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EXHIBIT 4.1    
  

 
 

FORM OF NINTH SUPPLEMENTAL INDENTURE    
  

SIMON PROPERTY GROUP, L.P.

ISSUER

TO

THE CHASE MANHATTAN BANK

TRUSTEE  

NINTH SUPPLEMENTAL INDENTURE

DATED AS OF OCTOBER 26, 2001  

 $750,000,000 63/8% NOTES DUE 2007  

 SUPPLEMENT TO INDENTURE,

DATED AS OF NOVEMBER 26, 1996,

BETWEEN

SIMON PROPERTY GROUP, L.P.

AND

THE CHASE MANHATTAN BANK,

AS TRUSTEE  

 

    NINTH SUPPLEMENTAL INDENTURE, dated as of October 26, 2001 (the "Ninth Supplemental Indenture"), between
SIMON PROPERTY GROUP, L.P. (formerly known as Simon DeBartolo Group, L.P.), a Delaware limited partnership (the "Issuer" or the "Operating Partnership"), having its principal offices at
National City Center, 115 West Washington Street, Suite 15 East, Indianapolis, Indiana 46204, and THE CHASE MANHATTAN BANK, a New York banking corporation, as trustee (the "Trustee"),
having its Corporate Trust Office at 450 West 33rd Street, 15th Floor, New York, New York 10001. 

RECITALS  

    WHEREAS, the Issuer and Simon Property Group, L.P., a Delaware limited partnership acting as a guarantor (the "Guarantor"), executed
and delivered to the Trustee an Indenture, dated as of November 26, 1996 (the "Original Indenture"), providing for the issuance from time to time of debt securities evidencing unsecured and
unsubordinated indebtedness of the Issuer; 

    WHEREAS, on December 31, 1997 the Guarantor was merged into the Issuer as contemplated under the Indenture; 

    WHEREAS, the Issuer changed its name from "Simon DeBartolo Group, L.P." to "Simon Property Group, L.P." effective as of
September 24, 1998; 

    WHEREAS, the Original Indenture provides that by means of a supplemental indenture, the Issuer may create one or more series of its
debt securities and establish the form and terms and conditions thereof; 

    WHEREAS, the Issuer intends by this Ninth Supplemental Indenture to create and provide for the following series of debt securities:
Simon Property Group, L.P. 63/8% Notes due 2007 in an aggregate principal amount of $750,000,000 (the "Notes"); 

    WHEREAS, the Board of Directors of Simon Property Group, Inc., the general partner of the Issuer, has approved the creation of
the Notes and the forms, terms and conditions thereof pursuant to Section 301 of the Original Indenture; and 

    WHEREAS, all actions required to be taken under the Original Indenture with respect to this Ninth Supplemental Indenture have been
taken. 

 NOW, THEREFORE, IT IS AGREED:  

ARTICLE ONE

Definitions, Creation, Forms and Terms and Conditions of the Notes  

    SECTION 1.01  Definitions.  Capitalized terms used in this Ninth Supplemental Indenture and not otherwise
defined shall have the meanings ascribed to them in the Original Indenture. Certain terms, used principally in Article Two of this Ninth Supplemental Indenture, are defined in that Article. In
addition, the following terms shall have the following meanings to be equally applicable to both the singular and the plural forms of the terms defined: 

    "Business Day" means any day, other than a Saturday or Sunday, on which banking institutions in New York, New York are open for
business. 

    "Dollar" or "$" means the lawful currency of the United States of America. 

    "DTC" mean The Depository Trust Company, its nominees and their successors and assigns. 

    "Global Note" means a single fully registered global note in book-entry form, substantially in the form of Exhibit A
attached hereto. 

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    "Holders" has the meaning set forth in Section 1.04(c). 

    "Indenture" means the Original Indenture as supplemented by this Ninth Supplemental Indenture. 

    "Interest Payment Date" has the meaning set forth in Section 1.04(c). 

    "Issuer" has the meaning set forth in the Recitals hereto. 

    "Make-Whole Amount" means, in connection with any optional redemption or accelerated payment of any Notes, the excess, if
any, of (i) the aggregate present value, as of the date of such redemption or accelerated payment, of each Dollar of principal being redeemed or paid and the amount of interest (exclusive of
interest accrued to the date of redemption or accelerated payment) that would have been payable in respect of each such Dollar if such redemption or accelerated payment had not been made, determined
by discounting, on a semi-annual basis, such principal and interest at the Reinvestment Rate (determined on the third Business Day preceding the date notice of such redemption or
accelerated payment is given) from the respective dates on which such principal and interest would have been payable if such redemption or accelerated payment had not been made, to the date of
redemption or accelerated payment, over (ii) the aggregate principal amount of the Notes being redeemed or accelerated. 

    "Notes" has the meaning set forth in the Recitals hereto. 

    "Operating Partnership" has the meaning set forth in the Recitals hereto. 

    "Original Indenture" has the meaning set forth in the Recitals hereto. 

    "Redemption Price" has the meaning set forth in Section 1.04(d). 

    "Regular Record Date" has the meaning set forth in Section 1.04(c). 

    "Reinvestment Rate" means, in connection with any optional redemption or accelerated payment of any Notes, the yield on treasury
securities at a constant maturity corresponding to the remaining life (as of the date of redemption or accelerated payment and rounded to the nearest month) to Stated Maturity of the principal being
redeemed (the "Treasury Yield") as stated in such Notes, plus 0.35%. For purposes hereof, the Treasury Yield shall be equal to the arithmetic mean of the yields published in the Statistical Release
under the heading "Week Ending" for "U.S. Government Securities—Treasury Constant Maturities" with a maturity equal to such remaining life; provided, that if no published maturity exactly
corresponds to such remaining life, then the Treasury Yield shall be interpolated or extrapolated on a straight-line basis from the arithmetic means of the yields for the next shortest and
next longest published maturities, rounding each of such relevant periods to the nearest month. For purposes of calculating the Reinvestment Rate, the most recent Statistical Release published prior
to the date of determination of the Make-Whole Amount shall be used. If the format or content of the Statistical Release changes in a manner that precludes determination of the Treasury
Yield in the above manner, then the Treasury Yield shall be determined in the manner that most closely approximates the above manner, as reasonably determined by the Operating Partnership. 

    "Statistical Release" means the statistical release designated "H.15(519)" or any successor publication which is published weekly by
the Federal Reserve System and which reports yields on actively traded United States government securities adjusted to constant maturities, or, if such statistical release is not published at the time
of any required determination, then such other reasonably comparable index which shall be designated by the Operating Partnership. 

    "Trustee" has the meaning set forth in the Recitals hereto. 

    SECTION 1.02  Creation of the Notes.  In accordance with Section 301 of the Original Indenture,
the Issuer hereby creates the Notes as a separate series of its Securities issued pursuant to the Indenture. The Notes initially shall be issued in an aggregate principal amount of $750,000,000. 

    SECTION 1.03  Form of the Notes.  The Notes shall be issued in the form of a Global Note which shall be
deposited with, or on behalf of, DTC and registered in the name of "Cede & Co" as the 

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nominee of DTC. The Notes shall be substantially in the form of Exhibit A attached hereto. So long as DTC, or its nominee, is the registered owner of the Global Note, DTC or its nominee, as the
case may be, shall be considered the sole owner or Holder of the Notes represented by such Global Note for all purposes under the Indenture. Ownership of beneficial interests in such Global Note shall
be shown on, and transfers thereof will be effected only through, records maintained by DTC (with respect to beneficial interests of participants) or by participants or Persons that hold interests
through participants (with respect to beneficial interests of beneficial owners). 

    SECTION 1.04  Terms and Conditions of the Notes.  The Notes shall be governed by all the terms and
conditions of the Original Indenture, as supplemented by this Ninth Supplemental Indenture, and in particular, the following provisions shall be terms of the Notes: 

    (a) Title and Aggregate Principal Amount. The title of the Notes shall be as specified in the Recitals; and the
aggregate principal amount of the Notes shall be as specified in Section 1.02 of this Ninth Supplemental Indenture, except as permitted by Section 306 of the Original Indenture. 

    (b) Stated Maturity. The Notes shall mature, and the unpaid principal thereon shall be payable, on November 15,
2007, subject to the provisions of the Original Indenture. 

    (c) Interest. The rate per annum at which interest shall be payable on the Notes shall be 63/8%. Interest
on the Notes shall accrue beginning October 26, 2001. Interest on the Notes shall be payable semi-annually in arrears on each May 15 and November 15, commencing
May 15, 2002 (each an "Interest Payment Date"), and on the Stated Maturity as specified in Section 1.04(b) of this Ninth Supplemental Indenture, to the Persons (the "Holders") in whose
names the applicable Notes are registered in the Security Register applicable to the Notes at the close of business on the 15th calendar day immediately prior to such payment date
regardless of whether such day is a Business Day (each, a "Regular Record Date"). Interest on the Notes shall be computed on the basis of a 360-day year of twelve 30-day
months. 

    (d) Sinking Fund, Redemption or Repayment. No sinking fund shall be provided for the Notes and the Notes shall not be
repayable at the option of the Holders thereof prior to Stated Maturity. The Notes may be redeemed at any time at the option of the Issuer, in whole or from time to time in part, at a redemption price
equal to the sum of (i) 100% of the principal amount of the Notes being redeemed plus accrued interest thereon to the redemption date and (ii) the Make-Whole Amount, if any,
with respect to such Notes (collectively, the "Redemption Price"), all in accordance with the provisions of Article Eleven of the Original Indenture. 

    If
notice of redemption has been given as provided in the Original Indenture and funds for the redemption of any Notes called for redemption shall have been made available on the
Redemption Date referred to in such notice, such Notes shall cease to bear interest on the Redemption Date and the only right of the Holders of the Notes from and after the Redemption Date shall be to
receive payment of the Redemption Price upon surrender of such Notes in accordance with such notice. 

    (e) Registration and Form. The Notes shall be issuable as Registered Securities in permanent global form, and the
depositary with respect to the Notes shall initially be DTC. Principal and interest payments on Notes represented by a Global Note shall be made to DTC or its nominee, as the case may be, as the
registered Holder of such Global Note. All payments of principal and interest in respect of the Notes shall be made by the Issuer in immediately available funds so long as the Notes are in
book-entry form. 

    (f)  Defeasance and Covenant Defeasance. The provisions for defeasance in Section 1402 of the Original Indenture,
and the provisions for covenant defeasance (which provisions shall apply, without limitation, to the covenants set forth in Article Two of this Ninth Supplemental Indenture) in Section 1403 of
the Original Indenture, shall be applicable to the Notes. 

    (g) Make-Whole Amount Payable Upon Acceleration. Upon any acceleration of the Stated Maturity of the Notes
in accordance with Section 502 of the Original Indenture, the Make-Whole Amount on 

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the Notes shall become immediately due and payable, subject to the terms and conditions of the Indenture. 

    (h) Further Issues. The Issuer may, from time to time, without the consent of the Holders, create and issue further
securities having the same terms and conditions as the Notes in all respects, except for issue date, issue price and the first payment of interest thereon. Additional Notes issued in this manner shall
be consolidated with and shall form a single series with the previously outstanding Notes. Notice of any such issuance shall be given to the Trustee and a new supplemental indenture shall be
executed in connection with the issuance of such securities. 

    (i)  Other Terms and Conditions. The Notes shall have such other terms and conditions as provided in the form thereof
attached as Exhibit A hereto. 

ARTICLE TWO

Covenants for Benefit of Holders of Notes  

    SECTION 2.01  Covenants for Benefit of Holders of Notes.  The Operating Partnership covenants and agrees,
for the benefit of the Holders of the Notes, as follows: 

    (a) Limitations on Incurrence of Debt. The Operating Partnership shall not, and shall not permit any Subsidiary to,
incur any Debt (as defined below), other than intercompany debt (representing Debt to which the only parties are the Company (as defined below), the Operating Partnership and any of their Subsidiaries
(but only so long as such Debt is held solely by any of the Company, the Operating Partnership and any Subsidiary) that is subordinate in right of payment to the Notes), if, immediately after giving
effect to the incurrence of such additional Debt, the aggregate principal amount of all
outstanding Debt would be greater than 60% of the sum of (i) the Operating Partnership's Adjusted Total Assets (as defined below) as of the end of the fiscal quarter prior to the incurrence of
such additional Debt and (ii) any increase in Adjusted Total Assets from the end of such quarter including, without limitation, any pro forma increase from the application of the proceeds of
such additional Debt. 

    In
addition, the Operating Partnership shall not, and shall not permit any Subsidiary to, incur any additional Secured Debt if, immediately after giving effect to the incurrence of
such additional Secured Debt, the aggregate principal amount of all outstanding Secured Debt is greater than 55% of the sum of (i) the Operating Partnership's Adjusted Total Assets as of the
end of the fiscal quarter prior to the incurrence of such additional Secured Debt and (ii) any increase in Adjusted Total Assets from the end of such quarter including, without limitation, any
pro forma increase from the application of the proceeds of such additional Secured Debt. 

    In
addition, the Operating Partnership shall not, and shall not permit any Subsidiary to, incur any Debt if the ratio of Annualized EBITDA After Minority Interest to Interest Expense
(in each case as defined below) for the period consisting of the four consecutive fiscal quarters most recently ended prior to the date on which such additional Debt is to be incurred shall have been
less than 1.75 to 1.00 on a pro forma basis after giving effect to the incurrence of such Debt and to the application of the proceeds therefrom, and calculated on the assumption that (i) such
Debt and any other Debt incurred since the first day of such four-quarter period had been incurred, and the proceeds therefrom had been applied (to whatever purposes such proceeds had been
applied as of the date of calculation of such ratio), at the beginning of such period, (ii) any other Debt that has been repaid or retired since the first day of such four-quarter
period had been repaid or retired at the beginning of such period (except that, in making such computation, the amount of Debt under any revolving credit facility shall be computed based upon the
average daily balance of such Debt during such period), (iii) any income earned as a result of any assets having been placed in service since the end of such four-quarter period had
been earned, on an annualized basis, during such period, and (iv) in the case of any acquisition or disposition by the Operating Partnership, any Subsidiary or any unconsolidated joint venture
in which the Operating Partnership or any Subsidiary owns an interest, of any assets since the first day of such 

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four-quarter period, including, without limitation, by merger, stock purchase or sale, or asset purchase or sale, such acquisition or disposition and any related repayment of Debt had
occurred as of the first day of such period with the appropriate adjustments with respect to such acquisition or disposition being included in such pro forma calculation. 

    For
purposes of the foregoing provisions regarding the limitation on the incurrence of Debt, Debt shall be deemed to be "incurred" by the Operating Partnership, its Subsidiaries and
by any unconsolidated joint venture, whenever the Operating Partnership, any Subsidiary, or any unconsolidated joint venture, as the case may be, shall create, assume, guarantee or otherwise become
liable in respect thereof. 

    (b) Maintenance of Unencumbered Assets. The Operating Partnership is required to maintain Unencumbered Assets (as
defined below) of not less than 150% of the aggregate outstanding principal amount of the Unsecured Debt (as defined below) of the Operating Partnership. 

    SECTION 2.02  Definitions.  As used herein: 

    "Adjusted Total Assets" as of any date means the sum of (i) the amount determined by multiplying the sum of the shares of common
stock of SPG Properties, Inc., a Maryland corporation ("Old SPG") issued in the initial public offering of Old SPG (the "IPO") and the units of the Operating Partnership not held by Old SPG
outstanding on the date of the IPO, by $22.25 (the "IPO Price"), (ii) the principal amount of the outstanding consolidated debt of Old SPG on the date of the IPO, less any portion applicable to
minority interests, (iii) the Operating Partnership's allocable portion, based on its ownership interest, of outstanding indebtedness of unconsolidated joint ventures on the date of the IPO,
(iv) the purchase price or cost of any real estate assets acquired (including the value, at the time of such acquisition, of any units of the Operating Partnership or shares of common stock of
the Company or Old SPG issued in connection therewith) or developed after the IPO by the Operating Partnership or any Subsidiary, less any portion attributable to minority interests, plus the
Operating Partnership's allocable portion, based on its ownership interest, of the purchase price or cost of any real estate assets acquired or developed after the IPO by any unconsolidated joint
venture, (v) the value of the DRC Merger (as defined below) computed as the sum of (a) the purchase price including all related closing costs and (b) the value of all outstanding
indebtedness assumed in the DRC Merger less any portion attributable to minority interests, including the Operating Partnership's allocable portion, based on its ownership interest, of outstanding
indebtedness of unconsolidated joint ventures assumed in the DRC Merger at the DRC Merger date, and (vi) working capital of the Operating Partnership; subject,
however, to reduction by the amount of the proceeds of any real estate assets disposed of after the IPO by the Operating Partnership or any Subsidiary, less any portion
applicable to minority interests, and by the Operating Partnership's allocable portion, based on its ownership interest, of the proceeds of any real estate assets disposed of after the IPO by
unconsolidated joint ventures. 

    "Annualized EBITDA" means earnings before interest, taxes, depreciation and amortization for all properties with other adjustments as
are necessary to exclude the effect of items classified as extraordinary items in accordance with generally accepted accounting principles, adjusted to reflect the assumption that (i) any
income earned as a result of any assets having been placed in service since the end of such period had been earned, on an annualized basis, during such period, and (ii) in the case of any
acquisition or disposition by the Operating Partnership, any Subsidiary or any unconsolidated joint venture in which the Operating Partnership or any Subsidiary owns an interest, of any assets since
the first day of such period, such acquisition or disposition and any related repayment of Debt had occurred as of the first day of such period with the appropriate adjustments with respect to such
acquisition or disposition. 

    "Annualized EBITDA After Minority Interest" means Annualized EBITDA after distributions to third party joint venture partners. 

    "Company" means Simon Property Group, Inc., a Delaware corporation and the general partner of the Operating Partnership. 

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    "Debt" means any indebtedness of the Operating Partnership and its Subsidiaries on a consolidated basis, less any portion attributable
to minority interests, plus the Operating Partnership's allocable portion, based on its ownership interest, of indebtedness of unconsolidated joint ventures, in respect of (i) borrowed money
evidenced by bonds, notes, debentures or similar instruments, as determined in accordance with generally accepted accounting principles, (ii) indebtedness secured by any mortgage, pledge, lien,
charge, encumbrance or any security interest existing on property owned by the Operating Partnership or any Subsidiary directly, or indirectly through unconsolidated joint ventures, as determined in
accordance with generally accepted accounting principles, (iii) reimbursement obligations, contingent or otherwise, in connection with any letters of credit actually issued or amounts
representing the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable and (iv) any lease of property
by the Operating Partnership or any Subsidiary as lessee which is reflected in the Operating Partnership's consolidated balance sheet as a capitalized lease or any lease of property by an
unconsolidated joint venture as lessee which is reflected in such joint venture's balance sheet as a capitalized lease, in each case, in accordance with generally accepted accounting principles;
provided, that Debt also includes, to the extent not otherwise included, any obligation by the Operating Partnership or any Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise,
items of indebtedness of another Person (other than the Operating Partnership or any Subsidiary) described in clauses (i) through (iv) above (or, in the case of any such obligation made
jointly with another Person, the Operating Partnership's or Subsidiary's allocable portion of such obligation based on its ownership interest in the related real estate assets). 

    "DRC Merger" means the merger of Old SPG and DeBartolo Realty Corporation and related transactions consummated on August 9,
1996, pursuant to the Agreement and Plan of Merger between Old SPG and DeBartolo Realty Corporation. 

    "Interest Expense" includes the Operating Partnership's pro rata share of joint venture interest expense and is reduced by amortization
of debt issuance costs. 

    "Secured Debt" means Debt secured by any mortgage, lien, pledge, encumbrance or security interest of any kind upon any of the property
of the Operating Partnership or any Subsidiary, whether owned at the date of the Original Indenture or thereafter acquired. 

    "Unencumbered Annualized EBITDA After Minority Interest" means Annualized EBITDA After Minority Interest less any portion thereof
attributable to assets serving as collateral for Secured Debt. 

    "Unencumbered Assets" as of any date shall be equal to Adjusted Total Assets as of such date multiplied by a fraction, the numerator of
which is Unencumbered Annualized EBITDA After Minority Interest and the denominator of which is Annualized EBITDA After Minority Interest. 

    "Unsecured Debt" means Debt which is not secured by any mortgage, lien, pledge, encumbrance or security interest of any kind. 

ARTICLE THREE

Trustee  

    SECTION 3.01  Trustee.  The Trustee shall not be responsible in any manner whatsoever for or in respect
of the validity or sufficiency of this Ninth Supplemental Indenture or the due execution thereof by the Issuer. The recitals of fact contained herein shall be taken as the statements solely of the
Issuer, and the Trustee assumes no responsibility for the correctness thereof. 

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ARTICLE FOUR

Miscellaneous Provisions  

    SECTION 4.01  Ratification of Original Indenture.  This Ninth Supplemental Indenture is executed and
shall be construed as an indenture supplemental to the Original Indenture, and as supplemented and modified hereby, the Original Indenture is in all respects ratified and confirmed, and the Original
Indenture and this Ninth Supplemental Indenture shall be read, taken and construed as one and the same instrument. 

    SECTION 4.02  Effect of Headings.  The Article and Section headings herein are for convenience only and
shall not affect the construction hereof. 

    SECTION 4.03  Successors and Assigns.  All covenants and agreements in this Ninth Supplemental Indenture
by the Issuer shall bind its successors and assigns, whether so expressed or not. 

    SECTION 4.04  Separability Clause.  In case any one or more of the provisions contained in this Ninth
Supplemental Indenture shall for any reason be held to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby. 

    SECTION 4.05  Governing Law.  This Ninth Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York. This Ninth Supplemental Indenture is subject to the provisions of the Trust Indenture Act that are required to be part of this Ninth Supplemental
Indenture and shall, to the extent applicable, be governed by such provisions. 

    SECTION 4.06  Counterparts.  This Ninth Supplemental Indenture may be executed in any number of
counterparts, and each of such counterparts shall for all purposes be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. 

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*    *    *    * 

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

	 	SIMON PROPERTY GROUP, L.P.
	

 	

By:	
 	

Simon Property Group, Inc.,

    as General Partner
	

 	

 	
 	

By:	
 	

 Name:

Title:
	

Attest:	

 	
 	

 	
 	

 
	

 Name:

Title:	

 	
 	

 	
 	

 
	

 	

THE CHASE MANHATTAN BANK

    as Trustee
	

 	

By:	
 	

 Name:

Title:
	

Attest:	

 	
 	

 	
 	

 
	

 Name:

Title:	

 	
 	

 	
 	

 

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   Exhibit A  

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

    UNLESS AND UNTIL THIS CERTIFICATE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS CERTIFICATE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE THEREOF OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A NOMINEE OF SUCH SUCCESSOR.  

	REGISTERED	 	REGISTERED
	NO.	 	PRINCIPAL AMOUNT
	

CUSIP NO. 828807 AJ 6	
 	

$750,000,000

GLOBAL SECURITY

SIMON PROPERTY GROUP, L.P.

63/8% NOTE DUE 2007  

    Simon Property Group, L.P., a Delaware limited partnership (the "Issuer," which term includes any successor under the Indenture hereinafter referred to), for
value received, hereby promises to pay to Cede & Co. or its registered assigns, the principal sum of SEVEN HUNDRED FIFTY MILLION Dollars on November 15, 2007 (the "Maturity Date"), and
to pay interest thereon from October 26, 2001, semi-annually in arrears on May 15 and November 15 of each year (each, an "Interest Payment
Date"), commencing on May 15, 2002, and on the Maturity Date, at the rate of 63/8% per annum, until payment of said principal sum has been made or duly provided for. 

    The
interest so payable and punctually paid or duly provided for on any Interest Payment Date and on the Maturity Date will be paid to the Holder in whose name this Note (or one or
more predecessor Notes) is registered in the Security Register applicable to this Note at the close of business on the "Record Date" for such payment, which will be the 15th calendar day
immediately prior to such payment date or the Maturity Date, as the case may be, regardless of whether such day is a Business Day (as defined below). Any interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular Record Date, and may be paid to the Holder in whose name this Note (or one or more predecessor Notes) is registered at
the close of business on a subsequent record date for the payment of such defaulted interest (which shall be not less than 10 calendar days prior to the date of the payment of such defaulted interest)
established by notice given by mail by or on behalf of the Issuer to the Holders of the Notes not less than 10 calendar days preceding such subsequent record date, or may be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture (as defined below). Interest on this Note will be computed on the basis of a 360-day year of twelve 30-day months. 

