Exhibit
4.1


 


INDENTURE


 


BETWEEN


 


VERTEX PHARMACEUTICALS INCORPORATED,


 


AS ISSUER


 


AND


 


U.S. BANK NATIONAL ASSOCIATION,


 


AS TRUSTEE


 


53⁄4% CONVERTIBLE SENIOR SUBORDINATED NOTES DUE 2011


 


DATED AS OF FEBRUARY 13, 2004


 

















 


 


CROSS-REFERENCE
TABLE*


 


	
  Trust Indenture

  Act Section

  	
   

  	
  Indenture

  Section

  
	
   

  	
   

  	
   

  
	
  310(a)(1)

  	
   

  	
  5.11

  
	
  (a)(2)

  	
   

  	
  5.11

  
	
  (a)(3)

  	
   

  	
  n/a

  
	
  (a)(4)

  	
   

  	
  n/a

  
	
  (a)(5)

  	
   

  	
  5.11

  
	
  (b)

  	
   

  	
  5.3; 5.11

  
	
  (c)

  	
   

  	
  n/a

  
	
  311(a)

  	
   

  	
  5.12

  
	
  (b)

  	
   

  	
  5.12

  
	
  (c)

  	
   

  	
  n/a

  
	
  312(a)

  	
   

  	
  2.10

  
	
  (b)

  	
   

  	
  14.3

  
	
  (c)

  	
   

  	
  14.3

  
	
  313(a)

  	
   

  	
  5.7

  
	
  (b)(1)

  	
   

  	
  n/a

  
	
  (b)(2)

  	
   

  	
  5.7

  
	
  (c)

  	
   

  	
  5.7; 14.2

  
	
  (d)

  	
   

  	
  5.7

  
	
  314(a)(1), (2),
  (3).

  	
   

  	
  9.6; 14.6

  
	
  (a)(4)

  	
   

  	
  9.6; 9.7; 14.6

  
	
  (b)

  	
   

  	
  n/a

  
	
  (c)(1)

  	
   

  	
  14.5

  
	
  (c)(2)

  	
   

  	
  14.5

  
	
  (c)(3)

  	
   

  	
  n/a

  
	
  (d)

  	
   

  	
  n/a

  
	
  (e)

  	
   

  	
  14.6

  
	
  (f)

  	
   

  	
  n/a

  
	
  315(a)

  	
   

  	
  5.1(a)

  



 


i

















 


	
  Trust Indenture

  Act Section

  	
   

  	
  Indenture

  Section

  
	
  (b)

  	
   

  	
  5.6; 14.2

  
	
  (c)

  	
   

  	
  5.1(b)

  
	
  (d)

  	
   

  	
  5.1(c)

  
	
  (e)

  	
   

  	
  4.14

  
	
  316(a)(last
  sentence)

  	
   

  	
  2.13

  
	
  (a)(1)(A)

  	
   

  	
  4.5

  
	
  (a)(1)(B)

  	
   

  	
  4.4

  
	
  (a)(2)

  	
   

  	
  n/a

  
	
  (b)

  	
   

  	
  4.7

  
	
  (c)

  	
   

  	
  7.4

  
	
  317(a)(1).

  	
   

  	
  4.8

  
	
  (a)(2)

  	
   

  	
  4.9

  
	
  (b)

  	
   

  	
  2.5

  
	
  318(a)

  	
   

  	
  14.1

  
	
  (b)

  	
   

  	
  n/a

  
	
  (c)

  	
   

  	
  14.1

  



 












“n/a” means not applicable.


 


*This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.


 


ii

















 


TABLE OF
CONTENTS


 


	
  ARTICLE
  1

  	
  DEFINITIONS
  AND INCORPORATION BY REFERENCE

  	
   

  
	
  Section 1.1

  	
  Definitions

  	
   

  
	
  Section 1.2

  	
  Incorporation
  by Reference of Trust Indenture Act

  	
   

  
	
  Section 1.3

  	
  Rules of
  Construction

  	
   

  
	
  ARTICLE 2

  	
  THE SECURITIES

  	
   

  
	
  Section 2.1

  	
  Title and
  Terms

  	
   

  
	
  Section 2.2

  	
  Form of
  Securities

  	
   

  
	
  Section 2.3

  	
  Legends

  	
   

  
	
  Section 2.4

  	
  Execution,
  Authentication, Delivery and Dating

  	
   

  
	
  Section 2.5

  	
  Registrar and
  Paying Agent

  	
   

  
	
  Section 2.6

  	
  Paying Agent
  To Hold Assets in Trust

  	
   

  
	
  Section 2.7

  	
  General
  Provisions Relating To Transfer and Exchange

  	
   

  
	
  Section 2.8

  	
  Book-Entry
  Provisions for the Global Securities

  	
   

  
	
  Section 2.9

  	
  Special
  Transfer Provisions

  	
   

  
	
  Section 2.10

  	
  Holder
  Lists

  	
   

  
	
  Section 2.11

  	
  Persons
  Deemed Owners

  	
   

  
	
  Section 2.12

  	
  Mutilated,
  Destroyed, Lost or Stolen Securities

  	
   

  
	
  Section 2.13

  	
  Treasury
  Securities

  	
   

  
	
  Section 2.14

  	
  Temporary Securities

  	
   

  
	
  Section 2.15

  	
  Cancellation

  	
   

  
	
  Section 2.16

  	
  CUSIP
  Numbers

  	
   

  
	
  Section 2.17

  	
  Defaulted
  Interest

  	
   

  
	
  ARTICLE 3

  	
  SATISFACTION AND
  DISCHARGE

  	
   

  
	
  Section 3.1

  	
  Satisfaction
  and Discharge of Indenture

  	
   

  
	
  Section 3.2

  	
  Deposited
  Monies To Be Held in Trust

  	
   

  
	
  Section 3.3

  	
  Return of
  Unclaimed Monies

  	
   

  
	
  ARTICLE 4

  	
  DEFAULTS AND REMEDIES

  	
   

  
	
  Section 4.1

  	
  Events of
  Default

  	
   

  
	
  Section 4.2

  	
  Acceleration
  of Maturity; Rescission and Annulment

  	
   

  
	
  Section 4.3

  	
  Other
  Remedies

  	
   

  
				



 


iii

















 


	
  Section 4.4

  	
  Waiver of
  Past Defaults

  	
   

  
	
  Section 4.5

  	
  Control by
  Majority

  	
   

  
	
  Section 4.6

  	
  Limitation on
  Suit

  	
   

  
	
  Section 4.7

  	
  Unconditional
  Rights of Holders To Receive Payment and To Convert

  	
   

  
	
  Section 4.8

  	
  Collection of
  Indebtedness and Suits for Enforcement by the Trustee

  	
   

  
	
  Section 4.9

  	
  Trustee May
  File Proofs of Claim

  	
   

  
	
  Section 4.10

  	
  Restoration
  of Rights and Remedies

  	
   

  
	
  Section 4.11

  	
  Rights and
  Remedies Cumulative

  	
   

  
	
  Section 4.12

  	
  Delay or
  Omission Not Waiver

  	
   

  
	
  Section 4.13

  	
  Application
  of Money Collected

  	
   

  
	
  Section 4.14

  	
  Undertaking
  for Costs

  	
   

  
	
  Section 4.15

  	
  Waiver of
  Stay or Extension Laws

  	
   

  
	
  ARTICLE 5

  	
  THE TRUSTEE

  	
   

  
	
  Section 5.1

  	
  Certain
  Duties and Responsibilities

  	
   

  
	
  Section 5.2

  	
  Certain
  Rights of Trustee

  	
   

  
	
  Section 5.3

  	
  Individual
  Rights of Trustee

  	
   

  
	
  Section 5.4

  	
  Money Held in
  Trust

  	
   

  
	
  Section 5.5

  	
  Trustee’s
  Disclaimer

  	
   

  
	
  Section 5.6

  	
  Notice of
  Defaults

  	
   

  
	
  Section 5.7

  	
  Reports by
  Trustee to Holders

  	
   

  
	
  Section 5.8

  	
  Compensation
  and Indemnification

  	
   

  
	
  Section 5.9

  	
  Replacement
  of Trustee

  	
   

  
	
  Section 5.10

  	
  Successor
  Trustee by Merger, Etc

  	
   

  
	
  Section 5.11

  	
  Corporate
  Trustee Required; Eligibility

  	
   

  
	
  Section 5.12

  	
  Collection
  of Claims Against the Company

  	
   

  
	
  ARTICLE 6

  	
  CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER
  OR LEASE

  	
   

  
	
  Section 6.1

  	
  Company May
  Consolidate, Etc., Only on Certain Terms

  	
   

  
	
  Section 6.2

  	
  Successor
  Substituted

  	
   

  
				



 


iv

















 


	
  ARTICLE 7

  	
  AMENDMENTS, SUPPLEMENTS AND WAIVERS

  	
   

  
	
  Section 7.1

  	
  Without
  Consent of Holders of Securities

  	
   

  
	
  Section 7.2

  	
  With Consent
  of Holders of Securities

  	
   

  
	
  Section 7.3

  	
  Compliance
  With Trust Indenture Act

  	
   

  
	
  Section 7.4

  	
  Revocation of
  Consents and Effect of Consents or Votes

  	
   

  
	
  Section 7.5

  	
  Notation on
  or Exchange of Securities

  	
   

  
	
  Section 7.6

  	
  Trustee To
  Sign Amendment, Etc

  	
   

  
	
  ARTICLE 8

  	
  MEETING OF
  HOLDERS OF SECURITIES

  	
   

  
	
  Section 8.1

  	
  Purposes for
  Which Meetings May Be Called

  	
   

  
	
  Section 8.2

  	
  Call Notice
  and Place of Meetings

  	
   

  
	
  Section 8.3

  	
  Persons
  Entitled To Vote at Meetings

  	
   

  
	
  Section 8.4

  	
  Quorum;
  Action

  	
   

  
	
  Section 8.5

  	
  Determination
  of Voting Rights; Conduct and Adjournment of Meetings

  	
   

  
	
  Section 8.6

  	
  Counting
  Votes and Recording Action of Meetings

  	
   

  
	
  ARTICLE 9

  	
  COVENANTS

  	
   

  
	
  Section 9.1

  	
  Payment of
  Principal, Premium and Interest

  	
   

  
	
  Section 9.2

  	
  Maintenance
  of Offices or Agencies

  	
   

  
	
  Section 9.3

  	
  Corporate
  Existence

  	
   

  
	
  Section 9.4

  	
  Maintenance
  of Properties

  	
   

  
	
  Section 9.5

  	
  Payment of
  Taxes and Other Claims

  	
   

  
	
  Section 9.6

  	
  Reports

  	
   

  
	
  Section 9.7

  	
  Compliance
  Certificate

  	
   

  
	
  Section 9.8

  	
  Resale of
  Certain Securities

  	
   

  
	
  ARTICLE 10

  	
  REDEMPTION OF
  SECURITIES

  	
   

  
	
  Section 10.1

  	
  Optional
  Redemption

  	
   

  
	
  Section 10.2

  	
  [Reserved]

  	
   

  
	
  Section 10.3

  	
  Notice to
  Trustee

  	
   

  
	
  Section 10.4

  	
  Selection
  of Securities To Be Redeemed

  	
   

  
	
  Section 10.5

  	
  Notice of
  Redemption

  	
   

  
				



 


v

















 


	
  Section 10.6

  	
  Effect of
  Notice of Redemption

  	
   

  
	
  Section 10.7

  	
  Deposit of
  Redemption Price

  	
   

  
	
  Section 10.8

  	
  Securities
  Redeemed in Part

  	
   

  
	
  ARTICLE
  11

  	
  REPURCHASE
  AT THE OPTION OF A HOLDER UPON A CHANGE OF CONTROL

  	
   

  
	
  Section 11.1

  	
  Repurchase
  Right

  	
   

  
	
  Section 11.2

  	
  Conditions
  to the Company’s Election To Pay the Repurchase Price in Common Stock

  	
   

  
	
  Section 11.3

  	
  Notices;
  Method of Exercising Repurchase Right, Etc

  	
   

  
	
  ARTICLE 12

  	
  CONVERSION OF SECURITIES

  	
   

  
	
  Section 12.1

  	
  Conversion
  Right and Conversion Price

  	
   

  
	
  Section 12.2

  	
  Exercise of
  Conversion Right

  	
   

  
	
  Section 12.3

  	
  Fractions
  of Shares

  	
   

  
	
  Section 12.4

  	
  Adjustment
  of Conversion Price

  	
   

  
	
  Section 12.5

  	
  Notice of
  Adjustments of Conversion Price

  	
   

  
	
  Section 12.6

  	
  Notice
  Prior to Certain Actions

  	
   

  
	
  Section 12.7

  	
  Company To
  Reserve Common Stock

  	
   

  
	
  Section 12.8

  	
  Taxes on
  Conversions

  	
   

  
	
  Section 12.9

  	
  Covenant as
  to Common Stock

  	
   

  
	
  Section 12.10

  	
  Cancellation
  of Converted Securities

  	
   

  
	
  Section 12.11

  	
  Effect of
  Recapitalization, Reclassification, Consolidation, Merger or Sale

  	
   

  
	
  Section 12.12

  	
  Responsibility
  of Trustee for Conversion Provisions

  	
   

  
	
  ARTICLE 13

  	
  SUBORDINATION

  	
   

  
	
  Section 13.1

  	
  Securities
  Subordinated to Senior Debt

  	
   

  
	
  Section 13.2

  	
  Subrogation

  	
   

  
	
  Section 13.3

  	
  Obligation
  of the Company Is Absolute and Unconditional

  	
   

  
	
  Section 13.4

  	
  Maturity of
  or Default on Senior Debt

  	
   

  
	
  Section 13.5

  	
  Payments on
  Securities Permitted

  	
   

  
	
  Section 13.6

  	
  Effectuation
  of Subordination by Trustee

  	
   

  
	
  Section 13.7

  	
  Knowledge
  of Trustee

  	
   

  
				



 


vi

















 


	
  Section 13.8

  	
  Trustee’s
  Relation to Senior Debt

  	
   

  
	
  Section 13.9

  	
  Rights of
  Holders of Senior Debt Not Impaired

  	
   

  
	
  Section 13.10

  	
  Modification
  of Terms of Senior Debt

  	
   

  
	
  Section 13.11

  	
  Certain
  Conversions Not Deemed Payment

  	
   

  
	
  ARTICLE
  14

  	
  OTHER
  PROVISIONS OF GENERAL APPLICATION

  	
   

  
	
  Section 14.1

  	
  Trust
  Indenture Act Controls

  	
   

  
	
  Section 14.2

  	
  Notices

  	
   

  
	
  Section 14.3

  	
  Communication
  by Holders With Other Holders

  	
   

  
	
  Section 14.4

  	
  Acts of
  Holders of Securities

  	
   

  
	
  Section 14.5

  	
  Certificate
  and Opinion as to Conditions Precedent

  	
   

  
	
  Section 14.6

  	
  Statements
  Required in Certificate or Opinion

  	
   

  
	
  Section 14.7

  	
  Effect of
  Headings and Table of Contents

  	
   

  
	
  Section 14.8

  	
  Successors
  and Assigns

  	
   

  
	
  Section 14.9

  	
  Separability
  Clause

  	
   

  
	
  Section 14.10

  	
  Benefits
  of Indenture

  	
   

  
	
  Section 14.11

  	
  Governing
  Law

  	
   

  
	
  Section 14.12

  	
  Counterparts

  	
   

  
	
  Section 14.13

  	
  Legal
  Holidays

  	
   

  
	
  Section 14.14

  	
  Recourse
  Against Others

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
  EXHIBIT A:  Form of Security

  	
   

  
				



 


vii

















 


INDENTURE, dated
as of February 13, 2004, between VERTEX PHARMACEUTICALS INCORPORATED, a
corporation duly organized and existing under the laws of the Commonwealth of
Massachusetts, having its principal office at 130 Waverly Street, Cambridge,
Massachusetts 02139 (the “Company”), and U.S. BANK NATIONAL ASSOCIATION, as
trustee (the “Trustee”), having its principal corporate trust office at One Federal Street, Boston,
Massachusetts 02110.


 


RECITALS OF THE COMPANY


 


The Company has duly authorized the creation of an
issue of its 53⁄4% Convertible Senior Subordinated Notes due February 15, 2011
(herein called the “Securities”) of substantially the tenor and amount
hereinafter set forth, and to provide therefor the Company has duly authorized the
execution and delivery of this Indenture.


 


All things necessary to make the Securities, when the
Securities are executed by the Company and authenticated and delivered
hereunder and duly issued by the Company, the valid obligations of the Company,
and to make this Indenture a valid agreement of the Company, in accordance with
their and its terms, have been done.


 


NOW, THEREFORE, THIS INDENTURE WITNESSETH:


 


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


 


ARTICLE 1



DEFINITIONS AND INCORPORATION BY REFERENCE


 


SECTION 1.1                                                  Definitions.


 


For all purposes of this Indenture and the Securities,
the following terms are defined as follows:


 


“Act,” when used with respect to any Holder of a
Security, has the meaning specified in Section 14.4(a) hereof.


 


“Adjusted Interest Rate” means, with respect to any
Reset Transaction, the rate per annum that is the arithmetic average of the
rates quoted by two Reference Dealers selected by the Company or its successor
as the rate at which interest on the Securities should accrue so that the fair
market value, expressed in dollars, of a Security immediately after the later
of:


 


(1)                                  the
public announcement of such Reset Transaction; or


 


(2)                                  the
public announcement of a change in dividend policy in connection with such
Reset Transaction,


 


1

















 


will equal the
average Trading Price of a Security for the 20 Trading Days preceding the date
of public announcement of such Reset Transaction; provided, that, the Adjusted
Interest Rate shall not be less than 5% per annum.


 


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


 


“Bankruptcy Law” means Title 11 of the U.S. Code or
any similar federal or state law for the relief of debtors.


 


“Board of Directors” means either the board of
directors of the Company or any committee of that board empowered to act for it
with respect to this Indenture.


 


“Board Resolution” means a resolution duly adopted by
the Board of Directors, a copy of which, certified by the Secretary or an
Assistant Secretary of the Company to be in full force and effect on the date
of such certification, shall have been delivered to the Trustee.


 


“Business Day,” when used with respect to any Place of
Payment or Place of Conversion, means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in that Place of
Payment or Place of Conversion, as the case may be, are authorized or obligated
by law to close.


 


“Change of Control” means
the occurrence of any of the following after the original issuance of the
Securities:


 


(1)                                  the
acquisition by any person, including any syndicate or group deemed to be a
“person” under Section 13(d)(3) of the Exchange Act, of beneficial ownership,
directly or indirectly, through a purchase, merger or other acquisition
transaction or series of transactions, of shares of capital stock of the
Company entitling such person to exercise 50% or more of the total voting power
of all shares of capital stock of the Company entitled to vote generally in
elections of directors, other than any such acquisition by the Company, any
subsidiary of the Company or any employee benefit plan of the Company;


 


(2)                                  any
consolidation or merger of the Company with or into any other person, any
merger of another person into the Company, or any conveyance, transfer, sale,
lease or other disposition of all or substantially all of the properties and
assets of the Company to another person, other than (a) any such transaction
(x) that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of capital stock of the Company and (y)
pursuant to which holders of capital stock of the Company immediately prior to
such transaction have the entitlement to exercise, directly or indirectly, 50%
or more of the total voting power of all shares of capital stock of the Company
entitled to vote generally in the election of directors of the continuing or
surviving person immediately after such transaction or (b) any merger which is
effected


 


2

















 


solely to change the jurisdiction of incorporation of the Company and
results in a reclassification, conversion or exchange of outstanding shares of
Common Stock solely into shares of common stock of the surviving entity;


 


(3)                                  during
any consecutive two-year period, individuals who at the beginning of that
two-year period constituted the Board of Directors (together with any new
directors whose election to the Board of Directors, or whose nomination for
election by the stockholders of the Company, was approved by a vote of a
majority of the directors then still in office who were either directors at the
beginning of such period or whose elections or nominations for election were
previously so approved) cease for any reason to constitute a majority of the
Board of Directors then in office; or


 


(4)                                  the
Company is liquidated or dissolved or a resolution is passed by the Company’s
stockholders approving a plan of liquidation or dissolution of the Company
other than in a transaction which complies with the provisions described in
Article 6 of the Indenture.


 


Beneficial ownership shall be determined in accordance
with Rule 13d-3 promulgated by the SEC under the Exchange Act.  The term “person” shall include any
syndicate or group which would be deemed to be a “person” under Section
13(d)(3) of the Exchange Act.


 


“Chief Executive Officer” means any chief executive
officer of the Company.


 


“Closing Date” means February 13, 2004 or such later
date on which the Securities may be delivered pursuant to the Dealer Manager
Agreement.


 


“Closing Price” of any
security on any date of determination means:


 


(1)                                  the
closing sale price (or, if no closing sale price is reported, the last reported
sale price) of such security (regular way) on the New York Stock Exchange on
such date;


 


(2)                                  if
such security is not listed for trading on the New York Stock Exchange on any
such date, the closing sale price as reported in the composite transactions for
the principal U.S. exchange on which such security is so listed;


 


(3)                                  if
such security is not so listed on a U.S. national or regional securities
exchange, the closing sale price as reported by the Nasdaq National Market;


 


(4)                                  if
such security is not so reported, the last quoted bid price for such security
in the over-the-counter market as reported by the National Quotation Bureau or
similar organization; or


 


(5)                                  if
such bid price is not available, the average of the mid-point of the last bid
and ask prices of such security on such date from at least three nationally
recognized independent investment banking firms retained for this purpose by
the Company.


 


3

















 


“Common Stock” means any stock of any class of the
Company which has no preference in respect of dividends or of amounts payable
in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which is not subject to redemption by the
Company.  However, subject to the
provisions of Section 12.11 hereof, shares issuable on conversion of Securities
shall include only shares of the class designated as Common Stock, par value
$0.01 per share, of the Company at the date of this Indenture or shares of any
class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Company and which are not subject to redemption by the
Company, provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be substantially
in the proportion which the total number of shares of such class resulting from
all such reclassifications bears to the total number of shares of all such
classes resulting from all such reclassifications.


 


“Company” means the corporation named as the “Company”
in the first paragraph of this instrument until a successor corporation shall
have become such pursuant to the applicable provisions of this Indenture, and
thereafter “Company” shall mean such successor corporation.


 


“Company Notice” has the meaning specified in Section
11.3 hereof.


 


“Company Order” means a written order signed in the
name of the Company by both (1) the Chief Executive Officer, the President or a
Vice President and (2) so long as not the same as the officer signing pursuant
to clause (1), the Chief Financial Officer, the Treasurer or the Secretary of
the Company, and delivered to the Trustee.


 


“Conversion Agent” means any Person authorized by the
Company to convert Securities in accordance with Article 12 hereof.


 


“Conversion Price” has the meaning specified in
Section 12.1 hereof.


 


“Corporate Trust Office” means for purposes of
presentation or surrender of Securities for payment, registration, transfer,
exchange or conversion or for service of notices or demands upon the Company,
the office of the Trustee located in the City of New York (which at the date of
this Indenture is located at 100 Wall Street, New York, NY 10005), and for all other
purposes, the office of the Trustee located in Boston, Massachusetts (which at
the date of this Indenture is located at One Federal Street, Boston, Massachusetts 02110).


 


“Corporation” means corporations, associations,
limited liability companies, companies and business trusts.


 


“Current Market Price” has the meaning set forth in
Section 12.4(g).


 


“Custodian” means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any Bankruptcy Law.


 


“Dealer Manager” means UBS Securities LLC.


 


4

















 


“Dealer Manager Agreement” means the Dealer Manager
Agreement, dated February 10, 2004, between the Company and the Dealer Manager.


 


“Default” means an event which is, or after notice or
lapse of time or both would be, an Event of Default.


 


“Defaulted Interest” has the meaning specified in
Section 2.17 hereof.


 


“Depositary” means The Depository Trust Company, its
nominees and their respective successors.


 


“Designated Senior Debt” means Senior Debt of the
Company which, at the date of determination, has an aggregate amount outstanding
of, or under which, at the date of determination, the holders thereof are
committed to lend up to, at least $20 million and is specifically designated in
the instrument evidencing or governing that Senior Debt as “Designated Senior
Debt” for purposes of this Indenture, provided, that, such instrument may place
limitations and conditions on the right of such Senior Debt to exercise the
rights of Designated Senior Debt.


 


“Dividend Yield” on any security for any period means
the dividends paid or proposed to be paid pursuant to an announced dividend
policy on such security for such period divided by, if with respect to
dividends paid on such security, the average Closing Price of such security
during such period and, if with respect to dividends proposed to be paid on
such security, the Closing Price of such security on the effective date of the
related Reset Transaction.


 


“Dollar,” “U.S. Dollar” or “U.S. $” means a dollar or
other equivalent unit in such coin or currency of the United States as at the
time shall be legal tender for the payment of public and private debts.


 


“DTC Participants” has the meaning specified in
Section 2.8 hereof.


 


“Event of Default” has the meaning specified in
Section 4.1 hereof.


 


“Exchange Act” means the Securities Exchange Act of 1934,
as amended.


 


“Expiration Time” has the meaning specified in Section
12.4(f) hereof.


 


“Fair market value” has the meaning set forth in
Section 12.4(g) hereof.


 


“Global Security” has the meaning specified in Section
2.2 hereof.


