EXHIBIT
4.4


 




 





UTSTARCOM,
INC.


 


7/8%
CONVERTIBLE SUBORDINATED NOTES DUE 2008


 


 












 


INDENTURE


DATED
AS OF MARCH 12, 2003


 


 












 


U.S.
BANK NATIONAL ASSOCIATION,


AS
TRUSTEE


 




 




















 


TABLE
OF CONTENTS


 


	
  ARTICLE 1 DEFINITIONS AND INCORPORATION BY
  REFERENCE

  
	
   

  
	
   

  	
  SECTION 1.1.

  	
  DEFINITIONS

  
	
   

  	
  SECTION 1.2.

  	
  OTHER DEFINITIONS

  
	
   

  	
  SECTION 1.3.

  	
  TRUST INDENTURE ACT PROVISIONS

  
	
   

  	
  SECTION 1.4.

  	
  RULES OF CONSTRUCTION

  
	
   

  
	
  ARTICLE 2 THE SECURITIES

  
	
   

  
	
   

  	
  SECTION 2.1.

  	
  FORM AND DATING

  
	
   

  	
  SECTION 2.2.

  	
  EXECUTION AND AUTHENTICATION

  
	
   

  	
  SECTION 2.3.

  	
  REGISTRAR, PAYING AGENT AND CONVERSION
  AGENT

  
	
   

  	
  SECTION 2.4.

  	
  PAYING AGENT TO HOLD MONEY IN TRUST

  
	
   

  	
  SECTION 2.5.

  	
  SECURITYHOLDER LISTS

  
	
   

  	
  SECTION 2.6.

  	
  TRANSFER AND EXCHANGE

  
	
   

  	
  SECTION 2.7.

  	
  REPLACEMENT SECURITIES

  
	
   

  	
  SECTION 2.8.

  	
  OUTSTANDING SECURITIES

  
	
   

  	
  SECTION 2.9.

  	
  TREASURY SECURITIES

  
	
   

  	
  SECTION 2.10.

  	
  TEMPORARY SECURITIES

  
	
   

  	
  SECTION 2.11.

  	
  CANCELLATION

  
	
   

  	
  SECTION 2.12.

  	
  LEGEND; ADDITIONAL TRANSFER AND EXCHANGE
  REQUIREMENTS

  
	
   

  	
  SECTION 2.13.

  	
  CUSIP NUMBERS

  
	
   

  
	
  ARTICLE 3 REDEMPTION AND PURCHASES

  
	
   

  
	
   

  	
  SECTION 3.1.

  	
  NO REDEMPTION BY THE COMPANY

  
	
   

  	
  SECTION 3.2.

  	
  PURCHASE OF SECURITIES AT OPTION OF THE
  HOLDER UPON CHANGE IN CONTROL

  
	
   

  	
  SECTION 3.3.

  	
  EFFECT OF CHANGE IN CONTROL PURCHASE NOTICE

  
	
   

  	
  SECTION 3.4.

  	
  DEPOSIT OF CHANGE IN CONTROL PURCHASE PRICE

  
	
   

  	
  SECTION 3.5.

  	
  SECURITIES PURCHASED IN PART

  
	
   

  	
  SECTION 3.6.

  	
  COMPLIANCE WITH SECURITIES LAWS UPON
  PURCHASE OF SECURITIES

  
	
   

  	
  SECTION 3.7.

  	
  REPAYMENT TO THE COMPANY

  
	
   

  
	
  ARTICLE 4 CONVERSION

  
	
   

  
	
   

  	
  SECTION 4.1.

  	
  CONVERSION PRIVILEGE

  
	
   

  	
  SECTION 4.2.

  	
  CONVERSION PROCEDURE

  
	
   

  	
  SECTION 4.3.

  	
  FRACTIONAL SHARES

  
	
   

  	
  SECTION 4.4.

  	
  TAXES ON CONVERSION

  
	
   

  	
  SECTION 4.5.

  	
  COMPANY TO PROVIDE STOCK

  
	
   

  	
  SECTION 4.6.

  	
  ADJUSTMENT OF CONVERSION PRICE

  
	
   

  	
  SECTION 4.7.

  	
  NO ADJUSTMENT

  
	
   

  	
  SECTION 4.8.

  	
  ADJUSTMENT FOR TAX PURPOSES

  
	
   

  	
  SECTION 4.9.

  	
  NOTICE OF ADJUSTMENT

  
	
   

  	
  SECTION 4.10.

  	
  NOTICE OF CERTAIN TRANSACTIONS

  
	
   

  	
  SECTION 4.11.

  	
  EFFECT OF RECLASSIFICATION, CONSOLIDATION,
  MERGER OR SALE ON CONVERSION PRIVILEGE

  
	
   

  	
  SECTION 4.12.

  	
  TRUSTEE’S DISCLAIMER

  



 


i

















 


	
   

  	
  SECTION 4.13.

  	
  VOLUNTARY REDUCTION

  
	
   

  
	
  ARTICLE 5 SUBORDINATION

  
	
   

  
	
   

  	
  SECTION 5.1.

  	
  AGREEMENT OF SUBORDINATION

  
	
   

  	
  SECTION 5.2.

  	
  PAYMENTS TO HOLDERS

  
	
   

  	
  SECTION 5.3.

  	
  SUBROGATION OF SECURITIES

  
	
   

  	
  SECTION 5.4.

  	
  AUTHORIZATION TO EFFECT SUBORDINATION

  
	
   

  	
  SECTION 5.5.

  	
  NOTICE TO TRUSTEE

  
	
   

  	
  SECTION 5.6.

  	
  TRUSTEE’S RELATION TO SENIOR INDEBTEDNESS

  
	
   

  	
  SECTION 5.7.

  	
  NO IMPAIRMENT OF SUBORDINATION

  
	
   

  	
  SECTION 5.8.

  	
  CERTAIN CONVERSIONS DEEMED PAYMENT

  
	
   

  	
  SECTION 5.9.

  	
  ARTICLE APPLICABLE TO PAYING AGENTS

  
	
   

  	
  SECTION 5.10.

  	
  SENIOR INDEBTEDNESS ENTITLED TO RELY

  
	
   

  
	
  ARTICLE 6 COVENANTS

  
	
   

  
	
   

  	
  SECTION 6.1.

  	
  PAYMENT OF SECURITIES

  
	
   

  	
  SECTION 6.2.

  	
  SEC REPORTS

  
	
   

  	
  SECTION 6.3.

  	
  COMPLIANCE CERTIFICATES

  
	
   

  	
  SECTION 6.4.

  	
  FURTHER INSTRUMENTS AND ACTS

  
	
   

  	
  SECTION 6.5.

  	
  MAINTENANCE OF CORPORATE EXISTENCE

  
	
   

  	
  SECTION 6.6.

  	
  RULE 144A INFORMATION REQUIREMENT

  
	
   

  	
  SECTION 6.7.

  	
  STAY, EXTENSION AND USURY LAWS

  
	
   

  	
  SECTION 6.8.

  	
  PAYMENT OF ADDITIONAL INTEREST

  
	
   

  
	
  ARTICLE 7 CONSOLIDATION, MERGER,
  CONVEYANCE, TRANSFER OR LEASE

  
	
   

  
	
   

  	
  SECTION 7.1.

  	
  COMPANY MAY CONSOLIDATE, ETC, ONLY ON
  CERTAIN TERMS

  
	
   

  	
  SECTION 7.2.

  	
  SUCCESSOR SUBSTITUTED

  
	
   

  
	
  ARTICLE 8 DEFAULT AND REMEDIES

  
	
   

  
	
   

  	
  SECTION 8.1.

  	
  EVENTS OF DEFAULT

  
	
   

  	
  SECTION 8.2.

  	
  ACCELERATION

  
	
   

  	
  SECTION 8.3.

  	
  OTHER REMEDIES

  
	
   

  	
  SECTION 8.4.

  	
  WAIVER OF DEFAULTS AND EVENTS OF DEFAULT

  
	
   

  	
  SECTION 8.5.

  	
  CONTROL BY MAJORITY

  
	
   

  	
  SECTION 8.6.

  	
  LIMITATIONS ON SUITS

  
	
   

  	
  SECTION 8.7.

  	
  RIGHTS OF HOLDERS TO RECEIVE PAYMENT AND TO
  CONVERT

  
	
   

  	
  SECTION 8.8.

  	
  COLLECTION SUIT BY TRUSTEE

  
	
   

  	
  SECTION 8.9.

  	
  TRUSTEE MAY FILE PROOFS OF CLAIM

  
	
   

  	
  SECTION 8.10.

  	
  PRIORITIES

  
	
   

  	
  SECTION 8.11.

  	
  UNDERTAKING FOR COSTS

  
	
   

  
	
  ARTICLE
  9 TRUSTEE

  
	
   

  
	
   

  	
  SECTION 9.1.

  	
  DUTIES OF TRUSTEE

  
	
   

  	
  SECTION 9.2.

  	
  RIGHTS OF TRUSTEE

  
	
   

  	
  SECTION 9.3.

  	
  INDIVIDUAL RIGHTS OF TRUSTEE

  



 


ii

















 


	
   

  	
  SECTION 9.4.

  	
  TRUSTEE’S DISCLAIMER

  
	
   

  	
  SECTION 9.5.

  	
  NOTICE OF DEFAULT OR EVENTS OF DEFAULT

  
	
   

  	
  SECTION 9.6.

  	
  REPORTS BY TRUSTEE TO HOLDERS

  
	
   

  	
  SECTION 9.7.

  	
  COMPENSATION AND INDEMNITY

  
	
   

  	
  SECTION 9.8.

  	
  REPLACEMENT OF TRUSTEE

  
	
   

  	
  SECTION 9.9.

  	
  SUCCESSOR TRUSTEE BY MERGER, ETC

  
	
   

  	
  SECTION 9.10.

  	
  ELIGIBILITY; DISQUALIFICATION

  
	
   

  	
  SECTION 9.11.

  	
  PREFERENTIAL COLLECTION OF CLAIMS AGAINST
  COMPANY

  
	
   

  
	
  ARTICLE 10 SATISFACTION AND DISCHARGE OF
  INDENTURE

  
	
   

  
	
   

  	
  SECTION 10.1.

  	
  SATISFACTION AND DISCHARGE OF INDENTURE

  
	
   

  	
  SECTION 10.2.

  	
  APPLICATION OF TRUST MONEY

  
	
   

  	
  SECTION 10.3.

  	
  REPAYMENT TO COMPANY

  
	
   

  	
  SECTION 10.4.

  	
  REINSTATEMENT

  
	
   

  
	
  ARTICLE 11 AMENDMENTS, SUPPLEMENTS AND
  WAIVERS

  
	
   

  
	
   

  	
  SECTION 11.1.

  	
  WITHOUT CONSENT OF HOLDERS

  
	
   

  	
  SECTION 11.2.

  	
  WITH CONSENT OF HOLDERS

  
	
   

  	
  SECTION 11.3.

  	
  COMPLIANCE WITH TRUST INDENTURE ACT

  
	
   

  	
  SECTION 11.4.

  	
  REVOCATION AND EFFECT OF CONSENTS

  
	
   

  	
  SECTION 11.5.

  	
  NOTATION ON OR EXCHANGE OF SECURITIES

  
	
   

  	
  SECTION 11.6.

  	
  TRUSTEE TO SIGN AMENDMENTS, ETC

  
	
   

  	
  SECTION 11.7.

  	
  EFFECT OF SUPPLEMENTAL INDENTURES

  
	
   

  
	
  ARTICLE 12 MISCELLANEOUS

  
	
   

  
	
   

  	
  SECTION 12.1.

  	
  TRUST INDENTURE ACT CONTROLS

  
	
   

  	
  SECTION 12.2.

  	
  NOTICES

  
	
   

  	
  SECTION 12.3.

  	
  COMMUNICATIONS BY HOLDERS WITH OTHER
  HOLDERS

  
	
   

  	
  SECTION 12.4.

  	
  CERTIFICATE AND OPINION AS TO CONDITIONS
  PRECEDENT

  
	
   

  	
  SECTION 12.5.

  	
  RECORD DATE FOR VOTE OR CONSENT OF
  SECURITYHOLDERS

  
	
   

  	
  SECTION 12.6.

  	
  RULES BY TRUSTEE, PAYING AGENT, REGISTRAR
  AND CONVERSION AGENT

  
	
   

  	
  SECTION 12.7.

  	
  LEGAL HOLIDAYS

  
	
   

  	
  SECTION 12.8.

  	
  GOVERNING LAW

  
	
   

  	
  SECTION 12.9.

  	
  NO ADVERSE INTERPRETATION OF OTHER
  AGREEMENTS

  
	
   

  	
  SECTION 12.10.

  	
  NO RECOURSE AGAINST OTHERS

  
	
   

  	
  SECTION 12.11.

  	
  SUCCESSORS

  
	
   

  	
  SECTION 12.12.

  	
  MULTIPLE COUNTERPARTS

  
	
   

  	
  SECTION 12.13.

  	
  SEPARABILITY

  
	
   

  	
  SECTION 12.14.

  	
  TABLE OF CONTENTS, HEADINGS, ETC

  



 


iii

















 


CROSS-REFERENCE
TABLE*


 


	
  TIA

  SECTION

  	
   

  	
   

  	
   

  	
  INDENTURE

  SECTION

  
	
  Section

  	
   

  	
  310(a)(1)

  	
   

  	
  9.10

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  9.10

  
	
   

  	
   

  	
  (a)(3)

  	
   

  	
  N.A.**

  
	
   

  	
   

  	
  (a)(4)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (a)(5)

  	
   

  	
  9.10

  
	
   

  	
   

  	
  (b)

  	
   

  	
  9.8; 9.10

  
	
   

  	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  Section

  	
   

  	
  311(a)

  	
   

  	
  9.11

  
	
   

  	
   

  	
  (b)

  	
   

  	
  9.11

  
	
   

  	
   

  	
  (c)

  	
   

  	
  N.A.

  
	
  Section

  	
   

  	
  312(a)

  	
   

  	
  2.5

  
	
   

  	
   

  	
  (b)

  	
   

  	
  12.3

  
	
   

  	
   

  	
  (c)

  	
   

  	
  12.3

  
	
  Section

  	
   

  	
  313(a)

  	
   

  	
  9.6

  
	
   

  	
   

  	
  (b)(1)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (b)(2)

  	
   

  	
  9.6

  
	
   

  	
   

  	
  (c)

  	
   

  	
  9.6; 12.2

  
	
   

  	
   

  	
  (d)

  	
   

  	
  9.6

  
	
  Section

  	
   

  	
  314(a)

  	
   

  	
  6.2; 6.3; 12.2

  
	
   

  	
   

  	
  (b)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (c)(1)

  	
   

  	
  12.4(a)

  
	
   

  	
   

  	
  (c)(2)

  	
   

  	
  12.4(a)

  
	
   

  	
   

  	
  (c)(3)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (d)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (e)

  	
   

  	
  12.4(b)

  
	
   

  	
   

  	
  (f)

  	
   

  	
  N.A.

  
	
  Section

  	
   

  	
  315(a)

  	
   

  	
  9.1(b)

  
	
   

  	
   

  	
  (b)

  	
   

  	
  9.5; 12.2

  
	
   

  	
   

  	
  (c)

  	
   

  	
  9.1(a)

  
	
   

  	
   

  	
  (d)

  	
   

  	
  9.1(c)

  
	
   

  	
   

  	
  (e)

  	
   

  	
  8.11

  
	
  Section

  	
   

  	
  316(a)(last sentence)

  	
   

  	
  2.9

  
	
   

  	
   

  	
  (a)(1)(A)

  	
   

  	
  8.5

  
	
   

  	
   

  	
  (a)(1)(B)

  	
   

  	
  8.4

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  N.A.

  
	
   

  	
   

  	
  (b)

  	
   

  	
  8.7

  
	
   

  	
   

  	
  (c)

  	
   

  	
  12.5

  
	
  Section

  	
   

  	
  317(a)(1)

  	
   

  	
  8.8

  
	
   

  	
   

  	
  (a)(2)

  	
   

  	
  8.9

  
	
   

  	
   

  	
  (b)

  	
   

  	
  2.4

  
	
  Section

  	
   

  	
  318(a)

  	
   

  	
  12.1

  



 












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


**  N.A. means Not Applicable.


 

















 


THIS INDENTURE dated as
of March 12, 2003 is between UTStarcom, Inc., a corporation duly organized
under the laws of the State of Delaware (the “Company”), and U.S. Bank National
Association, a national banking association organized and existing under the
laws of the United States, as Trustee (the “Trustee”).


 


In consideration of the
premises and the purchase of the Securities by the Holders thereof, both
parties agree as follows for the benefit of the other and for the equal and
ratable benefit of the registered Holders of the Company’s 7/8% Convertible
Subordinated Notes due 2008.


 


ARTICLE
1

DEFINITIONS AND INCORPORATION BY REFERENCE


 


SECTION 1.1.   DEFINITIONS.


 


“Additional Interest” has
the meaning specified in Section 5 of the Registration Rights
Agreement.  All references herein to
interest accrued or payable as of any date shall include any Additional
Interest accrued or payable as of such date as provided in the Registration
Rights Agreement.


 


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


 


“Agent” means any
Registrar, Paying Agent or Conversion Agent.


 


“Applicable Procedures”
means, with respect to any transfer or exchange of beneficial ownership
interests in a Global Security, the rules and procedures of the Depositary, in
each case to the extent applicable to such transfer or exchange.


 


“Applicable Stock” means
(i) the Common Stock or (ii) in the event of a merger, consolidation or
other similar transaction involving the Company that is otherwise permitted
hereunder in which the Company is not the surviving corporation, the common
stock, common equity interests, ordinary shares or depositary shares or other
certificates representing common equity interests of such surviving corporation
or its direct or indirect parent corporation.


 


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


 


“Business Day” means each
day that is not a Legal Holiday.


 


“Capital Stock” or
“capital stock” of any Person means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, but excluding any debt
securities convertible into such equity.


 


1

















 


“Cash” or “cash” means
such coin or currency of the United States as at any time of payment is legal
tender for the payment of public and private debts.


 


“Certificated Security”
means a Security that is in substantially the form attached hereto as Exhibit A
and that does not include the information or the schedule called for by
footnotes 1, 3 and 4 thereof.


 


“Common Stock” means the
common stock of the Company, $0.00125 par value, as it exists on the date of
this Indenture and any shares of any class or classes of capital stock of the
Company resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
the Company and which are not subject to redemption by the Company; provided,
however, that if at any time there shall be more than one such resulting
class, the shares of each such class then so issuable on conversion of
Securities shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.


 


“Company” means the party
named as such in the first paragraph of this Indenture until a successor
replaces it pursuant to the applicable provisions of this Indenture, and
thereafter “Company” shall mean such successor Company.


 


“Conversion Rate” means
the number of shares of Common Stock into which each Security is convertible,
and shall equal the quotient obtained by dividing $1,000 by the then current
Conversion Price.


 


“Corporate Trust Office”
means the principal office of the Trustee at which at any particular time its
corporate trust business shall be administered, which office at the date of the
execution of this Indenture is located at 550 S. Hope Street, Suite 500, Los
Angeles, California 90071, Attention: Corporate Trust Services (UTStarcom, Inc.
— 7/8% Convertible Subordinated Notes Due March 1, 2008) or at any other time
at such other address as the Trustee may designate from time to time by notice
to the Company.


 


“Default” or “default”
means, when used with respect to the Securities, any event which is or, after
notice or passage of time or both, would be an Event of Default.


 


“Designated Senior
Indebtedness” means any particular Senior Indebtedness of the Company in which the
instrument creating or evidencing the same or the assumption or guarantee
thereof (or any related agreements or documents to which the Company is a
party) expressly provides that such Senior Indebtedness shall be “Designated
Senior Indebtedness” for purposes of this Indenture (provided  that
such instrument, agreement or other document may place limitations and
conditions on the right of such Senior Indebtedness to exercise the rights of
Designated Senior Indebtedness). If any payment made to any holder of any
Designated Senior Indebtedness or its Representative with respect to such
Designated Senior Indebtedness is rescinded or must otherwise be returned by
such holder or Representative upon the insolvency, bankruptcy or reorganization
of the Company or otherwise, the reinstated Indebtedness of the Company arising
as a result of such rescission or return shall constitute Designated Senior
Indebtedness effective as of the date of such rescission or return.


 


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


 


“Final Maturity Date”
means March 1, 2008.


 


2

















 


“GAAP” means generally
accepted accounting principles in the United States of America as in effect as
of the date of this Indenture, including those set forth in (1) the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants, (2) the statements and
pronouncements of the Financial Accounting Standards Board, (3) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (4) the rules and regulations of the SEC
governing the inclusion of financial statements (including pro forma financial
statements) in registration statements filed under the Securities Act and
periodic reports required to be filed pursuant to Section 13 of the
Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the SEC.


 


“Global Security” means a
permanent Global Security that is in substantially the form attached hereto as Exhibit A
and that includes the information and schedule called for by footnotes 1,
3 and 4 thereof and which is deposited with the Depositary or its custodian and
registered in the name of the Depositary or its nominee.


 


“Holder” or
“Securityholder” means the person in whose name a Security is registered on the
Primary Registrar’s books.