    The
principal of each Note payable on the Maturity Date will be paid against presentation and surrender of this Note at the office or agency of the Issuer maintained for that purpose
in The 

A–1

 

Borough of Manhattan, The City of New York. The Issuer hereby initially designates the Corporate Trust Office of the Trustee in The City of New York as the office to be maintained by it where Notes
may be presented for payment, registration of transfer or exchange, and where notices to or demands upon the Issuer in respect of the Notes or the Indenture referred to on the reverse hereof may be
served. 

    Interest
payable on this Note on any Interest Payment Date and on the Maturity Date, as the case may be, will be the amount of interest accrued from and including the immediately
preceding Interest Payment Date (or from and including October 26, 2001, in the case of the initial Interest Payment Date) to but excluding the applicable Interest Payment Date or the Maturity
Date, as the case may be. If any date for the payment of principal, premium, if any, interest on, or any other amount with respect to, this Note (each a "Payment Date") falls on a day that is not a
Business Day, the principal, premium, if any, or interest payable with respect to such Payment Date will be made on the next succeeding Business Day with the same force and effect as if made on such
Payment Date, and no interest shall accrue on the amount so payable for the period from and after such Payment Date to such next succeeding Business Day. "Business Day" means any day, other than a
Saturday or a Sunday, on which banking institutions in New York, New York are open for business. 

    Payments
of principal and interest in respect of this Note will be made by wire transfer of immediately available funds in such coin or currency of the United States of America as at
the time of payment is legal tender for the payment of public and private debts. 

    Reference
is made to the further provisions of this Note set forth on the reverse hereof after the Trustee's Certificate of Authentication. Such further provisions shall for all
purposes have the same effect as though fully set forth at this place. 

    This
Note shall not be entitled to the benefits of the Indenture or be valid or obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by the
Trustee under such Indenture. 

    Capitalized
terms used herein which are not otherwise defined shall have the respective meanings assigned to them in the Indenture and the Ninth Supplemental Indenture hereinafter
referred to. 

A–2

 

    IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed manually or by facsimile by its authorized officers. 

Dated:
October 26, 2001 

	 	 	SIMON PROPERTY GROUP, L.P.

    as Issuer
	

 	
 	

By:	
 	

SIMON PROPERTY GROUP, INC.,

    as General Partner
	

 	
 	

By:	
 	

 Name:

Title:
	

Attest:	
 	

 	
 	

 
	

 Name:

Title:	
 	

 	
 	

 

A–3

 
TRUSTEE'S CERTIFICATE OF AUTHENTICATION  

    This is one of the Securities of the series designated herein referred to in the within-mentioned Indenture. 

	 	 	THE CHASE MANHATTAN BANK

    as Trustee
	

 	
 	

By:	
 	

 Authorized Officer

A–4

 
[REVERSE OF NOTE]

SIMON PROPERTY GROUP, L.P.

63/8% NOTE DUE 2007  

    This security is one of a duly authorized issue of debt securities of the Issuer (hereinafter called the "Securities"), issued or to be issued under and
pursuant to an Indenture dated as of November 26, 1996 (herein called the "Indenture"), duly executed and delivered by the Issuer to The Chase Manhattan Bank, as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture with respect to the series of Securities of which this Note is a part), to which Indenture and all indentures supplemental
thereto relating to this Note (including, without limitation, the Ninth Supplemental Indenture, dated as of October 26, 2001, between the Issuer and the Trustee) reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Issuer and the Holders of the Securities, and of the terms upon which the Securities
are, and are to be, authenticated and delivered and for the definition of capitalized terms used hereby and not otherwise defined. The Securities may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at different times, may bear interest (if any) at different rates, may be subject to different redemption provisions (if any),
and may otherwise vary as provided in the Indenture or any indenture supplemental thereto. This security is one of a series designated as the Simon Property Group, L.P. 63/8% Notes due
2007, initially limited in aggregate principal amount to $750,000,000 (the "Notes"). 

    In
case an Event of Default with respect to the Notes shall have occurred and be continuing, the principal amount of the Notes and the Make-Whole Amount may be declared
accelerated and thereupon become due and payable, in the manner, with the effect, and subject to the conditions provided in the Indenture. 

    The
Notes may be redeemed at any time at the option of the Issuer, in whole or from time to time in part, at a redemption price equal to the sum of (i) 100% of the principal
amount of the Notes being redeemed plus accrued interest thereon to the Redemption Date and (ii) the Make-Whole Amount, if any, with respect to such Notes. Notice of any optional
redemption will be given to Holders at their addresses, as shown in the Security Register for the Notes, not more than 60 nor less than 30 days prior to the date fixed for redemption. The
notice of redemption will specify, among other items, the redemption price and the principal amount of the Notes to be redeemed. 

    The
Indenture contains provisions permitting the Issuer and the Trustee, with the consent of the Holders of not less than a majority of the aggregate principal amount of the
Securities at the time Outstanding of all series to be affected (voting as one class), evidenced as provided in the Indenture, 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 Securities of each series;  provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security so affected,
(i) change the Stated Maturity of the principal of, or premium, (if any) or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate or
amount of interest thereon or any premium payable upon the redemption or acceleration thereof, or adversely affect any right of repayment at the option of the Holder of any Security, or change any
Place of Payment where, or the currency or currencies, currency unit or units or composite currency or currencies in which, the principal of any Security or any premium or interest thereon is payable,
or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof, or (ii) reduce the aforesaid percentage of Securities the Holders of which
are required to consent to any such supplemental indenture, or (iii) reduce the percentage of Securities the Holders of which are required to consent to any waiver of compliance with certain
provisions of the Indenture or any waiver of certain defaults and consequences thereunder or to reduce the quorum or voting requirements set forth in the Indenture, or (iv) effect certain other
changes to the Indenture or any supplemental indenture or in the rights of Holders of the Securities. The Indenture also permits the Holders of a majority in principal amount of the Outstanding
Securities of any series (or, in the case of certain defaults or 

A–5

 

Events of Default, all series of Securities), on behalf of the Holders of all the Securities of such series (or all of the Securities, as the case may be), to waive compliance by the Issuer with
certain provisions of the Indenture and certain past defaults or Events of Default under the Indenture and their consequences, prior to any declaration accelerating the maturity of such Securities, or
subject to certain conditions, rescind a declaration of acceleration and its consequences with respect to such Securities. 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 of this Note and of any Note that may be issued in exchange or substitution hereof, irrespective
of whether or not any notation thereof is made upon this Note or such other Note. 

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

    Notwithstanding
any other provision of the Indenture to the contrary, no recourse shall be had, whether by levy or execution or otherwise, for the payment of any sums due under the
Securities, including, without limitation, the principal of, premium, if any, or interest payable under the Securities, or for the payment or performance of any obligation under, or for any claim
based on, the Indenture or otherwise in respect thereof, against any partner of the Issuer, whether limited or general, including Simon Property Group, Inc., or such partner's assets or against
any principal, shareholder, officer, director, trustee or employee of such partner. It is expressly understood that the sole remedies under the Securities and the Indenture or under any other document
with respect to the Securities, against such parties with respect to such amounts, obligations or claims shall be against the Issuer. 

    This
Note is issuable only in registered form without Coupons in denominations of $1,000 and integral multiples thereof. This Note may be exchanged for a like aggregate principal
amount of Notes of other authorized denominations at the office or agency of the Issuer in The Borough of Manhattan, The City of New York, in the manner and subject to the limitations provided in the
Indenture, but without the payment of any service charge, except for any tax or other governmental charge imposed in connection therewith. 

    Upon
due presentment for registration of transfer of this Note at the office or agency of the Issuer in The Borough of Manhattan, The City of New York, one or more new Notes of
authorized denominations in an equal aggregate principal amount will be issued to the transferee in exchange therefor, subject to the limitations provided in the Indenture, without charge, except for
any tax or other governmental charge imposed in connection therewith. 

    The
Issuer, the Trustee and any authorized agent of the Issuer or the Trustee may deem and treat the Person in whose name this Note is registered 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), for the purpose of receiving payment of, or on account of, the principal and any
premium hereof or hereon, and subject to the provisions on the face hereof, interest hereon, and for all other purposes, and neither the Issuer nor the Trustee nor any authorized agent of the Issuer
or the Trustee shall be affected by any notice to the contrary. 

    This
Note, including the validity hereof, and the Indenture shall be governed by and construed in accordance with the laws of the State of New York, and for all purposes shall be
construed in accordance with the laws of such state, except as may otherwise be required by mandatory provisions of law. 

    Capitalized
terms used herein which are not otherwise defined shall have the respective meanings assigned to them in the Indenture and the Ninth Supplemental Indenture referred to
herein. 

A–6

QuickLinks

EXHIBIT 4.1

FORM OF NINTH SUPPLEMENTAL INDENTURE<PAGE>

                                                                     Exhibit 4.1

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

                         SECOND SUPPLEMENTAL INDENTURE

                         Dated as of October 19, 2001

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

                                    between

                            LOWE'S COMPANIES, INC.

                                      and

                                BANK ONE, N.A.,

                                  as Trustee

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

              Supplemental to the Amended and Restated Indenture

                         Dated as of December 1, 1995,

                               as Amended by the

                         First Supplemental Indenture

                         Dated as of February 23, 1999

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

                  Creating a Series of Securities designated

                       Senior Convertible Notes due 2021
<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
                                   ARTICLE I
            DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

   Section 101.  Definitions..............................................    2
                 -----------
   Section 102.  Section References.......................................    5
                 ------------------

                                  ARTICLE II
                                   THE NOTES

   Section 201.  Title of the Notes.......................................    6
                 ------------------
   Section 202.  Amount...................................................    6
                 ------
   Section 203.  Stated Maturity..........................................    6
                 ---------------
   Section 204.  Forms; Denominations.....................................    6
                 --------------------
   Section 205.  Transfer and Exchange....................................    7
                 ---------------------
   Section 206.  Conversion Agent.........................................    8
                 ----------------
   Section 207.  Restrictions on Transfers................................    8
                 -------------------------

                                  ARTICLE III
                                  CONVERSION

   Section 301.  Conversion Privilege.....................................   11
                 --------------------
   Section 302   Conversion Procedure.....................................   11
                 --------------------
   Section 303.  Fractional Shares........................................   12
                 -----------------
   Section 304.  Taxes on Conversion......................................   12
                 -------------------
   Section 305.  Company to Provide Stock.................................   13
                 ------------------------
   Section 306.  Adjustment for Change in Capital Stock...................   13
                 --------------------------------------
   Section 307.  Adjustment for Rights Issue..............................   14
                 ---------------------------
   Section 308.  Adjustment for Other Distributions.......................   15
                 ----------------------------------
   Section 309.  When Adjustment May Be Deferred..........................   16
                 -------------------------------
   Section 310.  When No Adjustment Required..............................   16
                 ---------------------------
   Section 311.  Notice of Adjustment.....................................   17
                 -------------------
   Section 312.  Voluntary Increase.......................................   17
                 ------------------
   Section 313.  Notice of Certain Transactions...........................   17
                 ------------------------------
   Section 314.  Reorganization of Company; Special Distributions.........   18
                 ------------------------------------------------
   Section 315.  Company Determination Final..............................   18
                 ---------------------------
   Section 316.  Trustee's Adjustment Disclaimer..........................   18
                 -------------------------------
   Section 317.  Simultaneous Adjustments.................................   19
                 ------------------------
   Section 318.  Successive Adjustments...................................   19
                 ----------------------
   Section 319.  Rights Issued in Respect of Common Stock Issued Upon
                 ----------------------------------------------------
                   Conversion.............................................   19
                   ----------
</TABLE>

                                      A1

<PAGE>

<TABLE>
<S>                                                                         <C>

                                  ARTICLE IV
             AMENDMENT OF CERTAIN PROVISIONS OF THE BASE INDENTURE

   Section 401.  Amendments Relating to the Notes.......................     19
                 --------------------------------
   Section 402.  Interpretation of Base Indenture.......................     42
                 --------------------------------

                                   ARTICLE V
                                  TAX MATTERS

   Section 501.  Optional Conversion to Semiannual Coupon Note upon Tax
                 ------------------------------------------------------
                    Event...............................................     42

   Section 502.  Payment of Interest; Interest Rights Preserved.........     42
                 ----------------------------------------------

                                   ARTICLE VI
                            MISCELLANEOUS PROVISIONS

   Section 601.  Concerning the Indenture...............................     44
                 ------------------------
   Section 602.  Governing Law..........................................     44
                 -------------
   Section 603.  Multiple Originals.....................................     44
                 ------------------

                                   EXHIBITS

Exhibit A-1      Form of Global Note....................................  A-1-1
                 -------------------
Exhibit A-2      Form of Certificated Note..............................  A-2-1
                 -------------------------
</TABLE>

                                       2

<PAGE>

     SECOND SUPPLEMENTAL INDENTURE, dated as of October 19, 2001 (the "Second
                                                                       ------
Supplemental Indenture"), between LOWE'S COMPANIES, INC., a corporation duly
----------------------
organized and existing under the laws of the State of North Carolina (the
"Company"), having its principal office at 1605 Curtis Bridge Road, Wilkesboro,
 -------
North Carolina 28697, and BANK ONE, N.A. (formerly THE FIRST NATIONAL BANK OF
Chicago), a national banking association duly organized and existing under the
laws of the United States, as Trustee (the "Trustee"),
                                            -------

                             W I T N E S S E T H :

          WHEREAS, the Company has heretofore executed and delivered to the
Trustee an Amended and Restated Indenture, dated as of December 1, 1995 (the
"Base Indenture") as supplemented and amended by a First Supplemental Indenture,
 --------------
dated as of February 23, 1999 among the Company and the Trustee (the "First
                                                                      -----
Supplemental Indenture, and, together with the Base Indenture and this Second
----------------------
Supplemental Indenture, the "Indenture"), providing for the issuance from time
                             ---------
to time of its unsecured unsubordinated debentures, notes or other evidences of
indebtedness (the "Securities"), to be issued in one or more series as provided
                   ----------
in the Base Indenture;

     WHEREAS, it is provided in Section 901 of the Indenture that, without the
consent of any Holders, the Company, when authorized by a Board Resolution, and
the Trustee may enter into indentures supplemental thereto (1) to add to, change
or eliminate any of the provisions of the Indenture in respect of one or more
series of Securities, provided that any such addition, change or elimination (i)
shall neither (A) apply to any Security of any series created prior to the
execution of such supplemental indenture and entitled to the benefit of such
provision nor (B) modify the rights of the Holder of any such Security with
respect to such provision or (ii) shall become effective only when there is no
such Security Outstanding, (2) to add to the covenants of the Company for the
benefit of the Holders of all or any series of Securities (and if such covenants
are to be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of such
series) and (3) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301 of the Indenture;

     WHEREAS, the Company, in the exercise of the power and authority conferred
upon and reserved to it under the provisions of the Indenture and pursuant to
appropriate resolutions of its board of directors and actions of its authorized
officers, has duly determined to make, execute and deliver to the Trustee this
Second Supplemental Indenture in order to establish the form and terms of, and
to provide for the creation and issuance of, a new series of Securities
designated as its Senior Convertible Notes due 2021 (the "Senior Convertible
                                                          ------------------
Notes due 2021", or the "Notes"), in an aggregate Principal Amount at Maturity
--------------           -----
of up to $580,700,000; and

     WHEREAS, all things necessary to make the Senior Convertible Notes due
2021, when executed by the Company and authenticated and delivered by the
Trustee or any Authenticating Agent (as defined in the Indenture) and issued
upon the terms and subject to the conditions of the Indenture against payment
therefor, the valid, binding and legal obligations of the Company and to make
this Second Supplemental Indenture a valid, binding and legal agreement of the
Company have been done.

                                      A1
<PAGE>

     NOW, THEREFORE, in order to establish the form and terms of the series of
the Senior Convertible Notes due 2021 and for and in consideration of the
premises and of the covenants contained in the Indenture and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, as follows:

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Definitions. For all purposes of the Indenture and this Second Supplemental
Indenture relating to the series of Notes (consisting of Notes) created hereby,
except as otherwise expressly provided or unless the context otherwise requires,
the terms used in this Second Supplemental Indenture have the meanings assigned
to them in this Article. Each capitalized term that is used in the Indenture and
this Second Supplemental Indenture but not defined herein shall have the meaning
specified in the Indenture.

     "accreted conversion price" has the meaning specified in paragraph 8 of the
      -------------------------
Notes.

     "Agent Members" has the meaning specified in Section 207(b)(v).
      -------------

     "Applicable Procedures" means, with respect to any transfer or transaction
      ---------------------
involving a Global Note or beneficial interest therein, the rules and procedures
of the Depositary for such Note, in each case to the extent applicable to such
transaction and as in effect from time to time.

     "Average Sale Price" means the average of the Sale Prices of the Common
      ------------------
Stock for the shorter of (1) 30 consecutive Trading Days ending on the last full
Trading Day prior to the Time of Determination with respect to the rights,
warrants or options or distribution in respect of which the Average Sale Price
is being calculated, or (2) the period (x) commencing on the date next
succeeding the first public announcement of (a) the issuance of rights, warrants
or options or (b) the distribution, in each case, in respect of which the
Average Sale Price is being calculated and (y) proceeding through the last full
Trading Day prior to the Time of Determination with respect to the rights,
warrants or options or distribution in respect of which the Average Sale Price
is being calculated (excluding days within such period, if any, which are not
Trading Days), or (3) the period, if any, (x) commencing on the date next
succeeding the Ex-Dividend Time with respect to the next preceding (a) issuance
of rights, warrants or options or (b) distribution, in each case, for which an
adjustment is required by the provisions of Section 306(e) or Section 307 and
(y) proceeding through the last full Trading Day prior to the Time of
Determination with respect to the rights, warrants or options or distribution in
respect of which the Average Sale Price is being calculated (excluding days
within such period, if any, which are not Trading Days).

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

     "cash" means U.S. legal tender.
      ----

                                       2
<PAGE>

     "Certificated Notes" means Notes that are in the form of the Note attached
      ------------------
hereto as Exhibit A-2.

     "Change in Control" has the meaning specified in Section 1108(a) of the
      -----------------
Base Indenture, as amended by Article IV of this Second Supplemental Indenture.

     "Change in Control Purchase Date" has the meaning specified in Section
      -------------------------------
1108(a) of the Base Indenture, as amended by Article IV of this Second
Supplemental Indenture.

     "Change in Control Purchase Notice" has the meaning specified in Section
      ---------------------------------
1108(a) of the Base Indenture, as amended by Article IV of this Second
Supplemental Indenture.

     "Change in Control Purchase Price" has the meaning specified in Section
      --------------------------------
1108(a) of the Base Indenture, as amended by Article IV of this Second
Supplemental Indenture.

     "Company Notice" has the meaning specified in Section 1107(e) of the Base
      --------------
Indenture, as amended by Article IV of this Second Supplemental Indenture.

     "Company Notice Date" has the meaning specified in Section 1107(e) of the
      -------------------
Base Indenture, as amended by Article IV of this Second Supplemental Indenture.

     "Conversion Agent" has the meaning specified in Section 206.
      ----------------

     "Conversion Date" has the meaning specified in Section 302.
      ---------------

     "Conversion Rate" has the meaning specified in Section 301.
      ---------------

     "Defaulted Interest" has the meaning specified in Section 502(b).
      ------------------

     "Depositary" means, with respect to the Notes issuable in whole or in part
      ----------
in global form, DTC and any nominee thereof, until a successor shall have been
appointed and become such pursuant to the applicable provisions of the
Indenture, and thereafter "Depositary" shall mean or include such successor and
                           ----------
any nominee thereof.

     "DTC" means The Depository Trust Company.
      ---

     "Ex-Dividend Measurement Period" has the meaning specified in Section 308.
      ------------------------------

     "Ex-Dividend Time" has the meaning specified in Section 301.
      ----------------

     "Extraordinary Cash Dividend" has the meaning specified in Section 308.
      ---------------------------

     "Global Note" means a Note issued in global form and deposited with or on
      -----------
behalf of the Depositary, substantially in the form of the Note attached hereto
as Exhibit A-1.

     "Holder" and "Noteholder," in the case of any Note, means the Person in
      ------       ----------
whose name such Note is registered in the Note Register.

     "Issue Date" means October 19, 2001.
      ----------

                                       3
<PAGE>

     "Issue Price" of any Note means, in connection with the original issuance
      -----------
of such Note, the initial issue price as set forth on the face of the Note.

     "Market Price" means the average Sale Prices of the Common Stock for the
      ------------
five-Trading-Day period ending on the third Business Day prior to the applicable
Purchase Date (if such third Business Day is a Trading Day or, if such third
Business Day is not a Trading Day, then, on the last Trading Day prior to the
applicable Purchase Date), appropriately adjusted to take into account the
occurrence, during the period commencing on the first of such Trading Days
during such five-Trading-Day period and ending on such Purchase Date, of certain
events that would result in an adjustment of the Conversion Rate.

     "Notes" means the Senior Convertible Notes due 2021 created hereby, and
      -----
"Note" means one of them.
 ----

     "Notice of Default" has the meaning specified in Section 501 of the
      -----------------
Base Indenture, as amended by Article IV of this Second Supplemental Indenture.

     "NYSE" means the New York Stock Exchange.
      ----

     "Original Issue Discount" of any Note means the difference between the
      -----------------------
Issue Price and the Principal Amount at Maturity of the Note as set forth on the
face of the Note, which shall accrue as set forth in the form of Note.

     "Principal Amount at Maturity" of a Note means the principal amount at
      ----------------------------
maturity as set forth on the face of the Note.

     "Purchase Agreement" means the Purchase Agreement, dated October 16, 2001,
      ------------------
between the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc
of America Securities LLC, SunTrust Capital Markets, Inc., U.S. Bancorp Piper
Jaffray Inc., First Union Securities, Inc. and Fleet Securities, Inc.

     "Purchase Date" has the meaning specified in Section 1107(a) of the Base
      -------------
Indenture, as amended by Article IV of this Second Supplemental Indenture.

     "Purchase Notice" has the meaning specified in Section 1107(a) of the Base
      ---------------
Indenture, as amended by Article IV of this Second Supplemental Indenture.

     "Purchase Price" has the meaning specified in Section 1107(a) of the Base
      --------------
Indenture, as amended by Article IV of this Second Supplemental Indenture.

     "Redemption Date", with respect to any Note or portion thereof to be
      ---------------
redeemed, means the date fixed for redemption in accordance with the terms of
the Notes and Article XI of the Base Indenture, as amended by Article IV of this
Second Supplemental Indenture.

     "Redemption Price", with respect to any Note or portion thereof to be
      ----------------
redeemed, means the price at which such Note or portion thereof is to be
redeemed as specified in paragraph 5 in the Notes.

                                       4
<PAGE>

     "Relevant Cash Dividends" has the meaning specified in Section 308.
      -----------------------

     "Sale Price" of the Common Stock or any other Capital Stock on any date
      ----------
means (A) the closing per share sale price (or, if no closing sale price is
reported, the average of the bid and ask prices or, if more than one in either
case, the average of the average bid and average ask prices) on such date on the
NYSE or such other principal United States securities exchange on which the
Common Stock is traded or, if the Common Stock is not listed on a United States
national or regional securities exchange, as reported by the National
Association of Securities Dealers Automated Quotation System or by the National
Quotation Bureau Incorporated, or (B) in the absence of a quotation, such price
as the Company shall determine on the basis of such quotations as the Company
considers appropriate.

     "Securities" has the meaning specified in the first recital hereof.
      ----------

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

     "Stated Maturity," when used with respect to any Note, means the date
      ---------------
specified in such Note as the fixed date on which an amount equal to the
Principal Amount at Maturity of such Note is due and payable.

     "Second Supplemental Indenture" means this Second Supplemental Indenture.
      -----------------------------

     "Tax Event" means that the Company shall have received an opinion from
      ---------
independent tax counsel experienced in such matters to the effect that, on or
after October 16, 2001, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein or (b) any amendment to, or change in, an
interpretation or application of such laws or regulations by any legislative
body, court, governmental agency or regulatory authority, in each case which
amendment or change is enacted, promulgated, issued or announced or which
interpretation is issued or announced or which action is taken, on or after
October 16, 2001, there is more than an insubstantial risk that interest
(including accrued Original Issue Discount) payable on the Notes either (i)
would not be deductible on a current accrual basis or (ii) would not be
deductible under any other method, in either case in whole or in part, by the
Company (by reason of deferral, disallowance, or otherwise) for United States
federal income tax purposes.