 


“Guarantee” means any obligation, contingent or
otherwise, of any Person, directly or indirectly guaranteeing any Indebtedness
of any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person:


 


(1)                                  to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods,


 


5

















 


securities or services, to take-or-pay, or maintain financial statement
conditions or otherwise); or


 


(2)                                  entered
into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part);


 


provided, however,
that the term “guarantee” will not include endorsements for collection or
deposit in the ordinary course of business. 
The term “guarantee” used as a verb has a corresponding meaning.


 


“Holder,” when used with respect to any Security,
means the Person in whose name the Security is registered in the Register.


 


“Indebtedness,” when used
with respect to any Person, and without duplication means:


 


(1)                                  all
indebtedness, obligations and other liabilities (contingent or otherwise) of
such Person for borrowed money (including obligations of the Company in respect
of overdrafts, foreign exchange contracts, currency exchange agreements,
Interest Rate Protection Agreements, and any loans or advances from banks,
whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or other instruments for the payment of money, or
incurred in connection with the acquisition of any property, services or assets
(whether or not the recourse of the lender is to the whole of the assets of
such Person or to only a portion thereof), other than any account payable or
other accrued current liability or obligation to trade creditors incurred in
the ordinary course of business in connection with the obtaining of materials
or services;


 


(2)                                  all
reimbursement obligations and other liabilities (contingent or otherwise) of
such Person with respect to letters of credit, bank guarantees, bankers’
acceptances, surety bonds, performance bonds or other guaranty of contractual
performance;


 


(3)                                  all
obligations and liabilities (contingent or otherwise) in respect of (a) leases
of such Person required, in conformity with generally accepted accounting
principles, to be accounted for as capitalized lease obligations on the balance
sheet of such Person and (b) any lease or related documents (including a
purchase agreement) in connection with the lease of real property which
provides that such Person is contractually obligated to purchase or cause a
third party to purchase the leased property and thereby guarantee a minimum
residual value of the leased property to the landlord and the obligations of
such Person under such lease or related document to purchase or to cause a
third party to purchase the leased property;


 


(4)                                  all
obligations of such Person (contingent or otherwise) with respect to an
interest rate or other swap, cap or collar agreement or other similar
instrument or agreement or foreign currency hedge, exchange, purchase or
similar instrument or agreement;


 


6

















 


(5)                                  all
direct or indirect guaranties or similar agreements by such Person in respect
of, and obligations or liabilities (contingent or otherwise) of such Person to
purchase or otherwise acquire or otherwise assure a creditor against loss in
respect of, indebtedness, obligations or liabilities of another Person of the
kind described in clauses (1) through (4);


 


(6)                                  any
indebtedness or other obligations described in clauses (1) through (4) secured
by any mortgage, pledge, lien or other encumbrance existing on property which
is owned or held by such Person, regardless of whether the indebtedness or
other obligation secured thereby shall have been assumed by such Person; and


 


(7)                                  any
and all deferrals, renewals, extensions, refinancings, replacements,
restatements and refundings of, or amendments, modifications or supplements to,
any indebtedness, obligation or liability of the kind described in clauses (1)
through (6).


 


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


 


“Interest Payment Date” means each February 15 and
August 15.


 


“Interest Rate” means, (a) if a Reset Transaction has
not occurred, 53⁄4% per annum, or (b) following the occurrence of a Reset
Transaction, the Adjusted Interest Rate related to such Reset Transaction to,
but not including the effective date of any succeeding Reset Transaction.


 


“Interest Rate Protection Agreement” means, with
respect to any Person, any interest rate swap agreement, interest rate cap or
collar agreement or other financial agreement or arrangement designed to
protect such person against fluctuations in interest rates, as in effect from
time to time.


 


“Internal Revenue Code” means the Internal Revenue
Code of 1986, as amended.


 


“Liquidated Damages” means all liquidated damages, if
any, payable pursuant to Section 3 of the Registration Rights Agreement.


 


“Maturity” means the date on which the principal of
such Security becomes due and payable as therein or herein provided, whether at
the Stated Maturity or by acceleration, conversion, call for redemption,
exercise of a Repurchase Right or otherwise.


 


“Nasdaq National Market” means the National
Association of Securities Dealers Automated Quotation National Market or any
successor national securities exchange or automated over-the-counter trading
market in the United States.


 


“Non-Electing Share” has the meaning specified in
Section 12.11 hereof.


 


“Notice Date” has the meaning specified in Section
10.1 hereof.


 


7

















 


“Officer” of the Company means the Chief Executive
Officer, the President, the Chief Financial Officer, the Treasurer, any Vice
President or the Secretary of the Company.


 


“Officers’ Certificate” means a certificate signed by
both (1) the Chief Executive Officer, the President or a Vice President and (2)
so long as not the same as the officer signing pursuant to clause (1), the
Chief Financial Officer, the Treasurer or the Secretary of the Company, and
delivered to the Trustee.


 


“Old Securities” means the Company’s 5% Convertible
Subordinated Notes due 2007 issued on September 19, 2000.


 


“Opinion of Counsel” means a written opinion of
counsel, who may be counsel to the Company (and may include directors or
employees of the Company) and which opinion is acceptable to the Trustee which
acceptance shall not be unreasonably withheld.


 


“Outstanding,” when used with respect to Securities,
means, as of the date of determination, all Securities theretofore
authenticated and delivered under this Indenture, except Securities:


 


(1)                                  previously
canceled by the Trustee or delivered to the Trustee for cancellation;


 


(2)                                  for
the payment or redemption of which money in the necessary amount has been
previously deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of such Securities,
provided that if such Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture; and


 


(3)                                  which
have been paid, in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the Trustee
proof satisfactory to it that such Securities are held by a protected purchaser
in whose hands such Securities are valid obligations of the Company.


 


“Paying Agent” has the meaning specified in Section
2.5 hereof.


 


“Payment Blockage Notice” has the meaning specified in
Section 13.1(d) hereof.


 


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


 


“Physical Securities” has the meaning specified in
Section 2.2 hereof.


 


“Place of Conversion” means any city in which any
Conversion Agent is located.


 


“Place of Payment” means any city in which any Paying
Agent is located.


 


8

















 


“Predecessor Security” of any particular Security means
every previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 2.12 hereof
in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.


 


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


 


“Record Date” means either a Regular Record Date or a
Special Record Date, as the case may be, provided that, for purposes of Section
12.4 hereof, Record Date has the meaning specified in Section 12.4(g) hereof.


 


“Reference Dealer” means a dealer engaged in the
trading of convertible securities.


 


“Reference Period” has the meaning set forth in
Section 12.4(d) hereof.


 


“Register” has the meaning specified in Section 2.5
hereof.


 


“Registrar” has the meaning specified in Section 2.5
hereof.


 


“Registration Rights Agreement” means the Resale Registration
Rights Agreement dated February 13, 2004, between the Company and the Dealer
Manager.


 


“Regular Record Date” for the interest on the
Securities (including Liquidated Damages, if any) payable means the February 1
(whether or not a Business Day) next preceding a February 15 Interest Payment
Date and the August 1 (whether or not a Business Day) next preceding a August
15 Interest Payment Date.


 


“Repurchase Date” has the meaning specified in Section
11.1 hereof.


 


“Repurchase Price” has the meaning specified in
Section 11.1 hereof.


 


“Repurchase Right” has the meaning specified in
Section 11.1 hereof.


 


“Reset Transaction” means (A) a merger, consolidation
or statutory share exchange to which the entity that is the issuer of the
shares of common stock into which the Securities are then convertible into is a
party; (B) a sale of all or substantially all the assets of that entity; (C) a
recapitalization of those shares of common stock; or (D) a distribution
described in Section 12.4(d) hereof; after the effective date of which
transaction or distribution the Securities would be convertible into:


 


(1)                                  shares
of an entity the common stock of which had a Dividend Yield for the four fiscal
quarters of such entity immediately preceding the public announcement of such
transaction or distribution that was more than 2.5% higher than the Dividend
Yield on the Common Stock (or other common stock then issuable upon conversion
of the Securities) for the four fiscal quarters preceding the public
announcement of such transaction or distribution; or


 


9

















 


(2)                                  shares
of an entity that announces a dividend policy prior to the effective date of
such transaction or distribution which policy, if implemented, would result in
a Dividend Yield on such entity’s common stock for the next four fiscal
quarters that would result in such a 2.5% increase.


 


“Responsible Officer,” when used with respect to the
Trustee, means any officer of the Trustee, including any vice president,
assistant vice president, secretary, assistant secretary, the treasurer, any
assistant treasurer, the managing director or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of such
officer’s knowledge of and familiarity with the particular subject.


 


“Restricted Securities” means the Securities defined
as such in Section 2.3(a) hereof.


 


“Restricted Securities Legend” has the meaning set
forth in Section 2.3(a) hereof.


 


“Rule 144” means Rule 144 as promulgated under the
Securities Act (including any successor rule thereof), as the same may be
amended from time to time.


 


“Rule 144A” means Rule 144A as promulgated under the
Securities Act (including any successor rule thereof), as the same may be
amended from time to time.


 


“SEC” means the Securities and Exchange Commission.


 


“Securities” has the meaning ascribed to it in the
first paragraph under the caption “Recitals of the Company.”


 


“Securities Act” means the Securities Act of 1933, as
amended.


 


“Senior Debt” means the principal of, premium, if any,
interest (including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and rent payable on or
termination payment with respect to or in connection with, and all fees, costs,
expenses and other amounts accrued or due on or in connection with,
Indebtedness of the Company, whether outstanding on the date of this Indenture
or subsequently created, incurred, assumed, guaranteed or in effect guaranteed
by the Company (including all deferrals, renewals, extensions or refundings of,
or amendments, modifications or supplements to, the foregoing), except for (a)
any Indebtedness that by its terms expressly provides that such Indebtedness
shall not be senior in right of payment to the Securities or expressly provides
that such Indebtedness is equal with or junior to the Securities and (b) any
Indebtedness between or among the Company and/or any of its Subsidiaries or
Affiliates and (c) any Indebtedness represented by the Company’s 5% Convertible
Subordinated Notes due 2007 issued on September 19, 2000.  The term “Senior Debt” shall include,
without limitation, all Designated Senior Debt.


 


“Significant Subsidiary” means any Subsidiary which is
a “significant subsidiary” within the meaning of Rule 405 under the Securities
Act.


 


10

















 


“Special Record Date” for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 2.17 hereof.


 


“Stated Maturity” means the date specified in any
Security as the fixed date for the payment of principal on such Security or on
which an installment of interest (including Liquidated Damages, if any) on such
Security is due and payable.


 


“Subsidiary” means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries.  For the purposes of
this definition only, “voting stock” means stock which ordinarily has voting
power for the election of directors, whether at all times or only so long as no
senior class of stock has such voting power by reason of any contingency.


 


“TIA” means the Trust
Indenture Act of 1939 (15 U.S. Code Section 77aaa-77bbbb), as in effect on the
date of this Indenture; provided, however, that in the event the TIA is amended
after such date, “TIA” means, to the extent required by such amendment, the
Trust Indenture Act of 1939, as so amended, or any successor statute.


 


“Trading Day” means:


 


(1)                                  if
the applicable security is listed or admitted for trading on the New York Stock
Exchange or another national security exchange, a day on which the New York
Stock Exchange or such other national security exchange is open for business;


 


(2)                                  if
the applicable security is quoted on the Nasdaq National Market, a day on which
trades may be made thereon; or


 


(3)                                  if
the applicable security is not so listed, admitted for trading or quoted, any
day other than a Saturday or Sunday or a day on which banking institutions in
the State of New York are authorized or obligated by law or executive order to
close.


 


“Trading Price” of a
security on any date of determination means:


 


(1)                                  the
closing sale price (or, if no closing sale price is reported, the last reported
sale price) of such security (regular way) on the New York Stock Exchange on
such date;


 


(2)                                  if
such security is not listed for trading on the New York Stock Exchange on any
such date, the closing sale price as reported in the composite transactions for
the principal U.S. securities exchange on which such security is so listed;


 


(3)                                  if
such security is not so listed on a U.S. national or regional securities
exchange, the closing sale price as reported by the Nasdaq National Market;


 


(4)                                  if
such security is not so reported, the last price quoted by Interactive Data
Corporation for such security or, if Interactive Data Corporation is not
quoting such price, a similar quotation service selected by the Company;


 


11

















 


(5)                                  if
such security is not so quoted, the average of the mid-point of the last bid
and ask prices for such security from at least two dealers recognized as
market-makers for such security; or


 


(6)                                  if
such security is not so quoted, the average of the last bid and ask prices for
such security from a Reference Dealer.


 


“Transfer Agent” means any Person, which may be the
Company, authorized by the Company to exchange or register the transfer of
Securities.


 


“Trigger Event” has the meaning specified in Section
12.4(d) hereof.


 


“Trustee” means the Person named as the “Trustee” in
the first paragraph of this instrument until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter “Trustee” shall mean such successor Trustee.


 


“U.S. Government Obligations” means:  (1) direct obligations of the United States
of America for the payment of which the full faith and credit of the United
States of America is pledged or (2) obligations of a person controlled or supervised
by and acting as an agency or instrumentality of the United States of America,
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America and which in either case, are
non-callable at the option of the issuer thereof.


 


“Vice President,” when used with respect to the
Company, means any vice president, whether or not designated by a number or a
word or words added before or after the title “vice president.”


 


SECTION 1.2                                                  Incorporation
by Reference of Trust Indenture Act.


 


Whenever this Indenture refers to a provision of the
TIA, the provision is incorporated by reference in and made a part of this
Indenture.


 


The following TIA terms
used in this Indenture have the following meanings:


 


“indenture securities” means the Securities;


 


“indenture security holder” means a Holder;


 


“indenture to be qualified” means this Indenture;


 


“indenture trustee” or “institutional trustee” means
the Trustee; and


 


“obligor” on the Securities means the Company and any
other obligor on the indenture securities.


 


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


 


12

















 


SECTION 1.3                                                  Rules
of Construction.


 


For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:


 


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


 


(2)                                  all
accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with accounting principles generally accepted in the United
States prevailing at the time of any relevant computation hereunder; and


 


(3)                                  the
words “herein,” “hereof” and “hereunder” 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 2.1                                                  Title
and Terms.


 


The Securities shall be known and designated as the
“53⁄4% Convertible Senior Subordinated Notes due 2011” of the Company.  The aggregate principal amount of Securities
which may be authenticated and delivered under this Indenture is limited to
$153,135,000, except for securities authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of other
Securities pursuant to Section 2.7, 2.8, 2.9, 2.12, 7.5, 10.8, 11.1 or 12.2
hereof.  The Securities shall be
issuable in denominations of $1,000 or integral multiples thereof.


 


The Securities shall mature on February 15, 2011.


 


Interest shall accrue from February 13, 2004 at the
Interest Rate until the principal thereof is paid or made available for
payment.  Interest shall be payable
semiannually in arrears on February 15 and August 15 in each year, commencing
August 15, 2004.


 


Interest on the Securities shall be computed (i) for
any full semiannual period for which a particular Interest Rate is applicable
on the basis of a 360-day year of twelve 30-day months and (ii) for any period
for which a particular Interest Rate is applicable shorter than a full
semiannual period for which interest is calculated, on the basis of a 30-day
month and, for such periods of less than a month, the actual number of days
elapsed over a 30-day month.  For
purposes of determining the Interest Rate, the Trustee may assume that a Reset
Transaction has not occurred unless the Trustee has received an Officers’ Certificate
stating that a Reset Transaction has occurred and specifying the Adjusted
Interest Rate then in effect.


 


A Holder of any Security at the close of business on a
Regular Record Date shall be entitled to receive interest (including Liquidated
Damages, if any) on such Security on the corresponding Interest Payment Date.


 


13

















 


A Holder of any Security which is converted after the
close of business on a Regular Record Date and prior to the corresponding Interest
Payment Date shall be entitled to receive interest (including Liquidated
Damages, if any) on the principal amount of such Security on such Interest
Payment Date, notwithstanding the conversion of such Security prior to such
Interest Payment Date.  However, any
such Holder which surrenders any such Security for conversion during such
period shall be required to pay the Company an amount equal to the interest
(including Liquidated Damages, if any) on the principal amount of such Security
so converted, which is payable by the Company to such Holder on such Interest
Payment Date, at the time such Holder surrenders such Security for
conversion.  Notwithstanding the
foregoing, any such Holder which surrenders for conversion during such period
any Security which has been called for redemption by the Company in a notice of
redemption given by the Company pursuant to Section 10.5 hereof (whether the
redemption date for such Security is on such Interest Payment Date or
otherwise) shall be entitled to receive (and retain) such interest (including
Liquidated Damages, if any) and need not pay the Company an amount equal to the
interest (including Liquidated Damages, if any) on the principal amount of such
Security so converted at the time such Holder surrenders such Security for
conversion.


 


Principal of, and premium, if any, and interest on,
Global Securities shall be payable to the Depositary in immediately available
funds.


 


Principal and premium, if any, on Physical Securities,
if any, shall be payable at the office or agency of the Company maintained for
such purpose, initially the Corporate Trust Office of the Trustee.  Interest on Physical Securities will be
payable by (i) U.S. Dollar check drawn on a bank located in the city where the
Corporate Trust Office of the Trustee is located mailed to the address of the
Person entitled thereto as such address shall appear in the Register, or (ii)
upon application to the Registrar not later than the relevant Record Date by a
Holder of an aggregate principal amount in excess of $5,000,000, wire transfer
in immediately available funds.


 


The Securities shall be redeemable at the option of
the Company as provided in Article 10 hereof.


 


The Securities shall have a Repurchase Right
exercisable at the option of Holders as provided in Article 11 hereof.


 


The Securities shall be convertible as provided in
Article 12 hereof.


 


The Securities shall be unsecured obligations of the
Company and will be (i) senior in right of payment to Old Securities and any
future obligations that are designated by the Company as subordinate to the
Securities; (ii) equal in right of payment with any existing or future
obligations that are designated by the Company as, or otherwise are determined
to be, on a parity with the Securities and (iii) subordinated in right of
payment to the prior payment in full of all of the existing and future Senior
Debt of the Company, each as provided in Article 13 hereof.  The Securities will constitute “Designated
Senior Debt” for purposes of the indenture for the Old Securities.


 


14

















 


SECTION 2.2                                                  Form
of Securities.


 


The Securities and the Trustee’s certificate of
authentication to be borne by such Securities shall be substantially in the
form annexed hereto as Exhibit A, which is incorporated in and made a part of
this Indenture.  The terms and
provisions contained in the form of Security shall constitute, and are hereby
expressly made, a part of this Indenture and to the extent applicable, the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.


 


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


 


The Securities will be offered and sold only to QIBs
and shall be issued initially only in the form of one or more permanent Global
Securities (each, a “Global Security”) in fully registered form without
interest coupons.  The Global Securities
shall be:


 


(1)                                  duly
executed by the Company and authenticated by the Trustee as hereinafter
provided;


 


(2)                                  registered
in the name of the Depositary (or its nominee) for credit to the respective
accounts of the Holders at the Depositary; and


 


(3)                                  deposited
with the Trustee, as custodian for the Depositary.


 


The Global Securities shall be substantially in the
form of Security set forth in Exhibit A annexed hereto (including the text and
schedule called for by footnotes 1 and 2 thereto).  The aggregate principal amount of the Global Securities may from
time to time be increased or decreased by adjustments made on the records of
the Trustee, as custodian for the Depositary (or its nominee), in accordance
with the instructions given by the Holder thereof, as hereinafter provided.


 


Securities issued in exchange for interests in the
Global Securities pursuant to Section 2.8(d) hereof shall be issued in the form
of permanent definitive Securities (the “Physical Securities”) in registered
form without interest coupons.  The
Physical Securities shall be substantially in the form set forth in Exhibit A
annexed hereto.


 


The Securities shall be typed, printed, lithographed
or engraved or produced by any combination of these methods or may be produced
in any other manner permitted by the rules of any securities exchange on which
the Securities may be listed, all as determined by the Officers executing such
Securities, as evidenced by their execution of such Securities.


 


15

















 


SECTION 2.3                                                  Legends.


 


(a)                                  Restricted
Securities Legends.


 


Each Security issued hereunder shall, upon issuance,
bear the legend set forth in Section 2.3(a)(i) or Section 2.3(a)(ii) (each, a
“Restricted Securities Legend”), as the case may be, and such legend shall not
be removed except as provided in Section 2.3(a)(iii).  Each Security that bears or is required to bear the Restricted
Securities Legend set forth in Section 2.3(a)(i) (together with any Common
Stock issued upon conversion of the Securities and required to bear the
Restricted Securities Legend set forth in Section 2.3(a)(ii), collectively, the
“Restricted Securities”) shall be subject to the restrictions on transfer set
forth in this Section 2.3(a) (including the Restricted Securities Legend set
forth below), and the Holder of each such Restricted Security, by such Holder’s
acceptance thereof, shall be deemed to have agreed to be bound by all such
restrictions on transfer.


 


As used in Section 2.3(a), the term “transfer”
encompasses any sale, pledge, transfer or other disposition whatsoever of any
Restricted Security.


 


(i)                                     Restricted Securities Legend for Securities.


 


Except as provided in Section 2.3(a)(iii), until two
years after the original issuance date of any Security, any certificate
evidencing such Security (and all securities issued in exchange therefor or
substitution thereof, other than Common Stock, if any, issued upon conversion
thereof which shall bear the legend set forth in Section 2.3(a)(ii), if
applicable) shall bear a Restricted Securities Legend in substantially the
following form:


 


THE
NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND
MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.  BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT); (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY RESELL OR OTHERWISE
TRANSFER THE NOTE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION
OF SUCH NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES
TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER); AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED (OTHER
THAN A TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE) A NOTICE


 


16

















 


SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND.  IN
CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF SUCH NOTE (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE 2(D) ABOVE), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE (OR ANY
SUCCESSOR TRUSTEE, AS APPLICABLE).  IF
THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 2(C) ABOVE, THE HOLDER MUST, PRIOR
TO SUCH TRANSFER, FURNISH TO STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE
(OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS
AND OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, THIS
LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS NOTE EVIDENCED
HEREBY PURSUANT TO CLAUSE 2(C) OR 2(D) ABOVE OR THE EXPIRATION OF TWO YEARS
FROM THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY.


 


(ii)                                  Restricted Securities Legend for Common Stock Issued
Upon Conversion of the Securities.


 


Until two years after the original issuance date of
any Security, any stock certificate representing Common Stock issued upon
conversion of such Security shall bear a Restricted Securities Legend in
substantially the following form:


 


THE
COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS,
AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE.  THE HOLDER HEREOF AGREES THAT
UNTIL THE EXPIRATION OF TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTE UPON
THE CONVERSION OF WHICH THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED, (1) IT
WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY EXCEPT
(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A “QUALIFIED INSTITUTIONAL
BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH
RULE 144A, (C) IN ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT OR (D) IN ACCORDANCE WITH A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND THAT
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER; (2) PRIOR TO ANY SUCH
TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(D) ABOVE), IT WILL FURNISH
TO EQUISERVE LIMITED


 


17

















 


PARTNERSHIP,
AS TRANSFER AGENT (OR ANY SUCCESSOR, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL
OPINIONS AND OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT; AND (3) IT WILL DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED
HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE l(D) ABOVE) A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF
THE COMMON STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE l(C) OR l(D) ABOVE OR THE
EXPIRATION OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE NOTE UPON THE
CONVERSION OF WHICH THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED.


 


(iii)                               Removal
of the Restricted Securities Legends.


 


Each Security or share of Common Stock issued upon
conversion of such Security shall bear the Restricted Securities Legend set
forth in Section 2.3(a)(i) or 2.3(a)(ii), as the case may be, until the earlier
of:


 


(A)                              two
years after the original issuance date of such Security;


 


(B)                                such
Security or Common Stock has been sold (x) 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 sale) or (y) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (subject to the
satisfaction of any requirement to furnish any certification, legal opinion or
other information in accordance with the Restricted Securities Legend and this
Indenture); or


 


(C)                                such
Common Stock has been issued upon conversion of Securities that have been sold
(x) 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
sale) or (y) pursuant to the exemption from registration provided by Rule 144
under the Securities Act (subject to the satisfaction of any requirement to
furnish any certification, legal opinion or other information in accordance
with the Restricted Securities Legend and this Indenture).


 


The Holder must give notice thereof to the Trustee and
any transfer agent for the Common Stock, as applicable.


 


Notwithstanding the foregoing, the Restricted Securities
Legend may be removed if there is delivered to the Company such satisfactory
evidence, which may include an opinion of independent counsel, as may be
reasonably required by the Company that neither such legend nor the
restrictions on transfer set forth therein are required to ensure that
transfers of such Security will not violate the registration requirements of
the Securities Act.  Upon provision of


 


18

















 


such satisfactory evidence, the Trustee, at the written direction of
the Company, shall authenticate and deliver in exchange for such Securities
another Security or Securities having an equal aggregate principal amount that
does not bear such legend.  If the Restricted
Securities Legend has been removed from a Security as provided above, no other
Security issued in exchange for all or any part of such Security shall bear
such legend, unless the Company has reasonable cause to believe that such other
Security is a “restricted security” within the meaning of Rule 144 and
instructs the Trustee in writing to cause a Restricted Securities Legend to
appear thereon.


 


Any Security (or security issued in exchange or
substitution thereof) 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 Restricted Securities Legend set forth in Section 2.3(a)(i) as
set forth therein have been satisfied may, upon surrender of such Security for
exchange to the Registrar in accordance with the provisions of Section 2.7
hereof, be exchanged for a new Security or Securities, of like tenor and
aggregate principal amount, which shall not bear the Restricted Securities
Legend required by Section 2.3(a)(i).


