EXHIBIT 10.1
 

 

 
CHATTEM, INC.
 
2.00% CONVERTIBLE SENIOR NOTES DUE 2013
 

 

 

 
INDENTURE
 

 

 

 
DATED AS OF NOVEMBER 22, 2006
 

 

 

 
U.S. BANK, NATIONAL ASSOCIATION
 
AS TRUSTEE
 

 

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TABLE OF CONTENTS

   
Page
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
1
Section 1.01.
Definitions.
1
Section 1.02.
Other Definitions.
8
Section 1.03.
Trust Indenture Act Provisions
9
Section 1.04.
Rules of Construction.
10
ARTICLE 2 THE SECURITIES
10
Section 2.01.
Form and Dating
10
Section 2.02.
Execution and Authentication.
12
Section 2.03.
Registrar, Paying Agent and Conversion Agent.
13
Section 2.04.
Paying Agent to Hold Money in Trust.
13
Section 2.05.
Lists of Holders of Securities.
14
Section 2.06.
Transfer and Exchange.
14
Section 2.07.
Replacement Securities.
15
Section 2.08.
Outstanding Securities.
16
Section 2.09.
Treasury Securities.
16
Section 2.10.
Temporary Securities.
16
Section 2.11.
Cancellation.
17
Section 2.12.
Legend; Additional Transfer and Exchange Requirements.
17
Section 2.13.
CUSIP Numbers.
21
ARTICLE 3 PURCHASE UPON FUNDAMENTAL CHANGE
21
Section 3.01.
Purchase at Holders’ Option upon a Fundamental Change.
21
Section 3.02.
Effect of Fundamental Change Purchase Notice.
23
Section 3.03.
Deposit of Fundamental Change Purchase Price.
24
Section 3.04.
Repayment to The Company.
25
Section 3.05.
Securities Purchased in Part.
25
Section 3.06.
Compliance with Securities Laws upon Purchase of Securities.
25
Section 3.07.
Purchase of Securities in Open Market.
25
ARTICLE 4 CONVERSION
26
Section 4.01.
Conversion Privilege and Conversion Rate.
26
Section 4.02.
Conversion Procedure.
30

 
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Section 4.03.
Fractional Shares.
31
Section 4.04.
Taxes on Conversion
31
Section 4.05.
Company to Provide Stock.
31
Section 4.06.
Adjustment of Conversion Rate.
32
Section 4.07.
No Adjustment
39
Section 4.08.
Notice of Adjustment.
40
Section 4.09.
Notice of Certain Transactions.
40
Section 4.10.
Effect of Recapitalization, Reclassification, Consolidation, Merger or Sale.
40
Section 4.11.
Trustee’s Disclaimer.
41
Section 4.12.
[Intentionally Omitted]
41
Section 4.13.
Settlement of Conversion Obligation.
41
ARTICLE 5 COVENANTS
42
Section 5.01.
Payment of Securities.
42
Section 5.02.
SEC and Other Reports.
43
Section 5.03.
Compliance Certificates.
44
Section 5.04.
Further Instruments and Acts.
44
Section 5.05.
Maintenance of Corporate Existence.
44
Section 5.06.
Rule 144A Information Requirement.
44
Section 5.07.
Stay, Extension and Usury Laws.
44
Section 5.08.
Payment of Additional Interest.
45
Section 5.09.
Maintenance of Office or Agency.
45
ARTICLE 6 CONSOLIDATION AND MERGER
45
Section 6.01.
Company May Consolidate, Etc., Only on Certain Terms.
45
Section 6.02.
Successor Substituted.
46
ARTICLE 7 DEFAULT AND REMEDIES
46
Section 7.01.
Events of Default.
46
Section 7.02.
Acceleration.
49
Section 7.03.
Other Remedies.
49
Section 7.04.
Waiver of Defaults and Events of Default.
49
Section 7.05.
Control by Majority.
50
Section 7.06.
Limitations on Suits.
50
Section 7.07.
Rights of Holders to Receive Payment and to Convert.
50

 
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Section 7.08.
Collection Suit by Trustee.
51
Section 7.09.
Trustee May File Proofs of Claim.
51
Section 7.10.
Priorities.
51
Section 7.11.
Undertaking for Costs.
52
ARTICLE 8 TRUSTEE
52
Section 8.01.
Obligations of Trustee.
52
Section 8.02.
Rights of Trustee.
53
Section 8.03.
Individual Rights of Trustee.
55
Section 8.04.
Trustee’s Disclaimer.
55
Section 8.05.
Notice of Default or Events of Default.
55
Section 8.06.
Reports by Trustee to Holders.
55
Section 8.07.
Compensation and Indemnity.
56
Section 8.08.
Replacement of Trustee.
57
Section 8.09.
Successor Trustee by Merger, Etc.
57
Section 8.10.
Eligibility; Disqualification.
58
Section 8.11.
Preferential Collection of Claims Against Company.
58
ARTICLE 9 SATISFACTION AND DISCHARGE OF INDENTURE
58
Section 9.01.
Satisfaction and Discharge of Indenture.
58
Section 9.02.
Application of Trust Money
59
Section 9.03.
Repayment to Company
59
Section 9.04.
Reinstatement
59
ARTICLE 10 AMENDMENTS; SUPPLEMENTS AND WAIVERS
60
Section 10.01.
Without Consent of Holders.
60
Section 10.02.
With Consent of Holders
60
Section 10.03.
Compliance with Trust Indenture Act
61
Section 10.04.
Revocation and Effect of Consents
61
Section 10.05.
Notation on or Exchange of Securities
62
Section 10.06.
Trustee to Sign Amendments, Etc.
62
Section 10.07.
Effect of Supplemental Indentures
62
ARTICLE 11 MISCELLANEOUS
62
Section 11.01.
Trust Indenture Act Controls
62
Section 11.02.
Notices
62
Section 11.03.
Communications By Holders with Other Holder
64

 
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Section 11.04.
Certificate and Opinion as to Conditions Precedent
64
Section 11.05.
Record Date for Vote or Consent of Holders of Securities
64
Section 11.06.
Rules by Trustee, Paying Agent, Registrar and Conversion Agent
65
Section 11.07.
Legal Holidays
65
Section 11.08.
Governing Law
65
Section 11.09.
No Adverse Interpretation of Other Agreements
65
Section 11.10.
No Recourse Against Others
65
Section 11.11.
No Security Interest Created
65
Section 11.12.
Successors
65
Section 11.13.
Multiple Counterparts
65
Section 11.14.
Separability
65
Section 11.15.
Table of Contents, Headings, Etc.
65
Section 11.16.
Calculations In Respect of Securities
66
Exhibit
 
A-1

 

 

 
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CROSS REFERENCE TABLE*
 
TIA
SECTION
 INDENTURE
SECTION
Section 310
11.01
310(a)(1)
8.10
(a)(2)
8.10
(a) (3)
N.A.**
(a) (4)
N.A.
(a) (5)
8.10
(b)
8.10
(c)
N.A.
Section 311
11.01
311 (a)
8.11
(b)
8.11
(c)
N.A.
Section 312
11.01
312(a)
2.05
(b)
11.03
(c)
11.03
Section 313
11.01
313(a)
8.06(a)
(b)(1)
N.A.
(b)(2)
8.06(a)
(c)
8.06(a)
(d)
8.06(b)
Section 314
11.01
314(a)
5.02(a); 5.03
(b)
N.A.
(c)(1)
2.02; 9.01; 11.04
(c)(2)
9.01; 11.04
(c)(3)
N.A.
(d)
N.A.
(e)
11.04
(f)
N.A.
Section 315
11.01
315(a)
8.01(b)
(b)
8.05
(d)
8.01(c)
(d)(2)
8.01(c)
(d)(3)
8.01(c)
(e)
7.11
Section 316
11.01
316 (a)
7.05; 10.02 (b)
(b)
7.07
(c)
11.05
Section 317
7.08; 7.09; 11.01

 

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TIA
SECTION
 INDENTURE
SECTION

Section 318
11.01
   

* This Cross-Reference Table shall not, for any purpose, be deemed a part of
this Indenture.
** N.A. means Not Applicable.

 
 
 
 
 
 
 
 
 
 
 
 
 
 

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THIS INDENTURE dated as of November 22, 2006 is between Chattem, Inc., a
corporation duly organized under the laws of the Tennessee (the “Company”), and
U.S. Bank, National Association, a national banking association, as Trustee (the
“Trustee”).
 
In consideration of the purchase of the Securities (as defined herein) by the
Holders thereof, both parties agree as follows for the benefit of the other and
for the equal and ratable benefit of the Holders of the Securities.
 
 
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
 
Section 1.01.  Definitions.
 
“Additional Interest” has the meaning specified in the Registration Rights
Agreement. All references herein to interest accrued or payable as of any date
shall include any Additional Interest accrued or payable as of such date as
provided in the Registration Rights Agreement.
 
“Affiliate” means, with respect to any specified person, any other person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified person. For the purposes of this definition,
“control” when used with respect to any person means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.
 
“Agent” means any Registrar, Paying Agent or Conversion Agent.
 
“Aggregate Share Cap” means initially 21.3858 shares of Common Stock per $1,000
principal amount of Securities, subject to proportional adjustment in the same
manner as the Conversion Rate upon the occurrence of any of the events described
under clauses (1) through (4) of Section 4.06(a).
 
“Applicable Procedures” means, with respect to any transfer or exchange of
beneficial ownership interests in a Global Security, the rules and procedures of
the Depositary, to the extent applicable to such transfer or exchange.
 
“Beneficial Ownership” means the definition such term is given in accordance
with Rule 13d-3 promulgated by the SEC under the Exchange Act.
 
“Board of Directors” means either the board of directors of the Company or any
committee of the Board of Directors authorized to act for it with respect to
this Indenture.
 
“Business Day” means any weekday that is not a day on which banking institutions
in The City of New York are authorized or obligated to close.
 
“Capital Stock” of any Person means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests
in (however designated) equity of such Person, but excluding any debt securities
convertible into such equity.
 

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“Cash” or “cash” means such coin or currency of the United States as at any time
of payment is legal tender for the payment of public and private debts.
 
“Certificated Security” means a Security that is in substantially the form
attached as Exhibit A but that does not include the information or the schedule
called for by footnote 1 thereof.
 
“Change of Control” means the occurrence of any of the following after the date
hereof: (i) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company and its
subsidiaries taken as a whole to any “person” (as such term is used in Section
13(d)(3) of the Exchange Act) other than one or more of the Company’s
wholly-owned subsidiaries; (ii) the adoption of a plan relating to the
liquidation or dissolution of the Company; (iii) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any “person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as
such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except
that a person shall be deemed to have “beneficial ownership” of all securities
that such person has the right to acquire, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, of more than 50% of the Voting Stock of the
Company (measured by voting power rather than number of shares), other than any
acquisition by the Company, any of the Company’s subsidiaries or any of the
Company’s employee benefit plans; (iv) the first day on which a majority of the
members of the Board of Directors of the Company are not Continuing Directors;
or (v) the Company consolidates with, or merges with or into, any Person, or any
Person consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which any of the outstanding Voting Stock of the
Company is converted into or exchanged for cash, securities or other property,
other than any such transaction where the Voting Stock of the Company
outstanding immediately prior to such transaction is converted into or exchanged
for Voting Stock of the surviving or transferee Person constituting a majority
of the outstanding shares of such Voting Stock of such surviving or transferee
Person (immediately after giving effect to such issuance). Notwithstanding
anything to the contrary set forth herein, it will not constitute a Change of
Control if 100% of the consideration for the Common Stock (excluding cash
payments for fractional shares and cash payments made in respect of dissenters’
appraisal rights) in the transaction or transactions otherwise constituting a
Change of Control consists of common stock or American Depositary Shares
representing shares of common stock, in each case which are traded on a U.S.
national securities exchange or quoted on an established automated
over-the-counter trading market in the United States, or which will be so traded
or quoted when issued or exchanged in connection with the Change of Control, and
as a result of such transaction or transactions the Securities become
convertible solely into cash in an amount equal to the lesser of $1,000 and the
Conversion Value and, if the Conversion Value is greater than $1,000, payment of
the excess value in the form of such common stock or American Depositary Shares,
subject to the right to deliver cash in lieu of all or a portion of such
remaining shares, in substantially the same manner as described under Section
4.13; provided that, with respect to an entity organized under the laws of a
jurisdiction outside the United States, such entity has a worldwide total market
capitalization of its equity securities of at least three times the market
capitalization of the Company before giving effect to the consolidation or
merger.
 
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“Closing Price” means on any Trading Day, the reported last sale price per share
(or if no last sale price is reported, the average of the bid and ask prices per
share or, if more than one in either case, the average of the average bid and
the average ask prices per share) on such date reported by the Nasdaq Global
Market or, if the Common Stock (or the applicable security) is not traded on the
Nasdaq Global Market, as reported by the principal national or regional
securities exchange on which the Common Stock (or such other security) is
listed. If the Common Stock (or such other security) is not listed for trading
on a United States national or regional securities exchange, the “Closing Price”
shall be the last quoted bid price for the Common Stock (or such other security)
in the over-the-counter market on the relevant date as reported by Pink Sheets
LLC or similar organization. If the Common Stock (or such other security) is not
so quoted, the “Closing Price” shall be the average of the midpoint of the last
bid and ask prices for the Common Stock (or such other security) on the relevant
date from each of at least three independent nationally recognized investment
banking firms selected by the Company for this purpose.
 
“Common Stock” means the common stock of the Company, without par value, as it
exists on the date of this Indenture and any shares of any class or classes of
Capital Stock of the Company resulting from any reclassification or
reclassifications thereof, or, in the event of a merger, consolidation or other
similar transaction involving the Company that is otherwise permitted hereunder
in which the Company is not the surviving corporation the common stock, common
equity interests, ordinary shares or depositary shares or other certificates
representing common equity interests of such surviving corporation or its direct
or indirect parent corporation, and which have no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Company and which are not subject
to redemption by the Company; provided, however, that if at any time there shall
be more than one such resulting class, the shares of each such class then so
issuable on conversion of Securities shall be substantially in the proportion
which the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
 
“Company” means the party named as such in the first paragraph of this Indenture
until a successor replaces it pursuant to the applicable provisions of this
Indenture, and thereafter “Company” shall mean such successor Company.
 
“Continuing Directors” means, as of any date of determination, any member of the
Board of Directors of the Company who (i) was a member of such Board of
Directors on the Issue Date or (ii) was nominated for election or elected to
such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election.
 
“Conversion Price” per share of Common Stock as of any day means the result
obtained by dividing (i) $1,000 by (ii) the then applicable Conversion Rate,
rounded to the nearest cent.
 
“Conversion Rate” means initially 16.9729 shares of Common Stock for each $1,000
principal amount of Securities, as adjusted from time to time pursuant to the
provisions of this Indenture.
 
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“Conversion Reference Period” means:
 
(i)  for Securities that are converted during the one month period prior to the
Final Maturity Date of the Securities, the 20 consecutive Trading Days preceding
and ending on the Final Maturity Date, subject to any extension due to a Market
Disruption Event; and
 
(ii)  in all other instances, the 20 consecutive Trading Days beginning on the
third Trading Day following the Conversion Date.
 
“Conversion Value” means, for each $1,000 principal amount of Securities, the
average of the Daily Conversion Values for each of the twenty consecutive
Trading Days of the Conversion Reference Period.
 
“Corporate Trust Office” means the office of the Trustee at which at any
particular time the trust created by this Indenture shall be administered, which
initially will be the office of U.S. Bank, National Association located at 150
Fourth Avenue North, 2nd Floor, Nashville, Tennessee 37219, attention: Corporate
Trust Services (Chattem, Inc. 2.00% Convertible Senior Notes due 2013).
 
“Daily Conversion Value” means, with respect to any Trading Day, the product of
(1) the applicable Conversion Rate and (2) the Volume Weighted Average Price per
share of the Company’s Common Stock on such Trading Day.
 
“Daily Share Amount” means, for each Trading Day of the Conversion Reference
Period and for each $1,000 principal amount of Securities surrendered for
conversion, a number of shares of Common Stock (but in no event less than zero)
determined by the following formula:
 
(Volume Weighted Average Price per share    Conversion Rate in effect
 
of Common Stock for such Trading Day    x on the Conversion Date)
 
- $1,000
 
________________________________________________________________________
Volume Weighted Average Price per share of Common Stock for such Trading
Day x 20
 
“Default” means, when used with respect to the Securities, any event that is or,
after notice or passage of time, or both, would be, an Event of Default.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.
 
“Final Maturity Date” means November 15, 2013.
 
“Fundamental Change” means the occurrence of a Change of Control or a
Termination of Trading following the original issuance of the Securities.
 
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“Fundamental Change Effective Date” means the date on which any Fundamental
Change becomes effective.
 
“Fundamental Change Purchase Price” of any Security, means 100% of the principal
amount of the Security to be purchased plus accrued and unpaid interest, if any,
and Additional Interest, if any, to, but excluding, the Fundamental Change
Purchase Date.
 
“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time, including those set forth in (1) the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants, (2) the statements and pronouncements
of the Public Company Accounting Oversight Board and the Financial Accounting
Standards Board, (3) such other statements by such other entity as approved by a
significant segment of the accounting profession and (4) the rules and
regulations of the SEC governing the inclusion of financial statements
(including pro forma financial statements) in registration statements filed
under the Securities Act and periodic reports required to be filed pursuant to
Section 13 of the Exchange Act, including opinions and pronouncements in staff
accounting bulletins and similar written statements from the accounting staff of
the SEC.
 
“Global Security” means a Security in global form that is in substantially the
form attached as Exhibit A and that includes the information and schedule called
for in footnote 1 thereof and which is deposited with the Depositary or its
custodian and registered in the name of the Depositary or its nominee.
 
“Holder” or “Holder of a Security” means the person in whose name a Security is
registered on the Registrar’s books.
 
“Indebtedness” means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker’s acceptances or
representing capital lease obligations or the balance deferred and unpaid of the
purchase price of any property or representing any hedging obligations, except
any such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing (other than letters of credit and hedging
obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, as well as all Indebtedness is assumed by such
Person) and, to the extent not otherwise included, the guarantee by such Person
of any indebtedness of any other Person. The amount of any Indebtedness
outstanding as of any date shall be (1) the accreted value thereof, in the case
of any Indebtedness issued with original issue discount, and (2) the principal
amount thereof, together with any interest thereon that is more than 30 days
past due, in the case of any other Indebtedness.
 
“Indenture” means this Indenture as amended or supplemented from time to time
pursuant to the terms of this Indenture, including the provisions of the TIA
that are automatically deemed to be a part of this Indenture by operation of the
TIA.
 
“Interest Payment Date” means November 15 and May 15 of each year, commencing
May 15, 2007.
 
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“Issue Date” of any Security means the date on which the Security was originally
issued or deemed issued as set forth on the face of the Security.
 
“Market Disruption Event” means the occurrence or existence for more than
one-half hour period in the aggregate on any scheduled Trading Day for the
Common Stock of any suspension or limitation imposed on trading (by reason of
movements in price exceeding limits permitted by the Nasdaq Global Market or
otherwise) in the Common Stock or in any options, contracts or future contracts
relating to the Common Stock, and such suspension or limitation occurs or exists
at any time before 1:00 p.m., New York City time, on such day.
 
“Officer” means the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Chief Financial Officer, the Controller, the
Secretary, any Assistant Controller or any Assistant Secretary of the Company.
 
“Officers’ Certificate” means a certificate signed on behalf of the Company by
two Officers; provided, however, that for purposes of Sections 4.11 and 5.03,
“Officers’ Certificate” means a certificate signed by (a) the principal
executive officer, principal financial officer or principal accounting officer
of the Company and (b) one other Officer.
 
“Opinion of Counsel” means a written opinion from legal counsel reasonably
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
 
“Person” or “person” means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any syndicate or group that would be deemed to be a “person” under
Section 13(d)(3) of the Exchange Act or any other entity.
 
“Principal” or “principal” of a debt security, including the Securities, means
the principal of the debt security plus, when appropriate, the premium, if any,
on the debt security.
 
“Purchaser” means the purchasers listed on the signature pages of the Securities
Purchase Agreement dated November 16, 2006 among Chattem, Inc. and the
purchasers party thereto.
 
“Registration Rights Agreement” means the Registration Rights Agreement, dated
as of November 22, 2006, between the Company and the Purchasers, as amended from
time to time in accordance with its terms.
 
“Regular Record Date” means, with respect to each Interest Payment Date,
November 1 or May 1, as the case may be, next preceding such Interest Payment
Date.
 
“Responsible Officer” means, when used with respect to the Trustee, any officer
within the corporate trust services department of the Trustee with direct
responsibility for the administration of this Indenture and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of such person’s knowledge of and familiarity with
the particular subject.
 
“Restricted Global Security” means a Global Security that is a Restricted
Security.
 
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“Restricted Security” means a Security required to bear the restricted legend
set forth in the form of Security annexed as Exhibit A.
 
“Rule 144” means Rule 144 under the Securities Act or any successor to such
Rule.
 
