or transferred to a transferee who receives Notes in
certificated form therefor or any Note in certificated form is exchanged or
transferred for part of a Global Note, the principal amount of such Global Note
shall, in accordance with the standing procedures and instructions existing
between the Depositary and the Custodian, be appropriately reduced or increased,
as the case may be, 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 or increase.

          (e Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any stock certificate representing Common Stock issued upon conversion of any
Note shall bear a legend in substantially the following form, unless such Common
Stock has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer) or such Common Stock has been issued upon conversion of
Notes that have been transferred pursuant to a registration statement that has
been declared effective under the Securities Act, or unless otherwise agreed by
the Company in writing with written notice thereof to the transfer agent:

                           THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN
                  REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
                  AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS,
                  AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
                  STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
                  EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER
                  HEREOF AGREES THAT, UNTIL THE EXPIRATION OF THE HOLDING PERIOD
                  APPLICABLE TO

                                       20
<PAGE>   32
                  SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER
                  THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), (1) IT WILL
                  NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED
                  HEREBY EXCEPT (A) TO IMCLONE SYSTEMS INCORPORATED OR ANY
                  SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
                  "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
                  THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) INSIDE
                  THE UNITED STATES TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
                  (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE
                  SECURITIES ACT) THAT PRIOR TO SUCH TRANSFER, FURNISHES TO
                  EQUISERVE, AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT,
                  AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN
                  REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
                  TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY (THE FORM OF
                  WHICH LETTER CAN BE OBTAINED FROM SUCH TRANSFER AGENT OR A
                  SUCCESSOR TRANSFER AGENT, AS APPLICABLE), (D) OUTSIDE THE
                  UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES
                  LAWS (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
                  BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F)
                  PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
                  EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
                  EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2) PRIOR TO SUCH
                  TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (1)(F)
                  ABOVE), IT WILL FURNISH TO EQUISERVE, AS TRANSFER AGENT (OR A
                  SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS,
                  LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY
                  REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
                  TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
                  REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (3) IT
                  WILL DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED
                  HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO
                  CLAUSE 1(F) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF

                                       21
<PAGE>   33
                  THIS LEGEND. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
                  ACCREDITED INVESTOR OR IS A PURCHASER WHO IS NOT A U.S.
                  PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
                  EQUISERVE (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH
                  CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY
                  REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
                  PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
                  TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS
                  LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE
                  COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE (1)(F) ABOVE
                  OR UPON ANY TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY
                  AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES
                  OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
                  SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED HEREIN,
                  THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
                  GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

         Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.5(e).

          (f Any Note or Common Stock issued upon the conversion or exchange of
a Note that, prior to the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
is purchased or owned by the Company or any Affiliate thereof may not be resold
by the Company or such Affiliate unless registered under the Securities Act or
resold pursuant to an exemption from the registration requirements of the
Securities Act in a transaction which results in such Notes or Common Stock, as
the case may be, no longer being "restricted securities" (as defined under Rule
144).

         SECTION 2.6. Mutilated, Destroyed, Lost or Stolen Notes. In case any
Note shall become mutilated or be destroyed, lost or stolen, the Company in its

                                       22
<PAGE>   34
discretion may execute, and upon its written request the Trustee or an
authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Note, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Note, or in lieu of
and in substitution for the Note so destroyed, lost or stolen. In every case the
applicant for a substituted Note shall furnish to the Company, to the Trustee
and, if applicable, to such authenticating agent such security or indemnity as
may be required by them to save each of them harmless for any loss, liability,
cost or expense caused by or connected with such substitution, and, in every
case of destruction, loss or theft, the applicant shall also furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent
evidence to their satisfaction of the destruction, loss or theft of such Note
and of the ownership thereof.

         Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described in
the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Note and make available for delivery such
Note. Upon the issuance of any substituted Note, the Company may require the
payment by the holder of a sum sufficient to cover any tax, assessment or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. In case any Note which has matured or is about to
mature or has been called for redemption or has been tendered for redemption
(and not withdrawn) or is to be converted into Common Stock shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Note, pay or authorize the payment of or convert or authorize the
conversion of the same (without surrender thereof except in the case of a
mutilated Note), as the case may be, if the applicant for such payment or
conversion shall furnish to the Company, to the Trustee and, if applicable, to
such authenticating agent such security or indemnity as may be required by them
to save each of them harmless for any loss, liability, cost or expense caused by
or connected with such substitution, and, in every case of destruction, loss or
theft, the applicant shall also furnish to the Company, the Trustee and, if
applicable, any paying agent or conversion agent evidence to their satisfaction
of the destruction, loss or theft of such Note and of the ownership thereof.

         Every substitute Note issued pursuant to the provisions of this Section
2.6 by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the

                                       23
<PAGE>   35
express condition that the foregoing provisions are exclusive with respect to
the replacement or payment or conversion of mutilated, destroyed, lost or stolen
Notes and shall preclude any and all other rights or remedies notwithstanding
any law or statute existing or hereafter enacted to the contrary with respect to
the replacement or payment or conversion of negotiable instruments or other
securities without their surrender.

         SECTION 2.7. Temporary Notes. Pending the preparation of Notes in
certificated form, the Company may execute and the Trustee or an authenticating
agent appointed by the Trustee shall, upon the written request of the Company,
authenticate and deliver temporary Notes (printed or lithographed). Temporary
Notes shall be issuable in any authorized denomination, and substantially in the
form of the Notes in certificated form, but with such omissions, insertions and
variations as may be appropriate for temporary Notes, all as may be determined
by the Company. Every such temporary Note shall be executed by the Company and
authenticated by the Trustee or such authenticating agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the Notes in certificated form. Without unreasonable delay the Company will
execute and deliver to the Trustee or such authenticating agent Notes in
certificated form (other than in the case of Notes in global form) and thereupon
any or all temporary Notes (other than any such Global Note) may be surrendered
in exchange therefor, at each office or agency maintained by the Company
pursuant to Section 5.2 and the Trustee or such authenticating agent shall
authenticate and make available for delivery in exchange for such temporary
Notes an equal aggregate principal amount of Notes in certificated form. Such
exchange shall be made by the Company at its own expense and without any charge
therefor. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits and subject to the same limitations under this
Indenture as Notes in certificated form authenticated and delivered hereunder.

         SECTION 2.8. Cancellation of Notes Paid, Etc. All Notes surrendered for
the purpose of payment, redemption, conversion, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent or any Note
registrar or any conversion agent, be surrendered to the Trustee and promptly
canceled by it, or, if surrendered to the Trustee, shall be promptly canceled by
it, and no Notes shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Indenture. The Trustee shall dispose of such
canceled Notes in accordance with its customary procedures. If the Company shall
acquire any of the Notes, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Notes unless and until the
same are delivered to the Trustee for cancellation.

                                       24
<PAGE>   36
         SECTION 2.9. CUSIP Numbers. The Company in issuing the Notes 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 Noteholders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Notes, and any such redemption
shall not be affected by any defect in or omission of such numbers. The Company
will promptly notify the Trustee of any change in the "CUSIP" numbers.

                                    ARTICLE 3

                               REDEMPTION OF NOTES

         SECTION 3.1. Optional Redemption by the Company. (a Provisional
Redemption by the Company. The Notes may be redeemed by the Company, in whole or
in part, at any time prior to March 6, 2003 (a "Provisional Redemption"), upon
notice as set forth in Section 3.2, at a redemption price equal to $1,000 per
$1,000 aggregate principal amount of notes to be redeemed plus accrued and
unpaid interest, if any (including Liquidated Damages Amount, if any), to the
date of redemption (the "Provisional Redemption Date") if (i) the closing price
of the Common Stock shall have exceeded 150% of the Conversion Price then in
effect for at least 20 Trading Days in any consecutive 30-Trading Day period and
(ii) if the redemption would occur before March 1, 2002, the shelf registration
statement covering resales of the Notes, and the Common Stock issuable upon
conversion of the Notes, is effective and available for use and is expected to
remain effective and available for use for the 30 days immediately following the
Provisional Redemption Date.

         Upon any such Provisional Redemption, the Company shall make an
additional payment (the "Additional Payment") with respect to the Notes called
for redemption to holders as of the Notice Date in an amount equal to $152.54
per $1,000 Note, minus the amount of any interest the Company actually paid on
such Note prior to the Notice Date. The Company shall make the Additional
Payment on all Notes called for Provisional Redemption, including any Notes
converted into Common Stock pursuant to the terms hereof after the Notice Date
and prior to the Provisional Redemption Date.

          (b Non-Provisional Redemption by the Company. At any time on or after
March 6, 2003, and prior to maturity, the Notes may be redeemed at the option of
the Company (a "Non-Provisional Redemption"), in whole or in part,

                                       25
<PAGE>   37
upon notice as set forth in Section 3.2, at the following redemption prices
(expressed as percentages of the principal amount), together in each case with
accrued and unpaid interest, if any (including Liquidated Damages, if any) to,
but excluding, the date fixed for redemption (the "Non-Provisional Redemption
Date"):

<TABLE>
<CAPTION>
                                                                                    Redemption
Period                                                                                Price
------                                                                             ------------
<S>                                                                                 <C>
Beginning on March 6, 2003 and ending on February 29, 2004                            102.20%
Beginning on March 1, 2004 and ending on February 28, 2005                            101.10%
</TABLE>

and 100% on March 1, 2005; provided, however, that if the date fixed for
redemption is on a March 1 or September 1, then the interest payable on such
date shall be paid to the holder of record on the preceding February 15 or
August 15, respectively.

         Notwithstanding the foregoing, the Company may not redeem the Notes if
the Company has failed to pay any interest or premium on the Notes and such
failure to pay is continuing.

         SECTION 3.2. Notice of Redemptions; Selection of Notes. In case the
Company shall desire to exercise the right to redeem all or, as the case may be,
any part of the Notes pursuant to Section 3.1, it shall fix a date for
redemption and it or, at its written request received by the Trustee not fewer
than forty-five (45) days prior (or such shorter period of time as may be
acceptable to the Trustee) to the date fixed for redemption, the Trustee in the
name of and at the expense of the Company, shall mail or cause to be mailed a
notice of such redemption not fewer than thirty (30) nor more than sixty (60)
days prior to the date fixed for redemption to the holders of Notes so to be
redeemed as a whole or in part at their last addresses as the same appear on the
Note register; provided, however, that in the event of a Provisional Redemption,
notice of such redemption shall be mailed within five Trading Days of the
consecutive 30-Trading Day period, and provided further that if the Company
shall give such notice, it shall also give written notice, and written notice of
the Notes to be redeemed, to the Trustee. Such mailing shall be by first class
mail. The notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the holder receives such
notice. In any case, failure to give such notice by mail or any defect in the
notice to the holder of any Note designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the redemption of any other
Note. Concurrently with the mailing of any such notice of redemption, the
Company shall issue a press release announcing such redemption, the form and
content of which press release shall be determined by the Company in its sole

                                       26
<PAGE>   38
discretion. The failure to issue any such press release or any defect therein
shall not affect the validity of the redemption notice or any of the proceedings
for the redemption of any Note called for redemption.

         Each such notice of redemption shall specify the aggregate principal
amount of Notes to be redeemed, the CUSIP number or numbers of the Notes being
redeemed, the date fixed for redemption (which shall be a Business Day), the
redemption price at which Notes are to be redeemed, the place or places of
payment, that payment will be made upon presentation and surrender of such
Notes, that interest accrued to the date fixed for redemption will be paid as
specified in said notice, and that on and after said date interest thereon or on
the portion thereof to be redeemed will cease to accrue. Such notice shall also
state the current Conversion Price and the date on which the right to convert
such Notes or portions thereof into Common Stock will expire. If such redemption
is a Provisional Redemption, such notice shall also state the amount of the
Additional Payment. If fewer than all the Notes are to be redeemed, the notice
of redemption shall identify the Notes to be redeemed (including CUSIP numbers,
if any). In case any Note is to be redeemed in part only, the notice of
redemption shall state the portion of the principal amount thereof to be
redeemed and shall state that, on and after the date fixed for redemption, upon
surrender of such Note, a new Note or Notes in principal amount equal to the
unredeemed portion thereof will be issued.

         On or prior to the redemption date specified in the notice of
redemption given as provided in this Section 3.2, the Company will deposit with
the Trustee or with one or more paying agents (or, if the Company is acting as
its own paying agent, set aside, segregate and hold in trust as provided in
Section 5.4) (i) an amount of money in immediately available funds sufficient to
redeem on the redemption date all the Notes (or portions thereof) so called for
redemption (other than those theretofore surrendered for conversion into Common
Stock) at the appropriate redemption price, together with accrued interest to,
but excluding, the date fixed for redemption (ii) with respect to Notes called
for Provisional Redemption pursuant to Section 3.1(a), an amount of money
sufficient to pay the Additional Payment for all the Notes (or portions thereof)
called for redemption (including those surrendered for conversion into Common
Stock after the Notice Date and prior to the Provisional Redemption Date);
provided, however, that if such payment is made on the redemption date it must
be received by the Trustee or paying agent, as the case may be, by 10:00 a.m.
New York City time on such date. The Company shall be entitled to retain any
interest, yield or gain on amounts deposited with the Trustee or any paying
agent pursuant to this Section 3.2 in excess of amounts required hereunder to
pay the redemption price together with accrued interest to, but excluding, the
date fixed for redemption. If any Note called for redemption is converted
pursuant hereto prior to such

                                       27
<PAGE>   39
redemption, any money deposited with the Trustee or any paying agent or so
segregated and held in trust for the redemption of such Note shall be paid to
the Company upon its written request, or, if then held by the Company, shall be
discharged from such trust; provided that, with respect to a Provisional
Redemption, any money so deposited for payment of the Additional Payment shall
remain segregated and held in trust for payment of the Additional Payment which
shall be made on all Notes called for Provisional Redemption, including Notes
converted into shares of Common Stock after the Notice Date and prior to the
Provisional Redemption Date. Whenever any Notes are to be redeemed, the Company
will give the Trustee written notice in the form of an Officers" Certificate not
fewer than forty-five (45) days (or such shorter period of time as may be
acceptable to the Trustee) prior to the redemption date as to the aggregate
principal amount of Notes to be redeemed.

         If less than all of the outstanding Notes are to be redeemed, the
Trustee shall select the Notes or portions thereof of the Global Note or the
Notes in certificated form to be redeemed (in principal amounts of $1,000 or
integral multiples thereof) by lot, on a pro rata basis or by another method the
Trustee deems fair and appropriate. If any Note selected for partial redemption
is submitted for conversion in part after such selection, the portion of such
Note submitted for conversion shall be deemed (so far as may be) to be the
portion to be selected for redemption. The Notes (or portions thereof) so
selected shall be deemed duly selected for redemption for all purposes hereof,
notwithstanding that any such Note is submitted for conversion in part before
the mailing of the notice of redemption.

         Upon any redemption of less than all of the outstanding Notes, the
Company and the Trustee may (but need not), solely for purposes of determining
the pro rata allocation among such Notes as are unconverted and outstanding at
the time of redemption, treat as outstanding any Notes surrendered for
conversion during the period of fifteen (15) days next preceding the mailing of
a notice of redemption and may (but need not) treat as outstanding any Note
authenticated and delivered during such period in exchange for the unconverted
portion of any Note converted in part during such period.

         SECTION 3.3. Payment of Notes Called for Redemption. If notice of
redemption has been given as above provided, the Notes or portion of Notes with
respect to which such notice has been given shall, unless converted into Common
Stock pursuant to the terms hereof, become due and payable on the date fixed for
redemption and at the place or places stated in such notice at the applicable
redemption price, together with interest accrued to (but excluding) the date
fixed for redemption, and, with respect to the Notes called for Provisional
Redemption (including Notes converted into Common Stock pursuant to the terms
hereof after

                                       28
<PAGE>   40
the Notice Date and prior to the Provisional Redemption Date), the Additional
Payment, and on and after said date (unless the Company shall default in the
payment of such Notes at the redemption price, together with interest accrued to
said date) interest on the Notes or portion of Notes so called for redemption
shall cease to accrue and, after the close of business on the Business Day next
preceding the date fixed for redemption, such Notes shall cease to be
convertible into Common Stock and, except as provided in Sections 8.5 and 13.4,
to be entitled to any benefit or security under this Indenture, and the holders
thereof shall have no right in respect of such Notes except the right to receive
the redemption price thereof and unpaid interest to (but excluding) the date
fixed for redemption and, with respect to the Notes called for Provisional
Redemption (including Notes converted into Common Stock pursuant to the terms
hereof after the Notice Date and prior to the Provisional Redemption Date), the
Additional Payment. On presentation and surrender of such Notes at a place of
payment in said notice specified, the said Notes or the specified portions
thereof shall be paid and redeemed by the Company at the applicable redemption
price, together with interest accrued thereon to (but excluding) the date fixed
for redemption and, with respect to the Notes called for Provisional Redemption
(including Notes converted into Common Stock pursuant to the terms hereof after
the Notice Date and prior to the Provisional Redemption Date), the Additional
Payment; provided, however, that if the applicable redemption date is an
interest payment date, the semi-annual payment of interest becoming due on such
date shall be payable to the holders of such Notes registered as such on the
relevant record date instead of the holders surrendering such Notes for
redemption on such date.

         Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed portion of
the Notes so presented.

         Notwithstanding the foregoing, the Trustee shall not redeem any Notes
or mail any notice of redemption during the continuance of a default in payment
of interest or premium, if any, on the Notes. If any Note called for redemption
shall not be so paid upon surrender thereof for redemption, the principal and
premium, if any (including the Additional Payment, if any), shall, until paid or
duly provided for, bear interest from the date fixed for redemption at the rate
borne by the Note and such Note shall remain convertible into Common Stock until
the principal and premium, if any (including the Additional Payment, if any),
and interest shall have been paid or duly provided for.