 


“Indebtedness” means,
with respect to any Person, without duplication, (a) all indebtedness,
obligations and other liabilities (contingent or otherwise) of such Person (i)
for borrowed money (including obligations of such Person 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 (ii) evidenced by credit or
loan agreements, bonds, debentures, notes or similar instruments (whether or
not the recourse of the lender is to the whole of the assets of such Person or
to only a portion thereof) (other than any accounts payable or other accrued
current liability or obligation incurred in the ordinary course of business in
connection with the obtaining of materials or services), (b) all
reimbursement obligations and other liabilities (contingent or otherwise) of
such Person with respect to letters of credit, bank guarantees or bankers’
acceptances, (c) all obligations and liabilities (contingent or otherwise)
of such Person (i) in respect of leases of such Person required, in conformity
with GAAP, to be accounted for as capitalized lease obligations on the balance
sheet of such Person (as determined by such Person), or (ii) under any
lease or related document (including a purchase agreement, conditional sale or
other title retention agreement) in connection with the lease of real property
or improvements thereon (or any personal property included as part of any such
lease) which provides that such Person is contractually obligated to purchase
or cause a third party to purchase the leased property or pay an agreed upon
residual value of the leased property to the lessor (whether or not such lease
transaction is characterized as an operating lease or a capitalized lease in
accordance with GAAP), (d) all obligations (contingent or otherwise) of
such Person with respect to any interest rate or other swap, cap, floor or
collar agreement, hedge agreement, forward contract, or other similar
instrument or agreement or foreign currency hedge, exchange, purchase or
similar instrument or agreement; (e) all direct or indirect guaranties or
similar agreements by such Person in respect of, and obligations or liabilities
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 kinds described in clauses (a) through (d), and (f) any and
all deferrals, renewals, extensions, refinancings and refundings of, or
amendments, modifications or supplements to, any indebtedness, obligation or
liability of the kinds described in clauses (a) through (e).


 


“Indenture” means this
Indenture as amended or supplemented from time to time pursuant to the terms of
this Indenture.


 


3

















 


“Initial Purchasers”
means Banc of America Securities LLC, Credit Suisse First Boston LLC and
Merrill Lynch, Pierce, Fenner & Smith Incorporated.


 


“Officer” means the
Chairman or any Co-Chairman of the Board, any Vice Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Chief Financial
Officer, the Secretary or any Assistant Secretary of the Company.


 


“Officers’ Certificate”
means a certificate signed by two Officers; provided, however,
that for purposes of Sections 4.11 and 6.3, “Officers’ Certificate” means
a certificate signed by the principal executive officer, principal financial
officer or principal accounting officer of the Company and by one other
Officer.


 


“Opinion of Counsel”
means a written opinion from legal counsel. 
The counsel may be an employee of or counsel to the Company or the
Trustee.


 


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


 


“Principal” or
“principal” of a debt security, including the Securities, means the principal
of the security plus, when appropriate, the premium, if any, on the security.


 


“Registration Rights
Agreement” means the Registration Rights Agreement dated, as of March 12,
2003, between the Company and the Initial Purchasers.


 


“Representative” means
the (a) indenture trustee or other trustee, agent or representative for
any Senior Indebtedness or (b) with respect to any Senior Indebtedness
that does not have any such trustee, agent or other representative, (i) in
the case of such Senior Indebtedness issued pursuant to an agreement providing
for voting arrangements as among the holders or owners of such Senior
Indebtedness, any holder or owner of such Senior Indebtedness acting with the
consent of the required persons necessary to bind such holders or owners of
such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.


 


“Restricted Global
Security” means a Global Security that is a Restricted Security.


 


“Restricted Security”
means a Security required to bear the restricted legend set forth in the form
of Security set forth in Exhibit A of this Indenture.


 


“Rule 144” means
Rule 144 under the Securities Act or any successor to such Rule.


 


“Rule 144A” means
Rule 144A under the Securities Act or any successor to such Rule.


 


“SEC” means the
Securities and Exchange Commission.


 


“Securities” means the
7/8% Convertible Subordinated Notes due 2008 or any of them (each, a
“Security”), as amended or supplemented from time to time, that are issued
under this Indenture.


 


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


 


4

















 


“Securities Custodian”
means the Trustee, as custodian with respect to the Securities in global form,
or any successor thereto.


 


“Senior Indebtedness”
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 allowed as a claim in any such
proceeding) and rent payable on or in connection with, and all fees, costs,
expenses and other amounts accrued or due on or in connection with,
Indebtedness of the Company, whether secured or unsecured, absolute or
contingent, due or to become due, outstanding on the date of this Indenture or
thereafter created, incurred, assumed, guaranteed or in effect guaranteed by
the Company (including all deferrals, renewals, extensions or refundings of, or
amendments, modifications or supplements to, the foregoing), unless in the case
of any particular Indebtedness the instrument creating or evidencing the same
or the assumption or guarantee thereof expressly provides that such
Indebtedness shall not be senior in right of payment to the Securities or
expressly provides that such Indebtedness is “pari passu” or “junior” to the
Securities. Notwithstanding the foregoing, the term Senior Indebtedness shall
not include (i) any Indebtedness of the Company to any Subsidiary of the
Company (other than Indebtedness of the Company to such Subsidiary arising by
reason of guarantees by the Company of Indebtedness of such Subsidiary to a
Person that is not a Subsidiary of the Company) or (ii) the
Securities.  If any payment made to any
holder of any Senior Indebtedness or its Representative with respect to such
Senior Indebtedness is rescinded or must otherwise be returned by such holder
or Representative upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, the reinstated Indebtedness of the Company arising as a
result of such rescission or return shall constitute Senior Indebtedness
effective as of the date of such rescission or return.


 


“Significant Subsidiary”
means, in respect of any Person, a Subsidiary of such Person that would
constitute a “significant subsidiary” as such term is defined under Rule 1-02
of Regulation S-X under the Securities Act and the Exchange Act.


 


“Subsidiary” means, in
respect of any Person, any corporation, association, partnership or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers, general partners or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person;
(ii) such Person and one or more Subsidiaries of such Person; or
(iii) one or more Subsidiaries of such Person.


 


“TIA” means the Trust
Indenture Act of 1939, as amended, and the rules and regulations thereunder as
in effect on the date of this Indenture, except as provided in
Section 11.3, and except to the extent any amendment to the Trust
Indenture Act expressly provides for application of the Trust Indenture Act as
in effect on another date.


 


“Trading Day” means, with
respect to any security, each Monday, Tuesday, Wednesday, Thursday and Friday,
other than any day on which securities are not generally traded on the
principal exchange or market in which such security is traded.


 


“Trustee” means the party
named as such in the first paragraph of this Indenture until a successor
replaces it in accordance with the provisions of this Indenture, and thereafter
means the successor.


 


5

















 


“Trust Officer” means,
with respect to the Trustee, any officer assigned to the Corporate Trust Office,
and also, with respect to a particular matter, any other officer to whom such
matter is referred because of such officer’s knowledge of and familiarity with
the particular subject.


 


“Unrestricted
Certificated Security” means a Certificated Security that is not a Restricted
Security.


 


“Unrestricted Global
Security” means a Global Security that is not a Restricted Security.


 


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


 


“Voting Stock” of a
Person means all classes of Capital Stock or other interests (including
partnership interests) of such Person then outstanding and normally entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors.


 


SECTION 1.2.   OTHER DEFINITIONS.


 


	
  Term

  	
   

  	
  Defined in
  Section

  
	
   

  	
   

  	
   

  	
   

  
	
  “Agent Members”

  	
   

  	
   

  	
  2.1(b)

  
	
  “Bankruptcy Law”

  	
   

  	
   

  	
  8.1

  
	
  “Change in Control”

  	
   

  	
   

  	
  3.2(a)

  
	
  “Change in Control
  Purchase Date”

  	
   

  	
   

  	
  3.2(a)

  
	
  “Change in Control
  Purchase Notice”

  	
   

  	
   

  	
  3.2(c)

  
	
  “Change in Control
  Purchase Price”

  	
   

  	
   

  	
  3.2(a)

  
	
  “Closing Price”

  	
   

  	
   

  	
  4.6(d)

  
	
  “Company Order”

  	
   

  	
   

  	
  2.2

  
	
  “Conversion Agent”

  	
   

  	
   

  	
  2.3

  
	
  “Conversion Date”

  	
   

  	
   

  	
  4.2

  
	
  “Conversion Price”

  	
   

  	
   

  	
  4.6

  
	
  “Conversion Value”

  	
   

  	
   

  	
  4.1

  
	
  “Current Market Price”

  	
   

  	
   

  	
  4.6(d)

  
	
  “Custodian”

  	
   

  	
   

  	
  8.1

  
	
  “DTC”

  	
   

  	
   

  	
  2.1

  
	
  “Depositary”

  	
   

  	
   

  	
  2.1

  
	
  “Determination Date”

  	
   

  	
   

  	
  4.6(c)

  
	
  “Event of Default”

  	
   

  	
   

  	
  8.1

  
	
  “Expiration Date”

  	
   

  	
   

  	
  4.6(c)

  
	
  “Expiration Time”

  	
   

  	
   

  	
  4.6(c)

  
	
  “Legal Holiday”

  	
   

  	
   

  	
  12.7

  
	
  “Legend”

  	
   

  	
   

  	
  2.12

  
	
  “NNM”

  	
   

  	
   

  	
  4.6(d)

  
	
  “Paying Agent”

  	
   

  	
   

  	
  2.3

  
	
  “Payment Blockage
  Notice”

  	
   

  	
   

  	
  5.2

  
	
  “Primary Registrar”

  	
   

  	
   

  	
  2.3

  
	
  “Purchase Agreement”

  	
   

  	
   

  	
  2.1

  
	
  “Purchased Shares”

  	
   

  	
   

  	
  4.6(c)

  



 


6

















 


	
  Term

  	
   

  	
  Defined in
  Section

  
	
  “QIB”

  	
   

  	
   

  	
  2.1

  
	
  “Registrar”

  	
   

  	
   

  	
  2.3

  
	
  “Rights Plan”

  	
   

  	
   

  	
  4.6(c)

  
	
  “Trading Price”

  	
   

  	
   

  	
  4.1

  
	
  “Triggering
  Distribution”

  	
   

  	
   

  	
  4.6(c)

  
	
  “Trigger Event”

  	
   

  	
   

  	
  4.6(c)

  
	
  “Unissued Shares”

  	
   

  	
   

  	
  3.2(a)

  



 


SECTION
1.3.   TRUST INDENTURE ACT PROVISIONS.


 


Whenever this Indenture
refers to a provision of the TIA, that provision is incorporated by reference
in and made a part of this Indenture. 
The Indenture shall also include those provisions of the TIA required to
be included herein by the provisions of the Trust Indenture Reform Act of 1990.  The following TIA terms used in this
Indenture have the following meanings:


 


“indenture securities”
means the Securities;


 


“indenture security
holder” means a Securityholder;


 


“indenture to be
qualified” means this Indenture;


 


“indenture trustee” or
“institutional trustee” means the Trustee; and “obligor” on the indenture
securities means the Company or any other obligor on the Securities.


 


All other terms used in
this Indenture that are defined in the TIA, defined by TIA reference to another
statute or defined by any SEC rule and not otherwise defined herein have the
meanings assigned to them therein.


 


SECTION
1.4.   RULES OF CONSTRUCTION.


 


Unless the context
otherwise requires:


 


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


 


(B)                                                        an
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;


 


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


 


(D)                                                       provisions
apply to successive events and transactions;


 


(E)                                                         the
term “merger” includes a statutory share exchange and the term “merged” has a
correlative meaning;


 


(F)                                                         the
masculine gender includes the feminine and the neuter;


 


7

















 


(G)                                                        references
to agreements and other instruments include subsequent amendments thereto; and


 


(H)                                                       “herein,”
“hereof” and other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other subdivision.


 


ARTICLE 2

THE SECURITIES


 


SECTION 2.1.   FORM AND DATING.


 


The Securities and the
Trustee’s certificate of authentication shall be substantially in the
respective forms set forth in Exhibit A, which Exhibit is
incorporated in and made part of this Indenture. The Securities may have
notations, legends or endorsements required by law, stock exchange rule or usage.  The Company shall provide any such
notations, legends or endorsements to the Trustee in writing.  Each Security shall be dated the date of its
authentication.  The Securities are
being offered and sold by the Company pursuant to a Purchase Agreement, dated
March 7, 2003 (the “Purchase Agreement”), between the Company and the Initial
Purchasers, in transactions exempt from, or not subject to, the registration
requirements of the Securities Act.


 


(a)          Restricted Global
Securities.  All of the Securities are
initially being offered and sold to qualified institutional buyers as defined
in Rule 144A (collectively, “QIBs” or individually, each a “QIB”) in
reliance on Rule 144A under the Securities Act and shall be issued
initially in the form of one or more Restricted Global Securities, which shall
be deposited on behalf of the purchasers of the Securities represented thereby
with the Trustee, at its Corporate Trust Office, as custodian for the
depositary, The Depository Trust Company (“DTC”) (such depositary, or any
successor thereto, being hereinafter referred to as the “Depositary”), and
registered in the name of its nominee, Cede & Co., duly executed by
the Company and authenticated by the Trustee as hereinafter provided.  The aggregate principal amount of the
Restricted Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Securities Custodian as hereinafter
provided, subject in each case to compliance with the Applicable Procedures.


 


(b)         Global Securities In
General.  Each Global Security shall
represent such of the outstanding Securities as shall be specified therein and
each shall provide that it shall represent the aggregate amount of outstanding
Securities from time to time endorsed thereon and that the aggregate amount of
outstanding Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges, purchases or conversions of
such Securities.   Any adjustment of the
aggregate principal amount of a Global Security to reflect the amount of any
increase or decrease in the amount of outstanding Securities represented
thereby shall be made by the Trustee in accordance with instructions given by
the Holder thereof as required by Section 2.12 hereof and shall be made on the
records of the Trustee and the Depositary.


 


Members of, or
participants in, the Depositary (“Agent Members”) shall have no rights under
this Indenture with respect to any Global Security held on their behalf by the
Depositary or under the Global Security, and the Depositary (including, for
this purpose, its nominee) may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner and Holder of such
Global Security for all purposes whatsoever. 
Notwithstanding the foregoing, nothing herein shall (A) prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or (B) impair, as between the


 


8

















 


Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a Holder of any Security.


 


(c)          Book Entry Provisions.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.1(c), authenticate and deliver initially one or more Global
Securities that (i) shall be registered in the name of the Depositary,
(ii) shall be delivered by the Trustee to the Depositary or pursuant to the
Depositary’s instructions and (iii) shall bear legends substantially to
the following effect:


 


“UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO UTSTARCOM, INC. (THE
“COMPANY”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.  THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE
THEREOF.  THIS SECURITY IS EXCHANGEABLE
FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR
ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND,
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY.”


 


SECTION
2.2.   EXECUTION AND AUTHENTICATION.


 


An Officer shall sign the
Securities for the Company by manual or facsimile signature attested by the
manual or facsimile signature of the Secretary or an Assistant Secretary of the
Company.  Typographic and other minor
errors or defects in any such facsimile signature shall not affect the validity
or enforceability of any Security which has been authenticated and delivered by
the Trustee.


 


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


 


A Security shall not be
valid until an authorized signatory of the Trustee manually signs the
certificate of authentication on the Security. 
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.


 


The Trustee shall
authenticate and make available for delivery Securities for original issue in
the aggregate principal amount of up to $402,500,000 upon receipt of a written
order or orders of the Company signed by two Officers of the Company (a
“Company Order”).  The Company Order
shall specify the amount of Securities to be authenticated, shall provide that
all such Securities will be represented by a Restricted Global Security and the
date on which each original issue of Securities is to be authenticated.  The aggregate


 


9

















 


principal amount of
Securities outstanding at any time may not exceed $402,500,000 except as provided
in Section 2.7.


 


The Trustee shall act as
the initial authenticating agent. 
Thereafter, the Trustee may appoint an authenticating agent acceptable
to the Company to authenticate Securities. 
An authenticating agent may authenticate Securities whenever the Trustee
may do so.  Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent.  An authenticating agent shall
have the same rights as an Agent to deal with the Company or an Affiliate of
the Company.


 


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


 


SECTION 2.3.   REGISTRAR,
PAYING AGENT AND CONVERSION AGENT.


 


The Company shall
maintain one or more offices or agencies where Securities may be presented for
registration of transfer or for exchange (each, a “Registrar”), one or more
offices or agencies where Securities may be presented for payment (each, a
“Paying Agent”), one or more offices or agencies where Securities may be
presented for conversion (each, a “Conversion Agent”) and one or more offices
or agencies where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. 
The Company will at all times maintain a Paying Agent, Conversion Agent,
Registrar and an office or agency where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served in the
Borough of Manhattan, The City of New York. One of the Registrars (the “Primary
Registrar”) shall keep a register of the Securities and of their transfer and
exchange.


 


The Company shall enter
into an appropriate agency agreement with any Agent not a party to this
Indenture.  The agreement shall
implement the provisions of this Indenture that relate to such Agent.  The Company shall notify the Trustee of the
name and address of any Agent not a party to this Indenture.  If the Company fails to maintain a
Registrar, Paying Agent, Conversion Agent or agent for service of notices and
demands in any place required by this Indenture, or fails to give the foregoing
notice, the Trustee shall act as such. 
The Company or any Affiliate of the Company may act as Paying Agent
(except for the purposes of Section 6.1 and Article 10).


 


The Company hereby
initially designates the Trustee as Paying Agent, Registrar, Custodian and
Conversion Agent, and each of the Corporate Trust Office of the Trustee and the
office or agency of the Trustee in the Borough of Manhattan, The City of New
York (which shall initially be the office of the Trustee located at 100 Wall
Street, Suite 1600, New York, New York 10005, Attention: Corporate Trust
Services (UTStarcom, Inc. —  7/8%
Convertible Subordinated Notes due 2008)), one such office or agency of the
Company for each of the aforesaid purposes.


 


SECTION
2.4.   PAYING AGENT TO HOLD MONEY IN
TRUST.


 


Prior to 11:00 a.m., New
York City time, on each due date of the principal of or interest, if any, on
any Securities, the Company shall deposit with a Paying Agent a sum sufficient
to pay such principal or interest, if any, so becoming due.  Subject to Section 5.2, a Paying Agent
shall hold in trust for the benefit of Securityholders or the Trustee all money
held by the Paying Agent for the payment of principal of or interest, if any,
on the Securities, and shall notify the Trustee of any default by the Company
(or any other obligor on the Securities) in making any such payment.  If the Company or an Affiliate of the
Company acts as Paying Agent, it shall, before 11:00 a.m., New York City time,
on each due date of the principal of or interest on any


 


10

















 


Securities, segregate the
money and hold it as a separate trust fund. 
The Company at any time may require a Paying Agent to pay all money held
by it to the Trustee, and the Trustee may at any time during the continuance of
any default, upon written request to a Paying Agent, require such Paying Agent
to pay forthwith to the Trustee all sums so held in trust by such Paying
Agent.  Upon doing so, the Paying Agent
(other than the Company) shall have no further liability for the money.


 


SECTION
2.5.   SECURITYHOLDER LISTS.


 


The Trustee shall
preserve in as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Securityholders.  If the Trustee is not the Primary Registrar,
the Company shall furnish to the Trustee on or before each semiannual 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 Securityholders.


 


SECTION
2.6.   TRANSFER AND EXCHANGE.


 


(a)          Subject to compliance
with any applicable additional requirements contained in Section 2.12,
when a Security is presented to a Registrar with a request to register a
transfer thereof or to exchange such Security for an equal principal amount of
Securities of other authorized denominations (if any), the Registrar shall register
the transfer or make the exchange as requested; provided, however,
that every Security presented or surrendered for registration of transfer or
exchange shall be duly endorsed or accompanied by an assignment form and, if
applicable, a transfer certificate each in the form included in Exhibit A,
and in form satisfactory to the Registrar duly executed by the Holder thereof
or its attorney duly authorized in writing. 
To permit registration of transfers and exchanges, upon surrender of any
Security for registration of transfer or exchange at an office or agency
maintained pursuant to Section 2.3, the Company shall execute and the
Trustee shall authenticate Securities of a like aggregate principal amount at
the Registrar’s request.  Any exchange
or transfer shall be without charge, except that the Company or the Registrar
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto, and provided, that
this sentence shall not apply to any exchange pursuant to Section 2.10,
2.12(a), 3.5, 4.2 (last paragraph) or 11.5.


 


Neither the Company, any
Registrar nor the Trustee shall be required to exchange or register a transfer
of any Securities or portions thereof in respect of which a Change in Control Purchase
Notice has been delivered and not withdrawn by the Holder thereof (except, in
the case of the purchase of a Security in part, the portion thereof not to be
purchased).


 


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


 


(b)         Any Registrar appointed
pursuant to Section 2.3 hereof shall provide to the Trustee such
information as the Trustee may reasonably require in connection with the
delivery by such Registrar of Securities upon transfer or exchange of
Securities.