     "Time of Determination" has the meaning specified in Section 301.
      ---------------------

     "Trading Day" means a day during which trading in securities generally
      -----------
occurs on the NYSE or, if the Common Stock is not listed on the NYSE, on the
principal other national or regional securities exchange on which the Common
Stock is then listed or, if the Common Stock is not listed on a national or
regional securities exchange, on the National Association of Securities Dealers
Automated Quotation System or, if the Common Stock is not quoted on the National
Association of Securities Dealers Automated Quotation System, on the principal
other market on which the Common Stock is then traded.

Section References. Each reference to a particular section set forth in this
Second Supplemental Indenture shall, unless the context otherwise requires,
refer to this Second Supplemental

                                       5
<PAGE>

Indenture. Each reference to a particular section of the Base Indenture shall
refer to that particular section of the Base Indenture.

ARTICLE II

THE NOTES

Title of the Notes. The Notes shall be known and designated as the "Senior
Convertible Notes due 2021".

Amount. The aggregate Principal Amount at Maturity of Notes that may be
authenticated and delivered under this Second Supplemental Indenture is limited
to $580,700,000, and Notes authenticated and delivered upon registration or
transfer of, or in exchange for, or in lieu of, other Notes pursuant to Article
III of the Base Indenture, as amended by this Second Supplemental Indenture, or
upon surrender in part of any Notes for conversion or exchange into Common Stock
pursuant to the terms of the Notes and the terms of the Indenture.

Stated Maturity.  The Stated Maturity of the Notes shall be October 19, 2021.

Forms; Denominations. The Notes shall be Registered Securities. The certificates
for the Notes shall be in substantially the forms attached hereto as Exhibit A-1
and Exhibit A-2. The Notes are being offered and sold by the Company pursuant to
the Purchase Agreement.

Global Notes. ARTICLE III Notes offered and sold as provided in the Purchase
------------
Agreement shall be issued initially in the form of one or more Global Notes in
definitive fully registered form without interest coupons, deposited on behalf
of the subscribers for the Notes represented thereby with Bank One, N.A., at its
Corporate Trust Office, as custodian for the Depositary and registered in the
name of DTC or a nominee thereof, duly executed by the Company and authenticated
by the Trustee as provided in the Indenture. The aggregate Principal Amount at
Maturity of the Global Notes may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary as hereinafter
provided.

     Each Global Note shall represent such of the Outstanding Notes as shall be
specified therein and each shall provide that it shall represent the aggregate
Principal Amount at Maturity of Outstanding Notes from time to time endorsed
thereon and that the aggregate Principal Amount at Maturity of Outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect conversions and redemptions.

     Any adjustment of the aggregate Principal Amount at Maturity of a Global
Note to reflect the amount of any increase or decrease in the Principal Amount
at Maturity of Outstanding Notes represented thereby shall be made by the
Trustee in accordance with instructions given by the Holder thereof as required
by Section 207 or pursuant to a Company Order delivered pursuant to Section 303
of the Base Indenture or Section 304 of the Base Indenture.

          Book-Entry Provisions. The Company shall execute and the Trustee
          ---------------------
shall, in accordance with this Section 204(a)(ii) and Section 303 of the Base
Indenture, authenticate and deliver initially one or more Global Notes that (a)
shall be registered in the name of the

                                       6
<PAGE>

Depositary, (b) shall be delivered by the Trustee to the Depositary or pursuant
to the Depositary's instructions and (c) shall bear legends substantially to the
following effect:

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

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS, IN WHOLE BUT NOT IN
PART, TO NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE 2 OF THE SUPPLEMENTAL INDENTURE REFERRED TO ON THE REVERSE HEREOF."

U.S. Tax Legend. All Notes shall bear the following legend:
---------------

          THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT, FOR PURPOSES OF
          SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE
          CODE OF 1986, AS AMENDED. THE ISSUE PRICE OF THIS NOTE WAS $861.03 PER
          $1,000 OF PRINCIPAL AMOUNT AT MATURITY; THE AMOUNT OF ORIGINAL ISSUE
          DISCOUNT, INCLUDING CASH INTEREST PAYABLE THROUGH OCTOBER 19, 2006
          TAXABLE AS ORIGINAL ISSUE DISCOUNT UNDER TREASURY REGULATION SECTION
          1.1273-1, IS $182.02 PER $1,000 OF PRINCIPAL AMOUNT AT MATURITY; THE
          ISSUE DATE IS OCTOBER 19, 2001; AND THE YIELD TO MATURITY FOR THE
          PURPOSES OF ACCRUING ORIGINAL ISSUE DISCOUNT IS 1% PER ANNUM,
          CALCULATED ON A SEMIANNUAL BOND EQUIVALENT BASIS.

Transfer and Exchange. (a) Notwithstanding any provision to the contrary herein,
so long as a Global Note remains Outstanding and is held by or on behalf of the
Depositary, transfers of a Global Note, in whole or in part, shall be made only
in accordance with Section 207(a)(i) and this Section 205.

Transfers of a Global Note shall be limited to transfers of such Global Note in
whole, or in part, to nominees of the Depositary or to a successor of the
Depositary or such successor's nominee.

                                       7
<PAGE>

Conversion Agent. The Company shall maintain an office or agency where Notes may
be presented for conversion ("Conversion Agent"). The term Conversion Agent
                              ----------------
includes any additional conversion agent.

     The Company shall enter into an appropriate agency agreement with any
Conversion Agent (other than the Trustee). The agreement shall implement the
provisions of the Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Conversion Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation therefore pursuant to Section 607 of the Base
Indenture. The Company or any Subsidiary or an Affiliate of either of them may
act as Paying Agent, Registrar, Conversion Agent or co-registrar.

     The Company initially appoints the Trustee as Conversion Agent in
connection with the Notes.

Restrictions on Transfers. (b) Notwithstanding any other provisions of this
Second Supplemental Indenture or the Notes, (A) transfers of a Global Note, in
whole or in part, shall be made only in accordance with Sections 205 and
207(a)(i), (B) transfer of a beneficial interest in a Global Note for a
Certificated Note shall comply with Section 207(a)(ii) below, and (C) transfers
of a Certificated Note shall comply with Section 207(a)(iii) and (iv) below.

          (i)  Transfer of Global Note. A Global Note may not be transferred, in
     whole or in part, to any Person other than the Depositary or a nominee
     thereof, and no such transfer to any such other Person may be registered;
     provided that this clause (i) shall not prohibit any transfer of a Note
     --------
     that is issued in exchange for a Global Note but is not itself a Global
     Note. No transfer of a Note to any Person shall be effective under the
     Indenture or the Notes unless and until such Note has been registered in
     the name of such Person. Nothing in this Section 207(a)(i) shall prohibit
     or render ineffective any transfer of a beneficial interest in a Global
     Note effected in accordance with the other provisions of this Section
     207(a).

          (ii) Restrictions on Transfer of a Beneficial Interest in a Global
     Note for a Certificated Note. A beneficial interest in a Global Note may
     not be exchanged for a Certificated Note except upon satisfaction of the
     requirements set forth below. Upon receipt by the Trustee of a request for
     transfer of a beneficial interest in a Global Note in accordance with
     Applicable Procedures for a Certificated Note in the form satisfactory to
     the Trustee, together with written instructions to the Trustee to make, or
     direct the Registrar to make, an adjustment on its books and records with
     respect to such Global Note to reflect a decrease in the aggregate
     Principal Amount at Maturity of the Notes represented by the Global Note,
     such instructions to contain information regarding the Depositary account
     to be credited with such decrease, then the Trustee shall cause, or direct
     the Registrar to cause, in accordance with the standing instructions and
     procedures existing between the Depositary and the Registrar, the aggregate
     Principal Amount at Maturity of Notes represented by the Global Note to be
     decreased by the aggregate Principal Amount at Maturity of the Certificated
     Note to be issued, shall issue such Certificated Note and shall debit or
     cause to be debited to the account of the Person

                                       8
<PAGE>

     specified in such instructions a beneficial interest in the Global Note
     equal to the Principal Amount at Maturity of the Certificated Note so
     issued.

          (iii) Transfer and Exchange of Certificated Notes. When Certificated
     Notes are presented to the Registrar with a request:

                (x) to register the transfer of such Certificated Notes; or

                (y) to exchange such Certificated Notes for an equal Principal
          Amount at Maturity of Certificated Notes of other authorized
          denominations,

the Registrar shall register the transfer or make the exchange as requested if
its reasonable requirements for such transaction are met; provided, however,
                                                          --------  -------
that the Certificated Notes surrendered for registration of transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form reasonably satisfactory to the Company and the Registrar, duly executed by
the Holder thereof or his attorney duly authorized in writing.

          (iv)  Restrictions on Transfer of a Certificated Note for a Beneficial
     Interest in a Global Note. A Certificated Note may not be exchanged for a
     beneficial interest in a Global Note except upon satisfaction of the
     requirements set forth below.

     Upon receipt by the Trustee of a Certificated Note, duly endorsed
     or accompanied by appropriate instruments of transfer, in form
     satisfactory to the Trustee, together with written instructions
     directing the Trustee to make, or to direct the Registrar to
     make, an adjustment on its books and records with respect to such
     Global Note to reflect an increase in the aggregate Principal
     Amount at Maturity of the Notes represented by the Global Note,
     such instructions to contain information regarding the Depositary
     account to be credited with such increase, then the Trustee shall
     cancel such Certificated Note and cause, or direct the Registrar
     to cause, in accordance with the standing instructions and
     procedures existing between the Depositary and the Registrar, the
     aggregate Principal Amount at Maturity of Notes represented by
     the Global Note to be increased by the aggregate Principal Amount
     at Maturity of the Certificated Note to be exchanged, and shall
     credit or cause to be credited to the account of the Person
     specified in such instructions a beneficial interest in the
     Global Note equal to the Principal Amount at Maturity of the
     Certificated Note so cancelled. If no Global Notes are then
     outstanding, the Company shall issue and the Trustee shall
     authenticate, upon receipt of a Company Order, a new Global Note
     in the appropriate Principal Amount at Maturity.

The provisions of clauses (i), (ii), (iii), (iv) and (v) below shall apply only
to Global Notes:

     Notwithstanding any other provisions of the Indenture or the Notes, except
     as provided in Section 207(a)(ii), a Global Note shall not be exchanged in
     whole or in part for a Note registered in the name of any Person other than
     the Depositary or one or more nominees thereof; provided that a Global Note
                                                     --------
     may be exchanged for Notes registered in the names of any person designated
     by the Depositary in the event that (A) the Depositary has notified the
     Company that it is unwilling or unable to continue as depositary for such

                                       9
<PAGE>

     Global Note or the Depositary has ceased to be a "clearing agency"
     registered under the Exchange Act, and a successor Depositary is not
     appointed by the Company within 90 days, (B) an Event of Default has
     occurred and is continuing with respect to the Notes or (C) if the Company
     executes and delivers a Company Order to the effect that the Global Note
     shall be exchangeable. Any Global Note exchanged pursuant to clause (A)
     above shall be so exchanged in whole and not in part, and any Global Note
     exchanged pursuant to clause (B) above may be exchanged in whole or from
     time to time in part as directed by the Depositary.

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

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

     In the event of the occurrence of any of the events specified in clause (i)
     above, the Company will promptly make available to the Trustee a reasonable
     supply of Certificated Notes.

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

                                      10
<PAGE>

CONVERSION

Conversion Privilege. A Holder of a Note may convert such Note into shares of
Common Stock at any time during the periods and subject to the conditions stated
in paragraph 8 of the Notes, subject to the provisions of this Article III. The
number of shares of Common Stock issuable upon conversion of a Note per $1,000
of Principal Amount at Maturity thereof (the "Conversion Rate") shall be
                                              ---------------
determined in accordance with the provisions of paragraph 8 of the Notes.

     A Holder may convert a portion of the Principal Amount at Maturity of a
Note if the portion is $1,000 or an integral multiple of $1,000. Provisions of
this Indenture that apply to conversion of all of a Note also apply to
conversion of a portion of a Note.

     "Time of Determination" means the time and date of the earlier of (i) the
      ---------------------
determination of stockholders entitled to receive rights, warrants or options or
a distribution, in each case, to which Section 307 or 308 applies and (ii) the
time ("Ex-Dividend Time") immediately prior to the commencement of "ex-dividend"
       ----------------
trading for such rights, warrants or options or distribution on the New York
Stock Exchange or such other national or regional exchange or market on which
the Common Stock is then listed or quoted.

Conversion Procedure. To convert a Note, a Holder must satisfy the requirements
in paragraph 8 in the Notes. The date on which the Holder satisfies all those
requirements is the conversion date (the "Conversion Date"). As soon as
                                          ---------------
practicable after the Conversion Date but in any event no later than the seventh
Business Day following the Conversion Date, the Company shall deliver to the
Holder, through the Conversion Agent, a certificate for the number of full
shares of Common Stock issuable upon the conversion and cash in lieu of any
fractional share determined pursuant to Section 303. The Company shall determine
such full number of shares and the amounts of the required cash with respect to
any fractional share, and shall set forth such information in an Officer's
certificate delivered to the Conversion Agent. The Conversion Agent shall have
no duties under this paragraph unless and until it has received such
certificate.

     The Person in whose name the certificate is registered shall be treated as
a stockholder of record on and after the Conversion Date; provided, however,
                                                          --------  -------
that no surrender of a Note on any date when the stock transfer books of the
Company shall be closed shall be effective to constitute the Person or Persons
entitled to receive the shares of Common Stock upon such conversion as the
record holder or holders of such shares of Common Stock on such date, but such
surrender shall be effective to constitute the Person or Persons entitled to
receive such shares of Common Stock as the record holder or holders thereof for
all purposes at the close of business on the next succeeding day on which such
stock transfer books are open; such conversion shall be at the Conversion Rate
in effect on the date that such Note shall have been surrendered for conversion,
as if the stock transfer books of the Company had not been closed. Upon
conversion of a Note, such Person shall no longer be a Holder of such Note.

     Holders may surrender a Note for conversion by means of book-entry delivery
in accordance with paragraph 8 of the Notes and the regulations of the
applicable book-entry facility.

                                       11
<PAGE>

     No payment or adjustment will be made for dividends on, or other
distributions with respect to, any Common Stock except as provided in this
Article III. On conversion of a Note, that portion of accrued Original Issue
Discount or cash interest attributable to the period from the Issue Date of the
Note through the Conversion Date, with respect to the converted Note shall not
be cancelled, extinguished or forfeited, but rather shall be deemed to be paid
in full to the Holder thereof through delivery of the Common Stock (together
with the cash payment, if any, in lieu of fractional shares) in exchange for the
Note being converted pursuant to the provisions hereof; and the fair market
value of such shares of Common Stock (together with any such cash payment in
lieu of fractional shares) shall be treated as issued, to the extent thereof,
first in exchange for accrued Original Issue Discount or cash interest through
the Conversion Date, and the balance, if any, of such fair market value of such
Common Stock (and any such cash payment) shall be treated as issued in exchange
for the Issue Price of the Note being converted pursuant to the provisions
hereof. Notwithstanding the foregoing, accrued cash interest will be payable
upon conversion of Notes made concurrently with or after acceleration of Notes
following an Event of Default.

     If the Holder converts more than one Note at the same time, the number of
shares of Common Stock issuable upon the conversion shall be based on the total
Principal Amount at Maturity of the Notes converted.

     A Note surrendered for conversion based on (a) the Common Stock price may
be surrendered for conversion until the close of business on the Business Day
immediately preceding October 19, 2021, (b) a credit downgrade may be
surrendered for conversion until the close of business on any Business Day
during the period of the continuance of the credit downgrade as more fully
described in paragraph 8 of the Note, (c) the Note being called for redemption
may be surrendered for conversion at any time prior to the close of business on
the second Business Day immediately preceding the Redemption Date, even if it is
not otherwise convertible at such time, and (d) upon the occurrence of certain
corporate transactions more fully described in paragraph 8 of the Note may be
surrendered for conversion at any time from and after the date which is 15 days
prior to the anticipated effective date of such transaction until 15 days after
the actual date of such transaction, and if such day is not a Business Day, the
next occurring Business Day following such day.

     Upon surrender of a Note that is converted in part, the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder, a new
Note in an authorized denomination equal in Principal Amount at Maturity to the
unconverted portion of the Note surrendered.

Fractional Shares. The Company will not issue a fractional share of Common Stock
upon conversion of a Note. Instead, the Company will deliver cash for the
current market value of the fractional share. The current market value of a
fractional share shall be determined, to the nearest 1/1,000/th/ of a share, by
multiplying the per share Sale Price of the Common Stock, on the last Trading
Day prior to the Conversion Date, by the fractional amount and rounding the
product to the nearest whole cent.

Taxes on Conversion. If a Holder converts a Note, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of shares
of Common Stock upon the conversion. However, the Holder shall pay any such tax
which is due because the Holder

                                       12
<PAGE>

requests the shares to be issued in a name other than the Holder's name and any
income tax which is imposed on the Holder as a result of the conversion. The
Conversion Agent may refuse to deliver the certificates representing the Common
Stock being issued in a name other than the Holder's name until the Conversion
Agent receives a sum sufficient to pay any tax which will be due because the
shares are to be issued in a name other than the Holder's name. Nothing herein
shall preclude the Company from any tax withholding or directing the withholding
of any tax required by law or regulations.

Company to Provide Stock. The Company shall, prior to issuance of any Notes
under this Article III, and from time to time as may be necessary, reserve out
of its authorized but unissued Common Stock a sufficient number of shares of
Common Stock to permit the conversion of the Notes.

     All shares of Common Stock delivered upon conversion of the Notes shall be
newly issued shares or treasury shares, shall be duly and validly issued and
fully paid and nonassessable and shall be free from preemptive rights and free
of any lien or adverse claim created by the Company.

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

Adjustment for Change in Capital Stock. Except as set forth in Section 314, if,
after the Issue Date of the Notes, the Company:

pays a dividend or makes a distribution on its Common Stock in shares of its
Common Stock or other capital stock;

subdivides its outstanding shares of Common Stock into a greater number of
shares;

pays a dividend or makes a distribution of its Common Stock in shares of its
Capital Stock (other than Common Stock or rights, warrants or options for its
Capital Stock);

combines its outstanding shares of Common Stock into a smaller number of shares;
or

issues by reclassification of its Common Stock any shares of its Capital Stock
(other than rights, warrants or options for its Capital Stock);

then the conversion privilege and the Conversion Rate in effect immediately
prior to such action shall be adjusted so that the Holder of a Note thereafter
converted may receive the number of shares or other units of Capital Stock of
the Company which such Holder would have owned immediately following such action
if such Holder had converted the Note immediately prior to such action.

                                       13
<PAGE>

     The adjustment shall become effective immediately after the record date in
the case of a dividend or distribution and immediately after the effective date
in the case of a subdivision, combination or reclassification.

Adjustment for Rights Issue. Except as set forth in Sections 314 and 319, if
after the Issue Date, the Company distributes any rights, warrants or options to
all holders of its Common Stock entitling them, for a period expiring within 60
days after the record date for such distribution, to purchase shares of Common
Stock at a price per share less than the Sale Price of the Common Stock as of
the Time of Determination, the Conversion Rate shall be adjusted in accordance
with the formula:

                             R'  =       R (O + N)
                                  ------------------------
                                     (O + [(N x P)/M)]

     where:

     R' = the adjusted Conversion Rate.

     R =  the current Conversion Rate.

     O =  the number of shares of Common Stock outstanding on the record date
for the distribution to which this Section 307 is being applied.

     N =  the number of additional shares of Common Stock offered pursuant to
the distribution.

     P =  the offering price per share of the additional shares.

     M =  the Average Sale Price, minus, in the case of (i) a distribution to
which Section 306(b) applies or (ii) a distribution to which Section 308
applies, for which, in each case, (x) the record date shall occur on or before
the record date for the distribution to which this Section 307 applies and (y)
the Ex-Dividend Time shall occur on or after the date of the Time of
Determination for the distribution to which this Section 307 applies, the fair
market value (on the record date for the distribution to which this Section 307
applies) of:

the Capital Stock of the Company distributed in respect of each share of Common
Stock in such Section 306(b) distribution; and

the assets of the Company or debt securities or any rights, warrants or options
to purchase securities of the Company distributed in respect of each share of
Common Stock in such Section 308 distribution.

               The Board of DirectOrs shall determine fair market values for the
purposes of this Section 307.

     The adjustment shall become effective immediately after the record date for
the determination of shareholders entitled to receive the rights, warrants or
options to which this Section 307 applies. If all of the shares of Common Stock
subject to such rights, warrants or

                                       14
<PAGE>

options have not been issued when such rights, warrants or options expire, then
the Conversion Rate shall promptly be readjusted to the Conversion Rate which
would then be in effect had the adjustment upon the issuance of such rights,
warrants or options been made on the basis of the actual number of shares of
Common Stock issued upon the exercise of such rights, warrants or options.

     No adjustment shall be made under this Section 307 if the application of
the formula stated above in this Section 307 would result in a value of R' that
is equal to or less than the value of R.

Adjustment for Other Distributions. If, after the Issue Date of the Notes, the
Company distributes to all holders of its Common Stock any of its assets or
evidence of indebtedness or any rights, warrants or options to purchase
securities of the Company (including securities or cash, but excluding (x)
distributions of Capital Stock referred to in Section 306 and distributions of
rights, warrants or options referred to in Section 307 and (y) cash dividends or
other cash distributions that are paid out of consolidated current net earnings
or earnings retained in the business as shown on the books of the Company unless
such cash dividends or other cash distributions are Extraordinary Cash
Dividends), the Conversion Rate shall be adjusted, in accordance with the
formula:

                    R' =   R x M
                         ---------
                           M - F

where:

     R' = the adjusted Conversion Rate.

     R =  the current Conversion Rate.

     M =  the Average Sale Price, minus, in the case of a distribution to which
Section 306(c) applies, for which (i) the record date shall occur on or before
the record date for the distribution to which this Section 308 applies and (ii)
the Ex-Dividend Time shall occur on or after the date of the Time of
Determination for the distribution to which this Section 308 applies, the fair
market value (on the record date for the distribution to which this Section 308
applies) of any Capital Stock of the Company distributed in respect of each
share of Common Stock in such Section 306(c) distribution.

     F =  the fair market value (on the record date for the distribution to
which this Section 308 applies) of the assets, securities, rights, warrants or
options to be distributed in respect of each share of Common Stock in the
distribution to which this Section 308 is being applied (including, in the case
of cash dividends or other cash distributions giving rise to an adjustment, all
such cash distributed concurrently).

               The Board of Directors shall determine fair market values for the
purposes of this Section 308.

                                       15
<PAGE>

     The adjustment shall become effective immediately after the record date for
the determination of shareholders entitled to receive the distribution to which
this Section 308 applies.

     For purposes of this Section 308, the term "Extraordinary Cash Dividend"
                                                 ---------------------------
shall mean any cash dividend or distribution with respect to the Common Stock
the amount of which, together with the aggregate amount of cash dividends on the
Common Stock to be aggregated with such cash dividend in accordance with the
provisions of this paragraph, equals or exceeds the threshold percentage set
forth in item (i) below. For purposes of item (i) below, the "Ex-Dividend
                                                              -----------
Measurement Period" with respect to a cash dividend on the Common Stock shall
------------------
mean the 365 consecutive day period ending on the date prior to the Ex-Dividend
Time with respect to such cash dividend, and the "Relevant Cash Dividends" with
                                                  -----------------------
respect to a cash dividend on the Common Stock shall mean the cash dividends on
the Common Stock with Ex-Dividend Times occurring in the Ex-Dividend Measurement
Period.

          (i)  If, upon the date prior to the Ex-Dividend Time with respect to a
          cash dividend on the Common Stock, the aggregate amount of such cash
          dividend together with the amounts of all Relevant Cash Dividends
          equals or exceeds on a per share basis 5% of the Sale Price of the
          Common Stock on the last Trading Day preceding the date of declaration
          by the Board of Directors of the cash dividend or distribution with
          respect to which this provision is being applied, then such cash
          dividend together with all Relevant Cash Dividends, shall be deemed to
          be an Extraordinary Cash Dividend and for purposes of applying the
          formula set forth above in this Section 308, the value of "F" shall be
          equal to (y) the aggregate amount of such cash dividend together with
          the amount of all Relevant Cash Dividends, minus (z) the aggregate
          amount of all Relevant Cash Dividends for which a prior adjustment in
          the Conversion Rate was previously made under this Section 308.

          In making the determinations required by item (i) above, the amount of
          cash dividends paid on a per share basis and the amount of any
          Relevant Cash Dividends specified in item (i) above, shall be
          appropriately adjusted to reflect the occurrence during such period of
          any event described in Section 306.