         SECTION 3.4. Conversion Arrangement on Call for Redemption. In
connection with any redemption of Notes, the Company may arrange for the

                                       29
<PAGE>   41
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 Noteholders, on or before the date fixed for redemption, an amount
not less than the applicable redemption price, together with interest accrued to
(but excluding) the date fixed for redemption, of such Notes and, in connection
with a Provisional Redemption, the Additional Payment. Notwithstanding anything
to the contrary contained in this Article Three, the obligation of the Company
to pay the redemption price of such Notes, together with interest accrued to
(but excluding) the date fixed for redemption and, in connection with a
Provisional Redemption, the Additional Payment, 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 will be filed with the Trustee
prior to the date fixed for redemption, 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
Fifteen) surrendered by such purchasers for conversion, all as of immediately
prior to the close of business on the date fixed for redemption (and the right
to convert any such Notes shall be extended through such time), subject to
payment of the above amount as aforesaid (including the Additional Payment, if
any, with respect to all Notes called for Provisional Redemption). 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 Indenture.

         SECTION 3.5. Redemption at Option of Holders. (a If there shall occur a
Fundamental Change at any time prior to maturity of the Notes, then each
Noteholder shall have the right, at such holder"s option, to require the Company
to redeem all of such holder"s Notes, or any portion thereof that is an integral
multiple of $1,000 principal amount, on the date (the "Repurchase Date") that is
thirty (30) days after the date of the Company Notice (as defined in Section
3.5(b) below) of such Fundamental Change (or, if such 30th day is not a Business
Day, the next succeeding Business Day) at a redemption price equal to 100% of
the principal amount thereof, together with accrued interest to (but excluding)
the Repurchase Date; provided, however, that, if such Repurchase Date is a March
1 or September 1, then the interest payable on such date shall be paid to the
holders of record of the Notes on the next preceding February 15 or August 15,
respectively.

                                       30
<PAGE>   42
         Upon presentation of any Note redeemed in part only, the Company shall
execute and, upon the Company"s written direction to the Trustee, the Trustee
shall authenticate and deliver to the holder thereof, at the expense of the
Company, a new Note or Notes, of authorized denominations, in principal amount
equal to the unredeemed portion of the Notes so presented.

          (b On or before the tenth day after the occurrence of a Fundamental
Change, the Company or at its written request (which must be received by the
Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree in
writing to a shorter period), the Trustee, in the name of and at the expense of
the Company, shall mail or cause to be mailed to all holders of record on the
date of the Fundamental Change a notice (the "Company Notice") of the occurrence
of such Fundamental Change and of the redemption right at the option of the
holders arising as a result thereof. Such notice shall be mailed in the manner
and with the effect set forth in the first paragraph of Section 3.2 (without
regard for the time limits set forth therein). If the Company shall give such
notice, the Company shall also deliver a copy of the Company Notice to the
Trustee at such time as it is mailed to Noteholders. Concurrently with the
mailing of any Company Notice, the Company shall issue a press release
announcing such Fundamental Change referred to in the Company Notice, the form
and content of which press release shall be determined by the Company in its
sole discretion. The failure to issue any such press release or any defect
therein shall not affect the validity of the Company Notice or any proceedings
for the redemption of any Note which any Noteholder may elect to have the
Company redeem as provided in this Section 3.5.

         Each Company Notice shall specify the circumstances constituting the
Fundamental Change, the Repurchase Date, the price at which the Company shall be
obligated to redeem Notes, that the holder must exercise the redemption right on
or prior to the close of business on the Repurchase Date (the "Fundamental
Change Expiration Time"), that the holder shall have the right to withdraw any
Notes surrendered prior to the Fundamental Change Expiration Time, a description
of the procedure which a Noteholder must follow to exercise such redemption
right and to withdraw any surrendered Notes, the place or places where the
holder is to surrender such holder"s Notes, the amount of interest accrued on
each Note to the Repurchase Date and the "CUSIP" number or numbers of the Notes
(if then generally in use).

         No failure of the Company to give the foregoing notices and no defect
therein shall limit the Noteholders" redemption rights or affect the validity of
the proceedings for the redemption of the Notes pursuant to this Section 3.5.

                                       31
<PAGE>   43

          (c For a Note to be so redeemed at the option of the holder, the
Company must receive at the office or agency of the Company maintained for that
purpose or, at the option of such holder, the Corporate Trust Office, such Note
with the form entitled "Option to Elect Repayment Upon A Fundamental Change" on
the reverse thereof duly completed, together with such Notes duly endorsed for
transfer, on or before the Fundamental Change Expiration Time. All questions as
to the validity, eligibility (including time of receipt) and acceptance of any
Note for repayment shall be determined by the Company, whose determination shall
be final and binding absent manifest error.

          (d On or prior to the Repurchase Date, the Company will deposit with
the Trustee or with one or more paying agents (or, if the Company is acting as
its own paying agent, set aside, segregate and hold in trust as provided in
Section 5.4) an amount of money sufficient to redeem on the Repurchase Date all
the Notes to be redeemed on such date at the appropriate redemption price,
together with accrued interest to (but excluding) the Repurchase Date; provided,
however, 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. New York City
time, on such date. Payment for Notes surrendered for redemption (and not
withdrawn) prior to the Fundamental Change Expiration Time will be made promptly
(but in no event more than five (5) Business Days) following the Repurchase Date
by mailing checks for the amount payable to the holders of such Notes entitled
thereto as they shall appear on the registry books of the Company.

          (e In the case of a reclassification, change, consolidation, merger,
combination, sale or conveyance to which Section 15.6 applies, in which the
Common Stock of the Company is changed or exchanged as a result into the right
to receive stock, securities or other property or assets (including cash), which
includes shares of Common Stock of the Company or shares of common stock of
another Person that are, or upon issuance will be, traded on a United States
national securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States and such shares constitute
at the time such change or exchange becomes effective in excess of 50% of the
aggregate fair market value of such stock, securities or other property or
assets (including cash) (as determined by the Company, which determination shall
be conclusive and binding), then the Person formed by such consolidation or
resulting from such merger or which acquires such assets, as the case may be,
shall execute and deliver to the Trustee a supplemental indenture (accompanied
by an Opinion of Counsel that such supplemental indenture complies with the
Trust Indenture Act as in force at the date of execution of such supplemental
indenture) modifying the provisions of this Indenture relating to the right of
holders of the Notes to cause the Company to repurchase the Notes following a
Fundamental Change, including without limitation the applicable provisions of
this Section 3.5

                                       32
<PAGE>   44
and the definitions of Common Stock and Fundamental Change, as appropriate, as
determined in good faith by the Company (which determination shall be conclusive
and binding), to make such provisions apply to such other Person if different
from the Company and the common stock issued by such Person (in lieu of the
Company and the Common Stock of the Company).

          (f The Company will comply with the provisions of Rule 13e-4 and any
other tender offer rules under the Exchange Act to the extent then applicable in
connection with the redemption rights of the holders of Notes in the event of a
Fundamental Change.

                                    ARTICLE 4

                             SUBORDINATION OF NOTES

         SECTION 4.1. Agreement of Subordination. The Company covenants and
agrees, and each holder of Notes issued hereunder by its acceptance thereof
likewise covenants and agrees, that all Notes shall be issued subject to the
provisions of this Article Four, and each Person holding any Note, whether upon
original issue or upon registration of transfer, assignment or exchange thereof,
accepts and agrees to be bound by such provisions.

         The payment of the principal of, premium, if any, and interest
(including Liquidated Damages, if any) on all Notes (including, but not limited
to, the redemption price and Additional Payment, if any, with respect to the
Notes called for redemption in accordance with Section 3.2 or submitted for
redemption in accordance with Section 3.5, as the case may be, as provided in
this Indenture) issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and subject in right of payment to the
prior payment in full of all Senior Indebtedness, whether outstanding at the
date of this Indenture or thereafter incurred.

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

         SECTION 4.2. Payments to Noteholders. No payment shall be made with
respect to the principal of, premium, if any, or interest (including Liquidated
Damages, if any) on the Notes (including, but not limited to, the redemption
price and Additional Payment, if any, with respect to the Notes to be called for
redemption in accordance with Section 3.2 or submitted for redemption in
accordance with Section 3.5, as the case may be, as provided in this Indenture),

                                       33
<PAGE>   45
except payments and distributions made by the Trustee as permitted by the first
or second paragraph of Section 4.5, if:

                  (i) a default in the payment of principal, premium, if any,
         interest, rent or other obligations in respect of Designated Senior
         Indebtedness occurs and is continuing (or, in the case of Designated
         Senior Indebtedness for which there is a period of grace, in the event
         of such a default that continues beyond the period of grace, if any,
         specified in the instrument or lease evidencing such Designated Senior
         Indebtedness) (a "Payment Default"), unless and until such Payment
         Default shall have been cured or waived or shall have ceased to exist;
         or

                 (ii) a default, other than a Payment Default, on any Designated
         Senior Indebtedness occurs and is continuing that then permits holders
         of such Designated Senior Indebtedness to accelerate its maturity (or
         in the case of any lease, a default occurs and is continuing that
         permits the lessor to either terminate the lease or require the Company
         to make an irrevocable offer to terminate the lease following an event
         of default thereunder) and the Trustee receives a notice of the default
         (a "Payment Blockage Notice") from a holder of Designated Senior
         Indebtedness, a Representative of Designated Senior Indebtedness or the
         Company (a "Non-Payment Default").

         If the Trustee receives any Payment Blockage Notice pursuant to clause
(ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section 4.2 unless and until at least 365 days shall have
elapsed since the initial effectiveness of the immediately prior Payment
Blockage Notice. No Non-Payment Default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice.

         The Company may and shall resume payments on and distributions in
respect of the Notes (including, but not limited to, the redemption price and
Additional Payment, if any, with respect to the Notes to be called for
redemption) upon the earlier of:

                  (1) the date upon which any such Payment Default is cured or
         waived or ceases to exist, or

                  (2) in the case of a Non-Payment Default, the earlier of (a)
         the date upon which such default is cured or waived or ceases to exist
         or (b) 179 days after the applicable Payment Blockage Notice is
         received by the Trustee if the maturity of such Designated Senior
         Indebtedness has not

                                       34
<PAGE>   46
         been accelerated (or in the case of any lease, 179 days after notice is
         received if the Company has not received notice that the lessor under
         such lease has exercised its right to terminate the lease or require
         the Company to make an irrevocable offer to terminate the lease
         following an event of default thereunder),

         unless this Article Four otherwise prohibits the payment or
distribution at the time of such payment or distribution.

         Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness (and satisfactory to the
holders of Senior Indebtedness in the case such Senior Indebtedness includes
Designated Senior Indebtedness), or payment thereof in accordance with its terms
provided for in cash or other payment satisfactory to the holders of such Senior
Indebtedness (and satisfactory to the holders of Senior Indebtedness in the case
such Senior Indebtedness includes Designated Senior Indebtedness) before any
payment is made on account of the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Notes (except payments made
pursuant to Article Thirteen from monies deposited with the Trustee pursuant
thereto prior to commencement of proceedings for such dissolution, winding up,
liquidation or reorganization), and upon any such dissolution or winding up or
liquidation or reorganization of the Company or bankruptcy, insolvency,
receivership or other similar proceeding, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the holders of the Notes or the Trustee would
be entitled, except for the provisions of this Article Four, shall (except as
aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the holders of the Notes or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Indebtedness (pro rata
to such holders on the basis of the respective amounts of Senior Indebtedness
held by such holders, or as otherwise required by law or a court order) or their
Representative or Representatives, as their respective interests may appear, to
the extent necessary to pay all Senior Indebtedness in full, in cash or other
payment satisfactory to the holders of such Senior Indebtedness (and
satisfactory to the holders of Senior Indebtedness in the case such Senior
Indebtedness includes Designated Senior Indebtedness), after giving effect to
any concurrent payment or distribution to or

                                       35
<PAGE>   47
for the holders of Senior Indebtedness, before any payment or distribution is
made to the holders of the Notes or to the Trustee.

         For purposes of this Article Four, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article Four with
respect to the Notes to the payment of all Senior Indebtedness which may at the
time be outstanding provided that (i) the Senior Indebtedness is assumed by the
new corporation, if any, resulting from any reorganization or readjustment, and
(ii) the rights of the holders of Senior Indebtedness (other than leases which
are not assumed by the Company or the new corporation, as the case may be) are
not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another Person upon the terms and conditions
provided for in Article Twelve shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 4.2 if such other
Person shall, as a part of such consolidation, merger, conveyance or transfer,
comply with the conditions stated in Article Twelve.

         In the event of the acceleration of the Notes because of an Event of
Default, no payment or distribution shall be made to the Trustee or any holder
of Notes in respect of the principal of, premium, if any, or interest (including
Liquidated Damages, if any) on the Notes (including, but not limited to, the
redemption price and Additional Payment, if any, with respect to the Notes
called for redemption in accordance with Section 3.2 or submitted for redemption
in accordance with Section 3.5, as the case may be, as provided in this
Indenture), except payments and distributions made by the Trustee as permitted
by the first or second paragraph of Section 4.5, until all Senior Indebtedness
has been paid in full in cash or other payment satisfactory to the holders of
Senior Indebtedness (and satisfactory to the holders of Designated Senior
Indebtedness in the case such Senior Indebtedness includes Designated Senior
Indebtedness) or such acceleration is rescinded in accordance with the terms of
this Indenture. If payment of the Notes is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Indebtedness of the
acceleration.

         In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing provisions in this Section
4.2, shall be

                                       36
<PAGE>   48
received by the Trustee or the holders of the Notes before all Senior
Indebtedness is paid in full in cash or other payment satisfactory to the
holders of such Senior Indebtedness (and satisfactory to the holders of Senior
Indebtedness in the case such Senior Indebtedness includes Designated Senior
Indebtedness), or provision is made for such payment thereof in accordance with
its terms in cash or other payment satisfactory to the holders of such Senior
Indebtedness (and satisfactory to the holders of Senior Indebtedness in the case
such Senior Indebtedness includes Designated Senior Indebtedness), such payment
or distribution shall be held in trust for the benefit of and shall be paid over
or delivered to the holders of Senior Indebtedness or their Representative or
Representatives, as their respective interests may appear, as calculated by the
Company, for application to the payment of any Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in cash or
other payment satisfactory to the holders of such Senior Indebtedness (and
satisfactory to the holders of Senior Indebtedness in the case such Senior
Indebtedness includes Designated Senior Indebtedness), after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness.

         Nothing in this Section 4.2 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 8.6. This Section 4.2 shall be subject
to the further provisions of Section 4.5.

         SECTION 4.3. Subrogation of Notes. Subject to the payment in full of
all Senior Indebtedness, the rights of the holders of the Notes shall be
subrogated to the extent of the payments or distributions made to the holders of
such Senior Indebtedness pursuant to the provisions of this Article Four
(equally and ratably with the holders of all indebtedness of the Company which
by its express terms is subordinated to other 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 holders of Senior Indebtedness
to receive payments or distributions of cash, property or securities of the
Company applicable to the Senior Indebtedness until the principal, premium, if
any, and interest (including Liquidated Damages, if any) on the Notes shall be
paid in full, and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property or
securities to which the holders of the Notes or the Trustee would be entitled
except for the provisions of this Article Four, and no payment pursuant to the
provisions of this Article Four, to or for the benefit of the holders of Senior
Indebtedness by holders of the Notes or the Trustee, shall, as among the
Company, its creditors other than holders of Senior Indebtedness, and the
holders of the Notes, be deemed to be a payment by the Company to or on account
of the Senior Indebtedness, and no payments or distributions of cash, property
or securities to or for the benefit of the holders of the Notes pursuant to the
subrogation provisions of this Article Four, which would

                                       37
<PAGE>   49
otherwise have been paid to the holders of Senior Indebtedness, shall be deemed
to be a payment by the Company to or for the account of the Notes. It is
understood that the provisions of this Article Four are intended solely for the
purposes of defining the relative rights of the holders of the Notes, on the one
hand, and the holders of the Senior Indebtedness, on the other hand.

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

         Upon any payment or distribution of assets of the Company referred to
in this Article Four, the Trustee, subject to the provisions of Section 8.1, and
the holders of the Notes shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction in which such bankruptcy, dissolution,
winding up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, delivered to the Trustee or
to the holders of the Notes, 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 and all other facts pertinent thereto or to this Article Four.

         SECTION 4.4. Authorization to Effect Subordination. Each holder of a
Note by the holder"s acceptance thereof authorizes and directs the Trustee on
the holder"s behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article Four and appoints the
Trustee to act as the holder's attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in the third paragraph of Section
7.2 hereof at least thirty (30) days before the expiration of the time to file
such claim, the holders of any Senior Indebtedness or their Representatives are
hereby authorized to file an appropriate claim for and on behalf of the holders
of the Notes.

                                       38
<PAGE>   50
         SECTION 4.5. Notice to Trustee. The Company shall give prompt written
notice in the form of an Officers' Certificate to a Responsible Officer of the
Trustee and to any paying agent of any fact known to the Company that would
prohibit the making of any payment of monies to or by the Trustee or any paying
agent in respect of the Notes pursuant to the provisions of this Article Four.
Notwithstanding the provisions of this Article Four or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the existence
of any facts that would prohibit the making of any payment of monies to or by
the Trustee in respect of the Notes pursuant to the provisions of this Article
Four, unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office from the Company (in the
form of an Officers' Certificate) or a Representative or a holder or holders of
Senior Indebtedness, and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 8.1, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if on a
date not less than one Business Day prior to the date upon which by the terms
hereof any such monies may become payable for any purpose (including, without
limitation, the payment of the principal of, or premium, if any, or interest
(including Liquidated Damages, if any) on any Note) the Trustee shall not have
received, with respect to such monies, the notice provided for in this Section
4.5, then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to apply monies received to the
purpose for which they were received, and shall not be affected by any notice to
the contrary that may be received by it on or after such prior date.

         Notwithstanding anything in this Article Four to the contrary, nothing
shall prevent any payment by the Trustee to the Noteholders of monies deposited
with it pursuant to Section 13.1, if a Responsible Officer of the Trustee shall
not have received written notice at the Corporate Trust Office on or before one
Business Day prior to the date such payment is due that such payment is not
permitted under Section 4.1 or 4.2.