 


(c)          The Trustee shall have
no obligation or duty to monitor, determine or inquire as to compliance with
any restrictions on transfer imposed under this Indenture or under applicable
law with respect to any transfer of any interest in any Security (including any
transfers between or among Agent Members or other beneficial owners of
interests in any Global Security) other than to require delivery of such
certificates and


 


11

















 


other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by the terms of, this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.


 


SECTION
2.7.   REPLACEMENT SECURITIES.


 


If any mutilated Security
is surrendered to the Company, a Registrar or the Trustee, or the Company, a
Registrar and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company, the applicable Registrar and the Trustee such security or indemnity as
will be required by them to save each of them harmless, then, in the absence of
notice to the Company, such Registrar or the Trustee that such Security has
been acquired by a bona fide purchaser, the Company shall execute, and upon its
written request the Trustee shall authenticate and deliver, in exchange for any
such mutilated Security or in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount, bearing a number
not contemporaneously outstanding.


 


In case any such
mutilated, destroyed, lost or stolen Security has become or is about to become
due and payable, or is about to be purchased by the Company pursuant to
Article 3, the Company in its discretion may, instead of issuing a new
Security, pay or purchase such Security, as the case may be.


 


Upon the issuance of any
new Securities under this Section 2.7, 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 reasonable expenses (including the
reasonable fees and expenses of the Trustee or the Registrar) in connection
therewith.


 


Every new Security issued
pursuant to this Section 2.7 in lieu of any mutilated, destroyed, lost or
stolen Security shall constitute an original additional contractual obligation
of the Company, whether or not the mutilated, destroyed, lost or stolen
Security shall be at any time enforceable by anyone, and shall be entitled to
all benefits of this Indenture equally and proportionately with any and all other
Securities duly issued hereunder.


 


The provisions of this
Section 2.7 are (to the extent lawful) exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.


 


SECTION
2.8.   OUTSTANDING SECURITIES.


 


Securities outstanding at
any time are all Securities authenticated by the Trustee, except for those
canceled by it, those converted pursuant to Article IV, those delivered to it
for cancellation or surrendered for transfer or exchange and those described in
this Section 2.8 as not outstanding.


 


If a Security is replaced
pursuant to Section 2.7, it ceases to be outstanding unless the Company
receives proof satisfactory to it that the replaced Security is held by a bona
fide purchaser.


 


If a Paying Agent (other
than the Company or an Affiliate of the Company) holds on a Change in Control
Purchase Date or the Final Maturity Date money sufficient to pay the principal
of (including premium, if any) and accrued interest on Securities (or portions
thereof) in respect of which a Change in Control Purchase Notice has been
delivered and not withdrawn payable on that date, then on and after such Change
in Control Purchase Date or the final Maturity Date, as the case may be, such
Securities (or portions thereof, as the case may be) shall cease to be
outstanding and interest on them shall cease to accrue.


 


12

















 


Subject to the
restrictions contained in Section 2.9, a Security does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Security.


 


SECTION
2.9.   TREASURY SECURITIES.


 


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


 


SECTION
2.10.   TEMPORARY SECURITIES.


 


Until definitive
Securities are ready for delivery, the Company may prepare and execute, and,
upon receipt of a Company Order, the Trustee shall authenticate and deliver,
temporary Securities.  Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company with the consent of the Trustee considers
appropriate for temporary Securities. 
Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate and deliver definitive Securities in exchange for temporary
Securities.


 


SECTION 2.11.   CANCELLATION.


 


The Company at any time
may deliver Securities to the Trustee for cancellation.  The Registrar, the Paying Agent and the
Conversion Agent shall forward to the Trustee or its agent any Securities
surrendered to them for transfer, exchange, payment or conversion.  The Trustee and no one else shall cancel, in
accordance with its standard procedures, all Securities surrendered for
transfer, exchange, payment, conversion or cancellation and shall deliver the
canceled Securities to the Company.  All
Securities which are purchased or otherwise acquired by the Company or any of
its Subsidiaries prior to the Final Maturity Date shall be delivered to the
Trustee for cancellation, and the Company may not hold or resell such
Securities or issue any new Securities to replace any such Securities or any
Securities that any Holder has converted pursuant to Article 4.


 


SECTION
2.12.   LEGEND; ADDITIONAL TRANSFER AND
EXCHANGE REQUIREMENTS.


 


(a)          If Securities are issued
upon the transfer, exchange or replacement of Securities subject to
restrictions on transfer and bearing the legends set forth on the forms of
Securities attached hereto as Exhibit A (collectively, the
“Legend”), or if a request is made to remove the Legend on a Security, the
Securities so issued shall bear the Legend, or the Legend shall not be removed,
as the case may be, unless there is delivered to the Company and the Registrar
such satisfactory evidence, which shall include an opinion of counsel if
requested by the Company or such Registrar, as may be reasonably required by
the Company and the Registrar, that neither the Legend nor the restrictions on
transfer set forth therein are required to ensure that transfers thereof comply
with the provisions of Rule 144A or Rule 144 under the Securities Act or that
such Securities are not “restricted” within the meaning of Rule 144 under the
Securities Act; provided


 


13

















 


that no
such evidence need be supplied in connection with the sale of such Security
pursuant to a registration statement that is effective at the time of such
sale.  Upon (i) provision of such
satisfactory evidence if requested, or (ii) notification by the Company to
the Trustee and Registrar of the sale of such Security pursuant to a
registration statement that is effective at the time of such sale, the Trustee,
at the written direction of the Company, shall authenticate and deliver a
Security that does not bear the Legend. If the Legend is removed from the face
of a Security and the Security is subsequently held by an Affiliate of the
Company, the Legend shall be reinstated.


 


(b)         A Global Security may not
be transferred, in whole or in part, to any Person other than the Depositary or
a nominee or any successor thereof, and no such transfer to any such other
Person may be registered; provided  that the foregoing shall not
prohibit any transfer of a Security that is issued in exchange for a Global
Security but is not itself a Global Security. No transfer of a Security to any
Person shall be effective under this Indenture or the Securities unless and
until such Security has been registered in the name of such Person. Notwithstanding
any other provisions of this Indenture or the Securities, transfers of a Global
Security, in whole or in part, shall be made only in accordance with this
Section 2.12.


 


(c)          Subject to the
succeeding paragraph, every Security shall be subject to the restrictions on
transfer provided in the Legend other than a Restricted Global Security.  Whenever any Restricted Security other than
a Restricted Global Security is presented or surrendered for registration of
transfer or for exchange for a Security registered in a name other than that of
the Holder, such Security must be accompanied by a certificate in substantially
the form set forth in Exhibit B, dated the date of such surrender and
signed by the Holder of such Security, as to compliance with such restrictions
on transfer. The Registrar shall not be required to accept for such
registration of transfer or exchange any Security not so accompanied by a
properly completed certificate.


 


(d)         The restrictions imposed
by the Legend upon the transferability of any Security shall cease and
terminate when such Security has been sold pursuant to an effective
registration statement under the Securities Act or transferred in compliance
with Rule 144 under the Securities Act (or any successor provision thereto) or,
if earlier, upon the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Security for exchange to the Registrar in accordance with the
provisions of this Section 2.12 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144 or any successor provision, by, if requested by the Company or
the Registrar, an opinion of counsel in form reasonably acceptable to the
Company and addressed to the Company, to the effect that the transfer of such
Security has been made in compliance with Rule 144 or such successor
provision), be exchanged for a new Security, of like tenor and aggregate
principal amount, which shall not bear the restrictive Legend. The Company
shall inform the Trustee of the effective date of any registration statement
registering the Securities under the Securities Act. The Trustee shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the aforementioned opinion of counsel or registration
statement.


 


(e)          As used in the preceding
two paragraphs of this Section 2.12, the term “transfer” encompasses any sale,
pledge, transfer, hypothecation or other disposition of any Security.


 


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


 


14

















 


(i)                                     Notwithstanding
any other provisions of this Indenture or the Securities, a Global Security
shall not be exchanged in whole or in part for a Security registered in the
name of any Person other than the Depositary or one or more nominees thereof, provided
that a Global Security may be exchanged for Securities registered in the
names of any person designated by the Depositary in the event that (A) the
Depositary has notified the Company that it is unwilling or unable to continue
as Depositary for such Global Security or such Depositary has ceased to be a
“clearing agency” registered under the Exchange Act, and a successor Depositary
is not appointed by the Company within 90 days, (B) the Company has
provided the Depositary with written notice that it has decided to discontinue
use of the system of book-entry transfer through the Depositary or any
successor Depositary or (C) an Event of Default has occurred and is
continuing with respect to the Securities. Any Global Security exchanged
pursuant to clauses (A) or (B) above shall be so exchanged in whole and not in
part, and any Global Security exchanged pursuant to clause (C) above may
be exchanged in whole or from time to time in part as directed by the
Depositary. Any Security issued in exchange for a Global Security or any
portion thereof shall be a Global Security; provided that any such Security so
issued that is registered in the name of a Person other than the Depositary or
a nominee thereof shall not be a Global Security.


 


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


 


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


 


(iv)                              In
the event of the occurrence of any of the events specified in clause (i)
above, the Company will promptly make available to the Trustee a reasonable
supply of Certificated Securities in definitive, fully registered form, without
interest coupons.


 


(v)                                 Neither
Agent Members nor any other Persons on whose behalf Agent Members may act shall
have any rights under this Indenture with respect to any Global Security
registered in the name of the Depositary or any nominee thereof, or under any
such Global Security, and the Depositary or such nominee, as the case may be,
may be treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner and holder of such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the


 


15

















 


Company or the Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or such nominee, as the case may be, or impair, as
between the Depositary, its Agent Members and any other person on whose behalf
an Agent Member may act, the operation of customary practices of such Persons
governing the exercise of the rights of a holder of any Security.


 


SECTION 2.13.   CUSIP NUMBERS.


 


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


 


ARTICLE
3

REDEMPTION AND PURCHASES


 


SECTION
3.1.   NO REDEMPTION BY THE COMPANY.


 


The Securities may not be
redeemed by the Company prior to the Final Maturity Date.


 


SECTION
3.2.   PURCHASE OF SECURITIES AT OPTION
OF THE HOLDER UPON CHANGE IN CONTROL.


 


If at any time that
Securities remain outstanding there shall occur a Change in Control, Securities
shall be purchased by the Company at the option of the Holders, in whole or in
part, as of the date that is 30 Business Days after the occurrence of the
Change in Control (the “Change in Control Purchase Date”) at a purchase price
equal to 100% of the principal amount of the Securities, together with accrued
and unpaid interest to, but excluding, the Change in Control Purchase Date (the
“Change in Control Purchase Price”), subject to satisfaction by or on behalf of
any Holder of the requirements set forth in subsection (c) of this Section
3.2.


 


The Company may elect to
pay the Change in Control Purchase Price by delivering shares of Applicable
Stock in lieu of cash if and only if the following conditions are satisfied:


 


(1)          the shares of Applicable
Stock deliverable in payment of the Change in Control Purchase Price shall have
a fair market value as of the Change in Control Purchase Date of not less than
the Change in Control Purchase Price. For purposes of this Section 3.2, the
fair market value of shares of Applicable Stock shall be determined by the
Company and shall be equal to 97% of the average of the closing sale price of
shares of the Applicable Stock for the five consecutive Trading Days immediately
preceding the second Trading Day prior to the Change in Control Purchase Date;


 


16

















 


(2)          the Change in Control
Purchase Price shall be paid only in cash in the event any shares of Applicable
Stock to be issued upon repurchase of Securities hereunder (i) require
registration under any federal securities law before such shares may be freely
transferable without being subject to any transfer restrictions under the
Securities Act upon repurchase and if such registration is not completed or
does not become effective prior to the Change in Control Purchase Date, and/or
(ii) require registration with or approval of any governmental authority under
any state law or any other federal law before such shares may be validly issued
or delivered upon repurchase and if such registration is not completed or does
not become effective or such approval is not obtained prior to the Change in
Control Purchase Date;


 


(3)          payment of the Change in
Control Purchase Price may not be made in Applicable Stock unless such stock
is, or shall have been listed on a national securities exchange or approved for
quotation on the Nasdaq National Market, in either case, prior to the Change in
Control Purchase Date; and


 


(4)          all shares of Applicable
Stock that may be issued upon repurchase of Securities will be issued out of
the Company’s authorized but unissued Common Stock or, in the event of a
merger, consolidation, or other similar transaction involving the Company that
is otherwise permitted under the terms of this Indenture in which the Company
is not the surviving corporation, out of the authorized but unissued common
stock, common equity interests, ordinary shares or depositary shares of the
surviving corporation or its direct or indirect parent corporation and, will
upon issue, be duly and validly issued and fully paid and non-assessable and
free of any preemptive or similar rights.


 


If conditions (1) through
(4) above are not satisfied in accordance with the terms thereof, the Change in
Control Purchase Price shall be paid by the Company only in cash.


 


A “Change in Control”
shall be deemed to have occurred if any of the following occurs after the date
hereof:


 


(1)          any “person” (as such
term is defined below) is or becomes the “beneficial owner” (as defined below),
directly or indirectly, through a purchase, merger or other acquisition
transaction or series of transactions, of shares of Voting Stock of the Company
entitling the person to exercise 50% or more of the total voting power of all
outstanding classes of Voting Stock of the Company, other than an acquisition
by the Company, any of its Subsidiaries or any of its employee benefit plans;
or


 


(2)          the Company merges or
consolidates with or into any Person, any Person consolidates with or merges
with or into the Company, or the Company conveys, sells, transfers or leases
all or substantially all of the assets of the Company to another Person other
than to one or more of the Company’s wholly-owned subsidiaries, other than
pursuant to a transaction in which the Persons that “beneficially owned” (as
defined below), directly or indirectly, shares of Voting Stock of the Company
immediately prior to such transaction have the entitlement to exercise,
directly or indirectly, shares of Voting Stock of the Company representing 50%
or more of the total voting power of all outstanding classes of Voting Stock
entitled to vote generally in the election of directors of the continuing or
surviving Person immediately after such transaction.


 


For the purpose of the
definition of “Change in Control,” (i) “person” has the meaning given such
term under Section 13(d) of the Exchange Act or any successor provision to
such provision and includes any syndicate or group which would be deemed to be
a “person” under Section 13(d)(3) of the Exchange Act, and (ii) a
“beneficial owner” shall be determined in accordance with Rule 13d-3 under
the Exchange Act, as in effect on the date of this Indenture, except that the
number of shares of Voting Stock of the Company shall be


 


17

















 


deemed to include, in
addition to all outstanding shares of Voting Stock of the Company and Unissued
Shares deemed to be held by the “person” (as such term is defined above) or
other Person with respect to which the Change in Control determination is being
made, all Unissued Shares deemed to be held by all other Persons.  The term “Unissued Shares” means shares of
Voting Stock not outstanding that are subject to options, warrants, rights to
purchase or conversion privileges exercisable within 60 days of the date of
determination of a Change in Control.


 


Notwithstanding anything
to the contrary set forth in this Section 3.2, a Change in Control will not be
deemed to have occurred if either:


 


(1)          the Closing Price
(determined in accordance with Section 4.6(d) of this Indenture) of the
Common Stock for any five Trading Days within (i) the period of ten consecutive
Trading Days ending immediately after the later of the Change in Control or the
public announcement of the Change in Control, in the case of a Change in
Control relating to an acquisition of Capital Stock, or (ii) the period of ten
consecutive Trading Days ending immediately before the Change in Control, in
the case of a Change in Control relating to a merger, consolidation or asset
sale, equals or exceeds 105% of the Conversion Price in effect on each of those
Trading Days; or


 


(2)          all of the
consideration, excluding cash payments for fractional shares and cash payments
made pursuant to dissenters’ appraisal rights, in a merger or consolidation
otherwise constituting a Change of Control consists of shares of common stock,
depository receipts or other certificates representing common equity interests
traded on a national securities exchange or quoted on the NNM, or will be so
traded or quoted immediately following such merger or consolidation, and as a
result of such merger or consolidation the Securities become convertible solely
into such common stock, depositary shares or other certificates representing
common equity interests.


 


(b)         Within 10 Business Days
after the occurrence of a Change in Control, the Company shall mail a written
notice of the Change in Control to the Trustee and to each Holder (and to
beneficial owners as required by applicable law).  The notice shall include the form of a Change in Control Purchase
Notice to be completed by the Holder and shall state:


 


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


 


(2)          the date by which the
Change in Control Purchase Notice pursuant to this Section 3.2 must be given;


 


(3)          the Change in Control
Purchase Date;


 


(4)          the Change in Control
Purchase Price, and whether the Change in Control Purchase Price shall be paid
by the Company in cash or by delivery of shares of Applicable Stock;


 


(5)          the Holder’s right to
require the Company to purchase the Securities;


 


(6)          briefly, the conversion
rights of the Securities;


 


(7)          the name and address of
each Paying Agent and Conversion Agent;


 


(8)          the Conversion Price and
any adjustments thereto;


 


18

















 


(9)          that Securities as to
which a Change in Control Purchase Notice has been given may be converted into
Common Stock pursuant to Article 4 of this Indenture only to the extent that
the Change in Control Purchase Notice has been withdrawn in accordance with the
terms of this Indenture;


 


(10)    the procedures that the Holder
must follow to exercise rights under this Section 3.2;


 


(11)    the procedures for withdrawing
a Change in Control Purchase Notice, including a form of notice of withdrawal;
and


 


(12)    that the Holder must satisfy
the requirements set forth in the Securities in order to convert the
Securities.


 


If any of the Securities
is in the form of a Global Security, then the Company shall modify such notice
to the extent necessary to accord with the procedures of the Depositary
applicable to the repurchase of Global Securities.


 


(c)          A Holder may exercise
its rights specified in subsection (a) of this Section 3.2 upon delivery
of a written notice (which shall be in substantially the form included in Exhibit
A hereto and which may be delivered by letter, overnight courier, hand
delivery, facsimile transmission or in any other written form and, in the case
of Global Securities, may be delivered electronically or by other means in
accordance with the Depositary’s customary procedures) of the exercise of such
rights (a “Change in Control Purchase Notice”) to any Paying Agent at any time
prior to the close of business on the second Business Day next preceding the
Change in Control Purchase Date.


 


The delivery of such
Security to any Paying Agent (together with all necessary endorsements) at the
office of such Paying Agent shall be a condition to the receipt by the Holder
of the Change in Control Purchase Price therefor.


 


The Company shall
purchase from the Holder thereof, pursuant to this Section 3.2, a portion of a
Security if the principal amount of such portion is $1,000 or an integral
multiple of $1,000.  Provisions of the
Indenture that apply to the purchase of all of a Security pursuant to Sections
3.2 through 3.7 also apply to the purchase of such portion of such Security.


 


Notwithstanding anything
herein to the contrary, any Holder delivering to a Paying Agent the Change in
Control Purchase Notice contemplated by this subsection (c) shall have the
right to withdraw such Change in Control Purchase Notice in whole or in a
portion thereof that is a principal amount of $1,000 or in an integral multiple
thereof at any time prior to the close of business on the second Business Day
next preceding the Change in Control Purchase Date by delivery of a written
notice of withdrawal to the Paying Agent in accordance with Section 3.3.


 


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


 


Anything herein to the
contrary notwithstanding, in the case of Global Securities, any Change in
Control Purchase Notice may be delivered or withdrawn and such Securities may
be surrendered or delivered for purchase in accordance with the Applicable
Procedures as in effect from time to time.


 


19

















 


SECTION
3.3.   EFFECT OF CHANGE IN CONTROL
PURCHASE NOTICE.


 


Upon receipt by any
Paying Agent of the Change in Control Purchase Notice specified in Section
3.2(c), the Holder of the Security in respect of which such Change in Control
Purchase Notice was given shall (unless such Change in Control Purchase Notice
is withdrawn as specified below) thereafter be entitled to receive the Change
in Control Purchase Price with respect to such Security.  Such Change in Control Purchase Price shall
be paid to such Holder promptly following the later of (a) the Change in
Control Purchase Date with respect to such Security (provided the
conditions in Section 3.2(c) have been satisfied) and (b) the time of
delivery of such Security to a Paying Agent by the Holder thereof in the manner
required by Section 3.2(c). 
Securities in respect of which a Change in Control Purchase Notice has
been given by the Holder thereof may not be converted into shares of Common
Stock pursuant to Article 4 on or after the date of the delivery of such Change
in Control Purchase Notice unless such Change in Control Purchase Notice has
first been validly withdrawn.


 


A Change in Control
Purchase Notice may be withdrawn by means of a written notice (which may be
delivered by mail, overnight courier, hand delivery, facsimile transmission or
in any other written form and, in the case of Global Securities, may be
delivered electronically or by other means in accordance with the Depositary’s
customary procedures) of withdrawal delivered by the Holder to a Paying Agent
at any time prior to the close of business on the second Business Day
immediately preceding the Change in Control Purchase Date, specifying the
principal amount of the Security or portion thereof (which must be a principal
amount of $1,000 or an integral multiple of $1,000 in excess thereof) with
respect to which such notice of withdrawal is being submitted.


 


SECTION
3.4.   DEPOSIT OF CHANGE IN CONTROL
PURCHASE PRICE.