When Adjustment May Be Deferred. No adjustment in the Conversion Rate need be
made unless the adjustment would require an increase or decrease of at least 1%
in the Conversion Rate. Any adjustments that are not made shall be carried
forward and taken into account in any subsequent adjustment and all adjustments
that are made and carried forward shall be taken in the aggregate in order to
determine if the 1% threshold is met.

     All calculations under this Article III shall be made to the nearest cent
or to the nearest 1/1,000th of a share, as the case may be.

When No Adjustment Required. No adjustment need be made for a transaction
referred to in Section 306, 307, 308 or 314 if Noteholders are to participate in
the transaction on a basis and with notice that the Board of Directors
determines to be fair and appropriate in light of the basis and notice on which
holders of Common Stock participate in the transaction. Such participation

                                       16
<PAGE>

by Noteholders may include participation upon conversion provided that an
adjustment shall be made at such time as the Noteholders are no longer entitled
to participate.

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

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

     Any adjustment relating to the Rights and the Rights Agreement are
discussed in Section 319 of the Second Supplemental Indenture.

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

     No adjustment will be made pursuant to this Article III that would result,
through the application of two or more provisions hereof, in the duplication of
any adjustment.

Notice of Adjustment. Whenever the Conversion Rate is adjusted, the Company
shall promptly mail to Noteholders a notice of the adjustment. The Company shall
file with the Trustee and the Conversion Agent such notice and a certificate
from the Company's independent public accountants briefly stating the facts
requiring the adjustment and the manner of computing it. Upon receipt by it of
such notice, and at the written request of the Company, the Conversion Agent
will promptly mail such notice to Noteholders at the Company's expense. The
certificate shall be conclusive evidence that the adjustment is correct. Neither
the Trustee nor any Conversion Agent shall be under any duty or responsibility
with respect to any such certificate except to exhibit the same to any Holder
desiring inspection thereof.

Voluntary Increase. The Company from time to time may increase the Conversion
Rate by any amount for any period of time. Whenever the Conversion Rate is
increased, the Company shall mail to Noteholders and file with the Trustee and
the Conversion Agent a notice of the increase. The Company shall mail the notice
at least 15 days before the date the increased Conversion Rate takes effect. The
notice shall state the increased Conversion Rate and the period it will be in
effect.

     A voluntary increase of the Conversion Rate does not change or adjust the
Conversion Rate otherwise in effect for purposes of Section 306, 307 or 308 or
314.

Notice of Certain Transactions. If:

the Company takes any action that would require an adjustment in the Conversion
Rate pursuant to Section 306, 307 or 308 (unless no adjustment is to occur
pursuant to Section 310); or

the Company takes any action that would require a supplemental indenture
pursuant to Section 314; or

there is a liquidation or dissolution of the Company;

                                       17
<PAGE>

then the Company shall mail to Noteholders and file with the Trustee and the
Conversion Agent a notice stating the proposed record date for a dividend or
distribution or the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, binding share exchange, transfer,
liquidation or dissolution. The Company shall file and mail the notice at least
15 days before such date. Failure to file or mail the notice or any defect in it
shall not affect the validity of the transaction.

Reorganization of Company; Special Distributions. If the Company is a party to a
transaction subject to Section 801 of the Base Indenture (other than a sale of
all or substantially all of the assets of the Company in a transaction in which
the holders of Common Stock immediately prior to such transaction do not receive
securities, cash, property or other assets of the Company or any other Person)
or a merger or binding share exchange which reclassifies or changes its
outstanding Common Stock, the Person obligated to deliver securities, cash or
other assets upon conversion of Notes shall enter into a supplemental indenture.
If the issuer of securities deliverable upon conversion of Notes is an Affiliate
of the successor Company, that issuer shall join in the supplemental indenture.

     The supplemental indenture shall provide that the Holder of a Note may
convert it into the kind and amount of securities, cash or other assets which
such Holder would have received immediately after the consolidation, merger,
binding share exchange or transfer if such Holder had converted the Note
immediately before the effective date of the transaction, assuming (to the
extent applicable) that such Holder (i) was not a constituent Person or an
Affiliate of a constituent Person to such transaction; (ii) made no election
with respect thereto; and (iii) was treated alike with the plurality of non-
electing Holders. The supplemental indenture shall provide for adjustments which
shall be as nearly equivalent as may be practical to the adjustments provided
for in this Article III. The successor Company shall mail to Noteholders a
notice briefly describing the supplemental indenture.

     If this Section applies, neither Section 306 nor 307 applies.

     If the Company makes a distribution to all holders of its Common Stock of
any of its assets, or debt securities or any rights, warrants or options to
purchase securities of the Company that would otherwise result in an adjustment
in the Conversion Rate pursuant to the provisions of Section 308, then, from and
after the record date for determining the holders of Common Stock entitled to
receive the distribution, a Holder of a Note that converts such Note in
accordance with the provisions of this Indenture shall upon such conversion be
entitled to receive, in addition to the shares of Common Stock into which the
Note is convertible, the kind and amount of securities, cash or other assets
comprising the distribution that such Holder would have received if such Holder
had converted the Note immediately prior to the record date for determining the
holders of Common Stock entitled to receive the distribution.

Company Determination Final. Any determination that the Company or the Board of
Directors must make pursuant to Section 303, 306, 307, 308, 309, 310, 314 or 317
is conclusive.

Trustee's Adjustment Disclaimer. The Trustee has no duty to determine when an
adjustment under this Article III should be made, how it should be made or what
it should be. The Trustee has no duty to determine whether a supplemental
indenture under Section 314 need be entered

                                       18
<PAGE>

into or whether any provisions of any supplemental indenture are correct. The
Trustee shall not be accountable for and makes no representation as to the
validity or value of any securities or assets issued upon conversion of Notes.
The Trustee shall not be responsible for the Company's failure to comply with
this Article III. Each Conversion Agent (other than the Company or an Affiliate
of the Company) shall have the same protection under this Section 316 as the
Trustee.

Simultaneous Adjustments. In the event that this Article III requires
adjustments to the Conversion Rate under more than one of Sections 306, 307 or
308, and the record dates for the distributions giving rise to such adjustments
shall occur on the same date, then such adjustments shall be made by applying,
first, the provisions of Section 306, second, the provisions of Section 308 and,
third, the provisions of Section 307.

Successive Adjustments. After an adjustment to the Conversion Rate under this
Article III, any subsequent event requiring an adjustment under this Article III
shall cause an adjustment to the Conversion Rate as so adjusted.

Rights Issued in Respect of Common Stock Issued Upon Conversion. Each share of
Common Stock issued upon conversion of Notes pursuant to this Article III shall
be entitled to receive such number of shares of Participating Cumulative
Preferred Stock, Series A of the Company that is specified in the Company's
Amended and Restated Shareholder Rights Plan dated as of December 2, 1999 in
relation to each share of Common Stock. Each share of Common Stock issued upon
conversion of the Notes pursuant to this Article III shall be further entitled
to such number of shares of Common Stock or preferred stock purchase rights, as
the case may be (together with the right to receive shares of Participating
Cumulative Preferred Stock, the "Rights"), if any, that all shares of Common
                                 ------
Stock are entitled to receive and the certificates representing the Common Stock
issued upon such conversion shall bear such legends, if any, in each case as may
be provided by the terms of any existing or future shareholder rights agreement
adopted by the Company, as the same may be amended from time to time (in each
case, a "Rights Agreement"). Provided that such Rights Agreement requires that
         ----------------
each share of Common Stock issued upon conversion of Notes at any time prior to
the distribution of separate certificates representing the Rights be entitled to
receive such Rights, then, notwithstanding anything else to the contrary in this
Article III, there shall not be any adjustment to the conversion privilege or
Conversion Rate as a result of the issuance of Rights, the distribution of
separate certificates representing the Rights, the exercise or redemption of
such Rights in accordance with any such Rights Agreement, or the termination or
invalidation of such Rights.

AMENDMENT OF CERTAIN PROVISIONS
OF THE base INDENTURE

Amendments Relating to the Notes. The Base Indenture is hereby amended, solely
with respect to the Notes (and not with respect to any other series of
Securities that may be issued under the Base Indenture), as follows:

     Sections 301, 304, 305 and 306 of the Base Indenture are hereby amended by
     replacing the words therein "principal amount" with "Principal Amount at
     Maturity".

                                       19
<PAGE>

     Article IV of the Base Indenture is hereby amended by replacing it in its
     entirety with the following:

                                 "ARTICLE FOUR

                            DISCHARGE OF INDENTURE

          SECTION 401 Discharge of Liability on Notes. When (i) the Company
                      -------------------------------
delivers to the Trustee all outstanding Notes (other than Notes replaced
pursuant to Section 306 of the Base Indenture for cancellation) or (ii) all
outstanding Notes have become due and payable and the Company deposits with the
Trustee cash or, if expressly permitted by the terms of the Notes, Common Stock
sufficient to pay all amounts due and owing on all outstanding Notes (other than
Notes replaced pursuant to Section 306 of the Base Indenture), and if in either
case the Company pays all other sums payable hereunder by the Company, then the
Indenture shall, subject to Section 607 of the Base Indenture and the last
paragraph of Section 1003 of the Base Indenture, cease to be of further effect
with respect to the Notes. The Trustee shall join in the execution of a document
prepared by the Company acknowledging satisfaction and discharge of the
Indenture and this Second Supplemental Indenture on demand of the Company
accompanied by an Officers' Certificate and Opinion of Counsel and at the cost
and expense of the Company.

          SECTION 402 Repayment to the Company. The Trustee and the Paying Agent
                      ------------------------
shall return to the Company upon written request any money or securities held by
them for the payment of any amount with respect to the Notes that remains
unclaimed for two years, subject to applicable unclaimed property law. After
such return to the Company, Holders entitled to the money or securities must
look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person and the Trustee and the Paying
Agent shall have no further liability to the Noteholders with respect to such
money or securities for that period commencing after the return thereof."

     Article V of the Base Indenture is hereby amended by replacing it in its
     entirety with the following:

                                 "ARTICLE FIVE

                                   REMEDIES
                                   --------

SECTION 501 Events of Default. An "Event of Default" occurs if:
            -----------------

          (1)  the Company defaults in payment of any interest when due under
the Notes and such default continues for 30 days;

          (2)  the Company defaults in the payment of the Principal Amount at
Maturity (or, if the Notes have been converted to semiannual coupon notes
following a Tax Event pursuant to Section 501 of the Second Supplemental
Indenture, the Restated Principal Amount), Issue Price plus accrued Original
Issue Discount or cash interest, Redemption Price, Purchase Price or Change in
Control Purchase Price on any Note when the same becomes due and payable at its
Stated Maturity, upon redemption, upon declaration, when due for purchase by the
Company or otherwise;

                                       20
<PAGE>

          (3)  the Company fails to comply with any of its agreements in the
Note or this Indenture (other than those referred to in clauses (1) and (2)
above) and such failure continues for 60 days after receipt by the Company of a
Notice of Default;

          (4)  default under any Debt, whether such Debt now exists or is
created later, which default results in such Debt becoming or being declared due
and payable prior to the date on which it would otherwise have become due and
payable, and the principal amount of all Debt so accelerated, together with all
Debt due and payable but not paid prior to the end of any grace period, is
$10,000,000 or more, and such acceleration has not been rescinded or annulled
within a period of 10 days after receipt by the Company of a Notice of Default
from the Trustee; provided, however, that if any such default shall be cured,
                  --------  -------
waived, rescinded or annulled, then the Event of Default by reason thereof shall
be deemed not to have occurred;

          (5)  the Company pursuant to or under or within the meaning of any
Bankruptcy Law:

               (A)  commences a voluntary case or proceeding;

               (B)  consents to the entry of an order for relief against it in
     an involuntary case or proceeding or the commencement of any case against
     it;

               (C)  consents to the appointment of a Custodian of it or for any
     substantial part of its property;

               (D)  makes a general assignment for the benefit of its creditors;

               (E)  files a petition in bankruptcy or answer or consent seeking
     reorganization or relief; or

               (F)  consents to the filing of such petition or the appointment
     of or taking possession by a Custodian; or

          (6)  a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:

               (A)  is for relief against the Company in an involuntary case or
     proceeding, or adjudicates the Company insolvent or bankrupt;

               (B)  appoints a Custodian of the Company or for any substantial
     part of its property; or

               (C)  orders the winding up or liquidation of the Company;

     and the order or decree remains unstayed and in effect for 60 days.

     "Bankruptcy Law" means Title 11, United States Code, or any similar federal
or state law for the relief of debtors.

                                       21
<PAGE>

     "Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.

     A Default under clause (3) or clause (4) above is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% in
aggregate Principal Amount at Maturity of the Notes at the time outstanding
notify the Company and the Trustee, of the Default and the Company does not cure
such Default (and such Default is not waived) within the time specified in
clause (3) or clause (4) above after actual receipt of such notice. Any such
notice must specify the Default, demand that it be remedied and state that such
notice is a "Notice of Default".

     The Company will deliver to the Trustee, within five Business Days of
becoming aware of the occurrence of an Event of Default, written notice thereof.
In addition, the Company shall deliver to the Trustee, within 30 days after it
becomes aware of the occurrence thereof, written notice of any event which with
the giving of notice or the lapse of time, or both, would become an Event of
Default under clause (3) or clause (4) above, its status and what action the
Company is taking or proposes to take with respect thereto.

          SECTION 502 Acceleration. If an Event of Default (other than an Event
                      ------------
of Default specified in Section 501(5) or (6)) occurs and is continuing, the
Trustee by Notice to the Company, or the Holders of at least 25% in aggregate
Principal Amount at Maturity of the Notes at the time outstanding by notice to
the Company and the Trustee, may declare the Issue Price plus accrued Original
Issue Discount or accrued cash interest (or if the Notes have been converted to
semiannual coupon notes following a Tax Event, the Restated Principal Amount,
plus accrued interest) through the date of declaration on all the Notes to be
immediately due and payable. Upon such a declaration, such Issue Price plus
accrued Original Issue Discount or cash interest shall be due and payable
immediately. If an Event of Default specified in Section 501(5) or (6) occurs
and is continuing, the Issue Price plus accrued Original Issue Discount or
accrued cash interest (or if the Notes have been converted to semiannual coupon
notes following a Tax Event, the Restated Principal Amount, plus accrued
interest) on all the Notes shall become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any
Noteholders. The Holders of a majority in aggregate Principal Amount at Maturity
of the Notes at the time outstanding, by notice to the Trustee (and without
notice to any other Noteholder) may rescind an acceleration and its consequences
if the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived except nonpayment of the
Issue Price plus accrued Original Issue Discount or accrued cash interest (or if
the Notes have been converted to semiannual coupon notes following a Tax Event,
the Restated Principal Amount, plus accrued interest) that have become due
solely as a result of acceleration and if all amounts due to the Trustee under
Section 607 of the Base Indenture have been paid. No such rescission shall
affect any subsequent Default or impair any right consequent thereto.

          SECTION 503 Other Remedies. If an Event of Default occurs and is
                      --------------
continuing, the Trustee may pursue any available remedy to collect the payment
of the Issue Price plus accrued Original Issue Discount or accrued cash interest
(or if the Notes have been converted to semiannual coupon notes following a Tax
Event, the Restated Principal Amount, plus accrued interest) on the Notes or to
enforce the performance of any provision of the Notes or this Indenture.

                                       22
<PAGE>

     The Trustee may maintain a proceeding even if the Trustee does not possess
any of the Notes or does not produce any of the Notes in the proceeding. A delay
or omission by the Trustee or any Noteholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of, or acquiescence in, the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.

          SECTION 504 Waiver of Past Defaults. Subject to Section 502, the
                      -----------------------
Holders of a majority in aggregate Principal Amount at Maturity of the Notes at
the time outstanding, by notice to the Trustee (and without notice to any other
Noteholder), may waive an existing Default and its consequences except (1) an
Event of Default described in Section 501(1) or (2), (2) a Default in respect of
a provision that under Section 902 of the Base Indenture, as amended by the
Second Supplemental Indenture, cannot be amended without the consent of each
Noteholder affected or (3) a Default which constitutes a failure to convert any
Note in accordance with the terms of Article III of the Second Supplemental
Indenture. When a Default is waived, it is deemed cured, but no such waiver
shall extend to any subsequent or other Default or impair any consequent right.
This Section 504 shall be in lieu of Section 316(a)1(B) of the TIA and such
Section 316(a)1(B) is hereby expressly excluded from this Indenture, as
permitted by the TIA.

          SECTION 505 Control by Majority. The Holders of a majority in
                      -------------------
aggregate Principal Amount at Maturity of the Notes at the time outstanding may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture or that the Trustee determines in good faith is
unduly prejudicial to the rights of other Noteholders or would involve the
Trustee in personal liability unless the Trustee is offered indemnity
satisfactory to it. This Section 505 shall be in lieu of Section 316(a)1(A) of
the TIA and such Section 316(a)1(A) is hereby expressly excluded from this
Indenture, as permitted by the TIA.

          SECTION 506 Limitation on Suits. A Noteholder may not pursue any
                      -------------------
remedy with respect to this Indenture or the Notes unless:

          (1)  the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;

          (2)  the Holders of at least 25% in aggregate Principal Amount at
Maturity of the Notes at the time outstanding make a written request to the
Trustee to pursue the remedy;

          (3)  such Holder or Holders offer to the Trustee security or indemnity
satisfactory to the Trustee against any loss, liability or expense;

          (4)  the Trustee does not comply with the request within 60 days after
receipt of such notice, request and offer of security or indemnity; and

          (5)  the Holders of a majority in aggregate Principal Amount at
Maturity of the Notes at the time outstanding do not give the Trustee a
direction inconsistent with the request during such 60-day period.

                                       23
<PAGE>

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

          SECTION 507 Rights of Holders to Receive Payment. Notwithstanding any
                      ------------------------------------
other provision of this Indenture, the right of any Holder to receive payment of
the Principal Amount at Maturity, Issue Price plus accrued Original Issue
Discount or cash interest, Redemption Price, Purchase Price or Change in Control
Purchase Price (or, if the Notes have been converted to semiannual coupon notes
following a Tax Event, the Restated Principal Amount, plus accrued interest) in
respect of the Notes held by such Holder, on or after the respective due dates
expressed in the Notes or any Redemption Date, and to convert the Notes in
accordance with Article III of the Second Supplemental Indenture, or to bring
suit for the enforcement of any such payment on or after such respective dates
or the right to convert, shall not be impaired or affected adversely without the
consent of such Holder.

          SECTION 508 Collection Suit by Trustee. If an Event of Default
                      --------------------------
described in Section 501(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount owing with respect to the Notes and the amounts
provided for in Section 607 of the Base Indenture.

          SECTION 509 Trustee May File Proofs of Claim. In case of the pendency
                      --------------------------------
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Notes or the property of the Company
or of such other obligor or their creditors, the Trustee (irrespective of
whether the Principal Amount at Maturity, Issue Price plus accrued Original
Issue Discount or cash interest, Redemption Price, Purchase Price or Change in
Control Purchase Price (or, if the Notes have been converted to semiannual
coupon notes following a Tax Event, the Restated Principal Amount, plus accrued
interest), if any, in respect 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 on the Company for the payment of any such
amount) shall be entitled and empowered, by intervention in such proceeding or
otherwise,

          (a)  to file and prove a claim for the whole amount of the Principal
     Amount at Maturity, Issue Price plus accrued Original Issue Discount or
     cash interest, Redemption Price, Purchase Price or Change in Control
     Purchase Price (or, if the Notes have been converted to semiannual coupon
     notes following a Tax Event, the Restated Principal Amount, plus accrued
     interest), and to file such other papers or documents as may be necessary
     or advisable in order to have the claims of the Trustee (including any
     claim for the reasonable compensation, expenses, disbursements and advances
     of the Trustee, its agents and counsel or any other amounts due the Trustee
     under Section 607 of the Base Indenture) and of the Holders allowed in such
     judicial proceeding, and

          (b)  to collect and receive any moneys or other property payable or
     deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly

                                       24
<PAGE>

to the Holders, to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 607 of the Base
Indenture.

     Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.

          SECTION 510 Priorities. If the Trustee collects any money pursuant to
                      ----------
this Article V, it shall pay out the money in the following order:

          FIRST: to the Trustee for amounts due under Section 607 of the Base
          Indenture;

          SECOND: to Noteholders for amounts due and unpaid on the Notes for the
          Principal Amount at Maturity, Issue Price plus accrued Original Issue
          Discount or cash interest, Redemption Price, Purchase Price or Change
          in Control Purchase Price (or, if the Notes have been converted to
          semiannual coupon notes following a Tax Event, the Restated Principal
          Amount, plus accrued interest) as the case may be, ratably, without
          preference or priority of any kind, according to such amounts due and
          payable on the Notes; and

          THIRD: the balance, if any, to the Company.

     The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 510. At least 15 days before such record
date, the Trustee shall mail to each Noteholder and the Company a notice that
states the record date, the payment date and the amount to be paid.

          SECTION 511 Undertaking for Costs. 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, a court in its discretion may
require the filing by any party litigant (other than the Trustee) in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 511
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
507 or a suit by Holders of more than 10% in aggregate Principal Amount at
Maturity of the Notes at the time outstanding. This Section 511 shall be in lieu
of Section 315(e) of the TIA and such Section 315(e) is hereby expressly
excluded from this Indenture, as permitted by the TIA.

          SECTION 512 Waiver of Stay, Extension or Usury Laws. The Company
                      ---------------------------------------
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury or other law
wherever enacted, now or at any time hereafter in force, which would prohibit or
forgive the Company from paying all or any portion of the Principal Amount at
Maturity, Issue Price plus accrued Original Issue Discount or cash interest,
Redemption Price, Purchase Price or Change in Control Purchase Price in respect
of Notes (or, if

                                       25
<PAGE>

the Notes have been converted to semiannual coupon notes following a Tax Event,
the Restated Principal Amount, plus accrued interest), as contemplated herein,
or which may affect the covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted."

     (d)  Section 902 of the Base Indenture is hereby amended by replacing it in
its entirety with the following:

          "SECTION 902. Modification of Indenture with Consent of Holders of
                        ----------------------------------------------------
Notes. With the written consent of the Holders of at least a majority in
-----
aggregate Principal Amount at Maturity of the Notes at the time outstanding, the
Company and the Trustee may amend the Indenture or the Notes. However, without
the consent of each Noteholder affected, an amendment to the Indenture or the
Notes may not:

          (a)  reduce the percentage in Principal Amount at Maturity of Notes
whose Holders must consent to an amendment;

          (b)  make any change in the manner or rate of accrual of Original
Issue Discount or cash interest, reduce the rate of cash interest referred to in
paragraph 1 of the Notes, or extend the time for payment of Original Issue
Discount or cash interest on any Note;

          (c)  reduce the Principal Amount at Maturity, Restated Principal
Amount or accrued Original Issue Discount or cash interest, with respect to any
Note, or extend the Stated Maturity of any Note;

          (d)  reduce the Redemption Price, Purchase Price or Change in Control
Purchase Price of any Note;

          (e)  make any Note payable in money or securities other than that
stated in the Note;

          (f)  make any change in Sections 504 and 507 of the Base Indenture, as
amended by Article V of the Second Supplemental Indenture, or this Section 902,
except to increase any percentage set forth therein;

          (g)  make any change that adversely affects the right to convert any
Note;

          (h)  make any change that adversely affects the right to require the
Company to purchase the Notes in accordance with the terms thereof and this
Indenture;

          (i)  impair the right to institute suit for the enforcement of any
payment with respect to, or conversion of, the Notes; or

          (j)  reduce the amount of principal payable upon acceleration of
maturity of the Notes, following an Event of Default.

                                       26
<PAGE>

          It shall not be necessary for the consent of the Holders under this
Section 902 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.

          After an amendment under this Section 902 becomes effective, the
Company shall mail to each Holder a notice briefly describing the amendment."

     Section 1001 of the Base Indenture is hereby amended by replacing it in its
     entirety with the following:

          "Section 1001. Payment of Notes. The Company shall promptly make all
                         ----------------
payments in respect of the Notes on the dates and in the manner provided in the
Notes, pursuant to the Base Indenture or the Second Supplemental Indenture. Any
amounts to be given to the Trustee or Paying Agent, shall be deposited with the
Trustee or Paying Agent by 10:00 a.m. (New York City time) by the Company.
Principal Amount at Maturity, Issue Price plus accrued Base Issue Discount,
Redemption Price, Purchase Price and Change in Control Purchase Price shall be
considered paid on the applicable date due if on such date (or, in the case of a
Purchase Price or Change in Control Purchase Price, on the Business Day
following the applicable Purchase Date or Change in Control Purchase Date, as
the case may be) the Trustee or the Paying Agent holds, in accordance with the
Base Indenture or the Second Supplemental Indenture, money or securities, if
permitted hereunder, sufficient to pay all such amounts then due.