 


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 Restricted Securities Legend set forth in Section
2.3(a)(ii) as 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 aggregate number of
shares of Common Stock, which shall not bear the Restricted Securities Legend
required by Section 2.3(a)(ii).


 


(b)                                 Global
Security Legend.


 


Each Global Security shall also bear the following
legend on the face thereof:


 


UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (“DTC”) TO VERTEX PHARMACEUTICALS INCORPORATED (OR ITS SUCCESSOR)
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, CONVERSION OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.


 


(c)                                Securities
Legend


 


Each Security
issued hereunder shall, upon issuance, bear the following legend:


 


THIS NOTE HAS BEEN ISSUED WITH
ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL INCOME TAX PURPOSES.  FOR INFORMATION ABOUT THE


 


19

















 


ISSUE PRICE, THE AMOUNT OF ORIGINAL
ISSUE DISCOUNT, THE ISSUE DATE AND THE YIELD TO MATURITY, PLEASE CONTACT VERTEX
PHARMACEUTICALS INCORPORATED, 130 WAVERLY STREET, CAMBRIDGE, MASSACHUSETTS
02139, (617) 444-6100, ATTENTION: INVESTOR RELATIONS.


 


SECTION 2.4                                                  Execution,
Authentication, Delivery and Dating.


 


Two Officers shall execute the Securities on behalf of
the Company by manual or facsimile signature. 
If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall be valid
nevertheless.


 


At any time and from time to time after the execution
and delivery of this Indenture, the Company may deliver Securities executed by
the Company to the Trustee for authentication, together with a Company Order
for the authentication and delivery of such Securities, and the Trustee in
accordance with such Company Order shall authenticate and deliver such
Securities as in this Indenture provided and not otherwise.


 


Each Security shall be dated the date of its
authentication.


 


No Security shall be entitled to any benefit under
this Indenture, or be valid or obligatory for any purpose, unless there appears
on such Security a certificate of authentication substantially in the form
provided for herein executed by or on behalf of the Trustee by manual
signature, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder.


 


The Trustee may appoint an authenticating agent or
agents reasonably acceptable to the Company with respect to the
Securities.  Unless limited by the terms
of such appointment, 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.


 


SECTION 2.5                                                  Registrar
and Paying Agent.


 


The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for exchange (the
“Registrar”) and an office or agency where Securities may be presented for
payment (the “Paying Agent”).  The
Registrar shall keep a register of the Securities (the “Register”) and of their
transfer and exchange.  The Company may
appoint one or more co-Registrars and one or more additional Paying Agents for
the Securities.  The term “Paying Agent”
includes any additional paying agent and the term “Registrar” includes any
additional registrar.  The Company may
change any Paying Agent or Registrar without prior notice to any Holder.


 


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


 


(1)                                  hold
all sums held by it for the payment of the principal of and premium, if any, or
interest (including Liquidated Damages, if any) on Securities in trust for the


 


20

















 


benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as provided in this Indenture;


 


(2)                                  give
the Trustee notice of any Default by the Company in the making of any payment
of principal and premium, if any, or interest (including Liquidated Damages, if
any); and


 


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


 


The Company shall give prompt written notice to the
Trustee of the name and address of any Agent who is not a party to this
Indenture.  If the Company fails to
appoint or maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such.  The Company or any
Affiliate of the Company may act as Paying Agent or Registrar; provided,
however, that none of the Company, its subsidiaries or the Affiliates of the foregoing
shall act:


 


(i)                                     as
Paying Agent in connection with redemptions, offers to purchase and discharges,
as otherwise specified in this Indenture, and


 


(ii)                                  as
Paying Agent or Registrar if a Default or Event of Default has occurred and is
continuing.


 


The Company hereby initially appoints the Trustee as
Registrar and Paying Agent for the Securities.


 


SECTION 2.6                                                  Paying
Agent To Hold Assets in Trust.


 


Not later than 11:00 a.m. (New York City time) on each
due date of the principal, premium, if any, and interest (including Liquidated
Damages, if any) on any Securities, the Company shall deposit with one or more
Paying Agents money in immediately available funds sufficient to pay such
principal, premium, if any, and interest (including Liquidated Damages, if any)
so becoming due.  The Company at any
time may require a Paying Agent to pay all money held by it to the
Trustee.  Upon payment over to the
Trustee, the Paying Agent (if other than the Company) shall have no further
liability for the money so paid over to the Trustee.


 


If the Company shall act as a Paying Agent, it shall,
prior to or on each due date of the principal of and premium, if any, or
interest (including Liquidated Damages, if any) on any of the Securities,
segregate and hold in trust for the benefit of the Holders a sum sufficient
with monies held by all other Paying Agents, to pay the principal and premium,
if any, or interest (including Liquidated Damages, if any) so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as
provided in this Indenture, and shall promptly notify the Trustee of its action
or failure to act.


 


SECTION 2.7                                                  General
Provisions Relating To Transfer and Exchange.


 


The Securities are issuable only in registered
form.  A Holder may transfer a Security
only by written application to the Registrar stating the name of the proposed
transferee and


 


21

















 


otherwise complying with the terms of this Indenture.  No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer by the Registrar in the
Register.  Furthermore, any Holder of a
Global Security shall, by acceptance of such Global Security, agree that
transfers of beneficial interests in such Global Security may be effected only
through a book-entry system maintained by the Holder of such Global Security
(or its agent) and that ownership of a beneficial interest in the Security
shall be required to be reflected in a book-entry.  Notwithstanding the foregoing, in the case of a Restricted
Security, a beneficial interest in a Global Security being transferred in
reliance on an exemption from the registration requirements of the Securities
Act other than in accordance with Rule 144 and Rule 144A may only be
transferred for a Physical Security.


 


When Securities are presented to the Registrar with a
request to register the transfer or to exchange them for an equal aggregate
principal amount of Securities of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested if its
requirements for such transactions are met (including that such Securities are
duly endorsed or accompanied by a written instrument of transfer duly executed
by the Holder thereof or by an attorney who is authorized in writing to act on
behalf of the Holder).  Subject to
Section 2.4 hereof, to permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Securities at the
Registrar’s request.  No service charge
shall be made for any registration of transfer or exchange or redemption of the
Securities, but the Company may require payment of a sum sufficient to cover
any transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or other similar governmental charge
payable upon exchanges pursuant to Section 2.14, 7.5 or 10.8 hereof).


 


Neither the Company nor the Registrar shall be
required to exchange or register a transfer of any Securities:


 


(1)                                  for
a period of 15 Business Days prior to the day of any selection of Securities
for redemption under Article 10 hereof;


 


(2)                                  so
selected for redemption or, if a portion of any Security is selected for redemption,
such portion thereof selected for redemption; or


 


(3)                                  surrendered
for conversion or, if a portion of any Security is surrendered for conversion,
such portion thereof surrendered for conversion.


 


SECTION 2.8                                                  Book-Entry
Provisions for the Global Securities.


 


(a)                                  The
Global Securities initially shall:


 


(i)                                     be
registered in the name of the Depositary (or a nominee thereof);


 


(ii)                                  be
delivered to the Trustee as custodian for such Depositary; and


 


(iii)                               bear
the Restricted Securities Legend as set forth in Section 2.3(a)(i) hereof.


 


Except as provided herein, members of, or participants
in, the Depositary (“DTC Participants”) shall have no rights under this
Indenture with respect to any Global Security held


 


22

















 


on their behalf by the Depositary, or the Trustee as its custodian, or
under such Global Security, and the Depositary may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute owner
of such Global Security for all purposes whatsoever.  Notwithstanding the foregoing, nothing contained herein shall
prevent the Company, the Trustee or any agent of the Company or Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and the DTC
Participants, the operation of customary practices governing the exercise of
the rights of a Holder of any Security.


 


(b)                                 The
registered Holder of a Global Security may grant proxies and otherwise
authorize any Person, including DTC Participants and Persons that may hold
interests through DTC Participants, to take any action which a Holder is
entitled to take under this Indenture or the Securities.


 


(c)                                  A
Global Security may not be transferred, in whole or in part, to any Person
other than the Depositary (or a successor or nominee thereof), and no such
transfer to any such other Person may be registered.  Beneficial interests in a Global Security may be transferred in
accordance with the rules and procedures of the Depositary and the provisions
of Section 2.9 hereof.


 


(d)                                 If
at any time:


 


(i)                                     the
Depositary notifies the Company in writing that it is no longer willing or able
to continue to act as Depositary for the Global Securities or the Depositary
ceases to be a “clearing agency” registered under the Exchange Act when the
Depositary is required to be so registered in order to act as Depositary and in
each case a successor depositary for the Global Securities is not appointed by
the Company within 90 days of such notice or cessation; or


 


(ii)                                  the
Company, at its option, notifies the Trustee in writing that it elects to cause
the issuance of the Securities in definitive form under this Indenture in
exchange for all or any part of the Securities represented by a Global Security
or Global Securities; or


 


(iii)                               an
Event of Default has occurred and is continuing and  the Registrar has received a request from the Depositary or the
Holder of a Global Security or Global Securities for the issuance of Physical
Securities in exchange for such Global Security or Global Securities, the
Depositary shall surrender such Global Security or Global Securities to the
Trustee for cancellation and the Company shall execute, and the Trustee, upon
receipt of an Officers’ Certificate and Company Order for the authentication
and delivery of Securities, shall authenticate and deliver in exchange for such
Global Security or Global Securities, Physical Securities of like tenor as that
of the Global Securities in an aggregate principal amount equal to the
aggregate principal amount of such Global Security or Global Securities.  Such Physical Securities shall be registered
in such names as the Depositary shall identify in writing as the beneficial
owners of the Securities represented by such Global Security or Global
Securities (or any nominees thereof).


 


23

















 


In the event that Physical Securities are not issued
to each such beneficial owner promptly after the Registrar has received a request
from the Depositary or the Holder of a Global Security to issue such Physical
Securities pursuant to the immediately preceding paragraph, the Company
expressly acknowledges, with respect to the right of any Holder to pursue a
remedy pursuant to Section 4.6 or 4.7 hereof, the right of any beneficial
holder of Securities to pursue such remedy with respect to the portion of the
Global Securities that represents such beneficial holders’ Securities as if
such Physical Securities had been issued.


 


Notwithstanding the foregoing, in connection with any
transfer of beneficial interests in a Global Security to beneficial owners
pursuant to Section 2.8(d) hereof, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of such Global Security
in an amount equal to the principal amount of the beneficial interest in such
Global Security to be transferred.


 


SECTION 2.9                                                  Special
Transfer Provisions.


 


Unless a Security is transferred after the time period
referred to in Rule 144(k) under the Securities Act or otherwise 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 sale),
the following provisions shall apply.


 


With respect to the
registration of any proposed transfer of Securities to a QIB:


 


(i)                                     If
the Securities to be transferred consist of an interest in the Global
Securities, the transfer of such interest may be effected only through the
book-entry system maintained by the Depositary.


 


(ii)                                  If
the Securities to be transferred consist of Physical Securities, the Registrar
shall register the transfer if such transfer is being made by a proposed
transferor who has checked the box provided for on the form of Security stating,
or has otherwise advised the Company and the Registrar in writing, that the
sale has been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of
Security stating or has otherwise advised the Company and the Registrar in
writing that:


 


(A)                              it
is purchasing the Securities for its own account or an account with respect to
which it exercises sole investment discretion, in each case for investment and
not with a view to distribution;


 


(B)                                it
and any such account is a QIB within the meaning of Rule 144A; and


 


(C)                                it
is aware that the sale to it is being made in reliance on Rule 144A.


 


In addition, the Registrar shall reflect on its books
and records the date and an increase in the principal amount of the Global
Securities in an amount equal to the principal amount of the Physical
Securities to be transferred, and the Trustee shall cancel the Physical
Securities so transferred.


 


24

















 


By its acceptance of any Security bearing the
Restricted Securities Legend, each Holder of such a Security acknowledges the
restrictions on transfer of such Security set forth in this Indenture and
agrees that it will transfer such Security only as provided in this
Indenture.  The Registrar shall not
register a transfer of any Security unless such transfer complies with the
restrictions on transfer of such Security set forth in this Indenture.  The Registrar shall be entitled to receive
and rely on written instructions from the Company verifying that such transfer
complies with such restrictions on transfer. 
In connection with any transfer of Securities, each Holder agrees by its
acceptance of the Securities to furnish the Registrar or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Registrar shall not be required to
determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such certifications, legal opinions or other
information.


 


The Registrar shall retain copies of all letters, notices
and other written communications received pursuant to Section 2.8 hereof or
this Section 2.9.  The Company shall
have the right to inspect and make copies of all such letters, notices or other
written communications at any reasonable time upon the giving of reasonable
written notice to the Registrar.


 


SECTION 2.10                                            Holder
Lists.


 


The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Holders and shall otherwise comply with Section 312(a) of the
TIA.  If the Trustee is not the
Registrar, the Company shall furnish to the Trustee prior to or on 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 relating to such Interest Payment
Date or request, as the case may be.


 


SECTION 2.11                                            Persons
Deemed Owners.


 


Except as provided in Section 2.8, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name any Security is registered as the owner of such Security for the
purpose of receiving payment of principal of and premium, if any, and interest
(including Liquidated Damages, if any) on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and
notwithstanding any notice of ownership or writing thereon, or any notice of
previous loss or theft or other interest therein.


 


SECTION 2.12                                            Mutilated,
Destroyed, Lost or Stolen Securities.


 


If any mutilated Security is surrendered to the
Trustee, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of like tenor and principal amount
and bearing a number not contemporaneously outstanding.


 


If there is delivered to
the Company and the Trustee


 


(1)                                  evidence
to their satisfaction of the destruction, loss or theft of any Security, and


 


25

















 


(2)                                  such
security or indemnity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of notice to the Company
or the Trustee that such Security has been acquired by a protected purchaser,
the Company shall execute and, upon request, the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.


 


In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, the Company in its
discretion, but subject to any conversion rights, may, instead of issuing a new
Security, pay such Security, upon satisfaction of the condition set forth in
the preceding paragraph.


 


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


 


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


 


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


 


SECTION 2.13                                            Treasury
Securities.


 


In determining whether the Holders of the requisite
principal amount of Outstanding Securities are present at a meeting of Holders
for quorum purposes or have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the Company
or any Affiliate of the Company shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such determination as to the presence of a quorum or upon
any such request, demand, authorization, direction, notice, consent or waiver,
only such Securities of which the Trustee has received written notice and are
so owned shall be so disregarded.


 


SECTION 2.14                                            Temporary
Securities.


 


Pending the preparation of Securities in definitive
form, the Company may execute and the Trustee shall, upon written request of
the Company, authenticate and deliver temporary Securities (printed or
lithographed).  Temporary Securities
shall be issuable in any authorized denomination, and substantially in the form
of the Securities in definitive form but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Company.  Every such
temporary Security shall be executed by the Company and authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
the same effect, as the Securities in definitive form.  Without


 


26

















 


unreasonable delay, the Company will execute and deliver to the Trustee
Securities in definitive form (other than in the case of Securities in global
form) and thereupon any or all temporary Securities (other than any such
Securities in global form) may be surrendered in exchange therefor, at each
office or agency maintained by the Company pursuant to Section 9.2 and the
Trustee shall authenticate and deliver in exchange for such temporary
Securities an equal aggregate principal amount of Securities in definitive
form.  Such exchange shall be made by
the Company at its own expense and without any charge therefor.  Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits and subject to the same
limitations under this Indenture as Securities in definitive form authenticated
and delivered hereunder.


 


SECTION 2.15                                            Cancellation.


 


All securities surrendered for payment, redemption,
repurchase, conversion, registration of transfer or exchange shall, if
surrendered to any Person other than the Trustee, be delivered to the
Trustee.  All Securities so delivered
shall be canceled promptly by the Trustee, and no Securities shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Indenture.  Upon written instructions of
the Company, the Trustee shall destroy canceled Securities and, after such
destruction, shall deliver a certificate of such destruction to the
Company.  If the Company shall acquire
any of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless the same
are delivered to the Trustee for cancellation.


 


SECTION 2.16                                            CUSIP
Numbers.


 


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


 


SECTION 2.17                                            Defaulted
Interest.


 


If the Company fails to make a payment of interest
(including Liquidated Damages, if any) on any Security when due and payable
(“Defaulted Interest”), it shall pay such Defaulted Interest plus (to the
extent lawful) any interest payable on the Defaulted Interest, in any lawful
manner.  It may elect to pay such
Defaulted Interest, plus any such interest payable on it, to the Persons who
are Holders of such Securities on which the interest is due on a subsequent
Special Record Date.  The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed to
be paid on each such Security.  The
Company shall fix any such Special Record Date and payment date for such payment.  At least 15 days before any such Special
Record Date, the Company shall mail to Holders affected thereby a notice that
states the Special Record Date, the Interest Payment Date, and amount of such
interest (and such Liquidated Damages, if any) to be paid.


 


27

















 


ARTICLE 3



SATISFACTION AND DISCHARGE


 


SECTION 3.1                                                  Satisfaction
and Discharge of Indenture.


 


When:


 


(1)                                  The
Company shall deliver to the Trustee for cancellation all securities previously
authenticated (other than any securities which have been destroyed, lost or
stolen and in lieu of, or in substitution for which, other securities shall
have been authenticated and delivered) and not previously canceled, or


 


(2)                                  (A)
all the securities not previously canceled or delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable at their scheduled maturity within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption,


 


(B)                                the
Company shall deposit with the Trustee, in trust, cash in U.S. dollars and/or
U.S. Government Obligations which through the payment of interest and principal
in respect thereof, in accordance with their terms, will provide (and without
reinvestment and assuming no tax liability will be imposed on such Trustee),
not later than one day before the due date of any payment of money, an amount
in cash, sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay principal of, premium, if any, or interest
(including Liquidated Damages, if any) on all of the Securities (other than any
Securities which shall have been mutilated, destroyed, lost or stolen and in
lieu of or in substitution for which other Securities shall have been
authenticated and delivered) not previously canceled or delivered to the
Trustee for cancellation, on the dates such payments of principal, premium, if
any, or interest (including Liquidated Damages, if any) are due to such date of
maturity or redemption, as the case may be, and


 


(C)                                the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel to the effect that (x) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (y) since
the date of execution of this Indenture, there has been a change in the
applicable federal income tax law, in the case of either clause (x) or (y) to
the effect that, and based thereon such Opinion of Counsel shall confirm that,
the Holders will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and discharge and will be subject to
federal income tax on the same amount and in the same manner and at the same
times as would have been the case if such deposit and discharge had not
occurred, and


 


if, in the case of
either clause (1) or (2), the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company, then this Indenture shall cease to
be of further effect (except as to:


 


28

















 


(i)                                     remaining
rights of registration of transfer, substitution and exchange and conversion of
Securities,


 


(ii)                                  rights
hereunder of Holders to receive payments of principal of and premium, if any,
and interest (including Liquidated Damages, if any) on, the Securities and the
other rights, duties and obligations of Holders, as beneficiaries hereof with
respect to the amounts, if any, so deposited with the Trustee, and


 


(iii)                               the
rights, obligations and immunities of the Trustee hereunder),


 


and the Trustee,
on demand of the Company accompanied by an Officers’ Certificate and an Opinion
of Counsel and at the cost and expense of the Company, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture;
provided, however, the Company shall reimburse the Trustee for all amounts due
the Trustee under Section 5.8 hereof and for any costs or expenses thereafter
reasonably and properly incurred by the Trustee and to compensate the Trustee
for any services thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Securities.


 


SECTION 3.2                                                  Deposited
Monies To Be Held in Trust.


 


Subject to Section 3.3 hereof, all monies deposited
with the Trustee pursuant to Section 3.1 hereof shall be held in trust and
applied by it to the payment, notwithstanding the provisions of Article 13
hereof, either directly or through any Paying Agent (including the Company if
acting as its own Paying Agent), to the Holders of the particular Securities
for the payment or redemption of which such monies have been deposited with the
Trustee, of all sums due and to become due thereon for principal, premium, if
any, and interest (including Liquidated Damages, if any).  All monies deposited with the Trustee
pursuant to Section 3.1 hereof (and held by it or any Paying Agent) for the
payment of Securities subsequently converted shall be returned to the Company
upon request of the Company.


 


SECTION 3.3                                                  Return
of Unclaimed Monies.


 


The Trustee and the Paying Agent shall pay to the
Company any money held by them for the payment of principal or premium, if any,
or interest (including Liquidated Damages, if any) that remains unclaimed for
two years after the date upon which such payment shall have become due.  After payment to the Company, Holders
entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.


 


ARTICLE 4



DEFAULTS
AND REMEDIES


 


SECTION 4.1                                                  Events
of Default.


 


An “Event of Default” with respect to the Securities
occurs when any of the following occurs (whatever the reason for such Event of
Default and whether it shall be occasioned by the


 


29

















 


provisions of Article 13 hereof or be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):


 


(a)                                  the
Company defaults in the payment of the principal of or premium, if any, on any
of the Securities when it becomes due and payable at Maturity, upon redemption
or exercise of a Repurchase Right or otherwise, whether or not such payment is
prohibited by Article 13 hereof; or


 


(b)                                 the
Company defaults in the payment of an installment of interest (including
Liquidated Damages, if any) on any of the Securities when it becomes due and
payable and such default continues for a period of 30 days, whether or not such
payment is prohibited by Article 13 hereof; or


 


(c)                                  the
Company fails to deliver shares of Common Stock, together with cash instead of
fractional shares, when those shares of Common Stock or cash instead of
fractional shares are required to be delivered following conversion of a Security
in accordance with Article 12, and that failure continues for 10 days; or


 


(d)                                 the
Company fails to perform or observe any other term, covenant or agreement
contained in the Securities or this Indenture and the failure continues for a
period of 60 days after written notice of such failure, requiring the Company
to remedy the same, shall have been given to the Company by the Trustee or to
the Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities; or


 


(e)                                  (i)
the Company fails to make any payment by the end of the applicable grace
period, if any, after the maturity of any Indebtedness for borrowed money in an
amount in excess of $5,000,000 or (ii) there is an acceleration of any
Indebtedness for borrowed money in an amount in excess of $5,000,000 because of
a default with respect to such Indebtedness without such Indebtedness having
been discharged or such acceleration having been cured, waived, rescinded or
annulled, in the case of either (i) or (ii) above, for a period of 30 days
after written notice to the Company by the Trustee or to the Company and the
Trustee by Holders of at least 25% in aggregate principal amount of the
Outstanding Securities; or


 


(f)                                    the
entry by a court having jurisdiction in the premises of (i) a decree or order
for relief in respect of the Company in an involuntary case or proceeding under
any applicable U.S. federal or state bankruptcy, insolvency, reorganization or
other similar law or (ii) a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company under
any applicable U.S. federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or of any substantial part of its property, or ordering the winding up
or liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a
period of 60 consecutive days; or


 


(g)                                 the
commencement by the Company of a voluntary case or proceeding under any
applicable U.S. federal or state bankruptcy, insolvency, reorganization or
other similar law or of


 


30

















 


any other case or proceeding to be adjudicated a bankrupt or insolvent,
or the consent by the Company to the entry of a decree or order for relief in
respect of the Company in an involuntary case or proceeding under any
applicable U.S. federal or state bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or insolvency case
or proceeding against the Company, or the filing by the Company of a petition
or answer or consent seeking reorganization or relief under any applicable U.S.
federal or state law, or the consent by the Company to the filing of such
petition or to the appointment of or the taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or of any substantial part of its property, or the making by the
Company of an assignment for the benefit of creditors, or the admission by the
Company in writing of its inability to pay its debts generally as they become
due, or the taking of corporate action by the Company expressly in furtherance
of any such action.


 


SECTION 4.2                                                  Acceleration
of Maturity; Rescission and Annulment.


 


If an Event of Default with respect to Outstanding
Securities (other than an Event of Default specified in Section 4.1(f) or
4.1(g) hereof) occurs and is continuing, the Trustee or the Holders of at least
25% in aggregate principal amount of the Outstanding Securities, by written
notice to the Company, may declare due and payable 100% of the principal amount
of all Outstanding Securities plus any accrued and unpaid interest (including
Liquidated Damages, if any) to the date of payment.  Upon a declaration of acceleration, such principal and accrued and
unpaid interest to the date of payment shall be immediately due and payable.


 


If an Event of Default specified in Section 4.1(f) or
4.1(g) hereof occurs and is continuing, all unpaid principal and accrued and
unpaid interest (including Liquidated Damages, if any) on the Outstanding
Securities shall automatically become and be immediately due and payable,
without any declaration or other act on the part of the Trustee or any Holder.


 


The Holders of a majority in aggregate principal
amount of the Outstanding Securities by written notice to the Trustee may
rescind and annul an acceleration and its consequences if:


 


(1)                                  all
existing Events of Default, other than the nonpayment of principal of or
interest (including Liquidated Damages, if any) on the Securities which have
become due solely because of the acceleration, have been remedied, cured or
waived, and


 


(2)                                  the
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction;


 


provided, however,
that in the event such declaration of acceleration has been made based on the
existence of an Event of Default under Section 4.1(e) hereof and such Event of
Default has been remedied, cured or waived in accordance with Section 4.1(e)
hereof, then, without any further action by the Holders, such declaration of
acceleration shall be rescinded automatically and the consequences of such
declaration shall be annulled.  No such
rescission or annulment shall affect any subsequent Default or impair any right
consequent thereon.