“Rule 144A” means Rule 144A under the Securities Act or any successor to such
Rule.
 
“SEC” means the Securities and Exchange Commission.
 
“Securities” means the up to $125,000,000 aggregate principal amount of 2.00%
Convertible Senior Notes due 2013, or any of them (each a “Security”), as
amended or supplemented from time to time, that are issued under this Indenture.
 
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, as in effect from time to time.
 
“Securities Custodian” means the Trustee, as custodian with respect to the
Securities in global form, or any successor thereto.
 
“Significant Subsidiary” means, in respect of any Person, as of any date of
determination, a Subsidiary of such Person that would constitute a “significant
subsidiary” as such term is defined under Rule 1-02(w) of Regulation S-X under
the Securities Act.
 
“Subsidiary” means, in respect of any Person, any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency within the control of such Person to satisfy) to vote in the
election of directors, managers, general partners or trustees thereof is at the
time owned or controlled, directly or indirectly, by (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person.
 
“Termination of Trading” means the termination (but not the temporary
suspension) of trading of the Common Stock, which will be deemed to have
occurred if the Common Stock or other common stock or American Depositary Shares
or similar instruments into which the Securities are convertible is neither
listed for trading on a United States national securities exchange nor approved
for quotation on an established automated over-the-counter securities market in
the United States or ceases to be traded or quoted in contemplation of a
delisting or withdrawal of approval.
 
“TIA” means the Trust Indenture Act of 1939, as amended, and the rules and
regulations thereunder as in effect on the date of this Indenture, except to the
extent that the Trust Indenture Act or any amendment thereto expressly provides
for application of the Trust Indenture Act as in effect on another date.
 
“Trading Day” means any day on which (i) there is no Marketing Disruption Event
and (ii) the Nasdaq Global Market or, if the Common Stock is not quoted on the
Nasdaq Global Market, the principal national or regional securities exchange on
which the Common Stock is listed, is open for trading or, if the Common Stock is
not so listed, admitted for trading or quoted,
 
7

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any Business Day. A Trading Day only includes those days that have a scheduled
closing time of 4:00 p.m. (New York City time) or the then standard closing time
for regular trading on the relevant exchange or trading system.
 
“Trading Price” of the Securities on any date of determination means the average
of the secondary market bid quotations obtained by the Company for $2.5 million
principal amount of Securities at approximately 3:30 p.m., New York City time,
on such determination date from three nationally recognized securities dealers
the Company selects; provided that if three such bids cannot reasonably be
obtained by the Company, but two such bids are obtained, then the average of the
two bids shall be used, and if only one such bid can reasonably be obtained by
the Company, that one bid shall be used. If the Company cannot reasonably obtain
at least one bid for $2.5 million principal amount of Securities from a
nationally recognized securities dealer, then the Trading Price per $1,000
principal amount of Securities will be deemed to be less than 97% of the product
of the Closing Price of the Common Stock and the Conversion Rate per $1,000
principal amount of Securities.
 
“Trustee” means the party named as such in the first paragraph of this Indenture
until a successor replaces it in accordance with the provisions of this
Indenture, and thereafter means the successor.
 
“Trust Officer” means, with respect to the Trustee, any officer assigned to the
Corporate Trust Office, and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer’s knowledge of
and familiarity with the particular subject.
 
“Vice President” when used with respect to the Company or the Trustee, means any
vice president, whether or not designated by a number or a word or words added
before or after the title “vice president.”
 
“Volume Weighted Average Price” per share of Common Stock on any Trading Day
means such price as displayed on Bloomberg (or any successor service) page CHTT
<equity> VAP in respect of the period from 9:30 a.m. to 4:00 p.m., New York City
time, on such Trading Day; or, if such price is not available, the Volume
Weighted Average Price means the market value per share of Common Stock on such
day as determined by a nationally recognized independent investment banking firm
retained for this purpose by the Company.
 
“Voting Stock” of a Person means all classes of Capital Stock or other interests
(including partnership interests) of such Person then outstanding and normally
entitled (without regard to the occurrence of any contingency within the control
of such person to satisfy) to vote in the election of directors, managers or
trustees thereof.
 
Section 1.02.  Other Definitions.
 
Term
Defined in Section
“Agent Members”
2.01
“Bankruptcy Law”
7.01
“Business Combination”
4.10
“Company Order”
2.02
“Conversion Trigger Price”
4.01

 
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Term
Defined in Section

“Conversion Agent”
2.03
“Conversion Date”
4.02
“Current Market Price”
4.06
“DTC”
2.01
“Depositary”
2.01
“Determination Date”
4.06
“Distributed Securities”
4.06
“Distribution Notice”
4.01
“Event of Default”
7.01
“Expiration Date”
4.06
“Expiration Time”
4.06
“Fundamental Change Company Notice”
3.01
“Fundamental Change Purchase Date”
3.01
“Fundamental Change Purchase Notice”
3.01
“Legal Holiday”
11.07
“Legend”
2.12
“Make Whole Premium”
4.01
“Notice of Default”
7.01
“Paying Agent”
2.03
“Primary Registrar”
2.03
“Purchase Agreement”
2.01
“Purchased Shares”
4.06
“record date”
4.06
“QIB”
2.01
“Receiver”
7.01
“Registrar”
2.03
“Remaining Shares”
4.13
“Rights”
4.06
“Rights Plan”
4.06
“Spinoff Securities”
4.06
“Spinoff Valuation Period”
4.06
“Stock Price”
4.01(j)
“tender offer”
4.06
“Triggering Distribution”
4.06
   

Section 1.03.  Trust Indenture Act Provisions. Whenever this Indenture refers to
a provision of the TIA, that provision is incorporated by reference in and made
a part of this Indenture. This Indenture shall also include those provisions of
the TIA required to be included herein by the provisions of the Trust Indenture
Reform Act of 1990. The following TIA terms used in this Indenture have the
following meanings:
 
“indenture securities” means the Securities;
 
“indenture security holder” means a Holder of a Security;
 
“indenture to be qualified” means this Indenture;
 
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“indenture trustee” or “institutional trustee” means the Trustee; and
 
“obligor” on the indenture securities means the Company or any other obligor on
the Securities.
 
All other terms used in this Indenture that are defined in the TIA, defined by
TIA reference to another statute or defined by any SEC rule and not otherwise
defined herein have the meanings assigned to them therein.
 
Section 1.04.  Rules of Construction.
 
(a)  Unless the context otherwise requires:
 
(1)  a term has the meaning assigned to it;
 
(2)  an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;
 
(3)  words in the singular include the plural, and words in the plural include
the singular;
 
(4)  provisions apply to successive events and transactions;
 
(5)  the term “merger” includes a statutory share exchange and the term “merged”
has a correlative meaning;
 
(6)  the masculine gender includes the feminine and the neuter;
 
(7)  references to agreements and other instruments include subsequent
amendments thereto; and
 
(8)  all “Article”, “Exhibit” and “Section” references are to Articles, Exhibits
and Sections, respectively, of or to this Indenture unless otherwise specified
herein, and the terms “herein,” “hereof” and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or other
subdivision.
 
ARTICLE 2
THE SECURITIES
 
Section 2.01.  Form and Dating. The Securities and the Trustee’s certificate of
authentication shall be substantially in the respective forms set forth in
Exhibit A, which Exhibit is incorporated in and made part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange or automated quotation system rule or regulation or usage. The Company
shall provide any such notations, legends or endorsements to the Trustee in
writing. Each Security shall be dated the date of its authentication. The
Securities are being offered and sold by the Company pursuant to a Securities
Purchase Agreement dated November 16, 2006 (the “Purchase Agreement”) among the
Company and the Purchasers.
 
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(a)  Restricted Global Securities. All of the Securities are initially being
offered and sold to qualified institutional buyers as defined in Rule 144A
(collectively, “QIBs” or individually, each a “QIB”) in reliance upon a private
placement exemption from registration under the Securities Act and shall be
issued initially in the form of one or more Restricted Global Securities, which
shall be deposited on behalf of the purchasers of the securities represented
thereby with the Trustee, at its Corporate Trust Office, as custodian for the
depositary, The Depository Trust Company (“DTC”, and such depositary, or any
successor thereto, being hereinafter referred to as the “Depositary”), and
registered in the name of its nominee, Cede & Co. (or any successor thereto),
for the accounts of participants in the Depositary, duly executed by the Company
and authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the Restricted Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Securities
Custodian as hereinafter provided, subject in each case to compliance with the
Applicable Procedures.
 
(b)  Global Securities In General. Each Global Security shall represent such of
the outstanding Securities as shall be specified therein and each shall provide
that it shall represent the aggregate amount of outstanding Securities from time
to time endorsed thereon and that the aggregate amount of outstanding Securities
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect replacements, exchanges, purchases, redemptions, or
conversions of such Securities. Any adjustment of the aggregate principal amount
of a Global Security to reflect the amount of any increase or decrease in the
amount of outstanding Securities represented thereby shall be made by the
Trustee in accordance with instructions given by the Holder thereof as required
by Section 2.12 and shall be made on the records of the Trustee and the
Depositary.
 
Members of, or participants in, the Depositary (“Agent Members”) shall have no
rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary or under the Global Security, and the Depositary
(including, for this purpose, its nominee) may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner and
Holder of such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall (1) 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 (2)
impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security.
 
(c)  Book Entry Provisions. The Company shall execute and the Trustee shall, in
accordance with this Section 2.01(c), authenticate and deliver initially one or
more Global Securities that (1) shall be registered in the name of the
Depositary or its nominee, (2) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary’s instructions and (3) 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 IN SUCH OTHER NAME
 
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AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN. THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.”
 
Section 2.02.  Execution and Authentication.
 
(a)  The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is limited to $125,000,000 aggregate principal
amount, except as provided in Sections 2.06 and 2.07.
 
(b)  An Officer shall sign the Securities for the Company by manual or facsimile
signature. Typographic and other minor errors or defects in any such facsimile
signature shall not affect the validity or enforceability of any Security that
has been authenticated and delivered by the Trustee.
 
(c)  If an officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
 
(d)  A Security shall not be valid until an authorized signatory of the Trustee
by manual signature signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
 
(e)  The Trustee shall authenticate and make available for delivery Securities
for original issue in the aggregate principal amount of up to $125,000,000 upon
receipt of a written order or orders of the Company signed by an Officer of the
Company (a “Company Order”). The Company order shall specify the amount of
Securities to be authenticated, shall provide that all such securities will be
represented by a Restricted Global Security and the date on which each original
issue of Securities is to be authenticated.
 
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(f)  The Trustee shall act as the initial authenticating agent. Thereafter, the
Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent shall have the same rights as an Agent to deal with the
Company or an Affiliate of the Company.
 
(g)  The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 principal amount and any integral multiple
thereof.
 
Section 2.03.  Registrar, Paying Agent and Conversion Agent.
 
(a)  The Company shall maintain one or more offices or agencies where Securities
may be presented for registration of transfer or for exchange (each, a
“Registrar”), one or more offices or agencies where Securities may be presented
for payment (each, a “Paying Agent”), one or more offices or agencies where
Securities may be presented for conversion (each, a “Conversion Agent”) and one
or more offices or agencies where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company will at
all times maintain a Paying Agent, Conversion Agent, Registrar and an office or
agency where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served in the Borough of Manhattan, The
City of New York. One of the Registrars (the “Primary Registrar”) shall keep a
register of the Securities and of their transfer and exchange.
 
(b)  The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture, provided that the Agent may be an Affiliate of
the Trustee. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee of the name and
address of any Agent not a party to this Indenture. If the Company fails to
maintain a Registrar, Paying Agent, Conversion Agent, or agent for service of
notices and demands in any place required by this Indenture, or fails to give
the foregoing notice, the Trustee shall act as such. The Company or any
Affiliate of the Company may act as Paying Agent (except for the purposes of
Section 5.01 and Article 9).
 
(c)  The Company hereby initially designates the Trustee as Paying Agent,
Registrar, Securities Custodian and Conversion Agent, and initially designates
the Corporate Trust Office of the Trustee as an office or agency where notices
and demands to or upon the Company in respect of the Securities and this
Indenture shall be served.
 
Section 2.04.  Paying Agent to Hold Money in Trust.
 
Prior to 12:00 p.m. (noon), New York City time, on each due date of the payment
of principal of, or interest on, any Securities, the Company shall deposit with
the Paying Agent a sum sufficient to pay such principal or interest so becoming
due. Subject to Section 9.02, a Paying Agent shall hold in trust for the benefit
of Holders of Securities or the Trustee all money held by the Paying Agent for
the payment of principal of, or interest on, the Securities, and shall notify
the Trustee of any failure by the Company (or any other obligor on the
Securities) to make any such payment. If the Company or an Affiliate of the
Company acts as Paying Agent, it shall, before 12:00 p.m. (noon), New York City
time, on each due date of the principal of, or interest
 
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on, any Securities, segregate the money and hold it as a separate trust fund.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee, and the Trustee may at any time during the continuance of any
Default, upon written request to a Paying Agent, require such Paying Agent to
pay forthwith to the Trustee all sums so held in trust by such Paying Agent.
Upon doing so, the Paying Agent (other than the Company) shall have no further
liability for the money.
 
Section 2.05.  Lists of Holders of Securities.
 
The Trustee shall preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of Holders of
Securities. If the Trustee is not the Primary Registrar, the Company shall
furnish to the Trustee on or before each Interest Payment Date and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of Holders
of Securities.
 
Section 2.06.  Transfer and Exchange.
 
(a)  Subject to compliance with any applicable additional requirements contained
in Section 2.12, when a Security is presented to a Registrar with a request to
register a transfer thereof or to exchange such Security for an equal principal
amount of Securities of other authorized denominations, the Registrar shall
register the transfer or make the exchange as requested; provided, however, that
every Security presented or surrendered for registration of transfer or exchange
shall be duly endorsed or accompanied by an assignment form and, if applicable,
a transfer certificate each in the form included in the form of Security
attached as Exhibit A hereto, and completed in a manner satisfactory to the
Registrar and duly executed by the Holder thereof or its attorney duly
authorized in writing. To permit registration of transfers and exchanges, upon
surrender of any Security for registration of transfer or exchange at an office
or agency maintained pursuant to Section 2.03, the Company shall execute and the
Trustee shall authenticate Securities of a like aggregate principal amount at
the Registrar’s request. Any exchange or transfer shall be without charge,
except that the Company or the Registrar may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto; provided that this sentence shall not apply to any exchange pursuant to
Section 2.10, 2.12(a), 3.06, 4.02(e) or 10.05.
 
(b)  Neither the Company, any Registrar nor the Trustee shall be required to
exchange or register a transfer of (1) any Securities for a period of 15 days
next preceding mailing of a notice of Securities to be redeemed, or (2) any
Securities or portions thereof in respect of which a Fundamental Change Purchase
Notice has been delivered and not withdrawn by the Holder thereof (except, in
the case of the purchase of a Security in part, the portion thereof not to be
purchased).
 
(c)  All Securities issued upon any transfer or exchange of Securities shall be
valid obligations of the Company, evidencing the same debt and entitled to the
same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.
 
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(d)  Any Registrar appointed pursuant to Section 2.03 shall provide to the
Trustee such information as the Trustee may reasonably require in connection
with the delivery by such Registrar of Securities upon transfer or exchange of
Securities.
 
(e)  The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Agent Members or other
beneficial owners of interests in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
 
Section 2.07.  Replacement Securities.
 
(a)  If any mutilated Security is surrendered to the Company, a Registrar or the
Trustee, and the Company, a Registrar and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security, and there is
delivered to the Company, the applicable Registrar and the Trustee such security
or indemnity as will be required by them to save each of them harmless, then, in
the absence of notice to the Company, such Registrar or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall execute,
and upon its written request the Trustee shall authenticate and deliver, in
exchange for any such mutilated Security or in lieu of any such destroyed, lost
or stolen Security, a new Security of like tenor and principal amount, bearing a
number not contemporaneously outstanding.
 
(b)  If any such mutilated, destroyed, lost or stolen Security has become or is
about to become due and payable, or is about to be purchased by the Company
pursuant to Article 3, or converted pursuant to Article 4, the Company in its
discretion may, instead of issuing a new Security, pay, purchase or convert such
Security, as the case may be.
 
(c)  Upon the issuance of any new Securities under this Section 2.07, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto as a result of any
Securities, at the request of any Holder, being issued to a Person other than
such Holder and any other reasonable expenses (including the reasonable fees and
expenses of the Trustee or the Registrar) in connection therewith.
 
(d)  Every new Security issued pursuant to this Section 2.07 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
 
(e)  The provisions of this Section 2.07 are (to the extent lawful) exclusive
and shall preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Securities.
 
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Section 2.08.  Outstanding Securities.
 
(a)  Securities outstanding at any time are all Securities authenticated by the
Trustee, except for those canceled by it, those purchased pursuant to Article 3,
those converted pursuant to Article 4, those delivered to the Trustee for
cancellation or surrendered for transfer or exchange and those described in this
Section 2.08 as not outstanding.
 
(b)  If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Company receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
 
(c)  If a Paying Agent (other than the Company or an Affiliate of the Company)
holds in respect of the outstanding Securities on a Fundamental Change Purchase
Date or the Final Maturity Date money sufficient to pay the principal of
(including premium, if any), accrued interest and Additional Interest, if any,
on Securities (or portions thereof) payable on that date, then on and after such
Fundamental Change Purchase Date or Final Maturity Date, as the case may be,
such Securities (or portions thereof, as the case may be) shall cease to be
outstanding and cash interest and Additional Interest, if any, on them shall
cease to accrue.
 
(d)  Subject to the restrictions contained in Section 2.09, a Security does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Security.
 
Section 2.09.  Treasury Securities.
 
In determining whether the Holders of the required principal amount of
Securities have concurred in any notice, direction, waiver or consent,
Securities owned by the Company or any other obligor on the Securities or by any
Affiliate of the Company or of such other obligor shall be disregarded, except
that, for purposes of determining whether the Trustee shall be protected in
relying on any such notice, direction, waiver or consent, only Securities which
a Trust Officer of the Trustee with responsibility for this Indenture actually
knows are so owned shall be so disregarded. Securities so owned which have been
pledged in good faith shall not be disregarded if the pledgee establishes to the
satisfaction of the Trustee the pledgee’s right so to act with respect to the
Securities and that the pledgee is not the Company or any other obligor on the
Securities or any Affiliate of the Company or of such other obligor.
 
Section 2.10.  Temporary Securities.
 
Until definitive Securities are ready for delivery, the Company may prepare and
execute, and, upon receipt of a Company Order, the Trustee shall authenticate
and deliver, temporary Securities. Temporary Securities shall be substantially
in the form of definitive securities but may have variations that the Company
with the consent of the Trustee considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate and deliver definitive Securities in exchange for temporary
Securities.
 
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Section 2.11.  Cancellation.
 
The Company at any time may deliver Securities to the Trustee for cancellation.
The Registrar, the Paying Agent and the Conversion Agent shall forward to the
Trustee or its agent any Securities surrendered to them for transfer, exchange,
purchase, payment or conversion. The Trustee and no one else shall cancel, in
accordance with its standard procedures, all Securities surrendered for
transfer, exchange, purchase, payment, conversion or cancellation and shall
dispose of the cancelled Securities in accordance with its customary procedures
or deliver the canceled Securities to the Company.
 
Section 2.12.  Legend; Additional Transfer and Exchange Requirements.
 
(a)  If Securities are issued upon the transfer, exchange or replacement of
Securities subject to restrictions on transfer and bearing the legends set forth
on the forms of Securities attached as Exhibit A (collectively, the “Legend”),
or if a request is made to remove the Legend on a Security, the Securities so
issued shall bear the Legend, or the Legend shall not be removed, as the case
may be, unless there is delivered to the Company and the Registrar such
satisfactory evidence, which shall include an Opinion of Counsel if requested by
the Company or such Registrar, as may be reasonably required by the Company and
the Registrar, that neither the Legend nor the restrictions on transfer set
forth therein are required to ensure that transfers thereof comply with the
provisions of Rule 144A or Rule 144 under the Securities Act or that such
Securities are not “restricted” within the meaning of Rule 144 under the
Securities Act; provided that no such evidence need be supplied in connection
with the sale of such Security pursuant to a registration statement that is
effective at the time of such sale. Upon (1) provision of such satisfactory
evidence if requested or (2) notification by the Company to the Trustee and
Registrar of the sale of such Security pursuant to a registration statement that
is effective at the time of such sale, the Trustee, at the written direction of
the Company, shall authenticate and deliver a Security that does not bear the
Legend. If the Legend is removed from the face of a Security and the Security is
subsequently held by an Affiliate of the Company, the Legend shall be
reinstated.
 
(b)  A Global Security may not be transferred, in whole or in part, to any
Person other than the Depositary or a nominee or any successor thereof, and no
such transfer to any such other Person may be registered; provided that the
foregoing shall not prohibit any transfer of a Security that is issued in
exchange for a Global Security but is not itself a Global Security. No transfer
of a Security to any Person shall be effective under this Indenture or the
Securities unless and until such Security has been registered in the name of
such Person. Notwithstanding any other provisions of this Indenture or the
Securities, transfers of a Global Security, in whole or in part, shall be made
only in accordance with this Section 2.12.
 