 


On or before 11:00 a.m.
New York City time on the Change in Control Purchase Date, the Company shall
deposit with the Trustee or with a Paying Agent (other than the Company or an
Affiliate of the Company) an amount of money (in immediately available funds if
deposited on such Change in Control Purchase Date) sufficient to pay the
aggregate Change in Control Purchase Price of all the Securities or portions
thereof that are to be purchased as of such Change in Control Purchase
Date.  The manner in which the deposit
required by this Section 3.4 is made by the Company shall be at the option of
the Company, provided  that such deposit shall be made in a manner
such that the Trustee or a Paying Agent shall have immediately available funds
on the Change in Control Purchase Date.


 


If a Paying Agent holds,
in accordance with the terms hereof, money sufficient to pay the Change in
Control Purchase Price of any Security for which a Change in Control Purchase
Notice has been tendered and not withdrawn in accordance with this Indenture
then, on the Change in Control Purchase Date, such Security will cease to be
outstanding and the rights of the Holder in respect thereof shall terminate
(other than the right to receive the Change in Control Purchase Price as
aforesaid).  The Company shall publicly
announce the principal amount of Securities purchased as a result of such
Change in Control on or as soon as practicable after the Change in Control
Purchase Date.


 


SECTION
3.5.   SECURITIES PURCHASED IN PART.


 


Any Security that is to
be purchased only in part shall be surrendered at the office of a Paying Agent,
and promptly after the Change in Control Purchase Date the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge, a new Security or Securities, of such
authorized denomination or denominations as may be requested by such Holder, in
aggregate


 


20

















 


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


 


SECTION
3.6.   COMPLIANCE WITH SECURITIES LAWS
UPON PURCHASE OF SECURITIES.


 


In connection with any
offer to purchase or purchase of Securities under Section 3.2, the Company
shall (a) comply with Rule 13e-4 and Rule 14e-1 (or any successor to
either such Rule), if applicable, under the Exchange Act, (b) file the
related Schedule TO (or any successor or similar schedule, form or report) if
required under the Exchange Act, and (c) otherwise comply with all federal
and state securities laws in connection with such offer to purchase or purchase
of Securities, all so as to permit the rights of the Holders and obligations of
the Company under Sections 3.2 through 3.5 to be exercised in the time and in
the manner specified therein.


 


SECTION
3.7.   REPAYMENT TO THE COMPANY.


 


To the extent that the
aggregate amount of cash deposited by the Company pursuant to Section 3.4
exceeds the aggregate Change in Control Purchase Price together with interest,
if any, thereon of the Securities or portions thereof that the Company is
obligated to purchase, then promptly after the Change in Control Purchase Date
the Trustee or a Paying Agent, as the case may be, shall return any such excess
cash to the Company.


 


ARTICLE 4

CONVERSION


 


SECTION
4.1.   CONVERSION PRIVILEGE.


 


Subject to the further
provisions of this Article 4 and paragraph 7 of the Securities, a Holder of a
Security may convert the principal amount of such Security (or any portion
thereof equal to $1,000 or any integral multiple of $1,000 in excess thereof)
into Common Stock at any time prior to the close of business on the Final
Maturity Date, at the Conversion Price then in effect, if:


 


(a)          as of the last day of
the immediately preceding fiscal quarter, the Closing Price (determined in
accordance with Section 4.6(d) of this Indenture) of the Common Stock for the
last Trading Day of such fiscal quarter was 110% or more of the then current
Conversion Price on the Securities;


 


(b)         during the period
beginning January 1, 2008 through the Final Maturity Date, the Closing Price of
the Common Stock on the immediately preceding Trading Day was 110% of more of
the then current Conversion Price on the Security;


 


(c)          the Company distributes
to Holders of Common Stock rights entitling them to purchase Common Stock at
less than the Closing Price of the Common Stock on the last Trading Day
preceding the declaration for such distribution;


 


(d)         the Company distributes
to Holders of Common Stock assets, debt, securities or certain rights to
purchase the Company’s securities, which distribution has a per share value as
determined by the Board of Directors exceeding 10% of the Closing Price of the
Common Stock for the last Trading Day preceding the declaration for such
distribution; or


 


21

















 


(e)          the Company becomes a
party to a consolidation, merger or sale of all or substantially all of the
Company’s assets or a Change in Control occurs pursuant to which the Common
Stock would be converted into cash, stock or other property unless all of the
consideration, excluding cash payments for fractional shares and cash payments
made pursuant to dissenters’ appraisal rights, in a merger or consolidation
otherwise constituting a Change of Control consists of shares of common stock,
depositary receipts or other certificates representing common equity interests
traded on a national securities exchange or quoted on the NNM, or will be so
traded immediately following such merger or consolidation, and as a result of
such merger or consolidation the Securities become convertible solely into such
common stock, depositary shares or other securities representing common equity
interests.


 


In the case of Sections
4.1(c) and 4.1(d) above, the Company must notify Holders at least 20 days prior
to the ex-dividend date for such distribution. 
Once the Company has given such notice, Holders may surrender their
Securities for conversion at any time until the earlier of the close of
business on the Business Day prior to the ex-dividend date or our announcement
that such distribution will not take place.


 


A Holder of a Security
may also convert the principal amount of such Security (or any portion thereof
equal to $1,000 or any integral multiple of $1,000 in excess thereof) into
Common Stock:


 


(a)                                  at
any time prior to March 1, 2006 after any five (5) consecutive Trading Day
period in which the average Trading Prices for the Securities for that five (5)
Trading Day period was less than 103% of the average Conversion Value for the
Securities during that period; and


 


(b)                                 at
any time on or after March 1, 2006 and prior to maturity after any five
(5) consecutive Trading Day period in which the average Trading Prices for the
Securities for that five (5) Trading Day period was less than 97% of the
average Conversion Value for the Securities during that period, however, a
Holder may not convert a Security on or after March 1, 2006 pursuant to this
clause if, at the time of the calculation, the Closing Price of shares of
Common Stock is between the then current Conversion Price on the Securities and
110% of the then current Conversion Price of the Securities.


 


The “Conversion Value”
for the Securities is equal to the product of (i) the Closing Price of the
Common Stock on a given day and (ii) the then current Conversion Rate.


 


The “Trading Price” of
the Securities on any Trading Day means the average of the secondary market bid
quotations per Security obtained by the Conversion Agent for $2,500,000
principal amount of the Securities at approximately 3:30 p.m., New York City
time, on such Trading Day from three independent nationally recognized
securities dealers the Company selects, provided  that if at least
three such bids cannot reasonably be obtained by the Conversion Agent, but two
such bids can be obtained, then the average of the two bids shall be used, and
if only one such bid can reasonably be obtained by the Conversion Agent, this
one bid shall be used.  If the
Conversion Agent cannot reasonably obtain at least one bid for $2,500,000
principal amount of the Securities from a nationally recognized securities
dealer or in the Company’s reasonable judgment, the bid quotations are not
indicative of the secondary market value of the Securities, then the trading
price of the Securities will be deemed to be less than 97% of the Conversion
Value for the Securities on such Trading Day. 
The Conversion Agent shall have no obligation to determine the trading
price of the Securities unless the Company has requested such determination;
and the Company shall have no obligation to make such request unless the
Holders provide the Company with reasonable evidence that the trading price of
the Securities would be less than 97% of the product of the Closing Price of
the Common Stock and the number of shares issuable upon conversion of $1,000
principal amount of the Securities; at which time, the Company shall instruct
the Conversion Agent to determine the trading price of the Securities beginning
on the


 


22

















 


next Trading Day and on
each successive Trading Day until the trading price is greater than or equal to
97% of the product of the Closing Price of Common Stock and the number of
shares issuable upon conversion of $1,000 principal amount of the Securities.


 


If a Security is
submitted or presented for purchase pursuant to Article 3, the Holder’s
conversion right shall terminate at the close of business on the Business Day
immediately preceding the Change in Control Purchase Date for such Security or
such earlier date as the Holder presents such Security for purchase (unless the
Company shall default in making the Change in Control Purchase Price payment
when due, in which case the conversion right shall terminate at the close of
business on the date such default is cured and such Security is
purchased).  The number of shares of
Common Stock issuable upon conversion of a Security shall be determined by
dividing the principal amount of the Security or portion thereof surrendered
for conversion by the Conversion Price in effect on the Conversion Date.  The initial Conversion Price is set forth in
paragraph 7 of the Securities and is subject to adjustment as provided in
this Article 4.


 


Provisions of this
Indenture that apply to conversion of all of a Security also apply to
conversion of a portion of a Security.


 


A Security in respect of
which a Holder has delivered a Change in Control Purchase Notice pursuant to
Section 3.2(c) exercising the option of such Holder to require the Company
to purchase such Security may be converted, as provided in Section 4.1 of this
Article 4, only if such Change in Control Purchase Notice is withdrawn by a written
notice of withdrawal delivered to a Paying Agent prior to the close of business
on the second Business Day immediately preceding the Change in Control Purchase
Date in accordance with Section 3.3.


 


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


 


SECTION
4.2.   CONVERSION PROCEDURE.


 


To convert a Security, a
Holder must (a) complete and manually sign the conversion notice on the
back of the Security and deliver such notice to a Conversion Agent,
(b) surrender the Security to a Conversion Agent, (c) furnish
appropriate endorsements and transfer documents if required by a Registrar or a
Conversion Agent, and (d) pay any transfer or similar tax, if
required.  The date on which the Holder
satisfies all of those requirements is the “Conversion Date.”  As soon as practicable after the Conversion
Date, the Company shall deliver to the Holder through a Conversion Agent a
certificate for the number of whole shares of Common Stock issuable upon the
conversion and cash in lieu of any fractional shares pursuant to
Section 4.3.  Anything herein to
the contrary notwithstanding, in the case of Global Securities, conversion
notices may be delivered and such Securities may be surrendered for conversion
in accordance with the Applicable Procedures as in effect from time to time.


 


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


 


23

















 


provided,
further, that such conversion shall be at the Conversion Price in effect
on the Conversion Date as if the stock transfer books of the Company had not
been closed.  Upon conversion of a
Security, such person shall no longer be a Holder of such Security.  No payment or adjustment will be made for
dividends or distributions on shares of Common Stock issued upon conversion of
a Security.


 


Securities so surrendered
for conversion (in whole or in part) during the period from the close of
business on any regular record date to the opening of business on the next
succeeding interest payment date (excluding Securities or portions thereof
presented for purchase upon a Change in Control on a Change in Control Purchase
Date during the period beginning at the close of business on a regular record
date and ending at the opening of business on the first Business Day after the
next succeeding interest payment date, or if such interest payment date is not
a Business Day, the second such Business Day) shall also be accompanied by
payment in funds acceptable to the Company of an amount equal to the interest
payable on such interest payment date on the principal amount of such Security
then being converted, and such interest shall be payable to such registered
Holder notwithstanding the conversion of such Security, subject to the
provisions of this Indenture relating to the payment of defaulted interest by
the Company.  However, if a Holder
submits Securities for conversion between the record date for the final
interest payment and the opening of business on the Final Maturity Date, such
Holder will not be required to pay funds equal to the interest payable on the
Final Maturity Date.  Except as
otherwise provided in this Section 4.2, no payment or adjustment will be
made for accrued interest on a converted Security.  If the Company defaults in the payment of interest payable on
such interest payment date, the Company shall promptly repay such funds to such
Holder.


 


Nothing in this
Section shall affect the right of a Holder in whose name any Security is
registered at the close of business on a record date to receive the interest
payable on such Security on the related interest payment date in accordance
with the terms of this Indenture and the Securities. If a Holder converts more than
one Security at the same time, the number of shares of Common Stock issuable
upon the conversion shall be based on the aggregate principal amount of
Securities converted.


 


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


 


SECTION 4.3.   FRACTIONAL SHARES.


 


The Company will not
issue fractional shares of Common Stock upon conversion of Securities.  In lieu thereof, the Company will pay an
amount in cash for the current market value of the fractional shares.  The current market value of a fractional
share shall be determined, (calculated to the nearest 1/1000th of a
share) by multiplying the Closing Price (determined as set forth in Section
4.6(d)) of the Common Stock on the Trading Day immediately prior to the
Conversion Date by such fractional share and rounding the product to the
nearest whole cent.


 


SECTION
4.4.   TAXES ON CONVERSION.


 


If a Holder converts a
Security, the Company shall pay any documentary, stamp or similar issue or
transfer tax due on the issue of shares of Common Stock upon such
conversion.  However, the Holder shall
pay any such tax which is due because the Holder requests the shares to be
issued in a name other than the Holder’s name. 
The Conversion Agent may refuse to deliver the certificate representing
the Common Stock being issued in a name other than the Holder’s name until the
Conversion Agent receives a sum sufficient to


 


24

















 


pay any tax which will be
due because the shares are to be issued in a name other than the Holder’s
name.  Nothing herein shall preclude any
tax withholding required by law or regulation.


 


SECTION
4.5.   COMPANY TO PROVIDE STOCK.


 


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


 


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


 


The Company will
endeavor promptly to comply with all federal and state securities laws
regulating the offer and delivery of shares of Common Stock upon conversion of
Securities, if any, and will list or cause to have quoted such shares of Common
Stock on each national securities exchange or on the Nasdaq National Market or
other over-the-counter market or such other market on which the Common Stock is
then listed or quoted; provided, however, that if rules of such
automated quotation system or exchange permit the Company to defer the listing
of such Common Stock until the first conversion of the Notes into Common Stock
in accordance with the provisions of this Indenture, the Company covenants to
list such Common Stock issuable upon conversion of the Notes in accordance with
the requirements of such automated quotation system or exchange at such
time.  Any Common Stock issued upon
conversion of a Security hereunder which at the time of conversion was a
Restricted Security will also be a Restricted Security.


 


SECTION
4.6.   ADJUSTMENT OF CONVERSION PRICE.


 


The conversion price as
stated in paragraph 7 of the Securities (the “Conversion Price”) shall be
adjusted from time to time by the Company as follows:


 


(a)          In case the Company
shall (i) pay a dividend on its Common Stock in shares of Common Stock,
(ii) make a distribution on its Common Stock in shares of Common Stock,
(iii) subdivide its outstanding Common Stock into a greater number of
shares, or (iv) combine its outstanding Common Stock into a smaller number
of shares, the Conversion Price in effect immediately prior thereto shall be
adjusted so that the Holder of any Security thereafter surrendered for conversion
shall be entitled to receive that number of shares of Common Stock which it
would have owned had such Security been converted immediately prior to the
happening of such event.  An adjustment
made pursuant to this subsection (a) shall become effective immediately
after the record date in the case of a dividend or distribution and shall
become effective immediately after the effective date in the case of
subdivision or combination.


 


(b)         In case the Company shall
issue rights or warrants to all or substantially all holders of its Common
Stock entitling them (for a period of not more than 60 days after such
issuance) to subscribe for or purchase shares of Common Stock (or securities
convertible into Common Stock) at a price per share (or having a conversion
price per share) less than the Current Market Price per share of Common Stock
(as determined in accordance with subsection (e) of this Section 4.6)
on the record date for the determination of stockholders entitled to receive
such rights or warrants, the Conversion Price in effect immediately prior
thereto shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to such record
date by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding on such record date plus the number of shares which
the aggregate


 


25

















 


offering price of the
total number of shares of Common Stock so offered (or the aggregate conversion
price of the convertible securities so offered, which shall be determined by
multiplying the number of shares of Common Stock issuable upon conversion of
such convertible securities by the conversion price per share of Common Stock
pursuant to the terms of such convertible securities) would purchase at the
Current Market Price per share (as defined in subsection (e) of this
Section 4.6) of Common Stock on such record date, and of which the
denominator shall be the number of shares of Common Stock outstanding on such
record date plus the number of additional shares of Common Stock offered (or
into which the convertible securities so offered are convertible).  Such adjustment shall be made successively
whenever any such rights or warrants are issued, and shall become effective
immediately after such record date.  If
at the end of the period during which such rights or warrants are exercisable
not all rights or warrants shall have been exercised, the adjusted Conversion
Price shall be immediately readjusted to what it would have been based upon the
number of additional shares of Common Stock actually issued (or the number of
shares of Common Stock issuable upon conversion of convertible securities
actually issued).


 


(c)          In case the Company
shall distribute to all or substantially all holders of its Common Stock any
shares of capital stock of the Company (other than Common Stock), evidences of
indebtedness or other non-cash assets (including securities of any person other
than the Company but excluding (1) dividends or distributions paid
exclusively in cash or (2) dividends or distributions referred to in
subsection (a) of this Section 4.6), or shall distribute to all or
substantially all holders of its Common Stock rights or warrants to subscribe
for or purchase any of its securities (excluding those rights and warrants
referred to in subsection (b) of this Section 4.6 and also excluding
the distribution of rights to all holders of Common Stock pursuant to a Rights
Plan (as defined below) adopted before or after the date of this Indenture),
then in each such case the Conversion Price shall be adjusted so that the same
shall equal the price determined by multiplying the current Conversion Price by
a fraction of which the numerator shall be the Current Market Price per share
(as defined in subsection (e) of this Section 4.6) of the Common
Stock on the record date mentioned below less the fair market value on such
record date (as determined by the Board of Directors, whose determination shall
be conclusive evidence of such fair market value and which shall be evidenced
by an Officers’ Certificate delivered to the Trustee) of the portion of the
capital stock, evidences of indebtedness or other non-cash assets so
distributed or of such rights or warrants applicable to one share of Common
Stock (determined on the basis of the number of shares of Common Stock
outstanding on the record date), and of which the denominator shall be the
Current Market Price per share (as defined in subsection (e) of this
Section 4.6) of the Common Stock on such record date.  Such adjustment shall be made successively
whenever any such distribution is made and shall become effective immediately
after the record date for the determination of shareholders entitled to receive
such distribution.


 


In the event the then
fair market value (as so determined) of the portion of the capital stock,
evidences of indebtedness or other non-cash assets so distributed or of such
rights or warrants applicable to one share of Common Stock is equal to or greater
than the Current Market Price per share of the Common Stock on such record
date, in lieu of the foregoing adjustment, adequate provision shall be made so
that each holder of a Security shall have the right to receive upon conversion
the amount of capital stock, evidences of indebtedness or other non-cash assets
so distributed or of such rights or warrants such holder would have received
had such holder converted each Security on such record date.  In the event that such 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 distribution had not
been declared.  If the Board of
Directors determines the fair market value of any distribution for purposes of
this Section 4.6(c) by reference to the actual or when issued trading
market for any securities, it must in doing so consider the prices in such
market over the same period used in computing the Current Market Price of the
Common Stock.


 


26

















 


With respect to any
rights that may be issued or distributed pursuant to any rights plan that the
Company implements after the date of this Indenture (a “Rights Plan”), upon
conversion of the Securities into Common Stock, to the extent that such Rights
Plan is in effect upon such conversion, the holders of Securities will receive,
in addition to the Common Stock, the rights described therein (whether or not
the rights have separated from the Common Stock at the time of conversion), subject
to the limitations set forth in any such Rights Plan.  Any distribution of rights or warrants pursuant to a Rights Plan
complying with the requirements set forth in the immediately preceding sentence
of this paragraph shall not constitute a distribution of rights or warrants
pursuant to this Section 4.6(c).


 


Rights or warrants (other
than rights issued pursuant to a Rights Plan) 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 4.6 (and no adjustment to the Conversion
Price under this Section 4.6 will be required) until the occurrence of the
earliest Trigger Event, whereupon such rights and warrants shall be deemed to
have been distributed and an appropriate adjustment (if any is required) to the
Conversion Price shall be made under this Section 4.6(c).  If any such right or warrant, including any
such existing rights or warrants distributed prior to the date of this
Indenture, are subject to events, upon the occurrence of which such rights or
warrants become exercisable to purchase different securities, evidences of indebtedness
or other non-cash assets, then the date of the occurrence of any and each such
event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof).  In addition, in the
event of any distribution (or deemed distribution) of rights or warrants, or
any Trigger Event or other event (of the type described in the preceding
sentence) with respect thereto that was counted for purposes of calculating a
distribution amount for which an adjustment to the Conversion Price under this
Section 4.6 was made, (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 or holders of Common
Stock with respect to such rights or warrants (assuming such holder had
retained such rights or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such
rights or warrants which shall have expired or been terminated without exercise
by any holders thereof, the Conversion Price shall be readjusted as if such
rights and warrants had not been issued.


 


(d)         (1) In case the Company
shall, by dividend or otherwise, at any time distribute (a “Triggering
Distribution”) to all or substantially all holders of its Common Stock cash in
an aggregate amount that, together with the aggregate amount of (A) any
cash and the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive evidence thereof and which shall be evidenced
by an Officers’ Certificate delivered to the Trustee) of any other
consideration payable in respect of any tender offer by the Company or a
Subsidiary of the Company for Common Stock consummated within the
12 months preceding the date of payment of the Triggering Distribution and
in respect of which no Conversion Price adjustment pursuant to this Section 4.6
has been made and (B) all other cash distributions to all or substantially
all holders of its Common Stock made within the 12 months preceding the date of
payment of the Triggering Distribution and in respect of which no Conversion
Price adjustment pursuant to this Section 4.6 has been made, exceeds an
amount equal to 10.0% of the product of the Current Market Price per share of
Common Stock (as determined in accordance with subsection (e) of this
Section 4.6) on the Business


 


27

















 


Day (the “Determination
Date”) immediately preceding the day on which such Triggering Distribution is
declared by the Company multiplied by the number of shares of Common Stock
outstanding on the Determination Date (excluding shares held in the treasury of
the Company), the Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying such Conversion Price in effect
immediately prior to the Determination Date by a fraction of which the
numerator shall be the Current Market Price per share of the Common Stock (as
determined in accordance with subsection (d) of this Section 4.6) on
the Determination Date less the sum of the aggregate amount of cash and the
aggregate fair market value (determined as aforesaid in this Section 4.6(d)(1))
of any such other consideration so distributed, paid or payable within such 12
months (including, without limitation, the Triggering Distribution) applicable
to one share of Common Stock (determined on the basis of the number of shares
of Common Stock outstanding on the Determination Date) and the denominator
shall be such Current Market Price per share of the Common Stock (as determined
in accordance with subsection (e) of this Section 4.6) on the
Determination Date, such reduction to become effective immediately prior to the
opening of business on the day following the date on which the Triggering
Distribution is paid.