         The Trustee, subject to the provisions of Section 8.1, shall be
entitled to rely conclusively on the delivery to it of a written notice by a
Representative or a person representing himself to be a holder of Senior
Indebtedness (or a trustee on behalf of such holder) to establish that such
notice has been given by a Representative or a holder of Senior Indebtedness or
a trustee on behalf of any such holder or holders. The Trustee shall not be
required to make any payment or distribution to or on behalf of a holder of
Senior Indebtedness pursuant to this Article Four unless it has received
satisfactory evidence 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 such
Person under this Article Four.

                                       39
<PAGE>   51
         SECTION 4.6. Trustee's Relation to Senior Indebtedness. The Trustee, in
its individual capacity, shall be entitled to all the rights set forth in this
Article Four 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
Section 8.13 or elsewhere in this Indenture shall deprive the Trustee of any of
its rights as such holder.

         With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Four, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 8.1, the Trustee shall not be liable to any holder of
Senior Indebtedness (i) for any failure to make any payments or distributions to
such holder or (ii) if it shall pay over or deliver to holders of Notes, the
Company or any other Person money in compliance with this Article Four.

         SECTION 4.7. No Impairment of Subordination. No right of any present or
future holder 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 Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with. Senior
Indebtedness may be created, renewed or extended and holders of Senior
Indebtedness may exercise any rights under any instrument creating or evidencing
such Senior Indebtedness, including, without limitation, any waiver of default
thereunder, without any notice to or consent from the holders of the Notes or
the Trustee. No compromise, alteration, amendment, modification, extension,
renewal or other change of, or waiver, consent or other action in respect of,
any liability or obligation under or in respect of the Senior Indebtedness or
any terms or conditions of any instrument creating or evidencing such Senior
Indebtedness shall in any way alter or affect any of the provisions of this
Article Four or the subordination of the Notes provided thereby.

         SECTION 4.8. Certain Conversions Not Deemed Payment. For the purposes
of this Article Four only, (1) the issuance and delivery of junior securities
upon conversion of Notes in accordance with Article Fifteen shall not be deemed
to constitute a payment or distribution on account of the principal of, premium,
if any, or interest (including Liquidated Damages, if any) on Notes or on
account of the purchase or other acquisition of Notes, and (2) the payment,
issuance or delivery of cash (except in satisfaction of fractional shares
pursuant to

                                       40
<PAGE>   52
Section 15.3), property or securities (other than junior securities) upon
conversion of a Note shall be deemed to constitute payment on account of the
principal of, premium, if any, or interest (including Liquidated Damages, if
any) on such Note. For the purposes of this Section 4.8, the term "junior
securities" means (a) shares of any stock of any class of the Company or (b)
securities of the Company that are subordinated in right of payment to all
Senior Indebtedness that 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 Four. Nothing
contained in this Article Four or elsewhere in this 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 Noteholders, the right, which is
absolute and unconditional, of the Holder of any Note to convert such Note in
accordance with Article Fifteen.

         SECTION 4.9. Article Applicable to Paying Agents. If 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 Four shall
(unless the context otherwise requires) 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 Four in addition to
or in place of the Trustee; provided, however, that the first paragraph of
Section 4.5 shall not apply to the Company or any Affiliate of the Company if it
or such Affiliate acts as paying agent.

         The Trustee shall not be responsible for the actions or inactions of
any other paying agents (including the Company if acting as its own paying
agent) and shall have no control of any funds held by such other paying agents.

         SECTION 4.10. Senior Indebtedness Entitled to Rely. The holders of
Senior Indebtedness (including, without limitation, Designated Senior
Indebtedness) shall have the right to rely upon this Article Four, and no
amendment or modification of the provisions contained herein shall diminish the
rights of such holders unless such holders shall have agreed in writing thereto.

         SECTION 4.11. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article Four, the Trustee and the Noteholders shall be entitled to rely
upon any order or decree entered by any court of competent jurisdiction in which
such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Noteholders,
for the purpose of ascertaining the Persons

                                       41
<PAGE>   53
entitled to participate in such payment or distribution, the holders of 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 Four.

                                    ARTICLE 5

                       PARTICULAR COVENANTS OF THE COMPANY

         SECTION 5.1. Payment of Principal, Premium and Interest. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any (including the redemption price and
Additional Payment, if any, upon redemption pursuant to Article Three), and
interest (including Liquidated Damages, if any), on each of the Notes at the
places, at the respective times and in the manner provided herein and in the
Notes.

         SECTION 5.2. Maintenance of Office or Agency. The Company will maintain
an office or agency in New York, New York, where the Notes may be surrendered
for registration of transfer or exchange or for presentation for payment or for
conversion or redemption and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Company will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency not designated or appointed by the Trustee.
If at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office or the office of agency of the Trustee in New York, New
York (which shall initially be located at The Bank of New York, 101 Barclay
Street, 21st Floor West, New York, New York, 10286, Attention: Corporate Trust
Trustee Administration.

         The Company may also from time to time designate co-registrars and one
or more offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations.
The Company will give prompt written notice of any such designation or
rescission and of any change in the location of any such other office or agency.

         The Company hereby initially designates the Trustee as paying agent,
Note registrar, Custodian and conversion agent and each of the Corporate Trust
Office and the office of agency of the Trustee in New York, New York (which
shall initially be located at The Bank of New York, 101 Barclay Street, 21st
Floor

                                       42
<PAGE>   54
West, New York, New York, 10286, Attention: Corporate Trust Trustee
Administration), shall be considered as one such office or agency of the Company
for each of the aforesaid purposes.

         So long as the Trustee is the Note registrar, the Trustee agrees to
mail, or cause to be mailed, the notices set forth in Section 8.10(a) and the
third paragraph of Section 8.11. If co-registrars have been appointed in
accordance with this Section , the Trustee shall mail such notices only to the
Company and the holders of Notes it can identify from its records.

         SECTION 5.3. Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.

         SECTION 5.4. Provisions as to Paying Agent. (a) If the Company shall
appoint a paying agent other than the Trustee, or if the Trustee shall appoint
such a paying agent, the Company will cause such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section 5.4:

                  (i) that it will hold all sums held by it as such agent for
         the payment of the principal of and premium, if any, or interest
         (including Liquidated Damages, if any) on the Notes (whether such sums
         have been paid to it by the Company or by any other obligor on the
         Notes) in trust for the benefit of the holders of the Notes;

                 (ii) that it will give the Trustee written notice of any
         failure by the Company (or by any other obligor on the Notes) to make
         any payment of the principal of and premium, if any, or interest on the
         Notes when the same shall be due and payable; and

                (iii) that at any time during the continuance of an Event of
         Default, upon request of the Trustee, it will forthwith pay to the
         Trustee all sums so held in trust.

         The Company shall, on or before each due date of the principal of,
premium, if any, or interest on the Notes, deposit with the paying agent a sum
(in funds which are immediately available on the due date for such payment)
sufficient to pay such principal, premium, if any, or interest, and (unless such
paying agent is the Trustee) the Company will promptly notify the Trustee in
writing of any failure to take such action; provided, however, that if such
deposit

                                       43
<PAGE>   55
is made on the due date, such deposit shall be received by the paying agent by
10:00 a.m. New York City time, on such date.

          (b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Notes, set aside, segregate and
hold in trust for the benefit of the holders of the Notes a sum sufficient to
pay such principal, premium, if any, or interest (including Liquidated Damages,
if any) so becoming due and will promptly notify the Trustee in writing of any
failure to take such action and of any failure by the Company (or any other
obligor under the Notes) to make any payment of the principal of, premium, if
any, or interest (including Liquidated Damages, if any) on the Notes when the
same shall become due and payable.

          (c) Anything in this Section 5.4 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any paying agent hereunder
as required by this Section 5.4, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any paying agent
to the Trustee, the Company or such paying agent shall be released from all
further liability with respect to such sums.

          (d) Anything in this Section 5.4 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 5.4 is subject to
Sections 13.3 and 13.4.

         The Trustee shall not be responsible for the actions of any other
paying agents (including the Company if acting as its own paying agent) and
shall have no control of any funds held by such other paying agents.

         SECTION 5.5. Existence. Subject to Article Twelve, the Company will do
or cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided, however, that
the Company shall not be required to preserve any such right if the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Noteholders.

         SECTION 5.6. Maintenance of Properties. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Significant Subsidiary to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to be

                                       44
<PAGE>   56
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section shall
prevent the Company from discontinuing the operation or maintenance of any of
such properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any subsidiary and
not disadvantageous in any material respect to the Noteholders.

         SECTION 5.7. Payment of Taxes and Other Claims. The Company will pay or
discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Significant Subsidiary or upon the income,
profits or property of the Company or any Significant Subsidiary, (ii) all
claims for labor, materials and supplies which, if unpaid, might by law become a
lien or charge upon the property of the Company or any Significant Subsidiary
and (iii) all stamps and other duties, if any, which may be imposed by the
United States or any political subdivision thereof or therein in connection with
the issuance, transfer, exchange or conversion of any Notes or with respect to
this Indenture; provided, however, that, in the case of clauses (i) and (ii),
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (A) if the failure to do so
will not, in the aggregate, have a material adverse impact on the Company, or
(B) if the amount, applicability or validity is being contested in good faith by
appropriate proceedings.

         SECTION 5.8. Rule 144A Information Requirement. Within the period prior
to the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Notes or any Common Stock issued upon conversion thereof
which continue to be Restricted Securities in connection with any sale thereof
and any prospective purchaser of Notes or such Common Stock designated by such
holder or beneficial holder, the information required pursuant to Rule
144A(d)(4) under the Securities Act upon the request of any holder or beneficial
holder of the Notes or such Common Stock and it will take such further action as
any holder or beneficial holder of such Notes or such Common Stock may
reasonably request, all to the extent required from time to time to enable such
holder or beneficial holder to sell its Notes or Common Stock without
registration under the Securities Act within the limitation of the exemption
provided by Rule 144A, as such Rule may be amended from time to time. Upon the
request of any holder or any beneficial holder of the Notes or such Common
Stock, the Company will deliver

                                       45
<PAGE>   57
to such holder a written statement as to whether it has complied with such
requirements.

         SECTION 5.9. Stay, Extension and Usury Laws. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of, premium,
if any, or interest (including Liquidated Damages, if any) on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.

         SECTION 5.10. Compliance Certificate. The Company shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Company, a certificate signed by either the principal executive officer,
principal financial officer or principal accounting officer of the Company,
stating whether or not to the best knowledge of the signer thereof the Company
is in default in the performance and observance of any of the terms, provisions
and conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and the status thereof of
which the signer may have knowledge.

         The Company will deliver to the Trustee, forthwith upon becoming aware
of (i) any default in the performance or observance of any covenant, agreement
or condition contained in this Indenture, or (ii) any Event of Default, an
Officers' Certificate specifying with particularity such default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.

         Any notice required to be given under this Section 5.10 or Section 4.5
shall be delivered to a Responsible Officer of the Trustee at its Corporate
Trust Office. In the event that the payment of the Notes is accelerated because
of an Event of Default, the Company shall promptly provide written notice to the
Trustee specifying the names and addresses of the holders of Senior Indebtedness
if the Trustee (and not the Company) is to provide holders of Senior
Indebtedness notice of such acceleration under Section 4.5 of the Indenture.

                                       46
<PAGE>   58
         SECTION 5.11. Liquidated Damages Notice. In the event that the Company
is required to pay Liquidated Damages to holders of Notes pursuant to the
Registration Rights Agreement, the Company will provide written notice
("Liquidated Damages Notice") to the Trustee of its obligation to pay Liquidated
Damages no later than fifteen days prior to the proposed payment date for the
Liquidated Damages, and the Liquidated Damages Notice shall set forth the amount
of Liquidated Damages to be paid by the Company on such payment date. The
Trustee shall not at any time be under any duty or owe a responsibility to any
holder of Notes to determine the Liquidated Damages, or with respect to the
nature, extent or calculation of the amount of Liquidated Damages when made, or
with respect to the method employed in such calculation of the Liquidated
Damages.

                                    ARTICLE 6

          NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

         SECTION 6.1. Noteholders' Lists. The Company covenants and agrees that
it will furnish or cause to be furnished to the Trustee, semiannually, not more
than fifteen (15) days after each February 15 and August 15 in each year
beginning with August 15, 2000, and at such other times as the Trustee may
request in writing, within thirty (30) days after receipt by the Company of any
such request (or such lesser time as the Trustee may reasonably request in order
to enable it to timely provide any notice to be provided by it hereunder), a
list in such form as the Trustee may reasonably require of the names and
addresses of the holders of Notes as of a date not more than fifteen (15) days
(or such other date as the Trustee may reasonably request in order to so provide
any such notices) prior to the time such information is furnished, except that
no such list need be furnished by the Company to the Trustee so long as the
Trustee is acting as the sole Note registrar.

         SECTION 6.2. Preservation and Disclosure of Lists. (a) The Trustee
shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Notes contained in
the most recent list furnished to it as provided in Section 6.1 or maintained by
the Trustee in its capacity as Note registrar or co-registrar in respect of the
Notes, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 6.1 upon receipt of a new list so furnished.

          (b) The rights of Noteholders to communicate with other holders of
Notes with respect to their rights under this Indenture or under the Notes, and
the

                                       47
<PAGE>   59
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.

          (c) Every Noteholder, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of holders of Notes made pursuant to the
Trust Indenture Act.

         SECTION 6.3. Reports by Trustee. (a) Within sixty (60) days after
February 15 of each year commencing with the year 2001, the Trustee shall
transmit to holders of Notes such reports dated as of August 15 of the year in
which such reports are made concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.

          (b) A copy of such report shall, at the time of such transmission to
holders of Notes, be filed by the Trustee with each stock exchange and automated
quotation system upon which the Notes are listed and with the Company. The
Company will promptly notify the Trustee in writing when the Notes are listed on
any stock exchange or automated quotation system or delisted therefrom.

         SECTION 6.4. Reports by Company. The Company shall file with the
Trustee (and the Commission if at any time after the Indenture becomes qualified
under the Trust Indenture Act), and transmit to holders of Notes, such
information, documents and other reports and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant to such Act, whether or not the Notes are governed by such
Act; provided, however, that any such information, documents or reports required
to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act shall be filed with the Trustee within fifteen (15) days after the same is
so required to be filed with the Commission. 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).

                                    ARTICLE 7

                                       48
<PAGE>   60
         REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF DEFAULT

         SECTION 7.1. Events of Default. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing:

          (a) default in the payment of any installment of interest (including
Liquidated Damages, if any) upon any of the Notes as and when the same shall
become due and payable, and continuance of such default for a period of thirty
(30) days, whether or not such payment is permitted under Article Four hereof;
or

          (b) default in the payment of the principal of or premium, if any
(including the Additional Payment, if any), on any of the Notes as and when the
same shall become due and payable either at maturity or in connection with any
redemption pursuant to Article Three, by acceleration or otherwise, whether or
not such payment is permitted under Article Four hereof; or

          (c) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the Notes or
in this Indenture (other than a covenant or agreement a default in whose
performance or whose breach is elsewhere in this Section 7.1 specifically dealt
with) continued for a period of sixty (60) days after the date on which written
notice of such failure, requiring the Company to remedy the same, shall have
been given to the Company by the Trustee, or the Company and a Responsible
Officer of the Trustee by the holders of at least twenty-five percent (25%) in
aggregate principal amount of the Notes at the time outstanding determined in
accordance with Section 9.4; or

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

          (e) an involuntary case or other proceeding shall be commenced against
the Company seeking liquidation, reorganization or other relief with respect to
the

                                       49
<PAGE>   61
Company or its debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period of ninety
(90) consecutive days;

then, and in each and every such case (other than an Event of Default specified
in Section 7.1(d) or (e)), unless the principal of all of the Notes shall have
already become due and payable, either the Trustee or the holders of not less
than twenty-five percent (25%) in aggregate principal amount of the Notes then
outstanding hereunder determined in accordance with Section 9.4, by notice in
writing to the Company (and to the Trustee if given by Noteholders), may declare
the principal of and premium, if any, on all the Notes and the interest accrued
thereon (including Liquidated Damages, if any) to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the Notes
contained to the contrary notwithstanding. If an Event of Default specified in
Section 7.1(d) or (e) occurs, the principal of all the Notes and the interest
accrued thereon shall (including Liquidated Damages, if any) be immediately and
automatically due and payable without necessity of further action. This
provision, however, is subject to the conditions that if, at any time after the
principal of the Notes shall have been so declared due and payable, and before
any judgment or decree for the payment of the monies 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 (including Liquidated Damages, if any) all Notes and the principal
of and premium, if any, on any and all Notes which shall have become due
otherwise than by acceleration (with interest on overdue installments of
interest (including Liquidated Damages, if any) (to the extent that payment of
such interest is enforceable under applicable law) and on such principal and
premium, if any, at the rate borne by the Notes, to the date of such payment or
deposit) and amounts due to the Trustee pursuant to Section 8.6, and if any and
all defaults under this Indenture, other than the nonpayment of principal of and
premium, if any, and accrued interest on (including Liquidated Damages, if any)
Notes which shall have become due by acceleration, shall have been cured or
waived pursuant to Section 7.7, then and in every such case the holders of a
majority in aggregate principal amount of the Notes then outstanding, by written
notice to the Company and to the Trustee, may waive all defaults or Events of
Default 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 Event of Default, or shall impair any right consequent
thereon. The Company shall notify a Responsible Officer of the Trustee in
writing, promptly upon becoming aware thereof, of any Event of Default.

                                       50
<PAGE>   62
         In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the holders of Notes, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Notes, and the Trustee shall
continue as though no such proceeding had been taken.

         SECTION 7.2. Payments of Notes on Default; Suit Therefor. The Company
covenants that (a) in case default shall be made in the payment of any
installment of interest upon (including Liquidated Damages, if any) any of the
Notes as and when the same shall become due and payable, and such default shall
have continued for a period of thirty (30) days, or (b) in case default shall be
made in the payment of the principal of or premium, if any, on any of the Notes
as and when the same shall have become due and payable, whether at maturity of
the Notes or in connection with any redemption, by or under this Indenture
declaration or otherwise, then, upon demand of the Trustee, the Company will pay
to the Trustee, for the benefit of the holders of the Notes, the whole amount
that then shall have become due and payable on all such Notes for principal and
premium, if any, or interest (including Liquidated Damages, if any), as the case
may be, with interest upon the overdue principal and premium, if any, and (to
the extent that payment of such interest is enforceable under applicable law)
upon the overdue installments of interest (including Liquidated Damages, if any)
at the rate borne by the Notes, 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, its agents, attorneys and counsel, and
all other amounts due the Trustee under Section 8.6. Until such demand by the
Trustee, the Company may pay the principal of and premium, if any, and interest
on (including Liquidated Damages, if any) the Notes to the registered holders,
whether or not the Notes are overdue.