(c)  Subject to Section 2.12(b) and in compliance with Section 2.12(d), every
Security shall be subject to the restrictions on transfer provided in the
Legend. Whenever any Restricted Security other than a Restricted Global Security
is presented or surrendered for registration of transfer or in exchange for a
Security registered in a name other than that of the Holder, such Security must
be accompanied by a certificate in substantially the form set forth in Exhibit
A, dated the date of such surrender and signed by the Holder of such Security,
as to compliance with such restrictions on transfer. The Registrar shall not be
required to accept for such
 
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registration of transfer or exchange any Security not so accompanied by a
properly completed certificate.
 
(d)  The restrictions imposed by the Legend upon the transferability of any
Security shall cease and terminate when such Security has been sold pursuant to
an effective registration statement under the Securities Act or transferred in
compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Security for exchange to the Registrar in accordance with the
provisions of this Section 2.12 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144 or any successor provision, by, if requested by the Company or the
Registrar, an Opinion of Counsel reasonably acceptable to the Company and the
Registrar and addressed to the Company and the Registrar, to the effect that the
transfer of such Security has been made in compliance with Rule 144 or such
successor provision), be exchanged for a new Security, of like tenor and
aggregate principal amount, which shall not bear the restrictive Legend. The
Company shall inform the Trustee of the effective date of any registration
statement registering the offer and sale of the Securities under the Securities
Act. The Trustee shall not be liable for any action taken or omitted to be taken
by it in good faith in accordance with the aforementioned Opinion of Counsel or
registration statement.
 
As used in Sections 2.12(c) and (d), the term “transfer” encompasses any sale,
pledge, transfer, hypothecation or other disposition of any Security.
 
(e)  The provisions below shall apply only to Global Securities:
 
(1)  Each Global Security authenticated under this Indenture shall be registered
in the name of the Depositary or a nominee thereof and delivered to such
Depositary or a nominee thereof or custodian therefor, and each such Global
Security shall constitute a single Security for purposes of this Indenture.
 
(2)  Notwithstanding any other provisions of this Indenture or the Securities, a
Global Security shall not be exchanged in whole or in part for a Security
registered, and no transfer of a Global Security in whole or in part shall be
registered in the name of any Person other than the Depositary or one or more
nominees thereof; provided that a Global Security may be exchanged for
securities registered in the names of any person designated by the Depositary in
the event that (A) the Depositary has notified the Company that it is unwilling
or unable to continue as Depositary for such Global Security or such Depositary
has ceased to be a “clearing agency” registered under the Exchange Act, and a
successor Depositary is not appointed by the Company within 90 days after
receiving such notice or becoming aware that the Depositary has ceased to be a
“clearing agency,” or (B) an Event of Default has occurred and is continuing
with respect to the Securities. Any Global Security exchanged pursuant to
subclause (A) above shall be so exchanged in whole and not in part, and any
Global Security exchanged pursuant to subclause (B) above may be exchanged in
whole or from time to time in part as directed by the Depositary. Any Security
issued in exchange for a Global Security or any portion
 
18

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thereof shall be a Global Security; provided further that any such Security so
issued that is registered in the name of a Person other than the Depositary or a
nominee thereof shall not be a Global Security.
 
(3)  Securities issued in exchange for a Global Security or any portion thereof
shall be issued in definitive, fully registered form, without interest coupons,
shall have an aggregate principal amount equal to that of such Global Security
or portion thereof to be so exchanged, shall be registered in such names and be
in such authorized denominations as the Depositary shall designate and shall
bear the applicable legends provided for herein. Any Global Security to be
exchanged in whole shall be surrendered by the Depositary to the Trustee, as
Registrar. With regard to any Global Security to be exchanged in part, either
such Global Security shall be so surrendered for exchange or, if the Trustee is
acting as custodian for the Depositary or its nominee with respect to such
Global Security, the principal amount thereof shall be reduced, by an amount
equal to the portion thereof to be so exchanged, by means of an appropriate
adjustment made on the records of the Trustee. Upon any such surrender or
adjustment, the Trustee shall authenticate and deliver the Security issuable on
such exchange to or upon the order of the Depositary or an authorized
representative thereof.
 
(4)  Subject to clause (6) of this Section 2.12(e), the registered Holder may
grant proxies and otherwise authorize any Person, including Agent Members and
Persons that may hold interests through Agent Members, to take any action which
a Holder is entitled to take under this Indenture or the Securities.
 
(5)  In the event of the occurrence of any of the events specified in clause (2)
of this Section 2.12(e), the Company will promptly make available to the Trustee
a reasonable supply of Certificated Securities in definitive, fully registered
form, without interest coupons.
 
(6)  Neither Agent Members nor any other Persons on whose behalf Agent Members
may act shall have any rights under this Indenture with respect to any Global
Security registered in the name of the Depositary or any nominee thereof, or
under any such Global Security, and the Depositary or such nominee, as the case
may be, may be treated by the Company, the Trustee and any agent of the Company
or the Trustee as the absolute owner and holder of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or such nominee, as the case may be, or impair, as between the
Depositary, its Agent Members and any other Person on whose behalf an Agent
Member may act, the operation of customary practices of such Persons governing
the exercise of the rights of a holder of any Security.
 
(7)  At such time as all interests in a Global Security have been converted,
canceled or exchanged for Securities in certificated form, such Global Security
shall, upon receipt thereof, be cancelled by the Trustee in accordance with
standing procedures and instructions existing between the Depositary and the
Securities Custodian, subject to Section 2.11 of this Indenture. At any time
prior to such cancellation, if any interest in a
 
19

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Global Security is converted, canceled or exchanged for Securities in
certificated form, the principal amount of such Global Security shall, in
accordance with the standing procedures and instructions existing between the
Depositary and the Securities Custodian, be appropriately reduced, and an
endorsement shall be made on such Global Security, by the Trustee or the
Securities Custodian, at the direction of the Trustee, to reflect such
reduction.
 
(f)  Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision thereto),
any stock certificate representing Common Stock issued upon conversion of any
Security shall bear a legend in substantially the following form, unless such
Common Stock has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be effective
at the time of such transfer) or transferred in compliance with Rule 144 under
the Securities Act (or any successor provision thereto), or such Common Stock
has been issued upon conversion of Securities that have been transferred
pursuant to a registration statement that has been declared effective under the
Securities Act or pursuant to Rule 144 under the Securities Act (or any
successor provision thereto), or unless otherwise agreed by the Company in
writing with written notice thereof to the transfer agent:
 
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS,
AND, ACCORDINGLY, MAY NOT BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION UNDER
THE SECURITIES ACT.
 
BY ITS ACQUISITION HEREOF, THE HOLDER AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER THE COMMON STOCK EVIDENCED HEREBY PRIOR TO THE DATE THAT IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH
CHATTEM INC. (THE “COMPANY”) OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF
THE COMMON STOCK EVIDENCED HEREBY (OR ANY PREDECESSOR OF THE COMMON STOCK
EVIDENCED HEREBY) (THE “RESALE RESTRICTION TERMINATION DATE”) ONLY (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (C) PURSUANT TO
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY’S AND THE TRANSFER AGENT’S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (C) PRIOR TO THE RESALE
RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN
EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THE OTHER SIDE OF THIS CERTIFICATE IS COMPLETED AND DELIVERED
BY THE TRANSFEROR TO THE TRANSFER AGENT. THIS LEGEND WILL BE REMOVED UPON THE
REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
 
20

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Any such Common Stock as to which such restrictions on transfer shall have
expired in accordance with their terms or as to which the conditions for removal
of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this section.
 
Section 2.13.  CUSIP Numbers.
 
The Company in issuing the Securities may use one or more “CUSIP” numbers (if
then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in
notices of purchase as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a purchase
and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such purchase shall not be affected by any defect in
or omission of such numbers. The Company will promptly notify the Trustee of any
change in the “CUSIP” numbers.
 
 
ARTICLE 3
PURCHASE UPON FUNDAMENTAL CHANGE
 
Section 3.01.  Purchase at Holders’ Option upon a Fundamental Change.
 
(a)  If a Fundamental Change occurs prior to the Final Maturity Date, each
Holder of a Security shall have the right, at the option of the Holder, to
require the Company to repurchase for cash all or any portion of the Securities
of such Holder equal to $1,000 principal amount (or an integral multiple
thereof) at the Fundamental Change Purchase Price, on the date (the “Fundamental
Change Purchase Date”) specified by the Company pursuant to subsection 3.01(b)
that is not less than 30 days nor more than 45 days after the Fundamental Change
Effective Date.
 
(b)  As promptly as practicable following the date when the Company publicly
announces a Fundamental Change but in no event less than 10 Trading Days prior
to the anticipated Fundamental Change Effective Date, the Company shall mail a
written notice of the Fundamental Change and of the resulting repurchase right
to the Trustee, Paying Agent and to each Holder (and to beneficial owners as
required by applicable law) (the “Fundamental Change Company Notice”). The
Fundamental Change Company Notice shall include the form of a Fundamental Change
Purchase Notice to be completed by the Holder and shall state:
 
(1)  the events causing such Fundamental Change;
 
(2)  the date (or expected date) of such Fundamental Change;
 
(3)  the last date by which the Fundamental Change Purchase Notice must be
delivered to elect the repurchase option pursuant to this Section 3.01;
 
(4)  the Fundamental Change Purchase Date;
 
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(5)  the Fundamental Change Purchase Price;
 
(6)  the Holder’s right to require the Company to purchase the Securities;
 
(7)  the name and address of each Paying Agent and Conversion Agent;
 
(8)  the then effective Conversion Rate and any adjustments to the Conversion
Rate resulting from such Fundamental Change;
 
(9)  the procedures that the Holder must follow to exercise rights under Article
4 and that Securities as to which a Fundamental Change Purchase Notice has been
given may be converted into Common Stock pursuant to Article 4 of this Indenture
only to the extent that the Fundamental Change Purchase Notice has been
withdrawn in accordance with the terms of this Indenture;
 
(10)  the procedures that the Holder must follow to exercise rights under this
Section 3.01;
 
(11)  the procedures for withdrawing a Fundamental Change Purchase Notice;
 
(12)  that, unless the Company fails to pay such Fundamental Change Purchase
Price, Securities covered by any Fundamental Change Purchase Notice will cease
to be outstanding and interest and Additional Interest, if any, will cease to
accrue on and after the Fundamental Change Purchase Date; and
 
(13)  the CUSIP number of the Securities.
 
At the Company’s request, the Trustee shall give such Fundamental Change Company
Notice in the Company’s name and at the Company’s expense; provided that, in all
cases, the text of such Fundamental Change Company Notice shall be prepared by
the Company. If any of the Securities is in the form of a Global Security, then
the Company shall modify such notice to the extent necessary to accord with the
Applicable Procedures relating to the purchase of Global Securities.
 
(c)  A Holder may exercise its rights specified in Section 3.01(a) upon delivery
of a written notice (which shall be in substantially the form set forth in the
form of Security attached as Exhibit A under the heading “Fundamental Change
Purchase Notice” and which may be delivered by letter, overnight courier, hand
delivery, facsimile transmission or in any other written form and, in the case
of Global Securities, may be delivered electronically or by other means in
accordance with the Depositary’s Applicable Procedures) of the exercise of such
rights (a “Fundamental Change Purchase Notice”) to the Company or any Paying
Agent at any time prior to the close of business on the Business Day next
preceding the Fundamental Change Purchase Date, subject to extension to comply
with applicable law.
 
22

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(1)  The Fundamental Change Purchase Notice shall state: (A) the certificate
number (if such Security is held other than in global form) of the Security
which the Holder will deliver to be purchased (or, if the Security is held in
global form, any other items required to comply with the Applicable Procedures),
(B) the portion of the principal amount of the Security which the Holder will
deliver to be purchased, which portion must be $1,000 or an integral multiple of
$1,000 and (C) that such Security shall be purchased as of the Fundamental
Change Purchase Date pursuant to the terms and conditions specified in the
Securities and in this Indenture.
 
(2)  The delivery of a Security for which a Fundamental Change Purchase Notice
has been timely delivered to any Paying Agent and not validly withdrawn prior
to, on or after the Fundamental Change Purchase Notice (together with all
necessary endorsements) at the office of such Paying Agent shall be a condition
to the receipt by the Holder of the Fundamental Change Purchase Price therefor.
 
(3)  The Company shall only be obliged to purchase, pursuant to this Section
3.01, a portion of a Security if the principal amount of such portion is $1,000
or an integral multiple of $1,000 (provisions of this Indenture that apply to
the purchase of all of a Security also apply to the purchase of such portion of
such Security).
 
(4)  Notwithstanding anything herein to the contrary, any Holder delivering to a
Paying Agent the Fundamental Change Purchase Notice contemplated by this Section
3.01(c) shall have the right to withdraw such Fundamental Change Purchase Notice
in whole or in a portion thereof that is a principal amount of $1,000 or in an
integral multiple thereof at any time prior to the close of business on the
Business Day prior to the Fundamental Change Purchase Date by delivery of a
written notice of withdrawal to the Paying Agent in accordance with Section
3.02.
 
(5)  A Paying Agent shall promptly notify the Company of the receipt by it of
any Fundamental Change Purchase Notice or written withdrawal thereof.
 
(6)  Anything herein to the contrary notwithstanding, in the case of Global
Securities, any Fundamental Change Purchase Notice may be delivered or withdrawn
and such Securities may be surrendered or delivered for purchase in accordance
with the Applicable Procedures as in effect from time to time.
 
Section 3.02.  Effect of Fundamental Change Purchase Notice.
 
(a)  Upon receipt by any Paying Agent of a properly completed Fundamental Change
Purchase Notice from a Holder, the Holder of the Security in respect of which
such Fundamental Change Purchase Notice was given shall (unless such Fundamental
Change Purchase Notice is withdrawn as specified in Section 3.02(b)) thereafter
be entitled to receive the Fundamental Change Purchase Price with respect to
such Security, subject to the occurrence of an absence of an Event of Default,
or a continuation thereof (other than a Default in the payment of the
Fundamental Change Purchase Price). Such Fundamental Change Purchase Price shall
be paid to such Holder promptly following the later of (1) the Fundamental
Change Purchase Date (provided that the conditions in Section 3.01 have been
satisfied) and (2) the time of delivery of
 
23

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such Security to a Paying Agent by the Holder thereof in the manner required by
Section 3.01(c). Securities in respect of which a Fundamental Change Purchase
Notice has been given by the Holder thereof may not be converted into shares of
Common Stock pursuant to Article 4 on or after the date of the delivery of such
Fundamental Change Purchase Notice unless such Fundamental Change Purchase
Notice has first been validly withdrawn in accordance with Section 3.02(b) with
respect to the Securities to be converted.
 
(b)  A Fundamental Change Purchase Notice may be withdrawn by means of a written
notice (which may be delivered by mail, overnight courier, hand delivery,
facsimile transmission or in any other written form and, in the case of Global
Securities, may be delivered electronically or by other means in accordance with
the Applicable Procedures) of withdrawal delivered by the Holder to a Paying
Agent at any time prior to the close of business on the Business Day immediately
prior to the Fundamental Change Purchase Date, specifying (1) if certificated
Securities have been issued, the certificate number of the Security being
withdrawn in whole or in withdrawable part (or if the Securities are not
certificated, such written notice must comply with the Applicable Procedures),
(2) the principal amount of the Security or portion thereof (which must be a
principal amount of $1,000 or an integral multiple of $1,000 in excess thereof)
with respect to which such notice of withdrawal is being submitted, and (3) the
portion of the principal amount of the Security that will remain subject to the
Fundamental Change Purchase Notice, which portion must be a principal amount of
$1,000 or an integral multiple thereof.
 
Section 3.03.  Deposit of Fundamental Change Purchase Price.
 
(a)  On or before 10:00 a.m., New York City time, on the applicable Fundamental
Change Purchase Date, the Company shall deposit with the Trustee or with a
Paying Agent (or if the Company or an Affiliate of the Company is acting as the
Paying Agent, shall segregate and hold in trust as provided in Section 2.04) an
amount of money (in immediately available funds), sufficient to pay the
aggregate Fundamental Change Purchase Price of all the Securities or portions
thereof that are to be purchased as of such Fundamental Change Purchase Date.
 
(b)  If a Paying Agent or the Trustee holds, in accordance with the terms
hereof, money sufficient to pay the Fundamental Change Purchase Price of any
Security for which a Fundamental Change Purchase Notice has been tendered and
not withdrawn in accordance with this Indenture then, on immediately after the
applicable Fundamental Change Purchase Date, such Security will cease to be
outstanding, whether or not the Security is delivered to the Paying Agent or the
Trustee, and interest and Additional Interest, if any, shall cease to accrue,
and the rights of the Holder in respect of the Security shall terminate (other
than the right to receive the Fundamental Change Purchase Price as aforesaid).
The Company shall publicly announce the principal amount of Securities
repurchased on or as soon as practicable after the Fundamental Change Purchase
Date.
 
(c)  The Paying Agent will promptly return to the respective Holders thereof any
Securities with respect to which a Fundamental Change Purchase Notice has been
withdrawn in compliance with this Indenture.
 
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(d)  If a Fundamental Change Purchase Date falls after a Regular Record Date and
on or before the related Interest Payment Date, then interest on the Securities
payable on such Interest Payment Date will be payable to the Holders in whose
names the Securities are registered at the close of business on such Regular
Record Date.
 
Section 3.04.  Repayment to The Company.
 
To the extent that the aggregate amount of cash deposited by the Company
pursuant to Section 3.03 exceeds the aggregate Fundamental Change Purchase Price
of the Securities or portions thereof that the Company is obligated to purchase,
then promptly after the Fundamental Change Purchase Date the Trustee or a Paying
Agent, as the case may be, shall return any such excess cash to the Company.
 
Section 3.05.  Securities Purchased in Part.
 
Any Security that is to be purchased only in part shall be surrendered at the
office of a Paying Agent, and promptly after the Fundamental Change Purchase
Date, the Company shall execute and the Trustee shall authenticate and deliver
to the Holder of such Security, without service charge, a new Security or
Securities, of such authorized denomination or denominations as may be requested
by such Holder (which must be equal to $1,000 principal amount or any integral
thereof), in aggregate principal amount equal to, and in exchange for, the
portion of the principal amount of the Security so surrendered that is not
purchased.
 
Section 3.06.  Compliance with Securities Laws upon Purchase of Securities.
 
In connection with any offer to purchase of Securities under Section 3.01, the
Company shall (a) comply with Rule 13e-4 and Rule 14e-1 (or any successor to
either such Rule), and any other tender offer rules, if applicable, under the
Exchange Act, (b) file the related Schedule TO (or any successor or similar
schedule, form or report) if required under the Exchange Act, and (c) otherwise
comply with all federal and state securities laws in connection with such offer
to purchase or purchase of Securities, all so as to permit the rights of the
Holders and obligations of the Company under Sections 3.01 through 3.04 to be
exercised in the time and in the manner specified therein. To the extent that
compliance with any such laws, rules and regulations would result in a conflict
with any of the terms hereof, this Indenture is hereby modified to the extent
required for the Company to comply with such laws, rules and regulations.
 
Section 3.07.  Purchase of Securities in Open Market.
 
The Company (a) on or prior to the date that is two years from the latest
issuance of any Securities and in accordance with Section 2.11, shall surrender
any Security purchased by the Company pursuant to this Article 3 to the Trustee
for cancellation, and (b) after such date and in accordance with Section 2.11,
may surrender such Security to the Trustee for cancellation. Any securities
surrendered to the Trustee for cancellation may not be reissued or resold by the
Company and will be canceled promptly in accordance with Section 2.11. The
Company may repurchase Securities in the open market, by tender at any price or
by negotiated transactions and such Securities may be reissued or resold, to the
extent permitted by applicable law, or may be surrendered to the Trustee for
cancellation.
 
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ARTICLE 4
CONVERSION
 
Section 4.01.  Conversion Privilege and Conversion Rate.
 