 


31

















 


SECTION 4.3                                                  Other
Remedies.


 


If an Event of Default with respect to Outstanding
Securities occurs and is continuing, the Trustee may pursue any available
remedy by proceeding at law or in equity to collect the payment of principal of
or interest on the Securities or to enforce the performance of any provision of
the Securities.


 


The Trustee may maintain a proceeding in which it may
prosecute and enforce all rights of action and claims under this Indenture or
the Securities, even if it does not possess any of the Securities or does not
produce any of them in the proceeding.


 


SECTION 4.4                                                  Waiver
of Past Defaults.


 


The Holders, either (a) through the written consent of
not less than a majority in aggregate principal amount of the Outstanding
Securities or (b) by the adoption of a written resolution, at a meeting of
Holders of the Outstanding Securities at which a quorum is present, by the
Holders of at least a majority in aggregate principal amount of the Outstanding
Securities represented at such meeting, may, on behalf of the Holders of all of
the Securities, waive an existing Default or Event of Default and its
consequences, except a Default or Event of Default:


 


(1)                                  in
the payment of the principal of or premium, if any, or interest (including
Liquidated Damages, if any) on any Security (provided, however, that subject to
Section 4.7 hereof, the Holders of a majority in aggregate principal amount of
the Outstanding Securities may rescind an acceleration and its consequences, including
any related payment default that resulted from such acceleration);


 


(2)                                  in
respect of the right to convert any Security in accordance with Article 12; or


 


(3)                                  in
respect of a covenant or provision hereof which, under Section 7.2 hereof,
cannot be modified or amended without the consent of the Holders of each
Outstanding Security affected.


 


Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture; provided, however, that no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.


 


SECTION 4.5                                                  Control
by Majority.


 


The Holders, either (a) through the written consent of
not less than a majority in aggregate principal amount of the Outstanding
Securities, or (b) by the adoption of a resolution, at a meeting of Holders of
the Outstanding Securities at which a quorum is present, by the Holders of at
least a majority in aggregate principal amount of the Outstanding Securities
represented at such meeting, shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on the Trustee.  However, the Trustee may refuse to follow
any direction that:


 


32

















 


(1)                                  conflicts
with any law or with this Indenture;


 


(2)                                  the
Trustee determines may be unduly prejudicial to the rights of the Holders not
joining therein; or


 


(3)                                  may
expose the Trustee to personal liability.


 


The Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.


 


SECTION 4.6                                                  Limitation
on Suit.


 


No Holder of any Security shall have any right to pursue
any remedy with respect to this indenture or the Securities (including,
instituting any proceeding, judicial or otherwise, with respect to this
Indenture or for the appointment of a receiver or trustee) unless:


 


(1)                                  such
Holder has previously given written notice to the Trustee of an Event of
Default that is continuing;


 


(2)                                  the
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities shall have made written request to the Trustee to pursue the remedy;


 


(3)                                  the
Trustee has failed to comply with the request for 60 days after its receipt of
such notice, request and offer of indemnity; and


 


(4)                                  during
such 60-day period, no direction inconsistent with such written request has
been given to the Trustee by the Holders of a majority in aggregate principal
amount of the Outstanding Securities (or such amount as shall have acted at a
meeting pursuant to the provisions of this Indenture);


 


provided, however,
that no one or more of such Holders may use this Indenture to prejudice the rights
of another Holder or to obtain preference or priority over another Holder.


 


SECTION 4.7                                                  Unconditional
Rights of Holders To Receive Payment and To Convert.


 


Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and premium, if any, and
interest (including Liquidated Damages, if any) on such Security on the Stated
Maturity expressed in such Security (or, in the case of redemption, on the
redemption date, or in the case of the exercise of a Repurchase Right, on the
Repurchase Date) and to convert such Security in accordance with Article 12,
and to bring suit for the enforcement of any such payment on or after such
respective dates and right to convert, and such rights shall not be impaired or
affected without the consent of such Holder.


 


33

















 


SECTION 4.8                                                  Collection
of Indebtedness and Suits for Enforcement by the Trustee.


 


The Company covenants
that if:


 


(1)                                  a
Default or Event of Default is made in the payment of any interest (including
Liquidated Damages, if any) on any Security when such interest (including
Liquidated Damages, if any) becomes due and payable and such Default or Event
of Default continues for a period of 30 days, or


 


(2)                                  a
Default or Event of Default is made in the payment of the principal of or
premium, if any, on any Security at the Maturity thereof,


 


the Company shall,
upon demand of the Trustee, pay to it, for the benefit of the Holders of such
Securities, the whole amount then due and payable (as expressed therein or as a
result of any acceleration effected pursuant to Section 4.2 hereof) on such
Securities for principal and premium, if any, and interest (including Liquidated
Damages, if any) and, to the extent that payment of such interest shall be
legally enforceable, interest on any overdue principal and premium, if any, and
on any overdue interest (including Liquidated Damages, if any), calculated
using the Interest Rate, and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.


 


If the Company fails to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of an express
trust, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and
may enforce the same against the Company and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the property of the
Company, wherever situated.


 


If an Event of Default occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its rights and the
rights of the Holders of Securities by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.


 


SECTION 4.9                                                  Trustee
May File Proofs of Claim.


 


In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company or the
property of the Company or its creditors, the Trustee (irrespective of whether
the principal of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue
principal or interest (including Liquidated Damages, if any)) shall be entitled
and empowered, by intervention in such proceeding or otherwise,


 


(1)                                  to
file and prove a claim for the whole amount of principal and premium, if any,
and interest (including Liquidated Damages, if any) owing and unpaid in respect
of the Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including
any claim for the


 


34

















 


reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders of Securities allowed in
such judicial proceeding, and


 


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


 


and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceedings is hereby authorized by each Holder of
Securities 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 of
Securities, 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 5.8.


 


Nothing contained herein shall be deemed to authorize
the Trustee to authorize or consent to or accept, or adopt on behalf of any
Holder of a Security, 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 of a
Security in any such proceeding.


 


SECTION 4.10                                            Restoration
of Rights and Remedies.


 


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


 


SECTION 4.11                                            Rights
and Remedies Cumulative.


 


Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities in
the last paragraph of Section 2.12, no right or remedy conferred in this
Indenture upon or reserved to the Trustee or to the Holders of Securities is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or hereafter existing at law or in
equity or otherwise.  The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.


 


SECTION 4.12                                            Delay
or Omission Not Waiver.


 


No delay or omission of the Trustee or of any Holder
of any Security to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or any acquiescence therein.  Every right and remedy given by this Article or by law to the
Trustee or to the Holders of Securities may be


 


35

















 


exercised from time to time, and as often as may be deemed expedient,
by the Trustee or by the Holders of Securities, as the case may be.


 


SECTION 4.13                                            Application
of Money Collected.


 


Subject to Article 13, any money and property
collected by the Trustee pursuant to this Article shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money and property on account of principal or premium, if
any, or interest (including Liquidated Damages, if any), upon presentation of
the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:


 


FIRST:  To the payment of all amounts due the
Trustee;


 


SECOND:  To the payment of the amounts then due and
unpaid for principal of and premium, if any, and interest (including Liquidated
Damages, if any) on the Securities and coupons in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for principal and premium, if any, and interest (including
Liquidated Damages, if any), respectively; and


 


THIRD:  Any remaining amounts shall be repaid to the
Company.


 


SECTION 4.14                                            Undertaking
for Costs.


 


All parties to this Indenture agree, and each Holder
of any Security by such Holder’s acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys’ fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made
by such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Company, to any suit instituted by the Trustee, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in aggregate principal amount of the Outstanding Securities, or
to any suit instituted by any Holder of any Security for the enforcement of the
payment of the principal of or premium, if any, or interest (including
Liquidated Damages, if any) on any Security on or after the Stated Maturity
expressed in such Security (or, in the case of redemption or exercise of a
Repurchase Right, on or after the redemption date) or for the enforcement of
the right to convert any Security in accordance with Article 12.


 


SECTION 4.15                                            Waiver
of Stay or Extension Laws.


 


The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim to take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and


 


36

















 


covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution
of every such power as though no such law had been enacted.


 


ARTICLE 5



THE TRUSTEE


 


SECTION 5.1                                                  Certain
Duties and Responsibilities.


 


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


 


(1)                                  The
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture or the TIA, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; 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; provided, however, that in the case of
any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall examine
the certificates or opinions to determine whether or not, on their face, they
conform to the requirements to this Indenture (but need not investigate or
confirm the accuracy of any facts stated therein).


 


(b)                                 In
case an Event of Default actually known to a Responsible Officer of the Trustee
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 their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person’s own affairs.


 


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


 


(1)                                  This
paragraph (c) shall not be construed to limit the effect of paragraph (a) of
this Section 5.1;


 


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


 


(3)                                  The
Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with a direction received by it of the
Holders of a majority in principal amount of the Outstanding Securities (or
such lesser amount as shall have acted at a meeting pursuant to the provisions
of this Indenture) relating to the time, method and place of conducting any
proceeding for any remedy available to the


 


37

















 


Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture.


 


(d)                                 Whether
or not herein expressly so provided, every provision of this Indenture relating
to the conduct or affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section 5.1.


 


(e)                                  No
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers.  The Trustee may refuse to perform any duty
or exercise any right or power unless it receives indemnity satisfactory to it
against any loss, liability, cost or expense (including, without limitation,
reasonable fees of counsel).


 


(f)                                    The
Trustee shall not be obligated to pay interest on any money or other assets
received by it unless otherwise agreed in writing with the Company.  Assets held in trust by the Trustee need not
be segregated from other funds except to the extent required by law.


 


(g)                                 The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, coupon,
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.


 


(h)                                 The
Trustee shall not be deemed to have notice or actual knowledge of any Event of
Default or a Registration Default (as such term is defined in the Registration
Rights Agreement) or the obligation of the Company to pay Liquidated Damages
unless a Responsible Officer of the Trustee has actual knowledge thereof or
unless written notice of any event which is in fact a Default is received by
the Trustee pursuant to Section 14.2 hereof, and such notice references the
Securities and this Indenture.


 


(i)                                     The
rights, privileges, protections, immunities and benefits given to the Trustee
hereunder, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and each Paying Agent, authenticating agent, Conversion Agent or
Registrar acting hereunder.


 


SECTION 5.2                                                  Certain
Rights of Trustee.


 


Subject to the provisions of Section 5.1 hereof and
subject to Sections 315(a) through (d) of the TIA:


 


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


 


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


 


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


 


(4)                                  The
Trustee shall not be liable for any action taken or omitted to be taken by it
in good faith which it believed to be authorized or within the discretion or
rights or powers conferred upon it by this Indenture, unless the Trustee’s
conduct constitutes negligence.


 


(5)                                  The
Trustee may consult with counsel of its selection and the advice of such
counsel as to matters of law shall be full and complete authorization and
protection in respect of any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.


 


(6)                                  Unless
otherwise specifically provided in this Indenture, any demand, request,
direction or notice from the Company shall be sufficient if signed by an
Officer of the Company.


 


(7)                                  The
permissive rights of the Trustee to do things enumerated in this Indenture
shall not be construed as a duty unless so specified herein.


 


SECTION 5.3                                                  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 any Affiliate of the Company with the same rights it would have if
it were not Trustee.  However, in the
event that the Trustee acquires any conflicting interest (as such term is
defined in Section 310(b) of the TIA), it must eliminate such conflict within
90 days, apply to the SEC for permission to continue as trustee (to the extent
permitted under Section 310(b) of the TIA) or resign.  Any agent may do the same with like rights and duties.  The Trustee is also subject to Sections 5.11
and 5.12 hereof.


 


SECTION 5.4                                                  Money
Held in Trust.


 


Money held by the Trustee in trust hereunder need not
be segregated from other funds except to the extent required by law.  The Trustee shall be under no liability for
interest on any money received by it hereunder except as otherwise expressly
agreed with the Company.


 


SECTION 5.5                                                  Trustee’s
Disclaimer.


 


The recitals contained herein and in the Securities
(except for those in the certificate of authentication) shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for their
correctness.  The Trustee makes no
representations as to the validity,


 


39

















 


sufficiency or priority of this Indenture or of the Securities.  The Trustee shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof.


 


SECTION 5.6                                                  Notice
of Defaults.


 


Within 90 days after the occurrence of any Default or
Event of Default hereunder of which the Trustee has received written notice,
the Trustee shall give notice to Holders pursuant to Section 14.2 hereof,
unless such Default or Event of Default shall have been cured or waived;
provided, however, that, except in the case of a Default or Event of Default in
the payment of the principal of or premium, if any, or interest (including
Liquidated Damages, if any), or in the payment of any redemption or repurchase
obligation on any Security, the Trustee shall be protected in withholding such
notice if and so long as Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interest of the
Holders.


 


SECTION 5.7                                                  Reports
by Trustee to Holders.


 


The Trustee shall transmit to holders as provided in
Section 313 of the TIA such reports concerning the Trustee and its actions
under this Indenture as may be required by Section 313 of the TIA at the times
and in the manner provided by the TIA.


 


A copy of each report at the time of its mailing to
Holders shall be filed with the SEC, if required by Section 313 of the TIA, and
each stock exchange, if any, on which the Securities are listed.  The Company shall promptly notify the
Trustee when the Securities become listed on any stock exchange.


 


SECTION 5.8                                                  Compensation
and Indemnification.


 


The Company covenants and agrees to pay to the Trustee
from time to time, and the Trustee shall be entitled to, reasonable
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) and the Company covenants
and agrees to pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all agents and other persons not regularly in its employ), except to the
extent that any such expense, disbursement or advance is due to its negligence
or bad faith.  When the Trustee incurs
expenses or renders services in connection with an Event of Default specified
in Section 4.1 hereof, the expenses (including the reasonable charges and
expenses of its counsel) and the compensation for the services are intended to
constitute expenses of administration under any Bankruptcy Law.  The Company also covenants to indemnify the
Trustee and its officers, directors, employees and agents for, and to hold such
Persons harmless against, any loss, liability or expense incurred by them,
arising out of or in connection with the acceptance or administration of this
Indenture or the trusts hereunder or the performance of their duties hereunder,
including the costs and expenses of defending themselves against or
investigating any claim of liability in the premises, except to the extent that
any such loss, liability or expense was due to the negligence or willful
misconduct of such Persons.  The
obligations of the Company under this Section 5.8 to compensate and indemnify
the Trustee and its officers, directors, employees and agents and to pay or
reimburse such Persons for expenses,


 


40

















 


disbursements and advances shall constitute additional indebtedness
hereunder and shall survive the satisfaction and discharge of this Indenture or
the earlier resignation or removal of the Trustee.  Such additional indebtedness shall be a senior claim to that of
the Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the benefit of the Holders of particular
Securities, and the Securities are hereby subordinated to such senior
claim.  “Trustee” for purposes of this
Section 5.8 shall include any predecessor Trustee, but the negligence or willful
misconduct of any Trustee shall not affect the indemnification of any other
Trustee.


 


SECTION 5.9                                                  Replacement
of Trustee.


 


A resignation or removal of the Trustee and
appointment of a successor Trustee shall become effective only upon the
successor Trustee’s acceptance of appointment as provided in this Section 5.9.


 


The Trustee may resign and be discharged from the
trust hereby created by so notifying the Company in writing.  The Holders of at least a majority in
aggregate principal amount of Outstanding Securities may remove the Trustee by
so notifying the Trustee and the Company in writing.  The Company must remove the Trustee if:


 


(i)                                     the
Trustee fails to comply with Section 5.11 hereof or Section 310 of the TIA;


 


(ii)                                  the
Trustee becomes incapable of acting.


 


(iii)                               the
Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law; or


 


(iv)                              a
Custodian or public officer takes charge of the Trustee or its property.


 


If the Trustee resigns or is removed or if a vacancy
exists in the office of the Trustee for any reason, the Company shall promptly
appoint a successor Trustee.  The
Trustee shall be entitled to payment of its fees and reimbursement of its
expenses while acting as Trustee. 
Within one year after the successor Trustee takes office, the Holders of
at least a majority in aggregate principal amount of Outstanding Securities may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.


 


Any Holder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee if the Trustee fails to comply with Section 5.11 hereof.


 


If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation or removal, the resigning or removed Trustee, as the
case may be, may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Trustee.


 


A successor Trustee shall deliver a written acceptance
of its appointment to the retiring Trustee and to the Company.  Thereupon 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


 


41

















 


Trustee under this Indenture. 
The Company shall mail a notice of the successor Trustee’s succession to
the Holders.  The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor
Trustee.  Notwithstanding replacement of
the Trustee pursuant to this Section 5.9, the Company’s obligations under
Section 5.8 hereof shall continue for the benefit of the retiring Trustee with
respect to expenses, losses and liabilities incurred by it prior to such
replacement.


 


SECTION 5.10                                            Successor
Trustee by Merger, Etc.


 


Subject to Section 5.11 hereof, if the Trustee
consolidates with, merges or converts into, or transfers or sells all or substantially
all of its corporate trust business to, another corporation or national banking
association, the successor entity without any further act shall be the
successor Trustee as to the Securities.


 


SECTION 5.11                                            Corporate
Trustee Required; Eligibility.


 


The Trustee shall at all times satisfy the
requirements of Sections 310(a)(1), (2) and (5) of the TIA.  The Trustee shall at all times have (or, in
the case of a corporation included in a bank holding company system, the
related bank holding company shall at all times have), a combined capital and
surplus of at least $100 million as set forth in its (or its related bank
holding company’s) most recent published annual report of condition.  The Trustee is subject to Section 310(b) of
the TIA.


 


SECTION 5.12                                            Collection
of Claims Against the Company.


 


The Trustee is subject to Section 311(a) of the TIA,
excluding any creditor relationship listed in Section 311(b) of the TIA.  A Trustee who has resigned or been removed
shall be subject to Section 311(a) of the TIA to the extent indicated therein.


 


ARTICLE 6



CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE


 


SECTION 6.1                                                  Company
May Consolidate, Etc., Only on Certain Terms.


 


The Company shall not consolidate with or merge into
any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and the Company shall not permit
any Person to consolidate with or merge into the Company or convey, transfer or
lease its properties and assets substantially as an entirety to the Company,
unless:


 


(1)                                  in
the event that the Company shall consolidate with or merge into another Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Company substantially as an
entirety shall be a corporation, limited liability company, partnership or
trust organized and validly existing under the laws of the United States of
America, any State thereof or the District of Columbia and, if the entity
surviving such transaction or transferee entity is not the Company, then such


 


42

















 


surviving or transferee entity shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal of
and premium, if any and interest (including Liquidated Damages, if any), on all
the Securities and the performance of every covenant and obligation of this
Indenture on the part of the Company to be performed or observed and shall have
provided for conversion rights in accordance with Section 12.11 hereof;


 


(2)                                  at
the time of consummation of 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 happened and be continuing; and


 


(3)                                  the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture comply with this Article and
that all conditions precedent herein provided for relating to such transaction
have been complied with.


 


SECTION 6.2                                                  Successor
Substituted.


 


Upon any consolidation or merger by the Company with
or into any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety to any Person, in
accordance with Section 6.1 hereof, 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 to another Person, the
predecessor Person shall be relieved of all obligations and covenants under
this Indenture and the Securities.


 


ARTICLE 7



AMENDMENTS, SUPPLEMENTS AND WAIVERS


 


SECTION 7.1                                                  Without
Consent of Holders of Securities.


 


Without the consent of any Holders of Securities, the
Company, when authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may amend this Indenture and the Securities to:


 


(a)                                  add
to the covenants of the Company for the benefit of the Holders of Securities;


 


(b)                                 surrender
any right or power herein conferred upon the Company;


 


(c)                                  make
provision with respect to the conversion rights of Holders of Securities
pursuant to Section 12.11 hereof;


 


43

















 


(d)                                 provide
for the assumption of the Company’s obligations to the Holders of Securities in
the case of a merger, consolidation, conveyance, transfer or lease pursuant to
Article 6 hereof;


 


(e)                                  reduce
the Conversion Price; provided, that such reduction in the Conversion Price
shall not adversely affect the interest of the Holders of Securities (after
taking into account tax and other consequences of such reduction) in any
material respect;


 


(f)                                    comply
with the requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the TIA;


 


(g)                                 make
any changes or modifications to this Indenture necessary in connection with the
registration of any Securities under the Securities Act as contemplated in the
Registration Rights Agreement, provided that such action pursuant to this
clause (g) does not adversely affect the interests of the Holders of Securities
in any material respect;


 


(h)                                 cure
any ambiguity, correct or supplement any provision herein which may be
inconsistent with any other provision herein or which is otherwise defective,
or make any other provisions with respect to matters or questions arising under
this Indenture which the Company and the Trustee may deem necessary or desirable
and which shall not be inconsistent with the provisions of this Indenture,
provided that such action pursuant to this clause (h) does not, in the good
faith opinion of the Board of Directors and the Trustee, adversely affect the
interests of the Holders of Securities in any material respect;


 


(i)                                     add
or modify any other provisions with respect to matters or questions arising
under this Indenture which the Company and the Trustee may deem necessary or
desirable and which shall not be inconsistent with the provisions of this
Indenture, provided that such action pursuant to this clause (i) does not
adversely affect the interests of the Holders of Securities in any material
respect; or


 


(j)                                     make
provision for the establishment of a book-entry system, in which Holders would
have the option to participate, for the clearance and settlement of
transactions in Securities originally issued in definitive form.


 


SECTION 7.2                                                  With
Consent of Holders of Securities.


 


Except as provided below in this Section 7.2, this Indenture
or the Securities may be amended or supplemented, and noncompliance by the
Company in any particular instance with any provision of this Indenture or the
Securities may be waived, in each case (i) with the written consent of the
Holders of at least a majority in aggregate principal amount of the Outstanding
Securities or (ii) by the adoption of a resolution, at a meeting of Holders of
the Outstanding Securities at which a quorum is present, by the Holders of a
majority in aggregate principal amount of the Outstanding Securities
represented at such meeting.


 


Without the written consent or the affirmative vote of
each Holder of Securities affected, an amendment or waiver under this Section
7.2 may not:


 


44

















 


(a)                                  change
the Stated Maturity of the principal of, or any installment of interest
(including Liquidated Damages, if any) on, any Security;


 


(b)                                 reduce
the principal amount of, or premium, if any, on any Security;


 


(c)                                  reduce
the Interest Rate or interest (including Liquidated Damages, if any) on any
Security;


 


(d)                                 change
the currency of payment of principal of, premium, if any, or interest
(including Liquidated Damages, if any) on any Security;


 


(e)                                  impair
the right of any Holder to institute suit for the enforcement of any payment on
or with respect to, or the conversion of, any Security;


 


(f)                                    modify
the obligation of the Company to maintain an office or agency in The City of
New York pursuant to Section 9.2 hereof;


 


(g)                                 except
as permitted by Section 12.11 hereof, adversely affect the right to convert any
Security as provided in Article 12 hereof;


 


(h)                                 adversely
affect the Repurchase Right;


 


(i)                                     modify
the subordination provisions of the Securities in a manner adverse to the
Holders of Securities,


 


(j)                                     modify
any of the provisions of this Section, Section 4.4 or Section 14.11, except to
increase any percentage contained herein or therein or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby; or


 


(k)                                  reduce
the requirements of Section 8.4 hereof for quorum or voting, or reduce the
percentage in aggregate principal amount of the Outstanding Securities the
consent of whose Holders is required for any supplemental indenture or the
consent of whose Holders is required for any waiver provided for in this
Indenture.


 


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


 


SECTION 7.3                                                  Compliance
With Trust Indenture Act.


 


Every amendment to this Indenture or the Securities
shall be set forth in a supplemental indenture that complies with the TIA as
then in effect.


 


SECTION 7.4                                                  Revocation
of Consents and Effect of Consents or Votes.


 


Until an amendment, supplement or waiver becomes
effective, a written consent to it by a Holder is a continuing consent by the
Holder and every subsequent Holder of a Security or


 


45

















 


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;
provided, however, that unless a record date shall have been established, any
such Holder or subsequent Holder may revoke the consent as to its Security or
portion of a Security if the Trustee receives written notice of revocation
before the date the amendment, supplement or waiver becomes effective.


 


An amendment, supplement or waiver becomes effective
on receipt by the Trustee of written consents from or affirmative votes by, as
the case may be, the Holders of the requisite percentage of aggregate principal
amount of the Outstanding Securities, and thereafter shall bind every Holder of
Securities; provided, however, if the amendment, supplement or waiver makes a
change described in any of the clauses (a) through (k) of Section 7.2 hereof,
the amendment, supplement or waiver shall bind only each Holder of a Security
which has consented to it or voted for it, as the case may be, and every
subsequent Holder of a Security or portion of a Security that evidences the
same indebtedness as the Security of the consenting or affirmatively voting, as
the case may be, Holder.


 


SECTION 7.5                                                  Notation
on or Exchange of Securities.


 


If an amendment,
supplement or waiver changes the terms of a Security:


 


(a)                                  the
Trustee may require the Holder of a Security to deliver such Securities to the
Trustee, the Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder and the Trustee may place an
appropriate notation on any Security thereafter authenticated; or


 


(b)                                 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.


 


Failure to make the appropriate notation or issue a
new Security shall not affect the validity and effect of such amendment,
supplement or waiver.


 


SECTION 7.6                                                  Trustee
To Sign Amendment, Etc.