          The Company shall, to the extent permitted by law, pay cash interest
on overdue amounts at the rate per annum set forth in paragraph 1 of the Notes,
compounded semiannually, which interest shall accrue from the date such overdue
amount was originally due to the date payment of such amount, including interest
thereon, has been made or duly provided for. All such interest shall be payable
on demand. The accrual of such interest on overdue amounts shall be in lieu of,
and not in addition to, the continued accrual of Original Issue Discount."

     Article XI of the Base Indenture is hereby amended by replacing it in its
     entirety with the following:

                                "ARTICLE ELEVEN

                      Redemption and Repurchases of Notes
                      -----------------------------------

     SECTION 1101. Right to Redeem; Notices to Trustee. The Company, at its
                   -----------------------------------
option, may redeem the Notes in accordance with the provisions of paragraph 5 of
the Notes. Prior to October 19, 2006, the Company cannot redeem the Notes at its
option. Beginning on October 19, 2006, the Company may redeem the Notes for cash
as a whole at any time, or in part from time to time. If the Company elects to
redeem Notes pursuant to paragraph 5 of the Notes, it shall notify the Trustee
in writing of the Redemption Date, the Principal Amount at Maturity of Notes to
be redeemed and the Redemption Price.

     The Company shall give the notice to the Trustee by a Company Order at
least 45 days before the Redemption Date (unless a shorter notice shall be
satisfactory to the Trustee). If fewer than all the Notes are to be redeemed,
the record date relating to such redemption shall be

                                       27
<PAGE>

selected by the Company and given to the Trustee, which record date shall not be
less than ten days after the date of notice to the Trustee.

     SECTION 1102. Selection of Notes to Be Redeemed. If less than all the Notes
                   ---------------------------------
are to be redeemed, the Trustee shall select the Notes to be redeemed pro rata
based on ownership thereof or by lot or by any other method the Trustee
considers fair and appropriate (so long as such method is not prohibited by the
rules of any stock exchange on which the Notes are then listed). The Trustee
shall make the selection at least 30 days but not more than 60 days before the
Redemption Date from outstanding Notes not previously called for redemption. The
Trustee may select for redemption portions of the Principal Amount at Maturity
of Notes that have denominations larger than $1,000.

     Notes and any portions thereof that the Trustee selects shall be in
Principal Amounts at Maturity of $1,000 or an integral multiple of $1,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption. The Trustee shall notify the
Company promptly of the Notes or portions of Notes to be redeemed.

     If any Note selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Note so
selected, the converted portion of such Note shall be deemed (so far as may be)
to be the portion selected for redemption. Notes that have been converted during
a selection of Notes to be redeemed may be treated by the Trustee as outstanding
for the purpose of such selection.

     Nothing in this Section 1102 shall affect the right of any Holder to
convert any Note pursuant to Article III of the Second Supplemental Indenture
before the termination of the conversion right with respect thereto.

     SECTION 1103. Notice of Redemption. At least 30 days but not more than 60
                   --------------------
days before a Redemption Date, the Company shall give notice of redemption to
each Holder of Notes to be redeemed in the manner provided in Section 106 of the
Base Indenture.

     Failure to give notice by mailing in the manner herein provided to the
Holder of any Notes designated for redemption as a whole or in part, or any
defect in the notice to any such Holder, shall not affect the validity of the
proceedings for the redemption of any other Notes or portion thereof. Any notice
that is mailed to the Holder of any Notes in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not such Holder
receives the notice.

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

          (a)  the Redemption Date;

          (b)  the Redemption Price;

          (c)  the Conversion Rate;

          (d)  the name and address of the Paying Agent and Conversion Agent and
     of the office or agency referred to in Section 1002 of the Base Indenture;

                                       28
<PAGE>

          (e)  that Notes called for redemption may be converted at any time
     before the close of business on the second Business Day immediately
     preceding the Redemption Date, even if not otherwise convertible at such
     time;

          (f)  that Holders who want to convert Notes must comply with the
     procedures in paragraph 8 of the Notes;

          (g)  that Notes called for redemption must be surrendered to the
     Paying Agent or at the office or agency referred to in Section 1002 of the
     Base Indenture to collect the Redemption Price;

          (h)  if fewer than all the outstanding Notes are to be redeemed, the
     certificate numbers and Principal Amounts at Maturity of the particular
     Notes to be redeemed;

          (i)  that, unless the Company defaults in making payment of such
     Redemption Price on Notes called for redemption, Original Issue Discount or
     cash interest will cease to accrue on and after the Redemption Date; and

          (j)  the CUSIP number of the Notes called for redemption.

     At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense, provided that the Company
                                                    --------
makes such request at least 15 days (unless a shorter period shall be acceptable
to the Trustee) prior to the date such notice of redemption must be mailed.

     SECTION 1104. Effect of Notice of Redemption. Once notice of redemption is
                   ------------------------------
given, Notes called for redemption become due and payable on the Redemption Date
and at the Redemption Price stated in the notice except for Notes which are
converted in accordance with the terms of the Second Supplemental Indenture.
Upon surrender to the Paying Agent, such Notes shall be paid at the Redemption
Price stated in the notice.

     SECTION 1105. Deposit of Redemption Price. Prior to 10:00 a.m. (New York
                   ---------------------------
City time), on the Redemption Date, the Company shall deposit with the Paying
Agent (or if the Company or a Subsidiary of the Company or an Affiliate of any
of them is the Paying Agent, shall segregate and hold in trust) money sufficient
to pay the Redemption Price of all Notes to be redeemed on that date other than
Notes or portions of Notes called for redemption which on or prior thereto have
been delivered by the Company to the Trustee for cancellation or have been
converted. The Paying Agent shall as promptly as practicable return to the
Company any money not required for that purpose because of conversion of Notes
pursuant to Article III of the Second Supplemental Indenture. If such money is
then held by the Company or a Subsidiary or an Affiliate of the Company in trust
and is not required for such purpose it shall be discharged from such trust. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by the Paying Agent. Upon
complying with this Section, the Paying Agent shall have no further liability
for the money delivered to the Trustee.

                                       29
<PAGE>

     SECTION 1106. Notes Redeemed in Part. Upon surrender of a Note that is
                   ----------------------
redeemed in part, the Company shall execute and the Trustee shall authenticate
and deliver to the Holder a new Note in an authorized denomination equal in
Principal Amount to the unredeemed portion of the Note surrendered.

     SECTION 1107. Purchase of Notes at the Option of the Holder. (a) General.
                   ---------------------------------------------      -------
If a Holder exercises its right to require the Company to repurchase the Notes,
the Notes shall be purchased by the Company on October 19, 2003, October 19,
2006 and October 19, 2011 (each, a "Purchase Date"), at the purchase price of
                                    -------------
specified in paragraph 6 of the Notes (each, a "Purchase Price") at the option
                                                --------------
of the Holder thereof, upon:

delivery to the Paying Agent, by the Holder, of a written notice of purchase (a
"Purchase Notice") at any time from the opening of business on the date that is
 ---------------
20 Business Days prior to a Purchase Date until the close of business on the
Business Day immediately preceding such Purchase Date stating:

          (A)  the certificate number of the Note which the Holder will deliver
     to be purchased,

          (B)  the portion of the Principal Amount at Maturity of the Note which
     the Holder will deliver to be purchased, which portion must be a Principal
     Amount at Maturity of $1,000 or an integral multiple thereof,

          (C)  that such Note shall be purchased as of the Purchase Date
     pursuant to the terms and conditions specified in the Notes, and

          (D)  in the event the Company elects, pursuant to Section 1107(b), to
     pay the Purchase Price to be paid as of such Purchase Date, in whole or in
     part, in shares of Common Stock but such portion of the Purchase Price
     shall ultimately be payable to such Holder entirely in cash because any of
     the conditions to payment of the Purchase Price (or a portion thereof) in
     Common Stock is not satisfied prior to the close of business on such
     Purchase Date, as set forth in Section 1107(d), whether such Holder elects
     (x) to withdraw such Purchase Notice as to some or all of the Notes to
     which such Purchase Notice relates (stating the Principal Amount at
     Maturity and certificate numbers of the Notes as to which such withdrawal
     shall relate), or (y) to receive cash in respect of the entire Purchase
     Price for all Notes (or portions thereof) to which such Purchase Notice
     relates; and

book-entry transfer or delivery of such Note to the Paying Agent prior to, on or
after the Purchase Date (together with all necessary endorsements) at the
offices of the Paying Agent, such delivery being a condition to receipt by the
Holder of the Purchase Price therefor; provided, however, that such Purchase
                                       --------  -------
Price shall be so paid pursuant to this Section 1107 only if the Note so
delivered to the Paying Agent shall conform in all respects to the description
thereof in the related Purchase Notice.

     If a Holder, in such Holder's Purchase Notice and in any written notice of
withdrawal of a portion of a Holder's Notes previously submitted for purchase
pursuant to a Purchase notice,

                                       30
<PAGE>

the portion that remains subject to the Purchase Notice, fails to indicate such
Holder's choice with respect to the election set forth in clause (D) of Section
1107(a)(i), such Holder shall be deemed to have elected to receive cash in
respect of the Purchase Price for all Notes subject to such Purchase Notice in
the circumstances set forth in such clause (D).

     The Company shall purchase from the Holder thereof, pursuant to this
Section 1107, a portion of a Note if the Principal Amount at Maturity of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a Note also apply to the purchase
of such portion of such Note.

     Any purchase by the Company contemplated pursuant to the provisions of this
Section 1107 shall be consummated by the delivery of the consideration to be
received by the Holder as promptly as practicable following the later of the
Purchase Date and the time of delivery of the Note.

     Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Purchase Notice contemplated by this Section 1107(a) shall
have the right to withdraw such Purchase Notice at any time prior to the close
of business on the Purchase Date by delivery of a written notice of withdrawal
to the Paying Agent in accordance with Section 1109.

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

     (b)  Company's Right to Elect Manner of Payment of Purchase Price. The
          ------------------------------------------------------------
Notes to be purchased pursuant to Section 1107(a) may be paid for, at the
election of the Company, in cash or Common Stock, or in any combination of cash
and Common Stock, subject to the conditions set forth in Sections 1107(c) and
(d). The Company shall designate, in the Company Notice delivered pursuant to
Section 1107(e), whether the Company will purchase the Notes for cash or Common
Stock, or, if a combination thereof, the percentages of the Purchase Price of
Notes in respect of which it will pay in cash or Common Stock; provided that the
                                                               --------
Company will pay cash for fractional interests in Common Stock. For purposes of
determining the existence of potential fractional interests, all Notes subject
to purchase by the Company held by a Holder shall be considered together (no
matter how many separate certificates are to be presented). Each Holder whose
Notes are purchased pursuant to this Section 1107 shall receive the same
percentage of cash or Common Stock in payment of the Purchase Price for such
Notes, except (i) as provided in Section 1107(d) with regard to the payment of
cash in lieu of fractional shares of Common Stock and (ii) in the event that the
Company is unable to purchase the Notes of a Holder or Holders for Common Stock
because any of the conditions specified in Section 1107(d) have not been
satisfied, the Company may purchase the Notes of such Holder or Holders for
cash. The Company may not change its election with respect to the consideration
(or components or percentages of components thereof) to be paid once the Company
has given its Company Notice to Noteholders except pursuant to this Section
1107(b) or pursuant to Section 1107(d) in the event of a failure to satisfy,
prior to the close of business on the Purchase Date, any condition to the
payment of the Purchase Price, in whole or in part, in Common Stock.

     At least three Business Days before the Company Notice Date, the Company
shall deliver an Officers' Certificate to the Trustee specifying:

                                       31
<PAGE>

          (i)    the manner of payment selected by the Company,

          (ii)   the information required by Section 1107(e),

          (iii)  if the Company elects to pay the Purchase Price, or a
     specified percentage thereof, in Common Stock, that the conditions to
     such manner of payment set forth in Section 1107(d) have been or will
     be complied with, and

          (iv)   whether the Company desires the Trustee to give the Company
     Notice required by Section 1107(e).

     (c)  Purchase with Cash. On each Purchase Date, at the option of the
          ------------------
Company, the Purchase Price of Notes in respect of which a Purchase Notice
pursuant to Section 1107(a) has been given, or a specified percentage thereof,
may be paid by the Company with cash equal to the aggregate Purchase Price of
such Notes.

     (d)  Payment by Issuance of Common Stock. On each Purchase Date, at the
          -----------------------------------
option of the Company, the Purchase Price of Notes in respect of which a
Purchase Notice pursuant to Section 1107(a) has been given, or a specified
percentage thereof, may be paid by the Company by the issuance of a number of
shares of Common Stock equal to the quotient obtained by dividing (i) the amount
of cash to which the Noteholders would have been entitled had the Company
elected to pay all or such specified percentage, as the case may be, of the
Purchase Price of such Notes in cash by (ii) the Market Price of a share of
Common Stock, subject to the next succeeding paragraph.

     The Company will not issue a fractional share of Common Stock in payment of
the Purchase Price. Instead the Company will pay cash for the current market
value of the fractional share. The current market value of a fraction of a share
shall be determined by multiplying the Market Price by such fraction and
rounding the product to the nearest whole cent. It is understood that if a
Holder elects to have more than one Note purchased, the number of shares of
Common Stock shall be based on the aggregate amount of Notes to be purchased.

     Upon a payment by Common Stock pursuant to the terms hereof, that portion
of accrued Original Issue Discount or cash interest attributable to the period
from the Issue Date to the Purchase Date with respect to the purchased Note
shall not be cancelled, extinguished or forfeited but rather shall be deemed
paid in full to the Holder through the delivery of the Common Stock in exchange
for the Note being purchased pursuant to the terms hereof, and the fair market
value of such Common Stock (together with any cash payments in lieu of
fractional shares of Common Stock) shall be treated as issued, to the extent
thereof, first in exchange for the accrued Original Issue Discount or cash
interest through the Purchase Date, and the balance, if any, of the fair market
value of such shares of Common Stock shall be treated as issued in exchange for
the Issue Price of the Note being purchased pursuant to the provisions hereof.
If the Company elects to purchase the Notes by the issuance of shares of Common
Stock, the Company Notice, as provided in Section 1107(e), shall be sent to the
Holders (and to beneficial owners as required by applicable law) not later than
the Company Notice Date.

     The Company's right to exercise its election to purchase the Notes pursuant
to this Section 1107 through the issuance of shares of Common Stock shall be
conditioned upon:

                                       32
<PAGE>

          (1)  the Company's not having given a Company Notice stating its
     election to pay entirely in cash for the Notes and its giving of timely
     Company Notice of election to purchase all or a specified percentage of the
     Notes with Common Stock as provided herein;

          (2)  the shares of Common Stock having been admitted for listing or
     admitted for listing subject to notice of issuance on the principal United
     States securities exchange on which the Common Stock is then listed or, if
     the Common Stock is not then listed on a national or regional securities
     exchange, admitted for quotation on the National Association of Securities
     Dealers Automated Quotation System;

          (3)  the registration of the shares of Common Stock to be issued in
     respect of the payment of the Purchase Price under the Securities Act and
     the Exchange Act, in each case, if required;

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

          (5)  the receipt by the Trustee of an Officers' Certificate and an
     Opinion of Counsel each stating that (A) the terms of the issuance of the
     Common Stock are in conformity with this Indenture and (B) the shares of
     Common Stock to be issued by the Company in payment of the Purchase Price
     in respect of Notes have been duly authorized and, when issued and
     delivered pursuant to the terms of this Indenture in payment of the
     Purchase Price in respect of the Notes, will be validly issued, fully paid
     and nonassessable and shall be free of any preemptive rights and any lien
     or adverse claim (provided that such Opinion of Counsel may state that,
     insofar as it relates to the absence of such preemptive rights, liens and
     adverse claims, it is given upon the best knowledge of such counsel), and,
     in the case of such Officers' Certificate, stating that conditions (1),
     (2), (3) and (4) above and the condition set forth in the second succeeding
     sentence have been satisfied and, in the case of such Opinion of Counsel,
     stating that conditions (2), (3) and (4) above have been satisfied.

     Such Officers' Certificate shall also set forth the number of shares of
Common Stock to be issued for each $1,000 Principal Amount at Maturity of Notes
and the Sale Price of a share of Common Stock on each Trading Day during the
period for which the Market Price is calculated. The Company may pay the
Purchase Price (or any portion thereof) in Common Stock only if the information
necessary to calculate the Market Price is published in a daily newspaper of
national circulation or by other appropriate means. If the foregoing conditions
are not satisfied with respect to a Holder or Holders prior to the close of
business on the Purchase Date and the Company has elected to purchase the Notes
pursuant to this Section 1107 through the issuance of shares of Common Stock,
the Company shall pay the entire Purchase Price of the Notes of such Holder or
Holders in cash.

                                       33
<PAGE>

     (e)  Notice of Election. The Company's notice of election to purchase with
          ------------------
cash or Common Stock or any combination thereof shall be sent to the Holders
(and to beneficial owners as required by applicable law) in the manner provided
in Section 106 of the Base Indenture (the "Company Notice"). The Company Notice
                                           --------------
shall be sent to the Holders (and to beneficial owners as required by applicable
law) not less than 20 Business Days prior to the applicable Purchase Date (the
"Company Notice Date"). Such Company Notice shall state the manner of payment
 -------------------
elected and shall contain the following information:

     In the event the Company has elected to pay the Purchase Price (or a
specified percentage thereof) with Common Stock, the Company Notice shall:

          (1)    state that each Holder will receive Common Stock with a Market
     Price determined as of a specified date prior to the Purchase Date equal to
     such specified percentage of the Purchase Price of the Notes held by such
     Holder (except any cash amount to be paid in lieu of fractional shares);

          (2)    set forth the method of calculating the Market Price of the
     Common Stock; and

          (3)    state that because the Market Price of Common Stock will be
     determined prior to the Purchase Date, Holders will bear the market risk
     with respect to the value of the Common Stock to be received from the date
     such Market Price is determined to the Purchase Date.

     In any case, each Company Notice shall include a form of Purchase Notice to
be completed by a Noteholder that wishes to exercise its option to have the
Company repurchase the Notes and shall state:

          (i)    the Purchase Price, the Conversion Rate and, to the extent
     known at the time of such notice, the amount of cash interest, if any, that
     will be accrued and payable with respect to the Notes as of the Purchase
     Date;

          (ii)   whether the Company will pay the Purchase Price in cash or in
     Common Stock or any combination thereof, specifying the percentage of each;

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

          (iv)   that Notes as to which a Purchase Notice has been given may be
     converted pursuant to Article III, only if any applicable Purchase Notice
     has been withdrawn in accordance with the terms of the Indenture;

          (v)    that Notes must be surrendered to the Paying Agent to collect
     payment of the Purchase Price;

          (vi)   that the Purchase Price for any Note as to which a Purchase
     Notice has been given and not withdrawn, together with any cash interest
     payable with

                                       34
<PAGE>

     respect thereto, will be paid as promptly as practicable following the
     later of the Purchase Date and the time of surrender of such Note as
     described in (v);

          (vii)  the procedures the Holder must follow to exercise rights under
     this Section 1107 and a brief description of those rights;

          (viii) briefly, the conversion rights of the Notes and that Holders
     who want to convert Notes must satisfy the requirements set forth in
     paragraph 9 of the Notes;

          (ix)   the procedures for withdrawing a Purchase Notice (including,
     without limitation, for a conditional withdrawal pursuant to the terms of
     Section 1107(a)(i)(D));

          (x)    that, unless the Company defaults in making payment of such
     Purchase Price on Notes surrendered for purchase, Original Issue Discount
     or cash interest will cease to accrue on and after the Purchase Date; and

          (xi)   the CUSIP number of the Notes.

     At the Company's request and upon being provided with a copy of such
Company Notice, the Trustee shall give such Company Notice in the Company's name
and at the Company's expense, provided that the Company makes such request at
least 15 days (unless a shorter period shall be acceptable to the Trustee) prior
to the date such Company Notice must be mailed; and provided, further, that, in
all cases, the text of such Company Notice shall be prepared by the Company.

     Upon determination of the actual number of shares of Common Stock to be
issued for each $1,000 Principal Amount at Maturity of Notes, the Company will
issue a press release and publish such determination on the Company's web site
or, at the Company's option, otherwise publicly disclose such information.

     (f)  Covenants of the Company. All shares of Common Stock delivered upon
          ------------------------
purchase of the Notes shall be newly issued shares or treasury shares, shall be
duly authorized, validly issued, fully paid and nonassessable and shall be free
from preemptive rights and free of any lien or adverse claim created by the
Company.

     The Company shall use its reasonable efforts to list or cause to have
quoted any shares of Common Stock to be issued to purchase Notes on the
principal United States securities exchange or over-the-counter or other
domestic market on which any other shares of the Common Stock are then listed or
quoted. The Company will promptly inform the Trustee in writing of any such
listing.

     (g)  Procedure upon Purchase. On or before the Purchase Date, the Company
          -----------------------
shall deposit cash (in respect of a cash purchase under Section 1107(c) or for
fractional interests, as applicable) or shares of Common Stock, or a combination
thereof, as applicable, at the time and in the manner as provided in Section
1110, sufficient to pay the aggregate Purchase Price of all Notes to be
purchased pursuant to this Section 1107. As soon as practicable after the
Purchase

                                       35
<PAGE>

Date, the Company shall deliver to each Holder entitled to receive Common Stock
through the Paying Agent, a certificate for the number of full shares of Common
Stock issuable in payment of the Purchase Price and cash in lieu of any
fractional interests. The person in whose name the certificate for Common Stock
is registered shall be treated as a holder of record of shares of Common Stock
on the Business Day following the Purchase Date. Subject to Section 1107(d), no
payment or adjustment will be made for dividends on the Common Stock the record
date for which occurred on or prior to the Purchase Date.

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

     (i)  Trustee's Disclaimer. The Trustee and each Paying Agent (other than a
          --------------------
Paying Agent that is the Company or an Affiliate of the Company) shall not be
accountable for and makes no representation as to the validity or value of any
securities or assets issued pursuant to a Company Notice.

     SECTION 1108. Purchase of Notes at Option of the Holder upon Change in
                   --------------------------------------------------------
Control. (a) If on or prior to October 19, 2006 there shall have occurred a
-------
Change in Control, Notes shall be purchased by the Company, at the option of the
Holder thereof, at a purchase price specified in paragraph 6 of the Notes (the
"Change in Control Purchase Price"), as of the date that is 35 Business Days
 --------------------------------
after the occurrence of the Change in Control (the "Change in Control Purchase
                                                    --------------------------
Date"), subject to satisfaction by or on behalf of the Holder of the
----
requirements set forth in Section 1108(c).

     A "Change in Control" shall be deemed to have occurred at such time as
either of the following events shall occur:

There shall be consummated any share exchange, consolidation or merger of the
   Company pursuant to which the Common Stock and other capital stock of the
   Company with equivalent voting rights would be converted into cash,
   securities or other property, in each case other than a share exchange,
   consolidation or merger of the Company in which the holders of the Common
   Stock immediately prior to the share exchange, consolidation or merger have,
   directly or indirectly, at least a majority of the total voting power in the
   aggregate of all classes of Capital Stock of the continuing or surviving
   corporation immediately after the share exchange, consolidation or merger; or

There is a report filed on Schedule 13D or TO (or any successor schedule, form
   or report) pursuant to the Exchange Act, disclosing that any person,
   including its Affiliates or Associates (for the purposes of this Section 1108
   only, as the term "person" is used in

                                       36
<PAGE>

   Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), has become the
   beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3
   or any successor rule or regulation promulgated under the Exchange Act) of
   50% or more of the aggregate voting power of the Common Stock and other
   capital stock of the Company with equivalent voting rights then outstanding;
   provided, however, that a person shall not be deemed beneficial owner of, or
   --------  -------
   to own beneficially, (A) any securities tendered pursuant to a tender or
   exchange offer made by or on behalf of such person or any of such person's
   Affiliates or Associates until such tendered securities are accepted for
   purchase or exchange thereunder, or (B) any securities if such beneficial
   ownership (1) arises solely as a result of a revocable proxy delivered in
   response to a proxy or consent solicitation made pursuant to the applicable
   rules and regulations under the Exchange Act, and (2) is not also then
   reportable on Schedule 13D (or any successor schedule) under the Exchange
   Act.