         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 actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.

                                       51
<PAGE>   63
         In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable 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 such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 7.2, shall
be entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal, premium, if
any, and interest (including Liquidated Damages, if any) owing and unpaid in
respect of the Notes, and, in case of any judicial proceedings, to file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and of the Noteholders allowed in
such judicial proceedings relative to the Company or any other obligor on the
Notes, its or their creditors, or its or their property, and to collect and
receive any monies or other property payable or deliverable on any such claims,
and to distribute the same after the deduction of any amounts due the Trustee
under Section 8.6, and any receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, custodian or similar official is hereby authorized
by each of the Noteholders to make such payments to the Trustee, and, in the
event that the Trustee shall consent to the making of such payments directly to
the Noteholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including reasonable counsel
fees and expenses incurred by it up to the date of such distribution. To the
extent that such payment of reasonable compensation, expenses, advances and
disbursements out of the estate in any such proceedings shall be denied for any
reason, payment of the same shall be secured by a lien on, and shall be paid out
of, any and all distributions, dividends, monies, securities and other property
which the holders of the Notes may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.

         All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, be for the ratable benefit of the holders of the Notes.

                                       52
<PAGE>   64
         In any proceedings brought by the Trustee (and in 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 Notes, and it shall not be necessary to make any holders of the Notes
parties to any such proceedings.

         SECTION 7.3. Application of Monies Collected by Trustee. Any monies
collected by the Trustee pursuant to this Article Seven shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:

                                             FIRST: To the payment of all
                                    amounts due the Trustee under Section 8.6;

                                             SECOND: Subject to the provisions
                                    of Article Four, in case the principal of
                                    the outstanding Notes shall not have become
                                    due and be unpaid, to the payment of
                                    interest on (including Liquidated Damages,
                                    if any) the Notes in default in the order of
                                    the maturity of the installments of such
                                    interest, with interest (to the extent that
                                    such interest has been collected by the
                                    Trustee) upon the overdue installments of
                                    interest (including Liquidated Damages, if
                                    any) at the rate borne by the Notes, such
                                    payments to be made ratably to the Persons
                                    entitled thereto;

                                             THIRD: Subject to the provisions of
                                    Article Four, in case the principal of the
                                    outstanding Notes shall have become due, by
                                    declaration or otherwise, and be unpaid to
                                    the payment of the whole amount then owing
                                    and unpaid upon the Notes for principal and
                                    premium, if any, and interest (including
                                    Liquidated Damages, if any), with

                                       53
<PAGE>   65
                                    interest on the overdue principal and
                                    premium, if any, and (to the extent that
                                    such interest has been collected by the
                                    Trustee) upon overdue installments of
                                    interest (including Liquidated Damages, if
                                    any) at the rate borne by the Notes, and in
                                    case such monies shall be insufficient to
                                    pay in full the whole amounts so due and
                                    unpaid upon the Notes, then to the payment
                                    of such principal and premium, if any, and
                                    interest (including Liquidated Damages, if
                                    any) without preference or priority of
                                    principal and premium, if any, over interest
                                    (including Liquidated Damages, if any), or
                                    of interest (including Liquidated Damages,
                                    if any) over principal and premium, if any,
                                    or of any installment of interest over any
                                    other installment of interest, or of any
                                    Note over any other Note, ratably to the
                                    aggregate of such principal and premium, if
                                    any, and accrued and unpaid interest; and

                                             FOURTH: Subject to the provisions
                                    of Article Four, to the payment of the
                                    remainder, if any, to the Company or any
                                    other Person lawfully entitled thereto.

         SECTION 7.4. Proceedings by Noteholder. No holder of any Note shall
have any right by virtue of or by reference to any provision of this Indenture
to institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
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 an Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the holders of not less than twenty-five percent (25%)
in aggregate principal amount of the Notes then outstanding shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity

                                       54
<PAGE>   66
satisfactory to it against the costs, expenses and liabilities to be incurred
therein or thereby, and the Trustee for sixty (60) days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding and no direction inconsistent with
such written request shall have been given to the Trustee pursuant to Section
7.7; it being understood and intended, and being expressly covenanted by the
taker and holder of every Note with every other taker and holder and the
Trustee, that no one or more holders of Notes shall have any right in any manner
whatever by virtue of or by reference to any provision of this Indenture to
affect, disturb or prejudice the rights of any other holder of Notes, 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 Notes
(except as otherwise provided herein). For the protection and enforcement of
this Section 7.4, each and every Noteholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.

         Notwithstanding any other provision of this Indenture and any provision
of any Note, the right of any holder of any Note to receive payment of the
principal of and premium, if any (including the redemption price upon redemption
pursuant to Article Three), and accrued interest on (including Liquidated
Damages, if any) such Note, on or after the respective due dates expressed in
such Note or in the event of redemption, or to institute suit for the
enforcement of any such payment on or after such respective dates against the
Company shall not be impaired or affected without the consent of such holder.

         Anything in this Indenture or the Notes to the contrary
notwithstanding, the holder of any Note, without the consent of either the
Trustee or the holder of any other Note, in its own behalf and for its own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.

         SECTION 7.5. Proceedings by Trustee. In case of an Event of Default
known to a Responsible Officer of the Trustee, 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 are necessary to protect
and enforce any of such rights, either by suit in equity or by action at law or
by proceeding in bankruptcy or otherwise, 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 7.6. Remedies Cumulative and Continuing. Except as provided in
Section 2.6, all powers and remedies given by this Article Seven to the Trustee

                                       55
<PAGE>   67
or to the Noteholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the holders of the Notes, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any holder of any of the Notes to exercise any right or power accruing
upon any default or 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
default or any acquiescence therein, and, subject to the provisions of Section
7.4, every power and remedy given by this Article Seven or by law to the Trustee
or to the Noteholders may be exercised from time to time, and as often as shall
be deemed expedient, by the Trustee or by the Noteholders.

         SECTION 7.7. Direction of Proceedings and Waiver of Defaults by
Majority of Noteholders. The holders of a majority in aggregate principal amount
of the Notes at the time outstanding determined in accordance with Section 9.4
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; provided, however, that (a) such direction shall
not be in conflict with any rule of law or with this Indenture, (b) the Trustee
may take any other action which is not inconsistent with such direction and (c)
the Trustee may decline to take any action that would benefit some Noteholder to
the detriment of other Noteholders. The holders of a majority in aggregate
principal amount of the Notes at the time outstanding determined in accordance
with Section 9.4 may, on behalf of the holders of all of the Notes, waive any
past default or Event of Default hereunder and its consequences except (i) a
default in the payment of interest (including Liquidated Damages, if any) or
premium, if any, on, or the principal of, the Notes, (ii) a failure by the
Company to convert any Notes into Common Stock, (iii) a default in the payment
of redemption price or Additional Payment pursuant to Article Three or (iv) a
default in respect of a covenant or provisions hereof which under Article Eleven
cannot be modified or amended without the consent of the holders of each or all
Notes then outstanding or affected thereby. Upon any such waiver, the Company,
the Trustee and the holders of the Notes shall be restored to their former
positions and rights hereunder; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon. Whenever any default or Event of Default hereunder shall have been
waived as permitted by this Section 7.7, said default or Event of Default shall
for all purposes of the Notes and this Indenture be deemed to have been cured
and to be not continuing; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.

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<PAGE>   68
         SECTION 7.8. Notice of Defaults. The Trustee shall, within ninety (90)
days after a Responsible Officer of the Trustee has knowledge of the occurrence
of a default, mail to all Noteholders, as the names and addresses of such
holders appear upon the Note register, notice of all defaults known to a
Responsible Officer, unless such defaults shall have been cured or waived before
the giving of such notice; provided, however, that except in the case of default
in the payment of the principal of, or premium, if any, or interest (including
Liquidated Damages, if any) on any of the Notes, the Trustee shall be protected
in withholding such notice if and so long as a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Noteholders.

         SECTION 7.9. Undertaking to Pay Costs. All parties to this Indenture
agree, and each holder of any Note 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 or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; provided, however, that the provisions of this
Section 7.9 (to the extent permitted by law) shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Noteholder, or group of
Noteholders, holding in the aggregate more than ten percent in principal amount
of the Notes at the time outstanding determined in accordance with Section 9.4,
or to any suit instituted by any Noteholder for the enforcement of the payment
of the principal of or premium, if any, or interest on any Note on or after the
due date expressed in such Note or to any suit for the enforcement of the right
to convert any Note in accordance with the provisions of Article Fifteen.

                                    ARTICLE 8

                                   THE TRUSTEE

         SECTION 8.1. Duties and Responsibilities of Trustee. The Trustee, prior
to the occurrence of an Event of Default and after the curing of all Events of
Default which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of
Default has occurred (which has not been cured or waived), the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of

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<PAGE>   69
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his own affairs.

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

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

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

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

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

          (c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the written
direction of the holders of not less than a majority in principal amount of the
Notes at the time outstanding determined as provided in Section 9.4 relating to
the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture;

          (d) whether or not therein provided, every provision of this Indenture
relating to the conduct or affecting the liability of, or affording protection
to, the Trustee shall be subject to the provisions of this Section;

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<PAGE>   70
          (e) the Trustee shall not be liable in respect of any payment (as to
the correctness of amount, entitlement to receive or any other matters relating
to payment) or notice effected by the Company or any paying agent or any records
maintained by any co-registrar with respect to the Notes; and

          (f) if any party fails to deliver a notice relating to an event the
fact of which, pursuant to this Indenture, requires notice to be sent to the
Trustee, the Trustee may conclusively rely on its failure to receive such notice
as reason to act as if no such event occurred.

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

         SECTION 8.2. Reliance on Documents, Opinions, Etc. Except as otherwise
provided in Section 8.1:

          (a) the Trustee may conclusively rely and shall be protected in acting
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, note, coupon or other paper or
document (whether in its original or facsimile form) believed by it in good
faith to be genuine and to have been signed or presented by the proper party or
parties;

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

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

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

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<PAGE>   71
          (e) 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 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 the books, records and premises
of the Company, personally or by agent or attorney;

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

          (g) the Trustee shall not be liable for any action taken, suffered or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or power conferred upon it by this
Indenture unless the Trustee's actions or omissions constitute gross negligence;

          (h) the Trustee shall not be deemed to have notice of any Default of
Event of Default unless a Responsible Officer has actual knowledge thereof or
unless written notice of any event constituting such a Default or Event of
Default has been given; and

          (i) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of 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 8.3. No Responsibility for Recitals, Etc. The recitals
contained herein and in the Notes (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.

         SECTION 8.4. Trustee, Paying Agents, Conversion Agents or Registrar May
Own Notes. The Trustee, any paying agent, any conversion agent or Note

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<PAGE>   72
registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Note registrar.

         SECTION 8.5. Monies to Be Held in Trust. Subject to the provisions of
Section 13.4 and Section 4.2, all monies received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which
they were received. Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as may be agreed in writing from time to time by the Company and the
Trustee.

         SECTION 8.6. Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, compensation for all services rendered by it hereunder in
any capacity (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) as mutually agreed to from
time to time in writing between the Company and the Trustee, and the Company
will pay or reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence, willful misconduct, recklessness or
bad faith. The Company also covenants to indemnify the Trustee (or any officer,
director or employee of the Trustee), in any capacity under this Indenture and
its agents and any authenticating agent for, and to hold them harmless against,
any and all loss, liability, damage, claim or expense incurred without
negligence, willful misconduct, recklessness or bad faith on the part of the
Trustee or such officers, directors, employees and agent or authenticating
agent, as the case may be, and arising out of or in connection with the
acceptance or administration of this trust or in any other capacity hereunder,
including the costs and expenses of defending themselves against any claim
(whether asserted by the Company, a holder of Notes or any other Person) of
liability in the premises. The obligations of the Company under this Section 8.6
to compensate or indemnify the Trustee and to pay or reimburse the Trustee for
expenses, disbursements and advances shall be secured by a lien prior to that of
the Notes upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of particular Notes.
The obligation of the Company under this Section shall survive the satisfaction
and discharge of this Indenture.

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<PAGE>   73
         When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
7.1(d) or (e) with respect to the Company occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.

         SECTION 8.7. Officers' Certificate as Evidence. Except as otherwise
provided in Section 8.1, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or willful misconduct on the part
of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee.

         SECTION 8.8. Conflicting Interests of Trustee. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.

         SECTION 8.9. Eligibility of Trustee. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 8.9, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.

         SECTION 8.10. Resignation or Removal of Trustee. (a) The Trustee may at
any time resign by giving written notice of such resignation to the Company and
to the holders of Notes. Upon receiving such notice of resignation, the Company
shall promptly appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor trustee. If
no successor trustee shall have been so appointed and have accepted appointment
sixty (60) days after the mailing of such notice of resignation to the
Noteholders, the resigning Trustee may, upon ten (10) business days' notice to
the Company

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<PAGE>   74
and the Noteholders, may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor trustee, or, if any
Noteholder who has been a bona fide holder of a Note or Notes for at least six
(6) months may, at the expense of the Company and subject to the provisions of
Section 7.9, on behalf of himself and all others similarly situated, petition
any such court for the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.

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

                  (i) the Trustee shall fail to comply with Section 8.8 after
         written request therefor by the Company or by any Noteholder who has
         been a bona fide holder of a Note or Notes for at least six (6) months;
         or

                 (ii) the Trustee shall cease to be eligible in accordance with
         the provisions of Section 8.9 and shall fail to resign after written
         request therefor by the Company or by any such Noteholder; or

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

         then, in any such case, the Company may remove the Trustee and appoint
a successor trustee by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.9, any Noteholder who has been a bona fide holder of a
Note or Notes for at least six (6) months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee; provided,
however, that if no successor Trustee shall have been appointed and have
accepted appointment sixty (60) days after either the Company or the Noteholders
has removed the Trustee, the Trustee so removed may petition, at the expense of
the Company, any court of competent jurisdiction for an appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.

          (c) The holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and nominate a
successor trustee which shall be deemed appointed as successor trustee unless,

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within ten (10) days after notice to the Company of such nomination, the Company
objects thereto, in which case the Trustee so removed or any Noteholder, or if
such Trustee so removed or any Noteholder fails to act, the Company, upon the
terms and conditions and otherwise as in Section 8.10(a) provided, may petition
any court of competent jurisdiction for an appointment of a successor trustee.

          (d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.11.

         SECTION 8.11. Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amount then due it pursuant to the provisions of Section
8.6, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property and funds held or collected by
such trustee as such, except for funds held in trust for the benefit of holders
of particular Notes, to secure any amounts then due it pursuant to the
provisions of Section 8.6.

         No successor trustee shall accept appointment as provided in this
Section 8.11 unless, at the time of such acceptance, such successor trustee
shall be qualified under the provisions of Section 8.8 and be eligible under the
provisions of Section 8.9.

         Upon acceptance of appointment by a successor trustee as provided in
this Section 8.11, the Company (or the former trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such trustee hereunder to the holders of Notes at their addresses as they shall
appear on the Note register. If the Company fails to mail such notice within ten
(10) days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Company.

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         SECTION 8.12. Succession by Merger, Etc. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee, such
corporation shall be qualified under the provisions of Section 8.8 and eligible
under the provisions of Section 8.9.

         In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee or authenticating agent appointed
by such predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee or any authenticating agent appointed by such successor
trustee may authenticate such Notes in the name of the successor trustee; and in
all such cases such certificates shall have the full force that is provided in
the Notes or in this Indenture; provided, however, that the right to adopt the
certificate of authentication of any predecessor Trustee or authenticate Notes
in the name of any predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.

         SECTION 8.13. Preferential Collection of Claims. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Notes), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).

         SECTION 8.14. Trustee's Application for Instructions from the Company .
Any application by the Trustee for written instructions from the Company (other
than with regard to any action proposed to be taken or omitted to be taken by
the Trustee that affects the rights of the holders of the Notes or holders of
Senior Indebtedness under this Indenture, including, without limitation, under
Article Four hereof) may, at the option of the Trustee, set forth in writing any
action proposed to be taken or omitted by the Trustee under this Indenture and
the date on and/or after which such action shall be taken or such omission shall
be effective. The Trustee shall not be liable for any action taken by, or
omission of, the Trustee in accordance with a proposal included in such
application on or after the date specified in such application (which date shall
not be less than three (3)

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Business Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.

                                    ARTICLE 9

                                 THE NOTEHOLDERS

         SECTION 9.1. Action by Noteholders. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by Noteholders
in person or by agent or proxy appointed in writing, or (b) by the record of the
holders of Notes voting in favor thereof at any meeting of Noteholders duly
called and held in accordance with the provisions of Article Ten, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Noteholders. Whenever the Company or the Trustee solicits the taking
of any action by the holders of the Notes, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall be not more than fifteen
(15) days prior to the date of commencement of solicitation of such action.

         SECTION 9.2. Proof of Execution by Noteholders. Subject to the
provisions of Sections 8.1, 8.2 and 10.5, proof of the execution of any
instrument by a Noteholder or its agent or proxy shall be sufficient if made in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Notes shall be proved by the registry of such Notes or by a
certificate of the Note registrar.

         The record of any Noteholders' meeting shall be proved in the manner
provided in Section 10.6.

         SECTION 9.3. Who Are Deemed Absolute Owners. The Company, the Trustee,
any paying agent, any conversion agent and any Note registrar may deem the
Person in whose name such Note shall be registered upon the Note register to be,
and may treat it as, the absolute owner of such Note (whether or not such Note

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shall be overdue and notwithstanding any notation of ownership or other writing
thereon made by any Person other than the Company or any Note registrar) for the
purpose of receiving payment of or on account of the principal of, premium, if
any, and interest on such Note, for conversion of such Note and for all other
purposes; and neither the Company nor the Trustee nor any paying agent nor any
conversion agent nor any Note registrar shall be affected by any notice to the
contrary. All such payments so made to any holder for the time being, 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 monies payable upon any
such Note.