 


The Trustee shall sign any amendment authorized
pursuant to this Article 7 if the amendment does not adversely affect the
rights, duties, liabilities or immunities of the Trustee.  If the amendment does adversely affect the
rights, duties, liabilities or immunities of the Trustee, the Trustee may but
need not sign it.  In signing or
refusing to sign such amendment, the Trustee shall be entitled to receive and
shall be fully protected in relying upon an Officers’ Certificate and an
Opinion of Counsel as conclusive evidence that such amendment is authorized or
permitted by this Indenture.


 


46

















 


ARTICLE 8



MEETING OF HOLDERS OF SECURITIES


 


SECTION 8.1                                                  Purposes
for Which Meetings May Be Called.


 


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


 


Notwithstanding anything contained in this Article 8,
the Trustee may, during the pendency of a Default or an Event of Default, call
a meeting of Holders of Securities in accordance with its standard practices.


 


SECTION 8.2                                                  Call
Notice and Place of Meetings.


 


(a)                                  The
Trustee may at any time call a meeting of Holders of Securities for any purpose
specified in Section 8.1 hereof, to be held at such time and at such place in
The City of New York or Boston, Massachusetts. 
Notice of every meeting of Holders of Securities, setting forth the time
and the place of such meeting, in general terms the action proposed to be taken
at such meeting and the percentage of the principal amount of the Outstanding
Securities which shall constitute a quorum at such meeting, shall be given, in
the manner provided in Section 14.2 hereof, not less than 21 nor more than 180
days prior to the date fixed for the meeting.


 


(b)                                 In
case at any time the Company, pursuant to a Board Resolution, or the Holders of
at least 10% in principal amount of the Outstanding Securities shall have
requested the Trustee to call a meeting of the Holders of Securities for any
purpose specified in Section 8.1 hereof, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have made the first publication of the notice of such meeting
within 21 days after receipt of such request or shall not thereafter proceed to
cause the meeting to be held as provided herein, then the Company or the
Holders of Securities in the amount specified, as the case may be, may
determine the time and the place in The City of New York or Boston,
Massachusetts for such meeting and may call such meeting for such purposes by
giving notice thereof as provided in paragraph (a) of this Section.


 


SECTION 8.3                                                  Persons
Entitled To Vote at Meetings.


 


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


 


47

















 


SECTION 8.4                                                  Quorum;
Action.


 


The Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Securities shall constitute a quorum.  In the absence of a quorum within 30 minutes
of the time appointed for any such meeting, the meeting shall, if convened at
the request of Holders of Securities, be dissolved.  In any other case, the meeting may be adjourned for a period of
not less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting.  In the
absence of a quorum at any such adjourned meeting, such adjourned meeting may
be further adjourned for a period of not less than 10 days as determined by the
chairman of the meeting prior to the adjournment of such adjourned meeting.  Notice of the reconvening of any adjourned
meeting shall be given as provided in Section 8.2(a) hereof, except that such
notice need be given only once and not less than five days prior to the date on
which the meeting is scheduled to be reconvened.


 


At a meeting or an adjourned meeting duly reconvened
and at which a quorum is present as aforesaid, any resolution and all matters
(except as limited by the second paragraph of Section 7.2 hereof) shall be
effectively passed and decided if passed or decided by the Persons entitled to
vote not less than a majority in aggregate principal amount of Outstanding
Securities represented and voting at such meeting.


 


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


 


SECTION 8.5                                                  Determination
of Voting Rights; Conduct and Adjournment of Meetings.


 


(a)                                  Notwithstanding
any other provisions of this Indenture, the Trustee may make such reasonable
regulations as it may deem advisable for any meeting of Holders of Securities
in regard to proof of the holding of Securities and of the appointment of
proxies and in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of the meeting as
it shall deem appropriate.


 


(b)                                 The
Trustee shall, by an instrument in writing, appoint a temporary chairman (which
may be the Trustee) of the meeting, unless the meeting shall have been called
by the Company or by Holders of Securities as provided in Section 8.2(b)
hereof, in which case the Company or the Holders of Securities calling the
meeting, as the case may be, shall in like manner appoint a temporary
chairman.  A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the Persons
entitled to vote a majority in principal amount of the Outstanding Securities
represented at the meeting.


 


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


 


48

















 


(d)                                 Any
meeting of Holders of Securities duly called pursuant to Section 8.2 hereof at
which a quorum is present may be adjourned from time to time by Persons
entitled to vote a majority in principal amount of the Outstanding Securities
represented at the meeting, and the meeting may be held as so adjourned without
further notice.


 


SECTION 8.6                                                  Counting
Votes and Recording Action of Meetings.


 


The vote upon any resolution submitted to any meeting
of Holders of Securities shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities or of their
representatives by proxy and the principal amounts and serial numbers of the
Outstanding Securities held or represented by them.  The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes cast at the
meeting.  A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities shall be
prepared by the secretary of the meeting and there shall be attached to said
record the original reports of the inspectors of votes on any vote by ballot
taken thereat and affidavits by one or more Persons having knowledge of the
facts setting forth a copy of the notice of the meeting and showing that said
notice was given as provided in Section 8.2 hereof and, if applicable, Section
8.4 hereof.  Each copy shall be signed
and verified by the affidavits of the permanent chairman and secretary of the
meeting and one such copy shall be delivered to the Company and another to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting.  Any
record so signed and verified shall be conclusive evidence of the matters
therein stated.


 


ARTICLE 9



COVENANTS


 


SECTION 9.1                                                  Payment
of Principal, Premium and Interest.


 


The Company will duly and punctually pay the principal
of and premium, if any, and interest (including Liquidated Damages, if any) in
respect of the Securities in accordance with the terms of the Securities and
this Indenture.  The Company will
deposit or cause to be deposited with the Trustee as directed by the Trustee,
no later than 11:00 a.m. on the day of the Stated Maturity of any Security or
installment of interest (including Liquidated Damages, if any), all payments so
due.


 


SECTION 9.2                                                  Maintenance
of Offices or Agencies.


 


The Company hereby appoints the Trustee’s Corporate
Trust Office as its office in The City of New York, where Securities may be:


 


(i)                                     presented
or surrendered for payment;


 


(ii)                                  surrendered
for registration of transfer or exchange;


 


(iii)                               surrendered
for conversion;


 


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and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture maybe served.


 


The Company may at any time and from time to time vary
or terminate the appointment of any such office or appoint any additional
offices for any or all of such purposes; provided, however, that until all of
the Securities have been delivered to the Trustee for cancellation, or moneys
sufficient to pay the principal of and premium, if any, and interest (including
Liquidated Damages, if any) on the Securities have been made available for
payment and either paid or returned to the Company pursuant to the provisions
of Section 9.3 hereof, the Company will maintain in The City of New York, an
office or agency where Securities may be presented or surrendered for payment,
where Securities may be surrendered for registration of transfer or exchange,
where Securities may be surrendered for conversion and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served.  The Company will give
prompt written notice to the Trustee, and notice to the Holders in accordance
with Section 14.2 hereof, of the appointment or termination of any such agents and
of the location and any change in the location of any such office or agency.


 


If at any time the Company shall fail to maintain any
such required office or agency in The City of New York, or shall fail to
furnish the Trustee with the address thereof, presentations and surrenders may
be made at, and notices and demands may be served on, the Corporate Trust
Office of the Trustee.


 


SECTION 9.3                                                  Corporate
Existence.


 


Subject to Article 6 hereof, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, rights (charter and statutory) and franchises;
provided, however, that the Company shall not be required to preserve any such
right or franchise if the Company determines that the preservation thereof is
no longer desirable in the conduct of the business of the Company and that the
loss thereof is not disadvantageous in any material respect to the Holders.


 


SECTION 9.4                                                  Maintenance
of Properties.


 


The Company will maintain and keep its properties and
every part thereof in such repair, working order and condition, and make or
cause to be made all such needful and proper repairs, renewals and replacements
thereto, as in the judgment of the Company are necessary in the interests of
the Company; provided, however, that nothing contained in this Section shall
prevent the Company from selling, abandoning or otherwise disposing of any of
its properties or discontinuing a part of its business from time to time if, in
the judgment of the Company, such sale, abandonment, disposition or
discontinuance is advisable and does not materially adversely affect the
interests or business of the Company.


 


SECTION 9.5                                                  Payment
of Taxes and Other Claims.


 


The Company will, and will cause any Significant
Subsidiary to, promptly pay and discharge or cause to be paid and discharged
all material taxes, assessments and governmental charges or levies lawfully
imposed upon it or upon its income or profits or upon any of its property, real
or personal, or upon any part thereof, as well as all material claims for
labor,


 


50

















 


materials and supplies which, if unpaid, might by law become a lien or
charge upon its property; provided, however, that neither the Company nor any
Significant Subsidiary shall be required to pay or discharge or cause to be
paid or discharged any such tax, assessment, charge, levy, or claim if the
amount, applicability or validity thereof shall currently be contested in good
faith by appropriate proceedings and if the Company or such Significant
Subsidiary, as the case may be, shall have set aside on its books reserves
deemed by it adequate with respect thereto.


 


SECTION 9.6                                                  Reports.


 


(a)                                  The
Company shall deliver to the Trustee within 15 days after it files them with
the SEC copies of the annual reports and of the information, documents, and
other reports (or copies of such portions of any of the foregoing as the SEC
may by rules and regulations prescribe) which the Company is required to file
with the SEC pursuant to Section 13 or 15(d) of the Exchange Act; provided,
however, the Company shall not be required to deliver to the Trustee any
materials for which the Company has sought and received confidential treatment
by the SEC.  The Company also shall
comply with the other provisions of Section 314(a) of the TIA.


 


(b)                                 If
at any time the Company is not subject to Section 13 or 15(d) of the Exchange
Act, upon the request of a Holder of a Security, the Company will promptly
furnish or cause to be furnished to such Holder or to a prospective purchaser
of such Security designated by such Holder, as the case may be, the
information, if any, required to be delivered by it pursuant to Rule 144A(d)(4)
under the Securities Act to permit compliance with Rule 144A in connection with
the resale of such Security; [provided, however, that the Company shall not be
required to furnish such information in connection with any request made on or
after the date which is two years from the later of the date such security was
last acquired from the Company or an Affiliate of the Company].


 


SECTION 9.7                                                  Compliance
Certificate.


 


The Company shall deliver to the Trustee, within 90
days after the end of each fiscal year of the Company, an Officers’ Certificate
stating that in the course of the performance by the signers of their duties as
Officers of the Company, they would normally have knowledge of any failure by
the Company to comply with all conditions, or Default by the Company with
respect to any covenants, under this Indenture, and further stating whether or
not they have knowledge of any such failure or Default and, if so, specifying
each such failure or Default and the nature thereof.  Within five Business Days of an Officer of the Company coming to
have actual knowledge of a Default, regardless of the date, the Company shall
deliver an Officers’ Certificate to the Trustee specifying such Default and the
nature and status thereof.


 


SECTION 9.8                                                  Resale
of Certain Securities.


 


During the period of two years after the last date of
original issuance of any Securities, the Company shall not, and shall not
permit any of its Affiliates to, resell any Securities, or shares of Common
Stock issuable upon conversion of the Securities, which constitute “restricted
securities” under Rule 144, that are acquired by any of them within the United
States or to “U.S. persons” (as defined in Regulation S) except pursuant to an
effective registration statement under


 


51

















 


the Securities Act or an applicable exemption therefrom.  The Trustee shall have no responsibility or
liability in respect of the Company’s performance of its agreement in the
preceding sentence.


 


ARTICLE 10



REDEMPTION
OF SECURITIES


 


SECTION 10.1                                            Optional
Redemption.


 


Prior to February 15, 2007, the Company cannot redeem
the Securities.  The Company may, on or
after February 15, 2007, at its option, redeem the Securities in whole or in
part on any date from time to time, upon notice as set forth in Section 10.5,
at a redemption price, payable in cash, equal to 100% of the principal amount
of the Securities redeemed plus accrued and unpaid interest (including any
Liquidated Damages), if any, to but excluding the date of redemption.


 


If the Paying Agent hold money sufficient to pay the
redemption price due on a Security on the date of redemption in accordance with
the terms hereof, then, on and after such date of redemption, the Security will
cease to be outstanding, and interest on such Security will cease to accrue,
whether or not the Security is delivered to the Paying Agent.  Thereafter, all other rights of the Holder
terminate, other than the right to receive the redemption price upon delivery
of the Security.


 


SECTION 10.2                                            [Reserved].


 


SECTION 10.3                                            Notice
to Trustee.


 


If the Company elects to redeem Securities pursuant to
the redemption provisions of Section 10.1 hereof, it shall notify the Trustee
at least 20 days prior to the redemption date of such intended redemption date,
the principal amount of Securities to be redeemed and the CUSIP numbers of the
Securities to be redeemed.


 


SECTION 10.4                                            Selection
of Securities To Be Redeemed.


 


If fewer than all the Securities are to be redeemed,
the Trustee shall select the particular Securities to be redeemed from the
Outstanding Securities on a pro rata basis or by lot or in accordance with any
other method the Trustee considers fair and appropriate.  Securities and portions thereof that the
Trustee selects shall be in amounts equal to the minimum authorized denominations
for Securities to be redeemed or any integral multiple thereof.


 


If any Securities are to be redeemed in part only, a
new Security or Securities in principal amount equal to the unredeemed
principal portion thereof will be issued.


 


If any Security selected for partial redemption is
converted in part before termination of the conversion right with respect to
the portion of the Security so selected, the converted portion of such Security
shall be deemed to be the portion selected for redemption (provided, however,
that the Holder of such Security so converted and deemed redeemed shall not be
entitled to any additional interest payment as a result of such deemed
redemption than such Holder would have


 


52

















 


otherwise been entitled to receive upon conversion of such
Security).  Securities which have been
converted during a selection of Securities to be redeemed may be treated by the
Trustee as Outstanding for the purpose of such selection.


 


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


 


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


 


SECTION 10.5                                            Notice
of Redemption.


 


Notice of redemption shall be given in the manner
provided in Section 14.2 hereof to the Holders of Securities to be
redeemed.  Such notice shall be given
not less than 30 nor more than 60 days prior to the redemption date.


 


All notices of redemption
shall state:


 


(1)                                  the
redemption date;


 


(2)                                  the
redemption price and interest (including Liquidated Damages, if any) and
accrued and unpaid to the redemption date, if any;


 


(3)                                  if
fewer than all the Outstanding Securities are to be redeemed, the aggregate
principal amount of Securities to be redeemed and the aggregate principal
amount of Securities which will be outstanding after such partial redemption;


 


(4)                                  that
on the redemption date the redemption price and interest (including Liquidated
Damages, if any) accrued and unpaid to the redemption date, if any, will become
due and payable upon each such Security to be redeemed, and that interest
thereon shall cease to accrue on and after such date;


 


(5)                                  the
Conversion Price, the date on which the right to convert the principal of the
Securities to be redeemed will terminate and the places where such Securities
may be surrendered for conversion;


 


(6)                                  the
place or places where such Securities are to be surrendered for payment of the
redemption price and accrued and unpaid interest, if any; and


 


(7)                                  the
CUSIP number of the Securities.


 


The notice given shall specify the last date on which
exchanges or transfers of Securities may be made pursuant to Section 2.7
hereof, and shall specify the serial numbers of Securities and the portions
thereof called for redemption.


 


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Notice of redemption of Securities to be redeemed at
the election of the Company shall be given by the Company.


 


SECTION 10.6                                            Effect
of Notice of Redemption.


 


Notice of redemption having been given as provided in
Section 10.5 hereof, the Securities so to be redeemed shall, on the redemption
date, become due and payable at the redemption price therein specified and from
and after such date (unless the Company shall default in the payment of the
redemption price and accrued and unpaid interest (including Liquidated Damages,
if any)) such Securities shall cease to bear interest.  Upon surrender of any such Security for
redemption in accordance with such notice, such Security shall be paid by the
Company at the redemption price plus accrued and unpaid interest (including any
Liquidated Damages), if any; provided, however, that the installments of
interest on Securities whose Stated Maturity is prior to or on the redemption
date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such on the relevant Record Date
according to their terms and the provisions of Section 2.1 hereof.


 


If any Security called for redemption shall not be so
paid upon surrender thereof for redemption, the principal and premium, if any,
shall, until paid, bear interest from the redemption date at the Interest Rate.


 


SECTION 10.7                                            Deposit
of Redemption Price.


 


Prior to or on any redemption date, the Company shall
deposit with the Trustee or with a Paying Agent an amount of money sufficient
to pay the redemption price of all the Securities to be redeemed on that
redemption date, other than any Securities called for redemption on that date
which have been converted prior to the date of such deposit, and accrued and
unpaid interest (including any Liquidated Damages), if any, on such Securities.


 


If any Security called for redemption is converted,
any money deposited with the Trustee or with a Paying Agent or so segregated
and held in trust for the redemption of such Security shall (subject to any
right of the Holder of such Security or any Predecessor Security to receive
interest as provided in Section 2.1 hereof) be paid to the Company on Company
Request or, if then held by the Company, shall be discharged from such trust.


 


SECTION 10.8                                            Securities
Redeemed in Part.


 


Any Security which is to be redeemed only in part
shall be surrendered at an office or agency of the Company designated for that
purpose pursuant to Section 9.2 hereof (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or the Holder’s attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Security without service charge, a new Security or Securities of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.


 


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ARTICLE 11



REPURCHASE AT THE OPTION OF A HOLDER UPON A CHANGE OF CONTROL


 


SECTION 11.1                                            Repurchase
Right.


 


In the event that a Change of Control shall occur,
each Holder shall have the right (the “Repurchase Right”), at the Holder’s
option, but subject to the provisions of Section 11.2 hereof, to require the
Company to repurchase, and upon the exercise of such right the Company shall
repurchase, all of such Holder’s Securities not theretofore called for
redemption, or any portion of the principal amount thereof that is equal to
$1,000 or any integral multiple thereof (provided that no single Security may
be repurchased in part unless the portion of the principal amount of such
Security to be Outstanding after such repurchase is equal to $1,000 or integral
multiples thereof), on the date (the “Repurchase Date”) that is 45 days after
the date of the Company Notice at a purchase price equal to 100% of the
principal amount of the Securities to be repurchased (the “Repurchase Price”),
plus interest (including Liquidated Damages, if any) accrued and unpaid to, but
excluding, the Repurchase Date; provided, however, that installments of
interest on Securities whose Stated Maturity is prior to or on the Repurchase
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such on the relevant Record Date
according to their terms and the provisions of Section 2.1 hereof.


 


Subject to the fulfillment by the Company of the
conditions set forth in Section 11.2 hereof, the Company may elect to pay the
Repurchase Price by delivering the number of shares of Common Stock equal to
(i) the Repurchase Price divided by (ii) 95% of the average of the Closing
Prices per share of Common Stock for the five consecutive Trading Days
immediately preceding and including the third Trading Day prior to the Repurchase
Date.


 


Whenever in this Indenture (including Sections 2.2,
4.1(a) and 4.7 hereof) or Exhibit A annexed hereto there is a reference, in any
context, to the principal of any Security as of any time, such reference shall
be deemed to include reference to the Repurchase Price payable in respect to
such Security to the extent that such Repurchase Price is, was or would be so
payable at such time, and express mention of the Repurchase Price in any
provision of this Indenture shall not be construed as excluding the Repurchase
Price in those provisions of this Indenture when such express mention is not
made; provided, however, that, for the purposes of Article 13 hereof, such
reference shall be deemed to include reference to the Repurchase Price only to
the extent the Repurchase Price is payable in cash.


 


SECTION 11.2                                            Conditions
to the Company’s Election To Pay the Repurchase Price in Common Stock.


 


(a)                                  The
shares of Common Stock to be issued upon repurchase of Securities hereunder:


 


(i)                                     shall
not require registration under any federal securities law before such shares
may be freely transferable without being subject to any transfer restrictions
under the Securities


 


55

















 


Act upon repurchase or, if such registration is required, such
registration shall be completed and shall become effective prior to the
Repurchase Date; and


 


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


 


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


 


(c)                                  All
shares of Common Stock which may be issued upon repurchase of Securities will
be issued out of the Company’s authorized but unissued Common Stock and will,
upon issue, be duly and validly issued and fully paid and nonassessable and
free of any preemptive or similar rights.


 


(d)                                 If
any of the conditions set forth in clauses (a) through (c) of this Section 11.2
are not satisfied in accordance with the terms thereof, the Repurchase Price
shall be paid by the Company only in cash.


 


SECTION 11.3                                            Notices;
Method of Exercising Repurchase Right, Etc.


 


(a)                                  Unless
the Company shall have theretofore called for redemption all of the Outstanding
Securities, prior to or on the 30th day after the occurrence of a Change of
Control, the Company, or, at the written request and expense of the Company
prior to or on the 30th day after such occurrence, the Trustee, shall give to
all Holders of Securities notice, in the manner provided in Section 14.2
hereof, of the occurrence of the Change of Control and of the Repurchase Right
set forth herein arising as a result thereof (the “Company Notice”).  The Company shall also deliver a copy of
such notice of a Repurchase Right to the Trustee.  Each notice of a Repurchase Right shall state:


 


(1)                                  the
Repurchase Date;


 


(2)                                  the
date by which the Repurchase Right must exercised;


 


(3)                                  the
Repurchase Price and accrued and unpaid interest (including any Liquidated
Damages), if any, and whether the Repurchase Price shall be paid by the Company
in cash or by delivery of shares of Common Stock;


 


(4)                                  a
description of the procedure which a Holder must follow to exercise a
Repurchase Right, and the place or places where such Securities, are to be
surrendered for payment of the Repurchase Price and accrued and unpaid interest
(including any Liquidated Damages), if any;


 


(5)                                  that
on the Repurchase Date the Repurchase Price and accrued and unpaid interest
(including any Liquidated Damages), if any, will become due and payable upon


 


56

















 


each such Security designated by the Holder to be repurchased, and that
interest thereon shall cease to accrue on and after said date;


 


(6)                                  the
Conversion Rate then in effect, the date on which the right to convert the
principal amount of the Securities to be repurchased will terminate and the
place where such Securities may be surrendered for conversion, and


 


(7)                                  the
place or places where such Securities, together with the Option to Elect
Repayment Upon a Change of Control certificate included in Exhibit A annexed
hereto are to be delivered for payment of the Repurchase Price and accrued and
unpaid interest (including any Liquidated Damages), if any.


 


No failure of the Company to give the foregoing
notices or defect therein shall limit any Holder’s right to exercise a Repurchase
Right or affect the validity of the proceedings for the repurchase of
Securities.


 


If any of the foregoing provisions or other provisions
of this Article 11 are inconsistent with applicable law, such law shall govern.


 


(b)                                 To
exercise a Repurchase Right, a Holder shall deliver to the Trustee prior to or
on the 30th day after the date of the Company Notice:


 


(1)                                  written
notice of the Holder’s exercise of such right, which notice shall set forth the
name of the Holder, the principal amount of the Securities to be repurchased
(and, if any Security is to be repurchased in part, the serial number thereof,
the portion of the principal amount thereof to be repurchased) and a statement
that an election to exercise the Repurchase Right is being made thereby, and,
in the event that the Repurchase Price shall be paid in shares of Common Stock,
the name or names (with addresses) in which the certificate or certificates for
shares of Common Stock shall be issued, and


 


(2)                                  the
Securities with respect to which the Repurchase Right is being exercised.


 


Such written notice shall be irrevocable, except that
the right of the Holder to convert the Securities with respect to which the
Repurchase Right is being exercised shall continue until the close of business
on the Business Day immediately preceding the Repurchase Date.


 


(c)                                  In
the event a Repurchase Right shall be exercised in accordance with the terms
hereof, the Company shall pay or cause to be paid to the Trustee the Repurchase
Price in cash for payment to the Holder on the Repurchase Date or, if shares of
Common Stock are to be paid, shares of Common Stock, as provided above, as
promptly after the Repurchase Date as practicable, together with accrued and
unpaid interest (including any Liquidated Damages, if any) to the Repurchase
Date payable in cash with respect to the Securities as to which the Repurchase
Right has been exercised; provided, however, that installments of interest that
mature prior to or on the Repurchase Date shall be payable in cash to the
Holders of such Securities, or one or more Predecessor Securities, registered
as such at the close of business on the relevant Regular Record Date.


 


57

















 


(d)                                 If
any Security (or portion thereof) surrendered for repurchase shall not be so
paid on the Repurchase Date, the principal amount of such Security (or portion
thereof, as the case may be) shall, until paid, bear interest to the extent
permitted by applicable law from the Repurchase Date at the Interest Rate, and
each Security shall remain convertible into Common Stock until the principal of
such Security (or portion thereof, as the case may be) shall have been paid or
duly provided for.


 


(e)                                  Any
Security which is to be repurchased only in part shall be surrendered to the
Trustee (with, if the Company or the Trustee so requires, due endorsement by,
or a written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate and
make available for delivery to the Holder of such Security without service
charge, a new Security or Securities, containing identical terms and
conditions, each in an authorized denomination in aggregate principal amount
equal to and in exchange for the unrepurchased portion of the principal of the
Security so surrendered.


 


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


 


(g)                                 No
fractions of shares of Common Stock shall be issued upon repurchase of any
Security or Securities.  If more than
one Security shall be repurchased from the same Holder and the Repurchase Price
shall be payable in shares of Common Stock, the number of full shares which
shall be issued upon such repurchase shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof) to
be so repurchased.  Instead of any
fractional share of Common Stock which would otherwise be issued on the
repurchase of any Security or Securities (or specified portions thereof), the
Company shall pay a cash adjustment in respect of such fraction (calculated to
the nearest one-100th of a share) in an amount equal to the same fraction of
the Closing Price of the Common Stock as of the Trading Day preceding the
Repurchase Date.