(a)  Subject to the obligation and the right of the Company to pay some or all
of the conversion consideration in cash in accordance with Section 4.13, and
upon compliance with the provisions of this Article 4, at the option of the
Holder thereof, any Security or portion thereof that is an integral multiple of
$1,000 principal amount may be converted into fully paid and nonassessable
shares (calculated as to each conversion to the nearest 1/100th of a share) of
Common Stock prior to the close of business on the Business Day immediately
preceding the Final Maturity Date or such earlier date set forth in this Article
4, unless previously purchased by the Company at the Holder’s option upon the
occurrence of a Fundamental Change, at the Conversion Rate in effect at such
time, determined as hereinafter provided and subject to the adjustments
described below, only under the following circumstances:
 
(1)  during any fiscal quarter beginning after February 28, 2007, and only
during such fiscal quarter, if, as of the last day of the immediately preceding
fiscal quarter, the Closing Price per share of the Common Stock for at least 20
Trading Days in the period of the 30 consecutive Trading Days ending on the last
Trading Day of such preceding calendar quarter was more than 130% of the
Conversion Price (the “Conversion Trigger Price”);
 
(2)  if the Company distributes to all holders of Common Stock rights (including
rights under a shareholder rights agreement) or warrants entitling them to
purchase, for a period expiring within 45 days of the date of issuance, Common
Stock at less than the Current Market Price of the Common Stock on the day of
issuance;
 
(3)  if the Company distributes to all holders of Common Stock, assets, debt
securities or rights to purchase the Company’s securities, which distribution
has a per share value exceeding 15% of the average of the Closing Prices of the
Common Stock for the five consecutive Trading Days ending on the date
immediately preceding the first public announcement of such distribution;
 
(4)  if a Fundamental Change occurs;
 
(5)  at any time during the one month period beginning on October 15, 2013 and
ending at the close of business on the Business Day immediately preceding the
Final Maturity Date; or
 
(6)  prior to October 15, 2013, during any five Business Day period after any
five consecutive Trading Day period in which the Trading Price per $1,000
principal amount of Securities, as determined following a request by a Holder in
accordance with the procedures described below in Section 4.01(e)(ii), for each
day of that period was less than 97% of the product of the Closing Price of the
Common Stock and the then applicable Conversion Rate.
 
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(b)  In the case of a distribution contemplated by clauses (2) and (3) of
Section 4.01(a), the Company shall notify Holders and Trustee at least 20 days
prior to the ex-dividend date for such distribution (the “Distribution Notice”);
provided that if the Company distributes rights pursuant to a shareholder rights
agreement, it will notify the Holders of the Securities on the Business Day
after the Company is required to give notice generally to its shareholders
pursuant to such shareholder rights agreement if such date is less than 20 days
prior to the date of such distribution. Once the Company has given the
Distribution Notice, Holders may surrender their Securities for conversion at
any time until the earlier of the close of business on the last Business Day
preceding the ex-dividend date or the Company’s announcement that such
distribution will not take place. Notwithstanding the provisions of clauses (2)
and (3) of Section 4.01(a), Holders may not convert the Securities if the
Holders will be entitled to participate in such distribution on an as converted
basis. The Company will provide written notice to the Conversion Agent as soon
as reasonably practicable of any anticipated or actual event or transaction that
will cause or causes the Securities to become convertible pursuant to clauses
(2) or (3) of Section 4.01(a).
 
(c)  [Intentionally Omitted]
 
(d)  In the case of a transaction contemplated by clause (4) of section 4.01(a),
the Company will notify the Holders and Trustee at least 10 Trading Days prior
to the anticipated Fundamental Change Effective Date of any Fundamental Change.
Holders may surrender Securities for conversion at any time beginning 10 Trading
Days before the anticipated Fundamental Change Effective Date of a Fundamental
Change and until the last Trading Day preceding the Fundamental Change Purchase
Date.
 
(e)  (i) For each fiscal quarter of the Company, beginning with the fiscal
quarter ending February 28, 2007, the Company will determine, on the first
Business Day following the last Trading Day of such fiscal quarter, whether the
Securities are convertible pursuant to clause (1) of Section 4.01(a), and, if
so, will notify the Trustee in writing. Upon request of the Conversion Agent,
the Company shall provide, or cause to be provided to, the Conversion Agent the
Closing Price per share of Common Stock for the 30 consecutive Trading Days
ending on the last Trading Day of the preceding fiscal quarter.
 
(ii)  The Company shall have no obligation to determine the Trading Price of the
Securities and whether the Securities are convertible pursuant to clause (6) of
Section 4.01(a) unless a Holder of Securities provides the Company with
reasonable evidence that the Trading Price per $1,000 principal amount of
Securities would be less than 97% of the product of the Closing Price of the
Common Stock and the Conversion Rate per $1,000 principal amount of Securities.
At such time, the Company shall determine the Trading Price of the Securities
beginning on the next Trading Day and on each successive Trading Day until the
Trading Price per $1,000 principal amount of the Securities is greater than 97%
of the product of the Closing Price of the Common Stock and the Conversion Rate
per $1,000 principal amount of the Securities.
 
(f)  The conversion rights pursuant to this Article 4 shall commence on the
initial issuance date of the Securities and expire at the close of business on
the Business Day immediately preceding the Final Maturity Date, but shall be
exercisable only during the time
 
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periods specified with respect to each circumstance pursuant to which the
Securities become convertible, subject, in the case of conversion of any Global
Security, to any Applicable Procedures. If a Security is convertible as a result
of a Fundamental Change, such conversion right shall commence and terminate as
set forth in Section 4.01(d). Securities in respect of which a Fundamental
Change Purchase Notice has been delivered may not be surrendered for conversion
pursuant to this Article 4 prior to a valid withdrawal of such Fundamental
Change Notice in accordance with the provisions of Article 3.
 
(g)  Provisions of this Indenture that apply to conversion of all of a Security
also apply to conversion of a portion of a Security.
 
(h)  A Holder of Securities is not entitled to any rights of a holder of Common
Stock until such Holder has converted its Securities into Common Stock, and only
to the extent such Securities are deemed to have been converted into Common
Stock pursuant to this Article 4.
 
(i)  The Conversion Rate shall be adjusted in certain instances as provided in
Section 4.01(j) and Section 4.06.
 
(j)  If a Fundamental Change occurs as a result of a Termination of Trading or
as a result of the occurrence of one of the events specified in clause (i),
(ii), (iii) or (v) of the definition of the term Change in Control, the Company
shall pay, to the extent set forth in this Section 4.01(j), a make-whole premium
to a Holder who converts its Securities in connection with any such transaction
by increasing the Conversion Rate applicable to such Securities. A conversion of
Securities will be deemed for the purposes of this Section 4.01(j) to be “in
connection with” a Fundamental Change if the Conversion Notice set forth in the
form of Security attached as Exhibit A is received by the Conversion Agent on or
subsequent to the date 10 Trading Days prior to the date announced by the
Company as the anticipated Fundamental Change Effective Date but before the
close of business on the Business Day immediately preceding the related
Fundamental Change Purchase Date. Any increase in the applicable Conversion Rate
shall be determined by reference to the table below and shall be based on the
date on which the Fundamental Change Effective Date occurs and the price paid,
or deemed to be paid, per share of Common Stock in the transaction constituting
the Fundamental Change (the “Stock Price”). If holders of Common Stock receive
only cash in the Fundamental Change, the Stock Price shall be the cash amount
paid per share of Common Stock. In all other cases, the Stock Price shall be the
average of the Closing Prices of the Common Stock for each of the 10 Trading
Days immediately prior to but not including the Fundamental Change Effective
Date.
 
The following table sets forth the amount, if any, by which the applicable
Conversion Rate shall increase for each Stock Price and Fundamental Change
Effective Date set forth below.
 
Make Whole Premium Upon a Fundamental Change (Increase in Applicable Conversion
Rate)
 
Stock Price on
Effective Date
 
November 22,
2006*
 
November 15,
2007
 
November 15,
2008
 
November 15,
2009
 
November 15,
2010
 
November 15,
2011
 
November 15,
2012
 
November 15,
2013
$46.76
 
4.4129
 
4.4129
 
4.4129
 
4.4129
 
4.4129
 
4.4129
 
4.4129
 
0.0000
$50.00
 
3.8875
 
3.7929
 
3.6897
 
3.5693
 
3.4176
 
3.2406
 
3.0205
 
0.0000
$55.00
 
3.2546
 
3.1264
 
2.9831
 
2.8112
 
2.5959
 
2.3248
 
1.9365
 
0.0000
$60.00
 
2.7763
 
2.6300
 
2.4639
 
2.2662
 
2.0172
 
1.7018
 
1.2432
 
0.0000

 
28

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

Stock Price on
Effective Date
 
November 22,
2006*
 
November 15,
2007
 
November 15,
2008
 
November 15,
2009
 
November 15,
2010
 
November 15,
2011
 
November 15,
2012
 
November 15,
2013

$65.00
 
2.4089
 
2.2532
 
2.0764
 
1.8662
 
1.6052
 
1.2787
 
0.8158
 
0.0000
$70.00
 
2.1203
 
1.9616
 
1.7815
 
1.5698
 
1.3101
 
0.9907
 
0.5595
 
0.0000
$75.00
 
1.8898
 
1.7325
 
1.5540
 
1.3465
 
1.0952
 
0.7931
 
0.4081
 
0.0000
$80.00
 
1.7035
 
1.5494
 
1.3757
 
1.1751
 
0.9360
 
0.6563
 
0.3183
 
0.0000
$85.00
 
1.5501
 
1.4008
 
1.2333
 
1.0416
 
0.8168
 
0.5596
 
0.2633
 
0.0000
$90.00
 
1.4227
 
1.2787
 
1.1179
 
0.9360
 
0.7254
 
0.4896
 
0.2310
 
0.0000
$95.00
 
1.3147
 
1.1766
 
1.0233
 
0.8506
 
0.6537
 
0.4376
 
0.2100
 
0.0000
$100.00
 
1.2227
 
1.0906
 
0.9442
 
0.7811
 
0.5969
 
0.3994
 
0.1951
 
0.0000
$150.00
 
0.7448
 
0.6561
 
0.5633
 
0.4611
 
0.3569
 
0.2431
 
0.1263
 
0.0000
$200.00
 
0.5485
 
0.4828
 
0.4150
 
0.3403
 
0.2652
 
0.1814
 
0.0946
 
0.0000
                                 

*Original issue date of the notes.
 
The actual Stock Price and Fundamental Change Effective Date may not be set
forth in the table, in which case:
 
(i)  if the actual Stock Price on the Fundamental Change Effective Date is
between two Stock Prices in the table or the actual Fundamental Change Effective
Date is between two Fundamental Change Effective Dates in the table, the amount
of the Conversion Rate adjustment shall be determined by a straight-line
interpolation between the adjustment amounts set forth for the two Stock Prices
and the two Fundamental Change Effective Dates set forth in the table based on a
365-day year, as applicable;
 
(ii)  if the Stock Price on the Effective date exceeds $200.00 per share,
subject to adjustment as described below, no adjustment to the applicable
conversion rate will be made; and
 
(iii)  if the stock price on the effective date is less than $46.76 per share,
subject to adjustment as described below, no adjustment to the applicable
conversion rate will be made.
 
The Stock Prices set forth in the first column of the table above will be
adjusted as of any date on which the Conversion Rate of the Securities is
adjusted in accordance with Section 4.06. The adjusted Stock Prices shall equal
the Stock Prices applicable immediately prior to such adjustment multiplied by a
fraction, the numerator of which shall be the Conversion Rate immediately prior
to the adjustment giving rise to the Stock Price adjustment and the denominator
of which shall be the Conversion Rate as so adjusted. The Conversion Rate
adjustment amounts set forth in the table above shall be adjusted in the same
manner as the Conversion Rate as set forth in Section 4.06.
 
Notwithstanding the foregoing paragraph, in no event will the Conversion Rate
exceed 21.3858 per $1,000 principal amount of Securities, subject to adjustment
in the manner set forth in clauses (1) through (4) of Section 4.06(a) hereof.
 
(k)  Except as set forth in Section 4.02(c), by delivering the amount of cash
and/or the number of shares of Common Stock issuable on conversion to the
Trustee, the Company will be
 
29

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

deemed to have satisfied its obligation to pay the principal amount of the
Securities so converted and its obligation to pay accrued and unpaid interest,
and Additional Interest if any, attributable to the period from the most recent
Interest Payment Date through the Conversion Date (which amount will be deemed
paid in full rather than cancelled, extinguished or forfeited).
 
(l)  Notwithstanding anything else contained herein, the Securities shall not
become subject to conversion by reason of a merger, consolidation, or other
transaction effected with the Company’s direct or indirect Subsidiaries for the
sole purpose of changing the Company’s state of incorporation to any other state
within the United States or the District of Columbia.
 
Section 4.02.  Conversion Procedure.
 
(a)  To convert a Security, the Holder must (1) complete and manually sign the
Conversion Notice on the reverse of the Security and deliver such notice to the
Conversion Agent, (2) surrender the Security to the Conversion Agent, (3)
furnish appropriate endorsements and transfer documents if required by the
Conversion Agent, and (4) pay all transfer or similar taxes, if required
pursuant to Section 4.04. The date on which the Holder satisfies all of those
requirements is the “Conversion Date.” Upon the conversion of a Security, the
Company shall settle its conversion obligation in the manner set forth in
Section 4.13.
 
(b)  The person in whose name the shares of Common Stock, if any, that are
issued upon conversion shall be deemed to be a holder of record of such shares
of Common Stock on the date on which such shares, if any, are delivered to the
Holder in accordance with the provisions of Section 4.13. Except as set forth in
this Indenture, no payment or adjustment will be made for dividends or
distributions declared or made on shares of Common Stock issued upon conversion
of a Security prior to the issuance of such shares.
 
(c)  Holders of Securities surrendered for conversion (in whole or in part)
during the period from the close of business on any Regular Record Date to the
opening of business on the next succeeding Interest Payment Date will receive
the semi-annual interest payable on such Securities on the corresponding
Interest Payment Date notwithstanding the conversion. Except as otherwise
provided in this Section 4.02(c), no payment or adjustment will be made for
accrued interest on a converted Security.
 
(d)  Subject to Section 4.02(c), nothing in this Section shall affect the right
of a Holder in whose name any Security is registered at the close of business on
a Regular Record Date to receive the interest payable on such Security on the
related Interest Payment Date in accordance with the terms of this Indenture,
the Securities and the Registration Rights Agreement. If a Holder converts more
than one Security at the same time, the amount of cash to be paid and the number
of shares of Common Stock issuable upon the conversion, if any (and the amount
of any cash in lieu of fractional shares pursuant to Section 4.03), shall be
based on the aggregate principal amount of all Securities so converted.
 
(e)  In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, without service charge, a new Security or
Securities of authorized denominations in an aggregate principal amount equal
to, and in exchange for, the unconverted portion of the principal amount
 
30

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

of such Security. A Security may be converted in part, but only if the principal
amount of such part is an integral multiple of $1,000 and the principal amount
of such Security to remain outstanding after such conversion is equal to $1,000
or any integral multiple of $1,000 in excess thereof.
 
(f)  Upon the Company’s determination that a Holder is or will be entitled to
convert its Securities pursuant to this Article 4, the Company will promptly
after making such determination issue a press release and use reasonable efforts
to post such information on the Company’s website or otherwise publicly disclose
such information.
 
Section 4.03.  Fractional Shares.
 
The Company will not issue fractional shares of Common Stock upon conversion of
Securities. If more than one Security shall be surrendered for conversion at one
time by the same Holder, the number of full shares that shall be issuable upon
conversion shall be computed on the basis of the aggregate principal amount of
the Securities (or specified portions thereof to the extent permitted hereby) so
surrendered. In lieu of any fractional shares, the Company will pay an amount in
cash for the current market value of the fractional shares. The current market
value of a fractional share shall be determined (calculated to the nearest
1/100th of a share) by multiplying the arithmetic average of the Volume Weighted
Average Price of the Common Stock for each of the twenty consecutive Trading
Days of the Conversion Reference Period by such fractional share and rounding
the product to the nearest whole cent.
 
Section 4.04.  Taxes on Conversion. If a Holder converts a Security, the Company
shall pay any transfer, stamp or similar taxes or duties related to the issue or
delivery of shares of Common Stock, if any, upon such conversion. The Company
shall also pay any such tax with respect to cash received in lieu of fractional
shares. The Holder shall pay any such tax which is due because the Holder
requests the shares to be issued in a name other than the Holder’s name. The
Conversion Agent may refuse to deliver the certificate representing the Common
Stock being issued in a name other than the Holder’s name until the Conversion
Agent receives a sum sufficient to pay any tax which will be due because the
shares are to be issued in a name other than the Holder’s name. Nothing herein
shall preclude any tax withholding required by law or regulation.
 
Section 4.05.  Company to Provide Stock.
 
(a)  The Company shall, prior to issuance of any Securities hereunder, and from
time to time as may be necessary, reserve, out of its authorized but unissued
Common Stock, a sufficient number of shares of Common Stock to permit the
conversion of all outstanding Securities into shares of Common Stock.
 
(b)  All shares of Common Stock delivered upon conversion of the Securities
shall be duly authorized, validly issued, fully paid and nonassessable and shall
be free from preemptive or similar rights of any securityholder of the Company
and free of any lien or adverse claim as the result of any action by the
Company.
 
31

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

(c)  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 Securities.
 
Section 4.06.  Adjustment of Conversion Rate.
 
(a)  The Conversion Rate shall be adjusted from time to time by the Company as
follows:
 
(1)  If the Company shall pay a dividend or make a distribution to all holders
of outstanding Common Stock in shares of Common Stock, the Conversion Rate in
effect immediately prior to the record date for the determination of
shareholders entitled to receive such dividend or other distribution shall be
increased so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect immediately prior to such record date by a fraction of
which the numerator shall be the sum of the number of shares of Common Stock
outstanding at the close of business on such record date plus the total number
of shares of Common Stock constituting such dividend or other distribution and
of which the denominator shall be the number of shares of Common Stock
outstanding at the close of business on such record date. Such adjustment shall
be made successively whenever any such dividend or distribution is made and
shall become effective immediately after such record date. For the purpose of
this clause (1), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company (to the extent any
shares may be held in the treasury of the Company). The Company will not pay any
dividend or make any distribution on Common Stock held in the treasury of the
Company (to the extent any shares may be held in the treasury of the Company).
If any dividend or distribution of the type described in this clause is declared
but not so paid or made, the Conversion Rate shall again be adjusted to the
Conversion Rate that would then be in effect if such dividend or distribution
had not been declared.
 
(2)  If the Company shall subdivide its outstanding Common Stock into a greater
number of shares, or combine its outstanding Common Stock into a smaller number
of shares, the Conversion Rate in effect immediately prior to the day upon which
such subdivision or combination becomes effective shall be, in the case of a
subdivision of Common Stock, proportionately increased and, in the case of a
combination of Common Stock, proportionately reduced. Such adjustment shall be
made successively whenever any such subdivision or combination of the Common
Stock occurs and shall become effective immediately after the date upon which
such subdivision or combination becomes effective.
 
(3)  If the Company shall issue rights or warrants to all holders of its
outstanding Common Stock entitling them for a period expiring within 45 days
after such issuance to subscribe for or purchase shares of Common Stock (or
securities convertible into Common Stock) at a price per share (or having a
conversion price per share) less than the Current Market Price per share of
Common Stock (as determined in accordance with clause (9) of this Section
4.06(a)) on the record date for the determination of shareholders entitled to
receive such rights or warrants, the Conversion Rate in effect immediately prior
thereto shall be adjusted so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect
 
32

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

immediately prior to such record date by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding at the close of business on
such record date plus the number of additional shares of Common Stock that such
rights or warrants entitle holders thereof to subscribe for or purchase (or into
which such convertible securities are convertible) and of which the denominator
shall be the number of shares of Common Stock outstanding at the close of
business on such record date plus the number of shares which the aggregate
offering price of the total number of shares of Common Stock so offered for
subscription or purchase (or the aggregate conversion price of the convertible
securities so offered for subscription or purchase, which shall be determined by
multiplying the number of shares of Common Stock issuable upon conversion of
such convertible securities by the conversion price per share of Common Stock
pursuant to the terms of such convertible securities) would purchase at the
Current Market Price per share of Common Stock on such record date. Such
adjustment shall be made successively whenever any such rights or warrants are
issued, and shall become effective immediately after such record date. To the
extent that shares of Common Stock (or securities convertible into Common Stock)
are not delivered after the expiration of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate that would then be in
effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of delivery of only the number of shares of Common Stock
(or securities convertible into Common Stock) actually delivered. If such rights
or warrants are not so issued, the Conversion Rate shall again be adjusted to be
the Conversion Rate that would then be in effect if the record date for the
determination of shareholders entitled to receive such rights or warrants had
not been fixed. In determining whether any rights or warrants entitle the
shareholders to subscribe for or purchase shares of Common Stock at a price less
than the Current Market Price per share of Common Stock and in determining the
aggregate offering price of the total number of shares of Common Stock so
offered, there shall be taken into account any consideration received by the
Company for such rights or warrants and any amount payable on exercise or
conversion thereof, the value of such consideration, if other than cash, to be
determined by the Board of Directors.
 