         SECTION 9.4. Company-owned Notes Disregarded. In determining whether
the holders of the requisite aggregate principal amount of Notes have concurred
in any direction, consent, waiver or other action under this Indenture, Notes
which are owned by the Company or any other obligor on the Notes or any
Affiliate of the Company or any other obligor on the Notes shall be disregarded
and deemed not to be outstanding for the purpose of any such determination;
provided, however, that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, consent, waiver or other
action, only Notes which a Responsible Officer knows are so owned shall be so
disregarded. Notes so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 9.4 if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's right to vote
such Notes and that the pledgee is not the Company, any other obligor on the
Notes or any Affiliate of the Company or any such other obligor. In the case of
a dispute as to such right, any decision by the Trustee taken upon the advice of
counsel shall be full protection to the Trustee. Upon request of the Trustee,
the Company shall furnish to the Trustee promptly an Officers' Certificate
listing and identifying all Notes, 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 8.1, 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 Notes not listed therein are outstanding for the purpose of any
such determination.

         SECTION 9.5. Revocation of Consents; Future Holders Bound. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
9.1, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Notes specified in this Indenture in connection with
such action, any holder of a Note which is shown by the evidence to be included
in the Notes the holders of which have consented to such action may, by filing
written notice with the Trustee at its Corporate Trust Office and upon proof of
holding as provided in Section 9.2, revoke such action so far as concerns such
Note. Except as aforesaid, any such action taken by the holder of any Note shall
be conclusive and binding upon such holder and upon all future holders and

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owners of such Note and of any Notes issued in exchange or substitution
therefor, irrespective of whether any notation in regard thereto is made upon
such Note or any Note issued in exchange or substitution therefor.

                                   ARTICLE 10

                             MEETINGS OF NOTEHOLDERS

         SECTION 10.1. Purpose of Meetings. A meeting of Noteholders may be
called at any time and from time to time pursuant to the provisions of this
Article Ten for any of the following purposes:

                  (1) to give any notice to the Company or to the Trustee or to
         give any directions to the Trustee permitted under this Indenture, or
         to consent to the waiving of any default or Event of Default hereunder
         and its consequences, or to take any other action authorized to be
         taken by Noteholders pursuant to any of the provisions of Article
         Seven;

                  (2) to remove the Trustee and nominate a successor trustee
         pursuant to the provisions of Article Eight;

                  (3) to consent to the execution of an indenture or indentures
         supplemental hereto pursuant to the provisions of Section 11.2; or

                  (4) to take any other action authorized to be taken by or on
         behalf of the holders of any specified aggregate principal amount of
         the Notes under any other provision of this Indenture or under
         applicable law.

         SECTION 10.2. Call of Meetings by Trustee. The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 10.1, to
be held at such time and at such place as the Trustee shall determine. Notice of
every meeting of the Noteholders, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such meeting and
the establishment of any record date pursuant to Section 9.1, shall be mailed to
holders of Notes at their addresses as they shall appear on the Note register.
Such notice shall also be mailed to the Company. Such notices shall be mailed
not less than twenty (20) nor more than ninety (90) days prior to the date fixed
for the meeting.

         Any meeting of Noteholders shall be valid without notice if the holders
of all Notes then outstanding are present in person or by proxy or if notice is
waived

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before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.

         SECTION 10.3. Call of Meetings by Company or Noteholders. In case at
any time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least ten percent (10%) in aggregate principal amount of the Notes
then outstanding, shall have requested the Trustee to call a meeting of
Noteholders, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed the
notice of such meeting within twenty (20) days after receipt of such request,
then the Company or such Noteholders may determine the time and the place for
such meeting and may call such meeting to take any action authorized in Section
10.1, by mailing notice thereof as provided in Section 10.2.

         SECTION 10.4. Qualifications for Voting. To be entitled to vote at any
meeting of Noteholders a person shall (a) be a holder of one or more Notes on
the record date pertaining to such meeting or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes on the record
date pertaining to such meeting. The only persons who shall be entitled to be
present or to speak at any meeting of Noteholders shall be the persons entitled
to vote at such meeting and their counsel and any representatives of the Trustee
and its counsel and any representatives of the Company and its counsel.

         SECTION 10.5. Regulations. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes 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 think fit.

         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 Noteholders as provided in Section 10.3, in which case the Company
or the Noteholders 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 holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote at the
meeting.

         Subject to the provisions of Section 9.4, at any meeting each
Noteholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of

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<PAGE>   81
Notes held or represented by him; provided, however, that no vote shall be cast
or counted at any meeting in respect of any Note 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 other than by virtue of Notes held by
him or instruments in writing as aforesaid duly designating him as the proxy to
vote on behalf of other Noteholders. Any meeting of Noteholders duly called
pursuant to the provisions of Section 10.2 or 10.3 may be adjourned from time to
time by the holders of a majority of the aggregate principal amount of Notes
represented at the meeting, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.

         SECTION 10.6. Voting. The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the outstanding principal amount of the Notes 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 in duplicate of
the proceedings of each meeting of Noteholders 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 mailed as
provided in Section 10.2. The record shall show the principal amount of the
Notes voting in favor of or against any resolution. The record shall be signed
and verified by the affidavits of the permanent chairman and secretary of the
meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.

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

         SECTION 10.7. No Delay of Rights by Meeting. Nothing contained in this
Article Ten shall be deemed or construed to authorize or permit, by reason of
any call of a meeting of Noteholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
Noteholders under any of the provisions of this Indenture or of the Notes.

                                   ARTICLE 11

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                             SUPPLEMENTAL INDENTURES

         SECTION 11.1. Supplemental Indentures Without Consent of Noteholders.
The Company, when authorized by the resolutions of the Board of Directors, and
the Trustee may, from time to time, and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:

          (a) make provision with respect to the conversion rights of the
holders of Notes pursuant to the requirements of Section 15.6 and the redemption
obligations of the Company pursuant to the requirements of Section 3.5(e);

          (b) subject to Article Four, to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Notes, any property or assets;

          (c) to evidence the succession of another Person to the Company, or
successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Company pursuant to Article Twelve;

          (d) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Notes, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction or condition, 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 an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default;

          (e) to provide for the issuance under this Indenture of Notes in
coupon form (including Notes registrable as to principal only) and to provide
for exchangeability of such Notes with the Notes issued hereunder in fully
registered form and to make all appropriate changes for such purpose;

          (f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture that may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions

                                       71
<PAGE>   83
arising under this Indenture that shall not materially adversely affect the
interests of the holders of the Notes;

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

          (h) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect the qualifications of this Indenture
under the Trust Indenture Act, or under any similar federal statute hereafter
enacted.

         Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, 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 that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.

         Any supplemental indenture authorized by the provisions of this Section
11.1 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 11.2.

         Notwithstanding any other provision of the Indenture or the Notes, the
Registration Rights Agreement and the obligation to pay Liquidated Damages
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.

         SECTION 11.2. Supplemental Indenture with Consent of Noteholders. With
the consent (evidenced as provided in Article Nine) of the holders of not less
than a majority in aggregate principal amount of the Notes at the time
outstanding, the Company, when authorized by the resolutions of the 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 Notes; provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of any Note, or reduce the rate or
extend the time of payment of interest thereon, or reduce the principal amount
thereof or premium, if any, thereon, or reduce any amount payable on redemption
thereof, or impair the right of any Noteholder to institute suit for the payment
thereof, or

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<PAGE>   84
make the principal thereof or interest or premium, if any, thereon payable in
any coin or currency other than that provided in the Notes, or modify the
provisions of this Indenture with respect to the subordination of the Notes in a
manner adverse to the Noteholders in any material respect, or change the
obligation of the Company to redeem any Note upon the happening of a Fundamental
Change in a manner adverse to the holder of Notes, or impair the right to
convert the Notes into Common Stock subject to the terms set forth herein,
including Section 15.6, in each case, without the consent of the holder of each
Note so affected, or (ii) reduce the aforesaid percentage of Notes, the holders
of which are required to consent to any such supplemental indenture, without the
consent of the holders of all Notes then outstanding.

         Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.

         It shall not be necessary for the consent of the Noteholders under this
Section 11.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

         SECTION 11.3. Effect of Supplemental Indenture. Any supplemental
indenture executed pursuant to the provisions of this Article Eleven shall
comply with the Trust Indenture Act, as then in effect, provided that this
Section 11.3 shall not require such supplemental indenture or the Trustee to be
qualified under the Trust Indenture Act prior to the time such qualification is
in fact required under the terms of the Trust Indenture Act or the Indenture has
been qualified under the Trust Indenture Act, nor shall it constitute any
admission or acknowledgment by any party to such supplemental indenture that any
such qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article Eleven, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Notes shall
thereafter be determined, exercised and enforced hereunder, subject in all
respects to such

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<PAGE>   85
modifications and amendments and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.

         SECTION 11.4. Notation on Notes. Notes authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions of
this Article Eleven may bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company or the
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may, at the Company's expense, be
prepared and executed by the Company, authenticated by the Trustee (or an
authenticating agent duly appointed by the Trustee pursuant to Section 16.11)
and delivered in exchange for the Notes then outstanding, upon surrender of such
Notes then outstanding.

         SECTION 11.5. Evidence of Compliance of Supplemental Indenture to Be
Furnished to Trustee. Prior to entering into any supplemental indenture, the
Trustee shall receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article Eleven.

                                   ARTICLE 12

                CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

         SECTION 12.1. Company May Consolidate, Etc on Certain Terms. Subject
to the provisions of Section 12.2, nothing contained in this Indenture or in any
of the Notes shall prevent any consolidation or merger of the Company with or
into any other Person or Persons (whether or not affiliated with the Company),
or successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance or
lease (or successive sales, conveyances or leases) of all or substantially all
of the property of the Company, to any other Person (whether or not affiliated
with the Company), authorized to acquire and operate the same and that shall be
organized under the laws of the United States of America, any state thereof or
the District of Columbia; provided, however, that upon any such consolidation,
merger, sale, conveyance or lease, the due and punctual payment of the principal
of and premium, if any, and interest (including Liquidated Damages, if any) on
all of the Notes, according to their tenor and the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be

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<PAGE>   86
performed by the Company, shall be expressly assumed, by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to the Trustee by
the Person (if other than the Company) formed by such consolidation, or into
which the Company shall have been merged, or by the Person that shall have
acquired or leased such property, and such supplemental indenture shall provide
for the applicable conversion rights set forth in Section 15.6.

         SECTION 12.2. Successor Corporation to Be Substituted. In case of any
such consolidation, merger, sale, conveyance or lease and upon the assumption by
the successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual payment
of the principal of and premium, if any, and interest on all of the Notes and
the due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Company, such successor Person shall succeed to
and be substituted for the Company, with the same effect as if it had been named
herein as the party of this first part. Such successor Person thereupon may
cause to be signed, and may issue either in its own name or in the name of
ImClone Systems Incorporated any or all of the Notes, issuable hereunder that
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor Person instead of the Company and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver, or cause to be
authenticated and delivered, any Notes that previously shall have been signed
and delivered by the officers of the Company to the Trustee for authentication,
and any Notes that such successor Person thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Notes so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Notes
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Notes had been issued at the date of the execution hereof.
In the event of any such consolidation, merger, sale, conveyance or lease, the
Person named as the "Company" in the first paragraph of this Indenture or any
successor that shall thereafter have become such in the manner prescribed in
this Article Twelve may be dissolved, wound up and liquidated at any time
thereafter and such Person shall be released from its liabilities as obligor and
maker of the Notes and from its obligations under this Indenture.

         In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form (but not in substance) may be made in the
Notes thereafter to be issued as may be appropriate.

         SECTION 12.3. Opinion of Counsel to Be Given Trustee. The Trustee shall
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence

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<PAGE>   87
that any such consolidation, merger, sale, conveyance or lease and any such
assumption complies with the provisions of this Article Twelve.

                                   ARTICLE 13

                     SATISFACTION AND DISCHARGE OF INDENTURE

         SECTION 13.1. Discharge of Indenture. When (a) the Company shall
deliver to the Trustee for cancellation all Notes theretofore authenticated
(other than any Notes that have been destroyed, lost or stolen and in lieu of or
in substitution for which other Notes shall have been authenticated and
delivered) and not theretofore canceled, or (b) all the Notes not theretofore
canceled or delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption, and the Company shall
deposit with the Trustee, in trust, funds sufficient to pay at maturity or upon
redemption of all of the Notes (other than any Notes that shall have been
mutilated, destroyed, lost or stolen and in lieu of or in substitution for which
other Notes shall have been authenticated and delivered) not theretofore
canceled or delivered to the Trustee for cancellation, including principal and
premium, if any, and interest due or to become due to such date of maturity or
redemption date, as the case may be, accompanied by a verification report, as to
the sufficiency of the deposited amount, from an independent certified
accountant or other financial professional satisfactory to the Trustee, and if
the Company shall also pay or cause to be paid all other sums payable hereunder
by the Company, then this Indenture shall cease to be of further effect (except
as to (i) remaining rights of registration of transfer, substitution and
exchange and conversion of Notes, (ii) rights hereunder of Noteholders to
receive payments of principal of and premium, if any, and interest on, the Notes
and the other rights, duties and obligations of Noteholders, as beneficiaries
hereof with respect to the amounts, if any, so deposited with the Trustee and
(iii) the rights, obligations and immunities of the Trustee hereunder), and the
Trustee, on written demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel as required by Section 16.5 and at the
cost and expense of the Company, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture; the Company, however, hereby
agrees to reimburse the Trustee for any costs or expenses thereafter reasonably
and properly incurred by the Trustee and to compensate the Trustee for any
services thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Notes.

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<PAGE>   88
         SECTION 13.2. Deposited Monies to Be Held in Trust by Trustee. Subject
to Section 13.4, all monies deposited with the Trustee pursuant to Section 13.1,
provided such deposit was not in violation of Article Four, shall be held in
trust for the sole benefit of the Noteholders and not to be subject to the
subordination provisions of Article Four, and such monies shall be applied by
the Trustee to the payment, either directly or through any paying agent
(including the Company if acting as its own paying agent), to the holders of the
particular Notes for the payment or redemption of which such monies have been
deposited with the Trustee, of all sums due and to become due thereon for
principal and interest and premium, if any.

         SECTION 13.3. Paying Agent to Repay Monies Held. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent of the
Notes (other than the Trustee) shall, upon written request of the Company, be
repaid to it or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.

         SECTION 13.4. Return of Unclaimed Monies. Subject to the requirements
of applicable law, any monies deposited with or paid to the Trustee for payment
of the principal of, premium, if any, or interest on Notes and not applied but
remaining unclaimed by the holders of Notes for two years after the date upon
which the principal of, premium, if any, or interest on such Notes, as the case
may be, shall have become due and payable, shall be repaid to the Company by the
Trustee on written demand and all liability of the Trustee shall thereupon cease
with respect to such monies; and the holder of any of the Notes shall thereafter
look only to the Company for any payment that such holder may be entitled to
collect unless an applicable abandoned property law designates another Person.

         SECTION 13.5. Reinstatement. If the Trustee or the paying agent is
unable to apply any money in accordance with Section 13.2 by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company"s obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 13.1 until such time as the Trustee or the paying
agent is permitted to apply all such money in accordance with Section 13.2;
provided, however, that if the Company makes any payment of interest on or
principal of any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the holders of such Notes to
receive such payment from the money held by the Trustee or paying agent.

                                   ARTICLE 14

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<PAGE>   89
        IMMUNITY OF INCORPORATIONS, STOCKHOLDERS, OFFICERS AND DIRECTORS

         SECTION 14.1. Indenture and Notes Solely Corporate Obligations. No
recourse for the payment of the principal of or premium, if any, or interest on
any Note, or for any claim based thereon or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
this Indenture or in any supplemental indenture or in any Note, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer, director or subsidiary, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the Notes.

                                   ARTICLE 15

                               CONVERSION OF NOTES

         SECTION 15.1. Right to Convert. Subject to and upon compliance with the
provisions of this Indenture, including, without limitation, Article Four, the
holder of any Note shall have the right, at its option, at any time after the
original issuance of the Notes hereunder through the close of business on the
final maturity date of the Notes (except that, with respect to any Note or
portion of a Note that shall be called for redemption, such right shall
terminate, except as provided in Section 15.2, Section 3.2 or Section 3.4, at
the close of business on the Business Day next preceding the date fixed for
redemption of such Note or portion of a Note unless the Company shall default in
payment due upon redemption thereof) to convert the principal amount of any such
Note, or any portion of such principal amount which is $1,000 or an integral
multiple thereof, into that number of fully paid and non-assessable shares of
Common Stock (as such shares shall then be constituted) obtained by dividing the
principal amount of the Note or portion thereof surrendered for conversion by
the Conversion Price in effect at such time, by surrender of the Note so to be
converted in whole or in part in the manner provided, together with any required
funds, in Section 15.2. A Note in respect of which a holder is exercising its
option to require redemption upon a Fundamental Change pursuant to Section 3.5
may be converted only if such holder withdraws its election to exercise in
accordance with Section 3.5. A holder of Notes is not entitled to any rights of
a holder of Common Stock until such holder has

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<PAGE>   90
converted his Notes to Common Stock, and only to the extent such Notes are
deemed to have been converted to Common Stock under this Article Fifteen.

         SECTION 15.2. Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or Dividends. In order to
exercise the conversion privilege with respect to any Note in certificated form,
the holder of any such Note to be converted in whole or in part shall surrender
such Note, duly endorsed, at an office or agency maintained by the Company
pursuant to Section 5.2, accompanied by the funds, if any, required by the
penultimate paragraph of this Section 15.2, and shall give written notice of
conversion in the form provided on the Notes (or such other notice which is
acceptable to the Company) to the office or agency that the holder elects to
convert such Note or the portion thereof specified in said notice. Such notice
shall also state the name or names (with address or addresses) in which the
certificate or certificates for shares of Common Stock which shall be issuable
on such conversion shall be issued, and shall be accompanied by transfer taxes,
if required pursuant to Section 15.7. Each such Note surrendered for conversion
shall, unless the shares issuable on conversion are to be issued in the same
name as the registration of such Note, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the holder or his duly authorized attorney.