 


(2)          In case any tender offer
made by the Company or any of its Subsidiaries for Common Stock shall expire and
such tender offer (as amended upon the expiration thereof) shall involve the
payment of aggregate consideration in an amount (determined as the sum of the
aggregate amount of cash consideration and the aggregate fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
evidence thereof and which shall be evidenced by an Officers’ Certificate
delivered to the Trustee thereof) of any other consideration) that, together
with the aggregate amount of (A) any cash and the fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
evidence thereof and which shall be evidenced by an Officers’ Certificate
delivered to the Trustee) of any other consideration payable in respect of any
other tender offers by the Company or any Subsidiary of the Company for Common
Stock consummated within the 12 months preceding the date of the Expiration
Date (as defined below) and in respect of which no Conversion Price adjustment
pursuant to this Section 4.6 has been made and (B) all cash
distributions to all or substantially all holders of its Common Stock made
within the 12 months preceding the Expiration Date and in respect of which no
Conversion Price adjustment pursuant to this Section 4.6 has been made,
exceeds an amount equal to 10.0% of the product of the Current Market Price per
share of Common Stock (as determined in accordance with subsection (e) of
this Section 4.6) as of the last date (the “Expiration Date”) tenders
could have been made pursuant to such tender offer (as it may be amended) (the
last time at which such tenders could have been made on the Expiration Date is
hereinafter sometimes called the “Expiration Time”) multiplied by the number of
shares of Common Stock outstanding (including tendered shares but excluding any
shares held in the treasury of the Company) at the Expiration Time, then,
immediately prior to the opening of business on the day after the Expiration
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 the Expiration Date by a fraction of which
the numerator shall be the product of the number of shares of Common Stock
outstanding (including tendered shares but excluding any shares held in the
treasury of the Company) at the Expiration Time multiplied by the Current
Market Price per share of the Common Stock (as determined in accordance with
subsection (e) of this Section 4.6) on the Trading Day next
succeeding the Expiration Date and the denominator shall be the sum of
(x) the aggregate consideration (determined as aforesaid) payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender offer) of all shares validly tendered and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the “Purchased Shares”) and (y) the product of the number
of shares of Common Stock outstanding (less any Purchased Shares and excluding
any shares held in the treasury of the Company) at the Expiration Time and the
Current Market Price per share of Common Stock (as determined in accordance
with subsection (e) of this Section 4.6) on the Trading Day next
succeeding the Expiration Date,


 


28

















 


such reduction to become
effective immediately prior to the opening of business on the day following the
Expiration Date.  In the event that the
Company is obligated to purchase shares pursuant to any such tender offer, but
the Company is permanently prevented by applicable law from effecting any or
all such purchases or any or all such purchases are rescinded, the Conversion
Price shall again be adjusted to be the Conversion Price which would have been
in effect based upon the number of shares actually purchased.  If the application of this
Section 4.6(d)(2) to any tender offer would result in an increase in the
Conversion Price, no adjustment shall be made for such tender offer under this
Section 4.6(d)(2).


 


(3)          For purposes of this
Section 4.6(d), the term “tender offer” shall mean and include both tender
offers and exchange offers, all references to “purchases” of shares in tender
offers (and all similar references) shall mean and include both the purchase of
shares in tender offers and the acquisition of shares pursuant to exchange
offers, and all references to “tendered shares” (and all similar references)
shall mean and include shares tendered in both tender offers and exchange
offers.


 


(e)          For the purpose of any
computation under subsections (b), (c) and (d) of this Section 4.6,
the current market price (the “Current Market Price”) per share of Common Stock
on any date shall be deemed to be the average of the daily closing prices for
the 30 consecutive Trading Days commencing 45 Trading Days before (i) the
Determination Date or the Expiration Date, as the case may be, with respect to
distributions or tender offers under subsection (c) or (d) of this
Section 4.6 or (ii) the record date with respect to distributions,
issuances or other events requiring such computation under subsection (b),
(c) or (d) of this Section 4.6. 
The closing price (the “Closing Price”) for each day shall be the last
reported sales price or, in case no such reported sale takes place on such
date, the average of the reported closing bid and asked prices in either case
on the Nasdaq National Market (the “NNM”) or, if the Common Stock is not listed
or admitted to trading on the NNM, on the principal national securities
exchange on which the Common Stock is listed or admitted to trading or, if not
listed or admitted to trading on the NNM or any national securities exchange,
the last reported sales price of the Common Stock as quoted on NASDAQ or, in
case no reported sales takes place, the average of the closing bid and asked
prices as quoted on NASDAQ or any comparable system or, if the Common Stock is
not quoted on NASDAQ or any comparable system, the closing sales price or, in
case no reported sale takes place, the average of the closing bid and asked
prices, as furnished by any two members of the National Association of
Securities Dealers, Inc. selected from time to time by the Company for that
purpose.  If no such prices are
available, the Current Market Price per share shall be the fair value of a
share of Common Stock as determined in good faith by the Board of Directors
(which shall be evidenced by an Officers’ Certificate delivered to the
Trustee).


 


(f)            In any case in which
this Section 4.6 shall require that an adjustment be made following a
record date or a Determination Date or Expiration Date, as the case may be,
established for purposes of this Section 4.6, the Company may elect to
defer (but only until five Business Days following the filing by the Company
with the Trustee of the certificate described in Section 4.9) issuing to
the Holder of any Security converted after such record date or Determination
Date or Expiration Date the shares of Common Stock and other capital stock of
the Company issuable upon such conversion over and above the shares of Common
Stock and other capital stock of the Company issuable upon such conversion only
on the basis of the Conversion Price prior to adjustment; and, in lieu of the
shares the issuance of which is so deferred, the Company shall issue or cause
its transfer agents to issue due bills or other appropriate evidence prepared
by the Company of the right to receive such shares.  If any distribution in respect of which an adjustment to the
Conversion Price is required to be made as of the record date or Determination
Date or Expiration Date therefor is not thereafter made or paid by the Company
for any reason, the Conversion Price shall be readjusted to the Conversion
Price which would then be in effect if such record date had not been fixed or
such effective date or Determination Date or Expiration Date had not occurred.


 


29

















 


SECTION 4.7.   NO ADJUSTMENT.


 


No adjustment in the
Conversion Price shall be required unless the adjustment would require an
increase or decrease of at least 1% in the Conversion Price as last adjusted; provided,
however, that any adjustments which by reason of this Section 4.7 are
not required to be made shall be carried forward and taken into account in any
subsequent adjustment.  All calculations
under this Article 4 shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.


 


No adjustment need be
made for issuances of Common Stock pursuant to a Company plan for reinvestment
of dividends or interest or for a change in the par value or a change to no par
value of the Common Stock.


 


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


 


SECTION
4.8.   ADJUSTMENT FOR TAX PURPOSES.


 


The Company shall be
entitled to make such reductions in the Conversion Price, in addition to those
required by Section 4.6, as it in its discretion shall determine to be
advisable in order that any stock dividends, subdivisions of shares,
distributions of rights to purchase stock or securities or distributions of
securities convertible into or exchangeable for stock hereafter made by the
Company to its stockholders shall not be taxable.


 


SECTION
4.9.   NOTICE OF ADJUSTMENT.


 


Whenever the Conversion
Price is adjusted, the Company shall promptly mail to Securityholders a notice
of the adjustment and file with the Trustee an Officers’ Certificate briefly
stating the facts requiring the adjustment and the manner of computing it.  Unless and until the Trustee shall receive
an Officers’ Certificate setting forth an adjustment of the Conversion Price,
the Trustee may assume without inquiry that the Conversion Price has not been
adjusted and that the last Conversion Price of which it has knowledge remains
in effect.


 


SECTION
4.10.   NOTICE OF CERTAIN TRANSACTIONS.


 


In the event that:


 


(1)          the Company takes any
action which would require an adjustment in the Conversion Price;


 


(2)          the Company consolidates
or merges with, or transfers all or substantially all of its property and
assets to, another corporation and shareholders of the Company must approve the
transaction; or


 


(3)          there is a dissolution
or liquidation of the Company,


 


the Company shall mail to
Holders and file with the Trustee a notice stating the proposed record or
effective date, as the case may be.  The
Company shall mail the notice at least ten days before such date.  Failure to mail such notice or any defect therein
shall not affect the validity of any transaction referred to in
clause (1), (2) or (3) of this Section 4.10.


 


30

















 


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


 


If any of the following
shall occur, namely:  (a) any
reclassification or change of shares of Common Stock issuable upon conversion
of the Securities (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, or any other change for which an adjustment is provided in
Section 4.6); (b) any consolidation or merger or combination to which
the Company is a party other than a merger in which the Company is the
continuing corporation and which does not result in any reclassification of, or
change (other than 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) in,
outstanding shares of Common Stock; or (c) any sale or conveyance as an
entirety or substantially as an entirety of the property and assets of the
Company, directly or indirectly, to any person, then the Company, or such
successor, purchasing or transferee corporation, as the case may be, shall, as
a condition precedent to such reclassification, change, combination,
consolidation, merger, sale or conveyance, execute and deliver to the Trustee a
supplemental indenture providing that the Holder of each Security then outstanding
shall have the right to convert such Security into the kind and amount of
shares of stock and other securities and property (including cash) receivable
upon such reclassification, change, combination, consolidation, merger, sale or
conveyance by a holder of the number of shares of Common Stock deliverable upon
conversion of such Security immediately prior to such reclassification, change,
combination, consolidation, merger, sale or conveyance.  Such supplemental indenture shall provide
for adjustments of the Conversion Price which shall be as nearly equivalent as
may be practicable to the adjustments of the Conversion Price provided for in
this Article 4.  If, in the case of
any such consolidation, merger, combination, sale or conveyance, the stock or other
securities and property (including cash) receivable thereupon by a holder of
Common Stock include shares of stock or other securities and property of a
person other than the successor, purchasing or transferee corporation, as the
case may be, in such consolidation, merger, combination, sale or conveyance,
then such supplemental indenture shall also be executed by such other person
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. 
The provisions of this Section 4.11 shall similarly apply to
successive reclassifications, changes, combinations, consolidations, mergers, sales
or conveyances.


 


In the event the Company
shall execute a supplemental indenture pursuant to this Section 4.11, the
Company shall promptly file with the Trustee (x) an Officers’ Certificate
briefly stating the reasons therefor, the kind or amount of shares of stock or
other securities or property (including cash) receivable by Holders of the
Securities upon the conversion of their Securities after any such
reclassification, change, combination, consolidation, merger, sale or
conveyance, any adjustment to be made with respect thereto and that all conditions
precedent have been complied with and (y) an Opinion of Counsel that all
conditions precedent have been complied with, and shall promptly mail notice
thereof to all Holders.


 


SECTION
4.12.   TRUSTEE’S DISCLAIMER.


 


The Trustee shall have no
duty to determine when an adjustment under this Article 4 should be made,
how it should be made or what such adjustment should be, but may accept as
conclusive evidence of that fact or the correctness of any such adjustment, and
shall be protected in relying upon, an Officers’ Certificate including the
Officers’ Certificate with respect thereto which the Company is obligated to
file with the Trustee pursuant to Section 4.9.  The Trustee makes no representation as to the validity or value
of any securities or assets issued upon conversion of Securities, and the
Trustee shall not be responsible for the Company’s failure to comply with any
provisions of this Article 4.


 


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The Trustee shall not be
under any responsibility to determine the correctness of any provisions
contained in any supplemental indenture executed pursuant to Section 4.11,
but may accept as conclusive evidence of the correctness thereof, and shall be
fully protected in relying upon, the Officers’ Certificate with respect thereto
which the Company is obligated to file with the Trustee pursuant to
Section 4.11.


 


SECTION
4.13.   VOLUNTARY REDUCTION.


 


The Company from time to
time may reduce the Conversion Price by any amount for any period of time if the
period is at least 20 days and if the reduction is irrevocable during the
period if our Board of Directors determines that such reduction would be in the
best interest of the Company or to avoid or diminish income tax to holders of
shares of our Common Stock in connection with a dividend or distribution of
stock or similar event, and the Company provides 15 days prior notice of any
reduction in the Conversion Price; provided, however, that in no
event may the Company reduce the Conversion Price to be less than the par value
of a share of Common Stock.


 


ARTICLE 5

SUBORDINATION


 


SECTION
5.1.   AGREEMENT OF SUBORDINATION.


 


The Company covenants and
agrees, and each Holder of Securities issued hereunder by its acceptance
thereof likewise covenants and agrees, that all Securities shall be issued
subject to the provisions of this Article 5; and each Person holding any
Security, whether upon original issue or upon transfer, assignment or exchange
thereof, accepts and agrees to be bound by such provisions.


 


The payment of the
principal of, premium, if any, and interest (including Additional Interest, if
any) on all Securities (including, but not limited to, the Change in Control
Purchase Price with respect to the Securities subject to purchase in accordance
with Article 3 as provided in this Indenture) issued hereunder shall, to
the extent and in the manner hereinafter set forth, be subordinated and subject
in right of payment to the prior payment in full in cash or payment
satisfactory to the holders of Senior Indebtedness of all Senior Indebtedness,
whether outstanding at the date of this Indenture or thereafter incurred.


 


No provision of this
Article 5 shall prevent the occurrence of any default or Event of Default
hereunder.


 


SECTION
5.2.   PAYMENTS TO HOLDERS.


 


No payment shall be made
with respect to the principal of, or premium, if any, or interest (including
Additional Interest, if any) on the Securities (including, but not limited to,
the Change in Control Purchase Price with respect to the Securities subject to
purchase in accordance with Article 3 as provided in this Indenture), except
payments and distributions made by the Trustee as permitted by the first or
second paragraph of Section 5.5, if:


 


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


 


32

















 


(ii)                                  a
default, other than a payment default, on a Designated Senior Indebtedness
occurs and is continuing that then permits holders of such Designated Senior
Indebtedness to accelerate its maturity and the Trustee receives a notice of
the default (a “Payment Blockage Notice”) from a Representative or holder of
Designated Senior Indebtedness or the Company.


 


Subject to the provisions
of Section 5.5, if the Trustee receives any Payment Blockage Notice pursuant to
clause (ii) above, no subsequent Payment Blockage Notice shall be
effective for purposes of this Section unless and until at least 365
consecutive days shall have elapsed since the effectiveness of the immediately
prior Payment Blockage Notice and all scheduled payments on the Securities that
have come due have been paid in full in cash. 
No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee (unless such default was
waived, cured or otherwise ceased to exist and thereafter subsequently
reoccurred) shall be, or be made, the basis for a subsequent Payment Blockage
Notice.


 


The Company may and shall
resume payments on and distributions in respect of the Securities:


 


(a)          in the case of a default
referred to in clause (i) above, upon the date upon which the default is
cured or waived or ceases to exist, or


 


(b)         in the case of a default
referred to in clause (ii) above, upon the earlier of (1) the date on
which such default is cured or waived or ceases to exist or (2) 179 days after
the date on which the applicable Payment Blockage Notice is received, if the
maturity of such Designated Senior Indebtedness has not been accelerated,
unless this Article 5 otherwise prohibits the payment or distribution at the
time of such payment or distribution.


 


Upon any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any dissolution or
winding-up or liquidation or reorganization of the Company (whether voluntary
or involuntary) or in bankruptcy, insolvency, receivership or similar
proceedings, all amounts due or to become due upon all Senior Indebtedness
shall first be paid in full in cash, or other payments satisfactory to the
holders of Senior Indebtedness before any payment is made on account of the
principal of, premium, if any, or interest (including Additional Interest, if
any) on the Securities (except payments made pursuant to Article 10 from monies
deposited with the Trustee pursuant thereto prior to commencement of
proceedings for such dissolution, winding-up, liquidation or reorganization);
and upon any such dissolution or winding-up or liquidation or reorganization of
the Company or bankruptcy, insolvency, receivership or other proceeding, any
payment by the Company, or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the Holders of the
Securities or the Trustee would be entitled, except for the provision of this
Article 5, shall (except as aforesaid) be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders of the Securities or by
the Trustee under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, or as otherwise
required by law or a court order) or their representative or representatives,
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any Senior Indebtedness may have been issued, as their
respective interests may appear, to the extent necessary to pay all Senior
Indebtedness in full in cash, or other payment satisfactory to the holders of
Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness, before any payment
or distribution is made to the Holders of the Securities or to the Trustee.


 


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For purposes of this
Article 5, the words, “cash, property or securities” shall not be deemed to
include shares of stock of the Company as reorganized or readjusted, or
securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinated at least
to the extent provided in this Article 5 with respect to the Securities to the
payment of all Senior Indebtedness which may at the time be outstanding; provided
that (i) the Senior Indebtedness is assumed by the new corporation,
if any, resulting from any reorganization or readjustment, and (ii) the
rights of the holders of Senior Indebtedness (other than leases which are not
assumed by the Company or the new corporation, as the case may be) are not,
without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance, transfer or lease of its property as an
entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article 7 shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this
Section 5.2 if such other corporation shall, as a part of such
consolidation, merger, conveyance, transfer or lease, comply with the
conditions stated in Article 7.


 


In the event of the
acceleration of the Securities because of an Event of Default, no payment or
distribution shall be made to the Trustee or any Holder of Securities in
respect of the principal of, premium, if any, or interest (including Additional
Interest, if any) on the Securities by the Company (including, but not limited
to, the Change in Control Purchase Price with respect to the Securities subject
to purchase in accordance with Article 3 as provided in this Indenture), except
payments and distributions made by the Trustee as permitted by Section 5.5,
until all Senior Indebtedness has been paid in full in cash or other payment
satisfactory to the holders of Senior Indebtedness or such acceleration is
rescinded in accordance with the terms of this Indenture. If payment of the
Securities is accelerated because of an Event of Default, the Company shall
promptly notify holders of Senior Indebtedness of such acceleration.


 


In the event that,
notwithstanding the foregoing provisions, any payment or distribution of assets
of the Company of any kind or character, whether in cash, property or
securities (including, without limitation, by way of setoff or otherwise),
prohibited by the foregoing, shall be received by the Trustee or the Holders of
the Securities before all Senior Indebtedness is paid in full, in cash or other
payment satisfactory to the holders of Senior Indebtedness, or provision is
made for such payment thereof in accordance with its terms in cash or other
payment satisfactory to the holders of Senior Indebtedness, such payment or
distribution shall be held in trust for the benefit of and shall be paid over
or delivered to the holders of Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, as calculated by the Company, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in full, in cash or other
payment satisfactory to the holders of Senior Indebtedness, after giving effect
to any concurrent payment or distribution to or for the holders of such Senior
Indebtedness.


 


Nothing in this Section
5.2 shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 9.7.  This Section 5.2 shall be
subject to the further provisions of Section 5.5.


 


SECTION
5.3.   SUBROGATION OF SECURITIES.


 


Subject to the payment in
full, in cash or other payment satisfactory to the holders of Senior
Indebtedness, of all Senior Indebtedness, the rights of the Holders of the
Securities shall be subrogated to the extent of the payments or distributions
made to the holders of such Senior Indebtedness pursuant to the provisions of
this Article 5 (equally and ratably with the holders of all indebtedness of the
Company which by


 


34

















 


its express terms is
subordinated to other indebtedness of the Company to substantially the same
extent as the Securities are subordinated and is entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the principal, premium, if any, and
interest (including Additional Interest, if any) on the Securities shall be
paid in full in cash or other payment satisfactory to the holders of Senior
Indebtedness; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property
or securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article 5, and no payment over
pursuant to the provisions of this Article 5, to or for the benefit of the
holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as between the Company, its creditors other than holders of Senior
Indebtedness, and the Holders of the Securities, be deemed to be a payment by
the Company to or on account of the Senior Indebtedness; and no payments or
distributions of cash, property or securities to or for the benefit of the
Holders of the Securities pursuant to the subrogation provisions of this
Article 5, which would otherwise have been paid to the holders of Senior
Indebtedness shall be deemed to be a payment by the Company to or for the
account of the Securities. It is understood that the provisions of this Article
5 are and are intended solely for the purposes of defining the relative rights
of the Holders of the Securities, on the one hand, and the holders of the
Senior Indebtedness, on the other hand.