(4)  If the Company shall make a dividend or other distribution to all holders
of its Common Stock of Capital Stock, other than Common Stock, or evidences of
indebtedness or other assets of the Company (excluding (x) any issuance of
rights or warrants to which the provisions of Section 4.06(a)(3) shall apply,
(y) dividends or distributions in connection with a reclassification, change,
consolidation, merger, combination, liquidation, dissolution, winding up, sale
or conveyance resulting in a change in the conversion consideration, or pursuant
to any shareholder rights plan or (z) any dividend or distribution paid
exclusively in cash to which the provisions of Section 4.06(a)(6) shall apply)
(the “Distributed Securities”), then in each such case (unless the Company
distributes such Distributed Securities for distribution to the Holders of
Securities on such dividend or distribution date as if each Holder had converted
such Security into a number of shares of Common Stock equal to the then
applicable Conversion Rate immediately prior to the record date with respect to
such distribution) the Conversion Rate in effect immediately prior to the record
date fixed for the determination of shareholders entitled to receive such
dividend or distribution shall be

33

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

adjusted so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect immediately prior to such record date by a fraction of
which the numerator shall be the Current Market Price per share of the Common
Stock on such record date and of which the denominator shall be Current Market
Price per share on such record date less the fair market value (as determined in
good faith by the Board of Directors, whose determination shall be conclusive
evidence of such fair market value and which shall be evidenced by an Officers’
Certificate delivered to the Trustee) on such record date of the portion of the
Distributed Securities so distributed applicable to one share of Common Stock
(determined on the basis of the number of shares of Common Stock outstanding at
the close of business on such record date). Such adjustment shall be made
successively whenever any such distribution is made and shall become effective
immediately after the record date for the determination of shareholders entitled
to receive such distribution. In the event that such dividend or distribution is
not so paid or made, the Conversion Rate shall again be adjusted to be the
Conversion Rate that would then be in effect if such dividend or distribution
had not been declared.
 
If the fair market value (as so determined) of the portion of the Distributed
Securities so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price per share of the Common Stock on such
record date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each holder of a Security shall have the right to receive upon
conversion the amount of Distributed Securities so distributed that such Holder
would have received had such Holder converted each Security on such record date
into a number of shares of Common Stock equal to the Conversion Rate. If the
Board of Directors determines the fair market value of any distribution for
purposes of this Section 4.06(a)(4) by reference to the actual or when issued
trading market for any securities, it must in doing so consider the prices in
such market over the same period used in computing the Current Market Price of
the Common Stock.
 
Notwithstanding the foregoing, if the securities distributed by the Company to
all holders of its Common Stock consist of Capital Stock of, or similar equity
interests in, a Subsidiary or other business unit of the Company (the “Spinoff
Securities”), the Conversion Rate shall be adjusted so that the same shall be
equal to the rate determined by multiplying the Conversion Rate in effect on the
record date fixed for the determination of shareholders entitled to receive such
distribution by a fraction, the numerator of which shall be the sum of (A) the
average Closing Price of one share of Common Stock over the ten consecutive
Trading Day period (the “Spinoff Valuation Period”) commencing on and including
the fifth Trading Day after the date on which ex-dividend trading commences for
such distribution on the Nasdaq Global Market or such other U.S. national or
regional exchange or market on which the Common Stock is then listed or quoted
and (B) the average of the Closing Prices over the Spinoff Valuation Period of
the Spinoff Securities multiplied by the number of Spinoff Securities
distributed in respect of one share of Common Stock and the denominator of which
shall be the average Closing Price of one share of Common Stock over the Spinoff
Valuation Period, such adjustment to become effective immediately prior to the
opening of business on the fifteenth Trading Day after the date on which
ex-dividend trading commences; provided, however, that the Company may in lieu
of the foregoing adjustment elect to
 
34

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

make an equivalent distribution to the Holders of the Securities or make
adequate provision so that each Holder of Securities shall have the right to
receive upon conversion thereof the amount of such Spinoff Securities that such
Holder of Securities would have received if such Securities had been converted
on the record date with respect to such distribution.
 
(5)  With respect to any rights or warrants (the “Rights”) that may be issued or
distributed pursuant to any existing rights plan of the Company or any rights
plans implemented by the Company after the date of this Indenture (a “Rights
Plan”), the Holders of Securities will receive, with respect to any shares of
Common Stock issued upon conversion, the Rights described therein (whether or
not the Rights have separated from the Common Stock at the time of conversion),
subject to the limitations set forth in and in accordance with any such Rights
Plan; provided that if at the time of conversion the Rights have separated from
the shares of Common Stock in accordance with the provisions of the Rights Plan
so that Holders would not be entitled to receive any rights in respect of the
shares of Common Stock, if any, issuable upon conversion of the Securities as a
result of the timing of the Conversion Date, the Conversion Rate will be
adjusted as if the Company distributed to all holders of Common Stock
Distributed Securities constituting such rights as provided in the first
paragraph of clause (4) of this Section 4.06(a), subject to appropriate
readjustment in the event of the expiration, termination, repurchase or
redemption of the Rights. Other than as specified in this clause (5) of this
Section 4.06(a), there will not be any adjustment to the Conversion Rate as the
result of the issuance of any Rights, the distribution of separate certificates
representing such Rights, the exercise or redemption of such Rights in
accordance with any Rights Plan or the termination or invalidation of any
Rights.
 
(6)  If the Company shall, by dividend or otherwise, at any time distribute (a
“Triggering Distribution”) to all holders of its Common Stock a payment
consisting exclusively of cash (excluding any dividend or distribution in
connection with the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary) the Conversion Rate shall be increased so that
the same shall equal the rate determined by multiplying such Conversion Rate in
effect immediately prior to the close of business on the record date for such
Triggering Distribution (a “Determination Date”) by a fraction of which the
numerator shall be such Current Market Price per share of the Common Stock on
the Determination Date and the denominator of which shall be the Current Market
Price per share of the Common Stock on the Determination Date less the amount of
such cash dividend or distribution applicable to one share of Common Stock
(determined on the basis of the number of shares of Common Stock outstanding at
the close of business on the Determination Date), such increase to become
effective immediately prior to the opening of business on the day following the
record date relating to such Triggering Distribution. If the amount of cash
dividend or distribution applicable to one share of Common Stock is equal to or
greater than the Current Market Price per share of the Common Stock on the
Determination Date, in lieu of the foregoing adjustment, adequate provision
shall be made so that each Holder of a Security shall have the right to receive
upon conversion the amount of cash so distributed that such Holder would have
received had such Holder converted each Security on such Determination Date into
a number of shares of Common Stock equal to the Conversion Rate. In the event
that such dividend
 
35

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

or distribution is not so paid or made, the Conversion Rate shall again be
adjusted to be the Conversion Rate that would then be in effect if such divided
or distribution had not been declared.
 
(7)  If any tender offer made by the Company or any of its Subsidiaries for all
or any portion of Common Stock shall expire, then, if the tender offer shall
require the payment to shareholders of consideration per share of Common Stock
having a fair market value (determined as provided below) that exceeds the
Closing Price per share of Common Stock on the Trading Day next succeeding the
last date (the “Expiration Date”) tenders could have been made pursuant to such
tender offer (as it may be amended) (the last time at which such tenders could
have been made on the Expiration Date is hereinafter sometimes called the
“Expiration Time”), the Conversion Rate shall be increased so that the same
shall equal the rate determined by multiplying the Conversion Rate in effect
immediately prior to the close of business on the Expiration Date by a fraction
of which the numerator shall be the sum of (A) the fair market value of the
aggregate consideration (the fair market value as determined in good faith by
the Board of Directors, whose determination shall be conclusive evidence of such
fair market value and which shall be evidenced by an Officers’ Certificate
delivered to the Trustee) payable to shareholders based on the acceptance (up to
any maximum specified in the terms of the tender offer) of all shares validly
tendered and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the “Purchased Shares”)
and (B) the product of the number of shares of Common Stock outstanding (less
any Purchased Shares and excluding any shares held in the treasury of the
Company) at the Expiration Time and the Closing Price per share of Common Stock
on the Trading Day next succeeding the Expiration Date and the denominator of
which shall be the product of the number of shares of Common Stock outstanding
(including Purchased Shares but excluding any shares held in the treasury of the
Company) at the Expiration Time multiplied by the Closing Price per share of the
Common Stock on the Trading Day next succeeding the Expiration Date, such
increase to become effective immediately prior to the opening of business on the
day following the Expiration Date. In the event that the Company is obligated to
purchase shares pursuant to any such tender offer, but the Company is
permanently prevented by applicable law from effecting any or all such purchases
or any or all such purchases are rescinded, the Conversion Rate shall again be
adjusted to be the Conversion Rate which would have been in effect based upon
the number of shares actually purchased, if any. If the application of this
clause (7) of Section 4.06(a) to any tender offer would result in a decrease in
the Conversion Rate, no adjustment shall be made for such tender offer under
this clause (7).
 
(8)  For purposes of this Section 4.06, the term “tender offer” shall mean and
include both tender offers and exchange offers, all references to “purchases” of
shares in tender offers (and all similar references) shall mean and include both
the purchase of shares in tender offers and the acquisition of shares pursuant
to exchange offers, and all references to “tendered shares” (and all similar
references) shall mean and include shares tendered in both tender offers and
exchange offers.
 
(9)  For purposes of any computation under this Section 4.06, “Current Market
Price” shall mean the average of the daily Closing Prices per share of Common
Stock for
 
36

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

each of the ten consecutive Trading Days immediately prior to the date in
question; provided, however, that if
 
(A)  the “ex” date (as hereinafter defined) for any event (other than the
issuance or distribution requiring such computation) that requires an adjustment
to the Conversion Rate pursuant to Section 4.06(a) (1), (2), (3), (4), (5), (6)
or (7) occurs during such ten consecutive Trading Days, the Closing Price for
each Trading Day prior to the “ex” date for such other event shall be adjusted
by dividing such Closing Price by the same fraction by which the Conversion Rate
is so required to be adjusted as a result of such other event;
 
(B)  the “ex” date for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the Conversion Rate
pursuant to Section 4.06(a) (1), (2), (3), (4), (5), (6) or (7) occurs on or
after the “ex” date for the issuance or distribution requiring such computation
and prior to the day in question, the Closing Price for each Trading Day on and
after the “ex” date for such other event shall be adjusted by dividing such
Closing Price by the reciprocal of the fraction by which the Conversion Rate is
so required to be adjusted as a result of such other event; and
 
(C)  the “ex” date for the issuance or distribution requiring such computation
is prior to the day in question, after taking into account any adjustment
required pursuant to the immediately preceding clause (A) or (B) of this Section
4.06(a)(9), the Closing Price for each Trading Day on or after such “ex” date
shall be adjusted by adding thereto the amount of any cash and the fair market
value (as determined in good faith by the Board of Directors in a manner
consistent with any determination of such value for purposes of Section
4.06(a)(4) or (7), whose determination shall be conclusive and set forth in a
board resolution of the Board of Directors) of the evidences of indebtedness,
shares of capital stock or assets being distributed applicable to one share of
Common Stock as of the close of business on the day before such “ex” date.
 
For purposes of any computation under Section 4.06(a)(7), if the “ex” date for
any event (other than the tender offer that is the subject of the adjustment
pursuant to Section 4.06(a)(7)) that requires an adjustment to the Conversion
Rate pursuant to Section 4.06(a)(1), (2), (3), (4), (5) or (6) occurs on the
date of the Expiration Time for the tender or exchange offer requiring such
computation or on the Trading Day next following the Expiration Time, the
Closing Price for each Trading Day on and after the “ex” date for such other
event shall be adjusted by dividing such Closing Price by the reciprocal of the
fraction by which the Conversion Rate is so required to be adjusted as a result
of such other event. For purposes of this Section 4.06(a)(9) the term “ex” date,
when used:
 
37

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

(A)  with respect to any issuance or distribution, means the first date on which
the Common Stock trades regular way on the relevant exchange or in the relevant
market from which the Closing Price was obtained without the right to receive
such issuance or distribution;
 
(B)  with respect to any subdivision or combination of shares of Common Stock,
means the first date on which the Common Stock trades regular way on such
exchange or in such market after the time at which such subdivision or
combination becomes effective, and
 
(C)  with respect to any tender or exchange offer, means the first date on which
the Common Stock trades regular way on such exchange or in such market after the
Expiration Time of such offer.
 
Notwithstanding the foregoing, whenever successive adjustments to the Conversion
Rate are called for pursuant to this Section 4.06, such adjustments shall be
made to the Current Market Price as may be necessary or appropriate to
effectuate the intent of this Section 4.06 and to avoid unjust or inequitable
results as determined in good faith by the Board of Directors.
 
(10)  Subject to applicable stock exchange rules and listing standards, the
Company shall be permitted to increase the Conversion Rate by any amount for a
period of at least 20 days if the Board of Directors determines that such
increase would be in the Company’s best interest. Subject to applicable stock
exchange rules and listing standards, the Company may also increase the
Conversion Rate to avoid or diminish income tax to Holders of the Common Stock
in connection with a dividend or distribution of Common Stock or similar event.
 
(b)  In any case in which this Section 4.06 shall require that an adjustment be
made following a record date, a Determination Date or Expiration Date, as the
case may be, established for the purposes specified in this Section 4.06, the
Company may elect to defer (but only until five Business Days following the
filing by the Company with the Trustee of the certificate described in Section
4.08) issuing to the Holder of any Security converted after such record date,
Determination Date or Expiration Date the shares of Common Stock and other
Capital Stock of the Company issuable upon such conversion over and above the
shares of Common Stock and other Capital Stock of the Company (or other cash,
property or securities, as applicable) issuable upon such conversion only on the
basis of the Conversion Rate prior to adjustment; and, in lieu of any cash,
property or securities the issuance of which is so deferred, the Company shall
issue or cause its transfer agents to issue due bills or other appropriate
evidence prepared by the Company of the right to receive such cash, property or
securities. If any distribution in respect of which an adjustment to the
Conversion Rate is required to be made as of the record date, Determination Date
or Expiration Date therefore is not thereafter made or paid by the Company for
any reason, the Conversion Rate shall be readjusted to the Conversion Rate which
would then be in effect if such record date had not been fixed or such record
date, Determination Date or Expiration Date had not occurred.
 
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(c)  For purposes of this Section 4.06, “record date” shall mean, with respect
to any dividend, distribution or other transaction or event in which the holders
of Common Stock have the right to receive any cash, securities or other property
or in which the Common Stock (or other applicable security) is exchanged or
converted into any combination of cash, securities or other property, the date
fixed for determination of shareholders entitled to receive such cash, security
or other property (whether or not such date is fixed by the Board of Directors
or by statute, contract or otherwise).
 
(d)  If one or more event occurs requiring an adjustment be made to the
Conversion Rate for a particular period, adjustments to the Conversion Rate
shall be determined by the Company’s Board of Directors to reflect the combined
impact of such Conversion Rate adjustment events, as set out in this Section
4.06, during such period.
 
(e)  Notwithstanding the provisions set forth in Section 4.06(a), in no event
shall the Conversion Rate exceed 21.3858 per $1,000 principal amount of
Securities, subject to adjustment in the manner set forth in clauses (1) through
(4) of Section 4.06(a).
 
Section 4.07.  No Adjustment. No adjustment in the Conversion Rate shall be
required if Holders may participate in the transactions set forth in Section
4.06 above (to the same extent as if the Securities had been converted into
Common Stock immediately prior to such transactions) without converting the
Securities held by such Holders.
 
(a)  No adjustment in the Conversion Rate shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Conversion Rate as last adjusted; provided, however, that any adjustments which
would be required to be made but for this Section 4.07(b) shall be carried
forward and taken into account in any subsequent adjustment. Notwithstanding the
foregoing, all adjustments not previously made shall have effect with respect to
any conversion on or after October 15, 2013. All calculations under this Article
4 shall be made to the nearest cent or to the nearest one-ten thousandth of a
share, as the case may be, with one half cent and 0.00005 of a share,
respectively, being rounded upward.
 
(b)  No adjustment in the Conversion Rate shall be required for (1) issuances of
Common Stock pursuant to any present or future plan of the Company providing for
the reinvestment of dividends or interest and the investment of additional
optional amounts of Common Stock under any plan, (2) issuances of Common Stock
or options or rights to purchase Common Stock pursuant to any present or future
employee, director or consultant benefit plan or program of, or assumed by, the
Company or any of its subsidiaries, (3) issuances of Common Stock pursuant to
any option, warrant, right or exercisable, exchangeable or convertible security
not described in clause (2) above and outstanding as of the Issue Date or
(4) for accrued and unpaid interest and Additional Interest owed, if any.
 
(c)  To the extent that the Securities become convertible into the right to
receive cash in accordance with the provision of Section 4.10, no adjustment
need be made thereafter as to the cash.
 
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Section 4.08.  Notice of Adjustment.
 
Whenever the Conversion Rate or conversion privilege is required to be adjusted
pursuant to this Indenture, the Company shall promptly mail to Holders a notice
of the adjustment and file with the Trustee an Officers’ Certificate briefly
stating the facts requiring the adjustment and the manner of computing it.
Failure to mail such notice or any defect therein shall not affect the validity
of any such adjustment. Unless and until the Trustee shall receive an Officers’
Certificate setting forth an adjustment of the Conversion Rate, the Trustee may
assume without inquiry that the Conversion Rate has not been adjusted and that
the last Conversion Rate of which it has knowledge remains in effect.
 
Section 4.09.  Notice of Certain Transactions.
 
In the event that there is a dissolution or liquidation of the Company, the
Company shall mail to Holders and file with the Trustee a notice stating the
proposed effective date. The Company shall mail such notice at least 10 days
before such proposed effective date. Failure to mail such notice or any defect
therein shall not affect the validity of any transaction referred to in this
Section 4.09.
 
Section 4.10.  Effect of Recapitalization, Reclassification, Consolidation,
Merger or Sale.
 
If any of following events occur (each, a “Business Combination”):
 
(1)  any recapitalization, reclassification or change of the Common Stock, other
than changes resulting from a subdivision or a combination,
 
(2)  a consolidation, merger or combination involving the Company,
 
(3)  a sale, conveyance or lease to another corporation of all or substantially
all of the property and assets of the Company, other than to one or more of the
Company’s subsidiaries, or
 
(4)  any statutory share exchange,
 
in each case as a result of which holders of Common Stock are entitled to
receive stock, other securities, other property or assets (including cash or any
combination thereof) with respect to or in exchange for Common Stock, the
Company or the successor or purchasing corporation, as the case may be, shall
execute with the Trustee a supplemental indenture (which shall comply with the
TIA as in force at the date of execution of such supplemental indenture if such
supplemental indenture is then required to so comply) providing that the
settlement of the Conversion Value will be based on the kind and amount of
shares of stock, other securities or other property or assets (including cash or
any combination thereof) which Holders of Common Stock receive in such Business
Combination in respect of each share of Common Stock. In the event holders of
Common Stock have the opportunity to elect the form of consideration to be
received in such Business Combination, the Company shall make adequate provision
whereby the Securities shall be convertible from and after the effective date of
such Business Combination into the form of consideration elected by a majority
of the Company’s shareholders in such Business
 
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Combination. Appropriate provisions will be made, as determined in good faith by
the Company’s Board of Directors, to preserve the settlement provisions in
Section 4.13 following such Business Combination to the extent feasible. The
Company may not become a party to any such transaction unless its terms are
consistent with this Section 4.10. Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 4. If, in the case of any such Business
Combination, the stock or other securities and assets receivable thereupon by a
holder of shares of Common Stock includes shares of stock or other securities
and assets of a corporation other than the successor or purchasing corporation,
as the case may be, in such Business Combination, then such supplemental
indenture shall also be executed by such other corporation and shall contain a
full and unconditional guarantee by such other corporation of all the Company’s
obligations under the Indenture and the Securities and such additional
provisions to protect the interests of the Holders of the Securities as the
Board of Directors shall reasonably consider necessary by reason of the
foregoing, including to the extent practicable the provisions providing for the
repurchase rights set forth in Article 3 hereof. Notwithstanding anything
contained in this Section, and for the avoidance of doubt, this Section shall
not affect the right of a Holder to convert its Securities into shares of Common
Stock prior to the effective date of the Business Combination.
 
Section 4.11.  Trustee’s Disclaimer.
 
The Trustee shall have no duty to determine when an adjustment under this
Article 4 should be made, how it should be made or what such adjustment should
be, but may accept as conclusive evidence of that fact or the correctness of any
such adjustment, and shall be protected in relying upon, an Officers’
Certificate, including the Officers’ Certificate with respect thereto which the
Company is obligated to file with the Trustee pursuant to Section 4.08. The
Trustee makes no representation as to the validity or value of any securities or
assets issued upon conversion of Securities.
 
Section 4.12.  [Intentionally Omitted] 
 
Section 4.13.  Settlement of Conversion Obligation.
 
(a)  Holders surrendering Securities for conversion shall receive for each
$1,000 principal amount of Securities surrendered for conversion:
 
(A)  cash in an amount equal to the lesser of (1) $1,000 and (2) the Conversion
Value; and
 
(B)  if the Conversion Value is greater than $1,000, a number of shares of
Common Stock (the “Remaining Shares”) equal to the sum of the Daily Share
Amounts for each of the 20 consecutive Trading Days in the Conversion Reference
Period, appropriately adjusted to reflect stock splits, stock dividends,
combinations or similar events occurring during the Conversion Reference Period,
subject to the Company’s right to deliver cash in lieu of all or a portion of
such Remaining Shares as set forth in Section 4.13(b);
 
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provided that in no event shall the aggregate number of Remaining Shares, per
$1,000 principal amount of Securities, exceed the Aggregate Share Cap.
 