         In order to exercise the conversion privilege with respect to any
interest in a Global Note, the beneficial holder must complete, or cause to be
completed, the appropriate instruction form for conversion pursuant to the
Depository's book-entry conversion program, deliver, or cause to be delivered,
by book-entry delivery an interest in such Global Note, furnish appropriate
endorsements and transfer documents if required by the Company or the Trustee or
conversion agent, and pay the funds, if any, required by this Section 15.2 and
any transfer taxes if required pursuant to Section 15.7.

         As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Noteholder (as if such transfer were a transfer of the Note or Notes
(or portion thereof) so converted), the Company shall issue and shall deliver to
such Noteholder at the office or agency maintained by the Company for such
purpose pursuant to Section 5.2, a certificate or certificates for the number of
full shares of Common Stock issuable upon the conversion of such Note or portion
thereof as determined by the Company in accordance with the provisions of this
Article Fifteen and a check or cash in respect of any fractional interest in
respect of a share of Common Stock arising upon such conversion, calculated by
the Company as provided in Section 15.3. In case any Note of a denomination
greater than

                                       79
<PAGE>   91
$1,000 shall be surrendered for partial conversion, and subject to Section 2.3,
the Company shall execute and the Trustee shall authenticate and deliver to the
holder of the Note so surrendered, without charge to him, a new Note or Notes in
authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Note.

         Each conversion shall be deemed to have been effected as to any such
Note (or portion thereof) on the date on which the requirements set forth above
in this Section 15.2 have been satisfied as to such Note (or portion thereof),
and the Person in whose name any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become on said date the holder of record of the shares represented thereby;
provided, however, that any such surrender on any date when the stock transfer
books of the Company shall be closed shall constitute the Person in whose name
the certificates are to be issued as the record holder thereof for all purposes
on the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Note shall be surrendered.

         No adjustment in respect of interest on any Note converted or dividends
on any shares issued upon conversion of such Note will be made upon any
conversion except as set forth in the next sentence. If this Note (or portion
hereof) is surrendered for conversion during the period from the close of
business on any record date for the payment of interest to the close of business
on the Business Day preceding the following interest payment date and either (x)
has not been called for redemption on a redemption date that occurs during such
period or (y) is not to be redeemed in connection with a Fundamental Change on a
Repurchase Date that occurs during such period, this Note (or portion hereof
being converted) must be accompanied by an amount, in New York Clearing House
funds or other funds acceptable to the Company, equal to the interest payable on
such interest payment date on the principal amount being converted; provided,
however, that no such payment shall be required if there shall exist at the time
of conversion a default in the payment of interest on the Notes.

         Upon the conversion of an interest in a Global Note, the Trustee (or
other conversion agent appointed by the Company), or the Custodian at the
direction of the Trustee (or other conversion agent appointed by the Company),
shall make a notation on such Global Note as to the reduction in the principal
amount represented thereby. The Company shall notify the Trustee in writing of
any conversions of Notes effected through any conversion agent other than the
Trustee.

         SECTION 15.3. Cash Payments in Lieu of Fractional Shares. No fractional
shares of Common Stock or scrip representing fractional shares shall be issued

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<PAGE>   92
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 that 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 stock would be
issuable upon the conversion of any Note or Notes, the Company shall make an
adjustment and payment therefor in cash at the current market price thereof to
the holder of Notes. The current market price of a share of Common Stock shall
be the Closing Price on the last Business Day immediately preceding the day on
which the Notes (or specified portions thereof) are deemed to have been
converted.

         SECTION 15.4. Conversion Price. The conversion price shall be as
specified in the form of Note (herein called the "Conversion Price") attached as
Exhibit A hereto, subject to adjustment as provided in this Article Fifteen.

         SECTION 15.5. Adjustment of Conversion Price. The Conversion Price
shall be adjusted from time to time by the Company as follows:

          (a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect at the opening of
business on the date following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution by a
fraction, the numerator of which shall be the number of shares of the Common
Stock outstanding at the close of business on the date fixed for such
determination, and the denominator of which shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the day following the date fixed for such determination. For the
purpose of this paragraph (a), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company. The
Company will not pay any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company. If any dividend or distribution of
the type described in this Section 15.5(a) is declared but not so paid or made,
the Conversion Price shall again be adjusted to the Conversion Price that would
then be in effect if such dividend or distribution had not been declared.

          (b) In case the Company shall issue rights or warrants to all holders
of its outstanding shares of Common Stock entitling them (for a period expiring
within forty-five (45) days after the date fixed for determination of
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of

                                       81
<PAGE>   93
Common Stock at a price per share less than the Current Market Price (as defined
below) on the date fixed for determination of stockholders entitled to receive
such rights or warrants, the Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the date fixed for determination of stockholders entitled
to receive such rights or warrants by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding at the close of business on
the date fixed for determination of stockholders entitled to receive such rights
or warrants plus the number of shares that the aggregate offering price of the
total number of shares so offered would purchase at such Current Market Price,
and the denominator of which shall be the number of shares of Common Stock
outstanding on the date fixed for determination of stockholders entitled to
receive such rights or warrants plus the total number of additional shares of
Common Stock offered for subscription or purchase. Such adjustment shall be
successively made whenever any such rights or warrants are issued, and shall
become effective immediately after the opening of business on the day following
the date fixed for determination of stockholders entitled to receive such rights
or warrants. To the extent that shares of Common Stock are not delivered after
the expiration of such rights or warrants, the Conversion Price shall be
readjusted to the Conversion Price that would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the
basis of delivery of only the number of shares of Common Stock actually
delivered. In the event that such rights or warrants are not so issued, the
Conversion Price shall again be adjusted to be the Conversion Price that would
then be in effect if such date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed. In determining
whether any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such Current Market Price, and in
determining the aggregate offering price of such shares of Common Stock, there
shall be taken into account any consideration received by the Company for such
rights or warrants and any amount payable on exercise or conversion thereof, the
value of such consideration, if other than cash, to be determined by the Board
of Directors.

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

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<PAGE>   94
         In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock shares of any class of capital stock of the Company
(other than any dividends or distributions to which Section 15.5(a) applies) or
evidences of its indebtedness or assets (including securities, but excluding any
rights or warrants referred to in Section 15.5(b), and excluding any dividend or
distribution (x) paid exclusively in cash or (y) referred to in Section 15.5(a)
(any of the foregoing hereinafter in this Section 15.5(d) called the
"Securities")), then, in each such case (unless the Company elects to reserve
such Securities for distribution to the Noteholders upon the conversion of the
Notes so that any such holder converting Notes will receive upon such
conversion, in addition to the shares of Common Stock to which such holder is
entitled, the amount and kind of such Securities which such holder would have
received if such holder had converted its Notes into Common Stock immediately
prior to the Record Date (as defined in Section 15.5(h)(4) for such distribution
of the Securities)), the Conversion Price shall be reduced so that the same
shall be equal to the price determined by multiplying the Conversion Price in
effect on the Record Date with respect to such distribution by a fraction, the
numerator of which shall be the Current Market Price per share of the Common
Stock on such Record Date less the fair market value (as determined by the Board
of Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) on the Record Date of the portion of the
Securities so distributed applicable to one share of Common Stock and the
denominator of which shall be the Current Market Price per share of the Common
Stock, such reduction to become effective immediately prior to the opening of
business on the day following such Record Date; provided, however, that in the
event the then fair market value (as so determined) of the portion of the
Securities so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price of the Common Stock on the Record Date, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
Noteholder shall have the right to receive upon conversion the amount of
Securities such holder would have received had such holder converted each Note
on the Record Date. In the event that such dividend or distribution is not so
paid or made, the Conversion Price shall again be adjusted to be the Conversion
Price that would then be in effect if such dividend or distribution had not been
declared. If the Board of Directors determines the fair market value of any
distribution for purposes of this Section 15.5(d) by reference to the actual or
when issued trading market for any securities, it must in doing so consider the
prices in such market over the same period used in computing the Current Market
Price of the Common Stock.

         Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which

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<PAGE>   95
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 15.5 (and no adjustment to the Conversion Price under
this Section 15.5 will be required) until the occurrence of the earliest Trigger
Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Price shall be made under this Section 15.5(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto that was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion Price under this Section 15.5 was made, (1) in the case of any such
rights or warrants that shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion 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 or holders
of Common Stock with respect to such rights or warrants (assuming such holder
had retained such rights or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such rights or
warrants that shall have expired or been terminated without exercise by any
holders thereof, the Conversion Price shall be readjusted as if such rights and
warrants had not been issued.

         No adjustment of the Conversion Price shall be made pursuant to this
Section 15.5(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights or warrants are
actually distributed, or reserved by the Company for distribution to holders of
Notes upon conversion by such holders of Notes to Common Stock.

         For purposes of this Section 15.5(d) and Sections 15.5(a) and (b), any
dividend or distribution to which this Section 15.5(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of

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<PAGE>   96
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Price reduction required by this Section 15.5(d) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Price reduction required by Sections
15.5(a) and (b) with respect to such dividend or distribution shall then be
made), except (A) the Record Date of such dividend or distribution shall be
substituted as "the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution", "the date fixed for the
determination of stockholders entitled to receive such rights or warrants" and
"the date fixed for such determination" within the meaning of Sections 15.5(a)
and (b), and (B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of Section 15.5(a).

          (d) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding (x) any quarterly cash dividend
on the Common Stock to the extent the aggregate cash dividend per share of
Common Stock in any fiscal quarter does not exceed the greater of (A) the amount
per share of Common Stock of the next preceding quarterly cash dividend on the
Common Stock to the extent that such preceding quarterly dividend did not
require any adjustment of the Conversion Price pursuant to this Section 15.5(e)
(as adjusted to reflect subdivisions, or combinations of the Common Stock), and
(B) 3.75% of the arithmetic average of the Closing Price (determined as set
forth in Section 15.5(h)) during the ten Trading Days (as defined in Section
15.5(h)) immediately prior to the date of declaration of such dividend, and (y)
any dividend or distribution in connection with the liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary), then, in such
case, the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to the close of business on such record date by a fraction, the numerator of
which shall be the Current Market Price of the Common Stock on the record date
less the amount of cash so distributed (and not excluded as provided above)
applicable to one share of Common Stock, and the denominator of which shall be
such Current Market Price of the Common Stock, such reduction to be effective
immediately prior to the opening of business on the day following the record
date; provided, however, that in the event the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price of the Common Stock on the record date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each Noteholder
shall have the right to receive upon conversion the amount of cash such holder
would have received had such holder converted each Note on the record date. In
the event that such dividend or distribution is not so paid or made, the
Conversion Price shall again be adjusted to

                                       85
<PAGE>   97
be the Conversion Price that would then be in effect if such dividend or
distribution had not been declared. If any adjustment is required to be made as
set forth in this Section 15.5(e) as a result of a distribution that is a
quarterly dividend, such adjustment shall be based upon the amount by which such
distribution exceeds the amount of the quarterly cash dividend permitted to be
excluded pursuant hereto. If an adjustment is required to be made as set forth
in this Section 15.5(e) above as a result of a distribution that is not a
quarterly dividend, such adjustment shall be based upon the full amount of the
distribution.

          (e) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall require
the payment to stockholders of consideration per share of Common Stock having a
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of Directors)
that as of the last time (the "Expiration Time") tenders or exchanges may be
made pursuant to such tender or exchange offer (as it may be amended) exceeds
the Current Market Price of the Common Stock on the Trading Day next succeeding
the Expiration Time, the Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the Expiration Time by a fraction the numerator of which
shall be the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) at the Expiration Time multiplied by the Current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator of which shall be the sum of (x) the fair
market value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) at the Expiration Time and the Current Market Price of the Common Stock
on the Trading Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the Trading Day
following the Expiration Time. In the event that the Company is obligated to
purchase shares pursuant to any such tender or exchange offer, but the Company
is permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Price shall again be adjusted
to be the Conversion Price that would then be in effect if such tender or
exchange offer had not been made.

          (f) In case of a tender or exchange offer made by a Person other than
the Company or any Subsidiary for an amount that increases the offeror's
ownership

                                       86
<PAGE>   98
of Common Stock to more than twenty-five percent (25%) of the Common Stock
outstanding and shall involve the payment by such Person of consideration per
share of Common Stock having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) that as of the last time (the "Offer
Expiration Time") tenders or exchanges may be made pursuant to such tender or
exchange offer (as it shall have been amended) that exceeds the Current Market
Price of the Common Stock on the Trading Day next succeeding the Offer
Expiration Time, and in which, as of the Offer Expiration Time the Board of
Directors is not recommending rejection of the offer, the Conversion Price shall
be reduced so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the Offer Expiration Time by a
fraction the numerator of which shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) at the Offer Expiration
Time multiplied by the Current Market Price of the Common Stock on the Trading
Day next succeeding the Offer Expiration Time and the denominator of which shall
be the sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged and not withdrawn as of the Offer
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Accepted Purchased Shares") and (y) the product of the
number of shares of Common Stock outstanding (less any Accepted Purchased
Shares) at the Offer Expiration Time and the Current Market Price of the Common
Stock on the Trading Day next succeeding the Offer Expiration Time, such
reduction to become effective immediately prior to the opening of business on
the Trading Day following the Offer Expiration Time. In the event that such
Person is obligated to purchase shares pursuant to any such tender or exchange
offer, but such Person is permanently prevented by applicable law from effecting
any such purchases or all such purchases are rescinded, the Conversion Price
shall again be adjusted to be the Conversion Price that would then be in effect
if such tender or exchange offer had not been made. Notwithstanding the
foregoing, the adjustment described in this Section 15.5(g) shall not be made
if, as of the Offer Expiration Time, the offering documents with respect to such
offer disclose a plan or intention to cause the Company to engage in any
transaction described in Article Twelve.

          (g) For purposes of this Section 15.5, the following terms shall have
the meaning indicated:

                  (i) "Closing Price" with respect to any security on any day
         shall mean the closing sale price, regular way, on such day or, in case
         no such sale takes place on such day, the average of the reported
         closing bid and asked prices, regular way, in each case as quoted on
         the Nasdaq National

                                       87
<PAGE>   99
         Market or, if such security is not quoted or listed or admitted to
         trading on such Nasdaq National Market, on the principal national
         securities exchange or quotation system on which such security is
         quoted or listed or admitted to trading or, if not quoted or listed or
         admitted to trading on any national securities exchange or quotation
         system, the average of the closing bid and asked prices of such
         security on the over-the-counter market on the day in question as
         reported by the National Quotation Bureau Incorporated, or a similar
         generally accepted reporting service, or if not so available, in such
         manner as furnished by any New York Stock Exchange member firm selected
         from time to time by the Board of Directors for that purpose, or a
         price determined in good faith by the Board of Directors or, to the
         extent permitted by applicable law, a duly authorized committee
         thereof, whose determination shall be conclusive.

                 (ii) "Current Market Price" shall mean the average of the daily
         Closing Prices per share of Common Stock for the ten consecutive
         Trading Days immediately prior to the date in question except as
         hereinafter provided for purposes of any computation under Section
         15.5(f) or (g); provided, however, that (1) if the "ex" date (as
         hereinafter defined) for any event (other than the issuance or
         distribution requiring such computation and other than the tender or
         exchange offer requiring such computation under Section 15.5(f) or (g))
         that requires an adjustment to the Conversion Price pursuant to Section
         15.5(a), (b), (c), (d), (e), (f) or (g) occurs during such ten
         consecutive Trading Days, the Closing Price for each Trading Day prior
         to the "ex" date for such other event shall be adjusted by multiplying
         such Closing Price by the same fraction by which the Conversion Price
         is so required to be adjusted as a result of such other event, (2) if
         the "ex" date for any event (other than the issuance or distribution
         requiring such computation and other than the tender or exchange offer
         requiring such computation under Section 15.5(f) or (g)) that requires
         an adjustment to the Conversion Price pursuant to Section 15.5(a), (b),
         (c), (d), (e), (f) or (g) occurs on or after the "ex" date for the
         issuance or distribution requiring such computation and prior to the
         day in question, the Closing Price for each Trading Day on and after
         the "ex" date for such other event shall be adjusted by multiplying
         such Closing Price by the reciprocal of the fraction by which the
         Conversion Price is so required to be adjusted as a result of such
         other event, and (3) if the "ex" date for the issuance or distribution
         requiring such computation is prior to the day in question, after
         taking into account any adjustment required pursuant to clause (1) or
         (2) of this proviso, the Closing Price for each Trading Day on or after
         such "ex" date shall be adjusted by adding thereto the amount of any
         cash and the fair market value (as determined by the Board of Directors
         or, to the extent permitted by applicable law, a duly

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<PAGE>   100
         authorized committee thereof in a manner consistent with any
         determination of such value for purposes of Section 15.5(d), (f) or
         (g), whose determination shall be conclusive and described in a
         resolution of the Board of Directors or such duly authorized committee
         thereof, as the case may be) of the evidences of indebtedness, shares
         of capital stock or assets being distributed applicable to one share of
         Common Stock as of the close of business on the day before such "ex"
         date. For purposes of any computation under Section 15.5(f) or (g), the
         "Current Market Price" of the Common Stock on any date shall be deemed
         to be the average of the daily Closing Prices per share of Common Stock
         for such day and the next two succeeding Trading Days; provided,
         however, that if the "ex" date for any event (other than the tender or
         exchange offer requiring such computation under Section 15.5(f) or (g))
         that requires an adjustment to the Conversion Price pursuant to Section
         15.5(a), (b), (c), (d), (e), (f) or (g) occurs on or after the
         Expiration Time or Offer Expiration Time, as the case may be, for the
         tender or exchange offer requiring such computation and prior to the
         day in question, the Closing Price for each Trading Day on and after
         the "ex" date for such other event shall be adjusted as provided in
         clauses (1), (2) and (3) of the proviso contained in the first sentence
         of this Section 15.5(h)(2). For purpose of this paragraph, the term
         "ex" date, (1) when used with respect to any issuance or distribution,
         means the first date on which the Common Stock trades, regular way, on
         the relevant exchange or in the relevant market from which the Closing
         Price was obtained without the right to receive such issuance or
         distribution, (2) when used with respect to any subdivision or
         combination of shares of Common Stock, means the first date on which
         the Common Stock trades, regular way, on such exchange or in such
         market after the time at which such subdivision or combination becomes
         effective, and (3) when used with respect to any tender or exchange
         offer means the first date on which the Common Stock trades, regular
         way, on such exchange or in such market after the Expiration Time or
         the Offer Expiration Time of such offer.