          Notwithstanding the foregoing provisions of this Section 1108, a
Change in Control shall not be deemed to have occurred by virtue of the Company,
any Subsidiary, any employee stock ownership plan or any other employee benefit
plan of the Company or any Subsidiary, or any person holding Common Stock for or
pursuant to the terms of any such employee benefit plan, filing or becoming
obligated to file a report under or in response to Schedule 13D or Schedule TO
(or any successor schedule, form or report) under the Exchange Act disclosing
beneficial ownership by it of shares of Common Stock, whether in excess of 50%
or otherwise.

     "Associate" shall have the meaning ascribed to such term in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date hereof.

     (b)  Within 15 Business Days after the occurrence of a Change in Control,
the Company shall mail a written notice of Change in Control by first-class mail
to the Trustee and to each Holder (and to beneficial owners as required by
applicable law). The notice shall include a form of Change in Control Purchase
Notice to be completed by the Noteholder and shall state:

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

          the date by which the Change in Control Purchase Notice pursuant to
this Section 1108 must be given;

          the Change in Control Purchase Date;

          the Change in Control Purchase Price;

          the name and address of the Paying Agent and the Conversion Agent;

          the Conversion Rate and any adjustments thereto;

          that Notes as to which a Change in Control Purchase Notice is given by
the Holder may be converted, if otherwise convertible, only if the Change in
Control Purchase Notice has been withdrawn in accordance with the terms of
Section 1109;

                                       37
<PAGE>

          that Notes must be surrendered to the Paying Agent to collect payment
of the Change in Control Purchase Price;

          that the Change in Control Purchase Price for any Note as to which a
Change in Control Purchase Notice has been duly given and not withdrawn will be
paid as promptly as practicable following the later of the Change in Control
Purchase Date and the time of surrender of such Note as described in clause (8),
above;

          the procedures the Holder must follow to exercise rights under this
Section 1108 and a brief description of those rights;

          briefly, the conversion rights of the Notes (including whether the
Notes are then currently convertible);

          the procedures for withdrawing a Change in Control Purchase Notice;

          that, unless the Company defaults in making payment of such Change in
Control Purchase Price on Notes surrendered for purchase, Original Issue
Discount or cash interest will cease to accrue on and after the Change in
Control Purchase Date; and

          the CUSIP number of the Notes.

     (c)  A Holder may exercise its rights specified in Section 1108(a) upon
delivery of a written notice of purchase (a "Change in Control Purchase Notice")
                                             ---------------------------------
to the Paying Agent at any time prior to the close of business on the Change in
Control Purchase Date, stating:

          (1)  the certificate number of the Note which the Holder will deliver
     to be purchased;

          (2)  the portion of the Principal Amount at Maturity of the Notes
     which the Holder will deliver to be purchased, which portion must be $1,000
     or an integral multiple thereof; and

          (3)  that such Note shall be purchased pursuant to the terms and
     conditions specified in the Notes.

     The delivery of such Note to the Paying Agent prior to, on or after the
Change in Control Purchase Date (together with all necessary endorsements)
at the offices of the Paying Agent shall be a condition to the receipt by the
Holder of the Change in Control Purchase Price therefor; provided, however, that
                                                         --------  -------
such Change in Control Purchase Price shall be so paid pursuant to this Section
1108 only if the Note so delivered to the Paying Agent or such office or agency
shall conform in all respects to the description thereof set forth in the
related Change in Control Purchase Notice and such Change in Control Purchase
Notice shall not be validly withdrawn by the Holder.

     The Company shall purchase from the Holder thereof, pursuant to this
Section 1108, a portion of a Note if the Principal Amount at Maturity of such
portion is $1,000 or an integral

                                       38
<PAGE>

multiple of $1,000. Provisions of the Second Supplemental Indenture that apply
to the purchase of all of a Note also apply to the purchase of such portion of
such Note.

         Any purchase by the Company contemplated pursuant to the provisions of
this Section 1108 shall be consummated by the delivery of the consideration to
be received by the Holder as promptly as practicable following the later of the
Change in Control Purchase Date and the time of delivery of the Note to the
Paying Agent in accordance with this Section 1108.

         Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Change in Control Purchase Notice contemplated by this
Section 1108(c) shall have the right to withdraw such Change in Control Purchase
Notice at any time prior to the close of business on the Change in Control
Purchase Date by delivery of a written notice of withdrawal to the Paying Agent
in accordance with Section 1109.

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

         SECTION 1109. Effect of Purchase Notice or Change in Control Purchase
                       -------------------------------------------------------
Notice. Upon receipt by the Paying Agent of the Purchase Notice or Change in
------
Control Purchase Notice specified in Section 1107(a) or Section 1108(c), as
applicable, the Holder of the Note in respect of which such Purchase Notice or
Change in Control Purchase Notice, as the case may be, was given shall (unless
such Purchase Notice or Change in Control Purchase Notice is withdrawn as
specified in the following two paragraphs) thereafter be entitled to receive
solely the Purchase Price or Change in Control Purchase Price, as the case may
be, with respect to such Note to the Purchase Date or Change in Control Purchase
Date, as the case may be. Such Purchase Price or Change in Control Purchase
Price shall be paid to such Holder, subject to receipts of funds and/or Common
Stock by the Paying Agent, as promptly as practicable following the later of (x)
the Purchase Date or the Change in Control Purchase Date, as the case may be,
with respect to such Note (provided the conditions in Section 1107(a) or Section
1108(c), as applicable, have been satisfied) and (y) the time of delivery of
such Note to the Paying Agent by the Holder thereof in the manner required by
Section 1107(a) or Section 1108(c), as applicable. Notes in respect of which a
Purchase Notice or Change in Control Purchase Notice, as the case may be, has
been given by the Holder thereof may not be converted pursuant to Article XI, on
or after the date of the delivery of such Purchase Notice or Change in Control
Purchase Notice, as the case may be, unless such Purchase Notice or Change in
Control Purchase Notice, as the case may be, has first been validly withdrawn as
specified in the following two paragraphs.

         A Purchase Notice or Change in Control Purchase Notice, as the case may
be, may be withdrawn by means of a written notice of withdrawal delivered to the
office of the Paying Agent in accordance with the Purchase Notice or Change in
Control Purchase Notice, as the case may be, at any time prior to the close of
business on the Purchase Date or the Change in Control Purchase Date, as the
case may be, specifying:

                  (1)   the Principal Amount at Maturity of the Notes with
         respect to which such notice of withdrawal is being submitted,

                                       39
<PAGE>

                  (2)   the certificate number of the Notes in respect of which
         such notice of withdrawal is being submitted, and

                  (3)   the Principal Amount at Maturity, if any, of any such
         Notes which remain subject to the original Purchase Notice or Change in
         Control Purchase Notice, as the case may be, and which has been or will
         be delivered for purchase by the Company.

         A written notice of withdrawal of a Purchase Notice may be in the form
set forth in the preceding paragraph or may be in the form of (i) a conditional
withdrawal contained in a Purchase Notice pursuant to the terms of Section
1107(a)(i)(D), or (ii) a conditional withdrawal containing the information set
forth in Section 1107(a)(i)(D), and the preceding paragraph and contained in a
written notice of withdrawal delivered to the Paying Agent as set forth in the
preceding paragraph.

         There shall be no purchase of any Notes pursuant to Section 1107 (other
than through the issuance of Common Stock in payment of the Purchase Price,
including cash in lieu of fractional shares) or Section 1108 if there has
occurred (prior to, on or after, as the case may be, the giving, by the Holders
of such Notes, of the required Purchase Notice or Change in Control Purchase
Notice, as the case may be) and is continuing an Event of Default (other than a
default in the payment of the Purchase Price or Change in Control Purchase
Price, as the case may be, with respect to such Notes). The Paying Agent will
promptly return to the respective Holders thereof any Notes (x) with respect to
which a Purchase Notice or Change in Control Purchase Notice, as the case may
be, has been withdrawn in compliance with the Indenture, or (y) held by it
during the continuance of an Event of Default (other than a default in the
payment of the Purchase Price or Change in Control Purchase Price, as the case
may be, with respect to such Notes) in which case, upon such return, the
Purchase Notice or Change in Control Purchase Notice with respect thereto shall
be deemed to have been withdrawn.

         SECTION 1110. Deposit of Purchase Price or Change in Control Purchase
                       -------------------------------------------------------
Price. Prior to 10:00 a.m. New York City time on the Business Day following the
-----
Purchase Date or the Change in Control Purchase Date, as the case may be, the
Company shall deposit with the Trustee or with the Paying Agent (or, if the
Company or a Subsidiary or an Affiliate of either of them is acting as the
Paying Agent, shall segregate and hold in trust as provided in Section 1003 of
the Base Indenture) an amount of money (in immediately available funds if
deposited on such Business Day) or Common Stock, if permitted hereunder,
sufficient to pay the aggregate Purchase Price or Change in Control Purchase
Price, as the case may be, of all the Notes or portions thereof which are to be
purchased as of the Purchase Date or Change in Control Purchase Date, as the
case may be. After the Purchase Date or the Change in Control Purchase Date,
Original Issue Discount or cash interest shall cease to accrue on such Note,
whether or not such Note is delivered to the Paying Agent.

         SECTION 1111. Notes Purchased in Part. Any Note which is to be
                       -----------------------
purchased only in part shall be surrendered at the office of the Paying Agent
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Note, without service charge, a
new Note or Notes, of any

                                       40
<PAGE>

authorized denomination as requested by such Holder in aggregate Principal
Amount equal to, and in exchange for, the portion of the Principal Amount at
Maturity of the Note so surrendered which is not purchased.

         SECTION 1112. Covenant to Comply with Securities Laws upon Purchase of
                       --------------------------------------------------------
Notes. (a) In connection with any offer to purchase or purchase of Notes under
-----
Section 1107 or 1108 (provided that such offer or purchase constitutes an
"issuer tender offer" for purposes of Rule 13e-4 (which term, as used herein,
includes any successor provision thereto) under the Exchange Act at the time of
such offer or purchase), the Company shall (i) comply with Rule 13e-4 and Rule
14e-1 under the Exchange Act and any other then applicable tender offer rules,
(ii) file the related Schedule TO (or any successor schedule, form or report)
under the Exchange Act, and (iii) otherwise comply with all Federal and state
securities laws so as to permit the rights and obligations under Sections 1107
and 1108, to be exercised in the time and in the manner specified in Sections
1107 and 1108.

         (b)  The Company may not waive its obligation to purchase the Notes at
the option of Holders in the event of a Change in Control.

         SECTION 1113. Repayment to the Company. The Trustee and the Paying
                       ------------------------
Agent shall return to the Company any cash or shares of Common Stock that remain
unclaimed as provided in paragraph 13 in the Notes, together with interest or
dividends, if any, thereon (subject to the provisions of Sections 606 and 1003
of the Base Indenture), held by them for the payment of the Purchase Price or
Change in Control Purchase Price, as the case may be; provided, however, that to
                                                      --------  -------
the extent that the aggregate amount of cash or shares of Common Stock deposited
by the Company pursuant to Section 1110, exceeds the aggregate Purchase Price or
Change in Control Purchase Price, as the case may be, of the Notes or portions
thereof which the Company is obligated to purchase as of the Purchase Date or
Change in Control Purchase Date, as the case may be, then as promptly as
practicable after the Business Day following the Purchase Date or Change in
Control Purchase Date, as the case may be, the Trustee shall return any such
excess to the Company together with interest or dividends, if any, thereon
(subject to the provisions of Sections 606 and 1003 of the Base Indenture).

         Notwithstanding anything in the Indenture to the contrary, all moneys
delivered to the Trustee (in any capacity) for payment to Holders shall remain
uninvested unless otherwise agreed to in writing between the Company and the
Trustee."

         (g)  Article XII of the Base Indenture is hereby deleted in its
entirety.

         (h)  Article XIII of the Base Indenture is hereby deleted in its
entirety.

                                       41
<PAGE>

Interpretation of Base Indenture. Except as otherwise specifically provided in
this Second Supplemental Indenture, whenever in the Indenture there is
mentioned, in any context, the principal of or principal amount of any Security
of any series or a percentage in principal amount of the Outstanding Securities
of any series, such mention shall be deemed to be, solely with respect to the
Notes, the Principal Amount at Maturity of the Notes or a percentage of the
aggregate Principal Amount at Maturity of the Notes at the time Outstanding.

TAX MATTERS

Optional Conversion to Semiannual Coupon Note upon Tax Event. From and after (i)
the date (the "Tax Event Date") of the occurrence of a Tax Event and (ii) the
               --------------
date the Company exercises the option provided for in this Section 501,
whichever is later (the "Option Exercise Date"), at the option of the Company,
                         --------------------
interest in lieu of future Original Issue Discount or cash interest shall accrue
at the rate of 1% per annum, calculated on a semiannual bond equivalent basis,
on a Restated Principal Amount, per $1,000 original Principal Amount at Maturity
(the "Restated Principal Amount") equal to the Issue Price plus Original Issue
      -------------------------
Discount accrued through the Option Exercise Date and shall be payable
semiannually on October 19 and April 19 of each year (each an "Interest Payment
                                                               ----------------
Date") to Holders of record at the close of business on the October 4 or April 4
----
(each a "Regular Record Date") immediately preceding such Interest Payment Date.
         -------------------
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months and will accrue from the most recent date on which interest has
been paid or, if no interest has been paid, from the Option Exercise Date.
Within 15 days of the occurrence of a Tax Event, the Company shall deliver a
written notice of such Tax Event by facsimile and first-class mail to the
Trustee and within 15 days of its exercise of such option the Company shall
deliver a written notice of the Option Exercise Date by facsimile and
first-class mail to the Trustee and by first class mail to the Holders of the
Notes. From and after the Option Exercise Date, (i) the Company shall be
obligated to pay at Stated Maturity, in lieu of the Principal Amount at Maturity
of a Note, the Restated Principal Amount thereof plus accrued and unpaid
interest on such Note and (ii) "Issue Price and accrued Original Issue
Discount," "Issue Price plus Original Issue Discount" or similar words, as used
herein, shall mean Restated Principal Amount plus accrued and unpaid interest
with respect to any Note. Notes authenticated and delivered after the Option
Exercise Date may, and shall if required by the Trustee, bear a notation in a
form approved by the Trustee as to the conversion of the Notes to semiannual
coupon notes. No other changes to this Indenture shall result as a result of the
events described in this Section 501.

Payment of Interest; Interest Rights Preserved. (a) Interest on any Note that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the person in whose name that Note is registered at the
close of business on the Regular Record Date for such interest at the office or
agency of the Company maintained for such purpose. Each installment of interest
on any Note shall be paid in same-day funds by transfer to an account maintained
by the payee located inside the United States. In the case of a permanent Global
Note, interest payable on any Interest Payment Date will be paid to the
Depositary, with respect to that portion of such permanent Global Note held for
its account by Cede & Co. for the purpose of permitting such party to credit the
interest received by it in respect of such permanent Global Note to the accounts
of the beneficial owners thereof.

                                       42
<PAGE>

                  (b) Except as otherwise specified with respect to the Notes,
any interest on any Note that is payable on any Interest Payment Date, but is
not punctually paid or duly provided for within 30 days following such Interest
Payment Date (herein called "Defaulted Interest", which term shall include any
                             ------------------
accrued and unpaid interest that has accrued on such defaulted amount in
accordance with paragraph 1 of the Notes), shall forthwith cease to be payable
to the registered Holder thereof on the relevant Regular Record Date by virtue
of having been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in clause (1) or (2) below:

                  (1) The Company may elect to make payment of any Defaulted
                  Interest to the persons in whose names the 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
                  proposed to be paid on each Note and the date of the proposed
                  payment (which shall not be less than 20 days after such
                  notice is received by the Trustee), and at the same time the
                  Company shall deposit with the Trustee an amount of money
                  equal to the aggregate amount proposed to be paid in respect
                  of such Defaulted Interest or shall make arrangements
                  satisfactory to the Trustee for such deposit on or prior to
                  the date of the proposed payment, such money when deposited to
                  be held in trust for the benefit of the persons entitled to
                  such Defaulted Interest as in this clause provided. Thereupon
                  the Trustee shall fix a Special Record Date for the payment of
                  such Defaulted Interest which shall be not more than 15 days
                  and not less than 10 days prior to the date of the proposed
                  payment and not less than 10 days after the receipt by the
                  Trustee of the notice of the proposed payment. The Trustee
                  shall promptly notify the Company of such Special Record Date
                  and, in the name and at the expense of the Company, shall
                  cause notice of the proposed payment of such Defaulted
                  Interest and the Special Record Date therefor to be mailed,
                  first-class postage prepaid, to each Holder of Notes at his
                  address as it appears on the list of Noteholders maintained
                  pursuant to Section 2.05 not less than 10 days prior to such
                  Special Record Date. Notice of the proposed payment of such
                  Defaulted Interest and the Special Record Date therefor having
                  been mailed as aforesaid, such Defaulted Interest shall be
                  paid to the persons in whose names the Notes are registered at
                  the close of business on such Special Record Date and shall no
                  longer be payable pursuant to the following clause (2).

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

         Subject to the foregoing provisions of this Section and Section 305 of
the Base Indenture , each Note delivered under this Indenture upon registration
of transfer of or in exchange for or in lieu of any other security shall carry
the rights to interest accrued and unpaid, and to accrue, which were carried by
such other Note.

                                       43
<PAGE>

MISCELLANEOUS PROVISIONS

Concerning the Indenture. Except as expressly amended hereby, the Base Indenture
shall continue in full force and effect in accordance with the provisions
thereof and the Base Indenture is in all respects hereby ratified and confirmed.
This Second Supplemental Indenture and all its provisions shall be deemed a part
of the Base Indenture in the manner and to the extent herein and therein
provided.

Governing Law. This Second Supplemental Indenture shall be governed by, and
construed in accordance with, the laws of the State of New York.

Multiple Originals. This Second Supplemental Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.

                                       44
<PAGE>

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

                                       45
<PAGE>

                                         Lowe's Companies, Inc.

                                         By: /s/ Marshall A. Croom
                                             ---------------------------------
                                             Name: Marshall A. Croom
                                             Title: Vice President & Treasurer

                                       46
<PAGE>

                                                Bank One, N.A., as Trustee

                                                By: /s/ Steve M. Husbands
                                                    -----------------------
                                                    Name: Steve M. Husbands
                                                    Title: Vice President

                                       47
<PAGE>

                                  EXHIBIT A-1

                         [FORM OF FACE OF GLOBAL NOTE]

         THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT, FOR PURPOSES OF
SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986,
AS AMENDED. THE ISSUE PRICE OF THIS NOTE WAS $861.03 PER $1,000 OF PRINCIPAL
AMOUNT AT MATURITY; THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, INCLUDING CASH
INTEREST PAYABLE THROUGH OCTOBER 19, 2006 TAXABLE AS ORIGINAL ISSUE DISCOUNT
UNDER TREASURY REGULATION SECTION 1.1273-1, IS $182.02 PER $1,000 OF PRINCIPAL
AMOUNT AT MATURITY; THE ISSUE DATE IS OCTOBER 19, 2001; AND THE YIELD TO
MATURITY FOR THE PURPOSES OF ACCRUING TAX ORIGINAL ISSUE DISCOUNT IS 1% PER
ANNUM, CALCULATED ON A SEMIANNUAL BOND EQUIVALENT BASIS.

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

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

                                     A-1-1
<PAGE>

                            LOWE'S COMPANIES, INC.

                        Senior Convertible Note due 2021

No. A-1                                        CUSIP:  548661CGO
Issue Date: October 19, 2001                   Original Issue Discount:  $182.02
Initial Issue Price:  $861.03                  (for each $1,000 Principal
(for each $1,000 Principal                     Amount at Stated Maturity)
Amount at Stated Maturity)

         LOWE'S COMPANIES, INC., a corporation incorporated under the laws of
the State of North Carolina, promises to pay to Cede & Co. or registered
assigns, the Principal Amount at Maturity of _________ DOLLARS ($__________) on
October 19, 2021.

         This Note shall not bear interest except as specified on the reverse
side of this Note. Original Issue Discount will accrue as specified on the
reverse side of this Note. This Note is convertible as specified on the reverse
side of this Note.

         Additional provisions of this Note are set forth on the reverse side of
this Note.

Dated:  October 19, 2001                       LOWE'S COMPANIES, INC.

                                               By: ____________________________
                                                   Name:
                                                   Title:

TRUSTEE'S CERTIFICATE OF
  AUTHENTICATION

BANK ONE, N.A.,
as Trustee, certifies that this
is one of the Notes referred
to in the within-mentioned Indenture.

By: ____________________________________
         Authorized Officer

Dated:   October 19, 2001

                                     A-1-2
<PAGE>

                         [REVERSE SIDE OF GLOBAL NOTE]

                       Senior Convertible Note due 2021

1.   Interest.
     --------

     The Company promises to pay interest in cash on the Principal Amount at
Maturity of this Note at the rate per annum of 0.8610% from the Issue Date, or
from the most recent date to which interest has been paid or provided for, until
October 19, 2006. During such period, the Company will pay cash interest
semiannually in arrears on April 19 and October 19 of each year (each an
"Interest Payment Date") to Holders of record at the close of business on each
 ---------------------
April 4 and October 4 (whether or not a business day) (each a "Regular Record
                                                               --------------
Date") immediately preceding such Interest Payment Date. Cash interest on the
----
Notes will accrue from the most recent date to which interest has been paid or
duly provided or, if no interest has been paid, from the Issue Date. Cash
interest will be computed on the basis of a 360-day year of twelve 30-day
months.

     After October 19, 2006, this Note shall not bear interest, except as
specified in this paragraph. If the Principal Amount at Maturity hereof or any
portion of such Principal Amount at Maturity is not paid when due (whether upon
acceleration pursuant to Section 502 of the Base Indenture, as amended by
Article IV of the Second Supplemental Indenture, upon the date set for payment
of the Redemption Price pursuant to paragraph 5 hereof, upon the date set for
payment of the Purchase Price or Change in Control Purchase Price pursuant to
paragraph 6 hereof or upon the Stated Maturity of this Note) or if installments
of cash interest are not paid in accordance with the preceding paragraph, then
in each such case the overdue amount shall, to the extent permitted by law, bear
interest at the rate of 1% per annum, compounded semiannually, which interest
shall accrue from the date such overdue amount was originally due to the date
payment of such amount, including interest thereon, has been made or duly
provided for. All such interest shall be payable on demand. The accrual of such
interest on overdue amounts shall be in lieu of, and not in addition to, the
continued accrual of Original Issue Discount or cash interest.

     Original Issue Discount (the difference between the Issue Price and the
Principal Amount at Maturity of the Note), in the period during which a Note
remains outstanding, shall accrue at 1% per annum, on a semi-annual bond
equivalent basis using a 360-day year comprised of twelve 30-day months,
beginning on October 19, 2006.

2.   Method of Payment.
     -----------------

     Subject to the terms and conditions of the Indenture, the Company will make
payments in respect of Redemption Prices, Purchase Prices, Change in Control
Purchase Prices and at Stated Maturity to Holders who surrender Notes to a
Paying Agent to collect such payments in respect of the Notes. In addition, the
Company will pay cash interest from the Issue Date until October 19, 2006 as
more fully described in paragraph 1 hereof. The Company will pay cash amounts in
money of the United States that at the time of payment is legal tender for
payment of public and

                                     A-1-3
<PAGE>

private debts. However, the Company may make such cash payments by check payable
in such money.

3.       Paying Agent, Conversion Agent and Registrar.
         --------------------------------------------

         Initially, Bank One, N.A., a national banking associated duly organized
and existing under the laws of the United States, will act as Paying Agent,
Conversion Agent and Registrar. The Company may appoint and change any Paying
Agent, Conversion Agent, Registrar or co-registrar without notice, other than
notice to the Trustee, except that the Company will maintain at least one Paying
Agent in the State of New York, City of New York, Borough of Manhattan, which
shall initially be an office or agency of the Trustee. The Company or any of its
Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion
Agent, Registrar or co-registrar.

4.       Indenture.
         ---------

         The Company has issued the Notes under an Amended and Restated
Indenture dated as of December 1, 1995 (the "Base Indenture"), between the
                                             --------------
Company and the Trustee, as supplemented by a First Supplemental Indenture,
dated as of February 23, 1999 (the "First Supplemental Indenture") and and as
                                    ----------------------------
further supplemented by a Second Supplemental Indenture (the "Second
                                                              ------
Supplemental Indenture", and together with the First Supplemental Indenture and
----------------------
the Base Indenture, the "Indenture"). The terms of the Notes include those
                         ---------
stated in the Indenture and those made part of the Indenture by reference to the
Notes themselves and the Trust Indenture Act of 1939, as in effect from time to
time (the "TIA"). Capitalized terms used herein and not defined herein have the
           ---
meanings ascribed thereto in the Indenture. The Notes are subject to all such
terms, and Noteholders are referred to the Indenture and the TIA for a statement
of those terms.