(b)  On any day prior to the first Trading Day of the applicable Conversion
Reference Period, the Company may specify a percentage of the Daily Share Amount
that will be settled in cash (the “Cash Percentage”). If the Company elects to
specify a Cash Percentage, the amount of cash that the Company will deliver in
respect of each Trading Day in the applicable Conversion Reference Period will
equal the product of: (1) the Cash Percentage, (2) the Daily Share Amount for
such Trading Day and (3) the Volume Weighted Average Price of the Common Stock
for such Trading Day (provided that after the consummation of a Fundamental
Change in which the consideration is comprised entirely of cash, the amount used
in this clause (3) will be the cash price per share received by holders of the
Common Stock in such Fundamental Change). The number of shares that the Company
shall deliver in respect of each Trading Day in the applicable Conversion
Reference Period will be a percentage of the Daily Share Amount equal to 100%
minus the Cash Percentage. Upon making a determination that a percentage of the
Daily Share Amount will be settled in cash, the Company shall promptly issue a
press release and disclose such information on its website prior to the first
Trading Day of the applicable Conversion Reference Period. If the Company does
not specify a Cash Percentage by the start of the applicable Conversion
Reference Period, the Company shall be required to settle 100% of the Daily
Share Amount for each Trading Day in the applicable Conversion Reference Period
with shares of Common Stock; provided, however, that the Company shall pay cash
in lieu of fractional shares otherwise issuable upon conversion of Securities.
 
(c)  The Company shall determine the Conversion Value, Daily Share Amount and
the number of shares of Common Stock, if any, to be issued upon conversion at
the end of the applicable Conversion Reference Period. Upon conversion of a
Security, the Company shall pay the cash and deliver the shares of Common Stock,
as applicable, as promptly as practicable after the last Trading Day of the
Conversion Reference Period but in any event not later than the third Trading
Day following the last Trading Day of the Conversion Reference Period.
 
For the purposes of Sections 4.13(a) and (b), in the event that any of
Conversion Value, Daily Share Amounts or Volume Weighted Average Price cannot be
determined for all portions of the Conversion Reference Period, the Company’s
Board of Directors shall in good faith determine the values necessary to
calculate the Conversion Value, Daily Share Amounts and Volume Weighted Average
Price, as applicable.
 
ARTICLE 5
COVENANTS
 
Section 5.01.  Payment of Securities.
 
(a)  The Company shall promptly make all payments in respect of the Securities
on the dates and in the manner provided in the Securities and this Indenture. A
payment of principal or interest or Additional Interest, if any, shall be
considered paid on the date it is due if the Paying Agent (other than the
Company) holds by 10:00 a.m., New York City time, on that date money, deposited
by or on behalf of the Company sufficient to make the payment. Subject to
 
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Section 4.02, accrued and unpaid interest on any Security 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 Security 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. Principal, interest, Fundamental Change
Purchase Price and Additional Interest, if any, in each case if payable, shall
be considered paid on the applicable date due if on such date the Trustee or the
Paying Agent holds, in accordance with this Indenture, money sufficient to pay
all such amounts then due. The Company shall, to the fullest extent permitted by
law, pay interest in immediately available funds on overdue principal amount and
interest at the annual rate borne by the Securities 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.
 
(b)  Payment of the principal of and interest, if any, on the Securities shall
be made at the office or agency of the Company maintained for that purpose in
the Borough of Manhattan, The City of New York (which shall initially be at the
address set forth in Section 2.03(c)) or at the Corporate Trust Office of the
Trustee in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Company payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address
appears in the Register; provided further that a Holder with an aggregate
principal amount in excess of $2,000,000 will be paid by wire transfer in
immediately available funds at the election of such Holder if such Holder has
provided wire transfer instructions to the Trustee at least 10 Business Days
prior to the payment date. Any wire transfer instructions received by the
Trustee will remain in effect until revoked by the Holder.
 
Section 5.02.  SEC and Other Reports.
 
(a)  The Company shall file all reports and other information and documents
which it is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act, and within 15 days after it files them with the SEC, the Company
shall file copies of all such reports, information and other documents with the
Trustee; provided that any such reports, information and documents filed with
the SEC pursuant to its Electronic Data Gathering, Analysis and Retrieval (or
EDGAR) system shall be deemed to be filed with the Trustee. The Company also
shall comply with the provisions of TIA Section 314(a).
 
(b)  Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee’s receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company’s
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers’ Certificates).
 
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Section 5.03.  Compliance Certificates.
 
The Company shall deliver to the Trustee, within 120 days after the end of each
fiscal year of the Company (beginning with the fiscal year ending on or about
November 30, 2006), an Officers’ Certificate as to the signer’s knowledge of the
Company’s compliance with all terms, conditions and covenants on its part
contained in this Indenture and stating whether or not the signer knows of any
Default or Event of Default. If such signer knows of such a Default or Event of
Default, the Officers’ Certificate shall describe the Default or Event of
Default and the efforts to remedy the same. For the purposes of this Section
5.03, compliance shall be determined without regard to any grace period or
requirement of notice provided pursuant to the terms of this Indenture.
 
Section 5.04.  Further Instruments and Acts.
 
Upon request of the Trustee, the Company will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purposes of this Indenture.
 
Section 5.05.  Maintenance of Corporate Existence.
 
Subject to Article 6, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence.
 
Section 5.06.  Rule 144A Information Requirement.
 
During the period prior to the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision), the Company covenants and agrees that it shall, during any period in
which it is not subject to Section 13 or 15(d) under the Exchange Act, upon the
request of any Holder or beneficial holder of the Securities, make available to
such Holder or beneficial holder of Securities or any Common Stock issued upon
conversion thereof which continue to be Restricted Securities in connection with
any sale thereof and any prospective purchaser of Securities or such Common
Stock designated by such Holder or beneficial holder, the information required
pursuant to Rule 144A(d)(4) under the Securities Act and it will take such
further action as any Holder or beneficial holder of such Securities or such
Common Stock may reasonably request, all to the extent required from time to
time to enable such Holder or beneficial holder to sell its Securities or Common
Stock without registration under the Securities Act within the limitation of the
exemption provided by Rule 144A, as such Rule may be amended from time to time.
Whether a person is a beneficial holder shall be determined by the Company.
 
Section 5.07.  Stay, Extension and Usury Laws.
 
The Company covenants (to the extent that it may lawfully do so) that it shall
not at any time insist upon, plead or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law or other law which
would prohibit or forgive the Company from paying all or any portion of the
principal of or accrued but unpaid interest or Additional Interest, if any, on
the Securities as contemplated herein, wherever enacted, now or at any time
hereafter in force, or which may affect the covenants or the performance of this
Indenture, and the
 
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Company (to the extent it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and covenants that it will not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
 
Section 5.08.  Payment of Additional Interest.
 
If Additional Interest is payable by the Company pursuant to the Registration
Rights Agreement, the Company shall deliver to the Trustee an Officers’
Certificate to that effect stating (i) the amount of such Additional Interest
that is payable, (ii) the reason why such Additional Interest is payable and
(iii) the date on which such Additional Interest is payable. Unless and until a
Trust Officer of the Trustee receives such a certificate, the Trustee may assume
without inquiry that no such Additional Interest is payable. If the Company has
paid Additional Interest directly to the Persons entitled to such Additional
Interest, the Company shall deliver to the Trustee a certificate setting forth
the particulars of such payment.
 
Section 5.09.  Maintenance of Office or Agency.
 
The Company will maintain an office or agency of the Trustee, Registrar and
Paying Agent where securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer, purchase or
redemption and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The Corporate Trust Office
shall initially be one such office or agency for all of the aforesaid purposes.
The Company shall give prompt written notice to the Trustee of the location, and
of any change in the location, of any such office or agency (other than a change
in the location of the office of the Trustee). If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the address of the Trustee set forth in Section
11.02.
 
The Company may also from time to time designate one or more other offices or
agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency.
 
ARTICLE 6
CONSOLIDATION AND MERGER
 
Section 6.01.  Company May Consolidate, Etc., Only on Certain Terms.
 
The Company may not consolidate with or merge into any Person or convey,
transfer or lease the property and assets, substantially as an entirety, of the
Company to another Person, other than to one or more of the Company’s
wholly-owned subsidiaries, unless:
 
(1)  Either (A) the Company is the continuing entity or (B) the Person (if other
than the Company) formed by such consolidation or into which the Company is
merged, or the Person which acquires by conveyance, transfer or lease all or
substantially all of
 
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the properties and assets of the Company, shall (i) be a corporation, limited
liability company, partnership, trust or other business entity organized and
existing under the laws of the United States of America or any State thereof or
the District of Columbia and (ii) such Person (if other than the Company)
expressly assumes, by an indenture supplemental hereto, executed and delivered
to the Trustee, in form satisfactory to the Trustee, the obligations of the
Company under the Securities and this Indenture and the performance or
observance of every covenant and provision of this Indenture and the Securities
required on the part of the Company to be performed or observed (including,
without limitation, the obligation to convert Securities in accordance with
Article 4), by supplemental indenture satisfactory in form to the Trustee,
executed and delivered to the Trustee, by the Person (if other than the Company)
formed by such consolidation or into which the Company shall have been merged or
by the Person which shall have acquired the Company’s assets;
 
(2)  after giving effect to such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of Default,
shall have occurred and be continuing; and
 
(3)  the Company shall have, at or prior to the effective date of such
consolidation, merger or transfer, delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer complies with this Article 6.01 and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture complies with this Article, and that all conditions precedent herein
provided for relating to such transaction have been complied with.
 
Section 6.02.  Successor Substituted.
 
Upon any consolidation of the Company with, or merger of the Company into, any
other Person or any conveyance, transfer or lease substantially as an entirety,
of the properties and assets of the Company and its Subsidiaries, taken as a
whole, in accordance with Section 6.01, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein,
and thereafter, except in the case of a lease, and except for obligations the
predecessor Person may have under a supplemental indenture, the predecessor
Person shall be relieved of all obligations and covenants under this Indenture
and the Securities.
 
ARTICLE 7
DEFAULT AND REMEDIES
 
Section 7.01.  Events of Default.
 
(a)  An “Event of Default” shall occur if:
 
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(1)  the Company shall fail to pay when due the Principal or Fundamental Change
Purchase Price of any Security, when the same becomes due and payable whether at
the Final Maturity Date, upon repurchase, acceleration or otherwise; or
 
(2)  the Company shall fail to pay an installment of cash interest or Additional
Interest, if any, on any of the Securities, which failure continues for 30 days
after the date when due; or
 
(3)  the Company shall fail to deliver when due all cash and shares of Common
Stock, if any, deliverable upon conversion of the Securities, which failure
continues for 15 days; or
 
(4)  the Company shall fail to provide a Fundamental Change Company Notice when
due;
 
(5)  the Company shall fail to perform or observe (or obtain a waiver with
respect to) any other term, covenant or agreement contained in the Securities or
this Indenture for a period of 60 days after receipt by the Company of a Notice
of Default specifying such failure; or
 
(6)  the Company shall default in the payment of principal by the end of any
applicable grace period 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 $7.5 million and such
acceleration has not been rescinded or annulled or such Indebtedness repaid
within a period of 30 days after receipt of a Notice of Default, provided that
if any such default is cured, waived, rescinded or annulled, then the Event of
Default by reason thereof would not be deemed to have occurred; or
 
(7)  the Company or any of its Subsidiaries shall fail to pay final judgment
aggregating in excess of $7.5 million (excluding therefrom any amount covered by
insurance as to which the insurer has acknowledged in writing its coverage
obligation), which judgments are not paid, discharged or stayed for a period of
60 days; or
 
(8)  the Company, or any Significant Subsidiary of the Company, pursuant to or
within the meaning of any Bankruptcy Law:
 
(A)  commences as a debtor 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 Receiver of it or for all or substantially
all of its property;
 
(D)  makes a general assignment for the benefit of its creditors;
 
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(E)  files a petition in bankruptcy or answer or consent seeking reorganization
or relief; or
 
(F)   consents to the filing of such a petition or the appointment of or taking
possession by a Receiver; or
 
(9) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
 
(A)  grants relief against the Company or any Significant Subsidiary of the
Company in an involuntary case or proceeding or adjudicates the Company or any
Significant Subsidiary of the Company insolvent or bankrupt;
 
(B)  appoints a Receiver of the Company or any Significant Subsidiary of the
Company or for all or substantially all of the property of the Company or any
Significant Subsidiary of the Company; or
 
(C)  orders the winding up or liquidation of the Company or any Significant
Subsidiary of the Company;
 
and in each case the order or decree remains unstayed and in effect for 60
consecutive days.
 
The term “Bankruptcy Law” means Title 11 of the United States Code (or any
successor thereto) or any similar federal or state law for the relief of
debtors. The term “Receiver” means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
 
(b)  Notwithstanding Section 7.01(a), no Event of Default under clauses (5) or
(6) of Section 7.01(a) shall occur until the Trustee notifies the Company in
writing, or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding notify the Company and the Trustee in writing, of
the Default (a “Notice of Default”), and the Company does not cure the Default
within the time specified in clause (5) or (6) of Section 7.01(a), as
applicable, after receipt of such notice. A notice given pursuant to this
Section 7.01 shall be given by registered or certified mail, must specify the
Default, demand that it be remedied and state that the notice is a Notice of
Default. When any Default under this Section 7.01 is cured, it ceases.
 
(c)  The Company will deliver to the Trustee, within five Business Days after
becoming aware of the occurrence of a Default or Event of Default, written
notice thereof.
 
The Trustee shall not be charged with knowledge of any Event of Default unless
written notice thereof shall have been given to a Trust Officer with
responsibility for this Indenture at the Corporate Trust Office of the Trustee
by the Company, a Paying Agent, any Holder or any agent of any Holder or unless
a Trust Officer with responsibility for this Indenture acquires actual knowledge
of such Event of Default in the course of performing other duties pursuant to
this Indenture.
 
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Section 7.02.  Acceleration.
 
If an Event of Default (other than an Event of Default specified in clause (8)
or (9) of Section 7.01(a)) occurs and is continuing with respect to the Company,
the Trustee may, by notice to the Company, or the Holders of at least 25% in
aggregate principal amount of the Securities then outstanding may, by notice to
the Company and the Trustee, declare the principal amount and accrued and unpaid
interest, if any, and accrued and unpaid Additional Interest, if any, through
the date of declaration on all the Securities to be immediately due and payable.
Upon such a declaration, such principal amount and such accrued and unpaid
interest, if any, and such accrued and unpaid Additional Interest, if any, shall
be due and payable immediately. If an Event of Default specified in Section
7.01(a)(8) or (9) occurs in respect of the Company and is continuing, the
principal amount and accrued but unpaid interest, if any, and accrued and unpaid
Additional Interest, if any, on all the Securities shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holders of Securities. The Holders of a majority in aggregate
principal amount of the Securities then outstanding by notice to the Trustee may
rescind an acceleration and its consequences if (a) all existing Events of
Default, other than the nonpayment of the principal of the Securities which have
become due solely by such declaration of acceleration, have been cured or
waived; (b) to the extent the payment of such interest is lawful, interest
(calculated at the rate per annum borne by the Securities) on overdue
installments of interest and overdue principal, which has become due otherwise
than by such declaration of acceleration, has been paid; (c) the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction; and (d) all payments due to the Trustee and any predecessor
Trustee under Section 8.07 have been made. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
 
Section 7.03.  Other Remedies.
 
(a)  Subject to Section 8.01(a), if an Event of Default occurs and is
continuing, the Trustee may, but shall not be obligated to, pursue any available
remedy by proceeding at law or in equity to collect payment of the principal
amount and accrued and unpaid interest, if any, and accrued and unpaid
Additional Interest, if any, on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
 
(b)  The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent permitted by
applicable law.
 
Section 7.04.  Waiver of Defaults and Events of Default.
 
Subject to Sections 7.07 and 10.02, the Holders of a majority in aggregate
principal amount of the Securities then outstanding by notice to the Trustee may
waive an existing Default or Event of Default and its consequences, except an
uncured Default or Event of Default in the payment of the principal of, premium,
if any, or any accrued but unpaid interest on any Security, an uncured failure
by the Company to convert any Securities into Common Stock and cash, as
 
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applicable, or any Default or Event of Default in respect of any provision of
this Indenture or the Securities which, under Section 10.02, cannot be modified
or amended without the consent of the Holder of each Security affected. When a
Default or Event of Default is waived, it is cured and ceases to exist.
 
Section 7.05.  Control by Majority.
 
The Holders of a majority in aggregate principal amount of the Securities then
outstanding may direct the time method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of another Holder or the Trustee, or that may involve
the Trustee in personal liability unless the Trustee is offered security or
indemnity satisfactory to it; provided, however, that the Trustee may take any
other action deemed proper by the Trustee which is not inconsistent with such
direction.
 
Section 7.06.  Limitations on Suits.
 
(a)  A Holder may not pursue any remedy with respect to this Indenture or the
Securities (except actions for payment of overdue principal, premium, if any, or
interest or for the conversion of the Securities pursuant to Article 4) unless:
 
(1)  the Holder gives to the Trustee written notice of a continuing Event of
Default;
 
(2)  the Holders of at least 25% in aggregate principal amount of the then
outstanding Securities make a written request to the Trustee to pursue the
remedy;
 
(3)  such Holder or Holders offer to the Trustee reasonable security or
indemnity to the Trustee against any loss, liability or expense;
 
(4)  the Trustee does not comply with the request within 60 days after receipt
of the request and the offer of security or indemnity; and
 
(5)  no direction inconsistent with such written request has been given to the
Trustee during such 60-day period by the Holders of a majority in aggregate
principal amount of the Securities then outstanding.
 
(b)  No Holder of a Security shall have any right under any provision of this
Indenture or the Securities to affect, disturb, or prejudice the rights of
another Holder of a Security or to obtain a preference or priority over another
Holder of a Security.
 
Section 7.07.  Rights of Holders to Receive Payment and to Convert.
 
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Security to receive payment of the principal amount, interest, Fundamental
Change Purchase Price, if any, or Additional Interest, if any, in respect of the
Securities held by such Holder, on or after the respective due dates expressed
in the Securities and this Indenture (whether upon
 
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repurchase or otherwise), and to convert such Security in accordance with
Article 4, and to bring suit for the enforcement of any such payment on or after
such respective due dates or for the right to convert in accordance with Article
4, is absolute and unconditional and shall not be impaired or affected without
the consent of the Holder.
 
Section 7.08.  Collection Suit by Trustee.
 
If an Event of Default described in clause (1) or (2) of Section 7.01(a) occurs
and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company or another obligor on the
Securities for the whole amount owing with respect to the Securities and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
 
Section 7.09.  Trustee May File Proofs of Claim.
 
The Trustee may file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and the Holders allowed in any judicial
proceedings relative to the Company (or any other obligor on the Securities),
its creditors or its property and shall be entitled and empowered to collect and
receive any money or other property payable or deliverable on any such claims
and to distribute the same, and any Receiver 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
to the Holders, to pay to the Trustee any amount due to 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 8.07, and to
the extent that such payment of the reasonable compensation, expenses,
disbursements and advances in any such proceedings shall be denied for any
reason, payment of the same shall be secured by a lien on, and shall be paid out
of, any and all distributions, dividends, money, securities and other property
which the Holders may be entitled to receive in such proceedings, whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to, or, on behalf of any Holder, to authorize, accept or adopt any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities 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 7.10.  Priorities.
 
(a)  If the Trustee collects any money pursuant to this Article 7, it shall pay
out the money in the following order:
 
(1)  First, to the Trustee for amounts due under Section 8.07;
 
(2)  Second, to Holders for amounts due and unpaid on the Securities for the
principal amount, interest, and Additional Interest, as applicable, ratably,
without preference or priority of any kind, according to such respective amounts
due and payable on the Holders’ Securities;
 
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(3)  Third, to such other Person or Persons, if any, to the extent entitled
thereto; and
 
(4)  Fourth, the balance, if any, to the Company.
 
(b)  The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 7.10.
 
Section 7.11.  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
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 7.11 does not apply to a suit made by the Trustee, a suit by a Holder
pursuant to Section 7.07 or a suit by Holders of more than 10% in aggregate
principal amount of the Securities then outstanding. This Section 7.11 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.
 
ARTICLE 8
TRUSTEE
 
Section 8.01.  Obligations of Trustee.
 
(a)  If an Event of Default of which a Responsible Officer of the Trustee shall
have actual knowledge has occurred and is continuing, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture and use the same
degree of care and skill in its exercise as a prudent person would exercise or
use under the circumstances in the conduct of his or her own affairs.
 
(b)  Except during the continuance of an Event of Default of which a Responsible
Officer of the Trustee shall have actual knowledge:
 
(1)  the Trustee need perform only those duties as are specifically set forth in
this Indenture and no others; and
 
(2)  in the absence of bad faith on its part, the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture. The Trustee, however, shall examine any
certificates and opinions which by any provision hereof are specifically
required to be delivered to the Trustee to determine whether or not they conform
to the requirements of this Indenture, but need not confirm or investigate the
accuracy of mathematical calculations or other facts stated therein.
 