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

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

                                       89
<PAGE>   101
         securities or other property (whether such date is fixed by the Board
         of Directors or by statute, contract or otherwise).

                  (v) "Trading Day" shall mean (x) if the applicable security is
         quoted on the Nasdaq National Market, a day on which trades may be made
         thereon or (y) if the applicable security is listed or admitted for
         trading on the New York Stock Exchange or another national securities
         exchange, a day on which the New York Stock Exchange or another
         national securities exchange is open for business or (z) if the
         applicable security is not so listed, admitted for trading or quoted,
         any day other than a Saturday or Sunday or a day on which banking
         institutions in the State of New York are authorized or obligated by
         law or executive order to close.

          (h) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 15.5(a), (b), (c), (d), (e), (f) or (g)
as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.

         To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time if the
period is at least twenty (20) days, the reduction is irrevocable during the
period and the Board of Directors shall have made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to holders of record of the Notes a
notice of the reduction at least fifteen (15) days prior to the date the reduced
Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.

          (i) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least one percent
(1%) in such price; provided, however, that any adjustments that by reason of
this Section 15.5(j) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Article Fifteen shall be made by the Company and shall be made to the nearest
cent or to the nearest one-hundredth (1/100) of a share, as the case may be. No
adjustment need be made for rights to purchase Common Stock pursuant to a
Company plan for reinvestment of dividends or interest. To the extent the Notes
become convertible into cash, assets, property or securities (other than capital
stock of the Company), no adjustment need be made thereafter as to the cash,
assets, property or such securities. Interest will not accrue on the cash.

                                       90
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          (j) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee and any conversion agent other than
the Trustee an Officers' Certificate setting forth the Conversion Price after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment. Unless and until a Responsible Officer of the Trustee shall have
received such Officers' Certificate, the Trustee shall not be deemed to have
knowledge of any adjustment of the Conversion Price and may assume that the last
Conversion Price of which it has knowledge is still in effect. Promptly after
delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Price setting forth the adjusted Conversion Price
and the date on which each adjustment becomes effective and shall mail such
notice of such adjustment of the Conversion Price to the holder of each Note at
his last address appearing on the Note register provided for in Section 2.5 of
this Indenture, within twenty (20) days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.

          (k) In any case in which this Section 15.5 provides that an adjustment
shall become effective immediately after (1) a record date or Record Date for an
event, (2) the date fixed for the determination of stockholders entitled to
receive a dividend or distribution pursuant to Section 15.5(a), (3) a date fixed
for the determination of stockholders entitled to receive rights or warrants
pursuant to Section 15.5(b), (4) the Expiration Time for any tender or exchange
offer pursuant to Section 15.5(f), or (5) the Offer Expiration Time for a tender
or exchange offer pursuant to Section 15.5(g) (each a "Determination Date"), the
Company may elect to defer until the occurrence of the relevant Adjustment Event
(as hereinafter defined) (x) issuing to the holder of any Note converted after
such Determination Date and before the occurrence of such Adjustment Event, the
additional shares of Common Stock or other securities issuable upon such
conversion by reason of the adjustment required by such Adjustment Event over
and above the Common Stock issuable upon such conversion before giving effect to
such adjustment and (y) paying to such holder any amount in cash in lieu of any
fraction pursuant to Section 15.3. For purposes of this Section 15.5(l), the
term "Adjustment Event" shall mean:

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

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

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

                                       91
<PAGE>   103
                  (iv) in any case referred to in clause (4) or clause (5)
         hereof, the date a sale or exchange of Common Stock pursuant to such
         tender or exchange offer is consummated and becomes irrevocable.

          (l) For purposes of this Section 15.5, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.

         SECTION 15.6. Effect of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 15.5(c) applies), (ii) any consolidation, merger or
combination of the Company with another Person as a result of which holders of
Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, or (iii) any sale or conveyance of all or substantially all of the
properties and assets of the Company to any other Person as a result of which
holders of Common Stock shall be entitled to receive stock, other securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock, then the Company or the successor or purchasing Person, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of such supplemental indenture) providing that such Note shall be convertible
into the kind and amount of shares of stock, other securities or other property
or assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance by a holder of a number
of shares of Common Stock issuable upon conversion of such Notes (assuming, for
such purposes, a sufficient number of authorized shares of Common Stock are
available to convert all such Notes) immediately prior to such reclassification,
change, consolidation, merger, combination, sale or conveyance assuming such
holder of Common Stock did not exercise his rights of election, if any, as to
the kind or amount of stock, other securities or other property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance (provided that, if the kind or amount of
stock, other securities or other property or assets (including cash) receivable
upon such reclassification, change, consolidation, merger, combination, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised ("non-electing share"),
then for the purposes of this Section 15.6 the kind and amount of stock, other
securities or other property or assets

                                       92
<PAGE>   104
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance for each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares). Such supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article Fifteen.

         The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at its address appearing on the
Note register provided for in Section 2.5 of this Indenture, within twenty (20)
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.

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

         If this Section 15.6 applies to any event or occurrence, Section 15.5
shall not apply.

         SECTION 15.7. Taxes on Shares Issued. The issue of stock certificates
on conversions of Notes shall be made without charge to the converting
Noteholder for any tax in respect of the issue thereof. The Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of stock in any name other than that
of the holder of any Note converted, and the Company shall not be required to
issue or deliver any such stock certificate unless and until the Person or
Persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.

         SECTION 15.8. Reservation of Shares; Shares to Be Fully Paid;
Compliance with Governmental Requirements; Listing of Common Stock. The Company
shall provide, free from preemptive rights, out of its authorized but unissued
shares or shares held in treasury, sufficient shares of Common Stock to provide
for the conversion of the Notes from time to time as such Notes are presented
for conversion.

         Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.

                                       93
<PAGE>   105
         The Company covenants that all shares of Common Stock which may be
issued upon conversion of Notes will upon issue be fully paid and non-assessable
by the Company and free from all taxes, liens and charges with respect to the
issue thereof.

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

         The Company further covenants that, if at any time the Common Stock
shall be listed on the Nasdaq National Market or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Note;
provided, however, that, if the rules of such exchange or automated quotation
system permit the Company to defer the listing of such Common Stock until the
first conversion of the Notes into Common Stock in accordance with the
provisions of this Indenture, the Company covenants to list such Common Stock
issuable upon conversion of the Notes in accordance with the requirements of
such exchange or automated quotation system at such time.

         SECTION 15.9. Responsibility of Trustee. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine the Conversion Price or whether any facts exist
which may require any adjustment of the Conversion Price, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Note; and the Trustee and any other conversion agent make no representations
with respect thereto. Neither the Trustee nor any conversion agent shall be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock or stock certificates or other securities or property or
cash upon the surrender of any Note for the purpose of conversion or to comply
with any of the duties, responsibilities or covenants of the Company contained
in this Article Fifteen.

                                       94
<PAGE>   106
Without limiting the generality of the foregoing, neither the Trustee nor any
conversion agent shall be under any responsibility to determine the correctness
of any provisions contained in any supplemental indenture entered into pursuant
to Section 15.6 relating either to the kind or amount of shares of stock or
securities or property (including cash) receivable by Noteholders upon the
conversion of their Notes after any event referred to in such Section 15.6 or to
any adjustment to be made with respect thereto, but, subject to the provisions
of Section 8.1, may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, the Officers' Certificate
(which the Company shall be obligated to file with the Trustee prior to the
execution of any such supplemental indenture) with respect thereto.

         SECTION 15.10. Notice to Holders Prior to Certain Actions. In case:

          (a) the Company shall declare a dividend (or any other distribution)
on its Common Stock that would require an adjustment in the Conversion Price
pursuant to Section 15.5; or

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

          (c) of any reclassification or reorganization 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 any Significant Subsidiary; or

          (d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company or any Significant Subsidiary; the Company shall cause
to be filed with the Trustee and to be mailed to each holder of Notes at his
address appearing on the Note register provided for in Section 2.5 of this
Indenture, as promptly as possible but in any event at least ten (10) 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 or warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution
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

                                       95
<PAGE>   107
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.

                                   ARTICLE 16

                            MISCELLANEOUS PROVISIONS

         SECTION 16.1. Provisions Binding on Company's Successors. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.

         SECTION 16.2. Official Acts by Successor Corporation. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any Person that shall at the time be the lawful sole successor of the
Company.

         SECTION 16.3. Addresses for Notices, Etc. Any notice or demand which by
any provision of this Indenture is required or permitted to be given or served
by the Trustee or by the holders of Notes on the Company shall be deemed to have
been sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to ImClone Systems Incorporated , 180 Varick Street, 7th Floor, New
York, New York 10014, Attention: Treasurer. Any notice, direction, request or
demand hereunder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or served by being
deposited, postage prepaid, by registered or certified mail in a post office
letter box addressed to the Corporate Trust Office, which office is, at the date
as of which this Indenture is dated, located at The Bank of New York, 101
Barclay Street, 21st Floor West, New York, New York, 10286, Attention: Corporate
Trust Trustee Administration.

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

         Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail, postage prepaid, at his address as it appears on the
Note

                                       96
<PAGE>   108
register and shall be sufficiently given to him if so mailed within the time
prescribed.

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

         SECTION 16.4. Governing Law. This Indenture and each Note shall be
deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of the State of New
York, without regard to the conflict of laws provisions thereof.

         SECTION 16.5. Evidence of Compliance with Conditions Precedent;
Certificates to Trustee. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.

         Each certificate or opinion provided for in this Indenture and
delivered to the Trustee 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; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion is
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 16.6. Legal Holidays. In any case in which the date of maturity
of interest on or principal of the Notes or the date fixed for redemption of any
Note will not be a Business Day, then payment of such interest on or principal
of the Notes need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period from and after such date.

         SECTION 16.7. Trust Indenture Act. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to

                                       97
<PAGE>   109
be part of and to govern indentures qualified under the Trust Indenture Act;
provided, however, that, unless otherwise required by law, notwithstanding the
foregoing, this Indenture and the Notes issued hereunder shall not be subject to
the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section 314 of the
Trust Indenture Act as now in effect or as hereafter amended or modified;
provided further that this Section 16.7 shall not require this Indenture or the
Trustee to be qualified under the Trust Indenture Act prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act,
nor shall it constitute any admission or acknowledgment by any party to the
Indenture that any such qualification is required prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act. If
any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in an indenture qualified under the
Trust Indenture Act, such required provision shall control.

         SECTION 16.8. No Security Interest Created. Nothing in this Indenture
or in the Notes, expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect, in any jurisdiction in which property of
the Company or its subsidiaries is located.

         SECTION 16.9. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto, any paying agent, any authenticating agent, any Note registrar and their
successors hereunder, the holders of Notes and the holders of Senior
Indebtedness, any benefit or any legal or equitable right, remedy or claim under
this Indenture.

         SECTION 16.10. Table of Contents, Headings, Etc. The table of contents
and the titles and headings of the articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.

         SECTION 16.11. Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.4, 2.5, 2.6, 2.7, 3.3 and 3.5, as fully to all
intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Notes. For all purposes of this Indenture, the authentication and delivery of
Notes by the authenticating agent shall be deemed to be authentication and
delivery of such Notes "by the Trustee" and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent shall be deemed to
satisfy any requirement hereunder or in

                                       98
<PAGE>   110
the Notes for the Trustee's certificate of authentication. Such authenticating
agent shall at all times be a Person eligible to serve as trustee hereunder
pursuant to Section 8.9.

         Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to all or substantially all the
corporate trust business of any authenticating agent, shall be the successor of
the authenticating agent hereunder, if such successor corporation is otherwise
eligible under this Section 16.11, without the execution or filing of any paper
or any further act on the part of the parties hereto or the authenticating agent
or such successor corporation.

         Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any authenticating agent by giving written notice
of termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section , the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the duties and obligations of the former authenticating agent under this
Indenture and, upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Notes as the names and
addresses of such holders appear on the Note register.

         The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in writing
between the Company and the authenticating agent.

         The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section 16.11
shall be applicable to any authenticating agent.

         SECTION 16.12. Execution in Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.

         SECTION 16.13. Severability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, then (to the extent
permitted by law) the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

                                       99
<PAGE>   111
         The Bank of New York hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions herein above set forth.

         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.

IMCLONE SYSTEMS INCORPORATED

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

THE BANK OF NEW YORK,

As Trustee

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

                                      100
<PAGE>   112
                                    EXHIBIT A

         For Global Note only: UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW
YORK, NEW YORK) (THE "DEPOSITARY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY
FOR THE CERTIFICATES) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY (AND ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), 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.

         THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS,
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U. S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED
IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL
ACCREDITED INVESTOR"); (2) AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THIS NOTE UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THIS
NOTE OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO
IMCLONE SYSTEMS INCORPORATED OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE BANK OF NEW YORK, AS
TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER

                                      A-1
<PAGE>   113
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS
ON TRANSFER OF THE NOTES (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE), AND IF SUCH TRANSFER IS IN
RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES OF LESS THAN $100,000, AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE
904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3)
PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (2)(F) ABOVE),
IT WILL FURNISH TO THE BANK OF NEW YORK,AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (4) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE PRIOR
TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS NOTE UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER
MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE BANK OF NEW YORK AS
TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFEREE IS
AN INSTITUTIONAL ACCREDITED INVESTOR OR IS A PURCHASER WHO IS NOT A U. S.
PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE BANK OF NEW
YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS SUCH TRUSTEE MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS NOTE
PURSUANT TO CLAUSE

                                      A-2
<PAGE>   114
(2)(F) ABOVE OR UPON ANY TRANSFER OF THIS NOTE UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING
RESTRICTION.

                                      A-3
<PAGE>   115
                          IMCLONE SYSTEMS INCORPORATED

                  5 1/2% CONVERTIBLE SUBORDINATED NOTE DUE 2005

                                                        CUSIP:_______________

No. __________                                           $___________________

         ImClone Systems Incorporated , a corporation duly organized and validly
existing under the laws of the State of Delaware (herein called the "Company",
which term includes any successor corporation under the Indenture referred to on
the reverse hereof), for value received hereby promises to pay to ___________or
its registered assigns, the principal sum of __________________ Dollars
($_________) on March 1, 2005, at the office or agency of the Company maintained
for that purpose in accordance with the terms of the Indenture, in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, and to pay interest,
semi-annually on March 1 and September 1 of each year, commencing September 1,
2000, on said principal sum at said office or agency, in like coin or currency,
at the rate per annum of 5 1/2%, from March 1 or September 1, as the case may
be, next preceding the date of this Note to which interest has been paid or duly
provided for, unless the date hereof is a date to which interest has been paid
or duly provided for, in which case from the date of this Note, or unless no
interest has been paid or duly provided for on the Notes, in which case from
February 29, 2000, until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is after any
February 15 or August 15, as the case may be, and before the following March 1
or September 1, this Note shall bear interest from such March 1 or September 1;
provided, however, that if the Company shall default in the payment of interest
due on such March 1 or September 1, then this Note shall bear interest from the
next preceding March 1 or September 1 to which interest has been paid or duly
provided for or, if no interest has been paid or duly provided for on such Note,
from February 29, 2000. Except as otherwise provided in the Indenture, the
interest payable on the Note pursuant to the Indenture on any March 1 or
September 1 will be paid to the Person entitled thereto as it appears in the
Note register at the close of business on the record date, which shall be the
February 15 or August 15 (whether or not a Business Day) next preceding such
March 1 or September 1, as provided in the Indenture; provided, however, that
any such interest not punctually paid or duly provided for shall be payable as
provided in the Indenture. Interest may, at the option of the Company, be paid
either (i) by check mailed to the registered address of such Person (provided
that the holder of Notes with an aggregate principal amount in excess of
$2,000,000 shall, at the written election of such holder, be paid by wire
transfer of immediately available funds) or (ii) by transfer

                                      A-4
<PAGE>   116
to an account maintained by such Person located in the United States; provided,
however, that payments to the Depositary will be made by wire transfer of
immediately available funds to the account of the Depositary or its nominee.

         Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions subordinating the
payment of principal of and premium, if any, and interest on the Notes to the
prior payment in full of all Senior Indebtedness, as defined in the Indenture,
and provisions giving the holder of this Note the right to convert this Note
into Common Stock of the Company on the terms and subject to the limitations
referred to on the reverse hereof and as more fully specified in the Indenture.
Such further provisions shall for all purposes have the same effect as though
fully set forth at this place.

         This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of the State of New York, without regard to principles
of conflicts of laws.

         This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.

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

                                      A-5
<PAGE>   117
Name:
Title:

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

                                      A-6
<PAGE>   118
TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Notes described in the within-named Indenture.

THE BANK OF NEW YORK, as Trustee

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

or
By:
   -------------------------------
     As Authenticating Agent
    (if different from Trustee)

                                      A-7
<PAGE>   119
                             FORM OF REVERSE OF NOTE

                          IMCLONE SYSTEMS INCORPORATED

                 5 1/2% CONVERTIBLE SUBORDINATED NOTE DUE 2005

         This Note is one of a duly authorized issue of Notes of the Company,
designated as its 5 1/2% Convertible Subordinated Notes due 2005 (herein called
the "Notes"), limited to the aggregate principal amount of $200,000,000
($240,000,000, if the option is fully exercised by the Initial Purchasers) all
issued or to be issued under and pursuant to an Indenture dated as of February
29, 2000 (herein called the "Indenture"), between the Company and The Bank of
New York, as trustee (herein called the "Trustee"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the holders of the Notes.

         In case an Event of Default (as defined in the Indenture) shall have
occurred and be continuing, the principal of, premium, if any, and accrued
interest (including Liquidated Damages (as defined in the Registration Rights
Agreement), if any) on all Notes may be declared by either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Notes then
outstanding, and upon said declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.