 


Nothing contained in this
Article 5 or elsewhere in this Indenture or in the Securities is intended to or
shall impair, as among the Company, its creditors other than the holders of
Senior Indebtedness, and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders of the
Securities the principal of (and premium, if any) and interest 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 the Senior Indebtedness, nor shall anything 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 5 of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.


 


Upon any payment or
distribution of assets of the Company referred to in this Article 5, the
Trustee, subject to the provisions of Section 9.1, 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 such bankruptcy, dissolution, winding-up,
liquidation or reorganization proceedings are pending, or a certificate of the
receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, delivered to the Trustee or to the Holders
of the Securities, for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon and
all other facts pertinent thereto or to this Article 5.


 


SECTION
5.4.   AUTHORIZATION TO EFFECT
SUBORDINATION.


 


Each Holder of a
Security by the Holder’s acceptance thereof authorizes and directs the Trustee
on the Holder’s behalf to take such action as may be necessary or appropriate
to effectuate the subordination as provided in this Article 5 and appoints the
Trustee to act as the Holder’s attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in Section 5.3 hereof at least 30
days before the expiration of the time to file such claim, the holders of any
Senior Indebtedness or their representatives are hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Securities.


 


35

















 


SECTION 5.5.   NOTICE TO TRUSTEE.


 


The Company shall give
prompt written notice in the form of an Officers’ Certificate to a Trust
Officer of the Trustee and to any Paying Agent of any fact known to the Company
which would prohibit the making of any payment of monies to or by the Trustee
or any Paying Agent in respect of the Securities pursuant to the provisions of
this Article 5. Notwithstanding the provisions of this Article 5 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment of
monies to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article 5, unless and until a Trust Officer of the Trustee
shall have received written notice thereof at the Corporate Trust Office from
the Company (in the form of an Officers’ Certificate) or a Representative or a
Holder or Holders of Senior Indebtedness or from any trustee thereof; and
before the receipt of any such written notice, the Trustee, subject to the
provisions of Section 9.1, shall be entitled in all respects to assume that no
such facts exist; provided  that if on a date not less than one
Business Day prior to the date upon which by the terms hereof any such monies
may become payable for any purpose (including, without limitation, the payment
of the principal of, or premium, if any, or interest on any Security) the
Trustee shall not have received, with respect to such monies, the notice
provided for in this Section 5.5, then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to 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 prior date. Notwithstanding anything in this
Article 5 to the contrary, nothing shall prevent any payment by the Trustee to
the Holders of monies deposited with it pursuant to Article 10, and any such
payment shall not be subject to the provisions of Article 5.


 


The Trustee, subject to
the provisions of Section 9.1, shall be entitled to rely on the delivery to it
of a written notice by a Representative or a person representing himself to be
a holder of Senior Indebtedness (or a trustee on behalf of such holder) to
establish that such notice has been given by a Representative or a holder of
Senior Indebtedness or a trustee on behalf of any such holder or holders. In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article 5, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article 5, and if such evidence is not furnished the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.


 


SECTION
5.6.   TRUSTEE’S RELATION TO SENIOR
INDEBTEDNESS.


 


The Trustee in its
individual capacity shall be entitled to all the rights set forth in this
Article 5 in respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing in Section
9.11 or elsewhere in this Indenture shall deprive the Trustee of any of its
rights as such holder.


 


With respect to the
holders of Senior Indebtedness, the Trustee undertakes to perform or to observe
only such of its covenants and obligations as are specifically set forth in
this Article 5, and no implied covenants or obligations with respect to the
holders of Senior Indebtedness shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and, subject to the provisions of Section 9.1,
the Trustee shall not be liable to any holder of Senior Indebtedness if it
shall pay over or deliver to Holders of Securities, the Company or any other
person


 


36

















 


money or assets to which
any holder of Senior Indebtedness shall be entitled by virtue of this Article 5
or otherwise.


 


SECTION
5.7.   NO IMPAIRMENT OF SUBORDINATION.


 


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


 


SECTION
5.8.   CERTAIN CONVERSIONS DEEMED
PAYMENT.


 


For the purposes of this
Article 5 only, (1) the issuance and delivery of junior securities
upon conversion of Securities in accordance with Article 4 shall not be deemed
to constitute a payment or distribution on account of the principal of (or
premium, if any) or interest 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 4.3),
property or securities (other than junior securities) upon conversion of a
Security shall be deemed to constitute payment on account of the principal of
such Security. For the purposes of this Section 5.8, the term “junior
securities” means (a) shares of any stock of any class of the Company, or
(b) securities of the Company which are subordinated in right of payment
to all Senior Indebtedness which may be outstanding at the time of issuance or
delivery of such securities to substantially the same extent as, or to a
greater extent than, the Securities are so subordinated as provided in this
Article. Nothing contained in this Article 5 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 Indebtedness and the Holders, the right,
which is absolute and unconditional, of the Holder of any Security to convert
such Security in accordance with Article 4.


 


SECTION
5.9.   ARTICLE APPLICABLE TO PAYING
AGENTS.


 


If at any time any Paying
Agent other than the Trustee shall have been appointed by the Company and be
then acting hereunder, the term “Trustee” as used in this Article shall (unless
the context otherwise requires) be construed as extending to and including such
Paying Agent within its meaning as fully for all intents and purposes as if
such Paying Agent were named in this Article in addition to or in place of the
Trustee; provided, however, that the first paragraph of Section
5.5 shall not apply to the Company or any Affiliate of the Company if it or
such Affiliate acts as Paying Agent.


 


SECTION
5.10.   SENIOR INDEBTEDNESS ENTITLED TO
RELY.


 


The holders of Senior
Indebtedness (including, without limitation, Designated Senior Indebtedness)
shall have the right to rely upon this Article 5, and no amendment or
modification of the provisions contained herein shall diminish the rights of
such holders unless such holders shall have agreed in writing thereto.


 


37

















 


ARTICLE 6

COVENANTS


 


SECTION
6.1.   PAYMENT OF SECURITIES.


 


The Company shall
promptly make all payments in respect of the Securities on the dates and in the
manner provided in the Securities and this Indenture.  An installment of principal or interest or Additional Interest,
if any, shall be considered paid on the date it is due if the Paying Agent
(other than the Company) holds by 11:00 a.m., New York City time, on that date
money, deposited by the Company or an Affiliate thereof, sufficient to pay the
installment.  The Company shall, (in
immediately available funds) to the fullest extent permitted by law, pay
interest on overdue principal (including premium, if any) and overdue
installments of interest at the rate borne by the Securities per annum.


 


Payment of the principal
of (and premium, if any) and any interest on the Securities shall be made at
the office or agency of the Company maintained for that purpose in the Borough
of Manhattan, The City of New York (which shall initially be the office at 100
Wall Street, Suite 1600, New York, New York 10005 of the Trustee or at the
Corporate Trust Office of the Trustee in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option
of the Company payment of interest may be made by check mailed to the address
of the Person entitled thereto as such address appears in the Register; provided
further that a Holder with an aggregate principal amount in excess of
$2,000,000 will be paid by wire transfer in immediately available funds at the
election of such Holder if such Holder has provided wire transfer instructions
to the Company at least 10 Business Days prior to the payment date.


 


SECTION 6.2.   SEC REPORTS.


 


The Company shall file
all reports and other information and documents which it is required to file
with the SEC pursuant to Section 13 or 15(d) of the Exchange Act, and
within 15 days after it files them with the SEC, the Company shall file copies
of all such reports, information and other documents with the Trustee.


 


Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee’s receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company’s compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers’
Certificates).


 


SECTION
6.3.   COMPLIANCE CERTIFICATES.


 


The Company shall deliver
to the Trustee, within 90 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending December 31, 2003), an Officers’
Certificate stating as to the best of the signer’s knowledge whether or not the
Company is in compliance with all conditions and covenants on its part
contained in this Indenture and stating whether or not, to the best of the
signer’s knowledge, there has been any default or Event of Default and, if so,
the Officers’ Certificate shall describe the default or Event of Default and
the efforts to remedy the same.  For the
purposes of this Section 6.3, compliance shall be determined without
regard to any grace period or requirement of notice provided pursuant to the
terms of this Indenture.


 


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SECTION
6.4.   FURTHER INSTRUMENTS AND ACTS.


 


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


 


SECTION
6.5.   MAINTENANCE OF CORPORATE
EXISTENCE.


 


Subject to
Article 7, the Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence.


 


SECTION
6.6.   RULE 144A INFORMATION
REQUIREMENT.


 


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


 


SECTION 6.7.   STAY,
EXTENSION AND USURY LAWS.


 


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


 


SECTION
6.8.   PAYMENT OF ADDITIONAL INTEREST.


 


If Additional Interest is
payable by the Company pursuant to the Registration Rights Agreement, the
Company shall deliver to the Trustee a certificate to that effect stating
(i) the amount of such Additional Interest that is payable and
(ii) the date on which such Additional Interest is payable.  Unless and until a Trust Officer of the
Trustee receives such a certificate, the Trustee may assume without inquiry
that no such Additional Interest is payable. 
If the Company has paid Additional Interest directly to the Persons
entitled to it, the Company shall deliver to the Trustee a certificate setting
forth the particulars of such payment.


 


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ARTICLE 7


CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE


 


SECTION 7.1.   COMPANY MAY
CONSOLIDATE, ETC, ONLY ON CERTAIN TERMS.


 


The Company shall not
consolidate with or merge into any other Person (in a transaction in which the
Company is not the surviving corporation) or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, other than to
one or more of its Subsidiaries, unless:


 


(1)          in case 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, trust or other business
entity organized and validly existing under the laws of the United States of
America, any State thereof or the District of Columbia and, if the Company is
not the surviving corporation, 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 any premium and interest on all the Securities and the performance or
observance of every covenant of this Indenture on the part of the Company to be
performed or observed and the conversion rights shall be provided for in
accordance with Article 4, by supplemental indenture satisfactory in form to
the Trustee, executed and delivered to the Trustee, by the Person (if other than
the Company) formed by such consolidation or into which the Company shall have
been merged or by the Person which shall have acquired the Company’s assets;


 


(2)          immediately after giving
effect to such transaction, no Event of Default or Default, shall have occurred
and be continuing; and


 


(3)          the Company has
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 complies with this Article and that
all conditions precedent herein provided for relating to such transaction have
been complied with.


 


SECTION
7.2.   SUCCESSOR SUBSTITUTED.


 


Upon any consolidation of
the Company with, or merger of the Company into, any other Person or any
conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety in accordance with Section 7.1, 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, the
predecessor Person shall be relieved of all obligations and covenants under
this Indenture and the Securities.


 


40

















 


ARTICLE 8

DEFAULT AND REMEDIES


 


SECTION 8.1.   EVENTS OF DEFAULT.


 


An “Event of Default”
shall occur if:


 


(1)          the Company defaults in
the payment of any interest or Additional Interest, if any, payable to all
holders of Registrable Securities (as defined in the Registration Rights
Agreement) on any Security when the same becomes due and payable and the
default continues for a period of 30 days, whether or not such payment shall be
prohibited by the provisions of Article 5 hereof;


 


(2)          the Company defaults in
the payment of any principal of (including, without limitation, any premium, if
any, on) any Security when the same becomes due and payable (whether at
maturity, on a Change of Control Purchase Date or otherwise), whether or not
such payment shall be prohibited by the provisions of Article 5 hereof;


 


(3)          the Company fails to
comply with any of its other agreements contained in the Securities or this
Indenture and the default continues for the period and after the notice
specified below;


 


(4)          the Company fails to
provide a Change in Control Purchase Notice when required by Section 3.2; or


 


(5)          any indebtedness under
any bond, debenture, note or other evidence of indebtedness for money borrowed
by the Company or any Significant Subsidiary (all or substantially all of the
outstanding voting securities of which are owned, directly or indirectly, by
the Company) or under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any indebtedness for
money borrowed by the Company or any Significant Subsidiary (all or
substantially all of the outstanding voting securities of which are owned,
directly or indirectly, by the Company) (an “Instrument”) with a principal
amount then outstanding in excess of U.S. $30,000,000, whether such
indebtedness now exists or shall hereafter be created, is not paid at final
maturity of the Instrument (either at its stated maturity or upon acceleration
thereof), and such indebtedness is not discharged, or such acceleration is not
rescinded or annulled, within a period of 30 days after there shall have been
given, by registered or certified mail, 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 then outstanding Securities a written notice specifying such
default and requiring the Company to cause such indebtedness to be discharged
or cause such default to be cured or waived or such acceleration to be
rescinded or annulled and stating that such notice is a “Notice of Default”
hereunder; or


 


(6)          the Company or any
Significant Subsidiary, pursuant to or within the meaning of any Bankruptcy
Law:


 


(A)      commences a voluntary case
or proceeding;


 


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


 


41

















 


(C)        consents to the
appointment of a Custodian of it or for all or substantially all of its
property; or


 


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


 


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


 


(A)      is for relief against the
Company or any Significant Subsidiary in an involuntary case or proceeding;


 


(B)        appoints a Custodian of
the Company or any Significant Subsidiary or for all or substantially all of
the property of the Company or any Significant Subsidiary; or


 


(C)        orders the liquidation of
the Company or any Significant Subsidiary;


 


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


 


The term “Bankruptcy Law”
means Title 11 of the United States Code (or any successor thereto) or any
similar federal or state law for the relief of debtors.  The term “Custodian” means any receiver,
trustee, assignee, liquidator, sequestrator or similar official under any
Bankruptcy Law.


 


A default under
clause (3) above is not an Event of Default until the Trustee notifies the
Company, or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding notify the Company and the Trustee, in writing of
the default, and the Company does not cure the default within 60 days after
receipt of such notice. The notice given pursuant to this Section 8.1 must
specify the default, demand that it be remedied and state that the notice is a
“Notice of Default.”  When any default
under this Section 8.1 is cured, it ceases.


 


The Trustee shall not be
charged with knowledge of any Event of Default unless written notice thereof
shall have been given to a Trust Officer at the Corporate Trust Office of the
Trustee by the Company, a Paying Agent, any Holder or any agent of any Holder.


 


SECTION 8.2.   ACCELERATION.


 


If an Event of Default
(other than an Event of Default specified in clause (6) or (7) of Section 8.1
with respect to the Company) occurs and is continuing, the Trustee may, by
notice to the Company, or the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding may, by notice to the Company and the
Trustee, declare all unpaid principal to the date of acceleration on the
Securities then outstanding (if not then due and payable) to be due and payable
upon any such declaration, and the same shall become and be immediately due and
payable.  If an Event of Default
specified in clause (6) or (7) of Section 8.1 occurs with respect to
the Company, all unpaid principal of the Securities then outstanding shall ipso
facto 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
Securities then outstanding by notice to the Trustee may rescind an
acceleration and its consequences if (a) all existing Events of Default,
other than the nonpayment of the principal of the Securities which has become
due solely by such declaration of acceleration, have been cured or waived;
(b) to the extent the payment of such interest is lawful, interest
(calculated at the rate per annum borne by the Securities) on overdue installments
of interest


 


42

















 


and overdue principal,
which has become due otherwise than by such declaration of acceleration, has
been paid; (c) the rescission would not conflict with any judgment or
decree of a court of competent jurisdiction; and (d) all payments due to
the Trustee and any predecessor Trustee under Section 9.7 have been
made.  No such rescission shall affect
any subsequent default or impair any right consequent thereto.


 


SECTION 8.3.   OTHER REMEDIES.


 


If an Event of Default
occurs and is continuing, the Trustee may, but shall not be obligated to,
pursue any available remedy by proceeding at law or in equity to collect the
payment of the principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.


 


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


 


SECTION
8.4.   WAIVER OF DEFAULTS AND EVENTS OF
DEFAULT.


 


Subject to
Sections 8.7 and 11.2, the Holders of a majority in aggregate principal
amount of the Securities then outstanding by notice to the Trustee may waive an
existing default or Event of Default and its consequence, except a default or
Event of Default in the payment of the principal of, premium, if any, or
interest on any Security, a failure by the Company to convert any Securities
into Common Stock or any default or Event of Default in respect of any
provision of this Indenture or the Securities which, under Section 11.2,
cannot be modified or amended without the consent of the Holder of each
Security affected.  When a default or
Event of Default is waived, it is cured and ceases.


 


SECTION
8.5.   CONTROL BY MAJORITY.


 


The Holders of a majority
in aggregate principal amount of the Securities then outstanding may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on it.  However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture, that the Trustee
determines may be unduly prejudicial to the rights of another Holder or the
Trustee, or that may involve the Trustee in personal liability unless the
Trustee is offered indemnity satisfactory to it; provided, however,
that the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction.


 


SECTION
8.6.   LIMITATIONS ON SUITS.


 


A Holder may not pursue
any remedy with respect to this Indenture or the Securities (except actions for
payment of overdue principal or interest (including any payments in connection
with a Change in Control) or for the conversion of the Securities pursuant to
Article 4) unless:


 


(1)          the Holder gives to the
Trustee written notice of a continuing Event of Default;


 


(2)          the Holders of at least
25% in aggregate principal amount of the then outstanding Securities make a written
request to the Trustee to pursue the remedy;


 


43

















 


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


 


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


 


(5)          no direction
inconsistent with such written request has been given to the Trustee during
such 60-day period by the Holders of a majority in aggregate principal amount
of the Securities then outstanding.


 


A Securityholder may not
use this Indenture to prejudice the rights of another Securityholder or to
obtain a preference or priority over such other Securityholder.


 


SECTION
8.7.   RIGHTS OF HOLDERS TO RECEIVE
PAYMENT AND TO CONVERT.


 


Notwithstanding any other
provision of this Indenture, the right of any Holder of a Security to receive
payment of the principal of and interest on the Security (including any
payments in connection with a Change in Control), on or after the respective
due dates expressed in the Security and this Indenture, to convert such
Security accordance with Article 4 and to bring suit for the enforcement
of any such payment on or after such respective dates or the right to convert,
is absolute and unconditional and shall not be impaired or affected without the
consent of the Holder.


 


SECTION
8.8.   COLLECTION SUIT BY TRUSTEE.


 


If an Event of Default in
the payment of principal or interest specified in clause (1) or (2) of
Section 8.1 occurs and is continuing, the Trustee may recover judgment in
its own name and as trustee of an express trust against the Company or another
obligor on the Securities for the whole amount of principal and accrued
interest remaining unpaid, together with, to the extent that payment of such
interest is lawful, interest on overdue principal and on overdue installments
of interest, in each case at the rate per annum borne by the Securities and
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.


 


SECTION
8.9.   TRUSTEE MAY FILE PROOFS OF CLAIM.


 


The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and the Holders allowed in any judicial proceedings
relative to the Company (or any other obligor on the Securities), its creditors
or its property and shall be entitled and empowered to collect and receive any
money or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under
Section 9.7, and to the extent that such payment of the reasonable
compensation, expenses, disbursements and advances in any such proceedings
shall be denied for any reason, payment of the same shall be secured by a lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other property which the Holders may be entitled to receive in


 


44

















 


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


 


SECTION 8.10.   PRIORITIES.


 


If the Trustee collects
any money pursuant to this Article 8, it shall pay out the money in the
following order:


 


First, to the Trustee for
amounts due under Section 9.7;


 


Second, to the holders of
Senior Indebtedness to the extent required by Article 5;


 


Third, to Holders for
amounts due and unpaid on the Securities for principal and interest (including
Additional Interest, if any), ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for principal
and interest (including Additional Interest, if any), respectively; and


 


Fourth, the balance, if
any, to the Company.


 


The Trustee may fix a
record date and payment date for any payment to Holders pursuant to this
Section 8.10.


 


SECTION
8.11.   UNDERTAKING FOR COSTS.


 


In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys’ fees and expenses, against
any party litigant in the suit, having due regard to the merits and good faith
of the claims or defenses made by the party litigant.  This Section 8.11 does not apply to a suit made by the
Trustee, a suit by a Holder pursuant to Section 8.7, or a suit by Holders
of more than 10% in aggregate principal amount of the Securities then
outstanding.


 


ARTICLE 9

TRUSTEE


 


SECTION 9.1.   DUTIES OF TRUSTEE.


 


(a)          If an Event of Default
has occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.


 


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


 


(1)          the Trustee need perform
only those duties as are specifically set forth in this Indenture and no
others; and


 


45

















 


(2)          in the absence of bad
faith on its part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture.  The
Trustee, however, shall examine any certificates and opinions which by any
provision hereof are specifically required to be delivered to the Trustee to
determine whether or not they conform to the requirements of this Indenture.


 


(c)          The Trustee may not be
relieved from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:


 


(1)          this paragraph does not
limit the effect of subsection (b) of this Section 9.1;


 


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


 


(3)          the Trustee shall not be
liable with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 8.5.


 


(d)         No provision of this
Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers unless the Trustee
shall have received adequate indemnity in its opinion against potential costs
and liabilities incurred by it relating thereto.


 


(e)          Every provision of this
Indenture that in any way relates to the Trustee is subject to subsections (a),
(b), (c) and (d) of this Section 9.1.


 


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


 


SECTION 9.2.   RIGHTS OF TRUSTEE.


 


Subject to
Section 9.1:


 


(a)          The Trustee may rely
conclusively 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.