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This Section 8.01(b) shall be in lieu of Section 315(a) of the TIA and such
Section 315(a) is hereby expressly excluded from this Indenture, as permitted by
the TIA.
 
(c)  The Trustee may not be relieved from liability for its own gross negligent
action, its own gross negligent failure to act, or its own willful misconduct,
except that:
 
(1)  this paragraph does not limit the effect of Section 8.01(b);
 
(2)  the Trustee shall not be liable in its individual capacity for any error of
judgment made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
 
(3)  the Trustee shall not be liable in its individual capacity with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 7.05.
 
This Section 8.01(c) shall be in lieu of Sections 315(d)(1), 315(d)(2) and
315(d)(3) of the TIA and such Sections are hereby expressly excluded from this
Indenture as permitted by the TIA.
 
(d)  No provision of this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers
unless the Trustee shall have received adequate security or indemnity in its
opinion against potential costs and liabilities incurred by it relating thereto.
 
(e)  Every provision of this Indenture that in any way relates to the Trustee is
subject to subsections (a), (b), (c) and (d) of this Section 8.01.
 
(f)  The Trustee shall not be liable for interest on any money received by it
except as the Trustee may agree in writing with the Company. Money held in trust
by the Trustee need not be segregated from other funds except to the extent
required by law.
 
Section 8.02.  Rights of Trustee.
 
(a)  Subject to Section 8.01:
 
(1)  The Trustee may rely conclusively and shall be protected in acting or
refraining from acting upon on any document believed by it to be genuine and to
have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
 
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(2)  Before the Trustee acts or refrains from acting, it may require an
Officers’ Certificate or an Opinion of Counsel, which shall conform to Section
11.04(b). The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on such Officers’ Certificate or Opinion of
Counsel.
 
(3)  The Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents, attorneys or
custodians, and the Trustee shall not be responsible for any misconduct or
negligence on the part of any such agent, attorney or custodian appointed by the
Trustee with due care.
 
(4)  The Trustee shall not be personally liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers.
 
(5)  The Trustee may consult with counsel of its selection, and the advice or
opinion of such counsel as to matters of law shall be full and complete
authorization and protection in respect of any such action taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
 
(6)  The Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture or to institute, conduct or defend any
litigation hereunder or in relation hereto at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee security or indemnity satisfactory to the Trustee against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction.
 
(7)  The Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney at the
sole cost of the Company, and shall incur no liability or additional liability
of any kind by reason of such inquiry or investigation. The reasonable expense
of every such examination shall be paid by the Company or, if paid by the
Trustee, shall be repaid by the Company upon demand from the Company’s own
funds.
 
(8)  The Trustee shall not be deemed to have notice or knowledge of any Default,
Event of Default, or Fundamental Change unless a Responsible Officer of the
Trustee has actual knowledge thereof or unless written notice of any event which
is in fact such a Default is received by the Trustee at the Corporate Trust
Office, and such notice references the Securities and this Indenture. In the
absence of receipt of such notice or actual knowledge, the Trustee may
conclusively assume that there is no Default, Event of Default, or Fundamental
Change.
 
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(9)  The rights, privileges, protections, immunities and benefits given to the
Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, including, without limitation as Paying Agent, Registrar and
Conversion Agent, and to each agent, custodian and other Person employed to act
hereunder.
 
(10)  The right of the Trustee to perform any discretionary act enumerated in
this Indenture shall not be construed as a duty, and the Trustee shall not be
answerable for other than its own gross negligence or willful misconduct in the
performance of such act.
 
Section 8.03.  Individual Rights of Trustee.
 
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may otherwise deal with the Company or an Affiliate of
the Company with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to Sections
8.10 and 8.11.
 
Section 8.04.  Trustee’s Disclaimer.
 
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities and the Trustee assumes no responsibility for their
correctness. It shall not be accountable for the Company’s use of the proceeds
from the Securities and it shall not be responsible for any statement in the
Securities other than its certificate of authentication.
 
Section 8.05.  Notice of Default or Events of Default.
 
If a Default or an Event of Default occurs and is continuing and if it is known
to the Trustee, the Trustee shall mail to each Holder of a Security notice of
all uncured Defaults or Events of Default known to it within 90 days after it
occurs or, if later, within 15 days after it becomes known to the Trustee.
However, the Trustee may withhold the notice if and for so long as a committee
of its Trust Officers in good faith determines that withholding notice is in the
interests of Holders of Securities, except in the case of a Default or an Event
of Default in payment of the principal of, or premium, if any, or interest on
any Security when due or in the payment of any redemption or purchase
obligation, or the Company’s failure to convert Securities when obligated to
convert them. This Section 8.05 is in lieu of section 315(b) of the TIA and such
provision is expressly excluded from this Indenture as permitted by the TIA.
 
Section 8.06.  Reports by Trustee to Holders.
 
(a)  If a report is required by TIA Section 313, within 60 days after each May
15, beginning with the May 15 following the date of this Indenture, the Trustee
shall mail to each Holder of Securities a brief report dated as of such May 15
that complies with TIA Section 313(a). If required by TIA Section 313, the
Trustee also shall comply with TIA Sections 313(b)(2) and (c).
 
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(b)  A copy of each report at the time of its mailing to Holders of Securities
shall be mailed to the Company and, to the extent required by the TIA, filed
with the SEC, and each stock exchange, if any, on which the Securities are
listed. The Company shall notify the Trustee whenever the Securities become
listed on any stock exchange or listed or admitted to trading on any quotation
system and any changes in the stock exchanges or quotation systems on which the
Securities are listed or admitted to trading and of any delisting thereof.
 
Section 8.07.  Compensation and Indemnity.
 
(a)  The Company shall pay to the Trustee from time to time such compensation
(as agreed to from time to time by the Company and the Trustee in writing) for
its services (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust). The Company shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances incurred or made by it. Such expenses may include the reasonable
compensation, disbursements and expenses of the Trustee’s agents and counsel.
 
(b)  The Company shall indemnify the Trustee or any predecessor Trustee (which
for purposes of this Section 8.07 shall include its officers, directors,
employees and agents) for, and hold it harmless against, any and all loss,
liability or expense including taxes (other than franchise taxes and taxes based
upon, measured by or determined by the income of the Trustee), incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture or any action or failure to act as authorized or
within the discretion or rights or powers conferred upon the Trustee hereunder
including the reasonable costs and expenses of the Trustee and its counsel in
defending (including reasonable legal fees and expenses) itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder. The Trustee shall notify the Company promptly of any
claim asserted against the Trustee for which it may seek indemnity. The Company
need not pay for any settlement effected without its prior written consent,
which shall not be unreasonably withheld. Anything in this Indenture to the
contrary notwithstanding, in no event shall the Trustee be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Trustee has been advised of the
likelihood of such loss or damage and regardless of the form of action.
 
(c)  The Company need not reimburse the Trustee for any expense or indemnify it
against any loss or liability incurred by it resulting from its gross
negligence, willful misconduct or bad faith.
 
(d)  The Trustee shall have a senior claim to which the Securities are hereby
made subordinate on all money or property held or collected by the Trustee. The
obligations of the Company under this Section 8.07 shall survive the
satisfaction and discharge of this Indenture or the resignation or removal of
the Trustee.
 
(e)  When the Trustee incurs expenses or renders services after an Event of
Default specified in clause (8) or (9) of Section 7.01(a) occurs, the expenses
and the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law. The provisions of this Section shall
survive the termination of this Indenture.
 
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Section 8.08.  Replacement of Trustee.
 
(a)  The Trustee may resign by so notifying the Company. The Holders of a
majority in aggregate principal amount of the Securities then outstanding may
remove the Trustee by so notifying the Trustee and the Company and may, with the
Company’s written consent, appoint a successor Trustee. The Company may remove
the Trustee at any time, so long as no Default or Event of Default has occurred
and is continuing, and appoint a Successor Trustee in accordance with this
Section 8.08.
 
(b)  If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. If the Company fails to promptly appoint a successor Trustee, the
Trustee shall have the right to choose a qualified Trustee as successor, and the
Company shall appoint such successor as Trustee. The resignation or removal of a
Trustee shall not be effective until a successor Trustee shall have delivered
the written acceptance of its appointment as described below.
 
(c)  If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of 10% in principal amount of the Securities then outstanding may
petition any court of competent jurisdiction for the appointment of a successor
Trustee at the expense of the Company.
 
(d)  If the Trustee fails to comply with Section 8.10, any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
 
(e)  A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee and be released from its obligations (exclusive of any liabilities that
the retiring Trustee may have incurred while acting as Trustee) hereunder, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its succession to
each Holder.
 
(f)  A retiring Trustee shall not be liable for the acts or omissions of any
successor Trustee after its succession.
 
(g)  Notwithstanding replacement of the Trustee pursuant to this Section 8.08,
the Company’s obligations under Section 8.07 shall continue for the benefit of
the retiring Trustee.
 
Section 8.09.  Successor Trustee by Merger, Etc.
 
If the Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business (including the administration
of this Indenture) to, another corporation, the resulting, surviving or
transferee corporation, without any further act, shall be the successor Trustee;
provided such transferee corporation shall qualify and be eligible under Section
8.10. Such successor Trustee shall promptly mail notice of its succession to the
Company and each Holder.
 
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Section 8.10.  Eligibility; Disqualification.
 
The Trustee shall always satisfy the requirements of paragraphs (1), (2) and (5)
of TIA Section 310(a). The Trustee (or its parent holding company) shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. If at any time the Trustee shall
cease to satisfy any such requirements, it shall resign immediately in the
manner and with the effect specified in this Article 8. The Trustee shall be
subject to the provisions of TIA Section 310(b). Nothing herein shall prevent
the Trustee from filing with the SEC the application referred to in the
penultimate paragraph of TIA Section 310(b).
 
Section 8.11.  Preferential Collection of Claims Against Company.
 
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
 
ARTICLE 9
SATISFACTION AND DISCHARGE OF INDENTURE
 
Section 9.01.  Satisfaction and Discharge of Indenture.
 
(a)  This Indenture shall cease to be of further force and effect (except as to
any surviving rights of conversion, registration of transfer or exchange of
Securities herein expressly provided for and except as further provided below),
and the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when either:
 
(A)  all Securities theretofore authenticated and delivered (other than (i)
Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 2.07 and (ii) Securities for whose
payment money has theretofore been deposited in trust and thereafter repaid to
the Company as provided in Section 9.03) have been delivered to the Trustee for
cancellation; or
 
(B)  all such Securities not theretofore delivered to the Trustee for
cancellation have become due and payable,
 
provided, that
 
(1)  the Company has deposited with the Trustee, a Paying Agent (other than the
Company or any of its Affiliates) or a Conversion Agent, if applicable,
immediately available funds in trust for the purpose of and in an amount
sufficient to pay and discharge all indebtedness and obligations related to such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and interest (including Additional Interest, if any) to the date of
such deposit;
 
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(2)  the Company has paid or caused to be paid all other sums payable hereunder
by the Company; and
 
(3)  the Company has delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein relating
to the satisfaction and discharge of this Indenture have been complied with.
 
(b)  Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company with respect to the conversion privilege and the
Conversion Rate of the Securities pursuant to Article 4, the obligations of the
Company to the Trustee under Section 8.07 and, if money shall have been
deposited with the Trustee pursuant to clause (2) of Section 9.01(a), the
provisions of Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.12, 5.01 and 11.05,
Article 4, and this Article 9, shall survive until the Securities have been paid
in full.
 
Section 9.02.  Application of Trust Money. Subject to the provisions of Section
9.03, the Trustee or a Paying Agent shall hold in trust, for the benefit of the
Holders, all money deposited with it pursuant to Section 9.01 and shall apply
the deposited money in accordance with this Indenture and the Securities to the
payment of the principal of and interest on the Securities.
 
Section 9.03.  Repayment to Company. The Trustee and each Paying Agent shall
promptly pay to the Company upon request any excess money (1) deposited with
them pursuant to Section 9.01 and (2) held by them at any time.
 
(a)  The Trustee and each Paying Agent shall, subject to applicable abandonment
property laws, pay to the Company upon request any money held by them for the
payment of principal or interest that remains unclaimed for two years after a
right to such money has matured; provided, however, that the Trustee or such
Paying Agent, before being required to make any such payment, may at the expense
of the Company cause to be mailed to each Holder entitled to such money notice
that such money remains unclaimed and that after a date specified therein, which
shall be at least 30 days from the date of such mailing, any unclaimed balance
of such money then remaining will be repaid to the Company. After payment to the
Company, Holders entitled to money must look to the Company for payment as
general creditors unless an applicable abandoned property law designates another
person.
 
Section 9.04.  Reinstatement. If the Trustee or any Paying Agent is unable to
apply any money in accordance with Section 9.02 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company’s obligations under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to Section
9.01 until such time as the Trustee or such Paying Agent is permitted to apply
all such money in accordance with Section 9.02; provided, however, that if the
Company has made any payment of the principal of or interest on any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive any such payment from
the money held by the Trustee or such Paying Agent.
 
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ARTICLE 10
AMENDMENTS; SUPPLEMENTS AND WAIVERS
 
Section 10.01.  Without Consent of Holders.
 
(a)  The Company and the Trustee may amend or supplement this Indenture or the
Securities without notice to or consent of any Holder of a Security for the
purpose of:
 
(1)  evidencing a successor to the Company and the assumption by that successor
of the Company’s obligations under this Indenture and the Securities;
 
(2)  adding to the Company’s covenants for the benefit of the Holders or
surrendering any right or power conferred upon the Company;
 
(3)  increasing the Conversion Rate;
 
(4)  securing the Company’s obligations in respect of the Securities;
 
(5)  evidencing and providing for the acceptance of the appointment of a
successor trustee in accordance with Article 8;
 
(6)  complying with the requirements of the SEC in connection with the
registration of the public offer and sale of the Securities under the Securities
Act pursuant to the Registration Rights Agreement or the qualification of this
Indenture under the TIA;
 
(7)  adding guarantees with respect to the Securities;
 
(8)  curing any ambiguity, omission, inconsistency or correcting or
supplementing any defective provision contained in this Indenture; or
 
(9)  modifying any other provisions of this Indenture in any manner that will
not adversely affect the rights of the Holders in any material respect.
 
Section 10.02.  With Consent of Holders. The Company and the Trustee may amend
or supplement this Indenture or the Securities with the written consent of the
Holders of not less than a majority in aggregate principal amount of the
Securities then outstanding. However, subject to Section 10.04, without the
written consent of each Holder affected, an amendment, supplement or waiver may
not:
 
(1)  alter the manner of calculation or rate of accrual of interest on any
Security or change the time of payment of any installment of interest on, or any
Additional Interest with respect to, any Security;
 
(2)  make any of the Securities payable in money or securities other than that
stated in the Securities;
 
(3)  change the stated maturity of any Security;
 
60

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(4)  reduce the principal amount or Fundamental Change Purchase Price (as
applicable) with respect to any of the Securities;
 
(5)  reduce the Conversion Rate or make any change that adversely affects the
conversion rights of a Holder in any material respect other than as provided
herein;
 
(6)  make any change that adversely affects the rights of Holders to require the
Company to purchase Securities at the option of Holders;
 
(7)  impair the right to institute suit for the enforcement of any payment on or
with respect to any Security or with respect to the conversion of any Security;
 
(8)  change the currency of payment of principal of, or interest on, the
Securities;
 
(9)  except as otherwise permitted or contemplated by Section 4.10, adversely
affect the conversion rights of the Securities; or
 
(10)  change the percentage in aggregate principal amount of Securities
outstanding necessary to modify or amend this Indenture or to waive any past
Default or otherwise change the provisions in this Indenture that relate to
modifying or amending this Indenture.
 
(b)  Without limiting the provisions of Section 10.02(a) hereof, the Holders of
a majority in principal amount of the Securities then outstanding may, on behalf
of all the Holders of all Securities, (i) waive compliance by the Company with
the restrictive provisions of this Indenture, and (ii) waive any past Default or
Event of Default under this Indenture and its consequences, except a default in
the payment when due of the principal amount, accrued and unpaid interest,
accrued and unpaid Additional Interest or Fundamental Change Purchase Price of
or in respect of any Security, or in the delivery when due of cash, and, if
applicable, Common Stock upon conversion of Securities, or in respect of any
provision which under this Indenture cannot be modified or amended without the
consent of the Holder of each outstanding Security affected.
 
(c)  After an amendment, supplement or waiver under this Section 10.02 becomes
effective, the Company shall promptly mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
 
Section 10.03.  Compliance with Trust Indenture Act. Every amendment to or
supplement of this Indenture or the Securities shall comply with the TIA as in
effect at the date of such amendment or supplement.
 
Section 10.04.  Revocation and Effect of Consents. Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder’s
Security, even if notation of the consent is not made on any Security.
 
61

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However, any such Holder or subsequent Holder may revoke the consent as to its
Security or portion of a Security if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective.
 
(a)  After an amendment, supplement or waiver becomes effective, it shall bind
every Holder of a Security.
 
Section 10.05.  Notation on or Exchange of Securities. If an amendment,
supplement or waiver changes the terms of a Security, the Trustee may require
the Holder of the Security to deliver it to the Trustee. The Trustee may place
an appropriate notation on the Security about the changed terms and return it to
the Holder. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms.
 
Section 10.06.  Trustee to Sign Amendments, Etc.The Trustee shall sign any
amendment or supplemental indenture authorized pursuant to this Article 10 if
the amendment or supplemental indenture does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does, the Trustee may,
in its sole discretion, but need not sign it. In signing or refusing to sign
such amendment or supplemental indenture, the Trustee shall be entitled to
receive and, subject to Section 8.01, shall be fully protected in relying upon,
an Opinion of Counsel stating that such amendment or supplemental indenture is
authorized or permitted by this Indenture. The Company may not sign an amendment
or supplement indenture until the Board of Directors approves it.
 
Section 10.07.  Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article 10, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
 
ARTICLE 11
MISCELLANEOUS
 
Section 11.01.  Trust Indenture Act Controls. If any provision of this Indenture
limits, qualifies or conflicts with the duties imposed by any of Sections 310 to
317, inclusive, of the TIA through operation of Section 318(c) thereof, such
imposed duties shall control.
 
Section 11.02.  Notices. Any demand, authorization notice, request, consent or
communication shall be given in writing and delivered in person or mailed by
first-class mail, postage prepaid, addressed as follows or transmitted by
facsimile transmission (confirmed by delivery in person or mail by first-class
mail, postage prepaid, or by guaranteed overnight courier) to the following
facsimile numbers:
 
62

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If to the Company, to:

 
Chattem, Inc.
1715 West 38th Street
Chattanooga, Tennessee 37409
Attention: Theodore K. Whitfield, Jr., General Counsel
Fax: (423) 821-0395
 
with a copy to:

 
Miller & Martin PLLC
Suite 1000 Volunteer Building
832 Georgia Avenue
Chattanooga, Tennessee 37402
Attention: Hugh F. Sharber
Fax: (423) 785-8480
 
if to the Trustee, to:

 
U.S. Bank, National Association
150 Fourth Avenue North, 2nd Floor
Nashville, Tennessee 37219
Attention: Corporate Trust Services
(Chattem, Inc. 2.00% Convertible Senior Notes due 2013)
Fax: (621) 251-0738
 
with a copy to:

 
Adams and Reese LLP
424 Church Street, Suite 2800
Nashville, Tennessee 37219
Attention: Cynthia M. Barnett
Fax: (615) 259-1470
 
Such notices or communications shall be effective when received.
 
The Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
 
Any notice or communication mailed to a Holder of a Security shall be mailed by
first-class mail or delivered by an overnight delivery service to it at its
address shown on the register kept by the Primary Registrar.
 
Failure to mail a notice or communication to a Holder of a Security or any
defect in it shall not affect its sufficiency with respect to other Holders of
Securities. If a notice or communication to a Holder of a Security is mailed in
the manner provided above, it is duly given, whether or not the addressee
receives it.
 
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If the Company mails any notice to a Holder of a Security, it shall mail a copy
to the Trustee and each Registrar, Paying Agent and Conversion Agent.
 
Section 11.03.  Communications By Holders with Other Holder. Holders of
Securities may communicate pursuant to TIA Section 312(b) with other Holders of
Securities with respect to their rights under this Indenture or the Securities.
The Company, the Trustee, the Registrar and any other person shall have the
protection of TIA Section 312(c).
 
Section 11.04.  Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee at the request of the
Trustee:
 
(1)  an Officers’ Certificate stating that, in the opinion of the signers, all
conditions precedent (including any covenants, compliance with which constitutes
a condition precedent), if any, provided for in this Indenture relating to the
proposed action have been complied with; and
 
(2)  an Opinion of Counsel stating that, in the opinion of such counsel, all
such conditions precedent (including any covenants, compliance with which
constitutes a condition precedent) have been complied with.
 