 


(h)                                 Any
issuance and delivery of certificates for shares of Common Stock on repurchase
of Securities shall be made without charge to the Holder of Securities being
repurchased for such certificates or for any tax or duty in respect of the
issuance or delivery of such certificates or the Securities represented
thereby; provided, however, that the Company shall not be required to pay any
tax or duty which may be payable in respect of (i) income of the Holder or (ii)
any transfer involved in the issuance or delivery of certificates for shares of
Common Stock in a name other than that of the Holder of the Securities being
repurchased, and


 


58

















 


no such issuance or delivery shall be made unless the Persons
requesting such issuance or delivery has paid to the Company the amount of any
such tax or duty or has established, to the satisfaction of the Company, that
such tax or duty has been paid.


 


(i)                                     All
Securities delivered for repurchase shall be delivered to the Trustee to be
canceled at the direction of the Trustee, which shall dispose of the same as
provided in Section 2.15 hereof.


 


ARTICLE 12



CONVERSION OF SECURITIES


 


SECTION 12.1                                            Conversion
Right and Conversion Price.


 


Subject to and upon compliance with the provisions of
this Article, at the option of the Holder thereof, any Security or any portion
of the principal amount thereof which is $1,000 or an integral multiple of
$1,000 may be converted at the principal amount thereof, or of such portion
thereof, into the number of duly authorized, fully paid and nonassessable
shares of Common Stock obtained by dividing the aggregate principal amount of
such Security (or portion thereof) surrendered for conversion by the Conversion
Price, determined as hereinafter provided, in effect at the time of
conversion.  Such conversion right shall
expire at the close of business on February 14, 2011.


 


In case a Security or portion thereof is called for
redemption, such conversion right in respect of the Security or the portion so
called, shall expire at the close of business on the Business Day immediately
preceding the redemption date, unless the Company defaults in making the
payment due upon redemption.  In the
case of a Change of Control for which the Holder exercises its Repurchase Right
in respect of a Security or portion thereof, such conversion right in respect
of the Security or portion thereof shall expire at the close of business on the
Business Day immediately preceding the Repurchase Date.


 


The price at which shares of Common Stock shall be
delivered upon conversion (the “Conversion Price”) shall be initially equal to
$14.94 per share of Common Stock.  The
Conversion Price shall be adjusted in certain instances as provided in
paragraphs (a), (b), (c), (d), (e), (f), (h) and (l) of Section 12.4 hereof.


 


SECTION 12.2                                            Exercise
of Conversion Right.


 


To exercise the conversion right, the Holder of any
Security to be converted shall surrender such Security duly endorsed or
assigned to the Company or in blank, at the office of any Conversion Agent, accompanied
by a duly signed conversion notice substantially in the form attached to the
Security to the Company stating that the Holder elects to convert such Security
or, if less than the entire principal amount thereof is to be converted, the
portion thereof to be converted.


 


Any Security surrendered for conversion during the
period between the close of business on any Regular Record Date and prior to
the corresponding Interest Payment Date shall be accompanied by payment in New
York Clearing House funds or other funds acceptable to the


 


59

















 


Company of an amount equal to the interest (including Liquidated
Damages, if any) to be received by the Holder on such Interest Payment Date on
the principal amount of the Security being surrendered for conversion.  Notwithstanding the foregoing, any Holder
which during such period surrenders for conversion any Security which has been
called for redemption by the Company in a notice of redemption given by the
Company pursuant to Section 10.5 hereof (whether the redemption date for such
Security is on such Interest Payment Date or otherwise) need not pay the
Company an amount equal to the interest (including Liquidated Damages, if any)
on the principal amount of such Security so converted at the time such Holder
surrenders such Security for conversion.


 


Securities shall be deemed to have been converted
immediately prior to the close of business on the day of surrender of such
Securities for conversion in accordance with the foregoing provisions, and at
such time the rights of the Holders of such Securities as Holders shall cease,
and the Person or Persons entitled to receive the Common Stock issuable upon
conversion shall be treated for all purposes as the record holder or holders of
such Common Stock at such time.  As
promptly as practicable on or after the conversion date, the Company shall
cause to be issued and delivered to such Conversion Agent a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share as
provided in Section 12.3 hereof.


 


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, at the expense of the Company,
a new Security or Securities of authorized denominations in aggregate principal
amount equal to the unconverted portion of the principal amount of such
Securities.


 


If shares of Common Stock to be issued upon conversion
of a Restricted Security, or Securities to be issued upon conversion of a
Restricted Security in part only, are to be registered in a name other than
that of the Holder of such Restricted Security, such Holder must deliver to the
Conversion Agent a certificate in substantially the form set forth in the form
of Security set forth in Exhibit A annexed hereto, dated the date of surrender
of such Restricted Security and signed by such Holder, as to compliance with
the restrictions on transfer applicable to such Restricted Security.  Neither the Trustee nor any Conversion
Agent, Registrar or Transfer Agent shall be required to register in a name
other than that of the Holder shares of Common Stock or Securities issued upon
conversion of any such Restricted Security (i) not so accompanied by a properly
completed certificate or (ii) the Holder does not comply with the applicable
restrictions on transfer set forth in Sections 2.7, 2.8 and 2.9 of this
Indenture.


 


The Company hereby initially appoints the Trustee as
the Conversion Agent.


 


Except as provided in Section 2.1 and this Article 12,
no payment or other adjustment shall be made for interest accrued on any
Security converted or for dividends on any shares of Common Stock issued upon
conversion of such Security.  Accrued
and unpaid interest on any Security at the time of conversion will be treated
as paid in stock.


 


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SECTION 12.3                                            Fractions
of Shares.


 


No fractional shares of Common Stock shall be issued
upon conversion of any Security or Securities. 
If more than one Security shall be surrendered for conversion at one
time by the same Holder, the number of full shares which shall be issued upon
conversion thereof shall be computed on the basis of the aggregate principal
amount of the Securities (or specified portions thereof) so surrendered.  Instead of any fractional share of Common
Stock which would otherwise be issued upon conversion of any Security or
Securities (or specified portions thereof), the Company shall pay a cash
adjustment in respect of such fraction (calculated to the nearest one-100th of
a share) in an amount equal to the same fraction of the Closing Price of the
Common Stock as of the Trading Day preceding the date of conversion.


 


SECTION 12.4                                            Adjustment
of Conversion Price.


 


The Conversion Price
shall be subject to adjustments, calculated by the Company, from time to time
as follows:


 


(a)                                  In
case the Company shall hereafter pay a dividend or make a distribution to all
holders of the outstanding Common Stock in shares of Common Stock, the
Conversion Price in effect at the opening of business on the date following the
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such Conversion
Price by a fraction:


 


(i)                                     the
numerator of which shall be the number of shares of Common Stock outstanding at
the close of business on the Record Date (as defined in Section 12.4(g)) fixed
for such determination, and


 


(ii)                                  the
denominator of which shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution.


 


Such reduction shall become effective immediately
after the opening of business on the day following the Record Date.  If any dividend or distribution of the type
described in this Section 12.4(a) is declared but not so paid or made, the
Conversion Price shall again be adjusted to the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.


 


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


 


(c)                                  In
case the Company shall issue rights or warrants (other than any rights or
warrants referred to in Section 12.4(d)) to all holders of its outstanding
shares of Common Stock


 


61

















 


entitling them 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 (as defined in
Section 12.4(g)) on the Record Date fixed for the determination of stockholders
entitled to receive such rights or warrants, the Conversion Price shall be
reduced so that the same shall equal the price determined by multiplying the
Conversion Price in effect at the opening of business on the date after such
Record Date by a fraction:


 


(i)                                     the
numerator of which shall be the number of shares of Common Stock outstanding at
the close of business on the Record Date plus the number of shares which the aggregate
offering price of the total number of shares so offered for subscription or
purchase (or the aggregate conversion price of the convertible securities so
offered) would purchase at such Current Market Price, and


 


(ii)                                  the
denominator of which shall be the number of shares of Common Stock outstanding
on the close of business on the Record Date plus the total number of additional
shares of Common Stock so offered for subscription or purchase (or into which
the convertible securities so offered are convertible).


 


Such adjustment shall become effective immediately
after the opening of business on the day following the Record Date fixed for
determination of stockholders entitled to receive such rights or warrants.  To the extent that shares of Common Stock
(or securities convertible into Common Stock) are not delivered pursuant to
such rights or warrants, upon the expiration or termination of such rights or
warrants the Conversion Price shall be readjusted to the Conversion Price which
would then be in effect had the adjustments made upon the issuance of such
rights or warrants been made on the basis of the delivery of only the number of
shares of Common Stock (or securities convertible into Common Stock) actually
delivered.  In the event that such
rights or warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such date
fixed for the determination of stockholders entitled to receive such rights or
warrants had not been fixed.  In
determining whether any rights or warrants entitle the holders to subscribe for
or purchase shares of Common Stock at less than such Current Market Price, and
in determining the aggregate offering price of such shares of Common Stock,
there shall be taken into account any consideration received for such rights or
warrants, the value of such consideration if other than cash, to be determined
by the Board of Directors.


 


(d)                                 In
case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock shares of any class of capital stock of the Company (other
than any dividends or distributions to which Section 12.4(a) applies) or
evidences of its indebtedness, cash or other assets, including securities, but
excluding (1) any rights or warrants referred to in Section 12.4(c), (2) any
stock, securities, dividends or other property or assets or distributions
(including cash) distributed in connection with a reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or
conveyance to which Section 12.11 hereof applies and (3) dividends and
distributions paid exclusively in cash (the securities described in foregoing
clauses (1), (2) and (3) hereinafter in this Section 12.4(d) called the
“securities”), then, in each such case, subject to the second succeeding
paragraph of this Section 12.4(d), the Conversion Price shall be reduced so
that the same shall be equal to the price determined by multiplying the
Conversion


 


62

















 


Price in effect immediately prior to the close of business on the
Record Date (as defined in Section 12.4(g)) with respect to such distribution
by a fraction:


 


(i)                                     the
numerator of which shall be the Current Market Price (determined as provided in
Section 12.4(g)) on such date less the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and set forth in a
Board Resolution) on such date of the portion of the shares of capital stock,
evidences of indebtedness, cash or other assets, including securities, so
distributed applicable to one share of Common Stock (determined on the basis of
the number of shares of the Common Stock outstanding on the Record Date), and


 


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


 


Such reduction shall become effective immediately
prior to the opening of business on the day following the Record Date.  However, in the event that the then fair
market value (as so determined) of the portion of the securities so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price on the Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder shall have the right to receive
upon conversion of a Security (or any portion thereof) the amount of shares of
capital stock, evidences of indebtedness, cash or other assets, including
securities, such Holder would have received had such Holder converted such
Security (or portion thereof) immediately prior to such Record Date.  In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.


 


If the Board of Directors determines the fair market
value of any distribution for purposes of this Section 12.4(d) by reference to
the actual or when issued trading market for any securities comprising all or
part of such distribution, it must in doing so consider the prices in such
market over the same period (the “Reference Period”) used in computing the
Current Market Price pursuant to Section 12.4(g) to the extent possible, unless
the Board of Directors in a Board Resolution determines in good faith that
determining the fair market value during the Reference Period would not be in
the best interest of the Holder.


 


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


 


(i)                                     are
deemed to be transferred with such shares of Common Stock;


 


(ii)                                  are
not exercisable; and


 


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


 


shall be deemed
not to have been distributed for purposes of this Section 12.4(d) (and no
adjustment to the Conversion Price under this Section 12.4(d) will be required)
until the occurrence of the earliest Trigger Event.  If such right or warrant is subject to subsequent events, upon
the occurrence of which such right or warrant shall become exercisable to
purchase different securities, evidences of indebtedness or other assets or
entitle the holder to purchase a


 


63

















 


different number
or amount of the foregoing or to purchase any of the foregoing at a different
purchase price, then the occurrence of each such event shall be deemed to be
the date of issuance and record date with respect to a new right or warrant
(and a termination or expiration of the existing right or warrant without
exercise by the holder thereof).  In
addition, in the event of any distribution (or deemed distribution) of rights
or warrants, or any Trigger Event or other event (of the type described in the
preceding sentence) with respect thereto, that resulted in an adjustment to the
Conversion Price under this Section 12.4(d):


 


(1)                                  in
the case of any such rights or warrants which shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion Price shall
be readjusted upon such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price received by
a holder of Common Stock with respect to such rights or warrant (assuming such
holder had retained such rights or warrants), made to all holders of Common
Stock as of the date of such redemption or repurchase, and


 


(2)                                  in
the case of such rights or warrants all of which shall have expired or been
terminated without exercise, the Conversion Price shall be readjusted as if
such rights and warrants had never been issued.


 


For purposes of
this Section 12.4(d) and Sections 12.4(a), 12.4(b) and 12.4(c), any dividend or
distribution to which this Section 12.4(d) is applicable that also includes
shares of Common Stock, a subdivision or combination of Common Stock to which
Section 12.4(b) applies, or rights or warrants to subscribe for or purchase
shares of Common Stock to which Section 12.4(c) applies (or any combination
thereof), shall be deemed instead to be:


 


(1)                                  a
dividend or distribution of the evidences of indebtedness, assets, shares of
capital stock, rights or warrants other than such shares of Common Stock, such
subdivision or combination or such rights or warrants to which Sections
12.4(a), 12.4(b) and 12.4(c) apply, respectively (and any Conversion Price
reduction required by this Section 12.4(d) with respect to such dividend or
distribution shall then be made), immediately followed by


 


(2)                                  a
dividend or distribution of such shares of Common Stock, such subdivision or combination
or such rights or warrants (and any further Conversion Price reduction required
by Sections 12.4(a), 12.4(b) and 12.4(c) with respect to such dividend or
distribution shall then be made), except:


 


(A)                              the
Record Date of such dividend or distribution shall be substituted as (x) “the
date fixed for the determination of stockholders entitled to receive such
dividend or other distribution,” “Record Date fixed for such determination” and
“Record Date” within the meaning of Section 12.4(a), (y) “the day upon which
such subdivision becomes effective” and “the day upon which such combination
becomes effective” within the meaning of Section 12.4(b), and (z) as “the
Record Date fixed for the determination of stockholders entitled to receive
such rights or warrants,” such “Record


 


64

















 


Date,” “the Record Date fixed for the determination of stockholders
entitled to receive such rights or warrants” and “such dated fixed for the
determination of stockholders entitled to receive such rights or warrants”
within the meaning of Section 12.4(c), and


 


(B)                                any
shares of Common Stock included in such dividend or distribution shall not be
deemed “outstanding at the close of business on the Record Date fixed for such
determination” within the meaning of Section 12.4(a) and any reduction or
increase in the number of shares of Common Stock resulting from such
subdivision or combination shall be disregarded in connection with such
dividend or distribution.


 


(e)                                  In
case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock cash (excluding any cash that is distributed upon a
reclassification, change, merger, consolidation, statutory share exchange,
combination, sale or conveyance to which Section 12.11 hereof applies or as
part of a distribution referred to in Section 12.4(d) hereof), in an aggregate
amount that, combined together with:


 


(1)                                  the
aggregate amount of any other such distributions to all holders of Common Stock
made exclusively in cash within the 12 months preceding the date of payment of
such distribution, and in respect of which no adjustment pursuant to this
Section 12.4(e) has been made, and


 


(2)                                  the
aggregate of any cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and set forth in a Board
Resolution), as of the expiration of the tender or exchange offer referred to
below, of consideration payable in respect of any tender or exchange offer by
the Company or any of its subsidiaries for all or any portion of the Common
Stock concluded within the 12 months preceding the date of such distribution,
and in respect of which no adjustment pursuant to Section 12.4(f) hereof has
been made,


 


exceeds 10% of the
product of the Current Market Price (determined as provided in Section 12.4(g))
on the Record Date with respect to such distribution times the number of shares
of Common Stock outstanding on such date, then and in each such case,
immediately after the close of business on such date, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close of
business on such Record Date by a fraction:


 


(i)                                     the
numerator of which shall be equal to the Current Market Price on the Record
Date less an amount equal to the quotient of (x) the excess of such combined
amount over such 10% and (y) the number of shares of Common Stock outstanding
on the Record Date, and


 


(ii)                                  the
denominator of which shall be equal to the Current Market Price on such date.


 


In the event that such dividend or distribution is not
so paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or distribution
had not been declared.


 


(f)                                    In
case a tender or exchange offer made by the Company or any of its subsidiaries
for all or any portion of the Common Stock shall expire and such tender or
exchange offer (as


 


65

















 


amended upon the expiration thereof) shall require the payment to
stockholders (based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of Purchased Shares (as defined below)) of an
aggregate consideration having a fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and set forth in a Board
Resolution) that combined together with:


 


(1)                                  the
aggregate of the cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and set forth in a Board
Resolution), as of the expiration of the other tender or exchange offer
referred to below, of consideration payable in respect of any other tender or
exchange offers by the Company or any of its subsidiaries for all or any
portion of the Common Stock expiring within the preceding 12 months and in
respect of which no adjustment pursuant to this Section 12.4(f) has been made,
and


 


(2)                                  the
aggregate amount of any distributions to all holders of the Company’s Common
Stock made exclusively in cash within the preceding 12 months and in respect of
which no adjustment pursuant to Section 12.4(e) has been made, exceeds 10% of
the product of the Current Market Price (determined as provided in Section
12.4(g)) as of the last time (the “Expiration Time”) tenders could have been
made pursuant to such tender or exchange offer (as it may be amended) times the
number of shares of Common Stock outstanding (including any tendered or exchanged
shares) on the Expiration Time, then, and in each such case, immediately prior
to the opening of business on the day after the date of the Expiration Time,
the Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
close of business on the date of the Expiration Time by a fraction:


 


(i)                                     the
numerator of which shall be (x) the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) at the Expiration Time
multiplied by the Current Market Price of the Common Stock on the Trading Day
next succeeding the Expiration Time minus (y) the fair market value (determined
as aforesaid) of the aggregate consideration payable to stockholders based on
the acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of all shares validly tendered or exchanged and not withdrawn
as of the Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the “Purchased Shares”), and


 


(ii)                                  the
denominator shall be the product of the number of shares of Common Stock
outstanding (including any Purchased Shares) on the Expiration Time and the
Current Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time.


 


Such reduction (if any) shall become effective
immediately prior to the opening of business on the day following the
Expiration Time.  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 such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if such
tender or exchange offer had not been made. 
If the application of this Section 12.4(f)


 


66

















 


to any tender or exchange offer would result in an increase in the
Conversion Price, no adjustment shall be made for such tender or exchange offer
under this Section 12.4(f).


 


(g)                                 For
purposes of this Section 12.4, the following terms shall have the meanings
indicated:


 


(1)                                  “Current
Market Price” shall mean the average of the daily Closing Prices per share of
Common Stock for the ten consecutive Trading Days immediately prior to the date
in question; provided, however, that if:


 


(i)                                     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 Price pursuant to Section 12.4(a), (b), (c), (d), (e) or (f) occurs
during such ten consecutive Trading Days, the Closing Price for each Trading
Day prior to the “ex” date for such other event shall be adjusted by multiplying
such Closing Price by the same fraction by which the Conversion Price is so
required to be adjusted as a result of such other event;


 


(ii)                                  the “ex” date for any event (other than the
issuance or distribution requiring such computation) that requires an adjustment
to the Conversion Price pursuant to Section 12.4(a), (b), (c), (d), (e) or (f)
occurs on or after the “ex” date for the issuance or distribution requiring
such computation and prior to the day in question, the Closing Price for each
Trading Day on and after the “ex” date for such other event shall be adjusted
by multiplying such Closing Price by the reciprocal of the fraction by which
the Conversion Price is so required to be adjusted as a result of such other
event; and


 


(iii)                               the
“ex” date for the issuance or distribution requiring such computation is prior
to the day in question, after taking into account any adjustment required
pursuant to clause (i) or (ii) of this proviso, the Closing Price for each
Trading Day on or after such “ex” date shall be adjusted by adding thereto the
amount of any cash and the fair market value (as determined by the Board of
Directors in a manner consistent with any determination of such value for
purposes of Section 12.4(d) or (f), whose determination shall be conclusive and
set forth in a Board Resolution) 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 12.4(f),
the Current Market Price of the Common Stock on any date shall be deemed to be
the average of the daily Closing Prices per share of Common Stock for such day
and the next two succeeding Trading Days; provided, however, that if the “ex”
date for any event (other than the tender offer requiring such computation)
that requires an adjustment to the Conversion Price pursuant to Section
12.4(a), (b), (c), (d), (e) or (f) occurs on or after the Expiration Time for
the tender or exchange offer requiring such computation and prior to the day in
question, the Closing Price for each Trading Day on and after the “ex” date for
such other event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the Conversion Price is so required to be
adjusted as a result of such other event. 
For purposes of this paragraph, the term “ex” date, when used:


 


67

















 


(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 Price are called for pursuant to this Section
12.4, such adjustments shall be made to the Current Market Price as may be
necessary or appropriate to effectuate the intent of this Section 12.4 and to
avoid unjust or inequitable results as determined in good faith by the Board of
Directors.


 


(1)                                  (2)                                  “fair
market value” shall mean the amount which a willing buyer would pay a willing
seller in an arm’s length transaction.


 


(3)                                  “Record
Date” shall mean, with respect to any dividend, distribution or other
transaction or event in which the holders of Common Stock have the right to
receive any cash, securities or other property or in which the Common Stock (or
other applicable security) is exchanged for or converted into any combination
of cash, securities or other property, the date fixed for determination of
stockholders entitled to receive such cash, securities or other property
(whether such date is fixed by the Board of Directors or by statute, contract
or otherwise).


 


(h)                                 The
Company may make such reductions in the Conversion Price, in addition to those
required by Section 12.4(a), (b), (c), (d), (e) or (f), as the Board of
Directors considers to be advisable to avoid or diminish any income tax to
holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.


 


To the extent permitted by applicable law, the Company
from time to time may reduce the Conversion Price by any amount for any period
of time if the period is at least 20 days and the reduction is irrevocable
during the period and the Board of Directors determines in good faith that such
reduction would be in the best interests of the Company, which determination
shall be conclusive and set forth in a Board Resolution.  Whenever the Conversion Price is reduced
pursuant to the preceding sentence, the Company shall mail to the Trustee and
each Holder at the address of such Holder as it appears in the Register a
notice of the reduction at least 15 days prior to the date the reduced
Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.


 


(i)                                     No
adjustment in the Conversion Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in such price; provided,
however, that any


 


68

















 


adjustments which by reason of this Section 12.4(i) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment.  All calculations under this
Article 12 shall be made by the Company and shall be made to the nearest cent
or to the nearest one hundredth of a share, as the case may be.  No adjustment need be made for a change in
the par value or no par value of the Common Stock.


 


(j)                                     In
any case in which this Section 12.4 provides that an adjustment shall become
effective immediately after a Record Date for an event, the Company may defer
until the occurrence of such event (i) issuing to the Holder of any Security
converted after such Record Date and before the occurrence of such event the
additional shares of Common Stock issuable upon such conversion by reason of
the adjustment required by such event over and above the Common Stock issuable
upon such conversion before giving effect to such adjustment and (ii) paying to
such holder any amount in cash in lieu of any fraction pursuant to Section 12.3
hereof.


 


(k)                                  For
purposes of this Section 12.4, the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company but
shall include shares issuable in respect of scrip certificates issued in lieu
of fractions of shares of Common Stock. 
The Company will not pay any dividend or make any distribution on shares
of Common Stock held in the treasury of the Company.


 


(l)                                     If
the distribution date for the rights provided in the Company’s rights
agreement, if any, occurs prior to the date a Security is converted, the Holder
of the Security who converts such Security after the distribution date is not
entitled to receive the rights that would otherwise be attached (but for the
date of conversion) to the shares of Common Stock received upon such
conversion; provided, however, that an adjustment shall be made to the
Conversion Price pursuant to clause 12.4(b) as if the rights were being
distributed to the common stockholders of the Company immediately prior to such
conversion.  If such an adjustment is
made and the rights are later redeemed, invalidated or terminated, then a
corresponding reversing adjustment shall be made to the Conversion Price, on an
equitable basis, to take account of such event.


 


SECTION 12.5                                            Notice
of Adjustments of Conversion Price.


 


Whenever the Conversion Price is adjusted as herein
provided (other than in the case of an adjustment pursuant to the second
paragraph of Section 12.4(h) for which the notice required by such paragraph
has been provided), the Company shall promptly file with the Trustee and any
Conversion Agent other than the Trustee an Officers’ Certificate setting forth
the adjusted Conversion Price and showing in reasonable detail the facts upon
which such adjustment is based. 
Promptly after delivery of such Officers’ Certificate, the Company shall
prepare a notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price and the date on which each
adjustment becomes effective, and shall mail such notice to each Holder at the
address of such Holder as it appears in the Register within 20 days of the
effective date of such adjustment. 
Failure to deliver such notice shall not effect the legality or validity
of any such adjustment.


 


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SECTION 12.6                                            Notice
Prior to Certain Actions.