         The Notes are unsecured and unsubordinated obligations of the Company
limited to $580,700,000 aggregate Principal Amount at Maturity and will rank
equally in right of payment to all the Company's present and future unsecured
and unsubordinated indebtedness. The Indenture does not limit other indebtedness
of the Company, secured or unsecured.

5.       Redemption at the Option of the Company.
         ---------------------------------------

         No sinking fund is provided for the Notes. The Notes are redeemable as
a whole, or from time to time in part, at any time at the option of the Company
at the Redemption Prices set forth below, provided that the Notes are not
redeemable prior to October 19, 2006.

         The table below shows Redemption Prices of a Note per $1,000 Principal
Amount at Maturity on the dates shown below and at Stated Maturity, which prices
reflect the Issue Price plus accrued Original Issue Discount, calculated to each
such date. The Redemption Price of a Note redeemed between such dates shall
include an additional amount reflecting the additional Original Issue Discount
accrued since the next preceding date in the table to but excluding the actual
Redemption Date.

                                     A-1-4

<PAGE>

<TABLE>
<CAPTION>
                                                          (1)                     (2)                         (3)
                                                         Note                   Accrued                   Redemption
       Redemption Date                                Issue Price         Original Issue Discount       Price (1) + (2)
       ---------------                                -----------         -----------------------       ---------------
       <S>                                            <C>                   <C>                          <C>
       October 19, 2006........................       $     861.03          $        0.00                $     861.03
       October 19, 2007........................       $     861.03          $        8.63                $     869.66
       October 19, 2008........................       $     861.03          $       17.35                $     878.38
       October 19, 2009........................       $     861.03          $       26.16                $     887.19
       October 19, 2010........................       $     861.03          $       35.05                $     896.08
       October 19, 2011........................       $     861.03          $       44.03                $     905.06
       October 19, 2012........................       $     861.03          $       53.11                $     914.14
       October 19, 2013........................       $     861.03          $       62.27                $     923.30
       October 19, 2014........................       $     861.03          $       71.53                $     932.56
       October 19, 2015........................       $     861.03          $       80.88                $     941.91
       October 19, 2016........................       $     861.03          $       90.32                $     951.35
       October 19, 2017........................       $     861.03          $       99.86                $     960.89
       October 19, 2018........................       $     861.03          $      109.49                $     970.52
       October 19, 2019........................       $     861.03          $      119.22                $     980.25
       October 19, 2020........................       $     861.03          $      129.04                $     990.07

       At Stated Maturity......................       $     861.03          $      138.97                $   1,000.00
</TABLE>

6.       Purchase by the Company at the Option of the Holder.
         ---------------------------------------------------

         Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, the Notes held by
such Holder on the following Purchase Dates and at the following Purchase
Prices, plus accrued and unpaid cash interest, if any, per $1,000 Principal
Amount at Maturity, upon delivery of a Purchase Notice containing the
information set forth in the Indenture, at any time from the opening of business
on the date that is at least 20 Business Days prior to such Purchase Date until
the close of business on the Business Day immediately preceding such Purchase
Date and upon delivery of the Notes to the Paying Agent by the Holder as set
forth in the Indenture.

         Purchase Date                                         Purchase Price
         -------------                                         --------------

         October 19, 2003...............................       $861.03
         October 19, 2006...............................       $861.03
         October 19, 2011...............................       $905.06

         The Purchase Price (equal to the Issue Price plus accrued Original
Issue Discount, if any, to the Purchase Date) may be paid, at the option of the
Company, in cash or shares of Common Stock, or any combination thereof in
accordance with the Indenture.

         If prior to a Purchase Date this Note has been converted to a
semiannual coupon note following the occurrence of a Tax Event, the Purchase
Price will be equal to the Restated Principal Amount, plus accrued cash interest
from the date of conversion to the Purchase Date.

         At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to purchase all or a portion
of the Notes held by such Holder as

                                     A-1-5
<PAGE>

of a date no later than 35 Business Days after the occurrence of a Change in
Control of the Company occurring on or prior to October 19, 2006, for a Change
in Control Purchase Price equal to the Issue Price plus accrued Original Issue
Discount or accrued cash interest to the Change in Control Purchase Date, which
Change in Control Purchase Price shall be paid in cash. If prior to a Change in
Control Purchase Date this Note has been converted to a semiannual coupon note
following the occurrence of a Tax Event, the Change in Control Purchase Price
shall be equal to the Restated Principal Amount, plus accrued cash interest from
the date of conversion to the Change in Control Purchase Date.

         A third party may make the offer and purchase of the Notes in lieu of
the Company in accordance with the Indenture.

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

         If cash (and/or securities if permitted under the Indenture) sufficient
to pay the Purchase Price or Change in Control Purchase Price, as the case may
be, of all Notes or portions thereof to be purchased as of the Purchase Date or
the Change in Control Purchase Date, as the case may be, is deposited with the
Paying Agent on the Business Day following the Purchase Date or the Change in
Control Purchase Date, as the case may be, such Notes (or portions thereof)
shall cease to be outstanding and Original Issue Discount or cash interest on
such Notes (or portions thereof) shall cease to accrue on such Purchase Date or
Change in Control Purchase Date, as the case may be, and the Holder thereof
shall have no other rights as such (other than the right to receive the Purchase
Price or Change in Control Purchase Price, as the case may be, upon surrender of
such Note).

7.       Notice of Redemption.
         --------------------

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

8.       Conversion.
         ----------

         Subject to the provisions of this paragraph 8 and notwithstanding the
fact that any other condition to conversion has not been satisfied, Holders may
convert the Notes into Common Stock on a Conversion Date in any fiscal quarter
commencing after February 1, 2002, if, as of the last day of the preceding
fiscal quarter, the Sale Price of the Common Stock for at least 20 trading days
in a period of 30 consecutive trading days ending on the last trading day of
such preceding calendar quarter is greater than the conversion trigger price.
The "conversion trigger price" for any calendar quarter shall be a reference
     ------------------------
percentage, beginning at 120%, and declining

                                     A-1-6
<PAGE>

0.1282% per quarter thereafter, of the accreted conversion price per share of
Common Stock on the last trading day of such preceding calendar quarter.

         The "accreted conversion price" per share of Common Stock as of any day
              -------------------------
equals the quotient of:

                    .        the Issue Price and accrued Original Issue Discount
                             or accrued cash interest to that day, divided by

                    .        the number of shares of Common Stock issuable upon
                             conversion of $1,000 Principal Amount at Maturity
                             of Notes on that day.

         For illustrative purposes only, the table below shows the conversion
trigger price per share of Common Stock in respect of each of the first 20
fiscal quarters. These prices reflect the accreted conversion price per share of
Common Stock (assuming that no events occurred requiring an adjustment to the
initial Conversion Rate of 17.2120 shares of Common Stock per $1,000 Principal
Amount of Maturity) multiplied by the applicable percentage for the respective
calendar quarter. Thereafter, the accreted conversion price per share of Common
Stock increases each calendar quarter by the accrued Original Issue Discount for
the quarter and the applicable percentage declines by 0.1282% per quarter.

<TABLE>
<CAPTION>
                                                          (1)                       (2)                (3)
                                                                                                    Conversion
                                                        Accreted                Applicable        Trigger Price
            Fiscal Quarter                          Conversion Price            Percentage           (1)x(2)
            --------------                          ----------------            ----------           -------
<S>                                                   <C>                        <C>               <C>
2001
    Quarter ended February 1, 2002................    $    50.03                  120.0000%         $     60.04
2002
    Quarter ended May 3, 2002.....................    $    50.03                  119.8718%               59.97
    Quarter ended August 2, 2002..................    $    50.03                  119.7436%               59.91
    Quarter ended November 1, 2002................    $    50.03                  119.6154%               59.84
    Quarter ended January 31, 2003................    $    50.03                  119.4872%               59.78
2003
    Quarter ended May 2, 2003.....................    $    50.03                  119.3590%               59.72
    Quarter ended August 1, 2003..................    $    50.03                  119.2308%               59.65
    Quarter ended October 31, 2003................    $    50.03                  119.1026%               59.59
    Quarter ended January 30, 2004................    $    50.03                  118.9744%               59.52
2004
    Quarter ended April 30, 2004..................    $    50.03                  118.8462%               59.46
    Quarter ended July 30, 2004...................    $    50.03                  118.7180%               59.39
    Quarter ended October 29, 2004................    $    50.03                  118.5898%               59.33
    Quarter ended January 28, 2005................    $    50.03                  118.4616%               59.27
2005
    Quarter ended April 29, 2005..................    $    50.03                  118.3334%               59.20
    Quarter ended July 29, 2005...................    $    50.03                  118.2052%               59.14
    Quarter ended October 28, 2005................    $    50.03                  118.0770%               59.07
    Quarter ended January 27, 2006................    $    50.03                  117.9488%               59.01
2006
    Quarter ended April 28, 2006..................    $    50.03                  117.8206%               58.95
</TABLE>

                                     A-1-7
<PAGE>

<TABLE>
   <S>                                                <C>                        <C>                     <C>
    Quarter ended July 28, 2006...................    $    50.03                  117.6924%               58.88
    Quarter ended October 27, 2006................    $    50.04                  117.5642%               58.85
</TABLE>

         Subject to the provisions of this paragraph 8 and notwithstanding the
fact that any other condition to conversion has not been satisfied, Holders may
convert the Notes into Common Stock on a Conversion Date during any period in
which the credit rating assigned to the Notes by a Rating Agency is at or below
the Applicable Rating. "Rating Agency" means (1) Moody's Investors Service, Inc.
and its successors ("Moody's"), (2) Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies Inc., and its successors ("Standard &
Poor's") or (3) Fitch, Inc. ("Fitch"). "Applicable Rating" means (1) Baa3, in
the case of Moody's, (2) BBB, in the case of Standard & Poor's or (3) BBB, in
the case of Fitch.

         Subject to the provisions of this paragraph 8 and notwithstanding the
fact that any other condition to conversion has not been satisfied, a Holder may
convert into Common Stock a Note or portion of a Note which has been called for
redemption pursuant to paragraph 5 hereof, even if the foregoing provisions have
not been satisfied, but such Notes may be surrendered for conversion until the
close of business on the second Business Day immediately preceding the
Redemption Date.

         Subject to the provisions of this paragraph 8 and notwithstanding the
fact that any other condition to conversion has not been satisfied, in the event
the Company is a party to a consolidation, merger or binding share exchange
pursuant to which the Common Stock would be converted into cash, securities or
other property as set forth in Article VIII of the Indenture, the Notes may be
surrendered for conversion at any time from and after the date which is 15 days
prior to the date the Company announces the anticipated effective time until 15
days after the actual effective date of such transaction, and at the effective
time of such transaction the right to convert a Note into Common Stock will be
deemed to have changed into a right to convert it into the kind and amount of
cash, securities or other property which the holder would have received if the
holder had converted its Note immediately prior to the transaction.

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

         The initial Conversion Rate is 17.2120 shares of Common Stock per
$1,000 Principal Amount at Maturity, subject to adjustment in certain events
described in the Indenture. The Company will deliver cash or a check in lieu of
any fractional share of Common Stock.

         In the event the Company exercises its option pursuant to Section 502
of the Base Indenture, as amended by Article IV of the Second Supplemental
Indenture, to have interest in lieu of Original Issue Discount or cash interest
accrue on the Note following a Tax Event, the Holder will be entitled on
conversion to receive the same number of shares of Common Stock such Holder
would have received if the Company had not exercised such option.

         Accrued and unpaid interest in lieu of Original Issue Discount and cash
interest will not be paid on Notes that are converted; provided, however that
accrued cash interest, if any, will be

                                     A-1-8
<PAGE>

payable upon any conversion of Notes at the option of the Holder made
concurrently with or after acceleration of the Notes following any Event of
Default. Holders of Notes surrendered for conversion during the period from the
close of business on any regular Record Date next preceding any Interest Payment
Date to the opening of business of such Interest Payment Date will receive the
semiannual interest payable on such Notes on the corresponding Interest Payment
Date notwithstanding the conversion and such Notes (except Notes called for
Redemption) upon surrender must be accompanied by funds equal to the amount of
semiannual interest payable on the Principal Amount of Notes so converted.

         To convert a Note, a Holder must (1) complete and manually sign the
conversion notice below (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent, (2) surrender the Note
to the Conversion Agent, (3) furnish appropriate endorsements and transfer
documents if required by the Conversion Agent, the Company or the Trustee and
(4) pay any transfer or similar tax, if required.

         A Holder may convert a portion of a Note if the Principal Amount at
Maturity of such portion is $1,000 or an integral multiple of $1,000. No payment
or adjustment will be made for dividends on the Common Stock except as provided
in the Indenture. On conversion of a Note, that portion of accrued Original
Issue Discount or accrued cash interest (or interest if the Company has
exercised its option provided for in paragraph 10 hereof) attributable to the
period from the Issue Date (or, if the Company has exercised the option referred
to in paragraph 10 hereof, the later of (x) the date of such exercise and (y)
the date on which interest was last paid) through the Conversion Date with
respect to the converted Note shall not be cancelled, extinguished or forfeited,
but rather shall be deemed to be paid in full to the Holder thereof through the
delivery of the Common Stock (together with the cash payment, if any, in lieu of
fractional shares) in exchange for the Note being converted pursuant to the
terms hereof; and the fair market value of such shares of Common Stock (together
with any such cash payment in lieu of fractional shares) shall be treated as
issued, to the extent thereof, first in exchange for Original Issue Discount or
cash interest (or interest, if the Company has exercised its option provided for
in paragraph 10 hereof) accrued through the Conversion Date, and the balance, if
any, of such fair market value of such Common Stock (and any such cash payment)
shall be treated as issued in exchange for the Issue Price of the Note being
converted pursuant to the provisions hereof.

         The Conversion Rate will be adjusted for dividends or distributions on
Common Stock payable in Common Stock or other Capital Stock; subdivisions,
combinations or certain reclassifications of Common Stock; distributions to all
holders of Common Stock of certain rights to purchase Common Stock for a period
expiring within 60 days at less than the Sale Price of the Common Stock at the
Time of Determination; and distributions to such holders of assets or debt
securities of the Company or certain rights to purchase securities of the
Company (excluding certain cash dividends or distributions). However, no
adjustment need be made if Noteholders may participate in the transaction or in
certain other cases. The Company from time to time may voluntarily increase the
Conversion Rate.

         If the Company is a party to a consolidation, merger or binding share
exchange or a transfer of all or substantially all of its assets, or upon
certain distributions described in the Indenture, the right to convert a Note
into Common Stock may be changed into a right to convert it into securities,
cash or other assets of the Company or another person.

                                     A-1-9
<PAGE>

9.       Conversion Arrangement on Call for Redemption.
         ---------------------------------------------

         Any Notes called for redemption, unless surrendered for conversion
before the close of business on the Redemption Date, may be deemed to be
purchased from the Holders of such Notes at an amount not less than the
Redemption Price, by one or more investment banks or other purchasers who may
agree with the Company to purchase such Notes from the Holders, to convert them
into Common Stock and to make payment for such Notes to the Trustee in trust for
such Holders.

10.      Tax Event.
         ---------

         (a)   From and after (i) the date (the "Tax Event Date") of the
                                                 --------------
occurrence of a Tax Event and (ii) the date the Company exercises the option
provided for in this paragraph 10, whichever is later (the "Option Exercise
                                                            ---------------
Date"), at the option of the Company, interest in lieu of future Original Issue
----
Discount or cash interest shall accrue at the rate of 1.0% per annum on a
principal amount per Note (the "Restated Principal Amount") equal to the Issue
                                -------------------------
Price plus Original Issue Discount accrued through the Option Exercise Date and
shall be payable semiannually on April 19 and October 19 of each year (each an
"Interest Payment Date") to Holders of record at the close of business on the
 ---------------------
April 4 and October 4 (each a "Regular Record Date") immediately preceding such
                               -------------------
Interest Payment Date. Interest will be computed on a semiannual bond equivalent
basis using a 360-day year comprised of twelve 30-day months and will accrue
from the most recent date to which interest has been paid or, if no interest has
been paid, from the Option Exercise Date.

         (b)   Interest on any Note that is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the person in
whose name that Note is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company maintained
for such purpose. Each installment of interest on any Note shall be paid in
same-day funds by transfer to an account maintained by the payee located inside
the United States.

         (c)   Except as otherwise specified with respect to the Notes, any
Defaulted Interest on any Note shall forthwith cease to be payable to the
registered Holder thereof on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the Company
as provided for in Section 502(b) of the Second Supplemental Indenture.

11.      Denominations; Transfer; Exchange.
         ---------------------------------

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

                                    A-1-10
<PAGE>

case of a Note to be purchased in part, the portion of the Note not to be
purchased) or any Notes for a period of 15 days before the mailing of a notice
of redemption of Notes to be redeemed.

12.      Persons Deemed Owners.
         ---------------------

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

13.      Unclaimed Money or Notes.
         ------------------------

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

14.      Amendment; Waiver.
         -----------------

         Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in aggregate Principal Amount at Maturity of the Notes at
the time outstanding and (ii) certain Defaults may be waived with the written
consent of the Holders of a majority in aggregate Principal Amount at Maturity
of the Notes at the time outstanding. Subject to certain exceptions set forth in
the Indenture, without the consent of any Noteholder, the Company and the
Trustee may amend the Indenture or the Notes to cure any ambiguity, omission,
defect or inconsistency, or to comply with Article IX of the Base Indenture or
Section 304 of the Second Supplemental Indenture, to secure the Company's
obligations under this Note or to add to the Company's covenants for the benefit
of the Noteholders or to surrender any right or power conferred, to comply with
any requirement of the SEC in connection with the qualification of the Indenture
under the TIA, or as necessary in connection with the registration of the Notes
under the Securities Act or to make any change that does not adversely affect
the rights of any Holders.

15.      Defaults and Remedies.
         ---------------------

         Under the Indenture, Events of Default include (i) the Company defaults
in payment of interest which becomes payable after the Notes have been converted
to semiannual coupon notes following the occurrence of a Tax Event pursuant to
Section 501 of the Second Supplemental Indenture and such default continues for
30 days (whether or not such payment shall be prohibited by the terms of the
Indenture); (ii) default in payment of the Principal Amount at Maturity (or, if
the Notes have been converted to semiannual coupon notes following a Tax Event,
the Restated Principal Amount), Issue Price plus accrued Original Issue Discount
or cash interest, Redemption Price, Purchase Price or Change in Control Purchase
Price, as the case may be, in respect of the Notes when the same becomes due and
payable (whether or not such payment shall be prohibited by the terms of the
Indenture); (iii) failure by the Company to comply with other agreements in the
Indenture or the Notes, subject to notice and lapse of time; (iv) default in the
payment of any principal when due or resulting in acceleration of other
indebtedness of the Company for borrowed money where the aggregate principal
amount with respect to which the default or acceleration has occurred exceeds
$10,000,000, and such

                                    A-1-11
<PAGE>

acceleration has not been rescinded or annulled within a period of 10 days after
receipt by the Company of a Notice of Default, subject to notice and lapse of
time; and (v) certain events of bankruptcy or insolvency. If an Event of Default
occurs and is continuing, the Trustee, or the Holders of at least 25% in
aggregate Principal Amount at Maturity of the Notes at the time outstanding, may
declare all the Notes to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the Notes
becoming due and payable immediately upon the occurrence of such Events of
Default.

         Noteholders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives indemnity or security reasonably satisfactory to
it. Subject to certain limitations, Holders of a majority in aggregate Principal
Amount at Maturity of the Notes at the time outstanding may direct the Trustee
in its exercise of any trust or power. The Trustee may withhold from Noteholders
notice of any continuing Default (except a Default in payment of amounts
specified in clause (i) or (ii) above) if it determines that withholding notice
is in their interests.

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

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

                      LOWE'S COMPANIES, INC.
                      1605 Curtis Bridge Road
                      Wilkesboro, North Carolina 28697
                      Attention:  Vice President and Treasurer

                                    A-1-12
<PAGE>

<TABLE>
<CAPTION>
             ASSIGNMENT FORM                                                  CONVERSION NOTICE
<S>                                                          <C>
To assign this Note, fill in the form below:                 To convert this Note into Common Stock of
                                                             the Company, check the box:  [_]
I or we assign and transfer this Note to:                    To convert only part of this Note, state the
                                                             Principal Amount at Maturity to be converted
___________________________________________                  (which must be $1,000 or an integral multiple
                                                             of $1,000): $________________________________
___________________________________________
(Insert assignee's Soc. Sec. or tax ID no.)
                                                             If you want the stock certificate made out in
                                                             another person's name, fill in the form below:
___________________________________________
                                                             _______________________________________________
___________________________________________
 (Print or type assignee's name, address                     _______________________________________________
              and zip code)

                                                             (Insert other person's Soc. Sec. or tax ID no.)

and irrevocably appoint ___________________
agent to transfer this Note on the books of
the Company. The agent may substitute another               ________________________________________________
to act for him.
                                                            ________________________________________________
                                                            (Print or type other person's name, address and
                                                            zip code)

Date: ___________________________                            Your
                                                             Signature: _____________________________________*
                                                             (Sign exactly as your name appears on the other
                                                             side of this Note)
</TABLE>

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

                                    A-1-13
<PAGE>

                                  EXHIBIT A-2

                      [FORM OF FACE OF CERTIFICATED NOTE]

         THIS NOTE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT, FOR PURPOSES OF
SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986,
AS AMENDED. THE ISSUE PRICE OF THIS NOTE WAS $861.03 PER $1,000 OF PRINCIPAL
AMOUNT AT MATURITY; THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, INCLUDING CASH
INTEREST PAYABLE THROUGH OCTOBER 19, 2006 TAXABLE AS ORIGINAL ISSUE DISCOUNT
UNDER TREASURY REGULATION SECTION 1.1273-1, IS $182.02 PER $1,000 OF PRINCIPAL
AMOUNT AT MATURITY; THE ISSUE DATE IS OCTOBER 19, 2001; AND THE YIELD TO
MATURITY FOR THE PURPOSES OF ACCRUING ORIGINAL ISSUE DISCOUNT IS 1.0% PER ANNUM,
CALCULATED ON A SEMIANNUAL BOND EQUIVALENT BASIS.

                                     A-2-1
<PAGE>

                            LOWE'S COMPANIES, INC.

                       Senior Convertible Note due 2021

No. C-1                                         CUSIP:  548661 CG 0
Issue Date: October 19, 2001                    Original Issue Discount: $182.02
Initial Issue Price: $861.03                    (for each $1,000 Principal
(for each $1,000 Principal                      Amount at Stated Maturity)
Amount at Stated Maturity)

         LOWE'S COMPANIES, INC., a corporation incorporated under the laws of
the State of North Carolina, promises to pay to Cede & Co. or registered
assigns, the Principal Amount at Maturity of _______________________ DOLLARS
($__________) on October 19, 2021.

         This Note shall not bear interest except as specified on the reverse
side of this Note. Original Issue Discount will accrue as specified on the
reverse side of this Note. This Note is convertible as specified on the reverse
side of this Note.

         Additional provisions of this Note are set forth on the reverse side of
this Note.

Dated:  October 19, 2001                             LOWE'S COMPANIES, INC.

                                                     By:
                                                         _______________________
                                                         Name:
                                                         Title:

TRUSTEE'S CERTIFICATE OF
  AUTHENTICATION

BANK ONE, N.A.,
as Trustee, certifies that this
is one of the Notes referred
to in the within-mentioned Indenture.

By:
   ____________________________________
         Authorized Officer

Dated:   October 19, 2001

                                     A-2-2

<PAGE>

                      [REVERSE SIDE OF CERTIFICATED NOTE]

                       Senior Convertible Note due 2021

1.       Interest.
         --------

         The Company promises to pay interest in cash on the Principal Amount at
Maturity of this Note at the rate per annum of 0.8610% from the Issue Date, or
from the most recent date to which interest has been paid or provided for, until
October 19, 2006. During such period, the Company will pay cash interest
semiannually in arrears on April 19 and October 19 of each year (each an
"Interest Payment Date") to Holders of record at the close of business on each
 ---------------------
April 4 and October 4 (whether or not a business day) (each a "Regular Record
                                                               --------------
Date") immediately preceding such Interest Payment Date. Cash interest on the
----
Notes will accrue from the most recent date to which interest has been paid or
duly provided or, if no interest has been paid, from the Issue Date. Cash
interest will be computed on the basis of a 360-day year of twelve 30-day
months.