 


(b)         Before the Trustee acts
or refrains from acting, it may require an Officers’ Certificate or an Opinion
of Counsel, which shall conform to Section 12.4(b).  The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such Officers’
Certificate or Opinion.


 


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


 


(d)         The Trustee shall not be
liable for any action it takes or omits to take in good faith which it believes
to be authorized or within its rights or powers.


 


(e)          The Trustee may consult
with counsel of its selection, and the advice or opinion of such counsel as to
matters of law shall be full and complete authorization and protection in
respect of any such action


 


46

















 


taken, omitted or
suffered by it hereunder in good faith and in accordance with the advice or
opinion of such counsel.


 


(f)            The Trustee shall be
under no obligation to exercise any of the rights or powers vested in it by
this Indenture at the request or direction of any of the Holders pursuant to
this Indenture, unless such Holders shall have offered to the Trustee security
or indemnity satisfactory to the Trustee against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction.


 


(g)         The Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further inquiry
or investigation, it shall be entitled to examine 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 of any Default or Event of Default unless a Trust Officer
of the Trustee has actual knowledge thereof or unless written notice of any
event which is in fact such a default is received by the Trustee at the
Corporate Trust Office, and such notice references the Securities and this
Indenture.


 


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


 


SECTION
9.3.   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 an Affiliate of the Company with the
same rights it would have if it were not Trustee.  Any Agent may do the same with like rights.  However, the Trustee is subject to Sections 9.10
and 9.11.


 


SECTION
9.4.   TRUSTEE’S DISCLAIMER.


 


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


 


SECTION
9.5.   NOTICE OF DEFAULT OR EVENTS OF
DEFAULT.


 


If a default or an Event
of Default occurs and is continuing and if it is known to the Trustee, the
Trustee shall mail to each Securityholder notice of the default or Event of
Default within 90 days after it occurs. 
However, the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding
notice is in the interests of Securityholders, except in the case of a default
or an Event of Default in payment of the principal of or interest on any
Security.


 


47

















 


SECTION
9.6.   REPORTS BY TRUSTEE TO HOLDERS.


 


If such report is
required by TIA Section 313, within 60 days after each May 15, beginning
with May 15, 2004, the Trustee shall mail to each Securityholder a brief report
dated as of such March 15 that complies with TIA Section 313(a).  The Trustee also shall comply with TIA
Section 313(b)(2) and (c).


 


A copy of each report at
the time of its mailing to Securityholders shall be mailed to the Company and
filed with the SEC and each stock exchange, if any, on which the Securities are
listed.  The Company shall notify the
Trustee whenever the Securities become listed on any stock exchange or listed
or admitted to trading on any quotation system and any changes in the stock
exchanges or quotation systems on which the Securities are listed or admitted
to trading and of any delisting thereof.


 


SECTION
9.7.   COMPENSATION AND INDEMNITY.


 


The Company shall pay to
the Trustee from time to time such compensation (as agreed to from time to time
by the Company and the Trustee in writing) for its services (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust).  The
Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it.  Such expenses may include the reasonable
compensation, disbursements and expenses of the Trustee’s agents and counsel.


 


The Company shall
indemnify the Trustee or any predecessor Trustee (which for purposes of this
Section 9.7 shall include its officers, directors, employees and agents)
for, and hold it harmless against, any and all loss, liability or expense
including taxes (other than taxes based upon, measured by or determined by the
income of the Trustee), (including reasonable legal fees and expenses) incurred
by it in connection with the acceptance or administration of its duties under
this Indenture or any action or failure to act as authorized or within the
discretion or rights or powers conferred upon the Trustee hereunder including
the reasonable costs and expenses of the Trustee and its counsel in defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.  The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity.  The Company need not pay for any settlement
effected without its prior written consent, which shall not be unreasonably
withheld.


 


The Company need not
reimburse the Trustee for any expense or indemnify it against any loss or
liability incurred by it resulting from its gross negligence or bad faith.


 


To secure the Company’s
payment obligations in this Section 9.7, the Trustee shall have a senior
claim to which the Securities are hereby made subordinate on all money or
property held or collected by the Trustee, except such money or property held
in trust to pay the principal of and interest on the Securities.  The obligations of the Company under this
Section 9.7 shall survive the satisfaction and discharge of this Indenture
or the resignation or removal of the Trustee.


 


When the Trustee incurs
expenses or renders services after an Event of Default specified in
clause (7) or (8) of Section 8.1 occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law. The provisions of this
Section shall survive the termination of this Indenture.


 


48

















 


SECTION
9.8.   REPLACEMENT OF TRUSTEE.


 


The Trustee may resign by
so notifying the Company.  The Holders
of a majority in aggregate principal amount of the Securities then outstanding
may remove the Trustee by so notifying the Trustee and may, with the Company’s
written consent (which consent shall not be unreasonably withheld), appoint a
successor Trustee.  The Company may
remove the Trustee if:


 


(1)          the Trustee fails to
comply with Section 9.10;


 


(2)          the Trustee is adjudged
a bankrupt or an insolvent;


 


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


 


(4)          the Trustee becomes incapable
of acting.


 


If the Trustee resigns or
is removed or if a vacancy exists in the office of Trustee for any reason, the
Company shall promptly appoint a successor Trustee.  The resignation or removal of a Trustee shall not be effective
until a successor Trustee shall have delivered the written acceptance of its
appointment as described below.


 


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


 


If the Trustee fails to
comply with Section 9.10, any Holder may petition any court of competent
jurisdiction for the removal of the Trustee and 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.  Immediately after that, the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee and be released from its obligations (exclusive of any
liabilities that the retiring Trustee may have incurred while acting as
Trustee) hereunder, the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture.  A successor Trustee shall mail notice of its succession to each
Holder.


 


A retiring Trustee shall
not be liable for the acts or omissions of any successor Trustee after its
succession.


 


Notwithstanding
replacement of the Trustee pursuant to this Section 9.8, the Company’s
obligations under Section 9.7 shall continue for the benefit of the retiring
Trustee.


 


SECTION
9.9.   SUCCESSOR TRUSTEE BY MERGER, ETC.


 


If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust assets (including the administration of this
Indenture) to, another corporation, the resulting, surviving or transferee
corporation, without any further act, shall be the successor Trustee, provided
such transferee corporation shall qualify and be eligible under
Section 9.10.  Such successor
Trustee shall promptly mail notice of its succession to the Company and each
Holder.


 


49

















 


SECTION
9.10.   ELIGIBILITY; DISQUALIFICATION.


 


The Trustee shall always
satisfy the requirements of paragraphs (1), (2) and (5) of TIA
Section 310(a).  The Trustee (or
its parent holding company) shall have a combined capital and surplus of at
least $50,000,000.  If at any time the
Trustee shall cease to satisfy any such requirements, it shall resign
immediately in the manner and with the effect specified in this
Article 9.  The Trustee shall be
subject to the provisions of TIA Section 310(b).  Nothing herein shall prevent the Trustee from filing with the SEC
the application referred to in the penultimate paragraph of TIA
Section 310(b).


 


SECTION
9.11.   PREFERENTIAL COLLECTION OF
CLAIMS AGAINST COMPANY.


 


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


 


ARTICLE
10

SATISFACTION AND DISCHARGE OF INDENTURE


 


SECTION
10.1.   SATISFACTION AND DISCHARGE OF
INDENTURE.


 


This Indenture shall
cease to be of further effect (except as to any surviving rights of conversion,
registration of transfer or exchange of Securities herein expressly provided
for and except as further provided below), and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when


 


(1)          either


 


(A)      all Securities theretofore
authenticated and delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 2.7 and (ii) Securities for whose payment money has
theretofore been deposited in trust and thereafter repaid to the Company as
provided in Section 10.3) have been delivered to the Trustee for
cancellation; or


 


(B)        all such Securities not
theretofore delivered to the Trustee for cancellation have become due and
payable and the Company has irrevocably deposited or caused to be irrevocably
deposited cash with the Trustee or a Paying Agent (other than the Company or
any of its Affiliates) as trust funds in trust for the purpose of and in an
amount sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and interest (including Additional Interest, if any) to the date of
such deposit (in the case of Securities which have become due and payable);


 


(2)          the Company has paid or
caused to be paid all other sums payable hereunder by the Company; and


 


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


 


50

















 


Notwithstanding the
satisfaction and discharge of this Indenture, the obligations of the Company to
the Trustee under Section 9.7 shall survive and, if money shall have been
deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the provisions of Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.12,
3.2, 3.3, 3.4, 3.5, 3.6, 3.7 and 12.5, Article 4, the last paragraph of
Section 6.2 and this Article 10, shall survive until the Securities
have been paid in full.


 


SECTION
10.2.   APPLICATION OF TRUST MONEY.


 


Subject to the provisions
of Section 10.3, the Trustee or a Paying Agent shall hold in trust, for
the benefit of the Holders, all money deposited with it pursuant to
Section 10.1 and shall apply the deposited money in accordance with this
Indenture and the Securities to the payment of the principal of and interest on
the Securities.  Money so held in trust
shall not be subject to the subordination provisions of Article 5.


 


SECTION
10.3.   REPAYMENT TO COMPANY.


 


The Trustee and each
Paying Agent shall promptly pay to the Company upon request any excess money
(i) deposited with them pursuant to Section 10.1 and (ii) held
by them at any time.


 


The Trustee and each
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years after
a right to such money has matured; provided, however, that the
Trustee or such Paying Agent, before being required to make any such payment,
may at the expense of the Company cause to be mailed to each Holder entitled to
such money notice that such money remains unclaimed and that after a date
specified therein, which shall be at least 30 days from the date of such
mailing, any unclaimed balance of such money then remaining will be repaid to
the Company.  After payment to the Company,
Holders entitled to money must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another
person.


 


SECTION 10.4.   REINSTATEMENT.


 


If the Trustee or any
Paying Agent is unable to apply any money in accordance with Section 10.2
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company’s obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 10.1 until such time as the Trustee or such Paying
Agent is permitted to apply all such money in accordance with
Section 10.2; provided, however, that if the Company has
made any payment of the principal of or interest on any Securities because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive any such payment from the
money held by the Trustee or such Paying Agent.


 


ARTICLE 11


AMENDMENTS, SUPPLEMENTS AND WAIVERS


 


SECTION
11.1.   WITHOUT CONSENT OF HOLDERS.


 


The Company and the
Trustee may amend or supplement this Indenture or the Securities without notice
to or consent of any Securityholder:


 


(a)          to comply with
Sections 4.11 and 7.1;


 


51

















 


(b)         to cure any ambiguity,
defect or inconsistency;


 


(c)          to make any other change
that does not adversely affect the rights of any Securityholder;


 


(d)         to comply with the provisions
of the TIA;


 


(e)          to add to the covenants
of the Company for the equal and ratable benefit of the Securityholders or to
surrender any right, power or option conferred upon the Company; or


 


(f)            to appoint a successor
Trustee.


 


SECTION
11.2.   WITH CONSENT OF HOLDERS.


 


The Company and the
Trustee may amend or supplement this Indenture or the Securities with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Securities then outstanding. 
The Holders of at least a majority in aggregate principal amount of the
Securities then outstanding may waive compliance in a particular instance by
the Company with any provision of this Indenture or the Securities without
notice to any Securityholder.  However,
notwithstanding the foregoing but subject to Section 11.4, without the
written consent of each Securityholder affected, an amendment, supplement or
waiver, including a waiver pursuant to Section 8.4, may not:


 


(a)          change the stated
maturity of the principal of, or time or manner of payment of interest on, any
Security;


 


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


 


(c)          reduce the amount of
principal payable upon acceleration of the maturity of any Security;


 


(d)         change the place or currency
of payment of principal of, or any premium or interest on, any Security;


 


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


 


(f)            modify the provisions
with respect to the purchase right of Holders pursuant to Article 3 upon a
Change in Control in a manner adverse to Holders;


 


(g)         modify the subordination
provisions of Article 5 in a manner adverse to the Holders of Securities;


 


(h)         adversely affect the
right of Holders to convert Securities other than as provided in or under
Article 4 of this Indenture;


 


(i)             reduce the percentage
of the aggregate principal amount of the outstanding Securities whose Holders
must consent to a modification or amendment;


 


(j)             reduce the percentage
of the aggregate principal amount of the outstanding Securities necessary for
the waiver of compliance with certain provisions of this Indenture or the
waiver of certain defaults under this Indenture; and


 


52

















 


(k)          modify any of the
provisions of this Section or Section 8.4, except to increase any such
percentage or to provide that certain provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each outstanding
Security affected thereby.


 


It shall not be necessary
for the consent of the Holders under this Section 11.2 to approve the
particular form of any proposed amendment, supplement or waiver, but it shall
be sufficient if such consent approves the substance thereof.


 


After an amendment,
supplement or waiver under this Section 11.2 becomes effective, the
Company shall mail to the Holders affected thereby a notice briefly describing
the amendment, supplement or waiver. 
Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
amendment, supplement or waiver. An amendment or supplement under this
Section 11.2 or under Section 11.1 may not make any change that
adversely affects the rights under Article 5 of any holder of an issue of
Senior Indebtedness unless the holders of that issue, pursuant to its terms,
consent to the change.


 


SECTION
11.3.   COMPLIANCE WITH TRUST INDENTURE
ACT.


 


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


 


SECTION
11.4.   REVOCATION AND EFFECT OF
CONSENTS.


 


Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder’s
Security, even if notation of the consent is not made on any Security.  However, any such Holder or subsequent
Holder may revoke the consent as to its Security or portion of a Security if
the Trustee receives the notice of revocation before the date the amendment,
supplement or waiver becomes effective.


 


After an amendment,
supplement or waiver becomes effective, it shall bind every Securityholder,
unless it makes a change described in any of clauses (a) through (k) of
Section 11.2.  In that case the
amendment, supplement or waiver shall bind each Holder of a Security who has
consented to it and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder’s Security.


 


SECTION
11.5.   NOTATION ON OR EXCHANGE OF
SECURITIES.


 


If an amendment,
supplement or waiver changes the terms of a Security, the Trustee may require
the Holder of the Security to deliver it to the Trustee.  The Trustee may place an appropriate
notation on the Security about the changed terms and return it to the
Holder.  Alternatively, if the Company
or the Trustee so determines, the Company in exchange for the Security shall
issue and the Trustee shall authenticate a new Security that reflects the
changed terms.


 


SECTION
11.6.   TRUSTEE TO SIGN AMENDMENTS, ETC.


 


The Trustee shall sign
any amendment or supplemental indenture authorized pursuant to this
Article 11 if the amendment or supplemental indenture does not adversely
affect the rights, duties, liabilities or immunities of the Trustee.  If it does, the Trustee may, in its sole
discretion, but need not sign it.  In
signing


 


53

















 


or refusing to sign such
amendment or supplemental indenture, the Trustee shall be entitled to receive
and, subject to Section 9.1, shall be fully protected in relying upon, an
Opinion of Counsel stating that such amendment or supplemental indenture is
authorized or permitted by this Indenture. 
The Company may not sign an amendment or supplement indenture until the
Board of Directors approves it.


 


SECTION
11.7.   EFFECT OF SUPPLEMENTAL
INDENTURES.


 


Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.


 


ARTICLE 12

MISCELLANEOUS


 


SECTION
12.1.   TRUST INDENTURE ACT CONTROLS.


 


If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by any of
Sections 310 to 317, inclusive, of the TIA through operation of
Section 318(c) thereof, such imposed duties shall control.


 


SECTION 12.2.   NOTICES.


 


Any demand, authorization
notice, request, consent or communication shall be given in writing and
delivered in person or mailed by first-class mail, postage prepaid, addressed
as follows or transmitted by facsimile transmission (confirmed by delivery in
person or mail by first-class mail, postage prepaid, or by guaranteed overnight
courier) to the following facsimile numbers:


 


	
  If to the Company, to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  UTStarcom, Inc.

  	
   

  	
   

  
	
  1275 Harbor Bay Parkway

  	
   

  	
   

  
	
  Alameda, California
  94502

  	
   

  	
   

  
	
  Attention: Michael J.
  Sophie, Vice President of Finance and Chief Financial Officer

  
	
  Facsimile No. (510)
  864-8802

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  if to the Trustee, to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  U.S. Bank National Association

  	
   

  	
   

  
	
  550 S. Hope Street, Suite 500

  	
   

  	
   

  
	
  Los Angeles, CA 
  90071

  	
   

  	
   

  
	
  Attn:

  	
  Corporate Trust Services

  
	
   

  	
  (UTStarcom, Inc. — 7/8% Convertible Subordinated
  Notes Due 2008)

  
	
  Facsimile No.: (213) 533-8729

  	
   

  	
   

  
				



 


Such notices or
communications shall be effective when received.


 


54

















 


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


 


Any notice or
communication mailed to a Securityholder shall be mailed by first-class mail or
delivered by an overnight delivery service to it at its address shown on the
register kept by the Primary Registrar.


 


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


 


SECTION
12.3.   COMMUNICATIONS BY HOLDERS WITH
OTHER HOLDERS.


 


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


 


SECTION
12.4.   CERTIFICATE AND OPINION AS TO
CONDITIONS PRECEDENT.


 


(a)          Upon any request or
application by the Company to the Trustee to take any action under this
Indenture, the Company shall furnish to the Trustee at the request of the
Trustee:


 


(1)          an Officers’ Certificate
stating that, in the opinion of the signers, all conditions precedent
(including any covenants, compliance with which constitutes a condition
precedent), if any, provided for in this Indenture relating to the proposed
action have been complied with; and


 


(2)          an Opinion of Counsel
stating that, in the opinion of such counsel, all such conditions precedent
(including any covenants, compliance with which constitutes a condition
precedent) have been complied with.


 


(b)         Each Officers’
Certificate and Opinion of Counsel with respect to compliance with a condition
or covenant provided for in this Indenture shall include:


 


(1)          a statement that the
person making such certificate or opinion has read such covenant or condition;


 


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


 


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


 


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


 


provided
however, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers’ Certificate or certificates of public officials.


 


55

















 


SECTION
12.5.   RECORD DATE FOR VOTE OR CONSENT
OF SECURITYHOLDERS.


 


The Company (or, in the
event deposits have been made pursuant to Section 10.1, the Trustee) may
set a record date for purposes of determining the identity of Holders entitled
to vote or consent to any action by vote or consent authorized or permitted
under this Indenture, which record date shall not be more than thirty (30) days
prior to the date of the commencement of solicitation of such action.  Notwithstanding the provisions of
Section 11.4, if a record date is fixed, those persons who were Holders of
Securities at the close of business on such record date (or their duly
designated proxies), and only those persons, shall be entitled to take such
action by vote or consent or to revoke any vote or consent previously given,
whether or not such persons continue to be Holders after such record date.


 


SECTION 12.6.   RULES BY
TRUSTEE, PAYING AGENT, REGISTRAR AND CONVERSION AGENT.


 


The Trustee may make
reasonable rules (not inconsistent with the terms of this Indenture) for action
by or at a meeting of Holders.  Any
Registrar, Paying Agent or Conversion Agent may make reasonable rules for its
functions.


 


SECTION 12.7.   LEGAL HOLIDAYS.


 


A “Legal Holiday” is a
Saturday, Sunday or a day on which state or federally chartered banking
institutions in New York, New York and the state in which the Corporate Trust
Office is located are not required to be open. 
If a payment date is a Legal Holiday, payment shall be made on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for
the intervening period.  If a regular
record date is a Legal Holiday, the record date shall not be affected.


 


SECTION 12.8.   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
12.9.   NO ADVERSE INTERPRETATION OF
OTHER AGREEMENTS.


 


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


 


SECTION 12.10.   NO RECOURSE AGAINST OTHERS.


All liability described
in paragraph 16 of the Securities of any director, officer, employee or
shareholder, as such, of the Company is waived and released.


 


SECTION 12.11.   SUCCESSORS.


 


All agreements of the
Company in this Indenture and the Securities shall bind its successor.  All agreements of the Trustee in this
Indenture shall bind its successor.


 


56

















 


SECTION
12.12.   MULTIPLE COUNTERPARTS.


 


The parties may sign
multiple counterparts of this Indenture. 
Each signed counterpart shall be deemed an original, but all of them
together represent the same agreement.


 


SECTION 12.13.   SEPARABILITY.


 


In case any provisions in
this Indenture or in the Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.


 


SECTION 12.14.   TABLE OF
CONTENTS, HEADINGS, ETC.


 


The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.


 


[Remainder of page
intentionally left blank].


 


57

















 


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


 


	
   

  	
  UTStarcom,
  Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael J. Sophie

  
	
   

  	
  Name:

  	
  Michael J. Sophie

  
	
   

  	
  Title:

  	
  Vice President of
  Finance and Chief

  
	
   

  	
   

  	
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  U.S.
  Bank National Association, as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen Rivero

  
	
   

  	
  Name: 

  	
  Stephen Rivero

  
	
   

  	
  Title: 

  	
  Vice President

  



 


[Signature
page to Indenture]


 


58

















 


EXHIBIT A

[FORM OF FACE OF SECURITY]


 


[UNLESS THIS CERTIFICATE
IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO
UTSTARCOM, INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN. THIS SECURITY IS A GLOBAL SECURITY
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY
OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.](1)


 


[THIS SECURITY (OR ITS
PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), AND THIS
SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION THEREOF MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.  EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE
SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.](2)


 


THE HOLDER OF THIS
SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS SECURITY AND
THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION THEREOF MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE


 












(1)  These paragraphs should be included only if
the Security is a Global Security.