 


In case at any time after
the date hereof:


 


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


 


(2)                                  the
Company shall authorize the granting to the holders of its Common Stock of
rights or warrants to subscribe for or purchase any shares of capital stock of
any class (or of securities convertible into shares of capital stock of any
class) or of any other rights;


 


(3)                                  there
shall occur any reclassification of the Common Stock of the Company (other than
a subdivision or combination of its outstanding Common Stock, a change in par
value, a change from par value to no par value or a change from no par value to
par value), or any merger, consolidation, statutory share exchange or
combination to which the Company is a party and for which approval of any
shareholders of the Company is required, or the sale, transfer or conveyance of
all or substantially all of the assets of the Company; or


 


(4)                                  there
shall occur the voluntary or involuntary dissolution, liquidation or winding up
of the Company;


 


the Company shall
cause to be filed at each office or agency maintained for the purpose of
conversion of securities pursuant to Section 9.2 hereof, and shall cause to be
provided to the Trustee and all Holders in accordance with Section 14.2 hereof,
at least 20 days (or 10 days in any case specified in clause (1) or (2) above)
prior to the applicable record or effective date hereinafter specified, a
notice stating:


 


(A)                              the
date on which a record is to be taken for the purpose of such dividend,
distribution, rights or warrants, or, if a record is not to be taken, the date
as of which the holders of Common Stock of record to be entitled to such
dividend, distribution, rights or warrants are to be determined, or


 


(B)                                the
date on which such reclassification, merger, consolidation, statutory share
exchange, combination, sale, transfer, conveyance, dissolution, liquidation or
winding up is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other property deliverable
upon such reclassification, merger, consolidation, statutory share exchange,
sale, transfer, dissolution, liquidation or winding up.


 


Neither the failure to give such notice nor any defect
therein shall affect the legality or validity of the proceedings or actions
described in clauses (1) through (4) of this Section 12.6.


 


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SECTION 12.7                                            Company
To Reserve Common Stock.


 


The Company shall at all times use its best efforts to
reserve and keep available, free from preemptive rights, out of its authorized
but unissued Common Stock, for the purpose of effecting the conversion of
Securities, the full number of shares of fully paid and nonassessable Common
Stock then issuable upon the conversion of all Outstanding Securities.


 


SECTION 12.8                                            Taxes
on Conversions.


 


Except as provided in the next sentence, the Company
will pay any and all taxes (other than taxes on income) and duties that may be
payable in respect of the issue or delivery of shares of Common Stock on
conversion of Securities pursuant hereto. 
A Holder delivering a Security for conversion shall be liable for and
will be required to pay any tax or duty which may be payable in respect of any
transfer involved in the issue and delivery of shares of Common Stock in a name
other than that of the Holder of the Security or Securities to be converted,
and no such issue or delivery shall be made unless the Person requesting such
issue has paid to the Company the amount of any such tax or duty, or has
established to the satisfaction of the Company that such tax or duty has been
paid.


 


SECTION 12.9                                            Covenant
as to Common Stock.


 


The Company covenants that all shares of Common Stock
which may be issued upon conversion of Securities will upon issue be fully paid
and nonassessable and, except as provided in Section 12.8, the Company will pay
all taxes, liens and charges with respect to the issue thereof.


 


SECTION 12.10                                      Cancellation
of Converted Securities.


 


All Securities delivered for conversion shall be
delivered to the Trustee to be canceled by or at the direction of the Trustee,
which shall dispose of the same as provided in Section 2.9.


 


SECTION 12.11                                      Effect
of Recapitalization, Reclassification, Consolidation, Merger or Sale.


 


If any of following
events occur, namely:


 


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


 


(ii)                                  any
merger, consolidation, statutory share exchange or combination of the Company
with another corporation as a result of which holders of Common Stock shall be
entitled to receive stock, securities or other property or assets (including
cash or any combination thereof) with respect to or in exchange for such Common
Stock, or


 


(iii)                               any
sale, conveyance or lease of the properties and assets of the Company as, or
substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash or any combination thereof) with respect to
or in exchange for such Common Stock,


 


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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 each Security shall be
convertible into the kind and amount of shares of stock and other securities or
property or assets (including cash or any combination thereof) which such
Holder would have been entitled to receive upon such recapitalization, reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or
conveyance had such Securities been converted into Common Stock immediately
prior to such recapitalization, reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance
assuming such holder of Common Stock did not exercise its rights of election,
if any, as to the kind or amount of securities, cash or other property
receivable upon such recapitalization, reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance
(provided that, if the kind or amount of securities, cash or other property
receivable upon such recapitalization, reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance is not
the same for each share of Common Stock in respect of which such rights of
election shall not have been exercised (“Non-Electing Share”), then for the
purposes of this Section 12.11 the kind and amount of securities, cash or other
property receivable upon such recapitalization, reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or
conveyance for each Non-Electing Share shall be deemed to be the kind and amount
so receivable per share by a plurality of the Non-Electing Shares).  Such supplemental indenture shall provide
for adjustments which shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Article 12.  If, in the case of any such recapitalization, reclassification,
change, merger, consolidation, statutory share exchange, combination, sale or
conveyance, 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 recapitalization, reclassification, change, merger,
consolidation, statutory share exchange, combination, sale or conveyance, then
such supplemental indenture shall also be executed by such other corporation
and shall contain such additional provisions to protect the interests of the
Holders of the 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 11 hereof.


 


The Company shall cause notice of the execution of
such supplemental indenture to be mailed to each Holder, at the address of such
Holder as it appears on the Register, within 20 days after execution
thereof.  Failure to deliver such notice
shall not affect the legality or validity of such supplemental indenture.


 


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


 


If this Section 12.11 applies to any event or
occurrence, Section 12.4 hereof shall not apply.


 


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SECTION 12.12                                      Responsibility
of Trustee for Conversion Provisions.


 


The Trustee, subject to the provisions of Section 5.1
hereof, and any Conversion Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts exist
which may require any adjustment of the Conversion Price, or with respect to
the nature or intent of any such adjustments when made, or with respect to the
method employed, or herein or in any supplemental indenture provided to be
employed, in making the same.  Neither
the Trustee, subject to the provisions of Section 5.1 hereof, nor any
Conversion Agent shall be accountable with respect to the validity or value (of
the kind or amount) of any Common Stock, or of any other securities or
property, which may at any time be issued or delivered upon the conversion of
any Security; and it or they do not make any representation with respect
thereto.  Neither the Trustee, subject
to the provisions of Section 5.1 hereof, nor any Conversion Agent shall be
responsible for any failure of the Company to make any cash payment or to
issue, transfer or deliver any shares of stock or share certificates or other
securities or property upon the surrender of any Security for the purpose of
conversion; and the Trustee, subject to the provisions of Section 5.1 hereof,
and any Conversion Agent shall not be responsible or liable for any failure of
the Company to comply with any of the covenants of the Company contained in
this Article.


 


ARTICLE 13



SUBORDINATION


 


SECTION 13.1                                            Securities
Subordinated to Senior Debt.


 


The Company covenants and agrees, and each Holder of
Securities, by such Holder’s acceptance thereof, likewise covenants and agrees,
that the Indebtedness represented by the Securities and the payment of the
principal of and premium, if any, and interest (including Liquidated Damages,
if any) on each and all of the Securities is hereby expressly (i) senior in
right of payment to the Old Securities and any future obligations that are
designated by the Company as subordinate to the Securities; (ii) equal in right
of payment with any existing or future obligations that are designated by the
Company as, or are otherwise determined to be, on a parity with the Securities
and (iii) subordinated and junior, to the extent and in the manner set forth
and as set forth in this Section 13.1, in right of payment to the prior payment
in full of all Senior Debt.  The
Securities will constitute “Designated Senior Debt” for purposes of the
indenture for the Old Securities.


 


(a)                                  In
the event of any payment or distribution of assets of the Company upon any
dissolution, winding up, liquidation or reorganization of the Company, whether
in bankruptcy, insolvency, reorganization or receivership proceedings or upon
an assignment for the benefit of creditors or any other marshalling of the
assets and liabilities of the Company or otherwise, the holders of all Senior
Debt shall first be entitled to receive payment of the full amount due thereon
in respect of all such Senior Debt and all other amounts due or provision shall
be made for such amount in cash, or other payments satisfactory to the holders
of Senior Debt, before the Holders of any of the Securities are entitled to
receive any payment or distribution of any character, whether in cash,
securities or other property, on account of the principal of or premium, if
any, or interest (including Liquidated Damages, if any) on the Securities.


 


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(b)                                 In
the event of any acceleration of Maturity of the Securities because of an Event
of Default, unless the full amount due in respect of all Senior Debt is paid in
cash or other form of payment satisfactory to the holders of Senior Debt, no
payment shall be made by the Company with respect to the principal of, premium,
if any, or interest (including Liquidated Damages, if any) on the Securities or
to acquire any of the Securities (including any redemption, conversion or cash
repurchase pursuant to the exercise of the Repurchase Right), and the Company
shall give prompt written notice of such acceleration to such holders of Senior
Debt.


 


(c)                                  In
the event of and during the continuance of any default in payment of the
principal of or premium, if any, or interest on, rent or other payment
obligation in respect of, any Senior Debt, unless all such payments due in
respect of such Senior Debt have been paid in full in cash or other payments
satisfactory to the holders of Senior Debt, no payment shall be made by the
Company with respect to the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Securities or to acquire any of
the Securities (including any redemption, conversion or cash repurchase
pursuant to the exercise of the Repurchase Right).  The Company shall give prompt written notice to the Trustee of
any default under any Senior Debt or under any agreement pursuant to which
Senior Debt may have been issued.


 


(d)                                 During
the continuance of any event of default with respect to any Designated Senior
Debt, as such event of default is defined under any such Designated Senior Debt
or in any agreement pursuant to which any Designated Senior Debt has been
issued (other than a default in payment of the principal of or premium, if any,
or interest on, rent or other payment obligation in respect of any Designated
Senior Debt), permitting the holder or holders of such Designated Senior Debt
to accelerate the maturity thereof (or in the case of any lease, permitting the
landlord either to terminate the lease or to require the Company to make an
irrevocable offer to terminate the lease following an event of default
thereunder), no payment shall be made by the Company, directly or indirectly,
with respect to principal of, premium, if any, or interest (including
Liquidated Damages, if any) on the Securities for 179 days following notice in
writing (a “Payment Blockage Notice”) to the Company, from any holder or
holders of such Designated Senior Debt or their representative or representatives
or the trustee or trustees under any indenture or under which any instrument
evidencing any such Designated Senior Debt may have been issued, that such an
event of default has occurred and is continuing, unless such event of default
has been cured or waived or such Designated Senior Debt has been paid in full
in cash or other payment satisfactory to the holders of such Designated Senior
Debt; provided, however, if the maturity of such Designated Senior Debt is
accelerated (or in the case of any lease, as a result of such event of default,
the landlord under the lease has given the Company notice of its intention to
terminate the lease or to require the Company to make an irrevocable offer to
terminate the lease following an event of default thereunder), no payment may
be made on the Securities until such Designated Senior Debt has been paid in
full in cash or other payment satisfactory to the holders of such Designated
Senior Debt or such acceleration (or termination, in the case of a lease) has
been cured or waived.


 


For purposes of this Section 13.1(d), such Payment
Blockage Notice shall be deemed to include notice of all other events of
default under such indenture or instrument which are continuing at the time of
the event of default specified in such Payment Blockage Notice.  The provisions of this Section 13.1(d) shall
apply only to one such Payment Blockage Notice given in any period of 365 days
with respect to any issue of Designated Senior Debt, and no such


 


74

















 


continuing event of default that existed or was continuing on the date
of delivery of any Payment Blockage Notice shall be, or shall be made, the
basis for a subsequent Payment Blockage Notice.


 


(e)                                  In
the event that, notwithstanding the foregoing provisions of Sections 13.1(a),
13.1(b), 13.1(c) and 13.1(d), any payment on account of principal, premium, if
any, or interest (including Liquidated Damages, if any) on the Securities shall
have been made by or on behalf of the Company and received by the Trustee, by
any Holder or by any Paying Agent (or, if the Company is acting as its own
Paying Agent, money for any such payment shall be segregated and held in
trust):


 


(i)                                     after
the occurrence of an event specified in Section 13.1(a) or 13.1(b), then,
unless all Senior Debt is paid in full in cash, or provision shall be made
therefor,


 


(ii)                                  after
the happening of an event of default of the type specified in Section 13.1(c)
above, then, unless the amount of such Senior Debt then due shall have been
paid in full, or provision made therefor or such event of default shall have
been cured or waived, or


 


(iii)                               after
the happening of an event of default of the type specified in Section 13.1(d)
above and delivery of a Payment Blockage Notice, then, unless such event of
default shall have been cured or waived or the 179-day period specified in
Section 13.1(d) shall have expired,


 


such payment
(subject, in each case, to the provisions of Section 13.7 hereof) shall be held
in trust for the benefit of, and shall be immediately paid over to, the holders
of Designated Senior Debt (unless an event described in Section 13.1(a), (b) or
(c) has occurred, in which case the payment shall be held in trust for the
benefit of, and shall be immediately paid over to all holders of Senior Debt)
or their representative or representatives or the trustee or trustees under any
indenture under which any instruments evidencing any of the Designated Senior
Debt or Senior Debt, as the case may be, may have been issued, as their interests
may appear.


 


SECTION 13.2                                            Subrogation.


 


Subject to the payment in full of all Senior Debt to
which the Indebtedness evidenced by the Securities is in the circumstances
subordinated as provided in Section 13.1 hereof, the Holders of the Securities
shall be subrogated to the rights of the holders of such Senior Debt to receive
payments or distributions of cash, property or securities of the Company
applicable to such Senior Debt until all amounts owing on the Securities shall
be paid in full, and, as between the Company, its creditors other than holders
of such Senior Debt, and the Holders of the Securities, no such payment or
distribution made to the holders of Senior Debt by virtue of this Article which
otherwise would have been made to the holders of the Securities shall be deemed
to be a payment by the Company on account of such Senior Debt, provided that
the provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of Senior Debt, on the other hand.


 


SECTION 13.3                                            Obligation
of the Company Is Absolute and Unconditional.


 


Nothing contained in this Article or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Debt, and the Holders
of the Securities, the obligation of the Company, which is absolute


 


75

















 


and unconditional, to pay to the Holders of the Securities the
principal of and premium, if any, and interest (including Liquidated Damages,
if any) on the Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Securities and creditors of the Company other than
the holders of Senior Debt, nor shall anything contained herein or therein
prevent the Trustee or the Holder of any Security from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture,
subject to the rights, if any, under this Article of the holders of Senior Debt
in respect of cash, property or securities of the Company received upon the
exercise of any such remedy.


 


SECTION 13.4                                            Maturity
of or Default on Senior Debt.


 


Upon the maturity of any Senior Debt by lapse of time,
acceleration or otherwise, all principal of or premium, if any, or interest on,
rent or other payment obligations in respect of all such matured Senior Debt
shall first be paid in full, or such payment shall have been duly provided for,
before any payment on account of principal, or premium, if any, or interest
(including Liquidated Damages, if any) is made upon the Securities.


 


SECTION 13.5                                            Payments
on Securities Permitted.


 


Except as expressly provided in this Article, nothing
contained in this Article shall affect the obligation of the Company to make,
or prevent the Company from making, payments of the principal of, or premium,
if any, or interest (including Liquidated Damages, if any) on the Securities in
accordance with the provisions hereof and thereof, or shall prevent the Trustee
or any Paying Agent from applying any moneys deposited with it hereunder to the
payment of the principal of, or premium, if any, or interest (including
Liquidated Damages, if any) on the Securities.


 


SECTION 13.6                                            Effectuation
of Subordination by Trustee.


 


Each Holder of Securities, by such Holder’s acceptance
thereof, authorizes and directs the Trustee on such Holder’s behalf to take
such action as may be necessary or appropriate to effectuate the subordination
provided in this Article and appoints the Trustee such Holder’s
attorney-in-fact for any and all such purposes.


 


Upon any payment or distribution of assets of the
Company referred to in this Article, the Trustee and the Holders of the
Securities shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which any such dissolution, winding up,
liquidation or reorganization proceeding affecting the affairs of the Company
is pending or upon a certificate of the trustee in bankruptcy, receiver,
assignee for the benefit of creditors, liquidating trustee or agent or other
Person making any payment or distribution, delivered to the Trustee or to the
Holders of the Securities, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, and as to other facts pertinent
to the right of such Persons under this Article, and if such evidence is not
furnished, the Trustee may defer any payment to such Persons pending judicial
determination as to the right of such Persons to receive such payment.


 


76

















 


SECTION 13.7                                            Knowledge
of Trustee.


 


Notwithstanding the provision of this Article or any
other provisions of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any Senior Debt, of any default in payment of
principal of, premium, if any, or interest on, rent or other payment obligation
in respect of any Senior Debt, or of any facts which would prohibit the making
of any payment of moneys to or by the Trustee, or the taking of any other
action by the Trustee, unless a Responsible Officer of the Trustee having
responsibility for the administration of the trust established by this
Indenture shall have received written notice thereof from the Company, any
Holder of Securities, any Paying or Conversion Agent of the Company or the
holder or representative of any class of Senior Debt, and, prior to the receipt
of any such written notice, the Trustee shall be entitled in all respects to
assume that no such default or facts exist; provided, however, that unless on
the third Business Day prior to the date upon which by the terms hereof any
such moneys may become payable for any purpose the Trustee shall have received
the notice provided for in this Section 13.7, then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such moneys and apply the same to the purpose for which
they were received, and shall not be affected by any notice to the contrary
which may be received by it on or after such date.


 


SECTION 13.8                                            Trustee’s
Relation to Senior Debt.


 


The Trustee shall be entitled to all the rights set
forth in this Article with respect to any Senior Debt at the time held by it,
to the same extent as any other holder of Senior Debt and nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder.


 


Nothing contained in this Article shall apply to
claims of or payments to the Trustee under or pursuant to Section 5.8 hereof.


 


With respect to the holders of Senior Debt, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article, and no implied
covenants or obligations with respect to the holders of Senior Debt shall be
read into this Indenture against the Trustee. 
The Trustee shall not be deemed to owe any fiduciary duty to the holders
of Senior Debt and the Trustee shall not be liable to any holder of Senior Debt
if it shall pay over or deliver to Holders, the Company or any other Person
moneys or assets to which any holder of Senior Debt shall be entitled by virtue
of this Article or otherwise.


 


SECTION 13.9                                            Rights
of Holders of Senior Debt Not Impaired.


 


No right of any present or future holder of any Senior
Debt to enforce the subordination herein shall at any time or in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any noncompliance by the Company with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with.


 


SECTION 13.10                                      Modification
of Terms of Senior Debt.


 


Any renewal or extension of the time of payment of any
Senior Debt or the exercise by the holders of Senior Debt of any of their
rights under any instrument creating or evidencing


 


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Senior Debt, including without limitation the waiver of default
thereunder, may be made or done all without notice to or assent from the
Holders of the Securities or the Trustee.


 


No compromise, alteration, amendment, modification,
extension, renewal or other change of, or waiver, consent or other action in
respect of, any liability or obligation under or in respect of, or of any of
the terms, covenants or conditions of any indenture or other instrument under
which any Senior Debt is outstanding or of such Senior Debt, whether or not
such release is in accordance with the provisions or any applicable document,
shall in any way alter or affect any of the provisions of this Article or of
the Securities relating to the subordination thereof.


 


SECTION 13.11                                      Certain
Conversions Not Deemed Payment.


 


For the purposes of this
Article 13 only:


 


(1)                                  the
issuance and delivery of junior securities upon conversion of Securities in
accordance with Article 12 hereof shall not be deemed to constitute a payment
or distribution on account of the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on Securities or on account of the
purchase or other acquisition of Securities, and


 


(2)                                  the
payment, issuance or delivery of cash (except in satisfaction of fractional
shares pursuant to Section 12.3 hereof), property or securities (other than
junior securities) upon conversion of a Security shall be deemed to constitute
payment on account of the principal of, premium, if any, or interest (including
Liquidated Damages, if any) on such Security.


 


For the purposes of this
Section 13.11, the term “junior securities” means:


 


(a)                                  shares
of any common stock of the Company or


 


(b)                                 other
securities of the Company that are subordinated in right of payment to all
Senior Debt that may be outstanding at the time of issuance or delivery of such
securities to substantially the same extent as, or to a greater extent than,
the Securities are so subordinated as provided in this Article.


 


Nothing contained in this Article 13 or elsewhere in
this Indenture or in the Securities is intended to or shall impair, as among
the Company, its creditors (other than holders of Senior Debt) and the Holders
of Securities, the right, which is absolute and unconditional, of the Holder of
any Security to convert such Security in accordance with Article 12 hereof.


 


ARTICLE 14



OTHER PROVISIONS OF GENERAL APPLICATION


 


SECTION 14.1                                            Trust
Indenture Act Controls.


 


This Indenture is subject to the provisions of the TIA
which are required to be part of this Indenture, and shall, to the extent
applicable, be governed by such provisions.


 


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SECTION 14.2                                            Notices.


 


Any notice or communication to the Company or the
Trustee is duly given if in writing and delivered in person or mailed by first-class
mail to the address set forth below:


 


(a)                                  if
to the Company:


 


Vertex Pharmaceuticals Incorporated

130 Waverly Street

Cambridge, MA  02139

Attention:  [Investor Relations]


 


with a copy to:


 


Mintz, Levin, Cohn, Ferris, Glovsky 

  and Popeo, P.C.

One Financial Center

Boston, MA  02111

Attention:  Michael L. Fantozzi, Esq.


 


(b)                                 if
to the Trustee:


 


U.S. Bank National Association

Corporate Trust
Department


One Federal Street, Boston, MA 02110


Attention: John Brennan


 


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 to a Holder shall be
mailed by first-class mail to his address shown on the Register kept by the
Registrar.  Failure to mail a notice or
communication to a Holder or any defect in such notice or communication shall
not affect its sufficiency with respect to other Holders.


 


If a notice or communication is mailed or sent in the
manner provided above within the time prescribed, it is duly given as of the
date it is mailed, whether or not the addressee receives it, except that notice
to the Trustee shall only be effective upon receipt thereof by the Trustee.


 


If the Company mails a notice or communication to
Holders, it shall mail a copy to the Trustee at the same time.


 


SECTION 14.3                                            Communication
by Holders With Other Holders.


 


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


 


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SECTION 14.4                                            Acts
of Holders of Securities.


 


(a)                                  Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders of Securities
may be embodied in and evidenced by:


 


(1)                                  one
or more instruments of substantially similar tenor signed by such Holders in
person or by agent or proxy duly appointed in writing;


 


(2)                                  the
record of Holders of Securities voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Securities duly
called and held in accordance with the provisions of Article 8; or


 


(3)                                  a
combination of such instruments and any such record.


 


Except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments or record or
both are delivered to the Trustee and, where it is hereby expressly required,
to the Company.  Such instrument or
instruments and record (and the action embodied therein and evidenced thereby)
are herein sometimes referred to as the “Act” of the Holders of Securities
signing such instrument or instruments and so voting at such meeting.  Proof of execution of any such instrument or
of a writing appointing any such agent or proxy, or of the holding by any
Person of a Security, shall be sufficient for any purpose of this Indenture and
(subject to Section 5.1 hereof) conclusive in favor of the Trustee and the
Company if made in the manner provided in this Section.  The record of any meeting of Holders of
Securities shall be proved in the manner provided in Section 8.6 hereof.


 


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


 


(c)                                  The
principal amount and serial numbers of Securities held by any Person, and the
date of such Person holding the same, shall be proved by the Register.


 


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


 


SECTION 14.5                                            Certificate
and Opinion as to Conditions Precedent.


 


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


 


80

















 


Any certificate or opinion of an officer of the
Company may be based, insofar as it relates to legal matters, upon an Opinion
of Counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the Opinion of Counsel with respect to the matters upon which
such certificate or opinion is based is erroneous.  Any such Opinion of Counsel may be based, insofar as it relates
to factual matters, upon a certificate or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company, unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
representations with respect to such matters are erroneous.


 


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


 


Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture, the Company
shall furnish to the Trustee an Officers’ Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that
in the opinion of such Counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.


 


SECTION 14.6                                            Statements
Required in Certificate or Opinion.


 


Each certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall include:


 


(1)                                  a
statement that each individual signing such certificate or opinion on behalf of
the Company has read such covenant or condition and the definitions herein
relating thereto;


 


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


 


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


 


(4)                                  a
statement as to whether, in the opinion of each such individual, such condition
or covenant has been complied with.


 


SECTION 14.7                                            Effect
of Headings and Table of Contents.


 


The Article and Section headings herein and the Table
of Contents are for convenience only and shall not affect the construction
hereof.


 


81

















 


SECTION 14.8                                            Successors
and Assigns.


 


All covenants and agreements in this Indenture by the
Company shall bind its successors and assigns, whether so expressed or not.


 


SECTION 14.9                                            Separability
Clause.


 


In case any provision in this Indenture or 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 14.10                                      Benefits
of Indenture.


 


Nothing contained in this Indenture or in the
Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, the holders of Senior Debt and
the Holders of Securities, any benefit or legal or equitable right, remedy or
claim under this Indenture.


 


SECTION 14.11                                      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 14.12                                      Counterparts.


 


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


 


SECTION 14.13                                      Legal
Holidays.


 


In any case where any Interest Payment Date,
redemption date or Stated Maturity of any Security or the last day on which a
Holder of a Security has a right to convert such Security shall not be a
Business Day at any Place of Payment or Place of Conversion, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest (including Liquidated Damages, if any) or principal or
premium, if any, or conversion of the Securities, need not be made at such
Place of Payment or Place of Conversion on such day, but may be made on the
next succeeding Business Day at such Place of Payment or Place of Conversion
with the same force and effect as if made on the Interest Payment Date or
redemption date or at the Stated Maturity or on such last day for conversion,
provided, that in the case that payment is made on such succeeding Business
Day, no interest shall accrue on the amount so payable for the period from and
after such Interest Payment Date, redemption date or Stated Maturity, as the
case may be.