         After October 19, 2006, this Note shall not bear interest, except as
specified in this paragraph. If the Principal Amount at Maturity hereof or any
portion of such Principal Amount at Maturity is not paid when due (whether upon
acceleration pursuant to Section 502 of the Base Indenture, as amended by
Article IV of the Second Supplemental Indenture, upon the date set for payment
of the Redemption Price pursuant to paragraph 5 hereof, upon the date set for
payment of the Purchase Price or Change in Control Purchase Price pursuant to
paragraph 6 hereof or upon the Stated Maturity of this Note) or if installments
of cash interest are not paid in accordance with the preceding paragraph, then
in each such case the overdue amount shall, to the extent permitted by law, bear
interest at the rate of 1% per annum, compounded semiannually, which interest
shall accrue from the date such overdue amount was originally due to the date
payment of such amount, including interest thereon, has been made or duly
provided for. All such interest shall be payable on demand. The accrual of such
interest on overdue amounts shall be in lieu of, and not in addition to, the
continued accrual of Original Issue Discount or cash interest.

          Original Issue Discount (the difference between the Issue Price and
the Principal Amount at Maturity of the Note), in the period during which a Note
remains outstanding, shall accrue at 1% per annum, on a semi-annual bond
equivalent basis using a 360-day year comprised of twelve 30-day months,
beginning on October 19, 2006.

2.       Method of Payment.
         -----------------

         Subject to the terms and conditions of the Indenture, the Company will
make payments in respect of Redemption Prices, Purchase Prices, Change in
Control Purchase Prices and at Stated Maturity to Holders who surrender Notes to
a Paying Agent to collect such payments in respect of the Notes. In addition,
the Company will pay cash interest from the Issue Date until October 19, 2006 as
more fully described in paragraph 1 hereof. The Company will pay cash amounts in
money of the United States that at the time of payment is legal tender for
payment of public and

                                     A-2-3
<PAGE>

private debts. However, the Company may make such cash payments by check payable
in such money.

3.       Paying Agent, Conversion Agent and Registrar.
         --------------------------------------------

         Initially, Bank One, N.A., a national banking associated duly organized
and existing under the laws of the United States, will act as Paying Agent,
Conversion Agent and Registrar. The Company may appoint and change any Paying
Agent, Conversion Agent, Registrar or co-registrar without notice, other than
notice to the Trustee, except that the Company will maintain at least one Paying
Agent in the State of New York, City of New York, Borough of Manhattan, which
shall initially be an office or agency of the Trustee. The Company or any of its
Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion
Agent, Registrar or co-registrar.

4.       Indenture.
         ---------

         The Company has issued the Notes under an Amended and Restated
Indenture dated as of December 1, 1995 (the "Base Indenture"), between the
                                             --------------
Company and the Trustee, as supplemented by a First Supplemental Indenture,
dated as of February 23, 1999 (the "First Supplemental Indenture") and and as
                                    ----------------------------
further supplemented by a Second Supplemental Indenture (the "Second
                                                              ------
Supplemental Indenture", and together with the First Supplemental Indenture and
----------------------
the Base Indenture, the "Indenture"). The terms of the Notes include those
                         ---------
stated in the Indenture and those made part of the Indenture by reference to the
Notes themselves and the Trust Indenture Act of 1939, as in effect from time to
time (the "TIA"). Capitalized terms used herein and not defined herein have the
           ---
meanings ascribed thereto in the Indenture. The Notes are subject to all such
terms, and Noteholders are referred to the Indenture and the TIA for a statement
of those terms.

         The Notes are unsecured and unsubordinated obligations of the Company
limited to $580,700,000 aggregate Principal Amount at Maturity and will rank
equally in right of payment to all the Company's present and future unsecured
and unsubordinated indebtedness. The Indenture does not limit other indebtedness
of the Company, secured or unsecured.

5.       Redemption at the Option of the Company.
         ---------------------------------------

         No sinking fund is provided for the Notes. The Notes are redeemable as
a whole, or from time to time in part, at any time at the option of the Company
at the Redemption Prices set forth below, provided that the Notes are not
redeemable prior to October 19, 2006.

         The table below shows Redemption Prices of a Note per $1,000 Principal
Amount at Maturity on the dates shown below and at Stated Maturity, which prices
reflect the Issue Price plus accrued Original Issue Discount, calculated to each
such date. The Redemption Price of a Note redeemed between such dates shall
include an additional amount reflecting the additional Original Issue Discount
accrued since the next preceding date in the table to but excluding the actual
Redemption Date.

                                     A-2-4
<PAGE>

<TABLE>
<CAPTION>
                                                           (1)                       (2)                       (3)
                                                           Note                    Accrued                 Redemption
       Redemption Date                                 Issue Price         Original Issue Discount       Price (1) + (2)
       ---------------                                 -----------         -----------------------       ---------------
       <S>                                            <C>                     <C>                         <C>
       October 19, 2006........................       $     861.03          $        0.00                $     861.03
       October 19, 2007........................       $     861.03          $        8.63                $     869.66
       October 19, 2008........................       $     861.03          $       17.35                $     878.38
       October 19, 2009........................       $     861.03          $       26.16                $     887.19
       October 19, 2010........................       $     861.03          $       35.05                $     896.08
       October 19, 2011........................       $     861.03          $       44.03                $     905.06
       October 19, 2012........................       $     861.03          $       53.11                $     914.14
       October 19, 2013........................       $     861.03          $       62.27                $     923.30
       October 19, 2014........................       $     861.03          $       71.53                $     932.56
       October 19, 2015........................       $     861.03          $       80.88                $     941.91
       October 19, 2016........................       $     861.03          $       90.32                $     951.35
       October 19, 2017........................       $     861.03          $       99.86                $     960.89
       October 19, 2018........................       $     861.03          $      109.49                $     970.52
       October 19, 2019........................       $     861.03          $      119.22                $     980.25
       October 19, 2020........................       $     861.03          $      129.04                $     990.07

       At Stated Maturity......................       $     861.03          $      138.97                $   1,000.00
</TABLE>

6.       Purchase by the Company at the Option of the Holder.
         ---------------------------------------------------

         Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, the Notes held by
such Holder on the following Purchase Dates and at the following Purchase
Prices, plus accrued and unpaid cash interest, if any, per $1,000 Principal
Amount at Maturity, upon delivery of a Purchase Notice containing the
information set forth in the Indenture, at any time from the opening of business
on the date that is at least 20 Business Days prior to such Purchase Date until
the close of business on the Business Day immediately preceding such Purchase
Date and upon delivery of the Notes to the Paying Agent by the Holder as set
forth in the Indenture.

         Purchase Date                                         Purchase Price
         -------------                                         --------------

         October 19, 2003...............................       $861.03
         October 19, 2006...............................       $861.03
         October 19, 2011...............................       $905.06

         The Purchase Price (equal to the Issue Price plus accrued Original
Issue Discount, if any, to the Purchase Date) may be paid, at the option of the
Company, in cash or shares of Common Stock, or any combination thereof in
accordance with the Indenture.

         If prior to a Purchase Date this Note has been converted to a
semiannual coupon note following the occurrence of a Tax Event, the Purchase
Price will be equal to the Restated Principal Amount, plus accrued cash interest
from the date of conversion to the Purchase Date.

         At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to purchase all or a portion
of the Notes held by such Holder as

                                     A-2-5
<PAGE>

of a date no later than 35 Business Days after the occurrence of a Change in
Control of the Company occurring on or prior to October 19, 2006, for a Change
in Control Purchase Price equal to the Issue Price plus accrued Original Issue
Discount or accrued cash interest to the Change in Control Purchase Date, which
Change in Control Purchase Price shall be paid in cash. If prior to a Change in
Control Purchase Date this Note has been converted to a semiannual coupon note
following the occurrence of a Tax Event, the Change in Control Purchase Price
shall be equal to the Restated Principal Amount, plus accrued cash interest from
the date of conversion to the Change in Control Purchase Date.

         A third party may make the offer and purchase of the Notes in lieu of
the Company in accordance with the Indenture.

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

         If cash (and/or securities if permitted under the Indenture) sufficient
to pay the Purchase Price or Change in Control Purchase Price, as the case may
be, of all Notes or portions thereof to be purchased as of the Purchase Date or
the Change in Control Purchase Date, as the case may be, is deposited with the
Paying Agent on the Business Day following the Purchase Date or the Change in
Control Purchase Date, as the case may be, such Notes (or portions thereof)
shall cease to be outstanding and Original Issue Discount or cash interest on
such Notes (or portions thereof) shall cease to accrue on such Purchase Date or
Change in Control Purchase Date, as the case may be, and the Holder thereof
shall have no other rights as such (other than the right to receive the Purchase
Price or Change in Control Purchase Price, as the case may be, upon surrender of
such Note).

7.       Notice of Redemption.
         --------------------

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

8.       Conversion.
         ----------

         Subject to the provisions of this paragraph 8 and notwithstanding the
fact that any other condition to conversion has not been satisfied, Holders may
convert the Notes into Common Stock on a Conversion Date in any fiscal quarter
commencing after February 1, 2002, if, as of the last day of the preceding
fiscal quarter, the Sale Price of the Common Stock for at least 20 trading days
in a period of 30 consecutive trading days ending on the last trading day of
such preceding calendar quarter is greater than the conversion trigger price.
The "conversion trigger price" for any calendar quarter shall be a reference
     ------------------------
percentage, beginning at 120%, and declining

                                     A-2-6
<PAGE>

0.1282% per quarter thereafter, of the accreted conversion price per share of
Common Stock on the last trading day of such preceding calendar quarter.

         The "accreted conversion price" per share of Common Stock as of any day
              -------------------------
equals the quotient of:

                    .        the Issue Price and accrued Original Issue Discount
                             or accrued cash interest to that day, divided by

                    .        the number of shares of Common Stock issuable upon
                             conversion of $1,000 Principal Amount at Maturity
                             of Notes on that day.

         For illustrative purposes only, the table below shows the conversion
trigger price per share of Common Stock in respect of each of the first 20
fiscal quarters. These prices reflect the accreted conversion price per share of
Common Stock (assuming that no events occurred requiring an adjustment to the
initial Conversion Rate of 17.2120 shares of Common Stock per $1,000 Principal
Amount of Maturity) multiplied by the applicable percentage for the respective
calendar quarter. Thereafter, the accreted conversion price per share of Common
Stock increases each calendar quarter by the accrued Original Issue Discount for
the quarter and the applicable percentage declines by 0.1282% per quarter.

<TABLE>
<CAPTION>
                                                          (1)                       (2)                  (3)
                                                                                                     Conversion
                                                        Accreted                 Applicable         Trigger Price
            Fiscal Quarter                          Conversion Price             Percentage            (1)x(2)
            -------------                           ----------------             ----------            -------
<S>                                                   <C>                          <C>                 <C>
2001
    Quarter ended February 1, 2002................    $    50.03                  120.0000%         $     60.04
2002
    Quarter ended May 3, 2002.....................    $    50.03                  119.8718%               59.97
    Quarter ended August 2, 2002..................    $    50.03                  119.7436%               59.91
    Quarter ended November 1, 2002................    $    50.03                  119.6154%               59.84
    Quarter ended January 31, 2003................    $    50.03                  119.4872%               59.78
2003
    Quarter ended May 2, 2003.....................    $    50.03                  119.3590%               59.72
    Quarter ended August 1, 2003..................    $    50.03                  119.2308%               59.65
    Quarter ended October 31, 2003................    $    50.03                  119.1026%               59.59
    Quarter ended January 30, 2004................    $    50.03                  118.9744%               59.52
2004
    Quarter ended April 30, 2004..................    $    50.03                  118.8462%               59.46
    Quarter ended July 30, 2004...................    $    50.03                  118.7180%               59.39
    Quarter ended October 29, 2004................    $    50.03                  118.5898%               59.33
    Quarter ended January 28, 2005................    $    50.03                  118.4616%               59.27
2005
    Quarter ended April 29, 2005..................    $    50.03                  118.3334%               59.20
    Quarter ended July 29, 2005...................    $    50.03                  118.2052%               59.14
    Quarter ended October 28, 2005................    $    50.03                  118.0770%               59.07
    Quarter ended January 27, 2006................    $    50.03                  117.9488%               59.01
2006
    Quarter ended April 28, 2006..................    $    50.03                  117.8206%               58.95
</TABLE>

                                     A-2-7
<PAGE>

<TABLE>
<S>                                                   <C>                          <C>                 <C>
    Quarter ended July 28, 2006...................    $    50.03                  117.6924%               58.88
    Quarter ended October 27, 2006................    $    50.04                  117.5642%               58.85
</TABLE>

         Subject to the provisions of this paragraph 8 and notwithstanding the
fact that any other condition to conversion has not been satisfied, Holders may
convert the Notes into Common Stock on a Conversion Date during any period in
which the credit rating assigned to the Notes by a Rating Agency is at or below
the Applicable Rating. "Rating Agency" means (1) Moody's Investors Service, Inc.
and its successors ("Moody's"), (2) Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies Inc., and its successors ("Standard &
Poor's") or (3) Fitch, Inc. ("Fitch"). "Applicable Rating" means (1) Baa3, in
the case of Moody's, (2) BBB, in the case of Standard & Poor's or (3) BBB, in
the case of Fitch.

         Subject to the provisions of this paragraph 8 and notwithstanding the
fact that any other condition to conversion has not been satisfied, a Holder may
convert into Common Stock a Note or portion of a Note which has been called for
redemption pursuant to paragraph 5 hereof, even if the foregoing provisions have
not been satisfied, but such Notes may be surrendered for conversion until the
close of business on the second Business Day immediately preceding the
Redemption Date.

         Subject to the provisions of this paragraph 8 and notwithstanding the
fact that any other condition to conversion has not been satisfied, in the event
the Company is a party to a consolidation, merger or binding share exchange
pursuant to which the Common Stock would be converted into cash, securities or
other property as set forth in Article VIII of the Indenture, the Notes may be
surrendered for conversion at any time from and after the date which is 15 days
prior to the date the Company announces the anticipated effective time until 15
days after the actual effective date of such transaction, and at the effective
time of such transaction the right to convert a Note into Common Stock will be
deemed to have changed into a right to convert it into the kind and amount of
cash, securities or other property which the holder would have received if the
holder had converted its Note immediately prior to the transaction.

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

         The initial Conversion Rate is 17.2120 shares of Common Stock per
$1,000 Principal Amount at Maturity, subject to adjustment in certain events
described in the Indenture. The Company will deliver cash or a check in lieu of
any fractional share of Common Stock.

         In the event the Company exercises its option pursuant to Section 502
of the Base Indenture, as amended by Article IV of the Second Supplemental
Indenture, to have interest in lieu of Original Issue Discount or cash interest
accrue on the Note following a Tax Event, the Holder will be entitled on
conversion to receive the same number of shares of Common Stock such Holder
would have received if the Company had not exercised such option.

         Accrued and unpaid interest in lieu of Original Issue Discount and cash
interest will not be paid on Notes that are converted; provided, however that
accrued cash interest, if any, will be

                                     A-2-8
<PAGE>

payable upon any conversion of Notes at the option of the Holder made
concurrently with or after acceleration of the Notes following any Event of
Default. Holders of Notes surrendered for conversion during the period from the
close of business on any regular Record Date next preceding any Interest Payment
Date to the opening of business of such Interest Payment Date will receive the
semiannual interest payable on such Notes on the corresponding Interest Payment
Date notwithstanding the conversion and such Notes (except Notes called for
Redemption) upon surrender must be accompanied by funds equal to the amount of
semiannual interest payable on the Principal Amount of Notes so converted.

         To convert a Note, a Holder must (1) complete and manually sign the
conversion notice below (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent, (2) surrender the Note
to the Conversion Agent, (3) furnish appropriate endorsements and transfer
documents if required by the Conversion Agent, the Company or the Trustee and
(4) pay any transfer or similar tax, if required.

         A Holder may convert a portion of a Note if the Principal Amount at
Maturity of such portion is $1,000 or an integral multiple of $1,000. No payment
or adjustment will be made for dividends on the Common Stock except as provided
in the Indenture. On conversion of a Note, that portion of accrued Original
Issue Discount or accrued cash interest (or interest if the Company has
exercised its option provided for in paragraph 10 hereof) attributable to the
period from the Issue Date (or, if the Company has exercised the option referred
to in paragraph 10 hereof, the later of (x) the date of such exercise and (y)
the date on which interest was last paid) through the Conversion Date with
respect to the converted Note shall not be cancelled, extinguished or forfeited,
but rather shall be deemed to be paid in full to the Holder thereof through the
delivery of the Common Stock (together with the cash payment, if any, in lieu of
fractional shares) in exchange for the Note being converted pursuant to the
terms hereof; and the fair market value of such shares of Common Stock (together
with any such cash payment in lieu of fractional shares) shall be treated as
issued, to the extent thereof, first in exchange for Original Issue Discount or
cash interest (or interest, if the Company has exercised its option provided for
in paragraph 10 hereof) accrued through the Conversion Date, and the balance, if
any, of such fair market value of such Common Stock (and any such cash payment)
shall be treated as issued in exchange for the Issue Price of the Note being
converted pursuant to the provisions hereof.

         The Conversion Rate will be adjusted for dividends or distributions on
Common Stock payable in Common Stock or other Capital Stock; subdivisions,
combinations or certain reclassifications of Common Stock; distributions to all
holders of Common Stock of certain rights to purchase Common Stock for a period
expiring within 60 days at less than the Sale Price of the Common Stock at the
Time of Determination; and distributions to such holders of assets or debt
securities of the Company or certain rights to purchase securities of the
Company (excluding certain cash dividends or distributions). However, no
adjustment need be made if Noteholders may participate in the transaction or in
certain other cases. The Company from time to time may voluntarily increase the
Conversion Rate.

         If the Company is a party to a consolidation, merger or binding share
exchange or a transfer of all or substantially all of its assets, or upon
certain distributions described in the Indenture, the right to convert a Note
into Common Stock may be changed into a right to convert it into securities,
cash or other assets of the Company or another person.

                                     A-2-9
<PAGE>

9.       Conversion Arrangement on Call for Redemption.
         ---------------------------------------------

         Any Notes called for redemption, unless surrendered for conversion
before the close of business on the Redemption Date, may be deemed to be
purchased from the Holders of such Notes at an amount not less than the
Redemption Price, by one or more investment banks or other purchasers who may
agree with the Company to purchase such Notes from the Holders, to convert them
into Common Stock and to make payment for such Notes to the Trustee in trust for
such Holders.

10.      Tax Event.
         ---------

         (a)   From and after (i) the date (the "Tax Event Date") of the
                                                 --------------
occurrence of a Tax Event and (ii) the date the Company exercises the option
provided for in this paragraph 10, whichever is later (the "Option Exercise
                                                            ---------------
Date"), at the option of the Company, interest in lieu of future Original Issue
----
Discount or cash interest shall accrue at the rate of 1.0% per annum on a
principal amount per Note (the "Restated Principal Amount") equal to the Issue
                                -------------------------
Price plus Original Issue Discount accrued through the Option Exercise Date and
shall be payable semiannually on April 19 and October 19 of each year (each an
"Interest Payment Date") to Holders of record at the close of business on the
 ---------------------
April 4 and October 4 (each a "Regular Record Date") immediately preceding such
                               -------------------
Interest Payment Date. Interest will be computed on a semiannual bond equivalent
basis using a 360-day year comprised of twelve 30-day months and will accrue
from the most recent date to which interest has been paid or, if no interest has
been paid, from the Option Exercise Date.

         (b)   Interest on any Note that is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the person in
whose name that Note is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company maintained
for such purpose. Each installment of interest on any Note shall be paid in
same-day funds by transfer to an account maintained by the payee located inside
the United States.

         (c)   Except as otherwise specified with respect to the Notes, any
Defaulted Interest on any Note shall forthwith cease to be payable to the
registered Holder thereof on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the Company
as provided for in Section 502(b) of the Second Supplemental Indenture.

11.      Denominations; Transfer; Exchange.
         ---------------------------------

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

                                    A-2-10
<PAGE>

case of a Note to be purchased in part, the portion of the Note not to be
purchased) or any Notes for a period of 15 days before the mailing of a notice
of redemption of Notes to be redeemed.

12.      Persons Deemed Owners.
         ---------------------

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

13.      Unclaimed Money or Notes.
         ------------------------

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

14.      Amendment; Waiver.
         -----------------

         Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in aggregate Principal Amount at Maturity of the Notes at
the time outstanding and (ii) certain Defaults may be waived with the written
consent of the Holders of a majority in aggregate Principal Amount at Maturity
of the Notes at the time outstanding. Subject to certain exceptions set forth in
the Indenture, without the consent of any Noteholder, the Company and the
Trustee may amend the Indenture or the Notes to cure any ambiguity, omission,
defect or inconsistency, or to comply with Article IX of the Base Indenture or
Section 304 of the Second Supplemental Indenture, to secure the Company's
obligations under this Note or to add to the Company's covenants for the benefit
of the Noteholders or to surrender any right or power conferred, to comply with
any requirement of the SEC in connection with the qualification of the Indenture
under the TIA, or as necessary in connection with the registration of the Notes
under the Securities Act or to make any change that does not adversely affect
the rights of any Holders.

15.      Defaults and Remedies.
         ---------------------

         Under the Indenture, Events of Default include (i) the Company defaults
in payment of interest which becomes payable after the Notes have been converted
to semiannual coupon notes following the occurrence of a Tax Event pursuant to
Section 501 of the Second Supplemental Indenture and such default continues for
30 days (whether or not such payment shall be prohibited by the terms of the
Indenture); (ii) default in payment of the Principal Amount at Maturity (or, if
the Notes have been converted to semiannual coupon notes following a Tax Event,
the Restated Principal Amount), Issue Price plus accrued Original Issue Discount
or cash interest, Redemption Price, Purchase Price or Change in Control Purchase
Price, as the case may be, in respect of the Notes when the same becomes due and
payable (whether or not such payment shall be prohibited by the terms of the
Indenture); (iii) failure by the Company to comply with other agreements in the
Indenture or the Notes, subject to notice and lapse of time; (iv) default in the
payment of any principal when due or resulting in acceleration of other
indebtedness of the Company for borrowed money where the aggregate principal
amount with respect to which the default or acceleration has occurred exceeds
$10,000,000, and such

                                    A-2-11
<PAGE>

acceleration has not been rescinded or annulled within a period of 10 days after
receipt by the Company of a Notice of Default, subject to notice and lapse of
time; and (v) certain events of bankruptcy or insolvency. If an Event of Default
occurs and is continuing, the Trustee, or the Holders of at least 25% in
aggregate Principal Amount at Maturity of the Notes at the time outstanding, may
declare all the Notes to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the Notes
becoming due and payable immediately upon the occurrence of such Events of
Default.

         Noteholders may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives indemnity or security reasonably satisfactory to
it. Subject to certain limitations, Holders of a majority in aggregate Principal
Amount at Maturity of the Notes at the time outstanding may direct the Trustee
in its exercise of any trust or power. The Trustee may withhold from Noteholders
notice of any continuing Default (except a Default in payment of amounts
specified in clause (i) or (ii) above) if it determines that withholding notice
is in their interests.

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

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

                           LOWE'S COMPANIES, INC.
                           1605 Curtis Bridge Road
                           Wilkesboro, North Carolina 28697
                           Attention:  Vice President and Treasurer

                                    A-2-12
<PAGE>

<TABLE>
<CAPTION>
            ASSIGNMENT FORM                                             CONVERSION NOTICE
<S>                                                          <C>
To assign this Note, fill in the form below:                 To convert this Note into Common Stock of
                                                             the Company, check the box:  [_]
I or we assign and transfer this Note to:                    To convert only part of this Note, state the
                                                             Principal Amount at Maturity to be converted
                                                             (which must be $1,000 or an integral multiple
____________________________________________                 of $1,000): $_________________________________

____________________________________________
(Insert assignee's Soc. Sec. or tax ID no.)
                                                             If you want the stock certificate made out in
____________________________________________                 another another person's name, fill in the form
                                                             below:
____________________________________________
  (Print or type assignee's name, address                    _______________________________________________
            and zip code)
                                                             _______________________________________________

                                                             (Insert other person's Soc. Sec. or tax ID no.)
and irrevocably appoint ____________________
agent to transfer this Note on the books of                  _______________________________________________
the Company. The agent may substitute another
to act for him.                                              _______________________________________________
                                                             (Print or type other person's name, address and
                                                             zip code)

Date: ___________________________                            Your
                                                             Signature: _____________________________________*
                                                             (Sign exactly as your name appears on the other
                                                             side of this Note)
</TABLE>

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

                                    A-2-13

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