         The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the Notes;
provided, however, that no such supplemental indenture shall (i) extend the
fixed maturity of any Note, or reduce the rate or extend the time of payment of
interest thereon, or reduce the principal amount thereof or premium, if any,
thereon, or reduce any amount payable upon redemption thereof, or impair the
right of any Noteholder to institute suit for the payment thereof, or make the
principal thereof or interest or premium, if any, thereon payable in any coin or
currency other than that provided in the Notes, or modify the provisions of the
Indenture with respect to the subordination of the Notes in a manner adverse to
the Noteholders in any material respect, or change the obligation of the Company
to redeem any Note upon the happening of a Fundamental Change (as defined in the
Indenture) in a manner adverse to the holder of the Notes, or impair the right
to convert the Notes into Common Stock subject to the terms set forth in the
Indenture, including Section 15.6 thereof,

                                      A-8
<PAGE>   120
without the consent of the holder of each Note so affected or (ii) reduce the
aforesaid percentage of Notes, the holders of which are required to consent to
any such supplemental indenture, without the consent of the holders of all Notes
then outstanding. Subject to the provisions of the Indenture, the holders of a
majority in aggregate principal amount of the Notes at the time outstanding may
on behalf of the holders of all of the Notes waive any past default or Event of
Default under the Indenture and its consequences except a default in the payment
of interest (including Liquidated Damages, if any) or any premium on, or the
principal of, any of the Notes, or a failure by the Company to convert any Notes
into Common Stock of the Company, or a default in the payment of the redemption
price pursuant to Article Three of the Indenture, or a default in respect of a
covenant or provisions of the Indenture which under Article Eleven of the
Indenture cannot be modified without the consent of the holders of each or all
Notes then outstanding or affected thereby. Any such consent or waiver by the
holder of this Note (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Note and any Notes which may be issued in exchange or substitution
hereof, irrespective of whether or not any notation thereof is made upon this
Note or such other Notes.

         The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, expressly subordinated and subject in right of
payment to the prior payment in full of all Senior Indebtedness of the Company,
whether outstanding at the date of the Indenture or thereafter incurred, and
this Note is issued subject to the provisions of the Indenture with respect to
such subordination. Each holder of this Note, by accepting the same, agrees to
and shall be bound by such provisions and authorizes the Trustee on its behalf
to take such action as may be necessary or appropriate to effectuate the
subordination so provided and appoints the Trustee his attorney-in-fact for such
purpose.

         No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
(including Liquidated Damages, if any) on this Note at the place, at the
respective times, at the rate and in the coin or currency herein prescribed.

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

         The Notes are issuable in fully registered form, without coupons, in
denominations of $1,000 principal amount and any integral multiple of $1,000. At
the office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax,

                                      A-9
<PAGE>   121
assessment or other governmental charge that may be imposed in connection with
any registration or exchange of Notes, Notes may be exchanged for a like
aggregate principal amount of Notes of any other authorized denominations.

         The Notes may be provisionally redeemed by the Company, in whole or in
part, at any time prior to March 6, 2003, at a redemption price equal to $1,000
per $1,000 aggregate principal amount of notes to be redeemed plus accrued and
unpaid interest, if any (including Liquidated Damages Amount, if any) to the
date of redemption if (i) the closing price of the Common Stock shall have
exceeded 150% of the conversion price then in effect for at least 20 trading
days in any consecutive 30-trading day period and (ii) if the redemption would
occur before March 1, 2002, the shelf registration statement covering resales of
the Notes and the Common Stock, issuable upon conversion of the Notes, is
effective and available for use and is expected to remain effective and
available for use for the 30 days immediately following the date of redemption.
The Company shall mail notice of any provisional redemption within five trading
days of a consecutive 30-trading day period.

         Upon any such provisional redemption, the Company shall make an
additional Additional Payment (as defined in the Indenture) with respect to the
Notes called for redemption to holders as of the date of mailing of the notice
of provisional redemption in an amount equal to $ 152.54 per $1,000 Note, minus
the amount of any interest the Company actually paid on such Note prior to the
Notice Date. The Company shall make the Additional Payment on all Notes called
for provisional redemption, including any Notes converted after the date of
mailing of the notice of provisional redemption and prior to the date of
redemption.

         At any time on or after March 6, 2003, and prior to maturity, the Notes
may be redeemed at the option of the Company, in whole or in part, upon mailing
a notice of such redemption not less than 30 days but not more than 60 days
before the date fixed for redemption to the holders of Notes at their last
registered addresses, all as provided in the Indenture, at the following
optional redemption prices (expressed as percentages of the principal amount),
together in each case with accrued and unpaid interest (including Liquidated
Damages, if any) to, but excluding, the date fixed for redemption:

<TABLE>
<CAPTION>
Period                                                              Redemption Price
<S>                                                                <C>
Beginning on March 6, 2003 and ending on February 29, 2004                   102.20%
Beginning on March 1, 2004 and ending on February 28, 2005                   110.10%
</TABLE>

and 100% on March 1, 2005; provided, however, that if the date fixed for
redemption is on a March 1 or September 1, then the interest payable on such
date

                                      A-10
<PAGE>   122
shall be paid to the holder of record on the preceding February 15 or August 15,
respectively.

         The Company may not redeem the Notes if a default in the payment of
interest or premium, if any, on the Notes has occurred and is continuing.

         The Notes are not subject to redemption through the operation of any
sinking fund.

         If a Fundamental Change occurs at any time prior to maturity of the
Notes, the Notes will be redeemable on the 30th day after notice thereof (the
"Repurchase Date") at the option of the holder of the Notes at a redemption
price equal to 100% of the principal amount thereof, together with accrued
interest to (but excluding) the date of redemption; provided, however, that, if
such Repurchase Date is a March 1 or September 1, the interest payable on such
date shall be paid to the holder of record of the Notes on the preceding
February 15 or August 15, respectively. The Notes will be redeemable in
multiples of $1,000 principal amount. The Company shall mail to all holders of
record of the Notes a notice of the occurrence of a Fundamental Change and of
the redemption right arising as a result thereof on or before the 10th day after
the occurrence of such Fundamental Change. For a Note to be so redeemed at the
option of the holder, the Company must receive at the office or agency of the
Company maintained for that purpose in accordance with the terms of the
Indenture, such Note with the form entitled "Option to Elect Repayment Upon a
Fundamental Change" on the reverse thereof duly completed, together with such
Note, duly endorsed for transfer, on or before the 30th day after the date of
such notice of a Fundamental Change (or if such 30th day is not a Business Day,
the immediately succeeding Business Day).

         Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time after the original issuance of any Notes
through the close of business on the final maturity date of the Notes, or, as to
all or any portion hereof called for redemption, prior to the close of business
on the Business Day immediately preceding the date fixed for redemption (unless
the Company shall default in payment due upon redemption thereof), to convert
the principal hereof or any portion of such principal which is $1,000 or an
integral multiple thereof into that number of shares of the Company"s Common
Stock (as such shares shall be constituted at the date of conversion) obtained
by dividing the principal amount of this Note or portion thereof to be converted
by the Conversion Price of $110.18, as may adjusted from time to time as
provided in the Indenture, upon surrender of this Note, together with a
conversion notice as provided in the Indenture (the form entitled "Conversion
Notice" on the reverse hereof), to the Company at the office or agency of the
Company maintained for that purpose in accordance with the terms of the
Indenture, or at the option of such holder, the

                                      A-11
<PAGE>   123
Corporate Trust Office, and, unless the shares issuable on conversion are to be
issued in the same name as this Note, duly endorsed by, or accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the holder or by his duly authorized attorney. No adjustment in respect of
interest on any Note converted or dividends on any shares issued upon conversion
of such Note will be made upon any conversion except as set forth in the next
sentence. If this Note (or portion hereof) is surrendered for conversion during
the period from the close of business on any record date for the payment of
interest to the close of business on the Business Day preceding the following
interest payment date and either (x) has not been called for redemption on a
redemption date that occurs during such period or (y) is not to be redeemed in
connection with a Fundamental Change on a Repurchase Date that occurs during
such period, this Note (or portion hereof being converted) must be accompanied
by an amount, in New York Clearing House funds or other funds acceptable to the
Company, equal to the interest payable on such interest payment date on the
principal amount being converted; provided, however, that no such payment shall
be required if there shall exist at the time of conversion a default in the
payment of interest on the Notes. No fractional shares will be issued upon any
conversion, but an adjustment and payment in cash will be made, as provided in
the Indenture, in respect of any fraction of a share which would otherwise be
issuable upon the surrender of any Note or Notes for conversion. A Note in
respect of which a holder is exercising its right to require redemption upon a
Fundamental Change may be converted only if such holder withdraws its election
to exercise such right in accordance with the terms of the Indenture. Any Notes
called for redemption, unless surrendered for conversion by the holders thereof
on or before the close of business on the Business Day preceding the date fixed
for redemption, may be deemed to be redeemed from the holders of such Notes for
an amount equal to the applicable redemption price, together with accrued but
unpaid interest (including Liquidated Damages, if any) to (but excluding) the
date fixed for redemption, by one or more investment banks or other purchasers
who may agree with the Company (i) to purchase such Notes from the holders
thereof and convert them into shares of the Company"s Common Stock and (ii) to
make payment for such Notes as aforesaid to the Trustee in trust for the
holders.

         Upon due presentment for registration of transfer of this Note at the
office or agency of the Company maintained for that purpose in accordance with
the terms of the Indenture, a new Note or Notes of authorized denominations for
an equal aggregate principal amount will be issued to the transferee in exchange
thereof; subject to the limitations provided in the Indenture, without charge
except for any tax, assessment or other governmental charge imposed in
connection therewith.

                                      A-12
<PAGE>   124
         The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Note registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not this Note shall
be overdue and notwithstanding any notation of ownership or other writing hereon
made by anyone other than the Company or any Note registrar) for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any other
authenticating agent nor any paying agent nor other conversion agent nor any
Note registrar shall be affected by any notice to the contrary. All payments
made to or upon the order of such registered holder shall, to the extent of the
sum or sums paid, satisfy and discharge liability for monies payable on this
Note.

         No recourse for the payment of the principal of or any premium or
interest on this Note, or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any supplemental indenture or in any Note, or
because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, employee, agent, officer or director or
subsidiary, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.

         This Note shall be deemed to be a contract made under the laws of New
York, and for all purposes shall be construed in accordance with the laws of New
York, without regard to principles of conflicts of laws.

         Terms used in this Note and defined in the Indenture are used herein as
therein defined.

                                      A-13
<PAGE>   125
\                                  ABBREVIATIONS

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

<TABLE>
<S>                  <C>                               <C>
                                                       UNIF GIFT MIN ACT --
                                                       ____________________ Custodian
     TEN COM-        as tenants in common              (Cust)

                                                       ____________________
                                                       (Minor)

     TEN ENT-        as tenants by the entireties

     JT TEN-         as joint tenants with right of    Under Uniform Gifts to Minors Act
                     survivorship and not as tenants   ____________________
                     in common                         (State)
</TABLE>

                    ADDITIONAL ABBREVIATIONS MAY ALSO BE USED
                          THOUGH NOT IN THE ABOVE LIST.

                                      A-14
<PAGE>   126
                                CONVERSION NOTICE

TO:      IMCLONE SYSTEMS INCORPORATED THE BANK OF NEW YORK

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

Dated: ___________________

______________________________

                                      A-15
<PAGE>   127
Fill in the registration of shares of Common Stock if to be issued, and Notes if
to be delivered, other than to and in the name of the registered holder:

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

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

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

---------------------------------
Please print name and address

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

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

                                      A-16
<PAGE>   128
Social Security or Other Taxpayer
Identification Number:

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

                                      A-17
<PAGE>   129
                            OPTION TO ELECT REPAYMENT

                            UPON A FUNDAMENTAL CHANGE

TO:      IMCLONE SYSTEMS INCORPORATED THE BANK OF NEW YORK

         The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from ImClone Systems Incorporated (the
"Company") as to the occurrence of a Fundamental Change with respect to the
Company and requests and instructs the Company to repay the entire principal
amount of this Note, or the portion thereof (which is $1,000 or an integral
multiple thereof) below designated, in accordance with the terms of the
Indenture referred to in this Note at the price of 100% of such entire principal
amount or portion thereof, together with accrued interest to, but excluding,
such repayment date, to the registered holder hereof.

Dated: ___________________

______________________________

______________________________
Signature(s)

                                      A-18
<PAGE>   130
------------------------------

Social Security or Other

Taxpayer Identification Number

                                      A-19
<PAGE>   131
                                   ASSIGNMENT

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

         In connection with any transfer of the Note prior to the expiration of
the holding period applicable to sales thereof under Rule 144(k) under the
Securities Act (or any successor provision) (other than any transfer pursuant to
a registration statement that has been declared effective under the Securities
Act), the undersigned confirms that such Note is being transferred:

    \ \      To ImClone Systems Incorporated or a subsidiary thereof; or

    \ \      Inside the United States pursuant to and in compliance with Rule
             144A under the Securities Act of 1933, as amended; or

    \ \      Inside the United States to an Institutional Accredited
             Investor pursuant to and in compliance with the Securities Act
             of 1933, as amended, in a minimum denomination of $100,000; or

    \ \      Outside the Unites States in compliance with Rule 904 under the
             Securities Act; or

    \ \      Pursuant to and in compliance with Rule 144 under the Securities
             Act of 1933, as amended;

and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate").

                                      A-20
<PAGE>   132
    \ \      The transferee is an Affiliate of the Company.

Dated: ___________________

____________________________________

____________________________________
Signature(s)

                                      A-21
<PAGE>   133
----------------------------------

Signature Guarantee

NOTICE: The signature of the conversion notice, the option to elect repayment
upon a Fundamental Change or the assignment must correspond with the name as
written upon the face of the Note in every particular without alteration or
enlargement or any change whatever.

                                      A-22
<PAGE>   134
                                    EXHIBIT B

ImClone Systems Incorporated
180 Varick Street, 7th Floor
New York, New York  10014

The Bank of New York, as Trustee
101 Barclay Street
21st Floor West
New York, New York 10286
Attention:  Corporate Trust Trustee Administration

Ladies and Gentlemen:

         In connection with our proposed purchase of 5 1/2% Convertible
Subordinated Notes due 2005 (the "Notes") of IMCLONE SYSTEMS INCORPORATED, a
Delaware corporation (the "Company") we confirm that:

         (i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2) or (3) under the Securities Act of 1933, as amended (the
"Securities Act"), or an entity in which all of the equity owners are accredited
investors within the meaning of Rule 501(a)(1), (2) or (3) under the Securities
Act (an "Institutional Accredited Investor") and we are able to bear the
economic risk of an investment in the notes;

         (ii) (A) any purchase of Notes by us will be for our own account or for
the account of one or more other Institutional Accredited Investors for each of
which we exercise sole investment discretion (and have the authority to make,
and do make, the statements in this letter) or as fiduciary for the account of
one or more trusts, each of which is an "accredited investor" within the meaning
of Rule 501(a)(7) under the Securities Act and for each of which we exercise
sole investment discretion or (B) we are a "bank," within the meaning of Section
3(a)(2) of the Securities Act, or a "savings and loan association" or other
institution described in Section 3(a)(5)(A) of the Securities Act that is
acquiring Notes as fiduciary for the account of one or more institutions for
which we exercise sole investment discretion;

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

                                      B-1
<PAGE>   135
         (iv) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of purchasing
Notes; and

         (v) we are not acquiring Notes with a view to distribution thereof or
with any present intention of offering or selling Notes or the Common Stock of
the Company issuable upon conversion thereof, except as permitted below;
provided that the disposition of our property and property of any accounts for
which we are acting as fiduciary shall remain at all times within our control.

         We understand that the Notes are being offered in a transaction not
involving any public offering within the United States within the meaning of the
Securities Act and that the Notes and the Common Stock of the Company issuable
upon conversion thereof have not been registered under the Securities Act, and
we agree, on our own behalf and on behalf of each account for which we acquire
any Notes, that if in the future we decide to resell or otherwise transfer such
Notes or the Common Stock of the Company issuable upon conversion thereof, such
Notes or Common Stock of the Company may be resold or otherwise transferred only
(i) to the Company or any subsidiary thereof, (ii) inside the United States to a
person who is a "qualified institutional buyer" (as defined in Rule 144A under
the Securities Act) in a transaction meeting the requirements of Rule 144A,
(iii) inside the United States to an Institutional Accredited Investor that,
prior to such transfer, furnishes to the Trustee for the Notes (or in the case
of Common Stock of the Company, the transfer agent therefor) a signed letter
containing certain representations and agreements relating to the restrictions
on transfer of such securities (the form of which letter can be obtained from
the Trustee or the transfer agent, as the case may be), (iv) outside the United
States in a transaction meeting the requirements of Rule 904 under the
Securities Act, (v) pursuant to the exemption from registration provided by Rule
144 under the Securities Act (if applicable), or (vi) pursuant to a registration
statement that has been declared effective under the Securities Act (and which
continues to be effective at the time of such transfer), and in each case, in
accordance with any applicable securities law of any state of the United States
and in accordance with the legends set forth on the Notes or the Common Stock of
the Company issuable upon conversion thereof, as the case may be. We further
agree to provide any person purchasing any of the Notes or the Common Stock of
the Company issuable upon conversion thereof (other than pursuant to clause (v)
or (vi) above) from us a notice advising such purchaser that resales of such
securities are restricted as stated herein. We understand that the Trustee and
transfer agent for the Notes and the Common Stock of the Company will not be
required to accept for registration of transfer any Notes or any Common Stock of
the Company issued upon conversion of the Notes, except upon presentation of
evidence satisfactory to the Company that the foregoing restrictions on transfer
have been complied with. We further

                                      B-2
<PAGE>   136
understand that any Notes and any Common Stock of the Company issued upon
conversion of the Notes will be in the form of definitive physical certificates
and that such certificates will bear a legend reflecting the substance of this
paragraph other than certificates transferred pursuant to (v) or (vi) above.

         The Company and the Trustee and their respective counsel are entitled
to rely upon this letter and are irrevocably authorized to produce this letter
or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.

         THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.

(Name of Purchaser)

Company:____________________________

Name:___________________________

Title:____________________________

Address:_________________________

_________________________________

_________________________________

                                      B-3

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