(b)  Each Officers’ Certificate and Opinion of Counsel with respect to
compliance with a condition or covenant provided for in this Indenture shall
include:
 
(1)  a statement that the person making such certificate or opinion has read
such covenant or condition;
 
(2)  a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
 
(3)  a statement that, in the opinion of such person, he or she has made such
examination or investigation as is necessary to enable him or her to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
 
(4)  a statement as to whether or not, in the opinion of such person, such
condition or covenant has been complied with; provided, however, that with
respect to matters of fact an Opinion of Counsel may rely on an Officers’
Certificate or certificates of public officials.
 
Section 11.05.  Record Date for Vote or Consent of Holders of Securities. The
Company (or, in the event deposits have been made pursuant to Section 9.01, the
Trustee) may set a record date for purposes of determining the identity of
Holders entitled to vote or consent to any action by vote or consent authorized
or permitted under this Indenture, which record date shall not be more than 30
days prior to the date of the commencement of solicitation of such action.
Notwithstanding the provisions of Section 10.04, if a record date is fixed,
those persons who were Holders of Securities at the close of business on such
record date (or their duly designated proxies), and only those persons, shall be
entitled to take such action by vote or consent or to
 
64

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revoke any vote or consent previously given, whether or not such persons
continue to be Holders after such record date.
 
Section 11.06.  Rules by Trustee, Paying Agent, Registrar and Conversion Agent.
The Trustee may make reasonable rules (not inconsistent with the terms of this
Indenture) for action by or at a meeting of Holders. Any Registrar, Paying Agent
or Conversion Agent may make reasonable rules for its functions.
 
Section 11.07.  Legal Holidays. A “Legal Holiday” is a Saturday, Sunday or a day
on which state or federally chartered banking institutions in New York, New York
are authorized or obligated to close. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a Regular Record
Date is a Legal Holiday, the record date shall not be affected.
 
Section 11.08.  Governing Law. This Indenture and the Securities shall be
governed by, and construed in accordance with, the laws of the State of New
York.
 
Section 11.09.  No Adverse Interpretation of Other Agreements. This Indenture
may not be used to interpret another indenture, loan or debt agreement of the
Company or a Subsidiary of the Company. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
 
Section 11.10.  No Recourse Against Others. All liability described in paragraph
15 of the Securities of any director, officer, employee or shareholder, as such,
of the Company hereby is waived and released by each of the Holders.
 
Section 11.11.  No Security Interest Created. Nothing in this Indenture or in
the Securities, express or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, now in effect
or hereafter enacted and made effective, in any jurisdiction.
 
Section 11.12.  Successors. All agreements of the Company in this Indenture and
the Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
 
Section 11.13.  Multiple Counterparts. The parties may sign multiple
counterparts of this Indenture. Each signed counterpart shall be deemed an
original, but all of them together represent the same agreement.
 
Section 11.14.  Separability. If any provisions in this Indenture or in the
Securities shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
 
Section 11.15.  Table of Contents, Headings, Etc. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
 
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Section 11.16.  Calculations In Respect of Securities. The Company shall be
responsible for making all calculations called for under the Securities. All
calculations made by the Company shall be made in good faith and be final and
binding on the Holders of the Securities absent manifest error. The Company
shall provide a schedule of calculations to the Trustee, and the Trustee shall
be entitled to conclusively rely upon the accuracy of the calculations by the
Company without independent verification. The Trustee shall forward calculations
made by the Company to any Holder of Securities upon request.
 
[SIGNATURE PAGE FOLLOWS]
 

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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as of the
date and year first above written.
 

       
CHATTEM, INC.
 
   
   
    By:   /s/ Robert E. Bosworth  

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

Name: Robert E. Bosworth   Title: President and Chief Operating Officer

        U.S. BANK, NATIONAL ASSOCIATION  
   
   
    By:   /s/ Jaci L. Kitch  

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

Name: Jaci L. Kitch   Title: Vice President

 
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EXHIBIT A
 
[FORM OF FACE OF SECURITY]
 
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 IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.1 
 
THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY, THE
SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION UNDER THE SECURITIES ACT.2 
 
BY ITS ACQUISITION HEREOF, THE HOLDER AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY PRIOR TO THE DATE THAT IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH CHATTEM, INC. (THE
“COMPANY”) OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR
ANY PREDECESSOR OF SUCH SECURITY) (THE “RESALE RESTRICTION TERMINATION DATE”)
ONLY (A) TO THE
 
 

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

1 This paragraph should be included only if the Security is a Global Security.
 
2 This paragraph should be included only if the Security is a Restricted
Security.
 
A-1

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COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN RULE 144A
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, OR (D) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S AND
THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE
(D) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM, AND IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE
REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION
DATE.3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 

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3 This paragraph should be included only if the Security is a Restricted
Security.
 
A-2

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CHATTEM, INC.
 
2.00% Convertible Senior Notes due 2013
 

No. [ ] 
CUSIP: 162456AN7 

 
 
Chattem, Inc., a Tennessee corporation, promises to pay to Cede & Co. or
registered assigns the principal amount of one hundred million dollars
($125,000,000) on November 15, 2013.
 
This Security shall bear interest as specified on the other side of this
Security. This Security is convertible as specified on the other side of this
Security.
 
Additional provisions of this Security are set forth on the other side of this
Security.
 
Dated: November 22, 2006
 
SIGNATURE PAGE FOLLOWS

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

        CHATTEM, INC.  
   
   
    By:      

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

Name:
  Title 

 
Dated: November 22, 2006
 
Trustee’s Certificate of Authentication: This is one of the Securities referred
to in the within-mentioned Indenture.
 
U.S. BANK, NATIONAL ASSOCIATION
as Trustee
 
By:

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

Authorized Signatory

 
A-4

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[FORM OF REVERSE SIDE OF SECURITY]
 
CHATTEM, INC.
2.00% CONVERTIBLE SENIOR NOTES DUE 2013
 
1.  INTEREST
 
Chattem, Inc., a Tennessee corporation (the “Company”, which term shall include
any successor corporation under the Indenture hereinafter referred to), promises
to pay interest on the principal amount of this Security at the rate of 2.00%
per annum. The Company shall pay interest semiannually on November 15 and May 15
of each year (each, an “Interest Payment Date”), commencing May 15, 2007. Each
payment of interest will include interest accrued through the day before the
relevant Interest Payment Date (or purchase date). Cash interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months. Any
payment required to be made on a day that is not a Business Day shall be made on
the next succeeding Business Day. Any reference herein to interest accrued or
payable as of any date shall include any Additional Interest accrued or payable
on such date as provided in the Registration Rights Agreement.
 
No sinking fund is provided for the Securities.
 
2.  METHOD OF PAYMENT
 
The Company shall pay interest on this Security (except defaulted interest) to
the person who is the Holder of this Security at the close of business on
November 1 or May 1, as the case may be (each, a “Regular Record Date”), next
preceding the related Interest Payment Date. The Holder must surrender this
Security to a Paying Agent to collect payment of principal. The Company will pay
principal and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts. The Company may pay
principal and interest in respect of any Certificated Security by check or wire
payable in such money; provided, however, that a Holder with an aggregate
principal amount in excess of $2,000,000 will be paid by wire transfer in
immediately available funds at the election of such Holder if such Holder has
provided wire transfer instructions to the Trustee at least 10 Business Days
prior to the Payment Date. The Company may mail an interest check to the
Holder’s registered address. Notwithstanding the foregoing, so long as this
Security is registered in the name of a Depositary or its nominee, all payments
hereon shall be made by wire transfer of immediately available funds to the
account of the Depositary or its nominee.
 
Any wire transfer instructions received by the Trustee will remain in effect
until revoked by the Holder.
 
3.  PAYING AGENT, REGISTRAR AND CONVERSION AGENT
 
Initially, U.S. BANK, NATIONAL ASSOCIATION (the “Trustee”, which term shall
include any successor trustee under the Indenture hereinafter referred to) will
act as Paying Agent, Registrar and Conversion Agent. The Company may change any
Paying Agent, Registrar or Conversion Agent without notice to the Holder. The
Company or any of its Subsidiaries may, subject to certain limitations set forth
in the Indenture, act as Paying Agent or Registrar.
 
A-5

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4.  INDENTURE, LIMITATIONS
 
This Security is one of a duly authorized issue of Securities of the Company
designated as its 2.00% Convertible Senior Notes Due 2013 (the “Securities”),
issued under an Indenture dated as of November 22, 2006 (together with any
supplemental indentures thereto, the “Indenture”), between the Company and the
Trustee. The terms of this Security include those stated in the Indenture and
those required by or made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended, as in effect on the date of the Indenture.
This Security is subject to all such terms, and the Holder of this security is
referred to the Indenture and said Act for a statement of them. Capitalized
terms not otherwise defined herein have the meaning ascribed to such terms in
the Indenture.
 
The Securities are unsecured obligations of the Company limited to $125,000,000
aggregate principal amount. The Indenture does not limit other debt of the
Company, secured or unsecured.
 
5.  PURCHASE OF SECURITIES OF HOLDERS’ OPTION UPON A FUNDAMENTAL CHANGE
 
If a Fundamental Change occurs prior to the Final Maturity Date, at the option
of the Holder and subject to the terms and conditions of the Indenture, the
Company shall become obligated to purchase for cash, all or any part specified
by the Holder (so long as the principal amount of such part is $1,000 or an
integral multiple of $1,000) of the Securities held by such Holder on a date
specified by the Company that is not less than 30 nor more than 45 days after
the Fundamental Change Effective Date, at a purchase price equal to 100% of the
principal amount thereof together with accrued and unpaid interest, if any, and
accrued and unpaid Additional Interest, if any, to, but excluding, the
Fundamental Change Purchase Date. The Holder shall have the right to withdraw
any Fundamental Change Purchase Notice (in whole or in a portion thereof that is
$1,000 or an integral multiple of $1,000) at any time prior to the close of
business on the Business Day next preceding the Fundamental Change Purchase Date
by delivering a written notice of withdrawal to the Paying Agent in accordance
with the terms of the Indenture.
 
6.  CONVERSION
 
Subject to and upon compliance with the provisions of the Indenture and upon the
occurrence of the events specified in the Indenture, a Holder may surrender for
conversion any Security that is $1,000 principal amount or integral multiples
thereof. In lieu of receiving shares of Common Stock, a Holder will receive, for
each $1,000 principal amount of Securities surrendered for conversion:
 

·  
cash in an amount equal to the lesser of (1) $1,000 and (2) the Conversion
Value; and

 

·  
if the Conversion Value is greater than $1,000, a number of shares of Common
Stock equal to the sum of the Daily Share Amounts, for each of the twenty

 
A-6

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

 
consecutive Trading Days in the Conversion Reference Period, appropriately
adjusted to reflect stock splits, stock dividends, combinations or similar
events occurring during the Conversion Reference Period, subject to the
Company’s right to deliver cash in lieu of all or a portion of such shares as
described in the Indenture;

 
provided that in no event shall the aggregate number of shares of Common Stock
to be issued pursuant to the foregoing clause, per $1,000 principal amount of
Securities, exceed the Aggregate Share Cap, as defined in the Indenture.
 
The Conversion Rate on any Securities surrendered in connection with a
Fundamental Change may be increased by an amount, if any, determined in
accordance with Section 4.01(j) of the Indenture.
 
7.  DENOMINATIONS, TRANSFER, EXCHANGE
 
The Securities are in registered form, without coupons, in denominations of
$1,000 principal amount and integral multiples of $1,000 principal amount. A
Holder may register the transfer of or exchange Securities in accordance with
the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents.
 
8.  PERSONS DEEMED OWNERS
 
The Holder of a Security may be treated as the owner of it for all purposes.
 
9.  UNCLAIMED MONEY
 
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee and any Paying Agent will pay the money back to the Company
at its written request, subject to applicable unclaimed property law and the
provisions of the Indenture. After that, Holders entitled to money must look to
the Company for payment as general creditors unless an applicable abandoned
property law designates another person.
 
10.  AMENDMENT, SUPPLEMENT AND WAIVER
 
Subject to certain exceptions, the Indenture or the Securities may be amended or
supplemented with the consent of the Holders of at least a majority in aggregate
principal amount of the Securities then outstanding, and an existing Default or
Event of Default and its consequence or compliance with any provision of the
Indenture or the Securities may be waived in a particular instance with the
consent of the Holders of a majority in aggregate principal amount of the
Securities then outstanding. Without the consent of or notice to any Holder, the
Company and the Trustee may amend or supplement the Indenture or the Securities
to, among other things, cure any ambiguity, defect or inconsistency or make any
other change that does not adversely affect the rights of the Holders in any
material respect.
 
A-7

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11.  SUCCESSOR ENTITY
 
When a successor corporation assumes all the obligations of its predecessor
under the Securities and the Indenture in accordance with the terms and
conditions of the Indenture, the predecessor corporation (except in certain
circumstances specified in the Indenture) shall be released from those
obligations.
 
12.  DEFAULTS AND REMEDIES
 
An Event of Default shall occur upon the occurrence of any of the events
specified in Section 7.01 of the Indenture. Upon the occurrence of an Event of
Default, the principal amount of this Security and accrued and unpaid interest
shall be subject to becoming due and payable on the terms set forth in the
Indenture. Holders of Securities may, on the terms set forth in the Indenture,
rescind and annul the consequences of any such acceleration.
 
Holders may not enforce the Indenture or the Securities except as provided in
the Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Securities. Subject to certain limitations,
Holders of a majority in aggregate principal amount of the Securities then
outstanding may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing Default (except a
Default in payment of principal or interest) if and so long as it determines
that withholding notice is in their interests. The Company is required to file
periodic certificates with the Trustee as to the Company’s compliance with the
Indenture and knowledge or status of any Default.
 
13.  TRUSTEE DEALINGS WITH THE COMPANY
 
U.S. Bank, National Association, the initial Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from and
perform services for the Company or an Affiliate of the Company, and may
otherwise deal with the Company or an Affiliate of the Company, as if it were
not the Trustee.
 
14.  NO RECOURSE AGAINST OTHERS
 
A director, officer, employee or shareholder, as such, of the Company shall not
have any liability for any obligations of the Company under the Securities or
the Indenture nor for any claim based on, in respect of or by reason of such
obligations or their creation. The Holder of this Security by accepting this
Security waives and releases all such liability. The waiver and release are part
of the consideration for the issuance of this Security.
 
15.  AUTHENTICATION
 
This Security shall not be valid until the Trustee or an authenticating agent
manually signs the certificate of authentication on the other side of this
Security.
 
16.  ABBREVIATIONS AND DEFINITIONS
 
Customary abbreviations may be used in the name of the Holder or an assignee,
such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties),
JT TEN (= joint
 
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tenants with right of survivorship and not as tenants in common), CUST (=
Custodian) and UGMA (= Uniform Gifts to Minors Act).
 
All terms defined in the Indenture and used in this Security but not
specifically defined herein are defined in the Indenture and are used herein as
so defined.
 
17.  INDENTURE TO CONTROL; GOVERNING LAW
 
In the case of any conflict between the provisions of this Security and the
Indenture, the provisions of the Indenture shall control. This Security and the
Indenture shall be governed by, and construed in accordance with, the laws of
the State of New York.
 
The Company will furnish to any Holder, upon written request and without charge,
a copy of the Indenture. Requests may be made to: Chattem, Inc., 1715 West 38th
Street, Chattanooga, Tennessee 37409, Attention: Theodore K. Whitfield, Jr.,
General Counsel, facsimile: (423) 821-0395.
 

 
 
 
 
 

 
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ASSIGNMENT FORM
 
To assign this Security, fill in the form below:
 
I or we assign and transfer this Security to
 

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

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(Print or type assignee’s name, address and zip code)
 
and irrevocably appoint
 

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agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him or her.
 
 
 
Date:

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Your Signature
 
 

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

 
 
* Signature guaranteed by:
 
By:

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*
The signature must be guaranteed by an institution which is a member of one of
the following recognized signature guaranty programs: (i) the Securities
Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange
Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or
(iv) such other guaranty program acceptable to the Trustee.

 
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CONVERSION NOTICE
 
To convert this Security into Common Stock of the Company, check the box:
 
To convert only part of this Security, state the principal amount to be
converted (must be $1,000 or an integral multiple of $1,000): $              .
 
With respect to any shares of Common Stock that may be issuable upon conversion,
if you want the stock certificate made out in another person’s name, fill in the
form below:
 
 

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

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(Print or type assignee’s name, address and zip code)
 
and irrevocably appoint
 

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agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him or her.
 
 
 
Date:

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Your Signature
 
 

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

 
 
* Signature guaranteed by:
 
By:

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*
The signature must be guaranteed by an institution which is a member of one of
the following recognized signature guaranty programs: (i) the Securities
Transfer Agent Medallion Program (STAMP); (ii) the New York Stock Exchange
Medallion Program (MSP); (iii) the Stock Exchange Medallion Program (SEMP); or
(iv) such other guaranty program acceptable to the Trustee.

 
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FUNDAMENTAL CHANGE REPURCHASE NOTICE
 
To: Chattem, Inc.
 
The undersigned registered owner of this Security hereby irrevocably
acknowledges receipt of a notice from Chattem, Inc. (the “Company”) as to the
occurrence of a Fundamental Change with respect to the Company and requests and
instructs the Company to purchase the entire principal amount of this Security,
or the portion thereof (which is $1,000 or an integral multiple thereof) below
designated, in accordance with the terms of the Security and the Indenture
referred to in the Security at the Fundamental Change Purchase Price, together
with accrued and unpaid interest and Additional Interest, if any, to, but
excluding, such date, to the registered Holder hereof.
 
 
Date: 

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Signature (s)
 
Signature(s) must be guaranteed by a qualified guarantor institution with
membership in an approved signature guarantee program pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934.
 
 

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Signature Guaranty

 
Principal amount to be redeemed (in an integral
multiple of $1,000, if less than all):
 
 

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NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without any
alteration or change whatsoever.
 
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SCHEDULE OF EXCHANGES OF SECURITIES(1)
 
The following exchanges, purchase, redemptions, purchases or conversions of a
part of this Global Security have been made:
 
Principal Amount of this
Global Note Following
Such Decrease Date of
Exchange (or Increase)
 
Authorized Signatory of
Securities Custodian
 
Amount of Decrease in
Principal Amount of this
Global Note
 
Amount of Increase in
Principal Amount of this
Global Note
                                                       

 

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1. This schedule should be included only if the Security is a Global Security.
 
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CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION
 
OF TRANSFER OF RESTRICTED SECURITIES
 
Re: 2.00% Convertible Senior Notes Due 2013 (the “Securities”) of Chattem, Inc.
 
This certificate relates to $         principal amount of Securities owned in
(check applicable box) □ book-entry or □ definitive form by
                           (the “Transferor”).
 
The Transferor has requested a Registrar or the Trustee to exchange or register
the transfer of such Securities.
 
In connection with such request and in respect of each such Security, the
Transferor does hereby certify that the Transferor is familiar with transfer
restrictions relating to the Securities as provided in Section 2.12 of the
Indenture dated as of November 22, 2006 between Chattem, Inc. and U.S. Bank,
National Association, as trustee (the “Indenture”), and the transfer of such
Security is being made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the “Securities Act”), or the transfer or
exchange, as the case may be, of such Security does not require registration
under the Securities Act because (check applicable box):
 
 
 

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Such Security is being acquired for the Transferor’s own account, without
transfer. 

     
 

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Such Security is being transferred to the Company or a Subsidiary (as defined in
the Indenture) of the Company. 
          
Such security is being transferred to a person the Transferor reasonably
believes is a “qualified institutional buyer” (as defined in Rule 144A or any
successor provision thereto (“Rule 144A”) under the Securities Act) that is
purchasing for its own account or for the account of a “qualified institutional
buyer”, in each case to whom notice has been given that the transfer is being
made in reliance on such Rule 144A, and in each case in reliance on Rule 144A.
     
 

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Such Security is being transferred pursuant to and in compliance with an
exemption from the registration requirements under the Securities Act in
accordance with Rule 144 (or any successor thereto) (“Rule 144”) under the
Securities Act.
       

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  Such Security is being transferred to a non-U.S. Person in an offshore
transaction in compliance with Rule 904 of Regulation S under the Securities Act
(or any successor thereto).       
 

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Such Security is being transferred pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act (other than
an exemption referred to above) and as a result of which such Security will,
upon such transfer, cease to be a “restricted security” within the meaning of
Rule 144 under the Securities Act. 

 
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The Transferor acknowledges and agrees that, if the transferee will hold any
such Securities in the form of beneficial interests in a Global Note which is a
“restricted security” within the meaning of Rule 144 under the Securities Act,
then such transfer can only be made pursuant to (i) Rule 144A under the
Securities Act and such transferee must be a “qualified institutional buyer” (as
defined in Rule 144A) or (ii) Regulation S under the Securities Act.
 
 
Date: 

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(Insert Name of Transferor) 

 
 

 
 
 
 
 
 
 
 
 
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