 


82

















 


SECTION 14.14                                      Recourse
Against Others.


 


No recourse for the payment of the principal of or
premium, if any, or interest (including Liquidated Damages, if any) on any
Security, or for any claim based thereon or otherwise in respect thereof, shall
be had against any incorporator, shareholder, officer or director, as such,
past, present or future, of the Company or of any successor corporation,
whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance thereof and as part of the consideration for the issue
thereof, expressly waived and released.


 


83

















 


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


 


	
   

  	
   

  	
  VERTEX
  PHARMACEUTICALS

  
	
   

  	
   

  	
   

  	
  INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Ian Smith

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Ian F. Smith

  
	
   

  	
   

  	
   

  	
  Title: Senior Vice
  President and

  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  U.S.
  BANK NATIONAL

  
	
   

  	
   

  	
   

  	
  ASSOCIATION,
  AS TRUSTEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John A.
  Brennan

  	
   

  
	
   

  	
   

  	
   

  	
  Name: John A. Brennan

  
	
   

  	
   

  	
   

  	
  Title:  Trust Officer

  



 


84

















 


EXHIBIT A


 


FORM OF SECURITY


 


[FACE OF SECURITY]


 


UNLESS THIS CERTIFICATE IS PRESENTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (“DTC”) TO
VERTEX PHARMACEUTICALS INCORPORATED (OR ITS SUCCESSOR) OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, CONVERSION OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.(1)


 


THE NOTES EVIDENCED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. 
BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS A
“QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT); (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE
OF THE NOTE EVIDENCED HEREBY RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED
HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER
IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE
TIME OF SUCH TRANSFER); AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT
TO CLAUSE 2(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  IN CONNECTION WITH ANY TRANSFER OF THE NOTE
EVIDENCED HEREBY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH NOTE
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(D) ABOVE), THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF
SUCH TRANSFER AND SUBMIT THIS


 












(1)                                  This
legend should be included only if the Security is issued in global form.


 


A-1

















 


CERTIFICATE TO STATE STREET BANK AND
TRUST COMPANY, AS TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE).  IF THE PROPOSED TRANSFER IS PURSUANT TO
CLAUSE 2(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO STATE
STREET BANK AND TRUST COMPANY, AS TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS AND OTHER INFORMATION AS THE
COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.  THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF
THE NOTE EVIDENCED HEREBY PURSUANT TO CLAUSE 2(C) OR 2(D) ABOVE OR THE
EXPIRATION OF TWO YEARS FROM THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED
HEREBY.


 


A-2

















 


VERTEX PHARMACEUTICALS INCORPORATED


 


53⁄4 % Convertible
Subordinated Note due 2011


 


CUSIP NO. 92532F AE 0


 


	
  No.             

  	
   

  	
  $                   

  



 


VERTEX PHARMACEUTICALS INCORPORATED, a Massachusetts
corporation (the “Company”, which term includes any successor corporation under
the Indenture hereinafter referred to), for value received, hereby promises to
pay to Cede & Co., or its registered assigns, the principal sum of                                      
U.S. Dollars
($              )
on February 15, 2011.


 


Interest Payment
Dates:  February 15 and August 15,
commencing August 15, 2004.


 


Regular Record
Dates:  February 1 and August 1.


 


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


 


A-3

















 


IN WITNESS WHEREOF, the Company has caused this
Security to be duly executed manually or by facsimile by its duly authorized
officers.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VERTEX
  PHARMACEUTICALS

  INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


 


Trustee’s
Certificate of Authentication


 


This is one of the
53⁄4% Convertible Subordinated Notes due 2011 described in the within-named
Indenture.


 


	
  U.S. BANK NATIONAL ASSOCIATION,

  	
   

  
	
  as
  Trustee

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  
				



 


A-4

















 


[REVERSE OF SECURITY]


 


VERTEX PHARMACEUTICALS INCORPORATED


 


53⁄4% Convertible
Subordinated Note due 2011


 


Capitalized terms used herein but not defined shall
have the meanings assigned to them in the Indenture referred to below unless
otherwise indicated.


 


1.                                       Principal
and Interest.


 


Vertex Pharmaceuticals Incorporated, a Massachusetts
corporation, promises to pay interest on the principal amount of this Security
at the Interest Rate from the date of issuance until repayment at Maturity,
redemption or repurchase.  The Company
will pay interest on this Security semiannually in arrears on February 15 and
August 15 of each year (each an “Interest Payment Date”), commencing August 15,
2004.


 


Interest on the Securities shall be computed (i) for
any full semiannual period for which a particular Interest Rate is applicable
on the basis of a 360-day year of twelve 30-day months and (ii) for any period
for which a particular Interest Rate is applicable shorter than a full
semiannual period for which interest is calculated, on the basis of a 30-day
month and, for such periods of less than a month, the actual number of days
elapsed over a 30-day month.


 


A Holder of any Security at the close of business on a
Regular Record Date shall be entitled to receive interest on such Security on
the corresponding Interest Payment Date. 
A Holder of any Security which is converted after the close of business
on a Regular Record Date and prior to the corresponding Interest Payment Date
(other than any Security whose Maturity is prior to such Interest Payment Date)
shall be entitled to receive interest on the principal amount of such Security,
notwithstanding the conversion of such Security prior to such Interest Payment
Date.  However, any such Holder which
surrenders any such Security for conversion during such period shall be
required to pay the Company an amount equal to the interest on the principal
amount of such Security so converted, which is payable by the Company to such
Holder on such Interest Payment Date, at the time such Holder surrenders such
Security for conversion. 
Notwithstanding the foregoing, any such Holder which surrenders for
conversion during such period any Security which has been called for redemption
by the Company in a notice of redemption given by the Company pursuant to
Section 10.5 of the Indenture (whether the redemption date for such Security is
on such Interest Payment Date or otherwise) shall be entitled to receive (and
retain) such interest and need not pay the Company an amount equal to the
interest on the principal amount of such Security so converted at the time such
Holder surrenders such Security for conversion.  Except as provided in Section 2.1 and Article 12 of the
Indenture, no payment or other adjustment shall be made for interest accrued on
any Security converted or for dividends on any shares of Common Stock issued
upon conversion of such Security.


 


In accordance with the terms of the Registration
Rights Agreement, during the first 90 days following a Registration Default (as
defined in the Registration Rights Agreement), the Interest Rate borne by the
Securities shall be increased by 0.25% on:


 


A-5

















 


(A)                              June
13, 2004, if the shelf registration statement (the “Shelf Registration
Statement”) is not filed with the SEC prior to or on June 12, 2004;


 


(B)                                September
11, 2004, if the Shelf Registration Statement is not declared effective by the
SEC prior to or on September 10, 2004;


 


(C)                                the
day after the fifth Business Day after the Shelf Registration Statement,
previously declared effective, ceases to be effective or fails to be usable, if
a post-effective amendment (or report filed pursuant to the Exchange Act) that
cures the Shelf Registration Statement is not filed with the SEC during such
five Business Day period; or


 


(D)                               the
day after the 45th or 60th day, as specified in the Registration Rights
Agreement, of any period that the prospectus contained in the Shelf
Registration Statement has been suspended, if such suspension has not been
terminated.


 


From and after the 91st day following such
Registration Default, the Interest Rate borne by the Securities shall be
increased by 0.50%.  In no event shall
the Interest Rate borne by the Securities be increased by more than 0.50%.


 


Any amount of additional interest will be payable in
cash semiannually, in arrears, on each Interest Payment Date and will cease to
accrue on the date the Registration Default is cured.  The Holder of this Security is entitled to the benefits of the
Registration Rights Agreement.


 


2.                                       Method
of Payment.


 


Interest (including Liquidated Damages, if any) on any
Security which 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
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest.


 


Principal of, and premium, if any, and interest
(including Liquidated Damages, if any) on, Global Securities will be payable to
the Depositary in immediately available funds.


 


Principal and premium, if any, on Physical Securities,
if any, will be payable at the office or agency of the Company maintained for
such purpose, initially the Corporate Trust Office of the Trustee.  Interest on Physical Securities will be
payable by (i) U.S. Dollar check drawn on a bank located in the city where the
Corporate Trust Office of the Trustee is located, mailed to the address of the
Person entitled thereto as such address shall appear in the Register, or (ii)
upon application to the Registrar not later than the relevant Record Date by a
Holder of an aggregate principal amount in excess of $5,000,000, wire transfer
in immediately available funds.


 


3.                                       Paying
Agent and Registrar.


 


Initially, U.S. Bank National Association, the Trustee
under the Indenture, will act as Paying Agent and Registrar.  The Company may change the Paying Agent or
Registrar without notice to any Holder.


 


A-6

















 


4.                                       Indenture.


 


The Company issued this Security under an Indenture,
dated as of February 13, 2004, as it may from time to time be supplemented or
amended by one or more indentures supplemental thereto entered into pursuant to
the applicable provisions thereof (the “Indenture”), between the Company and US
Bank National Association, as Trustee. 
The terms of the Security include those stated in the Indenture and
those made part of the Indenture by reference to the TIA.  This Security is subject to all such terms,
and Holders are referred to the Indenture and the TIA for a statement of all
such terms.  To the extent permitted by
applicable law, in the event of any inconsistency between the terms of this
Security and the terms of the Indenture, the terms of the Indenture shall
control.


 


5.                                       [Reserved]


 


6.                                       Optional
Redemption.


 


Prior to February 15, 2007, the Company cannot redeem
the Securities.  The Company may, on or
after February 15, 2007, at its option, redeem the Securities in whole or in
part on any date from time to time, upon notice to the Holders as provided in
the Indenture, at a redemption price, payable in cash, equal to 100% of the
principal amount of the Securities redeemed plus accrued and unpaid interest
(including any Liquidated Damages), if any, to but excluding the date of
redemption.


 


If fewer than all the Securities are to be redeemed,
the Trustee shall select the particular Securities to be redeemed from the
Outstanding Securities by the methods as provided in the Indenture.  If any Security selected for partial
redemption is converted in part before termination of the conversion right with
respect to the portion of the Security so selected, the converted portion of
such Security shall be deemed to be the portion selected for redemption
(provided, however, that the Holder of such Security so converted and deemed
redeemed shall not be entitled to any additional interest payment as a result
of such deemed redemption than such Holder would have otherwise been entitled
to receive upon conversion of such Security). 
Securities which have been converted during a selection of Securities to
be redeemed may be treated by the Trustee as Outstanding for the purpose of
such selection.


 


On and after the redemption date, interest ceases to
accrue on Securities or portions of Securities called for redemption, unless
the Company defaults in the payment of the redemption price and accrued and
unpaid interest.


 


7.                                       Repurchase
Right Upon a Change of Control.


 


If a Change of Control occurs, the Holder of
Securities, at the Holder’s option, shall have the right, in accordance with
the provisions of the Indenture, to require the Company to repurchase the
Securities (or any portion of the principal amount hereof that is at least
$1,000 or an integral multiple thereof, provided that the portion of the
principal amount of this Security to be Outstanding after such repurchase is at
least equal to $1,000) at the Repurchase Price, plus any interest accrued and
unpaid to the Repurchase Date.


 


A-7

















 


Subject to the conditions provided in Section 11.2 of
the Indenture, the Company may elect to pay the Repurchase Price by delivering
a number of shares of Common Stock equal to (i) the Repurchase Price divided by
(ii) 95% of the average of the Closing Prices per share for the five consecutive
Trading Days immediately preceding and including the third Trading Day prior to
the Repurchase Date.


 


No fractional shares of Common Stock will be issued
upon repurchase of any Securities. 
Instead of any fractional share of Common Stock which would otherwise be
issued upon conversion of such Securities, the Company shall pay a cash
adjustment as provided in the Indenture.


 


A Company Notice will be given by the Company to the
Holders as provided in the Indenture. 
To exercise a Repurchase Right, a Holder must deliver to the Trustee a
written notice as provided in the Indenture.


 


8.                                       Conversion
Rights.


 


Subject to and upon compliance with the provisions of
the Indenture, the Holder of Securities is entitled, at such Holder’s option,
at any time before the close of business on February 14, 2011 to convert the
Holder’s Securities (or any portion of the principal amount hereof which is
$1,000 or an integral multiple thereof), at the principal amount thereof or of
such portion, into duly authorized, fully paid and nonassessable shares of
Common Stock of the Company at the Conversion Price in effect at the time of
conversion.


 


In the case of a Security (or a portion thereof)
called for redemption, such conversion right in respect of the Security (or
such portion thereof) so called shall expire at the close of business on the
Business Day immediately preceding the redemption date, unless the Company
defaults in making the payment due upon redemption.  In the case of a Change of Control for which the Holder exercises
its Repurchase Right in respect of a Security (or a portion thereof), such
conversion right in respect of the Security (or portion thereof) shall expire
at the close of business on the Business Day immediately preceding the
Repurchase Date.


 


The Conversion Price shall be initially equal to
$14.94 per share of Common Stock.  The
Conversion Price shall be adjusted under certain circumstances as provided in
the Indenture.


 


To exercise the conversion right, the Holder must
surrender the Security (or portion thereof) duly endorsed or assigned to the
Company or in blank, at the office of the Conversion Agent, accompanied by a
duly signed conversion notice to the Company. 
Any Security surrendered for conversion during the period between the
close of business on any Regular Record Date and prior to the corresponding
Interest Payment Date (other than any Security whose Maturity is prior to such
Interest Payment Date) shall be accompanied by payment in New York Clearing
House funds or other funds acceptable to the Company of an amount equal to the
interest payable on such Interest Payment Date by the Company on the principal
amount of the Security being surrendered for conversion.  Notwithstanding the foregoing, any Holder which
during such period surrenders for conversion any Security which has been called
for redemption by the Company in a notice of redemption given by the Company
pursuant to Section 10.5 of the Indenture (whether the redemption date for such
Security is on such Interest Payment Date or


 


A-8

















 


otherwise) need not pay the Company an amount equal to the interest on
the principal amount of such Security so converted at the time such Holder
surrenders such Security for conversion.


 


No fractional shares of Common Stock will be issued
upon conversion of any Securities. 
Instead of any fractional share of Common Stock which would otherwise be
issued upon conversion of such Securities, the Company shall pay a cash adjustment
as provided in the Indenture.


 


9.                                       Subordination.


 


The Indebtedness evidenced by this Security is, to the
extent and in the manner provided in the Indenture, (i) senior in right of
payment to the Old Securities and any future obligations that are designated by
the Company as subordinate to the Securities; (ii) equal in right of payment
with any existing or future obligations that are designated by the Company as,
or are otherwise determined to be, on a parity with the Securities and (iii)
subordinated and subject in right of payment to the prior payment in full of
all amounts then due on all Senior Debt of the Company, and this Security is
issued subject to such provisions of the Indenture with respect thereto.  Each Holder of this Security, by accepting
the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Trustee on such Holder’s behalf to take such action as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee such Holder’s attorney-in-fact for any and all such
purposes. The Securities will constitute “Designated Senior Debt” for purposes
of the indenture for the Old Securities.


 


10.                                 Denominations;
Transfer; Exchange.


 


The Securities are issuable in registered form,
without coupons, in denominations of $1,000 and integral multiples of $1,000 in
excess thereof.  A Holder may register
the transfer or exchange of Securities in accordance with the Indenture.  The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and
the Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture.


 


In the event of a redemption in part, the Company will
not be required (a) to register the transfer of, or exchange, Securities for a
period of 15 days immediately preceding the date notice is given identifying
the serial numbers of the Securities called for such redemption, or (b) to
register the transfer of, or exchange, any such Securities, or portion thereof,
called for redemption.


 


In the event of redemption, conversion or repurchase
of the Securities in part only, a new Security or Securities for the
unredeemed, unconverted or unrepurchased portion thereof will be issued in the
name of the Holder hereof.


 


11.                                 Persons
Deemed Owners.


 


Except as provided in the Indenture, the registered
Holder of this Security shall be treated as its owner for all purposes.


 


A-9

















 


12.                                 Unclaimed
Money.


 


The Trustee and the Paying Agent shall pay to the
Company any money held by them for the payment of principal, premium, if any,
or interest that remains unclaimed for two years after the date upon which such
payment shall have become due.  After
payment to the Company, Holders entitled to the money must look to the Company
for payment as general creditors unless an applicable abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.


 


13.                                 Discharge
Prior to Redemption or Maturity.


 


Subject to certain conditions contained in the
Indenture, the Company may discharge its obligations under the Securities and
the Indenture if (1) (a) all of the Outstanding Securities shall become due and
payable at their scheduled Maturity within one year or (b) all of the
Outstanding Securities are scheduled for redemption within one year, and (2)
the Company shall have deposited with the Trustee money and/or U.S. Government
Obligations sufficient to pay the principal of, and premium, if any, and
interest on, all of the Outstanding Securities on the date of Maturity or
redemption, as the case may be.


 


14.                                 Amendment;
Supplement; Waiver.


 


The Indenture permits, with certain exceptions as
therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities
under the Indenture at any time by the Company and the Trustee with the consent
of the Holders of a majority in aggregate principal amount of the Outstanding Securities
(or such lesser amount as shall have acted at a meeting pursuant to the
provisions of the Indenture).  The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities at the time Outstanding, on
behalf of the Holders of all the Securities, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences.  Any
such consent or waiver by the Holder of this Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security or such other Security.


 


No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest (including Liquidated Damages, if any) on this
Security at the times, places and rate, and in the coin or currency, herein
prescribed or to convert this Security (or pay cash in lieu of conversion) as
provided in the Indenture.


 


15.                                 Defaults
and Remedies.


 


The Indenture provides that an Event of Default with
respect to the Securities occurs when any of the following occurs:


 


(a)                                  the
Company defaults in the payment of the principal of or premium, if any, on any
of the Securities when it becomes due and payable at


 


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Maturity, upon redemption or exercise of a Repurchase Right or
otherwise, whether or not such payment is prohibited by the subordination
provisions of Article 13 of the Indenture;


 


(b)                                 the
Company defaults in the payment of an installment of interest (including
Liquidated Damages, if any) on any of the Securities when it becomes due and
payable and such default continues for a period of 30 days, whether or not such
payment is prohibited by the subordination provisions of Article 13 of the
Indenture;


 


(c)                                  the
Company fails to deliver shares of Common Stock, together with cash instead of
fractional shares, when those shares of Common Stock or cash instead of
fractional shares are required to be delivered following conversion of a
Security in accordance with the provisions of Article 12 of the Indenture, and
that failure continues for 10 days;


 


(d)                                 the
Company fails to perform or observe any other term, covenant or agreement
contained in the Securities or the Indenture and such default continues for a
period of 60 days after written notice of such failure is given as specified in
the Indenture;


 


(e)                                  (i)
the Company fails to make any payment by the end of the applicable grace
period, if any, after the maturity of any Indebtedness for borrowed money in an
amount in excess of $5,000,000, or (ii) there is an acceleration of any
Indebtedness for borrowed money in an amount in excess of $5,000,000 because of
a default with respect to such Indebtedness without such Indebtedness having
been discharged or such acceleration having been cured, waived, rescinded or
annulled, in the case of either clause (i) or (ii) above, for a period of 30
days after written notice is given to the Company as specified in the
Indenture; and


 


(f)                                    there
are certain events of bankruptcy, insolvency or reorganization of the Company.


 


If an Event of Default shall occur and be continuing,
the principal of all the Securities may be declared due and payable in the
manner and with the effect provided in the Indenture.


 


16.                                 Authentication.


 


This Security shall not be valid until the Trustee (or
authenticating agent) executes the certificate of authentication on the other
side of this Security.


 


17.                                 Abbreviations.


 


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


 


A-11

















 


18.                                 Additional
Rights of Holders of Transfer Restricted Securities.


 


In addition to the rights provided to Holders under
the Indenture, Holders of Transfer Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement.


 


19.                                 CUSIP
Numbers.


 


Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on this Security and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders.  No representation is made as to the accuracy
of such numbers either as printed on this Security or as contained in any
notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.


 


20.                                 Governing
Law.


 


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


 


21.                                 Successor
Corporation.


 


In the event a successor corporation assumes all the
obligations of the Company under this Security, pursuant to the terms hereof
and of the Indenture, the Company will be released from all such obligations.


 


A-12

















 


ASSIGNMENT FORM


 


To assign this Security, fill in the form below and
have your signature guaranteed:  (I) or
(we) assign and transfer this Security to:


 


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


 


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


 


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


 


	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  Your Name:

  	
   

  
	
   

  	
  (Print your name
  exactly as it appears on

  the face of this Security)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
  (Sign exactly as
  your name appears on

  the face of this Security)

  
	
   

  	
   

  
	
   

  	
  Signature Guarantee*:

  	
   

  
					



 












* PARTICIPANT IN A RECOGNIZED
SIGNATURE GUARANTEE MEDALLION PROGRAM (OR OTHER SIGNATURE GUARANTOR ACCEPTABLE
TO THE TRUSTEE).


 


In connection with any transfer of this Security
occurring prior to the end of the period referred to in Rule 144(k) under the
Securities Act, the undersigned confirms that without utilizing any general
solicitation or general advertising that:


 


[Check One]


 


o
(a) this Security is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided by Rule
144A thereunder.


 


or


 


o
(b) this Security is being transferred other than in accordance with (a) above
and documents are being furnished which comply with the conditions of transfer
set forth in this Security and the Indenture.


 


A-13

















 


If none of the foregoing boxes is checked, the Trustee
or other Registrar shall not be obligated to register this Security in the name
of any Person other than the Holder hereof unless the conditions to any such
transfer of registration set forth herein and in Sections 2.7, 2.8 and 2.9 of
the Indenture shall have been satisfied.


 


	
  Dated:

  	
   

  	
   

  	
   

  



 


 


NOTICE:  The signature to this assignment must
correspond with the name as written upon the face of the within-mentioned
instrument in every particular, without alteration or any change whatsoever.


 


Signature Guarantee:


 


Signature must be
guaranteed by a participant in a recognized signature guaranty medallion
program or other signature guarantor acceptable to the Trustee.


 


A-14

















 


TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.


 


The undersigned represents and warrants that it is
purchasing this Security for its own account or an account with respect to
which it exercises sole investment discretion, in each case for investment and
not with a view to distribution, and that it and any such account is a
“Qualified Institutional Buyer” within the meaning of Rule 144A under the
Securities Act of 1933 and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned’s foregoing representations in order
to claim the exemption from registration provided by Rule 144A.


 


	
  Dated:

  	
   

  	
   

  	
   

  



 


 


NOTICE:  To be executed by an executive officer


 


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CONVERSION NOTICE


 


TO:  VERTEX
PHARMACEUTICALS INCORPORATED

130 Waverly Street

Cambridge, Massachusetts  02139


 


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


 


 


	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  Your Name:

  	
   

  
	
   

  	
  (Print your name
  exactly as it appears on

  the face of this Security)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
  (Sign exactly as
  your name appears on

  the face of this Security)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature Guarantee*:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Social Security or
  other Taxpayer

  Identification Number:

  	
   

  
						



 


 


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


 












*
PARTICIPANT IN A RECOGNIZED SIGNATURE GUARANTEE MEDALLION PROGRAM (OR OTHER
SIGNATURE GUARANTOR ACCEPTABLE TO THE TRUSTEE).


 


A-16

















 


Fill in for
registration of shares (if to be issued) and Securities (if to be delivered)
other than to and in the name of the registered holder:


 


(Name)


 


(Street Address)


 


(City, State and
Zip Code)


 


A-17

















 


NOTICE OF EXERCISE OF REPURCHASE RIGHT


 


TO:  VERTEX
PHARMACEUTICALS INCORPORATED

130 Waverly Street

Cambridge, Massachusetts  02139


 


The undersigned registered owner of this Security
hereby irrevocably acknowledges receipt of a notice from Vertex Pharmaceuticals
Incorporated (the “Company”) as to the occurrence of a Change of Control with
respect to the Company and requests and instructs the Company to repay the
entire principal amount of this Security, or the portion thereof (which is
$1,000 principal amount or an integral multiple thereof) below designated, in
accordance with the terms of the Indenture referred to in this Security,
together with interest (including Liquidated Damages, if any) accrued and unpaid
to, but excluding, such date, to the registered holder hereof, in cash.


 


 


	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
  Your Name:

  	
   

  
	
   

  	
  (Print your name
  exactly as it appears on

  the face of this Security)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Your Signature:

  	
   

  
	
   

  	
  (Sign exactly as
  your name appears on

  the face of this Security)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature Guarantee*:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Social Security or
  other Taxpayer

  Identification Number:

  	
   

  
						



 


 


Principal amount to be repaid (if less than all):  $


 












* PARTICIPANT IN A RECOGNIZED
SIGNATURE GUARANTEE MEDALLION PROGRAM (OR OTHER SIGNATURE GUARANTOR ACCEPTABLE
TO THE TRUSTEE).


 


A-18

















 


SCHEDULE OF EXCHANGES FOR PHYSICAL SECURITIES(2)


 


The following exchanges of a part of this Global
Security for Physical Securities have been made:


 


	
  Date of
  Exchange

  	
   

  	
  Amount of decrease

  in Principal Amount

  of this Global

  Security

  	
   

  	
  Amount of increase

  in Principal Amount

  of this Global

  Security

  	
   

  	
  Principal
  Amount

  of this Global

  Security following

  such decrease

  (or increase)

  	
   

  	
  Signature of

  authorized officer of

  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 












(2)                                  This
schedule should be included only if the Security is issued in global form.


 


A-19