 


(2)  These paragraphs to be included only if the
Security is a Restricted Security.


 


A-1

















 


UNITED STATES IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (IV) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT
OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.](2)


 


[THE HOLDER OF THIS
SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS AGREEMENT (AS
SUCH TERM IS DEFINED IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF) AND,
BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE
PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.](2)


 












(2)  These paragraphs to be included only if the
Security is a Restricted Security.


 


A-2

















 


UTSTARCOM,
INC.


 


	
  CUSIP:  

  	
                      

  	
   

  	
   

  	
  R-

  	
                

  



 


7/8% CONVERTIBLE
SUBORDINATED NOTES DUE 2008


 


UTStarcom, Inc., a
Delaware corporation (the “Company”, which term shall include any successor
corporation under the Indenture referred to on the reverse hereof), promises to
pay to           
                 ,
or registered assigns, the principal sum of
                             
Dollars ($          ) on
March 1, 2008 [or such greater or lesser amount as is indicated on the Schedule
of Exchanges of Notes on the other side of this Note].(3)


 


Interest Payment Dates:            March 1 and September
1


 


Record Dates:            February 15 and August
15


 


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


 












(3)  This phrase should be included only if the
Security is a global Security.


 


A-3

















 


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


 


 


	
   

  	
   

  	
   

  	
  UTSTARCOM, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Hong Liang Lu

  
	
   

  	
   

  	
   

  	
  Title:

  	
  President and
  Chief Executive Officer

  
	
  Attest:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Michael J. Sophie

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President of
  Finance and Chief Financial Officer

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
  March 12, 2003

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Trustee’s Certificate
  of Authentication:  This is one of the

  Securities referred to in the within-mentioned Indenture.

  
	
   

  
	
  U.S. BANK NATIONAL ASSOCIATION,

  	
   

  
	
  as Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  	
   

  	
   

  
												



 


A-4

















 


[FORM
OF REVERSE SIDE OF SECURITY]


 


UTSTARCOM,
INC.

7/8% CONVERTIBLE SUBORDINATED NOTES DUE 2008


 


1.                                       INTEREST


 


UTStarcom, Inc., a
Delaware corporation (the “Company,” which term shall include any successor
corporation under the Indenture hereinafter referred to), promises to pay
interest on the principal amount of this Note at the rate of 7/8% per
annum.  The Company shall pay interest
semiannually on March 1 and September 1 of each year, commencing
September 1, 2003.  Interest on the
Notes shall accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from March 12, 2003; provided,
however, that if there is not an existing default in the payment of
interest and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding interest payment date, interest shall
accrue from such interest payment date. 
Interest will be computed on the basis of a 360-day year of twelve
30-day months.  Any reference herein to
interest accrued or payable as of any date shall include any Additional
Interest accrued or payable on such date as provided in the Registration Rights
Agreement.


 


2.                                       METHOD
OF PAYMENT


 


The Company shall pay
interest on this Note (except defaulted interest) to the person who is the
Holder of this Note at the close of business on February 15 and August 15, as
the case may be, next preceding the related interest payment date.  The Holder must surrender this Note to a
Paying Agent to collect payment of principal. 
The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts.  The Company may,
however, pay principal and interest in respect of any Certificated Security by
check or wire payable in such money; provided, however, that a
Holder with an aggregate principal amount in excess of $2,000,000 will be paid
by wire transfer in immediately available funds at the election of such Holder
if such Holder has provided wire transfer instructions to the Company.  The Company may mail an interest check to
the Holder’s registered address.  Notwithstanding
the foregoing, so long as this Note is registered in the name of a Depositary
or its nominee, all payments hereon shall be made by wire transfer of
immediately available funds to the account of the Depositary or its nominee.


 


3.                                       PAYING
AGENT, REGISTRAR AND CONVERSION AGENT


 


Initially, U.S. Bank
National Association (the “Trustee”, which term shall include any successor
trustee under the Indenture hereinafter referred to) will act as Paying Agent,
Registrar and Conversion Agent.  The
Company may change any Paying Agent, Registrar or Conversion Agent without
notice to the Holder.  The Company or
any of its Subsidiaries may, subject to certain limitations set forth in the
Indenture, act as Paying Agent or Registrar.


 


4.                                       INDENTURE,
LIMITATIONS


 


This Note is one of a
duly authorized issue of Securities of the Company designated as its 7/8%
Convertible Subordinated Notes due 2008 (the “Notes”), issued under an
Indenture dated as of March 12, 2003 (together with any supplemental
indentures thereto, the “Indenture”), between the Company and the Trustee.  The terms of this Note include those stated
in the Indenture and those required by or made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended, as in effect on the
date of the


 


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


 


The Notes are
subordinated unsecured obligations of the Company limited to $402,500,000
aggregate principal amount.  The Indenture
does not limit other debt of the Company, secured or unsecured, including
Senior Indebtedness.


 


5.                                       REDEMPTION


 


The Company may not
redeem the notes at any time prior to March 1, 2008.


 


No sinking fund is
provided for the Notes.


 


6.                                       PURCHASE
OF NOTES AT OPTION OF HOLDER UPON A CHANGE IN CONTROL


 


At the option of the
Holder and subject to the terms and conditions of the Indenture, the Company
shall become obligated to purchase all or any part specified by the Holder (so
long as the principal amount of such part is $1,000 or an integral multiple of
$1,000 in excess thereof) of the Notes held by such Holder on the date that is
30 Business Days after the occurrence of a Change in Control, at a purchase
price equal to 100% of the principal amount thereof together with accrued
interest up to, but excluding, the Change in Control Purchase Date.  The Holder shall have the right to withdraw
any Change in Control Purchase Notice (in whole or in a portion thereof that is
$1,000 or an integral multiple of $1,000 in excess thereof) at any time prior
to the close of business on the second Business Day next preceding the Change
in Control Purchase Date by delivering a written notice of withdrawal to the
Paying Agent in accordance with the terms of the Indenture.


 


The Company may elect to
pay the Change in Control Purchase Price by delivery of shares of Applicable
Stock if and only if the following conditions are satisfied:


 


(1)          the shares of Applicable
Stock deliverable in payment of the Change in Control Purchase Price shall have
a fair market value as of the Change in Control Purchase Date of not less than
the Change in Control Purchase Price. For purposes of this Section 6, the fair
market value of shares of Applicable Stock shall be determined by the Company
and shall be equal to 97% of the average of the closing sale price of shares of
the Applicable Stock for the five consecutive Trading Days immediately
preceding the second Trading Day prior to the Change in Control Purchase Date;


 


(2)          the Change in Control
Purchase Price shall be paid only in cash in the event any shares of Applicable
Stock to be issued upon repurchase of Securities hereunder (i) require
registration under any federal securities law before such shares may be freely
transferable without being subject to any transfer restrictions under the
Securities Act upon repurchase and if such registration is not completed or
does not become effective prior to the Change in Control Purchase Date, and/or
(ii) require registration with or approval of any governmental authority under
any state law or any other federal law before such shares may be validly issued
or delivered upon repurchase and if such registration is not completed or does
not become effective or such approval is not obtained prior to the Change in
Control Purchase Date;


 


(3)          payment of the Change in
Control Purchase Price may not be made in Applicable Stock unless such stock
is, or shall have been listed on a national securities exchange or approved for
quotation on the Nasdaq National Market, in either case, prior to the Change in
Control Purchase Date; and


 


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(4)          all shares of Applicable
Stock that may be issued upon repurchase of Securities will be issued out of
the Company’s authorized but unissued Common Stock or, in the event of a
merger, consolidation, or other similar transaction involving the Company that
is otherwise permitted under the terms of this Indenture in which the Company
is not the surviving corporation, out of the authorized but unissued common
stock, common equity interests, ordinary shares or depositary shares of the
surviving corporation or its direct or indirect parent corporation and, will
upon issue, be duly and validly issued and fully paid and non-assessable and
free of any preemptive or similar rights.


 


If conditions (1) through
(4) above are not satisfied in accordance with the terms thereof, the Change in
Control Purchase Price shall be paid by the Company only in cash.


 


7.                                       CONVERSION


 


Subject to the provisions
of the Indenture, a Holder may convert the principal amount of this Note (or
any portion of this Note equal to $1,000 or any integral multiple of $1,000 in
excess thereof) into Common Stock at any time prior to the close of business on
the Final Maturity Date, at the Conversion Price then in effect, if:


 


(a)          as of the last day of
the immediately preceding fiscal quarter, the Closing Price of the Common Stock
for the last Trading Day of such fiscal quarter is 110% or more of the then
current Conversion Price on the Notes;


 


(b)         during the period
beginning January 1, 2008 through the Final Maturity Date, the Closing Price of
the Common Stock on the immediately preceding Trading Day was 110% or more of
the then current Conversion Price on the Notes;


 


(c)          the Company distributes
to Holders of Common Stock certain rights entitling them to purchase Common
Stock at less than the Closing Price of the Common Stock for the last Trading
Day preceding the declaration for such distribution;


 


(d)         the Company distributes
to Holders of Common Stock assets, debt, securities or certain rights to
purchase the Company’s securities, which distribution has a per share value as
determined by the Board of Directors exceeding 10% of the Closing Price of the
Common Stock for the last Trading Day preceding the declaration for such
distribution; or


 


(e)          the Company becomes a
party to a consolidation, merger or sale of all or substantially all of the
Company’s assets or a change in control occurs pursuant to which the Common
Stock would be converted into cash, stock or other property unless all of the
consideration, excluding cash payments for fractional shares and cash payments
made pursuant to dissenters’ appraisal rights, in a merger or consolidation
otherwise constituting a Changes of Control consists of shares of common stock,
depositary receipts or other certificates representing common equity interests
traded on a national securities exchange or quoted on the Nasdaq National
Market, or will be so traded immediately following such merger or consolidation,
and as a result of such merger or consolidation the Securities become
convertible solely into such common stock, depositary shares or other
securities representing common equity interests.


 


In the case of Sections
7(c) and 7(d) above, the Company must notify Holders at least 20 days prior to
the ex-dividend date for such distribution. 
Once the Company has given such notice, Holders may surrender their
Securities for conversion at any time until the earlier of the close of
business on the Business Day prior to the ex-dividend date or our announcement
that such distribution will not take place.


 


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A holder may also convert
the principal amount of this Note (or any portion thereof equal to $1,000 or
any integral multiple of $1,000 in excess thereof) into Common Stock, if:


 


(a)                                  at
any time prior to March 1, 2006 after any five (5) consecutive Trading Day
period in which the average Trading Prices for the Notes for that five (5)
Trading Day period was less than 103% of the average Conversion Value for the
Notes during that period; and


 


(b)                                 at
any time on or after March 1, 2006 and prior to maturity after any five (5)
consecutive Trading Day period in which the average Trading Prices for the
Notes for that five (5) Trading Day period was less than 97% of the average
Conversion Value for the Notes during that period, however, a Holder may not
convert a Security on or after March 1, 2006 pursuant to this clause if, at the
time of the calculation, the Closing Price of shares of Common Stock is between
the then current Conversion Price on the Securities and 110% of the then
current Conversion Price of the Notes.


 


If a Note is subject to
purchase upon a Change in Control, the conversion right will terminate at the close
of business on the Business Day immediately preceding the Change in Control
Purchase Date for such Note or such earlier date as the Holder presents such
Note for purchase (unless the Company shall default in making the Change in
Control Purchase Price, as the case may be, when due, in which case the
conversion right shall terminate at the close of business on the date such
default is cured and such Note is purchased).


 


The initial Conversion
Price is $23.79 per share, subject to adjustment under certain circumstances as
provided in the Indenture.  The number
of shares of Common Stock issuable upon conversion of a Note is determined by
dividing the principal amount of the Note or portion thereof converted by the Conversion
Price in effect on the Conversion Date. 
No fractional shares will be issued upon conversion; in lieu thereof, an
amount will be paid in cash based upon the Closing Price of the Common Stock on
the Trading Day immediately prior to the Conversion Date.


 


To convert a Note, a
Holder must (a) complete and manually sign the conversion notice set forth
below and deliver such notice to a Conversion Agent, (b) surrender the
Note to a Conversion Agent, (c) furnish appropriate endorsements and
transfer documents if required by a Registrar or a Conversion Agent, and
(d) pay any transfer or similar tax, if required.  Notes so surrendered for conversion (in
whole or in part) during the period from the close of business on any regular
record date to the opening of business on the next succeeding interest payment
date (excluding Notes or portions thereof subject to purchase upon a Change in
Control on a Change in Control Purchase Date, as the case may be, during the
period beginning at the close of business on a regular record date and ending
at the opening of business on the first Business Day after the next succeeding
interest payment date, or if such interest payment date is not a Business Day,
the second such Business Day) shall also be accompanied by payment in funds
acceptable to the Company of an amount equal to the interest payable on such
interest payment date on the principal amount of such Note then being
converted, and such interest shall be payable to such registered Holder
notwithstanding the conversion of such Note, subject to the provisions of this
Indenture relating to the payment of defaulted interest by the Company.  However, if a Holder submits Notes for
conversion between the record date for the final interest payment and the
opening of business on the Final Maturity Date, such Holder will not be
required to pay funds equal to the interest payable on the Final Maturity
Date.  If the Company defaults in the
payment of interest payable on such interest payment date, the Company shall
promptly repay such funds to such Holder. 
A Holder may convert a portion of a Note equal to $1,000 or any integral
multiple thereof.


 


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


 


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8.                                       SUBORDINATION


 


The indebtedness
evidenced by the Notes is, to the extent and in the manner provided in the
Indenture, subordinate and junior in right of payment to the prior payment in
full of all Senior Indebtedness of the Company.  Any Holder by accepting this Note agrees to and shall be bound by
such subordination provisions and authorizes the Trustee to give them effect.
In addition to all other rights of Senior Indebtedness described in the
Indenture, the Senior Indebtedness shall continue to be Senior Indebtedness and
entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any terms of any instrument relating to
the Senior Indebtedness or any extension or renewal of the Senior Indebtedness.


 


9.                                       DENOMINATIONS,
TRANSFER, EXCHANGE


 


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


 


10.                                 PERSONS
DEEMED OWNERS


 


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


 


11.                                 UNCLAIMED
MONEY


 


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


 


12.                                 AMENDMENT,
SUPPLEMENT AND WAIVER


 


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


 


13.                                 SUCCESSOR
ENTITY


 


When a successor
corporation assumes all the obligations of its predecessor under the Notes and
the Indenture in accordance with the terms and conditions of the Indenture, the
predecessor corporation (except in certain circumstances specified in the
Indenture) be released from those obligations.


 


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14.                                 DEFAULTS
AND REMEDIES


 


Under the Indenture, an
Event of Default includes: 
(i) default for 30 days in payment of any interest or Additional
Interest on any Notes; (ii) default in payment of any principal
(including, without limitation, any premium, if any) on the Notes when due;
(iii) failure by the Company for 60 days after notice to it to comply with
any of its other agreements contained in the Indenture or the Notes; (iv)
default in the payment of certain indebtedness of the Company or a Significant
Subsidiary; (v) failure by the Company to give the Holders notice of their
right to require the Company to purchase Notes upon a Change of Control and
(vi) certain events of bankruptcy, insolvency or reorganization of the Company
or any Significant Subsidiary.  If an
Event of Default (other than as a result of certain events of bankruptcy,
insolvency or reorganization of the Company) occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding may declare all unpaid principal to the date of
acceleration on the Notes then outstanding to be due and payable immediately,
all as and to the extent provided in the Indenture.  If an Event of Default occurs as a result of certain events of
bankruptcy, insolvency or reorganization of the Company, unpaid principal of
the Notes then outstanding shall become due and payable immediately without any
declaration or other act on the part of the Trustee or any Holder, all as and
to the extent provided in the Indenture. 
Holders may not enforce the Indenture or the Notes except as provided in
the Indenture.  The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the
Notes.  Subject to certain limitations,
Holders of a majority in aggregate principal amount of the Notes then
outstanding may direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders notice
of any continuing default (except a default in payment of principal or
interest) if it determines that withholding notice is in their interests.  The Company is required to file periodic
reports with the Trustee as to the absence of default.


 


15.                                 TRUSTEE
DEALINGS WITH THE COMPANY


 


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


 


16.                                 NO
RECOURSE AGAINST OTHERS


 


A director, officer,
employee or shareholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Notes or the Indenture nor for any
claim based on, in respect of or by reason of such obligations or their
creation.  The Holder of this Note by
accepting this Note waives and releases all such liability.  The waiver and release are part of the
consideration for the issuance of this Note.


 


17.                                 AUTHENTICATION


 


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


 


18.                                 ABBREVIATIONS
AND DEFINITIONS


 


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


 


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All terms defined in the
Indenture and used in this Note but not specifically defined herein are defined
in the Indenture and are used herein as so defined.


 


19.                                 INDENTURE
TO CONTROL; GOVERNING LAW


 


In the case of any
conflict between the provisions of this Note and the Indenture, the provisions
of the Indenture shall control.  This
Note shall be governed by, and construed in accordance with, the laws of the
State of New York.


 


The Company will furnish
to any Holder, upon written request and without charge, a copy of the
Indenture.  Requests may be made
to:  UTStarcom, Inc., 1275 Harbor Bay
Parkway, Alameda, CA  94502, (510)
864-8800, Attention:  Investor
Relations.


 


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ASSIGNMENT
FORM


 


To assign this Note, fill
in the form below:


 


I or we assign and
transfer this Note to


 


 


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


 


 


 


 


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


 


and irrevocably appoint


 


 


 


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


 


 


	
   

  	
   

  	
  Your Signature:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign exactly as
  your name appears on the

  other side of this Note)

  
	
   

  	
   

  	
   

  
	
  *Signature guaranteed
  by:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
									



 












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


 


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CONVERSION
NOTICE


 


To convert this Note into
Common Stock of the Company, check the box: 
o


 


To convert only part of
this Note, state the principal amount to be converted (must be $1,000 or a
integral multiple of $1,000): 
$                .


 


If you want the stock
certificate made out in another person’s name, fill in the form below:


 


 


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


 


 


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


 


 


	
   

  	
   

  	
  Your Signature:

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign exactly as
  your name appears on the

  other side of this Note)

  
	
   

  	
   

  	
   

  
	
  *Signature guaranteed
  by:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
									



 












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


 


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OPTION
TO ELECT REPURCHASE


UPON
A CHANGE OF CONTROL


 


To:                              UTStarcom,
Inc.


 


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


 


	
  Dated: 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature(s)

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature Guaranty

  



 


Principal amount to be
purchased


(in an integral multiple
of $1,000, if less than all):


 












 


NOTICE:  The signature to the foregoing Election must
correspond to the Name as written upon the face of this Security in every
particular, without alteration or any change whatsoever.


 


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SCHEDULE
OF EXCHANGES OF NOTES(4)


 


The following exchanges,
repurchases or conversions of a part of this global Note have been made:


 


	
  Principal Amount

  of this Global Note

  Following Such

  Decrease Date

  of Exchange (or Increase)

  	
   

  	
  Authorized

  Signatory of

  Securities

  Custodian

  	
   

  	
  Amount of
  Decrease

  in

  Principal Amount

  of this Global Note

  	
   

  	
  Amount of

  Increase in

  Principal
  Amount

  of this Global Note

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 












(4)  This schedule should be included only if the
Security is a global Security.


 


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CERTIFICATE
TO BE DELIVERED UPON EXCHANGE OR REGISTRATION

OF TRANSFER OF TRANSFER RESTRICTED SECURITIES(5)


 


Re:                               7/8%
Convertible Subordinated Notes due 2008 (the “Notes”) of UTStarcom, Inc.


 


This certificate relates
to $        principal amount of Notes owned
in (check applicable box)


 


o   book-entry
or    o   definitive form by
                   
(the “Transferor”).


 


The Transferor has
requested a Registrar or the Trustee to exchange or register the transfer of
such Notes.


 


In connection with such
request and in respect of each such Note, the Transferor does hereby certify
that the Transferor is familiar with transfer restrictions relating to the
Notes as provided in Section 2.12 of the Indenture dated as of
March 12, 2003 between UTStarcom, Inc. and U.S. Bank National Association,
as trustee (the “Indenture”), and the transfer of such Note is being made
pursuant to an effective registration statement under the Securities Act of
1933, as amended (the “Securities Act”) (check applicable box) or the transfer
or exchange, as the case may be, of such Note does not require registration
under the Securities Act because (check applicable box):


 


o                                    Such Note is being
transferred pursuant to an effective registration statement under the
Securities Act.


 


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


 


o                                    Such Note is being
transferred to the Company or a Subsidiary (as defined in the Indenture) of the
Company.


 


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


 


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


 


Such Note is being
transferred pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act (other than an exemption
referred to above) and as a result of which such


 












(5)  This certificate should only be included if
the Security is a Restricted Security.


 


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Note will, upon such transfer, cease to be a “restricted security”
within the meaning of Rule 144 under the Securities Act.


 


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


 


	
  Date:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Insert Name of
  Transferor)

  



 


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